Exhibit 10.1

Long-Term Stock Incentive
Compensation Program
(Amended and restated as of March 6, 2007)

Edwards Lifesciences Corporation

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

Table of Contents

Article 1. Establishment, Objectives, and Duration

 

1

 

 

 

 

 

Article 2. Definitions

 

1

 

 

 

 

 

Article 3. Administration

 

5

 

 

 

 

 

Article 4. Eligibility and Participation

 

6

 

 

 

 

 

Article 5. Shares Subject to the Program and Maximum Awards

 

6

 

 

 

 

 

Article 6. Stock Options

 

7

 

 

 

 

 

Article 7. Restricted Stock

 

9

 

 

 

 

 

Article 8. Restricted Stock Units

 

11

 

 

 

 

 

Article 9. Performance Measures

 

12

 

 

 

 

 

Article 10. Beneficiary Designation

 

13

 

 

 

 

 

Article 11. Deferrals

 

13

 

 

 

 

 

Article 12. Rights of Employees and Contractors

 

14

 

 

 

 

 

Article 13. Change in Control

 

14

 

 

 

 

 

Article 14. Amendment, Modification, and Termination

 

15

 

 

 

 

 

Article 15. Compliance with Applicable Law and Withholding

 

15

 

 

 

 

 

Article 16. Indemnification

 

16

 

 

 

 

 

Article 17. Successors

 

16

 

 

 

 

 

Article 18. Legal Construction

 

17

 

 

 

 

 

 

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

Edwards Lifesciences Corporation
Long-Term Stock Incentive Compensation Program
(Amended and restated as of March 6, 2007)

Article 1. Establishment, Objectives, and Duration

1.1        Establishment of the Program.  Edwards Lifesciences Corporation, a
Delaware corporation (hereinafter referred to as the “Company”), hereby amends
and restates the incentive compensation plan established April 1, 2000 and known
as the “Edwards Lifesciences Corporation Long-Term Stock Incentive Compensation
Program” (hereinafter, as amended and restated, referred to as the “Program”),
as set forth in this document. The Program permits the grant of Nonqualified
Stock Options, Incentive Stock Options, Restricted Stock and Restricted Stock
Units.

The Program became effective as of April 1, 2000 (the “Effective Date”) and
shall remain in effect as provided in Section 1.3 hereof.

The Program was amended and restated effective as of July 12, 2000 to clarify
the definition of “Subsidiary” and was subsequently further amended and restated
as of May 8, 2002, February 20, 2003, February 17, 2005, February 16, 2006 and
March 6, 2007.

1.2        Objectives of the Program.  The objectives of the Program are to
optimize the profitability and growth of the Company through long-term
incentives which are consistent with the Company’s goals and which link the
personal interests of Participants to those of the Company’s stockholders; to
provide Participants with an incentive for excellence in individual performance;
and to promote teamwork among Participants. Awards generally are made in
conjunction with services performed by the Participant within the previous
twelve (12) months.

The Program is further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of Participants who make
significant contributions to the Company’s success and to allow Participants to
share in the success of the Company.

1.3        Duration of the Program.  The Program shall commence on the Effective
Date, as described in Section 1.1 hereof, and shall remain in effect, subject to
the right of the Board to amend or terminate the Program at any time pursuant to
Article 14 hereof, until all Shares subject to it shall have been purchased or
acquired according to the Program’s provisions. However, in no event may an
Award be granted under the Program on or after April 1, 2010.

ARTICLE 2. DEFINITIONS

Whenever used in the Program, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized:

2.1        “Award” means, individually or collectively, a grant under this
Program of Nonqualified Stock Options, Incentive Stock Options, Restricted Stock
or Restricted Stock Units.

1

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

2.2        “Award Agreement” means an agreement entered into by the Company and
each Participant set­ting forth the terms and provisions applicable to Awards
granted under this Program.

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

2.4        “Change in Control” of the Company shall mean the occurrence of any
one of the following events:

(a)                            Any “Person”, as such term is used in Sections
13(d) and 14(d) of the Exchange Act (other than the Company, any corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
and any trustee or other fiduciary holding securities under an employee benefit
plan of the Company or such proportionately owned corporation), 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 thirty percent
(30%) or more of the combined voting power of the Company’s then outstanding
securities; or

(b)                           During any period of not more than twenty-four
(24) months, individuals who at the beginning of such period constitute the
Board of Directors of the Company, and any new director (other than a director
designated by a Person who has entered into an agreement with the Company to
effect a transaction described in Sections 2.4(a), 2.4(c), or 2.4(d) of this
Section 2.4) whose election by the Board or nomination for election by the
Company’s stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority thereof; or

(c)                            The consummation of a merger or consolidation of
the Company with any other entity, other than: (i) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than sixty percent (60%) of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; or (ii) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
Person acquires more than thirty percent (30%) of the combined voting power of
the Company’s then outstanding securities; or

(d)                           The Company’s stockholders approve a plan of
complete liquidation or dissolution of the Company, or an agreement for the sale
or disposition by the Company of all or substantially all of the Company’s
assets (or any transaction having a similar effect).

2.5                         “Code” means the Internal Revenue Code of 1986, as
amended from time to time.

2

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

2.6        “Committee” means the Compensation and Governance Committee or any
other committee appointed by the Board to administer Awards to Participants, as
specified in Article 3 herein.

2.7        “Company” means Edwards Lifesciences Corporation, a Delaware
corporation, and any successor thereto as provided in Article 16 herein.

2.8        “Contractor” means an individual providing services to the Company
who is not an Employee or member of the Board, and who does not participate in
the Edwards Lifesciences Corporation Nonemployee Directors and Consultants Stock
Incentive Program.

2.9        “Covered Employee” means a Participant who is one of the group of
“covered employees,” as defined in the regulations promulgated under Code
Section 162(m), or any successor statute.

2.10      “Disability” shall have the meaning ascribed to such term in the
Participant’s governing long-term disability plan, or if no such plan exists, at
the discretion of the Board.

2.11      “Effective Date” shall have the meaning ascribed to such term in
Section 1.1 hereof.

2.12      “Employee” means any employee of the Company or of a Subsidiary of the
Company. Directors who are employed by the Company shall be considered Employees
under this Program.

2.13      “Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.

2.14      “Fair Market Value” means, at any date, the closing sale price on the
principal securities exchange on which the Shares are traded on the last
previous day on which a sale was reported.

2.15      “Incentive Stock Option” or “ISO” means an option to purchase Shares
granted under Article 6 herein and which is designated as an Incentive Stock
Option and which is intended to meet the requirements of Code Section 422.

2.16      “Insider” shall mean an individual who is, on the relevant date, an
officer, director, or beneficial owner of more than ten percent (10%) of any
class of the Company’s equity securities that is registered pursuant to
Section 12 of the Exchange Act, all as defined under Section 16 of the Exchange
Act.

2.17      “Nonqualified Stock Option” or “NQSO” means an option to purchase
Shares granted under Article 6 herein and which is not intended to meet the
requirements of Code Section 422.

2.18      “Option” means an Incentive Stock Option or a Nonqualified
Stock Option, as described in Article 6 herein.

2.19      “Option Price” means the price at which a Share may be purchased by a
Participant pursuant to an Option.

3

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

2.20      “Participant” means an Employee or Contractor who has been selected to
receive an Award or who has outstanding an Award granted under the Program.

2.21      “Performance-Based Exception” means the performance-based exception
from the tax deductibility limitations of Code Section 162(m) applicable to
compensation payable to Covered Employees.

2.22      “Period of Restriction” means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage of time,
the achievement of performance goals, or upon the occurrence of other events as
determined by the Committee, in its discretion), and the Shares are subject to a
substantial risk of forfeiture, as provided in Article 7 herein.

2.23      “Restricted Stock” means an Award granted to a Participant pursuant to
Article 7 herein.

2.24      “Restricted Stock Units” means an Award granted to a Participant
pursuant to Article 8 herein.

2.25      “Retirement” means, unless otherwise defined in the applicable Award
Agreement, any termination of an Employee’s employment or a Contractor’s service
after age fifty-five (55) other than due to death, Disability or, with respect
to Awards made after May 8, 2002, Cause, provided that such Employee or
Contractor has at least a combined ten (10) years of service with the Company
and Baxter International Inc. A Participant’s number of years of service with
the Company and Baxter International Inc. shall be determined by calculating the
number of complete twelve-month (12) periods of employment from the
Participant’s original date of hire as an Employee or Contractor with the
Company or Baxter International Inc. to the Participant’s date of employment or
service termination.  Employment or service with Baxter International Inc. shall
be included for purposes of determining qualification for Retirement only to the
extent that such employment or service immediately, and without any break,
precedes employment or service with the Company.  For purposes of this
definition, unless defined otherwise in the applicable Award Agreement, “Cause”
means: (a) a Participant’s willful and continued failure to substantially
perform his duties with the Company or a Subsidiary (other than any such failure
resulting from Disability); (b) a Participant’s willfully engaging in conduct
that is demonstrably and materially injurious to the Company or a Subsidiary,
monetarily or otherwise; or (c) a Participant’s having been convicted of a
felony. For the purpose of determining “Cause,” no act, or failure to act, on a
Participant’s part shall be deemed “willful” unless done, or omitted to be done,
by the Participant not in good faith and without reasonable belief that the
action or omission was in the best interests of the Company or a Subsidiary.

2.26      “Shares” means the shares of common stock of the Company.

2.27      “Subsidiary” means any business, whether or not incorporated, in which
the Company beneficially owns, directly or indirectly through another entity or
entities, securities or interests representing more than fifty percent (50%) of
the combined voting power of the voting securities or voting interests of such
business.

4

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

Article 3. Administration

3.1        General.  The Program shall be administered by the Compensation and
Governance Committee of the Board, or by any other Committee appointed by the
Board, which shall consist of two (2) or more nonemployee directors within the
meaning of the rules promulgated by the Securities and Exchange Commission under
Section 16 of the Exchange Act who also qualify as outside directors within the
meaning of Code Section 162(m) and the related regulations under the Code,
except as otherwise determined by the Board. Any Committee administering the
Program shall be comprised entirely of directors. The members of the Committee
shall be appointed from time to time by, and shall serve at the sole discretion
of, the Board.

The Committee shall have the authority to delegate administrative duties to
officers, Employees, or directors of the Company; provided, however, that the
Committee shall not be able to delegate its authority with respect to: (i)
granting Awards to Insiders; (ii) granting Awards that are intended to qualify
for the Performance-Based Exception; and (iii) certifying that any performance
goals and other material terms attributable to Awards that are intended to
qualify for the Performance-Based Exception have been satisfied.

3.2        Authority of the Committee.  Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions of the Program, the Committee shall have the authority to: (a)
interpret the provisions of the Program, and prescribe, amend, and rescind rules
and procedures relating to the Program; (b) grant Awards under the Program, in
such forms and amounts and subject to such terms and conditions as it deems
appropriate, including, without limitation, Awards which are made in combination
with or in tandem with other Awards (whether or not contemporaneously granted)
or compensation or in lieu of current or deferred compensation; (c) subject to
Article 14, modify the terms of, cancel and reissue, or repurchase outstanding
Awards; (d) prescribe the form of agreement, certificate, or other instrument
evidencing any Award under the Program; (e) correct any defect or omission and
reconcile any inconsistency in the Program or in any Award hereunder; (f) to
design Awards to satisfy requirements to make such Awards tax-advantaged to
Participants in any jurisdiction or for any other reason that the Company
desires; and (g) make all other determinations and take all other actions as it
deems necessary or desirable for the administration of the Program; provided,
however, that no outstanding Option will be amended to lower the exercise price
or will be canceled for the purpose of reissuing such Option to a Participant at
a lower exercise price (other than, in both cases, pursuant to Section 5.4)
without the approval of the Company’s stockholders. The determination of the
Committee on matters within its authority shall be conclusive and binding on the
Company and all other persons. The Committee shall comply with all applicable
laws in administering the Plan. As permitted by law (and subject to Section 3.1
herein), the Committee may delegate its authority as identified herein.

3.3        Decisions Binding.  All determinations and decisions made by the
Committee pursuant to the provisions of the Program and all related orders and
resolutions of the Board shall be final, conclusive, and binding on all persons,
including the Company, its stockholders, directors, Employees, Contractors,
Participants, and their estates and beneficiaries.

5

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

Article 4. Eligibility and Participation

4.1        Eligibility.  Persons eligible to participate in this Program shall
include all Employees and Contractors. Directors who are not Employees of the
Company shall not be eligible to participate in the Program.

4.2        Actual Participation.  Subject to the provisions of the Program, the
Committee may, from time to time, select from all eligible Employees and
Contractors those to whom Awards shall be granted and shall determine the nature
and amount of each Award.

Article 5. Shares Subject to the Program and Maximum Awards

5.1        Number of Shares Available for Grants.  Subject to adjustment as
provided in Section 5.4 herein, the number of Shares hereby reserved for
delivery to Participants under the Program shall be eighteen million eight
hundred thousand (18,800,000) Shares. No more than one million (1,000,000)
Shares reserved for issuance under the Program may be granted in the form of
Shares of Restricted Stock or Restricted Stock Units. The Committee shall
determine the appropriate methodology for calculating the number of Shares
issued pursuant to the Program. The following rules shall apply to grants of
such Awards under the Program:

(a)                            Options: The maximum aggregate number of Shares
that may be granted in the form of Options in any one (1) fiscal year to any one
(1) Participant shall be one million (1,000,000).

(b)                           Restricted Stock and Restricted Stock Units: The
maximum aggregate number of Shares that may be granted in the form of Restricted
Stock and Restricted Stock Units in any one (1) fiscal year to any one (1)
Participant shall be two hundred thousand (200,000).

5.2        Type of Shares.  Shares issued under the Program in connection with
Stock Options or Restricted Stock Units may be authorized and unissued Shares or
issued Shares held as treasury Shares. Shares issued under the Program in
connection with Restricted Stock shall be issued Shares held as treasury Shares;
provided, however, that authorized and unissued Shares may be issued in
connection with Restricted Stock to the extent that the Committee determines
that past services of the Participant constitute adequate consideration for at
least the par value thereof.

5.3        Reuse of Shares.

(a)                            General. In the event of the expiration or
termination (by reason of forfeiture, expiration, cancellation, surrender, or
otherwise) of any Award under the Program, that number of Shares that was
subject to the Award but not delivered shall again be available as Awards under
the Program.

(b)                           Restricted Stock. In the event that Shares are
delivered under the Program as Restricted Stock and are thereafter forfeited or
reacquired by the Company

6

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

pursuant to rights reserved upon the grant thereof, such forfeited or reacquired
Shares shall again be available as Awards under the Program.

(c)                            Limitation. Notwithstanding the provisions of
Sections 5.3(a) or 5.3(b) above, the following Shares shall not be available for
reissuance under the Program: (i) Shares which are withheld from any Award or
payment under the Program to satisfy tax withholding obligations; (ii) Shares
which are surrendered to fulfill tax obligations incurred under the Program; and
(iii) Shares which are surrendered in payment of the Option Price upon the
exercise of an Option.

5.4        Adjustments in Authorized Shares.  In the event of any change in
corporate capitalization, such as a stock split, or a corporate transaction,
such as any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization (whether or
not such reorganization comes within the definition of such term in Code Section
368) or any partial or complete liquidation of the Company, such adjustment
shall be made in the number and class of Shares which may be delivered under
Section 5.1, in the number and class of and/or price of Shares subject to
outstanding Awards granted under the Program, and in the Award limits set forth
in Section 5.1, as shall be determined to be appropriate and equitable by the
Committee, in its sole discretion, to prevent dilution or enlargement of rights;
provided, however, that the number of Shares subject to any Award shall always
be a whole number. In a stock-for-stock acquisition of the Company, the
Committee may, in its sole discretion, substitute securities of another issuer
for any Shares subject to outstanding Awards.

Article 6. Stock Options

6.1        Grant of Options.  Subject to the terms and provisions of the
Program, Options may be granted to Participants in such number, and upon such
terms, and at any time and from time to time as shall be determined by the
Committee. If all or any portion of the exercise price or taxes incurred in
connection with the exercise are paid by delivery (or, in the case of payment of
taxes, by withholding of Shares) of other Shares of the Company, the Options may
provide for the grant of replacement Options.

6.2        Award Agreement.  Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine. The Award Agreement also shall specify whether the
Option is intended to be an ISO or an NQSO.

6.3        Option Price.  The Option Price for each grant of an Option under
this Program shall be at least equal to one hundred percent (100%) of the Fair
Market Value of a Share on the date the Option is granted.

6.4        Duration of Options.  Each Option granted to a Participant on or
after February 16, 2006 shall expire at such time, not later than the seventh
(7th) anniversary date of its grant, as the Committee shall determine.

7

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

6.5        Exercise of Options.  Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant; provided, however, that each option shall
become exercisable over a minimum period of two (2) years measured from the date
of grant of the option.

6.6        Payment.  Options granted under this Article 6 shall be exercised by
the delivery of a written notice (or such other form of notice as the Company
may specify) of exercise to the Company, setting forth the number of Shares with
respect to which the Option is to be exercised, accompanied by full payment for
the Shares (or a satisfactory “cashless exercise” notice).

The Option Price upon exercise of any Option shall be payable to the Company in
full either: (a) in cash or its equivalent; (b) by tendering previously acquired
Shares (by either actual delivery or attestation) having an aggregate Fair
Market Value at the time of exercise equal to the total Option Price (provided
that the Shares which are tendered must have been held by the Participant for at
least six (6) months, or such shorter or longer period, if any, as is necessary
to avoid variable accounting treatment); (c) by a cashless exercise, as
permitted under Federal Reserve Board’s Regulation T, subject to applicable
securities law restrictions and such procedures and limitations as the Company
may specify from time to time, (d) by any other means which the Committee
determines to be consistent with the Program’s purpose and applicable law, or
(e) by a combination of two or more of (a) through (d).

Subject to any governing rules or regulations, including cashless exercise
procedures, as soon as practicable after receipt of a notification of exercise
and full payment (or a satisfactory “cashless exercise” notice), the Company
shall cause to be issued and delivered to the Participant, in certificate form
or otherwise, evidence of the Shares purchased under the Option(s).

6.7        Restrictions on Share Transferability.  The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article 6 as it may deem advisa­ble, including, without
limitation, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws applicable
to such Shares.

6.8        Termination of Employment or Service.  Each Participant’s Option
Award Agreement shall set forth the extent to which the Participant shall have
the right to exercise the Option following termination of the Participant’s
employment with the Company or service to the Company as a Contractor. Such
provisions shall be determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with each Participant, need not be
uniform among all Options issued pursuant to this Article 6, and may reflect
distinctions based on the reasons for termination.

8

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

6.9        Nontransferability of Options.

(a)                            Incentive Stock Options.  No ISO granted under
the Program may be sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated, other than by will or by the laws of descent and distribution.
Further, all ISOs granted to a Participant under the Program shall be
exercisable during his or her lifetime only by such Participant.

(b)                           Nonqualified Stock Options.  Except as otherwise
provided in a Participant’s Award Agreement, no NQSO granted under this
Article 6 may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution.
Further, except as otherwise provided in a Participant’s Award Agreement, all
NQSOs granted to a Participant under this Article 6 shall be exercisable during
his or her lifetime only by such Participant.

6.10      Substitution of Cash.  Unless otherwise provided in a Participant’s
Award Agreement, and notwithstanding any provision in the Program to the
contrary (including but not limited to Section 14.2), in the event of a Change
in Control in which the Company’s stockholders holding Shares receive
consideration other than shares of common stock that are registered under
Section 12 of the Exchange Act, the Committee shall have the authority to
require that any outstanding Option be surrendered to the Company by a
Participant for cancellation by the Company, with the Participant receiving in
exchange a cash payment from the Company within ten (10) days of the Change in
Control. Such cash payment shall be equal to the number of Shares under Option,
multiplied by the excess, if any, of the greater of (i) the highest per Share
price offered to stockholders in any transaction whereby the Change in Control
takes place, or (ii) the Fair Market Value of a Share on the date the Change in
Control occurs, over the Option Price.

Article 7. Restricted Stock

7.1        Grant of Restricted Stock.  Subject to the terms and provisions of
the Program, the Committee, at any time and from time to time, may grant Shares
of Restricted Stock to Participants in such amounts as the Committee shall
determine.

7.2        Restricted Stock Agreement.  Each Restricted Stock grant shall be
evidenced by a Restricted Stock Award Agreement that shall specify the Period(s)
of Restriction, the number of Shares of Restricted Stock granted, and such other
provisions as the Committee shall determine.  The Period of Restriction shall be
a minimum of three (3) years measured from the grant date of the Restricted
Stock.

7.3        Restriction on Transferability.  Except as provided in this
Article 7, the Shares of Restricted Stock granted herein may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated until the
end of the applicable Period of Restriction established by the Committee and
specified in the Restricted Stock Award Agreement, or upon earlier satisfaction
of any other conditions, as specified by the Committee in its sole discretion
and set forth in the Restricted Stock Award Agreement. All rights with respect
to the Restricted Stock granted to a Participant under the Program shall be
available during his or her lifetime only to such Participant.

9

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

7.4        Other Restrictions.  Subject to Article 9 herein, the Committee shall
impose such other conditions and/or restrictions on any Shares of Restricted
Stock granted pursuant to the Program as it may deem advisable including,
without limitation, any or all of the following:

(a)                            A required period of employment or service as a
Contractor with the Company, as determined by the Committee, prior to the
vesting of Shares of Restricted Stock.

(b)                           A requirement that Participants forfeit (or in the
case of Shares sold to a Participant, resell to the Company at his or her cost)
all or a part of Shares of Restricted Stock in the event of termination of his
or her employment or service as a Contractor during the Period of Restriction.

(c)                            A prohibition against employment of Participants
holding Shares of Restricted Stock by any competitor of the Company, against
such Participants’ dissemination of any secret or confidential information
belonging to the Company, or the solicitation by Participants of the Company’s
employees for employment by another entity.

Shares of Restricted Stock awarded pursuant to the Program shall be registered
in the name of the Participant and, if such Shares are certificated, in the sole
discretion of the Committee, may be deposited in a bank designated by the
Committee or with the Company. The Committee may require a stock power endorsed
in blank with respect to Shares of Restricted Stock whether or not certificated.

Except as otherwise provided in this Article 7, Shares of Restricted Stock
covered by each Restricted Stock grant made under the Program shall become
freely transferable (subject to any restrictions under any applicable securities
law) by the Participant after the last day of the applicable Period of
Restriction.

7.5        Voting Rights.  Unless the Committee determines otherwise,
Participants holding Shares of Restricted Stock issued hereunder shall be
entitled to exercise full voting rights with respect to those Shares during the
Period of Restriction.

7.6        Dividends and Other Distributions.  Unless the Committee determines
otherwise, during the Period of Restriction, Participants holding Shares of
Restricted Stock issued hereunder shall be entitled to regular cash dividends
paid with respect to such Shares. The Committee may apply any restrictions to
the dividends that the Committee deems appropriate. Without limiting the
generality of the preceding sentence, if the grant or vesting of Shares of
Restricted Stock  is designed to comply with the requirements of the
Performance-Based Exception, the Committee may apply any restrictions it deems
appropriate to the payment of dividends declared with respect to such Shares of
Restricted Stock, such that the dividends and/or the Shares of Restricted Stock
maintain eligibility for the Performance-Based Exception.

7.7        Termination of Employment or Service.  Each Restricted Stock Award
Agreement shall set forth the extent to which the Participant shall have the
right to vest in previously unvested Shares of Restricted Stock following
termination of the Participant’s employment with the Company or service to the
Company as a Contractor. Such provisions shall be determined in the sole
discretion

10

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

of the Committee, shall be included in the Award Agreement entered into with
each Participant, need not be uniform among all Shares of Restricted Stock
issued pursuant to the Program, and may reflect distinctions based on the
reasons for termination.

Article 8. Restricted Stock Units

8.1. Restricted Stock Units Awards.  Subject to the terms and conditions of the
Program, the Committee, at any time and from time to time, may issue Restricted
Stock Units which entitle the Participant to receive the Shares underlying those
units following the lapse of specified restrictions (whether based on the
achievement of designated performance goals or the satisfaction of specified
services or upon the expiration of a designated time period following the
vesting of the units).

8.2. Restricted Stock Units Award Agreement.  Each Restricted Stock Units award
shall be evidenced by a Restricted Stock Units Award Agreement that shall
specify the vesting restrictions, the number of Shares subject to the Restricted
Stock Units award, and such other provisions as the Committee shall determine. 
Restricted Stock Units shall vest over a minimum period of three (3) years
measured from the grant date of the award.

8.3. Restrictions. The Committee shall impose such other conditions and/or
restrictions on the issuance of any Shares under the Restricted Stock Units
granted pursuant to the Program as it may deem advisable including, without
limitation, any or all of the following:

(a)                                A required period of service with the
Company, as determined by the Committee, prior to the issuance of Shares under
the Restricted Stock Units award.

(b)                               A requirement that the Restricted Stock Units
award be forfeited in whole or in part in the event of termination of the
Participant’s employment or service as a Contractor during the vesting period.

(c)                                A prohibition against employment of
Participants holding Restricted Stock Units by any competitor of the Company,
against such Participants’ dissemination of any secret or confidential
information belonging to the Company, or the solicitation by Participants of the
Company’s employees for employment by another entity.

Except as otherwise provided in this Article 8, Shares subject to Restricted
Stock Units under the Program shall be freely transferable (subject to any
restrictions under applicable securities law) by the Participant after receipt
of such shares.

8.4. Stockholder Rights.  Participants holding Restricted Stock Units issued
hereunder shall not have any rights with respect to Shares subject to the award
until the award vests and the Shares are issued hereunder.  However,
dividend-equivalent units may be paid or credited, either in cash or in actual
or phantom Shares, on outstanding Restricted Stock Units awards, subject to such
terms and conditions as the Committee may deem appropriate.

11

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

8.5. Termination of Employment or Service.  Each Restricted Stock Units Award
Agreement shall set forth the extent to which the Participant shall have the
right to vest in previously unvested Shares subject to the Restricted Stock
Units award following termination of the Participant’s employment with the
Company or service to the Company as a Contractor.  Such provisions shall be
determined in the sole discretion of the Committee, shall be included in the
Award Agreement entered into with each Participant, need not be uniform among
all Restricted Stock Unit awards issued pursuant to the Program, and may reflect
distinctions based on the reasons for termination.

Article 9. Performance Measures

Unless and until the Board proposes for stockholder vote and stockholders
approve a change in the general performance measures set forth in this
Article 9, the attainment of which may determine the degree of payout and/or
vesting with respect to Awards to Covered Employees which are designed to
qualify for the Performance-Based Exception, the performance measure(s) to be
used for purposes of such grants shall be chosen from among:

(i)                               return measures (including, but not limited
to, return on assets, capital, investment, equity or sales);

(ii)                          earnings per share;

(iii)                       net income (before or after taxes) or operating
income;

(iv)                      earnings before interest, taxes, depreciation and
amortization or operating income before depreciation and amortization;

(v)                         sales or revenue targets;

(vi)                      market to book value ratio

(vii)                   cash flow or free cash flow (cash flow from operations
less capital expenditures);

(viii)                market share;

(ix)                        cost reduction goals;

(x)                           budget comparisons;

(xi)                          implementation, completion or progress of
projects, processes, products or product-lines strategic or critical to the
Company’s business operations;

(xii)                     measures of customer satisfaction;

(xiii)                  share price (including, but not limited to, growth
measures and total shareholder return);

(xiv)                 working capital;

12

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

(xv)                    economic value added;

(xvi)                 percentage of sales generated by new products;

(xvii)              progress of research and development projects or milestones;

(xviii)             growth in sales of products or product-lines;

(ix)                          any combination of, or a specified increase in,
any of the foregoing; and

(x)                           the formation of joint ventures, research and
development collaborations, marketing or customer service collaborations, or the
completion of other corporate transactions intended to enhance the Company’s
revenue or profitability or expand the Company’s customer base.

Subject to the terms of the Program, each of these measures shall be defined by
the Committee on a corporation, subsidiary, group or division basis or in
comparison with peer group performance, and may include or exclude specified
extraordinary items, as determined by the Company’s auditors.

The Committee shall have the discretion to adjust the determinations of
the degree of attainment of the preestablished performance goals or the size of
Awards; provided, however, that Awards which are designed to qualify for the
Performance-Based Exception, and which are held by a Covered Employee, may not
be adjusted upward in terms of either the degree of goal attainment or size (but
the Committee shall retain the discretion to adjust the degree of goal
attainment or the size of the Awards downward).

In the event that applicable tax and/or securities laws change to permit
Committee discretion to alter the governing performance measures without
obtaining stockholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining stockholder approval. In
addition, in the event that the Committee determines that it is advisable to
grant Awards that shall not qualify for the Performance-Based Exception, the
Committee may make such grants without satisfying the requirements of Code
Section 162(m).

Article 10. Beneficiary Designation

Each Participant under the Program may, from time to time, name any beneficiary
or beneficiaries (who may be named contingently or successively) to whom any
benefit under the Program is to be paid in case of his or her death before he or
she receives any or all of such benefit. Each such designation shall revoke all
prior designations by the same Participant, shall be in a form prescribed by the
Company, and will be effective only when filed by the Participant in writing
with the Company during the Participant’s lifetime. In the absence of any such
designation, benefits remaining unpaid at the Participant’s death shall be paid
to the Participant’s estate.

Article 11. Deferrals

The Committee may permit or require a Participant to defer such Participant’s
receipt of the payment of cash or the delivery of Shares that would otherwise be
due to such Participant by virtue

13

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

of the exercise of an Option or the lapse or waiver of restrictions with respect
to Restricted Stock or Restricted Stock Units.  If any such deferral election is
required or permitted, the Committee shall, in its sole discretion, establish
rules and procedures for such payment deferrals which shall be consistent with
the requirements of Code Section 409A and the Treasury regulations and rulings
promulgated thereunder.

Article 12. Rights of Employees and Contractors

12.1      Employment. Nothing in the Program or any Award Agreement shall
interfere with or limit in any way the right of the Company to terminate at any
time any Participant’s employment or service to the Company as a Contractor, nor
confer upon any Participant any right to continue in the employ of the Company
or to provide services to the Company as a Contractor.

12.2      Participation. No Employee or Contractor shall have the right to be
selected to receive an Award under this Program, or, having been so selected, to
be selected to receive a future Award.

Article 13. Change in Control

Except as may otherwise be provided in a Participant’s Award Agreement, upon the
occurrence of a Change in Control, unless otherwise specifically prohibited
under applicable laws or by the rules and regulations of any governing
governmental agencies or national securities exchanges:

(a)                            Any and all Options granted hereunder shall
become immediately exercisable, and, if granted before May 8, 2002, shall remain
exercisable throughout their entire term;

(b)                           Any restriction periods and restrictions imposed
on Shares of Restricted Stock and Restricted Stock Units that are not
performance-based shall lapse;

(c)                            The vesting of all performance-based Awards
denominated in Shares such as performance-based Restricted Stock and Restricted
Stock Units shall be accelerated as of the effective date of the Change in
Control, and there shall be paid out to Participants within thirty (30) days
following the effective date of the Change in Control a pro rata number of
Shares based upon an assumed achievement of all relevant targeted performance
goals and upon the length of time within the Performance Period(s) which has
elapsed prior to the Change in Control; provided, however, that if an Option or
Share of Restricted Stock or Restricted Stock Unit granted after May 8, 2002
becomes exercisable or vests only after either (i) a minimum fixed period of
employment or service (the duration of which is determined by the Committee at
the time of the grant of the Award) or (ii) the earlier achievement of a
performance-related goal, its exercisability or vesting shall not automatically
accelerate in full in accordance with Article 13 (a) or (b) above, but may
accelerate if and to the extent provided in the applicable Award Agreement.

14

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

Article 14. Amendment, Modification, and Termination

14.1      Amendment, Modification, and Termination. Subject to the terms of the
Program, including Section 14.2, the Board may at any time and from time to
time, alter, amend, suspend or terminate the Program in whole or in part. 
However, stockholder approval shall be required for any amendment of the Program
that (a) materially increases the number of Shares available for issuance under
the Program (other than pursuant to Article 5.4), (b) expands the type of awards
available under the Program, (c) materially expands the class of participants
eligible to receive Awards under the Program, (d) materially extends the term of
the Program, (e) materially changes the method of determining the Option Price
under the Program or (f) deletes or limits any provision of the Program
prohibiting the repricing of Options.  The Committee may amend Awards previously
granted under the Program.

14.2      Awards Previously Granted. Notwithstanding any provision of the
Program or of any Award Agreement to the contrary (but subject to Section 6.10
hereof), no termination, amendment, or modification of the Program or amendment
of an Award previously granted under the Program shall adversely affect in any
material way any Award previously granted under the Program, without the express
consent of the Participant holding such Award.

Article 15. Compliance with Applicable Law and Withholding

15.1      General.  The granting of Awards and the issuance of Shares under the
Program shall be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies or national securities exchanges as
may be required. Notwithstanding anything to the contrary in the Program or any
Award Agreement, the following shall apply:

(a)                            The Company shall have no obligation to issue any
Shares under the Program if such issuance would violate any applicable law or
any applicable regulation or requirement of any securities exchange or similar
entity.

(b)                           Prior to the issuance of any Shares under the
Program, the Company may require a written statement that the recipient is
acquiring the Shares for investment and not for the purpose or with the
intention of distributing the Shares and that the recipient will not dispose of
them in violation of the registration requirements of the Securities Act of
1933.

(c)                            With respect to any person who is subject to
Section 16(a) of the Exchange Act, the Committee may, at any time, add such
conditions and limitations to any incentive or payment under the Program or
implement procedures for the administration of the Program which it deems
necessary or desirable to comply with the requirements of Rule 16b-3 of the
Exchange Act.

(d)                           If, at any time, the Company, determines that the
listing, registration, or qualification (or any updating of any such document)
of any Award, or the Shares issuable pursuant thereto, is necessary on any
securities exchange or under any federal or state securities or blue sky law, or
that the consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in

15

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

connection with, any Award, the issuance of Shares pursuant to any Award, or the
removal of any restrictions imposed on Shares subject to an Award, such Award
shall not be granted and the Shares shall not be issued or such restrictions
shall not be removed, as the case may be, in whole or in part, unless such
listing, registration, qualification, consent, or approval shall have been
effected or obtained free of any conditions not acceptable to the Company.

15.2      Securities Law Compliance.  With respect to Insiders, transactions
under this Program are intended to comply with all applicable conditions of
Rule 16b-3 or its successors under the 1934 Act. To the extent any provision of
the Program or action by the Committee or the Board fails to so comply, it shall
be deemed null and void, to the extent permitted by law and deemed advisable by
the Board.

15.3      Tax Withholding.  The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy federal, state, and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of this Program.

15.4      Share Withholding.  Awards payable in Shares may provide that with
respect to withholding required upon any taxable event arising thereunder,
Participants may elect to satisfy the withholding requirement, in whole or in
part, by having the Company withhold Shares to satisfy their withholding tax
obligations; provided that Participants may only elect to have Shares withheld
having a Fair Market Value on the date the tax is to be determined equal to or
less than the minimum withholding tax which could be imposed on the transaction.
All elections shall be irrevocable, made in writing, signed by the Participant,
and shall be subject to any restrictions or limitations, including prior
Committee approval, that the Committee, in its sole discretion, deems
appropriate.

Article 16. Indemnification

Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Program
and against and from any and all amounts paid by him or her in settlement
thereof, with the Company’s approval, or paid by him or her in satisfaction of
any judgment in any such action, suit, or proceeding against him or her,
provided he or she shall give the Company an opportunity, at its own expense, to
handle and defend the same before he or she undertakes to handle and defend it
on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company’s Articles of Incorporation or Bylaws, as a matter of
law, or otherwise, or any power that the Company may have to indemnify them or
hold them harmless.

Article 17. Successors

All obligations of the Company under the Program with respect to Awards granted
hereunder shall, to the extent legally permissible, be binding on any successor
to the Company, whether the

16

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

existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.

Article 18. Legal Construction

18.1      Gender and Number.  Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.

18.2      Severability.  In the event any provision of the Program shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Program, and the Program shall be construed and
enforced as if the illegal or invalid provision had not been included.

18.3      Governing Law.  To the extent not preempted by federal law, the
Program, and all Award or other agreements hereunder, shall be construed in
accordance with and governed by the laws of the state of Delaware without giving
effect to principles of conflicts of laws.

17

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