Exhibit 10.1

MIVA, INC.

2006 STOCK AWARD AND INCENTIVE PLAN

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MIVA, INC.

2006 STOCK AWARD AND INCENTIVE PLAN

    Page       1. Purpose 1       2. Definitions 1       3. Administration 3    
  4. Stock Subject to Plan 3       5. Eligibility; Per-Person Award Limitations
4       6. Specific Terms of Awards 4       7. Performance Awards, Including
Annual Incentive Awards 7       8. Certain Provisions Applicable to Awards 10  
    9. Change in Control 10       10. Additional Award Forfeiture Provisions 12
      11. General Provisions 12

 

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MIVA, INC.

2006 STOCK AWARD AND INCENTIVE PLAN

       1.       Purpose. The purpose of this 2006 Stock Award and Incentive Plan
(the “Plan”) is to aid MIVA, Inc., a Delaware corporation (together with its
successors and assigns, the “Company”), in attracting, retaining, motivating and
rewarding employees, non-employee directors, and other service providers of the
Company or its subsidiaries or affiliates, to provide for equitable and
competitive compensation opportunities, to recognize individual contributions
and reward achievement of Company goals, and promote the creation of long-term
value for stockholders by closely aligning the interests of Participants with
those of stockholders. The Plan authorizes stock-based and cash-based incentives
for Participants.

           2.       Definitions. In addition to the terms defined in Section 1
above and elsewhere in the Plan, the following capitalized terms used in the
Plan have the respective meanings set forth in this Section:

           (a)       “Annual Incentive Award” means a type of Performance Award
granted to a Participant under Section 7(c) representing a conditional right to
receive cash, Stock or other Awards or payments, as determined by the Committee,
based on performance in a performance period of one fiscal year or a portion
thereof.

           (b)       “Annual Limit” shall have the meaning specified in Section
5(b).

           (c)       “Award” means any Option, SAR, Restricted Stock, Deferred
Stock, Stock granted as a bonus or in lieu of another award, Dividend
Equivalent, Other Stock-Based Award, Performance Award or Annual Incentive
Award, together with any related right or interest, granted to a Participant
under the Plan.

           (d)       “Beneficiary” means the legal representatives of the
Participant’s estate entitled by will or the laws of descent and distribution to
receive the benefits under a Participant’s Award upon a Participant’s death,
provided that, if and to the extent authorized by the Committee, a Participant
may be permitted to designate a Beneficiary, in which case the “Beneficiary”
instead will be the person, persons, trust or trusts (if any are then surviving)
which have been designated by the Participant in his or her most recent written
and duly filed beneficiary designation to receive the benefits specified under
the Participant’s Award upon such Participant’s death. Unless otherwise
determined by the Committee, any designation of a Beneficiary other than a
Participant’s spouse shall be subject to the written consent of such spouse.

           (e)       “Board” means the Company’s Board of Directors.

           (f)       “Change in Control” and related terms have the meanings
specified in Section 9.

           (g)       “Code” means the Internal Revenue Code of 1986, as amended.
References to any provision of the Code or regulation thereunder shall include
any successor provisions and regulations, and reference to regulations includes
any applicable guidance or pronouncement of the Department of the Treasury and
Internal Revenue Service.

           (h)       “Committee” means the Compensation Committee of the Board,
the composition and governance of which is established in the Committee’s
Charter as approved from time to time by the Board and subject to other
corporate governance documents of the Company. No action of the Committee shall
be void or deemed to be without authority due to the failure of any member, at
the time the action was taken, to meet any qualification standard set forth in
the Committee Charter or this Plan. The full Board may perform any function of
the Committee hereunder (except to the extent limited under applicable Nasdaq
Marketplace Rules), in which case the term “Committee” shall refer to the Board.

           (i)       “Covered Employee” means an Eligible Person who is a
Covered Employee as specified in Section 11(j).

           (j)       “Deferred Stock” means a right, granted under this Plan, to
receive Stock or other Awards or a combination thereof at the end of a specified
deferral period.

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       (k)       “Dividend Equivalent” means a right, granted under this Plan,
to receive cash, Stock, other Awards or other property equal in value to all or
a specified portion of the dividends paid with respect to a specified number of
shares of Stock.

           (l)       “Effective Date” means the effective date specified in
Section 11(p).

           (m)       “Eligible Person” has the meaning specified in Section 5.

           (n)       “Exchange Act” means the Securities Exchange Act of 1934,
as amended. References to any provision of the Exchange Act or rule (including a
proposed rule) thereunder shall include any successor provisions and rules.

           (o)       “Fair Market Value” means the fair market value of Stock,
Awards or other property as determined in good faith by the Committee or under
procedures established by the Committee. Unless otherwise determined by the
Committee, the Fair Market Value of Stock on a given day shall be the last sale
price of a share of stock before the 4 p.m. Eastern Time closing time (or
equivalent earlier time for partial trading days) on the last preceding day on
which the common stock was traded, as reported for securities listed on the
principle securities exchange or market maintained by NASDAQ or, if available,
on a composite tape reflecting transactions on such exchange or
NASDAQ-maintained market (as the case may be). Fair Market Value relating to the
exercise price or base price of any Non-409A Option or SAR and relating to the
market value of Stock measured at the time of exercise shall conform to
requirements under Code Section 409A.

           (p)      “409A Awards” means Awards that constitute a deferral of
compensation under Code Section 409A and regulations thereunder. “Non-409A
Awards” means Awards other than 409A Awards. Although the Committee retains
authority under the Plan to grant Options, SARs and Restricted Stock on terms
that will qualify those Awards as 409A Awards, Options, SARs, and Restricted
Stock are intended to be Non-409A Awards unless otherwise expressly specified by
the Committee.

           (q)       “Incentive Stock Option” or “ISO” means any Option
designated as an incentive stock option within the meaning of Code Section 422
and qualifying thereunder.

           (r)       “Option” means a right to purchase Stock granted under
Section 6(b).

           (s)       “Other Stock-Based Awards” means Awards granted to a
Participant under Section 6(h).

           (t)       “Participant” means a person who has been granted an Award
under the Plan which remains outstanding, including a person who is no longer an
Eligible Person.

           (u)       “Performance Award” means a conditional right, granted to a
Participant under Sections 6(i) or 7, to receive cash, Stock or other Awards or
payments.

           (v)       “Restricted Stock” means Stock granted under this Plan
which is subject to certain restrictions and to a risk of forfeiture.

           (w)       “Stock” means the Company’s Common Stock, par value $0.001
per share, and any other equity securities of the Company that may be
substituted or resubstituted for Stock pursuant to Section 11(c).

           (x)       “Stock Appreciation Rights” or “SAR” means a right granted
to a Participant under Section 6(c).

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  3.       Administration.

           (a)       Authority of the Committee. The Plan shall be administered
by the Committee, which shall have full and final authority, in each case
subject to and consistent with the provisions of the Plan, to select Eligible
Persons to become Participants; to grant Awards; to determine the type and
number of Awards, the dates on which Awards may be exercised and on which the
risk of forfeiture or deferral period relating to Awards shall lapse or
terminate, the acceleration of any such dates, the expiration date of any Award,
whether, to what extent, and under what circumstances an Award may be settled,
or the exercise price of an Award may be paid, in cash, Stock, other Awards, or
other property, and other terms and conditions of, and all other matters
relating to, Awards; to prescribe documents evidencing or setting terms of
Awards (such Award documents need not be identical for each Participant or each
Award), amendments thereto, and rules and regulations for the administration of
the Plan and amendments thereto; to construe and interpret the Plan and Award
documents and correct defects, supply omissions or reconcile inconsistencies
therein; and to make all other decisions and determinations as the Committee may
deem necessary or advisable for the administration of the Plan. Decisions of the
Committee with respect to the administration and interpretation of the Plan
shall be final, conclusive, and binding upon all persons interested in the Plan,
including Participants, Beneficiaries, transferees under Section 11(b) and other
persons claiming rights from or through a Participant, and stockholders. The
foregoing notwithstanding, the Board shall perform the functions of the
Committee for purposes of granting Awards under the Plan to non-employee
directors (the functions of the Committee with respect to other aspects of
non-employee director awards is not exclusive to the Board, however).

           (b)       Manner of Exercise of Committee Authority. The express
grant of any specific power to the Committee, and the taking of any action by
the Committee, shall not be construed as limiting any power or authority of the
Committee. The Committee may act through subcommittees, including for purposes
of perfecting exemptions under Rule 16b-3 or qualifying Awards under Code
Section 162(m) as performance-based compensation, in which case the subcommittee
shall be subject to and have authority under the charter applicable to the
Committee, and the acts of the subcommittee shall be deemed to be acts of the
Committee hereunder. The Committee may delegate to officers or managers of the
Company or any subsidiary or affiliate, or committees thereof, the authority,
subject to such terms as the Committee shall determine, to perform such
functions, including administrative functions, as the Committee may determine,
to the extent (i) that such delegation will not result in the loss of an
exemption under Rule 16b-3(d) for Awards granted to Participants subject to
Section 16 of the Exchange Act in respect of the Company and will not cause
Awards intended to qualify as “performance-based compensation” under Code
Section 162(m) to fail to so qualify, and (ii) permitted under Section 157 and
other applicable provisions of the Delaware General Corporation Law.

           (c)       Limitation of Liability. The Committee and each member
thereof, and any person acting pursuant to authority delegated by the Committee,
shall be entitled, in good faith, to rely or act upon any report or other
information furnished by any executive officer, other officer or employee of the
Company or a subsidiary or affiliate, the Company’s independent auditors,
consultants or any other agents assisting in the administration of the Plan.
Members of the Committee, any person acting pursuant to authority delegated by
the Committee, and any officer or employee of the Company or a subsidiary or
affiliate acting at the direction or on behalf of the Committee or a delegee
shall not be personally liable for any action or determination taken or made in
good faith with respect to the Plan, and shall, to the extent permitted by law,
be fully indemnified and protected by the Company with respect to any such
action or determination.

           4.       Stock Subject To Plan.

           (a)       Overall Number of Shares Available for Delivery. The total
number of shares of Stock reserved and available for delivery in connection with
Awards under the Plan shall be (i) two million shares, plus (ii) the number of
shares that, immediately prior to the Effective Date, remain available for new
awards under the 1999 Stock Incentive Plan and under the 2004 Stock Incentive
Plan, plus (iii) the number of shares subject to awards under the 1999 Stock
Incentive Plan and 2004 Stock Incentive Plan that become available in accordance
with Section 4(b) after the Effective Date; provided, however, that the total
number of shares with respect to which ISOs may be granted shall not exceed the
number specified under clause (i) above. Any shares of Stock delivered under the
Plan shall consist of authorized and unissued shares or treasury shares.

           (b)       Share Counting Rules. The Committee may adopt reasonable
counting procedures to ensure appropriate counting, avoid double counting (as,
for example, in the case of tandem or substitute awards) and make

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  adjustments in accordance with this Section 4(b). Shares shall be counted
against those reserved to the extent such shares have been delivered and are no
longer subject to a risk of forfeiture. Accordingly, (i) to the extent that an
Award under the Plan, an award under the 1999 Stock Incentive Plan, or an award
granted under the 2004 Stock Incentive Plan (other than to a non-United States
resident) is canceled, expired, forfeited, settled in cash, settled by delivery
of fewer shares than the number underlying the Award or award, or otherwise
terminated without delivery of shares to the participant, the shares retained by
or returned to the Company will not be deemed to have been delivered under the
Plan; and (ii) shares that are withheld from such an Award or award or
separately surrendered by the participant in payment of the exercise price or
taxes relating to such an Award or award shall be deemed to constitute shares
not delivered and will be available under the Plan. The Committee may determine
that Awards may be outstanding that relate to more shares than the aggregate
remaining available under the Plan so long as Awards will not in fact result in
delivery and vesting of shares in excess of the number then available under the
Plan. In addition, in the case of any Award granted in assumption of or in
substitution for an award of a company or business acquired by the Company or a
subsidiary or affiliate or with which the Company or a subsidiary or affiliate
combines, shares delivered or deliverable in connection with such assumed or
substitute Award shall not be counted against the number of shares reserved
under the Plan

           5.      Eligibility; Per-Person Award Limitations.

           (a)      Eligibility. Awards may be granted under the Plan only to
Eligible Persons. For purposes of the Plan, an “Eligible Person” means (i) an
employee of the Company or any sub­sid­iary or affiliate, including any
executive officer or employee director of the Company or a sub­sidiar­y or
affiliate, (ii) any person who has been offered employment by the Company or a
subsidiary or affiliate, provided that such prospective employee may not receive
any payment or exercise any right relating to an Award until such person has
commenced employment with the Company or a subsidiary or affiliate, (iii) any
non-employee director of the Company, and (iv) any person who provides
substantial services to the Company or a subsidiary or affiliate. An employee on
leave of absence may be considered as still in the employ of the Company or a
subsidiary or affiliate for purposes of eligibility for participation in the
Plan. For purposes of the Plan, a joint venture in which the Company or a
subsidiary has a substantial direct or indirect equity investment shall be
deemed an affiliate, if so determined by the Committee. Holders of awards
granted by a company or business acquired by the Company or a subsidiary or
affiliate, or with which the Company or a subsidiary or affiliate combines, are
eligible for grants of substitute awards granted in assumption of or in
substitution for such outstanding awards previously granted under the Plan in
connection with such acquisition or combination transaction.

           (b)       Per-Person Award Limitations. In each calendar year during
any part of which the Plan is in effect, an Eligible Person may be granted
Awards intended to qualify as “performance-based compensation” under Code
Section 162(m) under the Plan relating to up to his or her Annual Limit. A
Participant’s Annual Limit, in any year during any part of which the Participant
is then eligible under the Plan, shall equal one million shares plus the amount
of the Participant’s unused Annual Limit relating to the same type of Award as
of the close of the previous year, subject to adjustment as provided in Section
11(c). In the case of an Award which is not valued in a way in which the
limitation set forth in the preceding sentence would operate as an effective
limitation satisfying applicable law (including Treasury Regulation
1.162-27(e)(4)), an Eligible Person may not be granted Awards authorizing the
earning during any calendar year of an amount that exceeds the Eligible Person’s
Annual Limit, which for this purpose shall equal $2.0 million plus the amount of
the Eligible Person’s unused cash Annual Limit as of the close of the previous
year (this limitation is separate and not affected by the number of Awards
granted during such calendar year subject to the limitation in the preceding
sentence). For this purpose, (i) “earning” means satisfying performance
conditions so that an amount becomes payable, without regard to whether it is to
be paid currently or on a deferred basis or continues to be subject to any
service requirement or other non-performance condition, (ii) a Participant’s
Annual Limit is used to the extent an amount or number of shares may be
potentially earned or paid under an Award, regardless of whether such amount or
shares are in fact earned or paid, and (iii) the Annual Limit applies to
Dividend Equivalents under Section 6(g) only if such Dividend Equivalents are
granted separately from and not as a feature of another Award.

      6.       Specific Terms Of Awards.

           (a)       General. Awards may be granted on the terms and conditions
set forth in this Section 6. In addition, the Committee may impose on any Award
or the exercise thereof, at the date of grant or thereafter (subject to Sections
11(e) and 11(k)), such additional terms and conditions, not inconsistent with
the provisions of the Plan, as the Committee shall determine, including terms
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  employment or service by the Participant and terms permitting a Participant to
make elections relating to his or her Award. The Committee shall retain full
power and discretion with respect to any term or condition of an Award that is
not mandatory under the Plan, subject to Section 11(k) and the terms of the
Award agreement. The Committee shall require the payment of lawful consideration
for an Award to the extent necessary to satisfy the requirements of the Delaware
General Corporation Law, and may otherwise require payment of consideration for
an Award except as limited by the Plan.

        (b) Options. The Committee is authorized to grant Options to
Participants on the following terms and conditions:

            (i) Exercise Price. The exercise price per share of Stock
purchasable under an Option (including both ISOs and non-qualified Options)
shall be determined by the Committee, provided that such exercise price shall be
not less than the Fair Market Value of a share of Stock on the date of grant of
such Option, subject to Section 8(a). Notwithstanding the foregoing, any
substitute award granted in assumption of or in substitution for an outstanding
award granted by a company or business acquired by the Company or a subsidiary
or affiliate, or with which the Company or a subsidiary or affiliate combines
may be granted with an exercise price per share of Stock other than as required
above. No adjustment will be made for a dividend or other right for which the
record date is prior to the date on which the stock is issued, except as
provided in Section 11(c) of the Plan.

            (ii) Option Term; Time and Method of Exercise. The Committee shall
determine the term of each Option, provided that in no event shall the term of
any Option exceed a period of ten years from the date of grant. The Committee
shall determine the time or times at which or the circumstances under which an
Option may be exercised in whole or in part (including based on achievement of
performance goals and/or future service requirements), the methods by which such
exercise price may be paid or deemed to be paid and the form of such payment
(subject to Sections 11(k) and 11(l)), including, without limitation, cash,
Stock (including by withholding Stock deliverable upon exercise), other Awards
or awards granted under other plans of the Company or any subsidiary or
affiliate, or other property (including through broker-assisted “cashless
exercise” arrangements, to the extent permitted by applicable law), and the
methods by or forms in which Stock will be delivered or deemed to be delivered
in satisfaction of Options to Participants (including, in the case of 409A
Awards, deferred delivery of shares subject to the Option, as mandated by the
Committee, with such deferred shares subject to any vesting, forfeiture or other
terms as the Committee may specify).

            (iii) ISOs. The terms of any ISO granted under the Plan shall comply
in all respects with the provisions of Code Section 422.

        (c) Stock Appreciation Rights. The Committee is authorized to grant SARs
to Participants on the following terms and conditions:

            (i) Right to Payment. An SAR shall confer on the Participant to whom
it is granted a right to receive, upon exercise thereof, the excess of (A) the
Fair Market Value of one share of Stock on the date of exercise over (B) the
grant price of the SAR as determined by the Committee.

            (ii) Other Terms. The Committee shall determine the term of each
SAR, provided that in no event shall the term of an SAR exceed a period of ten
years from the date of grant. The Committee shall determine at the date of grant
or thereafter, the time or times at which and the circumstances under which a
SAR may be exercised in whole or in part (including based on achievement of
performance goals and/or future service requirements), the method of exercise,
method of settlement, form of consideration payable in settlement, method by or
forms in which Stock will be delivered or deemed to be delivered to
Participants, whether or not a SAR shall be free-standing or in tandem or
combination with any other Award, and whether or not the SAR will be a 409A
Award or Non-409A Award. Limited SARs that may only be exercised in connection
with a Change in Control or termination of service following a Change in Control
as specified by the Committee may be granted on such terms, not inconsistent
with this Section 6(c), as the

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      Committee may determine. The Committee may require that an outstanding
Option be exchanged for an SAR exercisable for Stock having vesting, expiration,
and other terms substantially the same as the Option, so long as such exchange
will not result in additional accounting expense to the Company.

(d)    Restricted Stock. The Committee is authorized to grant Restricted Stock
to Participants on the following terms and conditions:

    (i) Grant and Restrictions. Restricted Stock shall be subject to such
restrictions on transferability, risk of forfeiture and other restrictions, if
any, as the Committee may impose, which restrictions may lapse separately or in
combination at such times, under such circumstances (including based on
achievement of performance goals and/or future service requirements), in such
installments or otherwise and under such other circumstances as the Committee
may determine at the date of grant or thereafter. Except to the extent
restricted under the terms of the Plan and any Award document relating to the
Restricted Stock, a Participant granted Restricted Stock shall have all of the
rights of a stockholder, including the right to vote the Restricted Stock and
the right to receive dividends thereon (subject to any mandatory reinvestment or
other requirement imposed by the Committee).

            (ii) Forfeiture. Except as otherwise determined by the Committee,
upon termination of employment or service during the applicable restriction
period, Restricted Stock that is at that time subject to restrictions shall be
forfeited and reacquired by the Company; provided that the Committee may
provide, by rule or regulation or in any Award document, or may determine in any
individual case, that restrictions or forfeiture conditions relating to
Restricted Stock will lapse in whole or in part, including in the event of
terminations resulting from specified causes.

            (iii) Certificates for Stock. Restricted Stock granted under the
Plan may be evidenced in such manner as the Committee shall determine. If
certificates representing Restricted Stock are registered in the name of the
Participant, the Committee may require that such certificates bear an
appropriate legend referring to the terms, conditions and restrictions
applicable to such Restricted Stock, that the Company retain physical possession
of the certificates, and that the Participant deliver a stock power to the
Company, endorsed in blank, relating to the Restricted Stock.

            (iv) Dividends and Splits. As a condition to the grant of an Award
of Restricted Stock, the Committee may require that any dividends paid on a
share of Restricted Stock shall be either (A) paid with respect to such
Restricted Stock at the dividend payment date in cash, in kind, or in a number
of shares of unrestricted Stock having a Fair Market Value equal to the amount
of such dividends, or (B) automatically reinvested in additional Restricted
Stock or held in kind, which shall be subject to the same terms as applied to
the original Restricted Stock to which it relates, or (C) deferred as to
payment, either as a cash deferral or with the amount or value thereof
automatically deemed reinvested in shares of Deferred Stock, other Awards or
other investment vehicles, subject to such terms as the Committee shall
determine or permit a Participant to elect. Unless otherwise determined by the
Committee, Stock distributed in connection with a Stock split or Stock dividend,
and other property distributed as a dividend, shall be subject to restrictions
and a risk of forfeiture to the same extent as the Restricted Stock with respect
to which such Stock or other property has been distributed.

(e)       Deferred Stock. The Committee is authorized to grant Deferred Stock to
Participants, subject to the following terms and conditions:

    (i) Award and Restrictions. Issuance of Stock will occur upon expiration of
the deferral period specified for an Award of Deferred Stock by the Committee
(or, if permitted by the Committee, as elected by the Participant). In addition,
Deferred Stock shall be subject to such restrictions on transferability, risk of
forfeiture and other restrictions, if any, as the Committee may impose, which
restrictions may lapse at the expiration of the deferral period or at earlier
specified times (including based on achievement of performance goals and/or
future service requirements), separately or in combination, in installments or
otherwise, and under such other circumstances as

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      the Committee may determine at the date of grant or thereafter. Deferred
Stock may be satisfied by delivery of Stock, other Awards, or a combination
thereof (subject to Section 11(l)), as determined by the Committee at the date
of grant or thereafter.

            (ii) Forfeiture. Except as otherwise determined by the Committee,
upon termination of employment or service during the applicable deferral period
or portion thereof to which forfeiture conditions apply (as provided in the
Award document evidencing the Deferred Stock), all Deferred Stock that is at
that time subject to such forfeiture conditions shall be forfeited; provided
that the Committee may provide, by rule or regulation or in any Award document,
or may determine in any individual case, that restrictions or forfeiture
conditions relating to Deferred Stock will lapse in whole or in part, including
in the event of terminations resulting from specified causes. Deferred Stock
subject to a risk of forfeiture may be called “restricted stock units” or
otherwise designated by the Committee.

            (iii) Dividend Equivalents. Unless otherwise determined by the
Committee, Dividend Equivalents on the specified number of shares of Stock
covered by an Award of Deferred Stock shall be either (A) paid with respect to
such Deferred Stock at the dividend payment date in cash or in shares of
unrestricted Stock having a Fair Market Value equal to the amount of such
dividends, or (B) deferred with respect to such Deferred Stock, either as a cash
deferral or with the amount or value thereof automatically deemed reinvested in
additional Deferred Stock, other Awards or other investment vehicles having a
Fair Market Value equal to the amount of such dividends, as the Committee shall
determine or permit a Participant to elect.

(f)       Bonus Stock and Awards in Lieu of Obligations. The Committee is
authorized to grant to Participants Stock as a bonus, or to grant Stock or other
Awards in lieu of obligations of the Company or a subsidiary or affiliate to pay
cash or deliver other property under the Plan or under other plans or
compensatory arrangements, subject to such terms as shall be determined by the
Committee.

(g)       Dividend Equivalents. The Committee is authorized to grant Dividend
Equivalents to a Participant, which may be awarded on a free-standing basis or
in connection with another Award. The Committee may provide that Dividend
Equivalents shall be paid or distributed when accrued or shall be deemed to have
been reinvested in additional Stock, Awards, or other investment vehicles, and
subject to restrictions on transferability, risks of forfeiture and such other
terms as the Committee may specify.

(h)       Other Stock-Based Awards. The Committee is authorized, subject to
limitations under applicable law, to grant to Participants such other Awards
that may be denominated or payable in, valued in whole or in part by reference
to, or otherwise based on, or related to, Stock or factors that may influence
the value of Stock, including, without limitation, convertible or exchangeable
debt securities, other rights convertible or exchangeable into Stock, purchase
rights for Stock, Awards with value and payment contingent upon performance of
the Company or business units thereof or any other factors designated by the
Committee, and Awards valued by reference to the book value of Stock or the
value of securities of or the performance of specified subsidiaries or
affiliates or other business units. The Committee shall determine the terms and
conditions of such Awards. Stock delivered pursuant to an Award in the nature of
a purchase right granted under this Section 6(h) shall be purchased for such
consideration, paid for at such times, by such methods, and in such forms,
including, without limitation, cash, Stock, other Awards, notes, or other
property, as the Committee shall determine. Cash awards, as an element of or
supplement to any other Award under the Plan, may also be granted pursuant to
this Section 6(h).

(i)      Performance Awards. Performance Awards, denominated in cash or in Stock
or other Awards, may be granted by the Committee in accordance with Section 7.

7.       Performance Awards, Including Annual Incentive Awards.

(a)       Performance Awards Generally. Performance Awards may be denominated as
a cash amount, number of shares of Stock, or specified number of other Awards
(or a combination) which may be earned upon achievement or satisfaction of
performance conditions specified by the Committee. In addition, the Committee
may specify that any other Award shall constitute a Performance Award by
conditioning the right of a Participant to exercise the Award or have it
settled, and the timing thereof, upon achievement or satisfaction of such
performance conditions as may be specified by the Committee. The Committee may
use such business criteria and other measures of performance as it may deem
appropriate in establishing any performance conditions, and may exercise

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its discretion to reduce or increase the amounts payable under any Award subject
to performance conditions, except as limited under Sections 7(b) and 7(c) in the
case of a Performance Award intended to qualify as “performance-based
compensation” under Code Section 162(m).

 (b)       Performance Awards Granted to Covered Employees. If the Committee
determines that a Performance Award to be granted to an Eligible Person who is
designated by the Committee as likely to be a Covered Employee should qualify as
“performance-based compensation” for purposes of Code Section 162(m), the grant,
exercise and/or settlement of such Performance Award shall be contingent upon
achievement of a preestablished performance goal and other terms set forth in
this Section 7(b).

    (i) Performance Goal Generally. The performance goal for such Performance
Awards shall consist of one or more business criteria and a targeted level or
levels of performance with respect to each of such criteria, as specified by the
Committee consistent with this Section 7(b). The performance goal shall be
objective and shall otherwise meet the requirements of Code Section 162(m) and
regulations thereunder, including the requirement that the level or levels of
performance targeted by the Committee result in the achievement of performance
goals being “substantially uncertain.” The Committee may determine that such
Performance Awards shall be granted, exercised and/or settled upon achievement
of any one performance goal or that two or more of the performance goals must be
achieved as a condition to grant, exercise and/or settlement of such Performance
Awards. Performance goals may differ for Performance Awards granted to any one
Participant or to different Participants.

            (ii) Business Criteria. One or more of the following business
criteria for the Company, on a consolidated basis, and/or for specified
subsidiaries or affiliates or other business units of the Company shall be used
by the Committee in establishing performance goals for such Performance Awards:
(1) gross revenue or sales measures; (2) operating income, earnings from
operations, earnings before or after taxes, earnings before or after interest,
depreciation, amortization, or extraordinary or special items, (3) net income or
net income per common share (basic or diluted); (4) return on assets, return on
investment, return on capital, or return on equity; (5) cash flow, free cash
flow, cash flow return on investment, or net cash provided by operations; (6)
interest expense after taxes; (7) economic profit or value created; (8)
operating margin; (9) stock price or total stockholder return; and (10)
strategic business criteria, consisting of one or more objectives based on
meeting specified market penetration, geographic business expansion goals, cost
targets, customer satisfaction, employee satisfaction, management of employment
practices and employee benefits, supervision of litigation and information
technology, and goals relating to acquisitions or divestitures of subsidiaries,
affiliates, joint ventures or other assets. The targeted level or levels of
performance with respect to such business criteria may be established at such
levels and in such terms as the Committee may determine, in its discretion,
including in absolute terms, as a goal relative to performance in prior periods,
or as a goal compared to the performance of one or more comparable companies or
an index covering multiple companies.

            (iii) Performance Period; Timing for Establishing Performance Goals.
Achievement of performance goals in respect of such Performance Awards shall be
measured over a performance period of up to one year or more than one year, as
specified by the Committee. A performance goal shall be established not later
than the earlier of (A) 90 days after the beginning of any performance period
applicable to such Performance Award or (B) the time 25% of such performance
period has elapsed.

            (iv) Performance Award Pool. The Committee may establish a
Performance Award pool, which shall be an unfunded pool, for purposes of
measuring performance of the Company in connection with Performance Awards. The
amount of such Performance Award pool shall be based upon the achievement of a
performance goal or goals based on one or more of the business criteria set
forth in Section 7(b)(ii) during the given performance period, as specified by
the Committee in accordance with Section 7(b)(iv). The Committee may specify the
amount of the Performance Award pool as a percentage of any of such business
criteria, a percentage thereof in excess of a threshold amount, or as another
amount which need not bear a strictly mathematical relationship to such business
criteria.

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    (v) Settlement of Performance Awards; Other Terms. Settlement of Performance
Awards shall be in cash, Stock, other Awards or other property, in the
discretion of the Committee. The Committee may, in its discretion, increase or
reduce the amount of a settlement otherwise to be made in connection with such
Performance Awards, but may not exercise discretion to increase any such amount
payable to a Covered Employee in respect of a Performance Award subject to this
Section 7(b) beyond the level of payment authorized for achievement of the
performance goal specified under this Section 7(b) based on the actual level of
achievement of such goal. Any settlement which changes the form of payment from
that originally specified shall be implemented in a manner such that the
Performance Award and other related Awards do not, solely for that reason, fail
to qualify as “performance-based compensation” for purposes of Code Section
162(m). The Committee shall specify the circumstances in which such Performance
Awards shall be paid or forfeited in the event of termination of employment by
the Participant or other event (including a Change in Control) prior to the end
of a performance period or settlement of such Performance Awards.

(c)       Annual Incentive Awards Granted to Designated Covered Employees. The
Committee may grant an Annual Incentive Award to an Eligible Person who is
designated by the Committee as likely to be a Covered Employee. Such Annual
Incentive Award will be intended to qualify as “performance-based compensation”
for purposes of Code Section 162(m), and its grant, exercise and/or settlement
shall be contingent upon achievement of preestablished performance goals and
other terms set forth in this Section 7(c).

    (i) Grant of Annual Incentive Awards. Not later than the earlier of 90 days
after the beginning of any performance period applicable to such Annual
Incentive Award or the time 25% of such performance period has elapsed, the
Committee shall determine the Covered Employees who will potentially receive
Annual Incentive Awards, and the amount(s) potentially payable thereunder, for
that performance period. The amount(s) potentially payable shall be based upon
the achievement of a performance goal or goals based on one or more of the
business criteria set forth in Section 7(b)(ii) in the given performance period,
as specified by the Committee. The Committee may designate an annual incentive
award pool as the means by which Annual Incentive Awards will be measured, which
pool shall conform to the provisions of Section 7(b)(iv). In such case, the
portion of the Annual Incentive Award pool potentially payable to each Covered
Employee shall be preestablished by the Committee. In all cases, the maximum
Annual Incentive Award of any Participant shall be subject to the limitation set
forth in Section 5.

            (ii) Payout of Annual Incentive Awards. After the end of each
performance period, the Committee shall determine the amount, if any, of the
Annual Incentive Award for that performance period payable to each Participant.
The Committee may, in its discretion, determine that the amount payable to any
Participant as a final Annual Incentive Award shall be reduced from the amount
of his or her potential Annual Incentive Award, including a determination to
make no final Award whatsoever, but may not exercise discretion to increase any
such amount in respect of an Award subject to this Section 7(b) beyond the level
of payment authorized for achievement of the performance goal specified under
this Section 7(c) based on the actual level of achievement of such goal. The
Committee shall specify the circumstances in which an Annual Incentive Award
shall be paid or forfeited in the event of termination of employment by the
Participant or other event prior to the end of a performance period or
settlement of such Annual Incentive Award.

(d)       Written Determinations. Determinations by the Committee as to the
establishment of performance goals, the amount potentially payable in respect of
Performance Awards and Annual Incentive Awards, the level of actual achievement
of the specified performance goals relating to Performance Awards and Annual
Incentive Awards, and the amount of any final Performance Award and Annual
Incentive Award shall be recorded in writing in the case of Performance Awards
intended to qualify under Section 162(m). Specifically, the Committee shall
certify in writing, in a manner conforming to applicable regulations under
Section 162(m), prior to settlement of each such Award granted to a Covered
Employee, that the performance objective relating to the Performance Award and
other material terms of the Award upon which settlement of the Award was
conditioned have been satisfied.

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8.     Certain Provisions Applicable To Awards.

(a)       Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted
under the Plan may, in the discretion of the Committee, be granted either alone
or in addition to, in tandem with, or in substitution or exchange for, any other
Award or any award granted under another plan of the Company, any subsidiary or
affiliate, or any business entity to be acquired by the Company or a subsidiary
or affiliate, or any other right of a Participant to receive payment from the
Company or any subsidiary or affiliate; provided, however, that a 409A Award may
not be granted in tandem with a Non-409A Award; and, provided further, that any
exchange or substitution of an Award or buyout of an Award under the Plan shall
be subject to applicable requirements of Section 11(e) if the transaction would
constitute a “repricing.” Awards granted in addition to or in tandem with other
Awards or awards may be granted either as of the same time as or a different
time from the grant of such other Awards or awards. Subject to Sections 11(k)
and (l), the Committee may determine that, in granting a new Award, the
in-the-money value or fair value of any surrendered Award or award or the value
of any other right to payment surrendered by the Participant may be applied to
the purchase of any other Award.

(b)       Term of Awards. The term of each Award shall be for such period as may
be determined by the Committee, subject to the express limitations set forth in
Sections 6(b)(ii), 6(c)(ii) and 8 or elsewhere in the Plan.

 (c)       Form and Timing of Payment under Awards; Deferrals. Subject to the
terms of the Plan (including Sections 11(k) and (l)) and any applicable Award
document, payments to be made by the Company or a subsidiary or affiliate upon
the exercise of an Option or other Award or settlement of an Award may be made
in such forms as the Committee shall determine, including, without limitation,
cash, Stock, other Awards or other property, and may be made in a single payment
or transfer, in installments, or on a deferred basis. The settlement of any
Award may be accelerated, and cash paid in lieu of Stock in connection with such
settlement, in the discretion of the Committee or upon occurrence of one or more
specified events, subject to Sections 11(k) and (l). Subject to Section 11(k),
installment or deferred payments may be required by the Committee (subject to
Section 11(e)) or permitted at the election of the Participant on terms and
conditions established by the Committee. Payments may include, without
limitation, provisions for the payment or crediting of reasonable interest on
installment or deferred payments or the grant or crediting of Dividend
Equivalents or other amounts in respect of installment or deferred payments
denominated in Stock. In the case of any 409A Award that is vested and no longer
subject to a risk of forfeiture (within the meaning of Code Section 83), such
Award will be distributed to the Participant, upon application of the
Participant, if the Participant has had an unforeseeable emergency within the
meaning of Code Sections 409A(a)(2)(A)(vi) and 409A(a)(2)(B)(ii), in accordance
with Section 409A(a)(2)(B)(ii).

9.     Change in Control.

(a)     Effect of “Change in Control” on Non-Performance Based Awards. In the
event of a “Change in Control,” the following provisions shall apply to
non-performance based Awards, including Awards as to which performance
conditions previously have been satisfied or are deemed satisfied under Section
9(b), unless otherwise provided by the Committee in the Award document:

    (i) All forfeiture conditions and other restrictions applicable to Awards
granted under the Plan shall lapse and such Awards shall be fully payable as of
the time of the Change in Control without regard to vesting or other conditions,
except to the extent of any waiver by the Participant and subject to applicable
restrictions set forth in Section 11(a); and

            (ii) Any Award carrying a right to exercise that was not previously
exercisable and vested shall become fully exercisable and vested as of the time
of the Change in Control and, upon any termination of employment or service by
the Participant other than a termination for cause within two years after the
Change in Control, shall remain outstanding and exercisable until the earlier of
three years after such termination or the stated expiration date of such Award,
subject only to applicable restrictions set forth in Section 11(a); and

            (iii) All deferral of settlement, forfeiture conditions and other
restrictions applicable to an unvested Award granted under the Plan shall lapse
and such Awards shall be fully payable as of the time of the Change in Control
without regard to deferral and vesting conditions, except to the extent of

 

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      any waiver by the Participant (if permitted under Section 409A) and
subject to applicable restrictions set forth in Section 11(a);

      provided, however, that no distribution shall occur with respect to a 409A
Award unless the Change in Control also constitutes a 409A Ownership/Control
Change.

(b)     Effect of “Change in Control” on Performance-Based Awards. In the event
of a “Change in Control,” with respect to an outstanding Award subject to
achievement of performance goals and conditions, such performance goals and
conditions shall be deemed to be met or exceeded if and to the extent so
provided by the Committee in the Award document governing such Award or other
agreement with the Participant. Unless otherwise specified in such Award
agreement, vesting and exercisability or settlement of such Award with regard to
non-performance based terms will be as provided in Section 9(a).

(c)     Definition of “Change in Control.” “Change in Control” means the
occurrence of any one of the following events after the date of grant of any
affected Award:

    (i) any person is or becomes the beneficial owner, directly or indirectly,
of securities of the Company representing thirty-five percent (35%) or more,
excluding in the calculation of beneficial ownership securities acquired
directly from the Company, of the combined voting power of the Company’s then
outstanding voting securities;

            (ii) any Person is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing more than fifty percent
(50%) of the combined voting power of the Company’s then outstanding voting
securities;

            (iii) the following individuals cease for any reason to constitute a
majority of the number of directors of the Company then serving: individuals
who, on the Effective Date, constitute the Board and any new director (other
than a director whose initial assumption of office is in connection with an
actual or threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by the Company’s
stockholders was approved or recommended by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors on the Effective
Date or whose appointment, election or nomination for election was previously so
approved or recommended;

            (iv) there is a consummated merger or consolidation of the Company
with any other corporation, other than (A) 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 or parent entity) more than
fifty percent (50%) of the combined voting power of the voting securities of the
Company or such surviving or parent entity’s equity outstanding immediately
after such merger or consolidation or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
Person, directly or indirectly, acquired twenty-five percent (25%) or more of
the combined voting power of the Company’s then outstanding securities (with any
securities acquired by such Person directly from the Company or its subsidiaries
or affiliates not being counted as part of such Person’s beneficially owned
securities); or

            (v) the stockholders of the Company approve a plan of complete
liquidation of the Company and there remains no material contingency to
implementation of such plan or there is consummated 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), other than a sale or disposition
by the Company of all or substantially all of the Company’s assets to an entity,
at least fifty percent (50%) of the combined voting power of the voting
securities of which are owned by stockholders of the Company in substantially
the same proportions as their ownership of the Company immediately prior to such
sale.

(d)      Definition of “409A Ownership/Control Change.” A “409A
Ownership/Control Change” shall be deemed to have occurred if a Change in
Control occurs which involves transactions which constitute a change in the
ownership or effective control of the Company, or in the ownership of a
substantial portion of the assets of the Company, within the meaning of Code
Section 409A(a)(2)(A)(v).

 

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       10.       Additional Award Forfeiture Provisions.

           The Committee may condition a Participant’s right to receive a grant
of an Award, to exercise the Award, to retain cash, Stock, other Awards, or
other property acquired in connection with an Award, or to retain the profit or
gain realized by a Participant in connection with an Award, including cash or
other proceeds received upon sale of Stock acquired in connection with an Award,
upon compliance by the Participant with specified conditions relating to
non-competition, confidentiality of information relating to or possessed by the
Company, non-solicitation of customers, suppliers, and employees of the Company,
cooperation in litigation, non-disparagement of the Company and its subsidiaries
and affiliates and the officers, directors and affiliates of the Company and its
subsidiaries and affiliates, and other restrictions upon or covenants of the
Participant, including during specified periods following termination of
employment or service to the Company.

           11.       General Provisions.

           (a)       Compliance with Legal and Other Requirements. The Company
may, to the extent deemed necessary or advisable by the Committee and subject to
Section 11(k), postpone the issuance or delivery of Stock or payment of other
benefits under any Award until completion of such registration or qualification
of such Stock or other required action under any federal or state law, rule or
regulation, listing or other required action with respect to any stock exchange
or automated quotation system upon which the Stock or other securities of the
Company are listed or quoted, or compliance with any other obligation of the
Company, as the Committee may consider appropriate, and may require any
Participant to make such representations, furnish such information and comply
with or be subject to such other conditions as it may consider appropriate in
connection with the issuance or delivery of Stock or payment of other benefits
in compliance with applicable laws, rules, and regulations, listing
requirements, or other obligations. The foregoing notwithstanding, in connection
with a Change in Control, the Company shall take or cause to be taken no action,
and shall undertake or permit to arise no legal or contractual obligation, that
results or would result in any postponement of the issuance or delivery of Stock
or payment of benefits under any Award or the imposition of any other conditions
on such issuance, delivery or payment, to the extent that such postponement or
other condition would represent a greater burden on a Participant than existed
on the 90th day preceding the Change in Control.

           (b)       Limits on Transferability; Beneficiaries. No Award or other
right or interest of a Participant under the Plan shall be pledged, hypothecated
or otherwise encumbered or subject to any lien, obligation or liability of such
Participant to any party (other than the Company or a subsidiary or affiliate
thereof), or assigned or transferred by such Participant otherwise than by will
or the laws of descent and distribution or to a Beneficiary upon the death of a
Participant, and such Awards or rights that may be exercisable shall be
exercised during the lifetime of the Participant only by the Participant or his
or her guardian or legal representative, except that Awards and other rights
(other than ISOs and SARs in tandem therewith) may be transferred to one or more
transferees during the lifetime of the Participant for purposes of
estate-planning, and may be exercised by such transferees in accordance with the
terms of such Award, but only if and to the extent such transfers are permitted
by the Committee and the Committee has determined that there will be no transfer
of the Award to a third party for value, and subject to any terms and conditions
which the Committee may impose thereon (which may include limitations the
Committee may deem appropriate in order that offers and sales under the Plan
will meet applicable requirements of registration forms under the Securities Act
of 1933 specified by the Securities and Exchange Commission). A Beneficiary,
transferee, or other person claiming any rights under the Plan from or through
any Participant shall be subject to all terms and conditions of the Plan and any
Award document applicable to such Participant, except as otherwise determined by
the Committee, and to any additional terms and conditions deemed necessary or
appropriate by the Committee.

           (c)       Adjustments. In the event that any large, special and
non-recurring dividend or other distribution (whether in the form of cash or
property other than Stock), recapitalization, forward or reverse split, Stock
dividend, reorganization, merger, consolidation, spin-off, combination,
repurchase, share exchange, liquidation, dissolution or other similar corporate
transaction or event affects the Stock such that an adjustment is determined by
the Committee to be appropriate or, in the case of any outstanding Award, which
is necessary in order to prevent dilution or enlargement of the rights of the
Participant, then the Committee shall, in an equitable manner as determined by
the Committee, adjust any or all of (i) the number and kind of shares of Stock
which may be delivered in connection with Awards granted thereafter, including
the number of shares available under Section 4, (ii) the number and kind of
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  Section 5, (iii) the number and kind of shares of Stock subject to or
deliverable in respect of outstanding Awards and (iv) the exercise price, grant
price or purchase price relating to any Award or, if deemed appropriate, the
Committee may make provision for a payment of cash or property to the holder of
an outstanding Option (subject to Section 11(l)). In addition, the Committee is
authorized to make adjustments in the terms and conditions of, and the criteria
included in, Awards (including Performance Awards and perfor­mance goals and any
hypothetical funding pool relating thereto) in recognition of unusual or
nonrecurring events (including, without limitation, events described in the
preceding sentence, as well as acquisitions and dispositions of businesses and
assets) affecting the Company, any sub­sid­iary or affiliate or other business
unit, or the financial statements of the Company or any subsidiary or affiliate,
or in response to changes in applicable laws, regulations, accounting
principles, tax rates and regulations or business conditions or in view of the
Committee’s assessment of the business strategy of the Company, any subsidiary
or affiliate or business unit thereof, performance of comparable organizations,
economic and business conditions, personal performance of a Participant, and any
other circumstances deemed relevant; provided that no such adjustment shall be
authorized or made if and to the extent that the existence of such authority (i)
would cause Options, SARs, or Performance Awards granted under the Plan to
Participants designated by the Committee as Covered Employees and intended to
qualify as “performance-based compensation” under Code Section 162(m) and
regulations thereunder to otherwise fail to qualify as “performance-based
compensation” under Code Section 162(m) and regulations thereunder, or (ii)
would cause the Committee to be deemed to have authority to change the targets,
within the meaning of Treasury Regulation 1.162-27(e)(4)(vi), under the
performance goals relating to Options or SARs granted to Covered Employees and
intended to qualify as “performance-based compensation” under Code Section
162(m) and regulations thereunder.

        (d) Tax Provisions.

            (i) Withholding. The Company and any subsidiary or affiliate is
authorized to withhold from any Award granted, any payment relating to an Award
under the Plan, including from a distribution of Stock, or any payroll or other
payment to a Participant, amounts of withholding and other taxes due or
potentially payable in connection with any transaction involving an Award, and
to take such other action as the Committee may deem advisable to enable the
Company and Participants to satisfy obligations for the payment of withholding
taxes and other tax obligations relating to any Award. This authority shall
include authority to withhold or receive Stock or other property and to make
cash payments in respect thereof in satisfaction of a Participant’s withholding
obligations, either on a mandatory or elective basis in the discretion of the
Committee, or in satisfaction of other tax obligations. Other provisions of the
Plan notwithstanding, only the minimum amount of Stock deliverable in connection
with an Award necessary to satisfy statutory withholding requirements will be
withheld, unless withholding of any additional amount of Stock will not result
in additional accounting expense to the Company.

            (ii) Required Consent to and Notification of Code Section 83(b)
Election. No election under Section 83(b) of the Code (to include in gross
income in the year of transfer the amounts specified in Code Section 83(b)) or
under a similar provision of the laws of a jurisdiction outside the United
States may be made unless expressly permitted by the terms of the Award document
or by action of the Committee in writing prior to the making of such election.
In any case in which a Participant is permitted to make such an election in
connection with an Award, the Participant shall notify the Company of such
election within ten days of filing notice of the election with the Internal
Revenue Service or other governmental authority, in addition to any filing and
notification required pursuant to regulations issued under Code Section 83(b) or
other applicable provision.

            (iii) Requirement of Notification Upon Disqualifying Disposition
Under Code Section 421(b). If any Participant shall make any disposition of
shares of Stock delivered pursuant to the exercise of an ISO under the
circumstances described in Code Section 421(b) (i.e., a disqualifying
disposition), such Participant shall notify the Company of such disposition
within ten days thereof.

(e)       Changes to the Plan. The Board may amend, suspend or terminate the
Plan or the Committee’s authority to grant Awards under the Plan without the
consent of stockholders or Participants; provided, however, that any amendment
to the Plan shall be submitted to the Company’s stockholders for approval not
later than the earliest annual meeting for which the record date is at or after
the date of such Board action if such stockholder approval is required by any
federal or state law or regulation or Nasdaq Marketplace Rules or any other
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exchange or automated quotation system on which the Stock may then be listed or
quoted, or if such amendment would materially increase the number of shares
reserved for issuance and delivery under the Plan, and the Board may otherwise,
in its discretion, determine to submit other amendments to the Plan to
stockholders for approval. The Committee is authorized to amend outstanding
awards, except as limited by the Plan. The Board and Committee may not amend
outstanding Awards (including by means of an amendment to the Plan) without the
consent of an affected Participant if such an amendment would materially and
adversely affect the rights of such Participant with respect to the outstanding
Award (for this purpose, actions that alter the timing of federal income
taxation of a Participant will not be deemed material unless such action results
in an income tax penalty on the Participant, and any discretion that is reserved
by the Board or Committee with respect to an Award is unaffected by this
provision). Without the approval of stockholders, the Committee will not amend
or replace previously granted Options or SARs in a transaction that constitutes
a “repricing,” which for this purpose means any of the following or any other
action that has the same effect:

• Lowering the exercise price of an option or SAR after it is granted;

    • Any other action that is treated as a repricing under generally accepted
accounting principles;

    • Canceling an option or SAR at a time when its exercise price exceeds the
fair market value of the underlying Stock, in exchange for another option or
SAR, restricted stock, or other equity;

provided, however, that the foregoing transactions shall not be deemed a
repricing if pursuant to an adjustment authorized under Section 11(c). With
regard to other terms of Awards, the Committee shall have no authority to waive
or modify any such Award term after the Award has been granted to the extent the
waived or modified term would be mandatory under the Plan for any Award newly
granted at the date of the waiver or modification.

(f)       Right of Setoff. The Company or any subsidiary or affiliate may, to
the extent permitted by applicable law, deduct from and set off against any
amounts the Company or a subsidiary or affiliate may owe to the Participant from
time to time, including amounts payable in connection with any Award, owed as
wages, fringe benefits, or other compensation owed to the Participant, such
amounts as may be owed by the Participant to the Company, including but not
limited to amounts owed under Section 10(a), although the Participant shall
remain liable for any part of the Participant’s payment obligation not satisfied
through such deduction and setoff. By accepting any Award granted hereunder, the
Participant agrees to any deduction or setoff under this Section 11(f).

(g)      Unfunded Status of Awards; Creation of Trusts. The Plan is intended to
constitute an “unfunded” plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant or obligation to deliver
Stock pursuant to an Award, nothing contained in the Plan or any Award shall
give any such Participant any rights that are greater than those of a general
creditor of the Company; provided that the Committee may authorize the creation
of trusts and deposit therein cash, Stock, other Awards or other property, or
make other arrangements to meet the Company’s obligations under the Plan. Such
trusts or other arrangements shall be consistent with the “unfunded” status of
the Plan unless the Committee otherwise determines with the consent of each
affected Participant.

(h)      Nonexclusivity of the Plan. Neither the adoption of the Plan by the
Board nor its submission to the stockholders of the Company for approval shall
be construed as creating any limitations on the power of the Board or a
committee thereof to adopt such other incentive arrangements, apart from the
Plan, as it may deem desirable, including incentive arrangements and awards
which do not qualify under Code Section 162(m), and such other arrangements may
be either applicable generally or only in specific cases.

(i)     Payments in the Event of Forfeitures; Fractional Shares. Unless
otherwise determined by the Committee, in the event of a forfeiture of an Award
with respect to which a Participant paid cash consideration, the Participant
shall be repaid the amount of such cash consideration. No fractional shares of
Stock shall be issued or delivered pursuant to the Plan or any Award. The
Committee shall determine whether cash, other Awards or other property shall be
issued or paid in lieu of such fractional shares or whether such fractional
shares or any rights thereto shall be forfeited or otherwise eliminated.

(j)      Compliance with Code Section 162(m). It is the intent of the Company
that Options and SARs granted to Covered Employees and other Awards designated
as Awards to Covered Employees subject to Section 7

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shall constitute qualified “performance-based compensation” within the meaning
of Code Section 162(m) and regulations thereunder, unless otherwise determined
by the Committee at the time of allocation of an Award. Accordingly, the terms
of Sections 7(b), (c), and (d), including the definitions of Covered Employee
and other terms used therein, shall be interpreted in a manner consistent with
Code Section 162(m) and regulations thereunder. The foregoing notwithstanding,
because the Committee cannot determine with certainty whether a given
Participant will be a Covered Employee with respect to a fiscal year that has
not yet been completed, the term Covered Employee as used herein shall mean only
a person designated by the Committee as likely to be a Covered Employee with
respect to a specified fiscal year. If any provision of the Plan or any Award
document relating to a Performance Award that is designated as intended to
comply with Code Section 162(m) does not comply or is inconsistent with the
requirements of Code Section 162(m) or regulations thereunder, such provision
shall be construed or deemed amended to the extent necessary to conform to such
requirements, and no provision shall be deemed to confer upon the Committee or
any other person discretion to increase the amount of compensation otherwise
payable in connection with any such Award upon attainment of the applicable
performance objectives.

(k)     Certain Limitations on Awards to Ensure Compliance with Section 409A.
For purposes of the Plan, references to an Award term or event (including any
authority or right of the Company or a Participant) being “permitted” under
Section 409A mean, for a 409A Award, that the term or event will not cause the
Participant to be deemed to be in constructive receipt of compensation relating
to the Award prior to the distribution of Stock, cash or other property or to be
liable for payment of interest or a tax penalty under Section 409A and, for a
Non-409A Award, that the term or event will not cause the Award to be treated as
subject to Section 409A. Other provisions of the Plan notwithstanding, the terms
of any 409A Award and any Non-409A Award, including any authority of the Company
and rights of the Participant with respect to the Award, shall be limited to
those terms permitted under Section 409A, and any terms not permitted under
Section 409A shall be automatically modified and limited to the extent necessary
to conform with Section 409A. For this purpose, other provisions of the Plan
notwithstanding, the Company shall have no authority to accelerate distributions
relating to 409A Awards in excess of the authority permitted under Section 409A,
any distribution subject to Section 409A(a)(2)(A)(i) upon separation from
service of a “Specified Employee” (or “key employee”) as defined under Section
409A(a)(2)(B)(i) shall not occur earlier than the earliest time permitted under
Section 409A(a)(2)(B)(i), any distribution triggered by a Participant’s
termination of employment and intended to qualify under Section 409A(a)(2)(A)(i)
shall be made only at or following such time as the Participant has had a
“separation from service” within the meaning of Section 409A(a)(2)(A)(i), and
any authorization of payment of cash to settle a Non-409A Award shall apply only
to the extent permitted under Section 409A for such Award.

(l)     Governing Law. The validity, construction, and effect of the Plan, any
rules and regulations relating to the Plan and any Award document shall be
determined in accordance with the laws of the State of Delaware, without giving
effect to principles of conflicts of laws, and applicable provisions of federal
law.

(m)     Awards to Participants Outside the United States. The Committee may
modify the terms of any Award under the Plan made to or held by a Participant
who is then resident or primarily employed outside of the United States, or
establish one or more sub-plans for such participants, in any manner deemed by
the Committee to be necessary or appropriate in order that such Award shall
conform to laws, regulations, and customs of the country in which the
Participant is then resident or primarily employed, or so that the value and
other benefits of the Award to the Participant, as affected by foreign tax laws
and other restrictions applicable as a result of the Participant’s residence or
employment abroad shall be comparable to the value of such an Award to a
Participant who is resident or primarily employed in the United States. An Award
may be modified under this Section 11(m) in a manner that is inconsistent with
the express terms of the Plan, so long as such modifications will not contravene
any applicable law or regulation or result in actual liability under Section
16(b) for the Participant whose Award is modified.

(n)      Limitation on Rights Conferred under Plan. Neither the Plan nor any
action taken hereunder shall be construed as (i) giving any Eligible Person or
Participant the right to continue as an Eligible Person or Participant or in the
employ or service of the Company or a subsidiary or affiliate, (ii) interfering
in any way with the right of the Company or a subsidiary or affiliate to
terminate any Eligible Person’s or Participant’s employment or service at any
time (subject to the terms and provisions of any separate written agreements),
(iii) giving an Eligible Person or Participant any claim to be granted any Award
under the Plan or to be treated uniformly with other Participants and employees,
or (iv) conferring on a Participant any of the rights of a stockholder of the
Company unless and until the Participant is duly issued or transferred shares of
Stock in accordance with the terms of an Award or an Option is duly exercised.
Except as expressly provided in the Plan and an Award document,

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neither the Plan nor any Award document shall confer on any person other than
the Company and the Participant any rights or remedies thereunder. Any Award
shall not be deemed compensation for purposes of computing benefits under any
retirement plan of the Company or any subsidiary or affiliate and shall not
affect any benefits under any other benefit plan at any time in effect under
which the availability or amount of benefits is related to the level of
compensation (unless required by any such other plan or arrangement with
specific reference to Awards under this Plan).

(o)     Severability; Entire Agreement. If any of the provisions of this Plan or
any Award document is finally held to be invalid, illegal or unenforceable
(whether in whole or in part), such provision shall be deemed modified to the
extent, but only to the extent, of such invalidity, illegality or
unenforceability, and the remaining provisions shall not be affected thereby;
provided, that, if any of such provisions is finally held to be invalid,
illegal, or unenforceable because it exceeds the maximum scope determined to be
acceptable to permit such provision to be enforceable, such provision shall be
deemed to be modified to the minimum extent necessary to modify such scope in
order to make such provision enforceable hereunder. The Plan and any Award
documents contain the entire agreement of the parties with respect to the
subject matter thereof and supersede all prior agreements, promises, covenants,
arrangements, communications, representations and warranties between them,
whether written or oral with respect to the subject matter thereof. No rule of
strict construction shall be applied against the Company, the Committee, or any
other person in the interpretation of any terms of the Plan, Award, or agreement
or other document relating thereto.

(p)     Plan Effective Date and Termination. The Plan shall become effective if,
and at such time as, the stockholders of the Company have approved it by the
affirmative votes of the holders of a majority of the voting securities of the
Company present, or represented, and entitled to vote on the subject matter at a
duly held meeting of stockholders, which shall be the Effective Date. Upon such
approval of the Plan by the stockholders of the Company, no further awards shall
be granted under the 1999 Stock Incentive Plan and awards will be limited to
non-U.S. residents under the 2004 Stock Incentive Plan, but any outstanding
awards under those plans shall continue in accordance with their terms. Unless
earlier terminated by action of the Board of Directors, the authority of the
Committee to make grants under the Plan shall terminate on the date that is ten
years after the latest date upon which stockholders of the Company have approved
the Plan, and the Plan will remain in effect until such time as no Stock remains
available for delivery under the Plan and the Company has no further rights or
obligations under the Plan with respect to outstanding Awards under the Plan.

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