Exhibit 10(I)

STOCK-BASED INCENTIVE COMPENSATION PLAN FOR OFFICERS AND KEY EMPLOYEES

CARPENTER TECHNOLOGY CORPORATION

STOCK-BASED INCENTIVE COMPENSATION PLAN

FOR OFFICERS AND KEY EMPLOYEES

Originally Adopted June 22, 1993

As Amended and Restated July 1, 2011

To be Effective July 1, 2011

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

CARPENTER TECHNOLOGY CORPORATION

STOCK-BASED INCENTIVE COMPENSATION PLAN

FOR OFFICERS AND KEY EMPLOYEES

Section 1. Purpose of the Plan. The purpose of the Plan is to assist the Company
and its Subsidiaries in attracting and retaining valued Employees by offering
them a greater stake in the Company’s success and a closer identity with it, and
to encourage ownership of the Company’s stock by such Employees.

Section 2. Definitions. As used herein, the following definitions shall apply:

2.1 “Award” means the grant of Restricted Stock, Options or Restricted Stock
Units under the Plan.

2.2 “Award Agreement” means the written agreement, instrument or document
evidencing an Award.

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

2.4 “Cause” means the Employee’s: (a) willful misconduct or gross negligence in
connection with the performance of the Employee’s duties for the Company or any
Subsidiary; (b) conviction of, or a plea of guilty or nolo contendere to, a
felony or a crime involving fraud or moral turpitude; (c) engagement in any
business that directly or indirectly competes with the Company or any
Subsidiary; (d) disclosure of trade secrets, customer lists or confidential
information of the Company or any Subsidiary to a competitor or unauthorized
person; or (e) act or omission that results in a violation of policy of either
the Company or any Subsidiary, as reasonably determined by the Board in its sole
discretion.

2.5 “Change in Control” means and includes each of the following:

(a) The acquisition by any person, entity, or group of persons (within the
meaning of section 13(d)(3) or 14(d)(2) of the Exchange Act) (each, a “Person”)
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of either (i) more than 50% of the then-outstanding shares of
common stock of the Company (the “Outstanding Company Common Stock”) or,
(ii) within any 12 month period, 35% or more of the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that, the following acquisitions shall not constitute a
Change in Control: (i) any acquisition directly from the Company, (ii) any
acquisition by the Company, or (iii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any affiliated
company;

 

1

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

(b) individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board
during any 12 month period; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company’s stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or

(c) the acquisition by any Person during any 12 month period of assets from the
Company that have a total gross fair market value equal to or more than 50% of
the total gross fair market value of all of the assets of the Company
immediately prior to the acquisition or acquisitions. For this purpose, gross
fair market value means the value of the assets of the Company, or the value of
the assets being disposed of, determined without regard to any liabilities
associated with the assets.

2.6 “Code” means the Internal Revenue Code of 1986, as amended. A reference to
any provision of the Code shall include reference to any successor provision of
the Code.

2.7 “Committee” means the committee designated by the Board to administer the
Plan under Section 4. With respect to Qualified Performance-Based Awards, the
Committee shall either be comprised exclusively of two or more members of the
Board who are Non-Employee Directors and “outside directors” within the meaning
of section 162(m)(4)(C) of the Code and treasury regulation 1.162-27(e)(3) or
the Committee shall designate a sub-committee that is so comprised.

2.8 “Common Stock” means the Common Stock of the Company, par value $5.00 per
share.

2.9 “Company” means Carpenter Technology Corporation, a Delaware corporation, or
any successor corporation.

2.10 “Disability” means a qualified physician designated by the Company has
reviewed and approved the determination that an Employee:

(a) is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months; or

(b) is, by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, receiving income replacement

 

2

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

benefits for a period of not less than 3 months under an accident and health
plan covering employees of the Company or any Subsidiary.

2.11 “Employee” means an officer or other key employee of the Company or a
Subsidiary including a director who is such an employee.

2.12 “Exchange Act” means the Securities Exchange Act of 1934, as amended. A
reference to any provision of the Exchange Act or rule promulgated under the
Exchange Act shall include reference to any successor provision or rule.

2.13 “Fair Market Value” means on any given date, the closing price of a share
of Common Stock on the New York Stock Exchange, or, in the absence of a closing
price on such date, the closing price on the last trading day preceding such
date.

2.14 “Non-Employee Director” means a member of the Board who is not an Employee
as defined in Rule 16b-3 promulgated by the U.S. Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended.

2.15 “Non-Qualified Option” means an Option or portion thereof not intended to
be an “Incentive Stock Option” as defined in section 422 of the Code.

2.16 “Option” means a right granted under the Plan to purchase a specified
number of shares of Common Stock at a specified price. All Options available
under the Plan are Non-Qualified Options.

2.17 “Outside Director” means a member of the Board within the meaning of
Section 162(m)(4)(C) of the Code and Treasury Regulation 1.162-27(e)(3), or any
successor thereto.

2.18 “Participant” means any individual who receives an Award.

2.19 “Performance Goal” means any one or more of the following performance
goals, intended by the Committee to constitute objective goals for purposes of
Code Section 162(m), either individually, alternatively, or in any combination,
applied to either the Company as a whole or to a business unit or Affiliate,
either individually, alternatively or in combination, and measured either
quarterly, annually, or cumulatively over a period of quarters or years, on an
absolute basis or relative to a pre-established target, to previous quarter’s or
years’ results or to a designated comparison group, in each case as specified by
the Committee in the Award:

(a) the price of Common Stock;

(b) market share;

(c) sales;

(d) revenue;

 

3

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

(e) earnings or diluted earnings per share of Common Stock, with or without net
pension credit/expense;

(f) return on shareholder equity;

(g) return on common book equity;

(h) costs;

(i) cash flow;

(j) return on total assets (“ROA”);

(k) return on invested capital;

(l) return on net assets (“RONA”);

(m) income, including but not limited to operating income and net income, with
or without net pension credit/expense;

(n) operating margin;

(o) capital costs;

(p) earnings before interest and income taxes (“EBIT”) or earnings before
interest, income taxes, depreciation and amortization (“EBITDA”);

(q) economic profit;

(r) total shareholder return;

(s) economic value added;

(t) expenses or operating expenses;

(u) cost reduction goals;

(v) total case incidence rate;

(w) customer satisfaction as measured by expenses or costs of, or lost income,
revenue, or sales attributable to, customer claims for refunds or remakes; or

(x) any combination of the foregoing.

 

4

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

The Committee may appropriately adjust any evaluation of performance under a
Performance Goal to remove the effect of equity compensation expense under FAS
123R, amortization of acquired technology and intangibles, asset write-downs;
litigation or claim judgments or settlements; the effect of changes in or
provisions under tax law, accounting principles or other such laws or provisions
affecting reported results; accruals for reorganization and restructuring
programs; discontinued operations; and any items that are extraordinary, unusual
in nature, non-recurring or infrequent in occurrence, except where such action
would result in the loss of the otherwise available exemption of the Award under
Section 162(m) of the Code, if applicable.

2.20 “Performance Period” means a period of one or more consecutive fiscal
years, or portions thereof, of the Company specified by the Committee during
which the performance of the Company, any Subsidiary or any department thereof,
or any individual is measured for the purpose of determining the extent to which
a Performance Goal is achieved. Nothing in this Plan shall prevent the Committee
from establishing a Performance Period that commences prior to the termination
of one or more other Performance Periods.

2.21 “Plan” means the Carpenter Technology Corporation Stock-Based Incentive
Compensation Plan for Officers and Key Employees herein set forth, as amended
from time to time.

2.22 “Qualified Performance-Based Award” means an Award or portion of an Award
that is intended to satisfy the requirements for “qualified performance-based
compensation” under section 162(m) of the Code and the regulations issued
thereunder. The Committee shall designate any Qualified Performance-Based Award
as such at the time it is granted.

2.23 “Restricted Stock” means Common Stock granted by the Committee under
Section 6.1 of the Plan.

2.24 “Restricted Stock Unit” means a book-entry unit with a value equal to one
share of Common Stock.

2.25 “Restriction Period” means the period during which Restricted Stock granted
under Section 6.1 of the Plan or Restricted Stock Units granted under
Section 6.3 of the Plan are subject to forfeiture.

2.26 “Retirement” means the Participant’s termination of employment with the
Company with eligibility to receive a monthly retirement benefit payment in the
following month under either the General Retirement Plan for Employees of
Carpenter Technology Corporation or the Supplemental Retirement Plan for
Executives of Carpenter Technology Corporation.

2.27 “Separation from Service” means a “separation from service” within the
meaning of section 409A of the Code and the Treasury regulations and other
guidance issued thereunder.

 

5

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

2.28 “Subsidiary” means any corporation, partnership, joint venture or other
business entity of which 50% or more of the outstanding voting power is
beneficially owned, directly or indirectly, by the Company.

Section 3. Eligibility. Any Employee may be selected by the Company to receive
an Award.

Section 4. Administration and Implementation of Plan.

4.1 The Plan shall be administered by the Committee. Any action of the Committee
in administering the Plan shall be final, conclusive and binding on all persons,
including the Company, its Subsidiaries, their employees, Participants, persons
claiming rights from or through Participants and stockholders of the Company.

4.2 Subject to the provisions of the Plan, and specifically including Section 3
hereof, the Committee shall have full and final authority in its discretion
(a) to select the Employees who will receive Awards pursuant to the Plan, (b) to
determine the type or types of Awards to be granted to each Participant, (c) to
determine the number of shares of Common Stock to which an Award will relate,
the terms and conditions of any Award granted under the Plan (including, but not
limited to, restrictions as to vesting, transferability or forfeiture,
exercisability or settlement of an Award and waivers or accelerations thereof,
and waivers of or modifications to performance conditions relating to an Award,
based in each case on such considerations as the Committee shall determine) and
all other matters to be determined in connection with an Award; (d) to determine
whether, to what extent, and under what circumstances an Award may be canceled,
forfeited, or surrendered; (e) to determine whether, and to certify that,
Performance Goals to which the settlement of an Award is subject are satisfied;
(f) to correct any defect or supply any omission or reconcile any inconsistency
in the Plan, and to adopt, amend and rescind such rules and regulations as, in
its opinion, may be advisable in the administration of the Plan; and (g) to make
all other determinations as it may deem necessary or advisable for the
administration of the Plan.

4.3 The Committee may delegate to the Company’s Chief Executive Officer (the
“CEO”), its authority under Section 4.2(a)-(d) above, to grant or amend Awards
covering a pre-determined aggregate number of shares of Common Stock. Such
delegation is limited to the authority to grant and amend Awards to Participants
who are not subject to the requirements of Rule 16b-3 of the Exchange Act. Any
Awards granted or amended by the CEO shall be subject to the terms of the Plan.
The CEO shall report to the Committee, in a form and manner to be determined by
the Committee, at least annually on the disposition of shares subject to Awards
granted or amended by the CEO.

Section 5. Shares of Common Stock Subject to the Plan.

5.1 Subject to adjustment as provided in Section 9, the total number of shares
of Common Stock available for Awards under the Plan as of June 29, 2011, shall
be 2,719,790 shares, increased by any shares of Common Stock that were reserved
under the Plan but were either (a) not subject to Awards or (b) subject to
Awards which were

 

6

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

forfeited, canceled or expired unexercised, in either case prior to this
amendment and restatement. Common Stock granted under the Plan may be reserved
or made available from the Company’s authorized and unissued Common Stock or
from Common Stock reacquired and held in the Company’s treasury.

5.2 Subject to adjustment as provided in Section 9, the maximum number of shares
that may be granted to any Employee as Awards under the Plan during any calendar
year shall not exceed 500,000 shares.

5.3 If any shares subject to an Award are forfeited or such Award otherwise
terminates or is settled for any reason whatsoever without an actual
distribution of shares to the Participant, any shares counted against the number
of shares available for issuance pursuant to the Plan with respect to such Award
shall, to the extent of any such forfeiture, settlement, or termination, again
be available for Awards under the Plan; provided, however, that the Committee
may adopt procedures for the counting of shares relating to any Award to ensure
appropriate counting, avoid double counting, and provide for adjustments in any
case in which the number of shares actually distributed differs from the number
of shares previously counted in connection with such Award.

Section 6. Awards. 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 the Award is granted or thereafter, such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall determine, including terms requiring forfeiture of
Awards in the event of the termination of employment or other relationship with
the Company or any Subsidiary by the Participant; provided, however, that the
Committee shall retain full power to accelerate or waive any such additional
term or condition as it may have previously imposed. Each Award shall be
evidenced by an Award Agreement. The right of a Participant to exercise or
receive a grant or settlement of any Award, and the timing thereof, may be
subject to such Performance Goals as may be specified by the Committee
consistent with Section 6.6 hereof.

6.1 Restricted Stock. An Award of Restricted Stock is a grant by the Company of
a specified number of shares of Common Stock to the Participant, which shares
are subject to forfeiture upon the happening of specified events. Such an Award
shall be subject to the following terms and conditions:

(a) Upon determination of the number of shares of Restricted Stock to be granted
to the Participant, the Committee shall direct the Company to see that its
transfer agent and registrar for the Common Stock (“Transfer Agent”) establishes
a special account representing the number of restricted shares of Common Stock
issued to the Participant. Following the Restriction Period, the Company will
instruct the Transfer Agent to remove the restriction from such shares of Common
Stock held for the Participant in the special account and transfer these shares
to an unrestricted account in the Participant’s name.

(b) From time to time during the Restriction Period, the Committee may, but is
not required to, authorize the payment of an amount equivalent to a

 

7

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

dividend declared and paid on the Company’s Common Stock to any Participant
awarded Restricted Stock. Such payment may be made in cash currently or deemed
reinvested in Restricted Stock as determined by the Committee in its sole
discretion. During the Restriction Period the Participant shall have the right
to vote the shares of Restricted Stock.

(c) The Award Agreement shall specify the duration of the Restriction Period and
the performance, employment or other conditions under which the Restricted Stock
may be forfeited to the Company. The Restriction Period for such Awards, unless
otherwise determined by the Committee, shall be at least (i) three years for
Awards that vest solely on the passage of time and (ii) one year for Awards that
are earned in whole or in part upon the attainment of Performance Goals. At the
end of the Restriction Period applicable to all or a portion of the Restricted
Stock, as applicable, the restrictions imposed hereunder shall lapse with
respect to that number of shares of Restricted Stock and these shares will be
transferred to an unrestricted account in the Participant’s name.

6.2 Options. Options give a Participant the right to purchase a specified number
of shares of Common Stock from the Company for a specified time period at a
fixed (or other determinable) price. The Award of Options shall be subject to
the following terms and conditions:

(a) Option Price: The price per share at which Common Stock may be purchased
upon exercise of an Option shall be determined by the Committee and set forth in
the applicable Award Agreement, but shall not be less than the Fair Market Value
of a share of Common Stock on the date the Award is granted.

(b) Term of Options: The Award Agreement shall specify when an Option may be
exercisable and the terms and conditions applicable thereto. The term of an
Option shall in no event be greater than ten years and no Option may be
exercisable sooner than one year from the date the Award is granted.

(c) Payment of Option Price: The Committee shall determine the time or times at
which an Option may be exercised by the Participant in whole or in part, whether
the exercise price for an Option shall be paid in cash, by the surrender at Fair
Market Value of Common Stock held by the Participant, by any combination of cash
and shares of Common Stock, the means or methods of payment, including “cashless
exercise” arrangements such as through a broker or by net exercise, to the
extent permitted by applicable law, and the methods by which, or the time or
times at which, Common Stock will be delivered or deemed to be delivered to the
Participant upon the exercise of such Option. Notwithstanding the foregoing, the
Committee shall not permit payment through any method that would constitute a
prohibited extension of credit to those officers of the Company who are subject
to the provisions of the Sarbanes-Oxley Act of 2002.

 

8

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

6.3 Restricted Stock Units. Restricted Stock Units shall confer on the
Participant the right to receive the Fair Market Value of the Restricted Stock
Units upon the attainment of Performance Goals, after a Restriction Period, or a
combination thereof, as specified by the Committee. The Award of Restricted
Stock Units shall be subject to the following terms and conditions:

(a) A Participant may not receive Awards of Restricted Stock Units totaling more
than the limit set forth in Section 5.2 hereof.

(b) Dividend Equivalents: The Committee may, but is not required to, authorize
the payment of an amount equivalent to a dividend declared and paid on the
Company’s Common Stock to any Participant awarded Restricted Stock Units,
provided that any such payment, if authorized, shall be made within 30 days
following the date the dividend was paid to the holders of the Company’s Common
Stock and shall be in the form of (i) cash or (ii) additional Restricted Stock
Units that shall be subject to the provisions of the Award Agreement governing
the Restricted Stock Units upon which the dividend equivalent is paid and added
to the number of Restricted Stock Units awarded under such Award Agreement.
Notwithstanding the preceding, a dividend equivalent shall be forfeited if the
Participant terminates employment with the Company for any reason prior to the
payment date of the dividend equivalent.

(c) Voting Rights: A Participant shall not have voting rights with respect to
Restricted Stock Units prior to payment of Common Stock in satisfaction of such
Restricted Stock Units.

(d) Form and Timing of Payment of Restricted Stock Units: Payment of Restricted
Stock Units shall be made as soon as practicable but not later than 30 days
following the later of the close of the Performance Period or the close of the
Restriction Period, as determined by the Committee and specified in the
applicable Award Agreement. Payment shall be in the form of Common Stock which
has an aggregate Fair Market Value equal to the Fair Market Value of the
Restricted Stock Units at the close of the Performance Period or other
applicable period determined at the Committee’s discretion and specified in the
applicable Award Agreement. The provisions of Section 6.4 below shall apply to
any Award that is subject to the application of Code Section 409A.

6.4 Deferral of Restricted Stock Units. The Committee may, but need not, permit
a Participant to defer receipt of payment in satisfaction of earned Restricted
Stock Units, provided that any such deferral shall be administered in good faith
compliance with section 409A of the Code and the guidance thereunder, including
the following rules:

(a) A Participant may only elect to defer payment of vested Restricted Stock
Units by making a valid, irrevocable election prior to: (i) in the case of
Restricted Stock Units that may become vested solely based upon the attainment
of Performance Goals within a Performance Period, six months prior to any date

 

9

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

during the Performance Period upon which the outcome of Performance Goals will
determine the portion, if any, of the vesting of such Award, (ii) in the case of
Restricted Stock Units that may become vested in whole or in part as a result of
the passage of time, the earlier of 30 days following the grant of Restricted
Stock Units or the last day of the Company’s fiscal year during which the
Restricted Stock Units are granted so long as the initial scheduled vesting of
such Restricted Stock Units does not precede the last day of the subsequent
fiscal year;

(b) Unless otherwise provided by the Committee, during the deferral period, the
Participant shall have those rights with respect to Restricted Stock Units set
forth at Section 6.3(b);

(c) A Participant may elect to have such Restricted Stock Units paid upon:

(i) such Participant’s Separation from Service on or after the Participant’s
Retirement;

(ii) a Change in Control which also constitutes a “change in the ownership or
effective control of the corporation or in the ownership of a substantial
portion of the assets of the corporation” within the meaning of Code
Section 409A and the Treasury regulations issued thereunder (a “409A Change in
Control”);

(iii) Disability;

(iv) the earlier to occur of (i), (ii) or (iii) above;

(v) the occurrence of an “Unforeseeable Emergency” within the meaning of section
409A of the Code and the guidance thereunder; or

(vi) a date specified by the Participant, provided that such date shall be no
earlier than the first day of the fourth month of the Company’s fiscal year
following the year during which such Restricted Stock Units are earned or
time-vested;

(d) Notwithstanding the foregoing, with respect to a Participant who, as of the
date of the Participant’s Separation from Service, is a “Specified Employee”
within the meaning of section 409A of the Code and the Treasury regulations and
other guidance thereunder, any payment of deferred Restricted Stock Units on
account of the Participant’s Separation from Service in accordance with
Section 6.4(c)(i) may not be made earlier than 6 months following such
Participant’s Separation from Service, except that in the event of any
Participant’s earlier death, such Restricted Stock Units shall be paid within 30
days after the Company receives notice of the Participant’s death; and

 

10

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

(e) The Committee is authorized to take such action as it deems necessary and
reasonable to avoid the application of the additional tax described in section
409A(a)(1)(B) of the Code to any Award deferred hereunder.

6.5 Effect of Termination on Awards. Unless otherwise specified in the Award
Agreement applicable to the relevant Award, the following rules shall apply:

(a) Options: Provided the Participant has remained in service for at least 12
months following the grant of an Option to such Participant, such Participant’s
Option will be exercisable following such Participant’s termination of
employment as follows:

(i) If the Participant’s termination of employment is by reason of such
Participant’s death or Disability, all Options that were granted more than 12
months before such event shall become fully vested and exercisable by the
Participant or his or her estate at any time prior to the expiration of the
original term of the Option.

(ii) If the Participant’s termination is by reason of Retirement, all
unexercisable Options that were granted more than 12 months before such
Retirement date shall be immediately vested and exercisable by the Participant
or his or her estate prior to the expiration of the original term of the Option;
provided, however, that the Committee (or the CEO in the case of an Option
granted under Section 4.3 hereof) reserves the right to determine that unvested
Options are forfeited. Options that were exercisable at the Participant’s
Retirement shall continue to be exercisable by the Participant, or his or her
estate, prior to the expiration of the original term.

(iii) If the Participant’s termination of employment is for any reason other
than as described in Sections 6.5(a)(i) and 6.5(a)(ii) above, any then
exercisable Option shall expire, and no longer be exercisable, by the
Participant or his or her estate as of the earlier of three months following
such termination or the original term of the Option.

(b) Restricted Stock and Restricted Stock Units:

(i) If the Participant’s termination of employment is by reason of such
Participant’s death or Disability, all earned Restricted Stock or Restricted
Stock Units shall become immediately vested and payable to the Participant, or
his or her estate. The Participant, or his or her estate, shall also be eligible
to receive a prorated payout of any unearned performance-based Restricted Stock
or Restricted Stock Units, payable at the time such payment would otherwise have
been made had the Participant’s employment continued, based upon the extent to
which Performance Goals were met during the Performance Period.

 

11

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

(ii) If the Participant’s termination is by reason of Retirement, all earned
Restricted Stock and Restricted Stock Units shall become immediately vested and
payable to the Participant, or his or her estate. The Participant, or his or her
estate shall also be eligible to receive a pro-rated payout of any unearned
performance-based Restricted Stock or Restricted Stock Units, payable at the
time such payment would otherwise have been made had the Participant’s
employment continued, based upon the extent to which Performance Goals were met
during the Performance Period. Notwithstanding the foregoing, the Committee (or
the CEO in the case of an Award granted under Section 4.3 hereof) reserves the
right to determine that unvested Restricted Stock and Restricted Stock Units are
forfeited.

(iii) In the event of the Participant’s termination of employment for any reason
other than death, Disability or Retirement, any Award of Restricted Stock or
Restricted Stock Units subject to Performance Goals or other restrictions or
conditions not satisfied at the time of such termination shall be forfeited.

(c) Termination for Cause: Notwithstanding anything in the Plan to the contrary,
in the event a Participant’s employment with the Company or any Subsidiary is
terminated for Cause, the Committee (or the CEO in the case of an Award granted
under Section 4.3 hereof) may, in its sole discretion, cancel each unexercised
or unvested Award granted to such Participant effective upon such termination.

6.6 Rules Applicable to Qualified Performance-Based Awards. To the extent the
Committee determines, in its sole discretion, that it is necessary or advisable
to grant Qualified Performance-Based Awards in compliance with section 162(m) of
the Code, the following rules shall apply:

(a) Only Employees who are “Covered Employees” within the meaning of section
162(m) of the Code and the Treasury regulations thereunder shall be eligible to
receive Qualified Performance-Based Awards. The Committee shall designate in its
sole discretion which Covered Employees will be Participants for a Performance
Period within the earlier of (x) the first 90 days of a Performance Period and
(y) the lapse of 25% of the Performance Period.

(b) The Committee shall establish in writing within the earlier of (x) the first
90 days of a Performance Period and (y) the lapse of 25% of the Performance
Period, and in any event, while the outcome is substantially uncertain,
(i) Performance Goals for the Performance Period, and (ii) in respect of such
Performance Goals, a minimum acceptable level of achievement below which no
payment will be made or no Award shall vest or become exercisable, and an
objective formula or other method for determining the amount of any payment to
be made or the extent to which an Award hereunder shall vest or

 

12

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

become exercisable if performance is at or above such minimum acceptable level
but falls short of the maximum achievement of the specified Performance Goals.

(c) Following the completion of a Performance Period, the Committee shall review
and certify in writing whether, and to what extent, the Performance Goals for
the Performance Period have been achieved and, if so, calculate and certify in
writing the amount of the Qualified Performance-Based Awards earned for the
Performance Period based upon the Performance Goals and the related formulas or
methods as determined pursuant to Section 6.6(b). The Committee shall then
determine the actual amount payable or the extent to which an Award is vested or
exercisable as a result of attainment of such Performance Goals under each
Participant’s Award for the Performance Period, and, in doing so, may reduce or
eliminate, except as otherwise provided in the Award Agreement, the amount of
the Award. In no event shall the Committee have the authority to increase Award
amounts to any Covered Employee.

(d) An Award granted, vesting or becoming exercisable with respect to a
Performance Period shall be paid (unless such Award is subject to the
Participant’s exercise, which exercise such Participant has not effectuated) to
the Participant within a reasonable time after completion of the certification
described in Section 6.6(c) and in accordance with Section 6.1, 6.2, 6.3, 6.4,
or 6.5, as applicable.

6.7 Additional Provisions Applicable to 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 for, any other Award granted under the
Plan or any Award granted under any other plan of the Company or any Subsidiary
or any business entity acquired by the Company or any Subsidiary, or any other
right of a Participant to receive payment from the Company or any Subsidiary.

Section 7. Exchange and Buy Out Provisions. Subject to the restrictions of
Section 10 hereof, the Committee may at any time exchange or buy out any
previously granted Award other than an Award with an exercise price that is less
than Fair Market Value or may provide in any Award Agreement terms and
conditions under which the Participant must sell, or offer to sell, to the
Company any unexercised Award, whether or not vested, or any Common Stock
acquired pursuant to such Award for a payment in cash, Common Stock or other
property based on such terms and conditions as the Committee shall determine and
communicate to the Participant at the time that such offer is made or as may be
set forth in the Award Agreement.

Section 8. Change in Control. Notwithstanding any provision in this Plan to the
contrary and unless otherwise provided in the applicable Participant’s Award
Agreement, upon the occurrence of a Change in Control (or solely with respect to
Restricted Stock Units, a 409A Change in Control), (a) each Option then
outstanding shall become immediately exercisable to the full extent of any
shares of Common Stock subject thereto, (b) any remaining restrictions on shares
of Restricted Stock shall immediately lapse, and (c) the Performance Goals
and/or time period or periods applicable to any Restricted Stock or Restricted
Stock Units shall be deemed satisfied and payment shall be made pursuant to
Sections 6.1(c) and 6.3(d), respectively.

 

13

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

Section 9. Adjustments upon Changes in Capitalization.

9.1 In the event that the Committee shall determine that any stock dividend,
recapitalization, forward split or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase or share exchange,
extraordinary or unusual cash distribution or other similar corporate
transaction or event, affects the Common Stock such that an adjustment is
appropriate in order to prevent dilution or enlargement of the rights of
Participants under the Plan, then the Committee shall, in such manner as it may
deem equitable, adjust any or all of (a) the number and kind of shares of Common
Stock which may thereafter be issued in connection with Awards, (b) the number
and kind of shares of Common Stock issuable in respect of outstanding Awards,
(c) the aggregate number and kind of shares of Common Stock available under the
Plan, and (d) the exercise or Award-date price relating to any Award, or, if
deemed appropriate, make provision for a cash payment with respect to any
outstanding Award; provided, however, in each case, that no adjustment shall be
made that would adversely affect the status of any Award that is intended to be
a Qualified Performance-Based Award.

9.2 In addition, the Committee is authorized to make adjustments in the terms
and conditions of, and the criteria included in, Awards, including any
Performance Goals, in recognition of unusual or nonrecurring events (including,
without limitation, events described in Section 15.1) affecting the Company or
any Subsidiary, or in response to changes in applicable laws, regulations, or
accounting principles. Notwithstanding the foregoing, no adjustment shall be
made in any outstanding Awards to the extent that such adjustment would
adversely affect the status of an Award intended to be a Qualified
Performance-Based Award.

Section 10. Changes to the Plan and Awards.

10.1 The Board may amend, alter, suspend, discontinue, or terminate the Plan
without the consent of the Company’s stockholders or Participants, except that
any such amendment, alteration, suspension, discontinuation, or termination
shall be subject to the approval of the Company’s stockholders if (a) such
action would (i) increase the number of shares subject to the Plan, except as
permitted at Section 9.1 hereof, (ii) constitute a repricing or exchange of any
Awards issued hereunder, or (iii) change the provisions of this Section 10;
(b) such stockholder approval is required by any federal or state law or
regulation or the rules of any stock exchange or automated quotation system on
which the Common Stock may then be listed or quoted; or (c) the Board
determines, in its discretion, to submit other such changes to the Plan to the
stockholders for approval; provided, however, that without the consent of an
affected Participant, no amendment, alteration, suspension, discontinuation, or
termination of the Plan may materially and adversely affect the rights of such
Participant under any outstanding Award unless required to comply with any
provision of the Code, applicable securities laws, or the rules of any exchange
upon which the Company’s Common Stock is listed.

10.2 Upon termination of this Plan, each Participant may receive payment of all
outstanding Restricted Stock Unit Awards if and to the extent permitted under
Code Section 409A and the related Treasury regulations and other guidance issued
under Code

 

14

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

Section 409A. Accordingly, payment of a Participant’s Restricted Stock Unit
Award may be made hereunder in accordance with one of the following:

(a) the termination of the Plan within twelve (12) months of a corporate
dissolution taxed under Code Section 331 or with the approval of a bankruptcy
court pursuant to 11 U.S.C. 503(b)(1)(A), as provided in Treasury Regulation
Section 1.409A-3(j)(4)(ix)(A); or

(b) the termination of the Plan within the thirty (30) days preceding or the
twelve (12) months following a Change in Control, provided that all
substantially similar arrangements are also terminated, as provided in Treasury
Regulation Section 1.409A-3(j)(4)(ix)(B); or

(c) the termination of the Plan, provided that the termination does not occur
proximate to a downturn in the financial health of the Company, if all
arrangements that would be aggregated with the Plan under Treasury Regulation
Section 1.409A-1(c) are terminated, and no payments other than payments that
would be payable under the terms of the Plan if the termination had not occurred
are made within twelve (12) months of the Plan termination, and all payments are
made within twenty-four (24) months of the Plan termination, and no new
arrangement that would be aggregated with the Plan under Treasury Regulation
Section 1.409A-1(c) is adopted within three (3) years following the Plan
termination, as provided in Treasury Regulation Section 1.409A-3(j)(4)(ix)(C);
or

(d) such other events and conditions as the IRS may prescribe in generally
applicable published regulatory or other guidance under Code Section 409A.

Section 11. No Right to Award, Employment or Service. No Participant shall have
any claim to be granted any Award under the Plan, and there is no obligation
that the terms of Awards be uniform or consistent among Participants. Neither
the Plan nor any action taken hereunder shall be construed as giving any
Employee any right to be retained in the employ of the Company or any
Subsidiary. For purposes of this Plan, transfer of employment between the
Company and its Subsidiaries and affiliates shall not be deemed a termination of
employment.

Section 12. Taxes. Each Participant must make appropriate arrangement for the
payment of any taxes relating to an Award granted hereunder. The Company or any
Subsidiary is authorized to withhold from any payment relating to an Award under
the Plan, including from a distribution of Common Stock or any payroll or other
payment to a Participant amounts of withholding and other taxes due 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 Common Stock or other property and to make cash
payments in respect thereof in satisfaction of a Participant’s tax obligations.
Withholding of taxes in the form of shares of Common Stock from the profit
attributable to the Award shall not occur at a rate that exceeds the legally
required federal and state withholding rates.

 

15

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

Section 13. Limits on Transferability; Beneficiaries. No Award or other right or
interest of a Participant under the Plan shall be pledged, encumbered, or
hypothecated to, or in favor of, or subject to any lien, obligation, or
liability of such Participant to, any party, other than the Company, any
Subsidiary or affiliate, or assigned or transferred by such Participant
otherwise than by will or the laws of descent and distribution, and such Awards
and rights shall be exercisable during the lifetime of the Participant only by
the Participant or his or her guardian or legal representative. Notwithstanding
the foregoing, the Committee may, in its discretion, provide that Awards or
other rights or interests of a Participant granted pursuant to the Plan be
transferable, without consideration, to immediate family members (i.e.,
children, grandchildren or spouse), to trusts for the benefit of such immediate
family members and to partnerships in which such family members are the only
partners. The Committee may attach to such transferability feature such terms
and conditions as it deems advisable. In addition, a Participant may, in the
manner established by the Committee, designate a beneficiary (which may be a
person or a trust) to exercise the rights of the Participant, and to receive any
distribution, with respect to any Award upon the death of the Participant. A
beneficiary, guardian, legal representative 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 Agreement applicable to such Participant,
except as otherwise determined by the Committee, and to any additional
restrictions deemed necessary or appropriate by the Committee.

Section 14. Foreign Nationals. Without amending the Plan, Awards may be granted
to Employees who are foreign nationals or employed outside the United States or
both. The Committee may adopt, amend or rescind rules, procedures or sub-plans
relating to the operation and administration of the Plan to accommodate the
specific requirements of local laws, procedures, and practices. Without limiting
the generality of the foregoing, the Committee is specifically authorized to
adopt rules, procedures, and sub-plans with provisions that limit or modify
rights on death, disability or retirement or on termination of employment;
available methods of exercise or settlement of an award; payment of income,
social insurance contributions and payroll taxes; the withholding procedures and
handling of any stock certificates or other indicia of ownership which vary with
local requirements. The Committee may also adopt rules, procedures, or sub-plans
applicable to particular affiliates or locations.

Section 15. Securities Law Requirements.

15.1 No Award granted hereunder shall be exercisable if the Company shall at any
time determine that (a) the listing upon any securities exchange, registration
or qualification under any state or federal law of any Common Stock otherwise
deliverable upon such exercise, or (b) the consent or approval of any regulatory
body or the satisfaction of withholding tax or other withholding liabilities, is
necessary or appropriate in connection with such exercise. In any of the events
referred to in clause (a) or clause (b) above, the exercisability of such Awards
shall be suspended and shall not be effective unless and until such withholding,
listing, registration, qualifications or approval shall have been effected or
obtained free of any conditions not acceptable to the Company in its sole
discretion, notwithstanding any termination of any Award or any portion of any
Award during the period when exercisability has been suspended.

 

16

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

15.2 The Committee may require, as a condition to receive or exercise any Award,
that the Participant deliver to the Company representations, warranties and
agreements to the effect that any shares of Common Stock to be purchased or
acquired pursuant to such Award are for investment only and without any present
intention to sell or otherwise distribute such shares and that the Participant
will not dispose of such shares in transactions which, in the opinion of counsel
to the Company, would violate the registration provisions of the Securities Act
of 1933, as amended, and the rules and regulations thereunder. The certificates
issued to evidence such shares shall bear appropriate legends summarizing such
restrictions on the disposition thereof.

Section 16. Automatic Termination. Unless earlier terminated, the Plan shall
terminate upon the date on which all outstanding Awards have expired,
terminated, been paid or otherwise provided for, and no Awards under the Plan
shall thereafter be granted.

Section 17. Fractional Shares. The Company will not be required to issue any
fractional shares of Common Stock pursuant to the Plan. The Committee may
provide for the elimination of fractions and settlement of such fractional
shares of Common Stock in cash.

Section 18. Discretion. In exercising, or declining to exercise, any grant of
authority or discretion hereunder, the Committee may consider or ignore such
factors or circumstances and may accord such weight to such factors and
circumstances as the Committee alone and in its sole judgment deems appropriate
and without regard to the effect such exercise, or declining to exercise such
grant of authority or discretion, would have upon the affected Participant, any
other Participant, any employee, the Company, any Subsidiary, any affiliate, any
stockholder or any other person.

Section 19. Governing Law. To the extent that Federal laws (such as the Exchange
Act or the Code) do not apply, the validity and construction of the Plan and any
Award Agreements entered into thereunder shall be construed and enforced in
accordance with the laws of the State of Delaware, but without giving effect to
the choice of law principles thereof.

Section 20. Adoption of the Plan and Effective Date. This amendment and
restatement of the Plan shall become effective upon its approval by the
stockholders of the Company, and no Award granted under this restatement shall
become exercisable, realizable or vested prior to such approval.

 

17