Exhibit 10.1

 

 

ON SEMICONDUCTOR CORPORATION

(Formerly Known as SCG Holding Corporation)

 

2000 STOCK INCENTIVE PLAN

(As Adopted by the Board of Directors on February 17, 2000;

Amended and Restated April 21, 2000;

Amended and Restated May 18, 2001;

Amended and Restated May 23, 2001

Amended and Restated May 21, 2003)

 

ARTICLE 1

PURPOSE

 

1.1 GENERAL. The purpose of the SCG Holding Corporation 2000 Stock Incentive
Plan (the “Plan”) is to promote the success and enhance the value of SCG Holding
Corporation (the “Company”) by linking the personal interests of its members of
the Board, employees, officers, and executives of, and consultants and advisors
to, the Company to those of Company stockholders and by providing such
individuals with an incentive for outstanding performance in order to generate
superior returns to shareholders of the Company. The Plan is further intended to
provide flexibility to the Company in its ability to motivate, attract, and
retain the services of members of the Board, employees, officers, and executives
of, and consultants and advisors to, the Company upon whose judgment, interest,
and special effort the successful conduct of the Company’s operation is largely
dependent.

 

 

ARTICLE 2

EFFECTIVE DATE

 

2.1 EFFECTIVE DATE. The Plan is effective as of the date the Plan is approved by
the Board (the “Effective Date”). Within 12 months of the Effective Date, the
Plan must be approved by the Company’s shareholders. The Plan will be deemed to
be approved by the shareholders if it receives the affirmative vote of the
holders of a majority of the shares of stock of the Company present or
represented and entitled to vote at a meeting duly held in accordance with the
applicable provisions of the Company’s Bylaws or by written consent of a
majority of the Company’s shareholders in lieu of a meeting. Any awards granted
under the Plan prior to shareholder approval are effective when made (unless the
Committee specifies otherwise at the time of grant), but no Award may be
exercised or settled and no restrictions relating to any Award may lapse before
the Plan is approved by the shareholders as provided above. If the shareholders
fail to approve the Plan, any Award previously made shall be automatically
canceled without any further act.

 

 

ARTICLE 3

DEFINITIONS AND CONSTRUCTION

 

3.1 DEFINITIONS. When a word or phrase appears in this Plan with the initial
letter capitalized, and the word or phrase does not commence a sentence, the
word or phrase shall generally be given the meaning ascribed to it in this
Section or in Sections 1.1 or 2.1 unless a

 

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clearly different meaning is required by the context. The following words and
phrases shall have the following meanings:

 

(a) “Award” means any Option, Stock Appreciation Right, Restricted Stock Award,
Performance Share Award, Performance-Based Award, or Take Ownership Grant
granted to a Participant under the Plan.

 

(b) “Award Agreement” means any written agreement, contract, or other instrument
or document evidencing an Award.

 

(c) “Board” means the Board of Directors of the Company.

 

(d) “Cause” means (except as otherwise provided in an Award Agreement) if the
Committee, in its reasonable and good faith discretion, determines that the
Participant (i) fails to substantially perform his duties (other than as a
result of Disability), after the Board or the executive to which the Participant
reports delivers to the Participant a written demand for substantial performance
that specifically identifies the manner in which the Participant has not
substantially performed his duties; (ii) engages in willful misconduct or gross
negligence that is materially injurious to the Company or a Subsidiary; (iii)
breaches his duty of loyalty to the Company or a Subsidiary; (iv) unauthorized
removal from the premises of the Company or a Subsidiary of a document (of any
media or form) relating to the Company or a Subsidiary or the customers of the
Company or a Subsidiary; or (v) has committed a felony or a serious crime
involving moral turpitude. Any rights the Company or any of its Subsidiaries may
have hereunder in respect of the events giving rise to Cause shall be in
addition to the rights the Company or any of its Subsidiaries may have under any
other agreement with the Participant or at law or in equity. If, subsequent to a
Participant’s termination of employment or services, it is discovered that such
Participant’s employment or services could have been terminated for Cause, the
Participant’s employment or services shall, at the election of the Board, in its
sole discretion, be deemed to have been terminated for Cause retroactively to
the date the events giving rise to Cause occurred.

 

(e) “Change of Control” shall mean the occurrence of any of the following
events: (i) any sale, lease, exchange, or other transfer (in one transaction or
a series of related transactions) of all or substantially all of the assets of
the Company or the Operating Subsidiary to any Person or group of related
persons for purposes of Section 13(d) of the Exchange Act (a “Group”), together
with any affiliates thereof other than TPG Semiconductor Holdings LLC, TPG
Partners II, L.P., or any of their affiliates (hereafter collectively referred
to as “TPG”); (ii) the approval by the holders of Stock and the consummation of
any plan or proposal for the liquidation or dissolution of the Company; (iii)
(A) any Person or Group (other than TPG) shall become the beneficial owner,
directly or indirectly, of shares representing more than 25% of the aggregate
voting power of the issued and outstanding stock entitled to vote in the
election of directors (the “Voting Stock”) of the Company and such Person or
Group has the power and authority to vote such shares and (B) TPG beneficially
owns (within the meaning of Section 13(d) of the Exchange Act), directly or
indirectly, in the aggregate a lesser percentage of the Voting Stock of the
Company than such other Person or Group; (iv) the actual replacement of a
majority of the Board over a two-year period from the individual directors who
constituted the Board at the beginning of such period, and such replacement
shall not have been approved by a

 

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vote of at least a majority of the Board then still in office who either were
members of such Board at the beginning of such period or whose election as a
member of such Board was previously so approved or who were nominated by, or
designees of, TPG; (v) any Person or Group other than TPG shall have acquired
shares of Voting Stock of the Company such that such Person or Group has the
power and authority to elect a majority of the members of the Board of Directors
of the Company; or (vi) the consummation of a merger or consolidation of the
Company with another entity in which holders of the Stock immediately prior to
the consummation of the transaction hold, directly or indirectly, immediately
following the consummation of the transaction, 50% or less of the common equity
interest in the surviving corporation in such transaction. Notwithstanding the
foregoing, in no event shall a Change of Control be deemed to have occurred as a
result of an initial public offering of the Stock.

 

(f) “Code” means the Internal Revenue Code of 1986, as amended.

 

(g) “Committee” means the committee of the Board described in Article 4.

 

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

 

(i) “Disability” shall mean (unless otherwise defined in an employment agreement
between the Company or any of its Subsidiaries and the Participant or in the
Participant’s Award Agreement) any illness or other physical or mental condition
of a Participant which renders the Participant incapable of performing his
customary and usual duties for the Company, or any medically determinable
illness or other physical or mental condition resulting from a bodily injury,
disease or mental disorder which in the judgment of the Committee is permanent
and continuous in nature. The Committee may require such medical or other
evidence as it deems necessary to judge the nature and permanency of the
Participant’s condition.

 

(j) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(k) “Fair Market Value” means, as of any given date, the fair market value of
Stock on a particular date determined by such methods or procedures as may be
established from time to time by the Committee. Unless otherwise determined by
the Committee, the Fair Market Value of Stock as of any date shall be the
closing price for the Stock as reported on the NASDAQ National Market System (or
on any national securities exchange on which the Stock is then listed) for that
date or, if no closing price is reported for that date, the closing price on the
next preceding date for which a closing price was reported.

 

(l) “Incentive Stock Option” means an Option that is intended to meet the
requirements of Section 422 of the Code or any successor provision thereto.

 

(m) “Non-Employee Director” means a member of the Board who qualifies as a
“Non-Employee Director” as defined in Rule 16b-3(b)(3) of the Exchange Act, or
any successor definition adopted by the Board.

 

(n) “Non-Qualified Stock Option” means an Option that is not intended to be an
Incentive Stock Option.

 

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(o) “Operating Subsidiary” means Semiconductor Components Industries, LLC.

 

(p) “Option” means a right granted to a Participant under Article 7 or Article
12 of the Plan to purchase Stock at a specified price during specified time
periods. An Option may be either an Incentive Stock Option or a Non-Qualified
Stock Option.

 

(q) “Participant” means a person who, as a member of the Board, employee,
officer, or executive of, or consultant or advisor providing services to, the
Company or any Subsidiary, has been granted an Award under the Plan.

 

(r) “Performance-Based Awards” means the Performance Share Awards and Restricted
Stock Awards granted to selected Covered Employees pursuant to Articles 9 and
10, but which are subject to the terms and conditions set forth in Article 11.
All Performance-Based Awards are intended to qualify as “performance-based
compensation” under Section 162(m) of the Code.

 

(s) “Performance Criteria” means the criteria that the Committee selects for
purposes of establishing the Performance Goal or Performance Goals for a
Participant for a Performance Period. The Performance Criteria that will be used
to establish Performance Goals are limited to the following: pre- or after-tax
net earnings, sales growth, operating earnings, operating cash flow, return on
net assets, return on stockholders’ equity, return on assets, return on capital,
Stock price growth, stockholder returns, gross or net profit margin, earnings
per share, price per share of Stock, and market share, any of which may be
measured either in absolute terms or as compared to any incremental increase or
as compared to results of a peer group. The Committee shall, within the time
prescribed by Section 162(m) of the Code, define in an objective fashion the
manner of calculating the Performance Criteria it selects to use for such
Performance Period for such Participant.

 

(t) “Performance Goals” means, for a Performance Period, the goals established
in writing by the Committee for the Performance Period based upon the
Performance Criteria. Depending on the Performance Criteria used to establish
such Performance Goals, the Performance Goals may be expressed in terms of
overall Company performance or the performance of a division, business unit, or
an individual. The Committee, in its discretion, may, within the time prescribed
by Section 162(m) of the Code, adjust or modify the calculation of Performance
Goals for such Performance Period in order to prevent the dilution or
enlargement of the rights of Participants (i) in the event of, or in
anticipation of, any unusual or extraordinary corporate item, transaction,
event, or development, or (ii) in recognition of, or in anticipation of, any
other unusual or nonrecurring events affecting the Company, or the financial
statements of the Company, or in response to, or in anticipation of, changes in
applicable laws, regulations, accounting principles, or business conditions.

 

(u) “Performance Period” means the one or more periods of time, which may be of
varying and overlapping durations, as the Committee may select, over which the
attainment of one or more Performance Goals will be measured for the purpose of
determining a Participant’s right to, and the payment of, a Performance-Based
Award.

 

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(v) “Performance Share” means a right granted to a Participant under Article 9,
to receive cash, Stock, or other Awards, the payment of which is contingent upon
achieving certain performance goals established by the Committee.

 

(w) “Plan” means the SCG Holding Corporation 2000 Stock Incentive Plan, as
amended.

 

(x) “Restricted Stock Award” means Stock granted to a Participant under Article
10 that is subject to certain restrictions and to risk of forfeiture.

 

(y) “Stock” means the common stock of the Company and such other securities of
the Company that may be substituted for Stock pursuant to Article 14.

 

(z) “Stock Appreciation Right” or “SAR” means a right granted to a Participant
under Article 8 to receive a payment equal to the difference between the Fair
Market Value of a share of Stock as of the date of exercise of the SAR over the
grant price of the SAR, all as determined pursuant to Article 8.

 

(aa) “Subsidiary” means any corporation or other entity of which a majority of
the outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Company.

 

(bb) “Take Ownership Grant” means the Option granted to each eligible
Participant pursuant to Article 12.

 

 

ARTICLE 4

ADMINISTRATION

 

4.1 COMMITTEE. The Plan shall be administered by the Board or a Committee
appointed by, and which serves at the discretion of, the Board. If the Board
appoints a Committee, the Committee shall consist of at least two individuals,
each of whom qualifies as (i) a Non-Employee Director, and (ii) an “outside
director” under Code Section 162(m) and the regulations issued thereunder.
Reference to the Committee shall refer to the Board if the Board does not
appoint a Committee.

 

4.2 ACTION BY THE COMMITTEE. A majority of the Committee shall constitute a
quorum. The acts of a majority of the members present at any meeting at which a
quorum is present, and acts approved in writing by a majority of the Committee
in lieu of a meeting, shall be deemed the acts of the Committee. Each member of
the Committee is entitled to, in good faith, rely or act upon any report or
other information furnished to that member by any officer or other employee of
the Company or any Subsidiary, the Company’s independent certified public
accountants, or any executive compensation consultant or other professional
retained by the Company to assist in the administration of the Plan.

 

4.3 AUTHORITY OF COMMITTEE. Subject to any specific designation in the Plan, the
Committee has the exclusive power, authority and discretion to:

 

(a) Designate Participants to receive Awards;

 

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(b) Determine the type or types of Awards to be granted to each Participant;

 

(c) Determine the number of Awards to be granted and the number of shares of
Stock to which an Award will relate;

 

(d) Determine the terms and conditions of any Award granted under the Plan
including but not limited to, the exercise price, grant price, or purchase
price, any restrictions or limitations on the Award, any schedule for lapse of
forfeiture restrictions or restrictions on the exercisability of an Award, and
accelerations or waivers thereof, based in each case on such considerations as
the Committee in its sole discretion determines; provided, however, that the
Committee shall not have the authority to accelerate the vesting or waive the
forfeiture of any Performance-Based Awards;

 

(e) Amend, modify, or terminate any outstanding Award, with the Participant’s
consent unless the Committee has the authority to amend, modify, or terminate an
Award without the Participant’s consent under any other provision of the Plan.

 

(f) Determine whether, to what extent, and under what circumstances an Award may
be settled in, or the exercise price of an Award may be paid in, cash, Stock,
other Awards, or other property, or an Award may be canceled, forfeited, or
surrendered;

 

(g) Prescribe the form of each Award Agreement, which need not be identical for
each Participant;

 

(h) Decide all other matters that must be determined in connection with an
Award;

 

(i) Establish, adopt, or revise any rules and regulations as it may deem
necessary or advisable to administer the Plan; and

 

(j) Interpret the terms of, and any matter arising under, the Plan or any Award
Agreement;

 

(k) Make all other decisions and determinations that may be required under the
Plan or as the Committee deems necessary or advisable to administer the Plan.

 

4.4 DECISIONS BINDING. The Committee’s interpretation of the Plan, any Awards
granted under the Plan, any Award Agreement and all decisions and determinations
by the Committee with respect to the Plan are final, binding, and conclusive on
all parties.

 

 

ARTICLE 5

SHARES SUBJECT TO THE PLAN

 

5.1 NUMBER OF SHARES. Subject to adjustment as provided in section 14.1, the
aggregate number of shares of Stock reserved and available for grant shall be
26,170,472, plus an additional number of shares of Stock equal to: (i) 2 % of
the total number of outstanding shares of common stock effective as of January
1, 2004; (ii) 1.8 % of the total number of outstanding shares of common stock
effective as of January 1, 2005; and (iii) 1.6 % of the total number of

 

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outstanding shares as of January 1, 2006. In determining these increases of
shares reserved for issuance under the 2000 SIP, relevant calculations shall be
made on a non-diluted basis, i.e., excluding all shares previously reserved for
issuance under the 2000 SIP and any other equity incentive plan of the
Corporation. Notwithstanding the foregoing, the total number of shares available
for grant under the 2000 SIP as Incentive Stock Options shall be 3,000,000.

 

5.2 LAPSED AWARDS. To the extent that an Award terminates, expires, or lapses
for any reason, any shares of Stock subject to the Award will again be available
for the grant of an Award under the Plan.

 

5.3 STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may consist,
in whole or in part, of authorized and unissued Stock, treasury Stock or Stock
purchased on the open market.

 

5.4 LIMITATION ON NUMBER OF SHARES SUBJECT TO AWARDS. Notwithstanding any
provision in the Plan to the contrary, and subject to the adjustment in Section
14.1, the maximum number of shares of Stock with respect to one or more Awards
that may be granted to any one Participant during the Company’s fiscal year
shall be 2,500,000.

 

 

ARTICLE 6

ELIGIBILITY AND PARTICIPATION

 

6.1 ELIGIBILITY.

 

(a) GENERAL. Persons eligible to participate in this Plan include all members of
the Board, employees, officers, and executives of, and consultants and advisors
to, the Company or a Subsidiary, as determined by the Committee.

 

(b) FOREIGN PARTICIPANTS. Subject to the provisions of Article 16 of the Plan,
in order to assure the viability of Awards granted to Participants employed in
foreign countries, the Committee may provide for such special terms as it may
consider necessary or appropriate to accommodate differences in local law, tax
policy, or custom. Moreover, the Committee may approve such supplements to, or
amendments, restatements, or alternative versions of the Plan as it may consider
necessary or appropriate for such purposes without thereby affecting the terms
of the Plan as in effect for any other purpose; provided, however, that no such
supplements, amendments, restatements, or alternative versions shall increase
the share limitations contained in Section 5.1 of the Plan.

 

6.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the Committee
may, from time to time, select from among all eligible individuals, those to
whom Awards shall be granted and shall determine the nature and amount of each
Award. No individual shall have any right to be granted an Award under this
Plan.

 

 

ARTICLE 7

STOCK OPTIONS

 

7.1 GENERAL. The Committee is authorized to grant Options to Participants on the
following terms and conditions:

 

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(a) EXERCISE PRICE. The exercise price per share of Stock under an Option shall
be determined by the Committee and set forth in the Award Agreement. It is the
intention under the Plan that the exercise price for any Option shall not be
less than the Fair Market Value as of the date of grant; provided, however that
the Committee may, in its discretion, grant Options (other than Options that are
intended to be Incentive Stock Options or Options that are intended to qualify
as performance-based compensation under Code Section 162(m)) with an exercise
price of less than Fair Market Value on the date of grant.

 

(b) TIME AND CONDITIONS OF EXERCISE. The Committee shall determine the time or
times at which an Option may be exercised in whole or in part. The Committee
shall also determine the performance or other conditions, if any, that must be
satisfied before all or part of an Option may be exercised. Unless otherwise
provided in an Award Agreement, an Option will lapse immediately if a
Participant’s employment or services are terminated for Cause.

 

(c) PAYMENT. The Committee shall determine the methods by which the exercise
price of an Option may be paid, the form of payment, including, without
limitation, cash, promissory note, shares of Stock (through actual tender or by
attestation), or other property (including broker-assisted “cashless exercise”
arrangements), and the methods by which shares of Stock shall be delivered or
deemed to be delivered to Participants.

 

(d) EVIDENCE OF GRANT. All Options shall be evidenced by a written Award
Agreement between the Company and the Participant. The Award Agreement shall
include such additional provisions as may be specified by the Committee.

 

7.2 INCENTIVE STOCK OPTIONS. Incentive Stock Options shall be granted only to
employees and the terms of any Incentive Stock Options granted under the Plan
must comply with the following additional rules:

 

(a) EXERCISE PRICE. The exercise price per share of Stock shall be set by the
Committee, provided that the exercise price for any Incentive Stock Option may
not be less than the Fair Market Value as of the date of the grant.

 

(b) EXERCISE. In no event, may any Incentive Stock Option be exercisable for
more than ten years from the date of its grant.

 

(c) LAPSE OF OPTION. An Incentive Stock Option shall lapse under the following
circumstances.

 

(1) The Incentive Stock Option shall lapse ten years from the date it is
granted, unless an earlier time is set in the Award Agreement.

 

(2) The Incentive Stock Option shall lapse upon termination of employment for
Cause or for any other reason, other than the Participant’s death or Disability,
unless otherwise provided in the Award Agreement.

 

(3) If the Participant terminates employment on account of Disability or death
before the Option lapses pursuant to paragraph (1) or (2) above, the Incentive

 

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Stock Option shall lapse, unless it is previously exercised, on the earlier of
(i) the date on which the Option would have lapsed had the Participant not
become Disabled or lived and had his employment status (i.e., whether the
Participant was employed by the Company on the date of his Disability or death
or had previously terminated employment) remained unchanged; or (ii) 12 months
after the date of the Participant’s termination of employment on account of
Disability or death. Upon the Participant’s Disability or death, any Incentive
Stock Options exercisable at the Participant’s Disability or death may be
exercised by the Participant’s legal representative or representatives, by the
person or persons entitled to do so under the Participant’s last will and
testament, or, if the Participant fails to make testamentary disposition of such
Incentive Stock Option or dies intestate, by the person or persons entitled to
receive the Incentive Stock Option under the applicable laws of descent and
distribution.

 

(d) INDIVIDUAL DOLLAR LIMITATION. The aggregate Fair Market Value (determined as
of the time an Award is made) of all shares of Stock with respect to which
Incentive Stock Options are first exercisable by a Participant in any calendar
year may not exceed $100,000.00 or such other limitation as imposed by Section
422(d) of the Code, or any successor provision. To the extent that Incentive
Stock Options are first exercisable by a Participant in excess of such
limitation, the excess shall be considered Non-Qualified Stock Options.

 

(e) TEN PERCENT OWNERS. An Incentive Stock Option shall be granted to any
individual who, at the date of grant, owns stock possessing more than ten
percent of the total combined voting power of all classes of Stock of the
Company only if such Option is granted at a price that is not less than 110% of
Fair Market Value on the date of grant and the Option is exercisable for no more
than five years from the date of grant.

 

(f) EXPIRATION OF INCENTIVE STOCK OPTIONS. No Award of an Incentive Stock Option
may be made pursuant to this Plan after the tenth anniversary of the Effective
Date.

 

(g) RIGHT TO EXERCISE. During a Participant’s lifetime, an Incentive Stock
Option may be exercised only by the Participant.

 

 

ARTICLE 8

STOCK APPRECIATION RIGHTS

 

8.1 GRANT OF SARS. The Committee is authorized to grant SARs to Participants on
the following terms and conditions:

 

(a) RIGHT TO PAYMENT. Upon the exercise of a Stock Appreciation Right, the
Participant to whom it is granted has the right to receive the excess, if any,
of:

 

(1) The Fair Market Value of a share of Stock on the date of exercise; over

 

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(2) The grant price of the Stock Appreciation Right as determined by the
Committee, which shall not be less than the Fair Market Value of a share of
Stock on the date of grant in the case of any SAR related to any Incentive Stock
Option.

 

(b) OTHER TERMS. All awards of Stock Appreciation Rights shall be evidenced by
an Award Agreement. The terms, methods of exercise, methods of settlement, form
of consideration payable in settlement, and any other terms and conditions of
any Stock Appreciation Right shall be determined by the Committee at the time of
the grant of the Award and shall be reflected in the Award Agreement.

 

 

ARTICLE 9

PERFORMANCE SHARES

 

9.1 GRANT OF PERFORMANCE SHARES. The Committee is authorized to grant
Performance Shares to Participants on such terms and conditions as may be
selected by the Committee. The Committee shall have the complete discretion to
determine the number of Performance Shares granted to each Participant. All
Awards of Performance Shares shall be evidenced by an Award Agreement.

 

9.2 RIGHT TO PAYMENT. A grant of Performance Shares gives the Participant
rights, valued as determined by the Committee, and payable to, or exercisable
by, the Participant to whom the Performance Shares are granted, in whole or in
part, as the Committee shall establish at grant or thereafter. Subject to the
terms of the Plan, the Committee shall set performance goals and other terms or
conditions to payment of the Performance Shares in its discretion which,
depending on the extent to which they are met, will determine the number and
value of Performance Shares that will be paid to the Participant.

 

9.3 OTHER TERMS. Performance Shares may be payable in cash, Stock, or other
property, and have such other terms and conditions as determined by the
Committee and reflected in the Award Agreement.

 

 

ARTICLE 10

RESTRICTED STOCK AWARDS

 

10.1 GRANT OF RESTRICTED STOCK. The Committee is authorized to make Awards of
Restricted Stock to Participants in such amounts and subject to such terms and
conditions as determined by the Committee. All Awards of Restricted Stock shall
be evidenced by a Restricted Stock Award Agreement.

 

10.2 ISSUANCE AND RESTRICTIONS. Restricted Stock shall be subject to such
restrictions on transferability and other restrictions as the Committee may
impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted Stock).
These restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, or otherwise, as the Committee
determines at the time of the grant of the Award or thereafter.

 

10.3 FORFEITURE. Except as otherwise determined by the Committee at the time of
the grant of the Award or thereafter, upon termination of employment during the
applicable

 

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restriction period, Restricted Stock that is at that time subject to
restrictions shall be forfeited, provided, however, that the Committee may
provide in any Restricted Stock Award Agreement that restrictions or forfeiture
conditions relating to Restricted Stock will be waived in whole or in part in
the event of terminations resulting from specified causes, and the Committee may
in other cases waive in whole or in part restrictions or forfeiture conditions
relating to Restricted Stock.

 

10.4 CERTIFICATES FOR RESTRICTED STOCK. Restricted Stock granted under the Plan
may be evidenced in such manner as the Committee shall determine. If
certificates representing shares of Restricted Stock are registered in the name
of the Participant, certificates must bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such Restricted Stock, and
the Company may, at its discretion, retain physical possession of the
certificate until such time as all applicable restrictions lapse.

 

 

ARTICLE 11

PERFORMANCE-BASED AWARDS

 

11.1 PURPOSE. The purpose of this Article 11 is to provide the Committee the
ability to qualify the Performance Share Awards under Article 9 and the
Restricted Stock Awards under Article 10 as “performance-based compensation”
under Section 162(m) of the Code. If the Committee, in its discretion, decides
to grant a Performance-Based Award to a Covered Employee, the provisions of this
Article 11 shall control over any contrary provision contained in Articles 9 or
10.

 

11.2 APPLICABILITY. This Article 11 shall apply only to those Covered Employees
selected by the Committee to receive Performance-Based Awards. The Committee
may, in its discretion, grant Restricted Stock Awards or Performance Share
Awards to Covered Employees that do not satisfy the requirements of this Article
11. The designation of a Covered Employee as a Participant for a Performance
Period shall not in any manner entitle the Participant to receive an Award for
the period. Moreover, designation of a Covered Employee as a Participant for a
particular Performance Period shall not require designation of such Covered
Employee as a Participant in any subsequent Performance Period and designation
of one Covered Employee as a Participant shall not require designation of any
other Covered Employees as a Participant in such period or in any other period.

 

11.3 DISCRETION OF COMMITTEE WITH RESPECT TO PERFORMANCE AWARDS. With regard to
a particular Performance Period, the Committee shall have full discretion to
select the length of such Performance Period, the type of Performance-Based
Awards to be issued, the kind and/or level of the Performance Goal, and whether
the Performance Goal is to apply to the Company, a Subsidiary or any division or
business unit thereof.

 

11.4 PAYMENT OF PERFORMANCE AWARDS. Unless otherwise provided in the relevant
Award Agreement, a Participant must be employed by the Company or a Subsidiary
on the last day of the Performance Period to be eligible for a Performance Award
for such Performance Period. Furthermore, a Participant shall be eligible to
receive payment under a Performance-Based Award for a Performance Period only if
the Performance Goals for such period are achieved. In determining the actual
size of an individual Performance-Based Award,

 

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the Committee may reduce or eliminate the amount of the Performance-Based Award
earned for the Performance Period, if in its sole and absolute discretion, such
reduction or elimination is appropriate.

 

11.5 MAXIMUM AWARD PAYABLE. The maximum Performance-Based Award payable to any
one Participant under the Plan for a Performance Period is 2,500,000 shares of
Stock, or in the event the Performance-Based Award is paid in cash, such maximum
Performance-Based Award shall be determined by multiplying 2,500,000 by the Fair
Market Value of one share of Stock as of the date of grant of the
Performance-Based Award.

 

 

ARTICLE 12

TAKE OWNERSHIP GRANTS

 

12.1 TAKE OWNERSHIP GRANTS. The Take Ownership Grants shall be awarded to
Participants selected by the Committee and shall be subject to the following
terms and conditions:

 

(a) EFFECTIVE DATE OF GRANTS. The effective date of the Take Ownership Grants
shall be on the day on which the Company’s initial public offering of Stock is
consummated; provided, however, that Take Ownership Grants shall not be made to
those persons who are not United States residents if the jurisdiction in which
any such person resides prohibits such Grants or makes it impractical for the
Company to make such Grants.

 

(b) EXERCISE PRICE FOR GRANTS. Notwithstanding any other provision hereof, the
exercise price per share of Stock under the Take Ownership Grants shall be the
price at which the Company’s Stock is offered under its initial public offering
of Stock (“IPO Price”), provided, however, that, with respect to Participants
who do not reside in the United States, if the day on which the Company receives
approval by the applicable foreign jurisdiction to offer Stock to Participants
residing in that jurisdiction is later than the day on which the Company’s
initial public offering becomes effective, the exercise price per share of Stock
under the Take Ownership Grants shall be the Fair Market Value on the day on
which the Company receives approval by the applicable foreign jurisdiction to
offer Stock to such Participants.

 

(c) AMOUNT OF THE TAKE OWNERSHIP GRANTS. Each Participant selected to receive a
Take Ownership Grant shall be entitled to receive an Option to purchase 50
shares of Stock. Such Option shall be designated as a Non-Qualified Stock
Option.

 

(d) TIME AND CONDITIONS OF EXERCISE. The Take Ownership Grants shall become
fully exercisable on the second anniversary of the date of grant.

 

(e) PAYMENT. The Committee shall determine the methods by which the exercise
price of the Take Ownership Grants may be paid, the form of payment, including,
without limitation, cash, promissory note, shares of Stock (through actual
tender or by attestation), or other property (including broker-assisted
“cashless exercise” arrangements), and the methods by which shares of Stock
shall be delivered or deemed to be delivered to Participants.

 

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(f) EVIDENCE OF GRANT. All Take Ownership Grants shall be evidenced by a written
Award Agreement between the Company and the Participant. The Award Agreement
shall provide that upon a Participant’s termination of employment or service
with the Company or a Subsidiary for any reason, the Participant may, at any
time within 90 days after the effective date of the Participant’s termination,
exercise the Take Ownership Grant to the extent that the Participant was
entitled to exercise the Take Ownership Grant at the date of termination,
provided that in no event shall the Take Ownership Grant be exercisable after
its expiration date, as provided in the Award Agreement. The Award Agreement
shall also include such other provisions as determined by the Committee.

 

 

ARTICLE 13

PROVISIONS APPLICABLE TO AWARDS

 

13.1 STAND-ALONE AND TANDEM AWARDS. Awards granted under the Plan may, in the
discretion of the Committee, be granted either alone, in addition to, or in
tandem with, any other Award granted under the Plan. Awards granted in addition
to or in tandem with other Awards may be granted either at the same time as or
at a different time from the grant of such other Awards.

 

13.2 EXCHANGE PROVISIONS. The Committee may at any time offer to exchange or buy
out any previously granted Award for a payment in cash, Stock, or another Award,
based on the terms and conditions the Committee determines and communicates to
the Participant at the time the offer is made.

 

13.3 TERM OF AWARD. The term of each Award shall be for the period as determined
by the Committee, provided that in no event shall the term of any Incentive
Stock Option or a Stock Appreciation Right granted in tandem with the Incentive
Stock Option exceed a period of ten years from the date of its grant.

 

13.4 FORM OF PAYMENT FOR AWARDS. Subject to the terms of the Plan and any
applicable law or Award Agreement, payments or transfers to be made by the
Company or a Subsidiary on the grant or exercise of an Award may be made in such
forms as the Committee determines at or after the time of grant, including
without limitation, cash, promissory note, Stock, other Awards, or other
property, or any combination, and may be made in a single payment or transfer,
in installments, or on a deferred basis, in each case determined in accordance
with rules adopted by, and at the discretion of, the Committee.

 

13.5 LIMITS ON TRANSFER. No right or interest of a Participant in any Award may
be pledged, encumbered, or hypothecated to or in favor of any party other than
the Company or a Subsidiary, or shall be subject to any lien, obligation, or
liability of such Participant to any other party other than the Company or a
Subsidiary. Except as otherwise provided by the Committee, no Award shall be
assignable or transferable by a Participant other than by will or the laws of
descent and distribution.

 

13.6 BENEFICIARIES. Notwithstanding Section 13.5, a Participant may, in the
manner determined by the Committee, designate a beneficiary to exercise the
rights of the

 

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Participant and to receive any distribution with respect to any Award upon the
Participant’s death. A beneficiary, legal guardian, legal representative, or
other person claiming any rights under the Plan is subject to all terms and
conditions of the Plan and any Award Agreement applicable to the Participant,
except to the extent the Plan and Award Agreement otherwise provide, and to any
additional restrictions deemed necessary or appropriate by the Committee. If the
Participant is married, a designation of a person other than the Participant’s
spouse as his beneficiary with respect to more than 50 % of the Participant’s
interest in the Award shall not be effective without the written consent of the
Participant’s spouse. If no beneficiary has been designated or survives the
Participant, payment shall be made to the person entitled thereto under the
Participant’s will or the laws of descent and distribution. Subject to the
foregoing, a beneficiary designation may be changed or revoked by a Participant
at any time provided the change or revocation is filed with the Committee.

 

13.7 STOCK CERTIFICATES. Notwithstanding anything herein to the contrary, the
Company shall not be required to issue or deliver any certificates evidencing
shares of Stock pursuant to the exercise of any Awards, unless and until the
Board has determined, with advice of counsel, that the issuance and delivery of
such certificates is in compliance with all applicable laws, regulations of
governmental authorities and, if applicable, the requirements of any exchange on
which the shares of Stock are listed or traded. All Stock certificates delivered
under the Plan are subject to any stop-transfer orders and other restrictions as
the Committee deems necessary or advisable to comply with Federal, state, or
foreign jurisdiction, securities or other laws, rules and regulations and the
rules of any national securities exchange or automated quotation system on which
the Stock is listed, quoted, or traded. The Committee may place legends on any
Stock certificate to reference restrictions applicable to the Stock. In addition
to the terms and conditions provided herein, the Board may require that a
Participant make such reasonable covenants, agreements, and representations as
the Board, in its discretion, deems advisable in order to comply with any such
laws, regulations, or requirements.

 

13.8 ACCELERATION UPON A CHANGE OF CONTROL. At the time of the grant of an
Option, Stock Appreciation Right or other Award or any time thereafter, the
Board shall have the authority and discretion, but shall not have any
obligation, to provide for the acceleration of the vesting and exercisability of
any outstanding Option, Stock Appreciation Right or other Award upon a Change in
Control.

 

 

ARTICLE 14

CHANGES IN CAPITAL STRUCTURE

 

14.1 GENERAL.

 

(a) SHARES AVAILABLE FOR GRANT. In the event of any change in the number of
shares of Stock outstanding by reason of any stock dividend or split,
recapitalization, merger, consolidation, combination or exchange of shares or
similar corporate change, the maximum aggregate number of shares of Stock with
respect to which the Committee may grant Awards shall be appropriately adjusted
by the Committee. In the event of any change in the number of shares of Stock
outstanding by reason of any other event or transaction, the Committee may, but
need not, make such adjustments in the number and class of shares of Stock with
respect to which Awards may be granted as the Committee may deem appropriate.

 

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(b) OUTSTANDING AWARDS – INCREASE OR DECREASE IN ISSUED SHARES WITHOUT
CONSIDERATION. Subject to any required action by the shareholders of the
Company, in the event of any increase or decrease in the number of issued shares
of Stock resulting from a subdivision or consolidation of shares of Stock or the
payment of a stock dividend (but only on the shares of Stock), or any other
increase or decrease in the number of such shares effected without receipt or
payment of consideration by the Company, the Committee shall proportionally
adjust the number of shares of Stock subject to each outstanding Award and the
exercise price per share of Stock of each such Award.

 

(c) OUTSTANDING AWARDS – CERTAIN MERGERS. Subject to any required action by the
shareholders of the Company, in the event that the Company shall be the
surviving corporation in any merger or consolidation (except a merger or
consolidation as a result of which the holders of shares of Stock receive
securities of another corporation), each Award outstanding on the date of such
merger or consolidation shall pertain to and apply to the securities which a
holder of the number of shares of Stock subject to such Award would have
received in such merger or consolidation.

 

(d) OUTSTANDING AWARDS – CERTAIN OTHER TRANSACTIONS. In the event of (i) a
dissolution or liquidation of the Company, (ii) a sale of all or substantially
all of the Company’s assets, (iii) a merger or consolidation involving the
Company in which the Company is not the surviving corporation or (iv) a merger
or consolidation involving the Company in which the Company is the surviving
corporation but the holders of shares of Stock receive securities of another
corporation and/or other property, including cash, the Committee shall, in its
absolute discretion, have the power to:

 

(1) cancel, effective immediately prior to the occurrence of such event, each
Award outstanding immediately prior to such event (whether or not then
exercisable), and, in full consideration of such cancellation, pay to the
Participant to whom such Award was granted an amount in cash, for each share of
Stock subject to such Award, respectively, equal to the excess of (A) the value,
as determined by the Committee in its absolute discretion, of the property
(including cash) received by the holder of a share of Stock as a result of such
event over (B) the exercise of such Award; or

 

(2) provide for the exchange of each Award outstanding immediately prior to such
event (whether or not then exercisable) for an option, a stock appreciation
right, restricted stock award, performance share award or performance-based
award with respect to, as appropriate, some or all of the property for which
such Award is exchanged and, incident thereto, make an equitable adjustment as
determined by the Committee in its absolute discretion in the exercise price or
value of the option, stock appreciate right, restricted stock award, performance
share award or performance-based award or the number of shares or amount of
property subject to the option, stock appreciation right, restricted stock
award, performance share award or performance-based award or, if appropriate,
provide for a cash payment to the Participant to whom such Award was granted in
partial consideration for the exchange of the Award.

 

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(e) OUTSTANDING AWARDS – OTHER CHANGES. In the event of any other change in the
capitalization of the Company or corporate change other than those specifically
referred to in Article 14, the Committee may, in its absolute discretion, make
such adjustments in the number and class of shares subject to Awards outstanding
on the date on which such change occurs and in the per share exercise price of
each Award as the Committee may consider appropriate to prevent dilution or
enlargement of rights.

 

(f) NO OTHER RIGHTS. Except as expressly provided in the Plan, no Participant
shall have any rights by reason of any subdivision or consolidation of shares of
stock of any class, the payment of any dividend, any increase or decrease in the
number of shares of stock of any class or any dissolution, liquidation, merger,
or consolidation of the Company or any other corporation. Except as expressly
provided in the Plan, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares of Stock subject to an Award or the exercise price of any
Award.

 

 

ARTICLE 15

AMENDMENT, MODIFICATION, AND TERMINATION

 

15.1 AMENDMENT, MODIFICATION, AND TERMINATION. With the approval of the Board,
at any time and from time to time, the Committee may terminate, amend or modify
the Plan; provided, however, that to the extent necessary and desirable to
comply with any applicable law, regulation, or stock exchange rule, the Company
shall obtain shareholder approval of any Plan amendment in such a manner and to
such a degree as required.

 

15.2 AWARDS PREVIOUSLY GRANTED. Except as otherwise provided in the Plan,
including without limitation, the provisions of Article 14, no termination,
amendment, or modification of the Plan shall adversely affect in any material
way any Award previously granted under the Plan, without the written consent of
the Participant.

 

 

ARTICLE 16

PROVISIONS RELATING TO FRENCH EMPLOYEES

 

Notwithstanding any other provisions of the Plan to the contrary, the following
provisions shall apply to Awards granted to any employee who is a French citizen
or who works primarily in France as of the grant date (referred to herein as
“French Employee”).

 

16.1 CONSULTANTS. Notwithstanding anything to the contrary herein, no French
Employee who would otherwise be considered a consultant under French law may be
granted an Award under the Plan.

 

16.2 TERMINATION FOR CAUSE. The last sentence of Section 3.1(d) (definition of
Cause) shall not apply to French Employees.

 

16.3 TEN PERCENT OWNERS. Notwithstanding Section 6.1(a) above, no Award shall be
granted to any French Employee who holds more than ten percent of the Stock on
the grant date.

 

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16.4 EXERCISE PRICE. Notwithstanding Section 7.1(a) above, all Awards granted to
French Employees shall be granted at an exercise price per share equal to Fair
Market Value per share as of the grant date.

 

16.5 TIME LIMITATIONS. No Options shall be granted to any French Employee five
years after the later of (a) the date the Company’s stockholders initially
approved the Plan, or (b) the date the Plan has been subsequently re-authorized,
in its original form or as amended from time to time by the Board, by the
Company’s stockholders.

 

16.6 VESTING OF OPTIONS. Notwithstanding Section 7.1(b) above, no portion of any
Award granted to a French Employee shall become exercisable before the five-year
anniversary of the grant date.

 

16.7 EFFECT OF PARTICIPANT’S DEATH. Notwithstanding Section 7.1(b) or any other
provision hereof, upon a French Employee’s death, the vested portion of such
Participant’s Award shall remain exercisable for a period of six months after
the date of his death and shall be exercisable by his heirs.

 

16.8 EXCHANGE OF OPTIONS. Notwithstanding Section 13.2 above, the Company shall
not terminate any portion of an Award granted to any French Employee.

 

16.9 ADJUSTMENT OF OPTIONS. Notwithstanding Section 14.1 herein, any adjustment
made to any Award granted to a French Employee shall comply with applicable
French law.

 

 

ARTICLE 17

GENERAL PROVISIONS

 

17.1 NO RIGHTS TO AWARDS. No Participant, employee, or other person shall have
any claim to be granted any Award under the Plan, and neither the Company nor
the Committee is obligated to treat Participants, employees, and other persons
uniformly.

 

17.2 NO STOCKHOLDERS RIGHTS. No Award gives the Participant any of the rights of
a stockholder of the Company unless and until shares of Stock are in fact issued
to such person in connection with such Award.

 

17.3 WITHHOLDING. The Company or any Subsidiary shall have the authority and the
right to deduct or withhold, or require a Participant to remit to the Company,
an amount sufficient to satisfy Federal, state, and local taxes (including the
Participant’s FICA obligation) required by law to be withheld with respect to
any taxable event arising as a result of this Plan. With the Committee’s
consent, a Participant may elect to have the Company withhold from those Stock
that would otherwise be received upon the exercise of any Option, a number of
shares having a Fair Market Value equal to the minimum statutory amount
necessary to satisfy the Company’s applicable federal, state, local and foreign
income and employment tax withholding obligations.

 

17.4 NO RIGHT TO EMPLOYMENT OR SERVICES. Nothing in the Plan or any Award
Agreement shall interfere with or limit in any way the right of the Company or
any

 

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Subsidiary to terminate any Participant’s employment or services at any time,
nor confer upon any Participant any right to continue in the employ of the
Company or any Subsidiary.

 

17.5 UNFUNDED STATUS OF AWARDS. The Plan is intended to be an “unfunded” plan
for incentive compensation. With respect to any payments not yet made to a
Participant pursuant to an Award, nothing contained in the Plan or any Award
Agreement shall give the Participant any rights that are greater than those of a
general creditor of the Company or any Subsidiary.

 

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

 

17.7 RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall be taken
into account in determining any benefits under any pension, retirement, savings,
profit sharing, group insurance, welfare or other benefit plan of the Company or
any Subsidiary.

 

17.8 EXPENSES. The expenses of administering the Plan shall be borne by the
Company and its Subsidiaries.

 

17.9 TITLES AND HEADINGS. The titles and headings of the Sections in the Plan
are for convenience of reference only, and in the event of any conflict, the
text of the Plan, rather than such titles or headings, shall control.

 

17.10 FRACTIONAL SHARES. No fractional shares of stock shall be issued and the
Committee shall determine, in its discretion, whether cash shall be given in
lieu of fractional shares or whether such fractional shares shall be eliminated
by rounding up or down as appropriate.

 

17.11 SECURITIES LAW COMPLIANCE. With respect to any person who is, on the
relevant date, obligated to file reports under Section 16 of the Exchange Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of the Plan or action by the Committee fails to so comply, it
shall be void to the extent permitted by law and voidable as deemed advisable by
the Committee.

 

17.12 GOVERNMENT AND OTHER REGULATIONS. The obligation of the Company to make
payment of awards in Stock or otherwise shall be subject to all applicable

 

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laws, rules, and regulations, and to such approvals by government agencies as
may be required. The Company shall be under no obligation to register under the
Securities Act of 1933, as amended, any of the shares of Stock paid under the
Plan. If the shares paid under the Plan may in certain circumstances be exempt
from registration under the Securities Act of 1933, as amended, the Company may
restrict the transfer of such shares in such manner as it deems advisable to
ensure the availability of any such exemption.

 

17.13 GOVERNING LAW. The Plan and all Award Agreements shall be construed in
accordance with and governed by the laws of the State of Delaware.

 

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