Exhibit 10.4

 

TE CONNECTIVITY LTD.

 

2007 STOCK AND INCENTIVE PLAN

(AMENDED AND RESTATED AS OF September 16, 2014)

 

ARTICLE I

PURPOSE

 

1.1  Purpose.  The purposes of this TE Connectivity Ltd. 2007 Stock and
Incentive Plan (Amended and Restated as of September 16, 2014) (the “Plan”) are
to promote the interests of TE Connectivity Ltd. (and any successor thereto) by
(i) aiding in the recruitment and retention of Directors and Employees, (ii)
providing incentives to such Directors and Employees by means of
performance-related incentives to achieve short-term and long-term performance
goals, (iii) providing Directors and Employees an opportunity to participate in
the growth and financial success of the Company, and (iv) promoting the growth
and success of the Company’s business by aligning the financial interests of
Directors and Employees with that of the other stockholders of the Company.
Toward these objectives, the Plan provides for the grant of Stock Options, Stock
Appreciation Rights, Annual Performance Bonuses, Long Term Performance Awards
and other Stock-Based Awards.

 

1.2  Effective Dates; Shareholder Approval.  The Plan was originally effective
June 29, 2007, the date of the dividend distribution of TE Connectivity Ltd.
shares to the Tyco International Ltd. shareholders of record on the distribution
date. The Plan was approved by the TE Connectivity Ltd. Board of Directors on
June 4, 2007 and adopted by Tyco International Ltd., as the Company’s sole
shareholder, on June 4, 2007. An amendment and restatement to the Plan to ensure
its compliance with Section 409A of the Code and to make certain other
clarifying changes was adopted by the Board of Directors of the Company on
January 13, 2009 and approved by the Company’s shareholders on June 22, 2009. In
order to provide for the issuance of additional shares under the Plan, an
amended and restated Plan was adopted by the Board of Directors of the Company
on November 17, 2009 and was approved by the Company’s shareholders on March 10,
2010. The Plan was further amended and restated on September 29, 2010. In order
to provide for the issuance of additional shares under the Plan, an amended and
restated Plan was adopted by the Board of Directors of the Company on November
15, 2011 and was approved by the Company’s shareholders on March 17, 2012.  This
amended and restated Plan was adopted by the Board of Directors of the Company
on September 16, 2014 for the purpose of adding certain administrative
amendments.

 

ARTICLE II

DEFINITIONS

 

For purposes of the Plan, the following terms have the following meanings,
unless another definition is clearly indicated by particular usage and context:

 

“Acquired Company” means any business, corporation or other entity acquired by
the Company or any Subsidiary.

 

“Acquired Grantee” means the grantee of a stock-based award of an Acquired
Company and may include a current or former Director of an Acquired Company.

 

“Annual Performance Bonus” means an Award of cash or Shares granted under
Section 4.4 of the Plan that is paid solely on account of the attainment of a
specified performance target in relation to one or more Performance Measures.

 

“Award” means any form of incentive or performance award granted under the Plan,
whether singly or in combination, to a Participant by the Committee pursuant to
any terms and conditions that the Committee may establish and set forth in the
applicable Award Certificate. Awards granted under the Plan may consist of:

 

(a)                                 “Stock Options” awarded pursuant to Section
4.3;

 

(b)                                 “Stock Appreciation Rights” awarded pursuant
to Section 4.3;

 

(c)                                  “Annual Performance Bonuses” awarded
pursuant to Section 4.4;

 

(d)                                 “Long Term Performance Awards” awarded
pursuant to Section 4.5;

 

(e)                                  “Other Stock-Based Awards” awarded pursuant
to Section 4.6;

 

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(f)                                   “Director Awards” awarded pursuant to
Section 4.7; and

 

(g)                                  “Substitute Awards” awarded pursuant to
Section 4.8.

 

“Award Certificate” means the document issued, either in writing or an
electronic medium, by the Committee or its designee to a Participant evidencing
the grant of an Award.

 

“Board” means the Board of Directors of the Company.

 

“Cause” means misconduct that is willfully or wantonly harmful to the Company or
any of its Subsidiaries, monetarily or otherwise, including, without limitation,
conduct that violates the Company’s Code of ethical Conduct.

 

“Change in Control” means the first to occur of any of the following events:

 

(a)                                 any “person” (as defined in Section 13(d)
and 14(d) of the Exchange Act, excluding for this purpose, (i) the Company or
any Subsidiary or (ii) any employee benefit plan of the Company or any
Subsidiary (or any person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan that acquires beneficial
ownership of voting securities of the Company), is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act) directly or indirectly
of securities of the Company representing more than 30 percent of the combined
voting power of the Company’s then outstanding securities; provided, however,
that no Change in Control will be deemed to have occurred as a result of a
change in ownership percentage resulting solely from an acquisition of
securities by the Company; or

 

(b)                                 persons who, as of the Effective Date
constitute the Board (the “Incumbent Directors”) cease for any reason (including
without limitation, as a result of a tender offer, proxy contest, merger or
similar transaction) to constitute at least a majority thereof, provided that
any person becoming a Director of the Company subsequent to the Effective Date
shall be considered an Incumbent Director if such person’s election or
nomination for election was approved by a vote of at least 50 percent of the
Incumbent Directors; but provided further, that any such person whose initial
assumption of office is in connection with an actual or threatened proxy contest
relating to the election of members of the Board or other actual or threatened
solicitation of proxies or consents by or on behalf of a “person” (as defined in
Section 13(d) and 14(d) of the Exchange Act) other than the Board, including by
reason of agreement intended to avoid or settle any such actual or threatened
contest or solicitation, shall not be considered an Incumbent Director; or

 

(c)                                  consummation of a reorganization, merger or
consolidation or sale or other disposition of at least 80 percent of the assets
of the Company (a “Business Combination”), in each case, unless, following such
Business Combination, all or substantially all of the individuals and entities
who were the beneficial owners of outstanding voting securities of the Company
immediately prior to such Business Combination beneficially own directly or
indirectly more than 50 percent of the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, of the company resulting from such Business Combination (including,
without limitation, a company which, as a result of such transaction, owns the
Company or all or substantially all of the Company’s assets either directly or
through one or more Subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the outstanding
voting securities of the Company; or

 

(d)                                 consummation of a complete liquidation or
dissolution of the Company;

 

provided, however, that if and to the extent that any provision of this Plan or
an Award Certificate would cause a payment of deferred compensation that is
subject to Code Section 409A(a)(2) to be made upon the occurrence of a “Change
in Control,” or would change the timing and/or form of any payment of deferred
compensation that is subject to Code Section 409A(a)(2) upon a specified date or
event occurring after a “Change in Control” or upon a “Change in Control
Termination,” then such payment shall not be made, or such change in timing or
form of payment shall not occur, unless such “Change in Control” is also a
“change in ownership or effective control” of the Company within the meaning of
Code Section 409A(2)(A)(v) and applicable regulations and rulings thereunder and
such payment, or such associated date or event, occurs no later than two years
after the date of such “Change in Control.”

 

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“Change in Control Termination” means a Participant’s involuntary termination of
employment that occurs during the 12 month period immediately following a Change
in Control. For this purpose, a Participant’s involuntary termination of
employment includes only the following:

 

(a)                                 termination of the Participant’s employment
by the Company for any reason other than for Cause, Disability or death;

 

(b)                                 termination of the Participant’s employment
by the Participant after one of the following events, provided that the
Participant’s termination of employment occurs within one hundred and eighty
(180) days after the occurrence of any such event:

 

i.                                          the Company (1) assigns or causes to
be assigned to the Participant duties inconsistent in any material respect with
his or her position as in effect immediately prior to the Change in Control; (2)
makes or causes to be made any material adverse change in the Participant’s
position, authority, duties or responsibilities; or (3) takes or causes to be
taken any other action which, in the reasonable judgment of the Participant,
would cause him or her to violate his or her ethical or professional obligations
(after written notice of such judgment has been provided by the Participant to
the Company and the Company has been given a 15-day period within which to cure
such action), or which results in a significant diminution in such position,
authority, duties or responsibilities; or

 

ii.                                       the Company, without the Participant’s
consent, (1) requires the Participant to relocate to a principal place of
employment more than fifty (50) miles from his or her existing place of
employment; or (2) reduces the Participant’s base salary, annual bonus, or
retirement, welfare, stock incentive, perquisite (if any) and other benefits
taken as a whole.

 

“Code” means the United States Internal Revenue Code of 1986, as amended.

 

“Committee” means the Management Development and Compensation Committee of the
Board or any successor committee or subcommittee of the Board, which committee
is comprised solely of two or more persons who are outside directors within the
meaning of Section 162(m)(4)(C)(i) of the Code and the applicable regulations
and nonemployee directors within the meaning of Rule 16b-3(b)(3) under the
Exchange Act.

 

“Common Stock” means the common stock of the Company, $.20 (U.S.) par value, and
such other securities or property as may become subject to Awards pursuant to an
adjustment made under Section 5.3 of the Plan.

 

“Company” means TE Connectivity Ltd., a Swiss company, or any successor thereto.

 

“Deferred Stock Unit” means a Unit granted under Section 4.6 to acquire Shares
upon Termination of Directorship or Termination of Employment, subject to any
restrictions that the Committee, in its discretion, may determine.

 

“Director” means a member of the Board who is a “non-employee director” within
the meaning of Rule 16b-3(b)(3) under the Exchange Act.

 

“Director Shares” means the award of fully-vested Shares to a Director under
Section 4.6 as part of the Director’s annual compensation, or under such
circumstances as are deemed appropriate by the Board.

 

“Disabled” or “Disability” means the inability of the Director or Employee to
perform the material duties pertaining to such Director’s directorship or such
Employee’s employment due to a physical or mental injury, infirmity or
incapacity for 180 days (including weekends and holidays) in any 365-day period.
The existence or nonexistence of a Disability shall be determined by an
independent physician selected by the Company and reasonably acceptable to the
Director or Employee. Notwithstanding the above, if and to the extent that any
provision of this Plan or an Award Certificate would cause a payment of deferred
compensation that is subject to Code Section 409A(a)(2) to be made upon the
occurrence of a “Disability” or upon a person becoming “Disabled,” or would
cause a change in the timing or form of payment of such deferred compensation
upon the occurrence of a “Disability” or upon a person becoming “Disabled,” then
such payment shall not be made, or such change in timing or form of payment
shall not occur, unless such “Disability” or condition of being “Disabled”
satisfies the requirements of Code Section 409A(2)(C) and applicable regulations
and rulings thereunder.

 

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“Dividend Equivalent” means an amount equal to the cash dividend or the Fair
Market Value of the stock dividend that would be paid on each Share underlying
an Award if the Share were duly issued and outstanding on the date on which the
dividend is payable. Dividend Equivalents will not be awarded in connection with
stock option or Stock Appreciation Rights Awards.

 

“Effective Date” means September 16, 2014. The original effective date of the TE
Connectivity Ltd. Stock and Incentive Plan was, June 29, 2007, the date of the
dividend distribution of TE Connectivity Ltd. shares to the Tyco International
Ltd. shareholders of record on the distribution date.

 

“Employee” means any individual who performs services as an officer or employee
of the Company or a Subsidiary.

 

“Exchange Act” means the United States Securities Exchange Act of 1934, as
amended.

 

“Exercise Price” means the price of a Share, as fixed by the Committee, which
may be purchased under a Stock Option or with respect to which the amount of any
payment pursuant to a Stock Appreciation Right is determined.

 

“Fair Market Value” of a Share means the closing sales price on the New York
Stock Exchange on the date as of which the determination of Fair Market Value is
being made or, if no sale is reported for such day, on the next preceding day on
which a sale of Shares was reported. Notwithstanding anything to the contrary
herein, the Fair Market Value of a Share will in no event be determined to be
less than par value.

 

“Fair Market Value Stock Option” means a Stock Option the Exercise Price of
which is fixed by the Committee at a price equal to the Fair Market Value of a
Share on the date of grant.

 

“GAAP” means United States generally accepted accounting principles.

 

“Incentive Stock Option” means a Stock Option granted under Section 4.3 of the
Plan that meets the requirements of Section 422 of the Code and any related
regulations and is designated in the Award Certificate to be an Incentive Stock
Option.

 

“Key Employee” means an Employee who is a “covered employee” within the meaning
of Section 162(m)(3) of the Code.

 

“Long Term Performance Award” means an Award granted under Section 4.5 of the
Plan that is paid solely on account of the attainment of a specified performance
target in relation to one or more Performance Measures or other performance
criteria as selected in the discretion of the Committee.

 

“Non-Employee Director” means any member of the Board, elected or appointed, who
is not otherwise an Employee of the Company or a Subsidiary. An individual who
is elected to the Board at an annual meeting of the stockholders of the Company
will be deemed to be a member of the Board as of the date of the meeting.

 

“Nonqualified Stock Option” means any Stock Option granted under Section 4.3 of
the Plan that is not an Incentive Stock Option.

 

“Participant” means a Director, Employee or Acquired Grantee who has been
granted an Award under the Plan.

 

“Performance Cycle” means, with respect to any Award that vests based on
Performance Measures, the period of 12 months or longer over which the level of
performance will be assessed. The first Performance Cycle under the Plan will
begin on such date as is set by the Committee, in its discretion.

 

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“Performance Measure” means, with respect to any Annual Performance Bonus or
Long Term Performance Award, the business criteria selected by the Committee to
measure the level of performance of the Company during the Performance Cycle.
The Committee may select as the Performance Measure for a Performance Cycle any
one or combination of the following Company measures, as interpreted by the
Committee, which measures (to the extent applicable) will be determined in
accordance with GAAP:

 

(a)                                 Net operating profit after taxes;

 

(b)                                 Net operating profit after taxes, per Share;

 

(c)                                  Return on invested capital;

 

(d)                                 Return on assets or net assets;

 

(e)                                  Total shareholder return;

 

(f)                                   Relative total shareholder return (as
compared with a peer group of the Company);

 

(g)                                  Earnings before income taxes;

 

(h)                                 Earnings per Share;

 

(i)                                     Net income;

 

(j)                                    Free cash flow;

 

(k)                                 Free cash flow per Share;

 

(l)                                     Revenue (or any component thereof); or

 

(m)                             Revenue growth.

 

“Performance Unit” means a Long Term Performance Award denominated in dollar
Units.

 

“Plan” means the TE Connectivity Ltd. 2007 Stock and Incentive Plan (Amended and
Restated as of September 16, 2014), as it may be amended from time to time.

 

“Premium-Priced Stock Option” means a Stock Option the Exercise Price of which
is fixed by the Committee at a price that exceeds the Fair Market Value of a
Share on the date of grant.

 

“Reporting Person” means a Director or an Employee who is subject to the
reporting requirements of Section 16(a) of the Exchange Act.

 

“Restricted Stock” means Shares issued pursuant to Section 4.6 that are subject
to any restrictions that the Committee, in its discretion, may impose.

 

“Restricted Unit” means a Unit granted under Section 4.6 to acquire Shares or an
equivalent amount in cash, which Unit is subject to any restrictions that the
Committee, in its discretion, may impose.

 

“Retirement” means Termination of Employment on or after a Participant has
attained age fifty-five (55) and has completed at least five years of service
with the Company and its Subsidiaries.

 

“Securities Act” means the United States Securities Act of 1933, as amended.

 

“Share” means a share of Common Stock.

 

“Stock Appreciation Right” means a right granted under Section 4.3 of the Plan
to an amount in cash or Shares equal to any difference between the Fair Market
Value of the Shares as of the date on which the right is exercised and the
Exercise Price, where the amount of Shares attributable to each Stock
Appreciation Right is set forth on or before the grant date.

 

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“Stock-Based Award” means an Award granted under Section 4.6 of the Plan and
denominated in Shares.

 

“Stock Option” means a right granted under Section 4.3 of the Plan to purchase
from the Company a stated number of Shares at a specified price. Stock Options
awarded under the Plan may be in the form of Incentive Stock Options or
Nonqualified Stock Options.

 

“Subsidiary” means a subsidiary company (wherever incorporated) of the Company;
provided, that in the case of any Award that provides deferred compensation
subject to Code Section 409A, “Subsidiary” shall not include any subsidiary
company as defined above unless such company is within a controlled group of
corporations with the Company as defined in Code Sections 1563(a)(1), (2) and
(3) where the phrase “at least 50%” is substituted in each place “at least 80%”
appears or is with the Company part of a group of trades or businesses under
common control as defined in Code Section 414(c) and Treas. Reg. § 1.414(c)-2
where the phrase “at least 50%” is substituted in each place “at least 80%”
appears, provided, however, that when the relevant determination is to be based
upon legitimate business criteria (as described in Treas. Reg. §
1.409A-1(b)(5)(iii)(E) and § 1.409A-1(h)(3)), the phrase “at least 20%” shall be
substituted in each place “at least 50%” appears as described above with respect
to both a controlled group of corporations and trades or business under common
control.

 

“Target Amount” means the amount of Performance Units that will be paid if the
Performance Measure is fully (100%) attained, as determined by the Committee.

 

“Target Vesting Percentage” means the percentage of performance- based
Restricted Units or Shares of Restricted Stock that will vest if the Performance
Measure is fully (100%) attained, as determined by the Committee.

 

“Termination of Directorship” means the date of cessation of a Director’s
membership on the Board for any reason, with or without Cause, as determined by
the Company; provided, that if and to the extent that any provision of this Plan
or an Award Certificate would cause a payment of deferred compensation that is
subject to Code Section 409A(a)(2) to be made upon the occurrence of a
Termination of Directorship or would change the timing and/or form of any
payment of deferred compensation that is subject to Code Section 409A(a)(2) upon
a person’s Termination of Directorship, then such payment shall not be made, or
such change in timing and/or form of payment shall not occur, unless such
Termination of Directorship would be deemed a “separation from service” within
the meaning of Code Section 409A(a)(2)(A)(i) and applicable regulations and
rulings thereunder, and shall not include any services provided in the capacity
of an employee or otherwise.

 

“Termination of Employment” means the date of cessation of an Employee’s
employment relationship with the Company or a Subsidiary for any reason, with or
without Cause, as determined by the Company; provided, that if and to the extent
that any provision of this Plan or an Award Certificate would cause a payment of
deferred compensation that is subject to Code Section 409A(a)(2) to be made upon
the occurrence of a Termination of Employment or would change the timing and/or
form of any payment of deferred compensation that is subject to Code Section
409A(a)(2) upon a person’s Termination of Employment, then such payment shall
not be made or such change in timing and/or form of payment shall not occur,
unless such Termination of Employment would be deemed a “separation from
service” within the meaning of Code Section 409A(a)(2)(A)(i) and applicable
regulations and rulings thereunder.

 

“Unit” means, for purposes of Performance Units, the potential right to an Award
equal to a specified amount denominated in such form as is deemed appropriate in
the discretion of the Committee and, for purposes of Restricted Units or
Deferred Stock Units, the potential right to acquire one Share.

 

ARTICLE III

ADMINISTRATION

 

3.1  Committee.  The Plan will be administered by the Committee.

 

3.2  Authority of the Committee.  The Committee or, to the extent required by
applicable law, the Board will have the authority, in its sole and absolute
discretion and subject to the terms of the Plan, to:

 

(a)                                 Interpret and administer the Plan and any
instrument or agreement relating to the Plan;

 

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(b)                                 Prescribe the rules and regulations that it
deems necessary for the proper operation and administration of the Plan, and
amend or rescind any existing rules or regulations relating to the Plan;

 

(c)                                  Select Employees to receive Awards under
the Plan;

 

(d)                                 Determine the form of an Award, the number
of Shares subject to each Award, all the terms and conditions of an Award,
including, without limitation, the conditions on exercise or vesting, the
designation of Stock Options as Incentive Stock Options or Nonqualified Stock
Options, and the circumstances in which an Award may be settled in cash or
Shares or may be cancelled, forfeited or suspended, and the terms of the Award
Certificate;

 

(e)                                  Determine whether Awards will be granted
singly, in combination or in tandem;

 

(f)                                   Establish and interpret Performance
Measures (or, as applicable, other performance criteria) in connection with
Annual Performance Bonuses and Long Term Performance Awards, evaluate the level
of performance over a Performance Cycle and certify the level of performance
attained with respect to Performance Measures (or other performance criteria, as
applicable);

 

(g)                                  Except as provided in Section 6.1, waive or
amend any terms, conditions, restrictions or limitations on an Award, except
that the prohibition on the repricing of Stock Options and Stock Appreciation
Rights, as described in Section 4.3(g), may not be waived and further provided
that any such waiver or amendment shall either comply with the requirements of
Section 409A or preserve any exemption from the application of Code Section
409A;

 

(h)                                 Make any adjustments to the Plan (including
but not limited to adjustment of the number of Shares available under the Plan
or any Award) and any Award granted under the Plan as may be appropriate
pursuant to Section 5.3;

 

(i)                                     Determine and set forth in the
applicable Award Certificate the circumstances under which Awards may be
deferred and the extent to which a deferral will be credited with Dividend
Equivalents and interest thereon;

 

(j)                                    Determine whether a Nonqualified Stock
Option or Restricted Share may be transferable to family members, a family trust
or a family partnership;

 

(k)                                 Establish any subplans and make any
modifications to the Plan or to Awards made hereunder (including the
establishment of terms and conditions not otherwise inconsistent with the terms
of the Plan) that the Committee may determine to be necessary or advisable for
grants made in countries outside the United States to comply with, or to achieve
favorable tax treatment under, applicable foreign laws or regulations;

 

(l)                                     Appoint such agents as it shall deem
appropriate for proper administration of the Plan; and

 

(m)                             Take any and all other actions it deems
necessary or advisable for the proper operation or administration of the Plan.

 

3.3  Effect of Determinations.  All determinations of the Committee will be
final, binding and conclusive on all persons having an interest in the Plan.

 

3.4  Delegation of Authority.  The Board or, if permitted under applicable
corporate law, the Committee, in its discretion and consistent with applicable
law and regulations, may delegate to the Chief Executive Officer of the Company
or any other officer or group of officers as it deems to be advisable, the
authority to select Employees to receive an Award and to determine the number of
Shares under any such Award, subject to any terms and conditions that the Board
or the Committee may establish. When the Board or the Committee delegates
authority pursuant to the foregoing sentence, it will limit, in its discretion,
the number of Shares or aggregate value that may be subject to Awards that the
delegate may grant. Only the Committee will have authority to grant and
administer Awards to Directors, Key Employees and other Reporting Persons or to
delegates of the Committee, and to establish and certify Performance Measures.

 

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3.5  Employment of Advisors.  The Committee may employ attorneys, consultants,
accountants and other advisors, and the Committee, the Company and the officers
and directors of the Company may rely upon the advice, opinions or valuations of
the advisors employed.

 

3.6  No Liability.  No member of the Committee or any person acting as a
delegate of the Committee with respect to the Plan will be liable for any losses
resulting from any action, interpretation or construction made in good faith
with respect to the Plan or any Award granted under the Plan.

 

ARTICLE IV

AWARDS

 

4.1  Eligibility.  All Participants and Employees are eligible to be designated
to receive Awards granted under the Plan, except as otherwise provided in this
Article IV.

 

4.2  Form of Awards.  Awards will be in the form determined by the Committee, in
its discretion, and will be evidenced by an Award Certificate. Awards may be
granted singly or in combination or in tandem with other Awards.

 

4.3  Stock Options and Stock Appreciation Rights.  The Committee may grant Stock
Options and Stock Appreciation Rights under the Plan to those Employees whom the
Committee may from time to time select, in the amounts and pursuant to the other
terms and conditions that the Committee, in its discretion, may determine and
set forth in the Award Certificate, subject to the provisions below:

 

(a)  Form.  Stock Options granted under the Plan will, at the discretion of the
Committee and as set forth in the Award Certificate, be in the form of Incentive
Stock Options, Nonqualified Stock Options or a combination of the two. If an
Incentive Stock Option and a Nonqualified Stock Option are granted to the same
Participant under the Plan at the same time, the form of each will be clearly
identified, and they will be deemed to have been granted in separate grants. In
no event will the exercise of one Award affect the right to exercise the other
Award. Stock Appreciation Rights may be granted either alone or in connection
with concurrently or previously granted Nonqualified Stock Options.

 

(b)  Exercise Price.  The Committee will set the Exercise Price of Fair Market
Value Stock Options or Stock Appreciation Rights granted under the Plan at a
price that is equal to the Fair Market Value of a Share on the date of grant,
subject to adjustment as provided in Section 5.3. The Committee will set the
Exercise Price of Premium-Priced Stock Options at a price that is higher than
the Fair Market Value of a Share as of the date of grant, provided that such
price is no higher than 150 percent of such Fair Market Value. The Exercise
Price of Incentive Stock Options will be equal to or greater than 110 percent of
the Fair Market Value of a Share as of the date of grant if the Participant
receiving the Stock Options owns stock possessing more than 10 percent of the
total combined voting power of all classes of stock of the Company or any
subsidiary or parent corporation of the Company, as defined in Section 424 of
the Code. The Exercise Price of a Stock Appreciation Right granted in tandem
with a Stock Option will equal the Exercise Price of the related Stock Option.
The Committee will set forth the Exercise Price of a Stock Option or Stock
Appreciation Right in the Award Certificate. Stock Options granted under the
Plan will, at the discretion of the Committee and as set forth in the Award
Certificate, be Fair Market Value Stock Options, Premium-Priced Stock Options or
a combination of Fair Market Value Stock Options and Premium- Priced Stock
Options.

 

(c)  Term and Timing of Exercise.  Each Stock Option or Stock Appreciation Right
granted under the Plan will be exercisable in whole or in part, subject to the
following conditions, unless determined otherwise by the Committee:

 

(i)                                     The Committee will determine and set
forth in the Award Certificate the date on which any Award of Stock Options or
Stock Appreciation Rights to a Participant may first be exercised. Unless the
applicable Award Certificate provides otherwise, a Stock Option or Stock
Appreciation Right will become exercisable in equal annual installments over a
period of four years beginning immediately after the date on which the Stock
Option or Stock Appreciation Right was granted. The right to exercise a Stock
Option or Stock Appreciation Right will lapse no later than 10 years after the
date of grant, except to the extent necessary to comply with applicable laws
outside of the United States or to preserve the tax advantages of the Award
outside the United States.

 

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(ii)                                  Unless the applicable Award Certificate
provides otherwise, upon the death or Disability of a Participant who has
outstanding Stock Options or Stock Appreciation Rights, the unvested Stock
Options or Stock Appreciation Rights will vest. Unless the applicable Award
Certificate provides otherwise, the Participant’s Stock Options and Stock
Appreciation Rights will lapse, and will not thereafter be exercisable, upon the
earlier of (A) their original expiration date or (B) the date that is three
years after the date on which the Participant dies or incurs a Disability.

 

(iii)                               Unless the applicable Award Certificate
provides otherwise, upon the Retirement of a Participant, a pro rata portion of
the Participant’s Stock Options and Stock Appreciation Rights will vest so that
the total number of vested Stock Options or Stock Appreciation Rights held by
the Participant at Termination of Employment (including those that have already
vested as of such date) will be equal to (A) the total number of Stock Options
or Stock Appreciation Rights originally granted to the Participant under each
Award multiplied by (ii) a fraction, the numerator of which is the period of
time (in whole months) that have elapsed since the date of grant, and the
denominator of which is four years (or such other applicable vesting term as is
set forth in the Award Certificate). Unless the Award Certificate provides
otherwise, such Participant’s Stock Options and Stock Appreciation Rights will
lapse, and will not thereafter be exercisable, upon the earlier of (A) their
original expiration date or (B) the date that is three years after the date of
Termination of Employment.

 

(iv)                              Upon the Termination of Employment of a
Participant that does not meet the requirements of paragraphs (ii) or (iii)
above, or as otherwise provided in Section 5.4 (Change in Control), any unvested
Stock Options or Stock Appreciation Rights will be forfeited unless the Award
Certificate provides otherwise. Any Stock Options or Stock Appreciation Rights
that are vested as of such Termination of Employment will lapse, and will not
thereafter be exercisable, upon the earlier of (A) their original expiration
date or (B) the date that is ninety (90) days after the date of such Termination
of Employment unless the Award Certificate provides otherwise.

 

(v)                                 Stock Options and Stock Appreciation Rights
of a deceased Participant may be exercised only by the estate of the Participant
or by the person given authority to exercise the Stock Options or Stock
Appreciation Rights by the Participant’s will or by operation of law. If a Stock
Option or Stock Appreciation Right is exercised by the executor or administrator
of a deceased Participant, or by the person or persons to whom the Stock Option
or Stock Appreciation Right has been transferred by the Participant’s will or
the applicable laws of descent and distribution, the Company will be under no
obligation to deliver Shares or cash until the Company is satisfied that the
person exercising the Stock Option or Stock Appreciation Right is the duly
appointed executor or administrator of the deceased Participant or the person to
whom the Stock Option or Stock Appreciation Right has been transferred by the
Participant’s will or by applicable laws of descent and distribution.

 

(vi)                              A Stock Appreciation Right granted in tandem
with a Stock Option is subject to the same terms and conditions as the related
Stock Option and will be exercisable only to the extent that the related Stock
Option is exercisable.

 

(d)  Payment of Exercise Price.  The Exercise Price of a Stock Option must be
paid in full when the Stock Option is exercised. Stock certificates will be
registered and delivered only upon receipt of payment. Payment of the Exercise
Price may be made in cash or by certified check, bank draft, wire transfer, or
postal or express money order, provided that the format is approved by the
Company or a designated third-party administrator. The Committee, in its
discretion may also allow payment to be made by any of the following methods, as
set forth in the Award Certificate:

 

(i)                                     Delivering a properly executed exercise
notice to the Company or its agent, together with irrevocable instructions to a
broker to deliver to the Company, within the typical settlement cycle for the
sale of equity securities on the relevant trading market (or otherwise in
accordance with the provisions of Regulation T issued by the Federal Reserve
Board), the amount of sale proceeds with respect to the portion of the Shares to
be acquired having a Fair Market Value on the date of exercise equal to the sum
of the applicable portion of the Exercise Price being so paid;

 

(ii)                                  Tendering (actually or by attestation) to
the Company previously acquired Shares that have been held by the Participant
for at least six months, subject to paragraph (iv), and that have a Fair Market
Value on the day prior to the date of exercise equal to the applicable portion
of the Exercise Price

 

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being so paid, provided that the Board has specifically approved the repurchase
of such Shares (unless such approval is not required by the terms of the
bye-laws of the Company) and the Committee has determined that, as of the date
of repurchase, the Company is, and after the repurchase will continue to be,
able to pay its liabilities as they become due; or

 

(iii)                               Provided such payment method has been
expressly authorized by the Board or the Committee in advance and subject to any
requirements of applicable law and regulations, instructing the Company to
reduce the number of Shares that would otherwise be issued by such number of
Shares as have in the aggregate a Fair Market Value on the date of exercise
equal to the applicable portion of the Exercise Price being so paid.

 

(iv)                              The Committee, in consideration of applicable
accounting standards, may waive any holding period on Shares required to tender
pursuant to clause (ii).

 

(e)  Incentive Stock Options.  Incentive Stock Options granted under the Plan
will be subject to the following additional conditions, limitations and
restrictions:

 

(i)                                     Eligibility.  Incentive Stock Options
may be granted only to Employees of the Company or a Subsidiary that is a
subsidiary or parent corporation of the Company, within the meaning of Section
424 of the Code.

 

(ii)                                  Timing of Grant.  No Incentive Stock
Option will be granted under the Plan after the 10-year anniversary of the date
on which the Plan is adopted by the Board or, if earlier, the date on which the
Plan is approved by the Company’s stockholders.

 

(iii)                               Amount of Award.  Subject to Section 5.3 of
the Plan, no more than 10 million Shares may be available for grant in the form
of Incentive Stock Options. The aggregate Fair Market Value (as of the date of
grant) of the Shares with respect to which the Incentive Stock Options awarded
to any Employee first become exercisable during any calendar year may not exceed
$100,000 (U.S.). For purposes of this $100,000 (U.S.) limit, the Employee’s
Incentive Stock Options under this Plan and all other plans maintained by the
Company and its Subsidiaries will be aggregated. To the extent any Incentive
Stock Option would exceed the $100,000 (U.S.) limit, the Incentive Stock Option
will afterwards be treated as a Nonqualified Stock Option for all purposes to
the extent required by the Code and underlying regulations and rulings.

 

(iv)                              Timing of Exercise.  If the Committee
exercises its discretion in the Award Certificate to permit an Incentive Stock
Option to be exercised by a Participant more than three months after the
Participant has ceased being an Employee (or more than 12 months if the
Participant is permanently and totally disabled, within the meaning of Section
22(e) of the Code), the Incentive Stock Option will afterwards be treated as a
Nonqualified Stock Option to the extent required by the Code and underlying
regulations and rulings. For purposes of this paragraph (iv), an Employee’s
employment relationship will be treated as continuing intact while the Employee
is on military leave, sick leave or another approved leave of absence if the
period of leave does not exceed 90 days, or a longer period to the extent that
the Employee’s right to reemployment with the Company or a Subsidiary is
guaranteed by statute or by contract. If the period of leave exceeds 90 days and
the Employee’s right to reemployment is not guaranteed by statute or contract,
the employment relationship will be deemed to have ceased on the 91st day of the
leave.

 

(v)                                 Transfer Restrictions.  In no event will the
Committee permit an Incentive Stock Option to be transferred by an Employee
other than by will or the laws of descent and distribution, and any Incentive
Stock Option awarded under this Plan will be exercisable only by the Employee
during the Employee’s lifetime.

 

(f)  Exercise of Stock Appreciation Rights.  Upon exercise of a Participant’s
Stock Appreciation Rights, the Company will pay cash or Shares or a combination
of cash and Shares, in the discretion of the Committee and as described in the
Award Certificate. Cash payments will be equal to the excess of the Fair Market
Value of a Share on the date of exercise over the Exercise Price, for each Share
for which a Stock Appreciation Right was exercised. If Shares are paid for the
Stock Appreciation Right, the Participant will receive a number of whole Shares
equal to the quotient of the cash payment amount divided by the Fair Market
Value of a Share on the date of exercise.

 

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(g)  No Repricing.  Except as otherwise provided in Section 5.3, in no event
will the Committee (i) decrease the Exercise Price of a Stock Option or Stock
Appreciation Right after the date of grant or (ii) cancel outstanding Stock
Options or Stock Appreciation Rights in exchange for a cash payment or for a
grant of replacement Stock Options or Stock Appreciation Rights with a lower
Exercise Price than that of the replaced Stock Options or Stock Appreciation
Rights or other Awards, without first obtaining the approval of the holders of a
majority of the Shares who are present in person or by proxy at a meeting of the
Company’s stockholders and entitled to vote.

 

4.4  Annual Performance Bonuses.  The Committee may grant Annual Performance
Bonuses under the Plan in the form of cash or Shares to the Reporting Persons
that the Committee may from time to time select, in the amounts and pursuant to
the terms and conditions that the Committee may determine and set forth in the
Award Certificate, subject to the provisions below:

 

(a)  Performance Cycles.  Annual Performance Bonuses will be awarded in
connection with a 12-month Performance Cycle, which will be the fiscal year of
the Company.

 

(b)  Eligible Participants.  Within 90 days after the commencement of a
Performance Cycle, the Committee will determine the Reporting Persons who will
be eligible to receive an Annual Performance Bonus under the Plan.

 

(c)  Performance Measures; Targets; Award Criteria.

 

(i)                                     Within 90 days after the commencement of
a Performance Cycle, the Committee will fix and establish in writing (A) the
Performance Measures that will apply to that Performance Cycle; (B) the Target
Amount payable to each Participant; and (C) subject to subsection (d) below, the
criteria for computing the amount that will be paid with respect to each level
of attained performance. The Committee will also set forth the minimum level of
performance, based on objective factors, that must be attained during the
Performance Cycle before any Annual Performance Bonus will be paid and the
percentage of the Target Amount that will become payable upon attainment of
various levels of performance that equal or exceed the minimum required level.

 

(ii)                                  The Committee may, in its discretion,
select Performance Measures that measure the performance of the Company or one
or more business units, divisions or Subsidiaries of the Company. The Committee
may select Performance Measures that are absolute or relative to the performance
of one or more comparable companies or an index of comparable companies.

 

(iii)                               The Committee, in its discretion, may, on a
case-by-case basis, reduce, but not increase, the amount payable to any Key
Employee with respect to any given Performance Cycle, provided, however, that no
reduction will result in an increase in the amount payable under any Annual
Performance Bonus of another Key Employee.

 

(d)  Payment, Certification.  No Annual Performance Bonus will vest with respect
to any Reporting Person until the Committee certifies in writing the level of
performance attained for the Performance Cycle in relation to the applicable
Performance Measures. In applying Performance Measures, the Committee may, in
its discretion, exclude unusual or infrequently occurring items (including any
event listed in Section 5.3 and the cumulative effect of changes in the law,
regulations or accounting rules), and may determine no later than ninety (90)
days after the commencement of any applicable Performance Cycle to exclude other
items, each determined in accordance with GAAP (to the extent applicable) and as
identified in the financial statements, notes to the financial statements or
discussion and analysis of management.

 

(e)  Form of Payment.  Annual Performance Bonuses will be paid in cash or
Shares. All such Performance Bonuses shall be paid no later than the 15th day of
the third month following the end of the calendar year (or, if later, following
the end of the Company’s fiscal year) in which such Performance Bonuses are no
longer subject to a substantial risk of forfeiture (as determined for purposes
of Section 409A of the Code), except to the extent that a Participant has
elected to defer payment under the terms of a duly authorized deferred
compensation arrangement in which case the terms of such arrangement shall
govern.

 

(f)  Section 162(m) of the Code.  It is the intent of the Company that Annual
Performance Bonuses be “performance-based compensation” for purposes of Section
162(m) of the Code, that this Section 4.4 be interpreted in a manner that
satisfies the applicable requirements of Section 162(m)(C) of the Code and
related regulations, and that the Plan be operated so that the Company may take
a full tax deduction for Annual Performance Bonuses. If any provision of this
Plan or any Annual Performance Bonus would otherwise frustrate or conflict with
this intent, the provision will be interpreted and deemed amended so as to avoid
this conflict.

 

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(g)  Retirement, Death, Disability and Other Events.  If a Participant would be
entitled to an Annual Performance Bonus but for the fact that the Participant’s
employment with the Company terminated prior to the end of the Performance Cycle
as a result of the Participant’s Retirement, death or Disability, or such other
event as designated by the Committee, the Participant may, in the Committee’s
discretion, receive an Annual Performance Bonus Award, pro rated for the portion
of the Performance Cycle that the Participant completed and which is payable at
the same time after the end of the Performance Cycle that payments to other
Annual Performance Bonus Award recipients are made.

 

4.5  Long Term Performance Awards.  The Committee may grant Long Term
Performance Awards under the Plan in the form of Performance Units, Restricted
Units or Restricted Stock to any Employee who the Committee may from time to
time select, in the amounts and pursuant to the terms and conditions that the
Committee may determine and set forth in the Award Certificate, subject to the
provisions below:

 

(a)  Performance Cycles.  Long Term Performance Awards will be awarded in
connection with a Performance Cycle, as determined by the Committee in its
discretion, provided, however, that a Performance Cycle may be no shorter than
12 months and no longer than 5 years.

 

(b)  Eligible Participants.  Within 90 days after the commencement of a
Performance Cycle, the Committee will determine the Employees who will be
eligible to receive a Long Term Performance Award for the Performance Cycle,
provided that the Committee may determine the eligibility of any Employee other
than a Key Employee after the expiration of the 90-day period.

 

(c)  Performance Measures; Targets; Award Criteria.

 

(i)                                     Within 90 days after the commencement of
a Performance Cycle, the Committee will fix and establish in writing (A) the
Performance Measures that will apply to that Performance Cycle; (B) with respect
to Performance Units, the Target Amount payable to each Participant; (C) with
respect to Restricted Units and Restricted Stock, the Target Vesting Percentage
for each Participant; and (D) subject to subsection (d) below, the criteria for
computing the amount that will be paid or will vest with respect to each level
of attained performance. The Committee will also set forth the minimum level of
performance, based on objective factors, that must be attained during the
Performance Cycle before any Long Term Performance Award will be paid or vest,
and the percentage of Performance Units that will become payable and the
percentage of performance- based Restricted Units or Shares of Restricted Stock
that will vest upon attainment of various levels of performance that equal or
exceed the minimum required level.

 

(ii)                                  The Committee may, in its discretion,
select Performance Measures that measure the performance of the Company or one
or more business units, divisions or Subsidiaries of the Company. The Committee
may select Performance Measures that are absolute or relative to the performance
of one or more comparable companies or an index of comparable companies.

 

(iii)                               The Committee, in its discretion, may, on a
case-by-case basis, reduce, but not increase, the amount of Long Term
Performance Awards payable to any Key Employee with respect to any given
Performance Cycle, provided, however, that no reduction will result in an
increase in the dollar amount or number of Shares payable under any Long Term
Performance Award of another Key Employee.

 

(iv)                              With respect to Employees who are not Key
Employees, the Committee may establish, in its discretion, performance criteria
other than the Performance Measures that will be applicable for the Performance
Cycle.

 

(d)  Payment, Certification.  No Long Term Performance Award will vest with
respect to any Employee until the Committee certifies in writing the level of
performance attained for the Performance Cycle in relation to the applicable
Performance Measures. Long Term Performance Awards awarded to Participants who
are not Key Employees will be based on the Performance Measures, or other
applicable performance criteria, and payment formulas that the Committee, in its
discretion, may establish for these purposes. These Performance Measures, or
other performance criteria, and formulas may be the same as or different than
the Performance Measures and formulas that apply to Key Employees.

 

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In applying Performance Measures, the Committee may, in its discretion, exclude
unusual or infrequently occurring items (including any event listed in Section
5.3) and the cumulative effect of changes in the law, regulations or accounting
rules, and may determine no later than ninety (90) days after the commencement
of any applicable Performance Cycle to exclude other items, each determined in
accordance with GAAP (to the extent applicable) and as identified in the
financial statements, notes to the financial statements or discussion and
analysis of management.

 

(e)  Form of Payment.  Long Term Performance Awards in the form of Performance
Units may be paid in cash or full Shares, in the discretion of the Committee,
and as set forth in the Award Certificate. Performance-based Restricted Units
and Restricted Stock will be paid in full Shares. Payment with respect to any
fractional Share will be in cash in an amount based on the Fair Market Value of
the Share as of the date the Performance Unit becomes payable. All such Long
Term Performance Awards shall be paid no later than the 15th day of the third
month following the end of the calendar year (or, if later, following the end of
the Company’s fiscal year) in which such Long Term Performance Awards are no
longer subject to a substantial risk of forfeiture (as determined for purposes
of Code Section 409A), except to the extent that a Participant has elected to
defer payment under the terms of a duly authorized deferred compensation
arrangement, in which case the terms of such arrangement shall govern.

 

(f)  Section 162(m) of the Code.  It is the intent of the Company that Long Term
Performance Awards made to Key Employees be “performance-based compensation” for
purposes of Section 162(m) of the Code, that this Section 4.5 be interpreted in
a manner that satisfies the applicable requirements of Section 162(m)(C) of the
Code and related regulations with respect to Long Term Performance awards made
to Key Employees, and that the Plan be operated so that the Company may take a
full tax deduction for Long Term Performance Awards. If any provision of this
Plan or any Long Term Performance Award would otherwise frustrate or conflict
with this intent, the provision will be interpreted and deemed amended so as to
avoid this conflict.

 

(g)  Retirement, Death, Disability and Other Events.  If a Participant would be
entitled to a Long Term Performance Award but for the fact that the
Participant’s employment with the Company terminated prior to the end of the
Performance Cycle as a result of the Participant’s Retirement, death or
Disability, or such other event as designated by the Committee, the Participant
may, in the Committee’s discretion, receive a Long Term Performance Award, pro
rated for the portion of the Performance Cycle that the Participant completed
and payable at the same time after the end of the Performance Cycle that
payments to other Long Term Performance Award recipients are made.

 

4.6  Other Stock-Based Awards.  The Committee may, from time to time, grant
Awards (other than Stock Options, Stock Appreciation Rights, Annual Performance
Bonuses or Long Term Performance Awards) to any Employee who the Committee may
from time to time select, which Awards consist of, or are denominated in,
payable in, valued in whole or in part by reference to, or otherwise related to,
Shares. These Awards may include, among other forms, Restricted Stock,
Restricted Units, or Deferred Stock Units. The Committee will determine, in its
discretion, the terms and conditions that will apply to Awards granted pursuant
to this Section 4.6, which terms and conditions will be set forth in the
applicable Award Certificate.

 

(a)  Vesting.  Unless the Award Certificate provides otherwise, restrictions on
Stock-Based Awards granted under this Section 4.6 will lapse in equal annual
installments over a period of four years beginning immediately after the date of
grant. If the restrictions on Stock-Based Awards have not lapsed or been
satisfied as of the Participant’s Termination of Employment, the Shares will be
forfeited by the Participant if the termination is for any reason other than the
Retirement, death or Disability of the Participant or a Change in Control.
Unless the Award Certificate provides otherwise, (i) all restrictions on
Stock-Based Awards granted pursuant to this Section 4.6 will lapse upon the
death or Disability of the Participant, (ii) in the event of Retirement, the
Award will vest pro rata with respect to the portion of the four-year vesting
term (or such other vesting term as is set forth in the Award Certificate) that
the Participant has completed as of the Participant’s Termination of Employment
and provided that the Participant has satisfied all other applicable conditions
established by the Committee with respect to such pro rata vesting, and (iii) in
the event of a Change in Control, Stock-Based Awards will be treated in
accordance with Section 5.4. In no event may the vesting period of a time-based
full-value share award be less than three years (on either a cliff or graded
vesting basis), except that the Committee may award up to 10 percent of the
shares authorized for issuance under Section 5.1 with a vesting period of less
than three years under such circumstances as it deems appropriate.

 

(b)  Grant of Restricted Stock.  The Committee may grant Restricted Stock to any
Employee, which Shares will be registered in the name of the Participant and
held for the Participant by the Company. The Participant will have all rights of
a stockholder with respect to the Shares, including the right to vote and to
receive dividends or other distributions, except that the Shares may be subject
to a vesting schedule and will be forfeited if the Participant attempts to sell,
transfer, assign, pledge or otherwise encumber or dispose of the Shares before
the restrictions are satisfied or lapse.

 

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(c)  Grant of Restricted Units.  The Committee may grant Restricted Units to any
Employee, which Units will be paid in cash or whole Shares or a combination of
cash and Shares, as determined in the discretion of the Committee. The Committee
will determine the terms and conditions applicable to the grant of Restricted
Units, which terms and conditions will be set forth in the Award Certificate.
For each Restricted Unit that vests, one Share will be paid or an amount in cash
equal to the Fair Market Value of a Share, as set forth in the Award
Certificate, will be delivered to the Participant on the applicable delivery
date.

 

(d)  Grant of Deferred Stock Units.  The Committee may grant Deferred Stock
Units to any Employee, which Units will be paid in whole Shares upon the
Employee’s Termination of Employment if the restrictions on the Units have
lapsed. One Share will be paid for each Deferred Stock Unit that becomes
payable.

 

(e)  Dividends and Dividend Equivalents.  At the discretion of the Committee and
as set forth in the applicable Award Certificate, dividends issued on Shares may
be paid immediately or withheld and deferred in the Participant’s account. In
the event of a payment of dividends on Common Stock, the Committee may credit
Restricted Units with Dividend Equivalents in accordance with terms and
conditions established in the discretion of the Committee. Dividend Equivalents
will be subject to such vesting terms as is determined by the Committee and may
be distributed immediately or withheld and deferred in the Participant’s account
as determined by the Committee and set forth in the applicable Award
Certificate. Deferred Stock Units may, in the discretion of the Committee and as
set forth in the Award Certificate, be credited with Dividend Equivalents or
additional Deferred Stock Units. The number of any Deferred Stock Units credited
to a Participant’s account upon the payment of a dividend will be equal to the
quotient produced by dividing the cash value of the dividend by the Fair Market
Value of one Share as of the date the dividend is paid. The Committee will
determine any terms and conditions on deferral of a dividend or Dividend
Equivalent, including the rate of interest to be credited on deferral and
whether interest will be compounded.

 

4.7  Director Awards.

 

(a)                                 The Committee may grant Deferred Stock Units
to each Director in such an amount as the Board, in its discretion, may approve
in advance. Each such Deferred Stock Unit will vest as determined by the
Committee and set forth in the Award Certificate and will be paid in Shares
within 30 days following the recipient’s Termination of Directorship, subject to
deferral under any applicable deferred compensation plan approved by the
Committee, in which case the terms of such arrangement shall govern. Dividend
Equivalents or additional Deferred Stock Units will be credited to each
Director’s account when dividends are paid on Common Stock to the shareholders,
and will be paid to the Director at the same time that the Deferred Stock Units
are paid to the Director.

 

(b)                                 The Committee may grant Director Shares to
each Director in such amounts as the Board, in its discretion, may approve in
advance.

 

(c)                                  The Committee may, in its discretion, grant
Stock Options, Stock Appreciation Rights and other Stock-Based Awards to
Directors.

 

4.8  Substitute Awards.  The Committee may make Awards under the Plan to
Acquired Grantees through the assumption of, or in substitution for, outstanding
Stock-Based Awards previously granted to such Acquired Grantees. Such assumed or
substituted Awards will be subject to the terms and conditions of the original
awards made by the Acquired Company, with such adjustments therein as the
Committee considers appropriate to give effect to the relevant provisions of any
agreement for the acquisition of the Acquired Company, provided that any such
adjustment with respect to Nonqualified Stock Options and Stock Appreciation
Rights shall satisfy the requirements of Treas. Reg. § 1.409A-1(b)(5)(v)(D) and
otherwise ensure that such awards continue to be exempt from Code Section 409A
and provided that any adjustment to Awards that are subject to Code Section 409A
is in compliance with Code Section 409A and the regulations and rulings
thereunder. Any grant of Incentive Stock Options pursuant to this Section 4.8
will be made in accordance with Section 424 of the Code and any final
regulations published thereunder.

 

4.9  Limit on Individual Grants.  Subject to Sections 5.1 and 5.3, no Employee
may be granted more than 6 million Shares over any calendar year pursuant to
Awards of Stock Options, Stock Appreciation Rights and performance- based
Restricted Stock and Restricted Units, except that an incentive Award of no more
than 10 million Shares may be made pursuant to Stock Options, Stock Appreciation
Rights and performance-based Restricted Stock and Restricted Units to any person
who has been hired within the calendar year as a Key Employee. The maximum
amount that may be paid in cash or Shares pursuant to Annual Performance Bonuses
or Long Term Performance Awards paid in Performance Units to any one Employee is
$10 million (U.S.) for any Performance Cycle of 12 months. For any longer
Performance Cycle, this maximum will be adjusted proportionally.

 

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4.10  Termination for Cause; Clawback.  (a) Notwithstanding anything to the
contrary herein, if a Participant incurs a Termination of Directorship or
Termination of Employment for Cause, then all Stock Options, Stock Appreciation
Rights, Annual Performance Bonuses, Long Term Performance Awards, Restricted
Units, Restricted Stock and other Stock-Based Awards will immediately be
cancelled. The exercise of any Stock Option or Stock Appreciation Right or the
payment of any Award may be delayed, in the Committee’s discretion, in the event
that a potential termination for Cause is pending, subject to ensuring an
exemption from or compliance with Code Section 409A and the underlying
regulations and rulings. If a Participant incurs a Termination of Employment for
Cause, or the Company becomes aware (after the Participant’s Termination of
Employment) of conduct on the part of the Participant that would be grounds for
a Termination of Employment for Cause, then the Participant will be required to
deliver to the Company (i) Shares (or, in the discretion of the Committee, cash)
in an amount that is equal in value to the amount of any profit the Participant
realized upon the exercise of an Option during the period beginning six (6)
months prior to the Participant’s Termination of Employment and ending on the
two (2) year anniversary of such Termination of Employment; and (ii) the number
of Shares (or, in the discretion of the Committee, the cash value of said
shares) the Participant received for Restricted Shares, Restricted Units or
other Stock-Based Awards that vested during the period described in (i) above.

 

(b)                                 In addition, the Committee shall have the
authority to establish any other terms and conditions applicable to Awards
(including the mandatory return of all or any portion of the value previously
realized by a Participant upon the vesting or exercise of an Award) as are
deemed necessary and/or appropriate to recover amounts mistakenly paid to
Participants (as a result of incorrect financial data or otherwise), including
provisions intended to comply with applicable rules adopted or to be adopted by
the Securities and Exchange Commission, New York Stock Exchange or any other
governmental agency or stock exchange having the authority to establish rules
affecting the payment of compensation under this Plan.

 

ARTICLE V

SHARES SUBJECT TO THE PLAN; ADJUSTMENTS

 

5.1  Shares Available.  The Shares issuable under the Plan will be authorized
but unissued Shares, and, to the extent permissible under applicable law, Shares
acquired by the Company, any Subsidiary or any other person or entity designated
by the Company. The original number of shares issuable under the Plan on and
after the original effective date of the Plan (June 29, 2007) was five percent
(5%) of the Shares outstanding as of that date. On March 10, 2010, the
shareholders of the Company authorized an additional fifteen million
(15,000,000) shares issuable under the Plan. On March 7, 2012, the shareholders
of the Company authorized an additional twenty million (20,000,000) shares
issuable under the Plan. The total number of Shares with respect to which Awards
may be issued under the Plan on and after the Effective Date may equal, but not
exceed, the total number of shares remaining from the original number of shares
issuable under the Plan, plus the additional fifteen million (15,000,000) shares
authorized on March 10, 2010, plus the additional twenty million (20,000,000)
shares authorized on March 7, 2012, subject to adjustment in accordance with
Section 5.3; provided that when Shares are issued pursuant to a grant of
Restricted Stock, Restricted Units, Deferred Stock Units, Performance Units or
as payment of an Annual Performance Bonus or other Stock-Based Award, the total
number of Shares remaining available for grant will be decreased by a margin of
at least 1.8 per Share issued. In addition, in the case of the settlement of any
stock-settled Stock Appreciation Right, the total number of Shares available for
grant will be decreased by the total number of Shares equal in value to the
total value of the Stock Appreciation Right on the day of settlement. No more
than 10 million Shares of the total Shares issuable under the Plan may be
available for grant in the form of Incentive Stock Options.

 

5.2  Counting Rules.  The following Shares related to Awards under this Plan may
again be available for issuance under the Plan, in addition to the Shares
described in Section 5.1:

 

(a)                                 Shares related to Awards paid in cash;

 

(b)                                 Shares related to Awards that expire, are
forfeited or cancelled or terminate for any other reason without issuance of
Shares, and provided that each such forfeited, cancelled or terminated Share
that was originally issued pursuant to a grant of Restricted Stock, Restricted
Units, Deferred Stock Units, Performance Units or as payment of an Annual
Performance Bonus or other Stock- Based Award shall be counted as 1.8 Share;

 

(c)                                  Any Shares issued in connection with Awards
that are assumed, converted or substituted as a result of the acquisition of an
Acquired Company by the Company or a combination of the Company with another
company; and

 

(d)                                 Any Shares of Restricted Stock that are
returned to the Company upon a Participant’s Termination of Employment.

 

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5.3  Adjustments.  In the event of a change in the outstanding Shares by reason
of a stock split, reverse stock split, dividend or other distribution (whether
in the form of cash, Shares, other securities or other property), extraordinary
cash dividend, recapitalization, merger, consolidation, split-up, spin-off,
reorganization, combination, repurchase or exchange of Shares or other
securities or similar corporate transaction or event, the Committee shall make
an appropriate adjustment to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan. Any such
adjustment with respect to Nonqualified Stock Options and Stock Appreciation
Rights shall satisfy the requirements of Treas. Reg. § 1.409A-1(b)(5)(v)(D) and
otherwise ensure that such awards continue to be exempt from Code Section 409A,
and any adjustment to Awards that are subject to Code Section 409A shall comply
with Code Section 409A and the regulations and rulings thereunder. Any
adjustment made by the Committee under this Section 5.3 will be conclusive and
binding for all purposes under the Plan.

 

5.4  Change in Control.

 

(a)                                 Unless otherwise provided under the terms of
an applicable Award Certificate, (i) all outstanding Stock Options and Stock
Appreciation Rights will become exercisable as of the effective date of a
Participant’s Change in Control Termination if the Awards are not otherwise
vested, and all conditions will be waived with respect to outstanding Restricted
Stock, Restricted Units and other Stock-Based Awards (other than Long Term
Performance Awards) and Deferred Stock Units, and (ii) each Participant who has
been granted an Annual Performance Bonus or Long Term Performance Award that is
outstanding as of the date of such Participant’s Change in Control Termination
will be deemed to have achieved a level of performance, as of the Change in
Control Termination, that would cause all (100%) of the Participant’s Target
Amounts to become payable and all restrictions on the Participant’s Restricted
Units and Shares of Restricted Stock to lapse. Unless the Committee determines
otherwise in its discretion (either when the award is granted or any time
thereafter), in the event that Awards outstanding as of the date of a Change in
Control that are payable in shares of Company Common Stock will not be
substituted with comparable awards payable or redeemable in shares of
publicly-traded stock after the Change in Control, each such outstanding Award
(i) will become fully vested (at target, where applicable) immediately prior to
the Change in Control and (ii) each such Award that is a Stock Option will be
settled in cash, without the Participant’s consent, for an amount equal to the
amount that could have been attained upon the exercise of such Award immediately
prior to the Change in Control had such Award been exercisable or payable at
such time.

 

(b)                                 In addition to the other actions described
in Section 5.4(a), in the event of a Change in Control the Committee may take
any one or more of the following actions with respect to any or all outstanding
Awards, without the consent of the Participant: (i) the Committee may determine
that outstanding Stock Options and Stock Appreciation Rights shall be fully
exercisable, and restrictions on Restricted Stock, Restricted Units, Deferred
Stock Units and other Stock-Based Awards shall lapse, as of the date of the
Change in Control or such other time (prior to a Participant’s Change in Control
Termination) as the Committee determines, (ii) the Committee may require that a
Participant surrender their outstanding Stock Options and Stock Appreciation
Rights in exchange for one or more payments by the Company, in cash or Common
Stock as determined by the Committee, in an amount equal to the amount by which
the then Fair Market Value of the shares of Common Stock subject to the
Participant’s unexercised Stock Options and Stock Appreciation Rights exceeds
the exercise price, if any, and on such terms as the Committee determines, (iii)
after giving Participants an opportunity to exercise their outstanding Stock
Options and Stock Appreciation Rights, the Committee may terminate any or all
unexercised Stock Options and Stock Appreciation Rights at such time as the
Committee deems appropriate, (iv) the Committee may determine that Annual
Performance Bonuses and/or Long Term Performance Awards will be paid out at
their target level, in cash or Common Stock as determined by the Committee, or
(v) the Committee may determine that Awards that remain outstanding after the
Change in Control shall be converted to similar grants of, or assumed by, the
surviving corporation (or a parent or subsidiary of the surviving corporation or
successor). Such acceleration, surrender, termination, settlement or conversion
shall take place as of the date of the Change in Control or such other date as
the Committee may specify. The Committee may specify how an Award will be
treated in the event of a Change in Control either when the Award is granted or
at any time thereafter, except as otherwise provided herein.

 

5.5  Fractional Shares.  No fractional Shares will be issued under the Plan.
Except as otherwise provided in Section 4.5(e), if a Participant acquires the
right to receive a fractional Share under the Plan, the Participant will
receive, in lieu of the fractional Share, a full Share as of the date of
settlement, unless otherwise provided by the Committee.

 

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ARTICLE VI

AMENDMENT AND TERMINATION

 

6.1  Amendment.  The Plan may be amended at any time and from time to time by
the Board without the approval of stockholders of the Company, except that no
material revision to the terms of the Plan will be effective until the amendment
is approved by the stockholders of the Company. A revision is “material” for
this purpose if, among other changes, it materially increases the number of
Shares that may be issued under the Plan (other than an increase pursuant to
Section 5.3 of the Plan), expands the types of Awards available under the Plan,
materially expands the class of persons eligible to receive Awards under the
Plan, materially extends the term of the Plan, materially decreases the Exercise
Price at which Stock Options or Stock Appreciation Rights may be granted,
reduces the Exercise Price of outstanding Stock Options or Stock Appreciation
Rights, or results in the replacement of outstanding Stock Options and Stock
Appreciation Rights with new Awards that have an Exercise Price that is lower
than the Exercise Price of the replaced Stock Options and Stock Appreciation
Rights. No amendment of the Plan or any outstanding Award made without the
Participant’s written consent may adversely affect any right of a Participant
with respect to an outstanding Award.

 

6.2  Termination.  The Plan will terminate upon the earlier of the following
dates or events to occur:

 

(a)                                 the adoption of a resolution of the Board
terminating the Plan; or

 

(b)                                 the day before the 10th anniversary of the
adoption of the Plan by the Company’s shareholder as described in Section 1.2.

 

No Awards will be granted under this Plan after it has terminated. The
termination of the Plan, however, will not alter or impair any of the rights or
obligations of any person under any Award previously granted under the Plan
without such person’s consent. After the termination of the Plan, any previously
granted Awards will remain in effect and will continue to be governed by the
terms of the Plan and the applicable Award Certificate.

 

ARTICLE VII

GENERAL PROVISIONS

 

7.1  Nontransferability of Awards.  No Award under the Plan will be subject in
any manner to alienation, anticipation, sale, assignment, pledge, encumbrance or
transfer, and no other persons will otherwise acquire any rights therein, except
as provided below.

 

(a)                                 Any Award may be transferred by (i) will or
by the laws of descent or distribution or (ii) under rules to be established by
the Company, to a Participant’s spouse or former spouse in accordance with a
domestic relations order or domestic settlement agreement associated with the
dissolution of the Participant’s marriage.

 

(b)                                 The Committee may provide in the applicable
Award Certificate that all or any part of a Nonqualified Option or Shares of
Restricted Stock may, subject to the prior written consent of the Committee, be
transferred to a family member. For purposes of this subsection (b), “family
member” includes any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of
the Participant, including adoptive relationships, any person sharing the
Participant’s household (other than a tenant or employee), a trust in which
these persons have more than 50 percent of the beneficial interest, a foundation
in which these persons (or the Participant) control the management of assets,
and any other entity in which these persons (or the Participant) own more than
50 percent of the voting interests.

 

Any transferred Award will be subject to all of the same terms and conditions as
provided in the Plan and the applicable Award Certificate. The Participant or
the Participant’s estate will remain liable for any withholding tax that may be
imposed by any federal, state or local tax authority. The Committee may, in its
discretion, disallow all or a part of any transfer of an Award pursuant to this
subsection (b) unless and until the Participant makes arrangements satisfactory
to the Committee for the payment of any withholding tax. The Participant must
immediately notify the Committee, in the form and manner required by the
Committee, of any proposed transfer of an Award pursuant to this subsection (b).
No transfer will be effective until the Committee consents to the transfer in
writing.

 

(c)                                  Except as otherwise provided in the
applicable Award Certificate, any Nonqualified Stock Option transferred by a
Participant pursuant to this subsection (c) may be exercised by the transferee
only to the extent that the Award would have been exercisable by the Participant
had no transfer occurred. The transfer of Shares upon exercise of the Award will
be conditioned on the payment of any withholding tax.

 

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(d)                                 Restricted Stock may be freely transferred
after the restrictions lapse or are satisfied and the Shares are delivered,
provided, however, that Restricted Stock awarded to an affiliate of the Company
may be transferred only pursuant to Rule 144 under the Securities Act, or
pursuant to an effective registration for resale under the Securities Act. For
purposes of this subsection (d), “affiliate” will have the meaning assigned to
that term under Rule 144.

 

(e)                                  In no event may a Participant transfer an
Incentive Stock Option other than by will or the laws of descent and
distribution.

 

7.2  Withholding of Taxes.  The Committee, in its discretion, may satisfy a
Participant’s tax withholding obligations by any of the following methods or any
method as it determines to be in accordance with the laws of the jurisdiction in
which the Participant resides, has domicile or performs services.

 

(a)  Stock Options and Stock Appreciation Rights.  As a condition to the
delivery of Shares pursuant to the exercise of a Stock Option or Stock
Appreciation Right, the Committee may require that the Participant, at the time
of exercise, pay to the Company by cash, certified check, bank draft, wire
transfer or postal or express money order an amount sufficient to satisfy any
applicable tax withholding obligations. The Committee may also, in its
discretion, accept payment of tax withholding obligations through any of the
Exercise Price payment methods described in Section 4.3(d).

 

(b)  Other Awards Payable in Shares.  The Participant shall satisfy the
Participant’s tax withholding obligations arising in connection with the release
of restrictions on Restricted Units, Restricted Stock and other Stock- Based
Awards by payment to the Company in cash or by certified check, bank draft, wire
transfer or postal or express money order, provided that the format is approved
by the Company or a designated third-party administrator. However, subject to
any requirements of applicable law, the Company may also satisfy the
Participant’s tax withholding obligations by other methods, including selling or
withholding Shares that would otherwise be available for delivery, provided that
the Board or the Committee has specifically approved such payment method in
advance.

 

(c)  Cash Awards.  The Company may satisfy a Participant’s tax withholding
obligation arising in connection with the payment of any Award in cash by
withholding cash from such payment.

 

7.3  Special Forfeiture Provision.  The Committee may, in its discretion,
provide in an Award Certificate that the Participant may not, within two years
of the Participant’s Termination of Employment with the Company, enter into any
employment or consultation arrangement (including service as an agent, partner,
stockholder, consultant, officer or director) with any entity or person engaged
in any business in which the Company or any Subsidiary is engaged without prior
written approval of the Committee if, in the sole judgment of the Committee, the
business is competitive with the Company or any Subsidiary or business unit or
such employment or consultation arrangement would present a risk that the
Participant would likely disclose Company proprietary information (as determined
by the Committee). If the Committee makes a determination that this prohibition
has been violated, the Participant (i) will forfeit all rights under any
outstanding Stock Option or Stock Appreciation Right that was granted subject to
the Award Certificate and will return to the Company the amount of any profit
realized upon an exercise of all Awards during the period, as the Committee
determines and sets forth in the Award Certificate, beginning no earlier than
six months prior to the Participant’s Termination of Employment, and (ii) will
forfeit and return to the Company any Annual Performance Bonuses, Performance
Units, Shares of Restricted Stock, Restricted Units (including any credited
Dividend Equivalents), Deferred Stock Units, and other Stock-Based Awards that
are outstanding on the date of the Participant’s Termination of Employment,
subject to the Award Certificate, and have not vested or that had vested and
remain subject to this Section 7.3 during a period, as the Committee determines
and sets forth in the Award Certificate, beginning no earlier than six months
prior to the Participant’s Termination of Employment.

 

7.4  No Implied Rights.  The establishment and operation of the Plan, including
the eligibility of a Participant to participate in the Plan, will not be
construed as conferring any legal or other right upon any Director for any
continuation of directorship or any Employee for the continuation of employment
through the end of any Performance Cycle or other period. The Company expressly
reserves the right, which may be exercised at any time and in the Company’s sole
discretion, to discharge any individual or treat him or her without regard to
the effect such discharge might have upon him or her as a Participant in the
Plan.

 

7.5  No Obligation to Exercise Awards.  The grant of a Stock Option or Stock
Appreciation Right will impose no obligation upon the Participant to exercise
the Award.

 

7.6  No Rights as Stockholders.  A Participant who is granted an Award under the
Plan will have no rights as a stockholder of the Company with respect to the
Award unless and until certificates for the Shares underlying the Award are
registered in the Participant’s name and (other than in the case of Restricted
Stock) delivered to the Participant. The right of any Participant to receive an
Award by virtue of participation in the Plan will be no greater than the right
of any unsecured general creditor of the Company.

 

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7.7  Indemnification of Committee.  The Company will indemnify, to the fullest
extent permitted by law, each person made or threatened to be made a party to
any civil or criminal action or proceeding by reason of the fact that the
person, or the executor or administrator of the person’s estate, is or was a
member of the Committee or a delegate of the Committee.

 

7.8  No Required Segregation of Assets.  Neither the Company nor any Subsidiary
will be required to segregate any assets that may at any time be represented by
Awards granted pursuant to the Plan.

 

7.9  Nature of Payments.  All Awards made pursuant to the Plan are in
consideration of services for the Company or a Subsidiary. Any gain realized
pursuant to Awards under the Plan constitutes a special incentive payment to the
Participant and will not be taken into account as compensation for purposes of
any other employee benefit plan of the Company or a Subsidiary, except as the
Committee otherwise provides. The adoption of the Plan will have no effect on
Awards made or to be made under any other benefit plan covering an employee of
the Company or a Subsidiary or any predecessor or successor of the Company or a
Subsidiary.

 

7.10  Securities Law Compliance.  Awards under the Plan are intended to satisfy
the requirements of Rule 16b-3 under the Exchange Act. If any provision of this
Plan or any grant of an Award would otherwise frustrate or conflict with this
intent, that provision will be interpreted and deemed amended so as to avoid
conflict. No Participant will be entitled to a grant, exercise, transfer or
payment of any Award if the grant, exercise, transfer or payment would violate
the provisions of the Sarbanes-Oxley Act of 2002 or any other applicable law.

 

7.11  Section 409A Compliance.  To the extent the Committee determines that any
Award granted under the Plan is subject to Section 409A of the Code, the Award
Certificate evidencing such Award will incorporate the terms and conditions
required by Section 409A of the Code. To the extent applicable, the Plan and the
Award Certificate will be interpreted in accordance with Section 409A of the
Code and Department of Treasury regulations and other interpretive guidance
issued thereunder, including without limitation any such regulations or other
guidance that may be issued after the Effective Date. Notwithstanding any
provision of the Plan, in the event that the Committee determines that any Award
may be subject to Section 409A of the Code, the Committee may adopt such
amendments to the Plan and/or the applicable Award Certificate or adopt policies
and procedures or take any other action or actions, including an action or
amendment with retroactive effect, that the Committee determines is necessary or
appropriate to (i) exempt the Award from the application of Section 409A of the
Code or (ii) comply with the requirements of Section 409A of the Code. Any Award
that provides for a payment to any Participant who is a “specified employee” of
deferred compensation that is subject to Code Section 409A(a)(2) and that
becomes payable upon, or that is accelerated upon, such Participant’s
Termination of Employment, shall also provide that no such payment shall be made
on or before the date which is six months following such Participant’s
Termination of Employment (or, if earlier, such Participant’s death). A
specified employee for this purpose shall be determined by the Committee or its
delegate in accordance with the provisions of Code Section 409A and the
regulations and rulings thereunder.

 

7.12  Governing Law, Severability.  The Plan and all determinations made and
actions taken under the Plan will be governed by the law of Switzerland and
construed accordingly. If any provision of the Plan is held unlawful or
otherwise invalid or unenforceable in whole or in part, the unlawfulness,
invalidity or unenforceability will not affect any other parts of the Plan,
which parts will remain in full force and effect.

 

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