Exhibit 10.1

 

INTERNATIONAL RECTIFIER CORPORATION

2011 PERFORMANCE INCENTIVE PLAN

 

1.                                      PURPOSE OF PLAN

 

The purpose of this International Rectifier Corporation 2011 Performance
Incentive Plan (this “Plan”) of International Rectifier Corporation, a Delaware
corporation (the “Corporation”), is to promote the success of the Corporation
and to increase stockholder value by providing an additional means through the
grant of awards to attract, motivate, retain and reward selected employees and
other eligible persons.

 

2.                                      ELIGIBILITY

 

The Administrator (as such term is defined in Section 3.1) may grant awards
under this Plan only to those persons that the Administrator determines to be
Eligible Persons. An “Eligible Person” is any person who is either: (a) an
officer (whether or not a director) or employee of the Corporation or one of its
Subsidiaries; (b) a director of the Corporation or one of its Subsidiaries; or
(c) an individual consultant or advisor who renders or has rendered bona fide
services (other than services in connection with the offering or sale of
securities of the Corporation or one of its Subsidiaries in a capital-raising
transaction or as a market maker or promoter of securities of the Corporation or
one of its Subsidiaries) to the Corporation or one of its Subsidiaries and who
is selected to participate in this Plan by the Administrator; provided, however,
that a person who is otherwise an Eligible Person under clause (c) above may
participate in this Plan only if such participation would not adversely affect
either the Corporation’s eligibility to use Form S-8 to register under the
Securities Act of 1933, as amended (the “Securities Act”), the offering and sale
of shares issuable under this Plan by the Corporation or the Corporation’s
compliance with any other applicable laws. An Eligible Person who has been
granted an award (a “participant”) may, if otherwise eligible, be granted
additional awards if the Administrator shall so determine. As used herein,
“Subsidiary” means any corporation or other entity a majority of whose
outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Corporation; and “Board” means the Board of Directors of the
Corporation.

 

3.                                      PLAN ADMINISTRATION

 

3.1                               The Administrator.  This Plan shall be
administered by and all awards under this Plan shall be authorized by the
Administrator. The “Administrator” means the Board or one or more committees
appointed by the Board or another committee (within its delegated authority) to
administer all or certain aspects of this Plan. Any such committee shall be
comprised solely of one or more directors or such number of directors as may be
required under applicable law. A committee may delegate some or all of its
authority to another committee so constituted. The Board or a committee
comprised solely of directors may also delegate, to the extent permitted by
Section 157(c) of the Delaware General Corporation Law and any other applicable
law, to one or more officers of the Corporation, its powers under this Plan
(a) to designate the officers and employees of the Corporation and its
Subsidiaries who will receive grants of awards under this Plan, and (b) to
determine the number of shares subject to, and the other terms and

 

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conditions of, such awards. The Board may delegate different levels of authority
to different committees with administrative and grant authority under this Plan.
Unless otherwise provided in the Bylaws of the Corporation or the applicable
charter of any Administrator: (a) a majority of the members of the acting
Administrator shall constitute a quorum, and (b) the vote of a majority of the
members present assuming the presence of a quorum or the unanimous written
consent of the members of the Administrator shall constitute action by the
acting Administrator.

 

With respect to awards intended to satisfy the requirements for
performance-based compensation under Section 162(m) of the Internal Revenue Code
of 1986, as amended (the “Code”), this Plan shall be administered by a committee
consisting solely of two or more outside directors (as this requirement is
applied under Section 162(m) of the Code); provided, however, that the failure
to satisfy such requirement shall not affect the validity of the action of any
committee otherwise duly authorized and acting in the matter. Award grants, and
transactions in or involving awards, intended to be exempt under Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), must
be duly and timely authorized by the Board or a committee consisting solely of
two or more non-employee directors (as this requirement is applied under
Rule 16b-3 promulgated under the Exchange Act). To the extent required by any
applicable listing agency, this Plan shall be administered by a committee
composed entirely of independent directors (within the meaning of the applicable
listing agency).

 

3.2                               Powers of the Administrator.  Subject to the
express provisions of this Plan, the Administrator is authorized and empowered
to do all things necessary or desirable in connection with the authorization of
awards and the administration of this Plan (in the case of a committee or
delegation to one or more officers, within the authority delegated to that
committee or person(s)), including, without limitation, the authority to:

 

(a)                                  determine eligibility and, from among those
persons determined to be eligible, the particular Eligible Persons who will
receive an award under this Plan;

 

(b)                                 grant awards to Eligible Persons, determine
the price at which securities will be offered or awarded and the number of
securities to be offered or awarded to any of such persons, determine the other
specific terms and conditions of such awards consistent with the express limits
of this Plan, establish the installments (if any) in which such awards shall
become exercisable or shall vest (which may include, without limitation,
performance and/or time-based schedules), or determine that no delayed
exercisability or vesting is required (subject to the minimum vesting rules of
Section 5.1.5), establish any applicable performance targets, and establish the
events of termination or reversion of such awards;

 

(c)                                  approve the forms of award agreements
(which need not be identical either as to type of award or among participants);

 

(d)                                 construe and interpret this Plan and any
agreements defining the rights and obligations of the Corporation, its
Subsidiaries, and participants under this Plan, further define the terms used in
this Plan, and prescribe, amend and rescind rules and regulations relating to
the administration of this Plan or the awards granted under this Plan;

 

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(e)                                  cancel, modify, or waive the Corporation’s
rights with respect to, or modify, discontinue, suspend, or terminate any or all
outstanding awards, subject to any required consent under Section 8.6.5;

 

(f)                                    accelerate or extend the vesting or
exercisability or extend the term of any or all such outstanding awards (in the
case of options or stock appreciation rights, within the maximum ten-year term
of such awards) in such circumstances as the Administrator may deem appropriate
(including, without limitation, in connection with a termination of employment
or services or other events of a personal nature) subject to any required
consent under Section 8.6.5 and subject to the minimum vesting rules of
Section 5.1.5;

 

(g)                                 adjust the number of shares of Common Stock
subject to any award, adjust the price of any or all outstanding awards or
otherwise change previously imposed terms and conditions, in such circumstances
as the Administrator may deem appropriate, in each case subject to Sections 4
and 8.6 (and subject to the no repricing provision below);

 

(h)                                 determine the date of grant of an award,
which may be a designated date after but not before the date of the
Administrator’s action (unless otherwise designated by the Administrator, the
date of grant of an award shall be the date upon which the Administrator took
the action granting an award);

 

(i)                                     determine whether, and the extent to
which, adjustments are required pursuant to Section 7 hereof and authorize the
termination, conversion, substitution or succession of awards upon the
occurrence of an event of the type described in Section 7;

 

(j)                                     acquire or settle (subject to Sections 7
and 8.6) rights under awards in cash, stock of equivalent value, or other
consideration (subject to the no repricing provision below); and

 

(k)                                  determine the fair market value of the
Common Stock or awards under this Plan from time to time and/or the manner in
which such value will be determined.

 

Notwithstanding the foregoing and except for an adjustment pursuant to
Section 7.1 or a repricing approved by stockholders, in no case may the
Administrator (1) amend an outstanding stock option or SAR to reduce the
exercise price or base price of the award, (2) cancel, exchange, or surrender an
outstanding stock option or SAR in exchange for cash or other awards for the
purpose of repricing the award, or (3) cancel, exchange, or surrender an
outstanding stock option or SAR in exchange for an option or SAR with an
exercise or base price that is less than the exercise or base price of the
original award.

 

3.3                               Binding Determinations.  Any action taken by,
or inaction of, the Corporation, any Subsidiary, or the Administrator relating
or pursuant to this Plan and within its authority hereunder or under applicable
law shall be within the absolute discretion of that entity or body and shall be
conclusive and binding upon all persons. Neither the Board nor any Board
committee, nor any member thereof or person acting at the direction thereof,
shall be liable for any act, omission, interpretation, construction or
determination made in good faith in connection with this Plan (or any award made
under this Plan), and all such persons shall be entitled to indemnification and
reimbursement by the Corporation in respect of any claim, loss, damage or
expense (including, without limitation, attorneys’ fees) arising or resulting
therefrom to the fullest extent

 

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permitted by law and/or under any directors and officers liability insurance
coverage that may be in effect from time to time.

 

3.4                               Reliance on Experts.  In making any
determination or in taking or not taking any action under this Plan, the
Administrator may obtain and may rely upon the advice of experts, including
employees and professional advisors to the Corporation. No director, officer or
agent of the Corporation or any of its Subsidiaries shall be liable for any such
action or determination taken or made or omitted in good faith.

 

3.5                               Delegation.  The Administrator may delegate
ministerial, non-discretionary functions to individuals who are officers or
employees of the Corporation or any of its Subsidiaries or to third parties.

 

4.                                      SHARES OF COMMON STOCK SUBJECT TO THE
PLAN; SHARE LIMITS

 

4.1                               Shares Available.  Subject to the provisions
of Section 7.1, the capital stock that may be delivered under this Plan shall be
shares of the Corporation’s authorized but unissued Common Stock and any shares
of its Common Stock held as treasury shares. For purposes of this Plan, “Common
Stock” shall mean the common stock of the Corporation and such other securities
or property as may become the subject of awards under this Plan, or may become
subject to such awards, pursuant to an adjustment made under Section 7.1.

 

4.2                               Share Limits.  The maximum number of shares of
Common Stock that may be delivered pursuant to awards granted to Eligible
Persons under this Plan (the “Share Limit”) is equal to:

 

(1)                                  10,000,000 shares of Common Stock, less

 

(2)                                  the number of any shares subject to awards
granted under the Corporation’s 2000 Incentive Plan, as amended and restated
(the “2000 Plan”), after June 27, 2011 and on or before the date of stockholder
approval of this Plan (with any shares subject to such awards that are
“Full-Value Awards” being counted against the Share Limit based on the
Full-Value Award Ratio specified below), plus

 

(3)                                  the number of any shares subject to stock
options granted under the 2000 Plan and outstanding as of June 27, 2011 which
expire, or for any reason are cancelled or terminated, after June 27, 2011
without being exercised, plus

 

(4)                                  the number of any shares subject to
restricted stock and restricted stock unit awards granted under the 2000 Plan
that are outstanding and unvested on June 27, 2011 that are forfeited,
terminated, cancelled or otherwise reacquired by the Corporation without having
become vested (with any such shares increasing the Share Limit based on the
Full-Value Award Ratio specified below).

 

provided that in no event shall the Share Limit exceed 15,984,976 shares (which
is the sum of (1) the 10,000,000 shares set forth above, plus (2) the aggregate
number of shares subject to stock options previously granted and outstanding
under the 2000 Plan as of June 27, 2011, plus (3) 1.5 (the Full-Value Award
Ratio) times the aggregate number of shares subject to restricted stock and
restricted stock units previously granted and outstanding under the 2000 Plan as
of June 27, 2011).

 

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Shares issued in respect of any “Full-Value Award” granted under this Plan shall
be counted against the foregoing Share Limit as 1.50 shares for every one share
issued in connection with such award (the “Full-Value Award Ratio”). (For
example, if a stock bonus of 100 shares of Common Stock is granted under this
Plan, 150 shares shall be charged against the Share Limit in connection with
that award.) For this purpose, a “Full-Value Award” means any award under this
Plan that is not a stock option grant or a stock appreciation right grant.

 

The following limits also apply with respect to awards granted under this Plan:

 

(a)                                  The maximum number of shares of Common
Stock that may be delivered pursuant to options qualified as incentive stock
options granted under this Plan is 10,000,000 shares.

 

(b)                                 The maximum number of shares of Common Stock
subject to those options and stock appreciation rights that are granted during
any three consecutive calendar year period to any individual under this Plan is
2,500,000 shares.

 

(c)                                  Additional limits with respect to
Performance-Based Awards are set forth in Section 5.2.3.

 

Each of the foregoing numerical limits is subject to adjustment as contemplated
by Section 4.3, Section 7.1, and Section 8.10.

 

4.3                               Awards Settled in Cash, Reissue of Awards and
Shares.  Except as provided in the next sentence, shares that are subject to or
underlie awards granted under this Plan which expire or for any reason are
cancelled or terminated, are forfeited, fail to vest, or for any other reason
are not paid or delivered under this Plan shall again be available for
subsequent awards under this Plan (with any such shares increasing the Share
Limit based on the Full-Value Award Ratio specified in Section 4.2). Shares that
are exchanged by a participant or withheld by the Corporation as full or partial
payment in connection with any award under this Plan, as well as any shares
exchanged by a participant or withheld by the Corporation or one of its
Subsidiaries to satisfy the tax withholding obligations related to any award,
shall not be available for subsequent awards under this Plan. To the extent that
an award granted under this Plan is settled in cash or a form other than shares
of Common Stock, the shares that would have been delivered had there been no
such cash or other settlement shall again be available for subsequent awards
under this Plan (with any such shares increasing the Share Limit based on the
Full-Value Award Ratio specified in Section 4.2). In the event that shares of
Common Stock are delivered in respect of a dividend equivalent right granted
under this Plan, the number of shares delivered with respect to the award shall
be counted against the share limits of this Plan (including, for purposes of
clarity, the limits of Section 4.2 of this Plan). (For purposes of clarity, if
1,000 dividend equivalent rights are granted and outstanding when the
Corporation pays a dividend, and 50 shares are delivered in payment of those
rights with respect to that dividend, 75 shares (after giving effect to the
Full-Value Award premium counting rules) shall be counted against the share
limits of this Plan). To the extent that shares of Common Stock are delivered
pursuant to the exercise of a stock appreciation right or stock option granted
under this Plan, the number of underlying shares as to which the exercise
related shall be counted against the applicable share limits under Section 4.2,
as opposed to only counting the shares issued. (For purposes of clarity, if a
stock appreciation right relates to 100,000 shares and is exercised at a time
when the payment due to the participant is 15,000 shares, 100,000 shares shall
be charged against the applicable share limits under Section 4.2 with respect to
such exercise.) Refer to Section 8.10

 

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for application of the foregoing share limits with respect to assumed awards.
The foregoing adjustments to the share limits of this Plan are subject to any
applicable limitations under Section 162(m) of the Code with respect to awards
intended as performance-based compensation thereunder.

 

4.4                               Reservation of Shares; No Fractional Shares;
Minimum Issue.  The Corporation shall at all times reserve a number of shares of
Common Stock sufficient to cover the Corporation’s obligations and contingent
obligations to deliver shares with respect to awards then outstanding under this
Plan (exclusive of any dividend equivalent obligations to the extent the
Corporation has the right to settle such rights in cash). No fractional shares
shall be delivered under this Plan. The Administrator may pay cash in lieu of
any fractional shares in settlements of awards under this Plan. The
Administrator may from time to time impose a limit (of not greater than 100
shares) on the minimum number of shares that may be purchased or exercised as to
awards granted under this Plan unless (as to any particular award) the total
number purchased or exercised is the total number at the time available for
purchase or exercise under the award.

 

5.                                      AWARDS

 

5.1                               Type and Form of Awards.  The Administrator
shall determine the type or types of award(s) to be made to each selected
Eligible Person. Awards may be granted singly, in combination or in tandem.
Awards also may be made in combination or in tandem with, in replacement of, as
alternatives to, or as the payment form for grants or rights under any other
employee or compensation plan of the Corporation or one of its Subsidiaries. The
types of awards that may be granted under this Plan are (subject, in each case,
to the no repricing provisions of Section 3.2):

 

5.1.1  Stock Options.  A stock option is the grant of a right to purchase a
specified number of shares of Common Stock during a specified period as
determined by the Administrator. An option may be intended as an incentive stock
option within the meaning of Section 422 of the Code (an “ISO”) or a
nonqualified stock option (an option not intended to be an ISO). The award
agreement for an option will indicate if the option is intended as an ISO;
otherwise it will be deemed to be a nonqualified stock option. The maximum term
of each option (ISO or nonqualified) shall be ten (10) years. The per share
exercise price for each option shall be not less than 100% of the fair market
value of a share of Common Stock on the date of grant of the option. When an
option is exercised, the exercise price for the shares to be purchased shall be
paid in full in cash or such other method permitted by the Administrator
consistent with Section 5.5.

 

5.1.2  Additional Rules Applicable to ISOs.  To the extent that the aggregate
fair market value (determined at the time of grant of the applicable option) of
stock with respect to which ISOs first become exercisable by a participant in
any calendar year exceeds $100,000, taking into account both Common Stock
subject to ISOs under this Plan and stock subject to ISOs under all other plans
of the Corporation or one of its Subsidiaries (or any parent or predecessor
corporation to the extent required by and within the meaning of Section 422 of
the Code and the regulations promulgated thereunder), such options shall be
treated as nonqualified stock options. In reducing the number of options treated
as ISOs to meet the $100,000 limit, the most recently granted options shall be
reduced first. To the extent a reduction of simultaneously

 

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granted options is necessary to meet the $100,000 limit, the Administrator may,
in the manner and to the extent permitted by law, designate which shares of
Common Stock are to be treated as shares acquired pursuant to the exercise of an
ISO. ISOs may only be granted to employees of the Corporation or one of its
subsidiaries (for this purpose, the term “subsidiary” is used as defined in
Section 424(f) of the Code, which generally requires an unbroken chain of
ownership of at least 50% of the total combined voting power of all classes of
stock of each subsidiary in the chain beginning with the Corporation and ending
with the subsidiary in question). There shall be imposed in any award agreement
relating to ISOs such other terms and conditions as from time to time are
required in order that the option be an “incentive stock option” as that term is
defined in Section 422 of the Code. No ISO may be granted to any person who, at
the time the option is granted, owns (or is deemed to own under
Section 424(d) of the Code) shares of outstanding Common Stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Corporation, unless the exercise price of such option is at least 110% of the
fair market value of the stock subject to the option and such option by its
terms is not exercisable after the expiration of five years from the date such
option is granted.

 

5.1.3  Stock Appreciation Rights.  A stock appreciation right or “SAR” is a
right to receive a payment, in cash and/or Common Stock, equal to the excess of
the fair market value of a specified number of shares of Common Stock on the
date the SAR is exercised over the “base price” of the award, which base price
shall be set forth in the applicable award agreement and shall be not less than
100% of the fair market value of a share of Common Stock on the date of grant of
the SAR. The maximum term of a SAR shall be ten (10) years.

 

5.1.4  Other Awards; Dividend Equivalent Rights.  The other types of awards that
may be granted under this Plan include: (a) stock bonuses, restricted stock,
performance stock, stock units, phantom stock or similar rights to purchase or
acquire shares, whether at a fixed or variable price or ratio related to the
Common Stock, upon the passage of time, the occurrence of one or more events, or
the satisfaction of performance criteria or other conditions, or any combination
thereof; (b) any similar securities with a value derived from the value of or
related to the Common Stock and/or returns thereon; or (c) cash awards. Dividend
equivalent rights may be granted as a separate award or in connection with
another award under this Plan; provided, however, that dividend equivalent
rights may not be granted in connection with a stock option or SAR granted under
this Plan. In addition, any dividends and/or dividend equivalents as to the
unvested portion of a restricted stock award that is subject to
performance-based vesting requirements or the unvested portion of a stock unit
award that is subject to performance- based vesting requirements will be subject
to termination and forfeiture to the same extent as the corresponding portion of
the award to which they relate.

 

5.1.5  Minimum Vesting Requirements.  Except as otherwise provided in the
following provisions of this Section 5.1.5 and except for any accelerated
vesting required or permitted pursuant to Section 7, and subject to such
additional vesting requirements or conditions (if any) as the Administrator may
establish with respect to the award, each award granted under this Plan that is
a Full-Value Award and payable in shares of Common Stock shall be subject to the
following minimum vesting requirements: (a) if the award includes a
performance-based vesting condition, the award shall not vest earlier than the
end of the applicable performance measurement period (which shall not be less
than one year); and (b) if the award does not

 

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include a performance-based vesting condition, the award shall not vest more
rapidly than in substantially equal periodic installments over the three-year
period immediately following the date of grant of the award. The Administrator
may (but need not) accelerate or provide in the applicable award agreement for
the accelerated vesting of any such award, however, in connection with (i) a
change in control of the Corporation or the award holder’s employer (or a parent
thereof), (ii) the termination of the award holder’s employment due to the award
holder’s death, disability or retirement, or a termination of the award holder’s
employment by his or her employer without cause or in circumstances in which the
award holder has good reason to terminate employment. The Administrator may also
accelerate or provide in the applicable award agreement for the accelerated
vesting of any Full-Value Award in circumstances not contemplated by the
preceding sentence, and/or provide for a vesting schedule that is shorter than
the minimum schedule contemplated by the foregoing, in such circumstances as it
may deem appropriate; provided, however, that in no event will greater than five
percent (5%) of the total number of shares of Common Stock available for award
grant purposes under this Plan be subject to Full-Value Awards that do not
satisfy the minimum vesting requirements of the preceding sentence (or, as to
any accelerated vesting, provide for accelerated vesting other than in the
circumstances contemplated by the preceding sentence).

 

5.2                               Section 162(m) Performance-Based Awards. 
Without limiting the generality of the foregoing, any of the types of awards
listed in Section 5.1.4 above may be, and options and SARs granted to officers
and employees (“Qualifying Options” and “Qualifying SARS,” respectively)
typically will be, granted as awards intended to satisfy the requirements for
“performance-based compensation” within the meaning of Section 162(m) of the
Code (“Performance-Based Awards”). The grant, vesting, exercisability or payment
of Performance-Based Awards may depend (or, in the case of Qualifying Options or
Qualifying SARs, may also depend) on the degree of achievement of one or more
performance goals relative to a pre-established targeted level or levels using
one or more of the Business Criteria set forth below (on an absolute basis or
relative to the performance of other companies or upon comparisons of any of the
indicators of performance relative to other companies) for the Corporation on a
consolidated basis or for one or more of the Corporation’s subsidiaries,
segments, divisions or business units, or any combination of the foregoing. Any
Qualifying Option or Qualifying SAR shall be subject only to the requirements of
Section 5.2.1 and 5.2.3 in order for such award to satisfy the requirements for
“performance-based compensation” under Section 162(m) of the Code. Any other
Performance-Based Award shall be subject to all of the following provisions of
this Section 5.2.

 

5.2.1  Class; Administrator.  The eligible class of persons for
Performance-Based Awards under this Section 5.2 shall be officers and employees
of the Corporation or one of its Subsidiaries. The Administrator approving
Performance-Based Awards or making any certification required pursuant to
Section 5.2.4 must be constituted as provided in Section 3.1 for awards that are
intended as performance-based compensation under Section 162(m) of the Code.

 

5.2.2  Performance Goals.  The specific performance goals for Performance-Based
Awards (other than Qualifying Options and Qualifying SARs) shall be, on an
absolute or relative basis, established based on one or more of the following
business criteria (“Business Criteria”) as selected by the Administrator in its
sole discretion: earnings per share, cash flow (which means

 

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cash and cash equivalents derived from either net cash flow from operations or
net cash flow from operations, financing and investing activities), working
capital, stock price, total stockholder return, gross revenue, revenue growth,
gross profit, operating income (before or after taxes), net earnings (before or
after interest, taxes, depreciation and/or amortization), gross margin,
operating margin, net margin, return on equity or on assets or on net
investment, cost containment or reduction, new product launch, product
development, or any combination thereof. As applicable, these terms are used as
applied under generally accepted accounting principles or in the financial
reporting of the Corporation or of its Subsidiaries. To qualify awards as
performance-based under Section 162(m), the applicable Business Criterion (or
Business Criteria, as the case may be) and specific performance goal or goals
(“targets”) must be established and approved by the Administrator during the
first 90 days of the performance period (and, in the case of performance periods
of less than one year, in no event after 25% or more of the performance period
has elapsed) and while performance relating to such target(s) remains
substantially uncertain within the meaning of Section 162(m) of the Code. The
terms of the Performance-Based Awards may specify the manner, if any, in which
performance targets shall be adjusted to mitigate the unbudgeted impact of
material, unusual or nonrecurring gains and losses, accounting changes or other
extraordinary events not foreseen at the time the targets were set unless the
Administrator provides otherwise at the time of establishing the targets. The
applicable performance measurement period may not be less than three months nor
more than 10 years.

 

5.2.3  Form of Payment; Maximum Performance-Based Award.  Grants or awards under
this Section 5.2 may be paid in cash or shares of Common Stock or any
combination thereof. Grants of Qualifying Options and Qualifying SARs to any one
participant in any one calendar year shall be subject to the limit set forth in
Section 4.2(b). The maximum number of shares of Common Stock which may be
subject to Performance-Based Awards (including Performance-Based Awards payable
in shares of Common Stock and Performance-Based Awards payable in cash where the
amount of cash payable upon or following vesting of the award is determined with
reference to the fair market value of a share of Common Stock at such time) that
are granted to any one participant in any three consecutive calendar year period
shall not exceed 1,200,000 shares, either individually or in the aggregate,
subject to adjustment as provided in Section 7.1; provided that this limit shall
not apply to Qualifying Options and Qualifying SARs (which are covered by the
limit of Section 4.2(b)). The aggregate amount of compensation to be paid to any
one participant in respect of all Performance-Based Awards payable only in cash
(excluding cash awards covered by the preceding sentence where the cash payment
is determined with reference to the fair market value of a share of Common Stock
upon or following the vesting of the award) and granted to that participant in
any three consecutive calendar year period shall not exceed $5,000,000. Awards
that are cancelled during the year shall be counted against these limits to the
extent required by Section 162(m) of the Code.

 

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5.2.4  Certification of Payment.  Before any Performance-Based Award under this
Section 5.2 (other than Qualifying Options and Qualifying SARs) is paid and to
the extent required to qualify the award as performance-based compensation
within the meaning of Section 162(m) of the Code, the Administrator must certify
in writing that the performance target(s) and any other material terms of the
Performance-Based Award were in fact timely satisfied.

 

5.2.5  Reservation of Discretion.  The Administrator will have the discretion to
determine the restrictions or other limitations of the individual awards granted
under this Section 5.2 including the authority to reduce awards, payouts or
vesting or to pay no awards, in its sole discretion, if the Administrator
preserves such authority at the time of grant by language to this effect in its
authorizing resolutions or otherwise.

 

5.2.6  Expiration of Grant Authority.  As required pursuant to Section 162(m) of
the Code and the regulations promulgated thereunder, the Administrator’s
authority to grant new awards that are intended to qualify as performance-based
compensation within the meaning of Section 162(m) of the Code (other than
Qualifying Options and Qualifying SARs) shall terminate upon the first meeting
of the Corporation’s stockholders that occurs in the fifth year following the
year in which the Corporation’s stockholders first approve this Plan, subject to
any subsequent extension that may be approved by stockholders.

 

5.3                               Award Agreements.  Each award shall be
evidenced by either (1) a written award agreement in a form approved by the
Administrator and executed by the Corporation by an officer duly authorized to
act on its behalf, or (2) an electronic notice of award grant in a form approved
by the Administrator and recorded by the Corporation (or its designee) in an
electronic recordkeeping system used for the purpose of tracking award grants
under this Plan generally (in each case, an “award agreement”), as the
Administrator may provide and, in each case and if required by the
Administrator, executed or otherwise electronically accepted by the recipient of
the award in such form and manner as the Administrator may require. The
Administrator may authorize any officer of the Corporation (other than the
particular award recipient) to execute any or all award agreements on behalf of
the Corporation. The award agreement shall set forth the material terms and
conditions of the award as established by the Administrator consistent with the
express limitations of this Plan.

 

5.4                               Deferrals and Settlements.  Payment of awards
may be in the form of cash, Common Stock, other awards or combinations thereof
as the Administrator shall determine, and with such restrictions as it may
impose. The Administrator may also require or permit participants to elect to
defer the issuance of shares or the settlement of awards in cash under such
rules and procedures as it may establish under this Plan. The Administrator may
also provide that deferred settlements include the payment or crediting of
interest or other earnings on the deferral amounts, or the payment or crediting
of dividend equivalents where the deferred amounts are denominated in shares.

 

5.5                               Consideration for Common Stock or Awards.  The
purchase price for any award granted under this Plan or the Common Stock to be
delivered pursuant to an award, as applicable, may be paid by means of any
lawful consideration as determined by the Administrator, including, without
limitation, one or a combination of the following methods:

 

·                  services rendered by the recipient of such award;

 

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·                  cash, check payable to the order of the Corporation, or
electronic funds transfer;

 

·                  notice and third party payment in such manner as may be
authorized by the Administrator;

 

·                  the delivery of previously owned shares of Common Stock;

 

·                  by a reduction in the number of shares otherwise deliverable
pursuant to the award; or

 

·                  subject to such procedures as the Administrator may adopt,
pursuant to a “cashless exercise” with a third party who provides financing for
the purposes of (or who otherwise facilitates) the purchase or exercise of
awards.

 

In no event shall any shares newly-issued by the Corporation be issued for less
than the minimum lawful consideration for such shares or for consideration other
than consideration permitted by applicable state law. Shares of Common Stock
used to satisfy the exercise price of an option shall be valued at their fair
market value on the date of exercise. The Corporation will not be obligated to
deliver any shares unless and until it receives full payment of the exercise or
purchase price therefor and any related withholding obligations under
Section 8.5 and any other conditions to exercise or purchase have been
satisfied. Unless otherwise expressly provided in the applicable award
agreement, the Administrator may at any time eliminate or limit a participant’s
ability to pay the purchase or exercise price of any award or shares by any
method other than cash payment to the Corporation.

 

5.6                               Definition of Fair Market Value.  For purposes
of this Plan, “fair market value” shall mean, unless otherwise determined or
provided by the Administrator in the circumstances, the closing price (in
regular trading) for a share of Common Stock as furnished by the New York Stock
Exchange (the “Exchange”) for the date in question or, if no sales of Common
Stock were reported by the Exchange on that date, the closing price (in regular
trading) for a share of Common Stock as furnished by the Exchange for the next
preceding day on which sales of Common Stock were reported by the Exchange. The
Administrator may, however, provide with respect to one or more awards that the
fair market value shall equal the closing price (in regular trading) for a share
of Common Stock as furnished by the Exchange on the last trading day preceding
the date in question or the average of the high and low trading prices of a
share of Common Stock as furnished by the Exchange for the date in question or
the most recent trading day. If the Common Stock is no longer listed or is no
longer actively traded on the Exchange as of the applicable date, the fair
market value of the Common Stock shall be the value as reasonably determined by
the Administrator for purposes of the award in the circumstances. The
Administrator also may adopt a different methodology for determining fair market
value with respect to one or more awards if a different methodology is necessary
or advisable to secure any intended favorable tax, legal or other treatment for
the particular award(s) (for example, and without limitation, the Administrator
may provide that fair market value for purposes of one or more awards will be
based on an average of closing prices (or the average of high and low daily
trading prices) for a specified period preceding the relevant date).

 

5.7                               Transfer Restrictions.

 

5.7.1  Limitations on Exercise and Transfer.  Unless otherwise expressly
provided in (or pursuant to) this Section 5.7 or required by applicable law:
(a) all awards are non-transferable and shall not be subject in any manner to
sale, transfer, anticipation, alienation, assignment,

 

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pledge, encumbrance or charge; (b) awards shall be exercised only by the
participant; and (c) amounts payable or shares issuable pursuant to any award
shall be delivered only to (or for the account of) the participant.

 

5.7.2  Exceptions.  The Administrator may permit awards to be exercised by and
paid to, or otherwise transferred to, other persons or entities pursuant to such
conditions and procedures, including limitations on subsequent transfers, as the
Administrator may, in its sole discretion, establish in writing. Any permitted
transfer shall be subject to compliance with applicable federal and state
securities laws and shall not be for value (other than nominal consideration,
settlement of marital property rights, or for interests in an entity in which
more than 50% of the voting interests are held by the Eligible Person or by the
Eligible Person’s family members).

 

5.7.3  Further Exceptions to Limits on Transfer.  The exercise and transfer
restrictions in Section 5.7.1 shall not apply to:

 

(a)                                  transfers to the Corporation (for example,
in connection with the expiration or termination of the award),

 

(b)                                 the designation of a beneficiary to receive
benefits in the event of the participant’s death or, if the participant has
died, transfers to or exercise by the participant’s beneficiary, or, in the
absence of a validly designated beneficiary, transfers by will or the laws of
descent and distribution,

 

(c)                                  subject to any applicable limitations on
ISOs, transfers to a family member (or former family member) pursuant to a
domestic relations order if approved or ratified by the Administrator,

 

(d)                                 if the participant has suffered a
disability, permitted transfers or exercises on behalf of the participant by his
or her legal representative, or

 

(e)                                  the authorization by the Administrator of
“cashless exercise” procedures with third parties who provide financing for the
purpose of (or who otherwise facilitate) the exercise of awards consistent with
applicable laws and the express authorization of the Administrator.

 

5.8                               International Awards.  One or more awards may
be granted to Eligible Persons who provide services to the Corporation or one of
its Subsidiaries outside of the United States. Any awards granted to such
persons may be granted pursuant to the terms and conditions of any applicable
sub-plans, if any, appended to this Plan and approved by the Administrator.

 

6.                                      EFFECT OF TERMINATION OF EMPLOYMENT OR
SERVICE ON AWARDS

 

6.1                               General.  The Administrator shall establish
the effect of a termination of employment or service on the rights and benefits
under each award under this Plan and in so doing may make distinctions based
upon, inter alia, the cause of termination and type of award. If the participant
is not an employee of the Corporation or one of its Subsidiaries and provides
other services to the Corporation or one of its Subsidiaries, the Administrator
shall be the sole judge for purposes of this Plan (unless a contract or the
award otherwise provides) of whether the

 

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participant continues to render services to the Corporation or one of its
Subsidiaries and the date, if any, upon which such services shall be deemed to
have terminated.

 

6.2                               Events Not Deemed Terminations of Service. 
Unless the express policy of the Corporation or one of its Subsidiaries, or the
Administrator, otherwise provides, the employment relationship shall not be
considered terminated in the case of (a) sick leave, (b) military leave, or
(c) any other leave of absence authorized by the Corporation or one of its
Subsidiaries, or the Administrator; provided that, unless reemployment upon the
expiration of such leave is guaranteed by contract or law or the Administrator
otherwise provides, such leave is for a period of not more than three months. In
the case of any employee of the Corporation or one of its Subsidiaries on an
approved leave of absence, continued vesting of the award while on leave from
the employ of the Corporation or one of its Subsidiaries may be suspended until
the employee returns to service, unless the Administrator otherwise provides or
applicable law otherwise requires. In no event shall an award be exercised after
the expiration of the term set forth in the applicable award agreement.

 

6.3                               Effect of Change of Subsidiary Status.  For
purposes of this Plan and any award, if an entity ceases to be a Subsidiary of
the Corporation a termination of employment or service shall be deemed to have
occurred with respect to each Eligible Person in respect of such Subsidiary who
does not continue as an Eligible Person in respect of the Corporation or another
Subsidiary that continues as such after giving effect to the transaction or
other event giving rise to the change in status unless the Subsidiary that is
sold, spun-off or otherwise divested (or its successor or a direct or indirect
parent of such Subsidiary or successor) assumes the Eligible Person’s award(s)
in connection with such transaction.

 

7.                                      ADJUSTMENTS; ACCELERATION

 

7.1                               Adjustments.  Subject to Section 7.2, upon
(or, as may be necessary to effect the adjustment, immediately prior to): any
reclassification, recapitalization, stock split (including a stock split in the
form of a stock dividend) or reverse stock split; any merger, combination,
consolidation, or other reorganization; any spin-off, split-up, or similar
extraordinary dividend distribution in respect of the Common Stock; or any
exchange of Common Stock or other securities of the Corporation, or any similar,
unusual or extraordinary corporate transaction in respect of the Common Stock;
then the Administrator shall equitably and proportionately adjust (1) the number
and type of shares of Common Stock (or other securities) that thereafter may be
made the subject of awards (including the specific share limits, maximums and
numbers of shares set forth elsewhere in this Plan), (2) the number, amount and
type of shares of Common Stock (or other securities or property) subject to any
outstanding awards, (3) the grant, purchase, or exercise price (which term
includes the base price of any SAR or similar right) of any outstanding awards,
and/or (4) the securities, cash or other property deliverable upon exercise or
payment of any outstanding awards, in each case to the extent necessary to
preserve (but not increase) the level of incentives intended by this Plan and
the then-outstanding awards.

 

Unless otherwise expressly provided in the applicable award agreement, upon (or,
as may be necessary to effect the adjustment, immediately prior to) any event or
transaction described in the preceding paragraph or a sale of all or
substantially all of the business or assets of the Corporation as an entirety,
the Administrator shall equitably and proportionately adjust the

 

13

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performance standards applicable to any then-outstanding performance-based
awards to the extent necessary to preserve (but not increase) the level of
incentives intended by this Plan and the then-outstanding performance-based
awards.

 

It is intended that, if possible, any adjustments contemplated by the preceding
two paragraphs be made in a manner that satisfies applicable U.S. legal, tax
(including, without limitation and as applicable in the circumstances,
Section 424 of the Code, Section 409A of the Code and Section 162(m) of the
Code) and accounting (so as to not trigger any charge to earnings with respect
to such adjustment) requirements.

 

Without limiting the generality of Section 3.3, any good faith determination by
the Administrator as to whether an adjustment is required in the circumstances
pursuant to this Section 7.1, and the extent and nature of any such adjustment,
shall be conclusive and binding on all persons.

 

7.2                               Corporate Transactions—Assumption and
Termination of Awards.  Upon the occurrence of any of the following: any merger,
combination, consolidation, or other reorganization in connection with which the
Corporation does not survive (or does not survive as a public company in respect
of its Common Stock); any exchange of Common Stock or other securities of the
Corporation in connection with which the Corporation does not survive (or does
not survive as a public company in respect of its Common Stock); a sale of all
or substantially all the business, stock or assets of the Corporation in
connection with which the Corporation does not survive (or does not survive as a
public company in respect of its Common Stock); a dissolution of the
Corporation; or any other event in which the Corporation does not survive (or
does not survive as a public company in respect of its Common Stock); then the
Administrator may make provision for a cash payment in settlement of, or for the
termination, assumption, substitution or exchange of any or all outstanding
share-based awards or the cash, securities or property deliverable to the holder
of any or all outstanding share-based awards, based upon, to the extent relevant
under the circumstances, the distribution or consideration payable to holders of
the Common Stock upon or in respect of such event. Upon the occurrence of any
event described in the preceding sentence, then, unless the Administrator has
made a provision for the substitution, assumption, exchange or other
continuation or settlement of the award or (unless the Administrator has
provided for the termination of the award) the award would otherwise continue in
accordance with its terms in the circumstances: (1) unless otherwise provided in
the applicable award agreement, each then-outstanding option and SAR shall
become fully vested, all shares of restricted stock then outstanding shall fully
vest free of restrictions, and each other award granted under this Plan that is
then outstanding shall become payable to the holder of such award; and (2) each
award shall terminate upon the related event; provided that the holder of an
option or SAR shall be given reasonable advance notice of the impending
termination and a reasonable opportunity to exercise his or her outstanding
vested options and SARs (after giving effect to any accelerated vesting required
in the circumstances) in accordance with their terms before the termination of
such awards (except that in no case shall more than ten days’ notice of the
impending termination be required and any acceleration of vesting and any
exercise of any portion of an award that is so accelerated may be made
contingent upon the actual occurrence of the event).

 

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The Administrator may adopt such valuation methodologies for outstanding awards
as it deems reasonable in the event of a cash or property settlement and, in the
case of options, SARs or similar rights, but without limitation on other
methodologies, may base such settlement solely upon the excess if any of the per
share amount payable upon or in respect of such event over the exercise or base
price of the award.

 

In any of the events referred to in this Section 7.2, the Administrator may take
such action contemplated by this Section 7.2 prior to such event (as opposed to
on the occurrence of such event) to the extent that the Administrator deems the
action necessary to permit the participant to realize the benefits intended to
be conveyed with respect to the underlying shares. Without limiting the
generality of the foregoing, the Administrator may deem an acceleration to occur
immediately prior to the applicable event and, in such circumstances, will
reinstate the original terms of the award if an event giving rise to an
acceleration does not occur.

 

Without limiting the generality of Section 3.3, any good faith determination by
the Administrator pursuant to its authority under this Section 7.2 shall be
conclusive and binding on all persons.

 

7.3                               Other Acceleration Rules.  The Administrator
may override the provisions of Section 7.2 by express provision in the award
agreement and may accord any Eligible Person a right to refuse any acceleration,
whether pursuant to the award agreement or otherwise, in such circumstances as
the Administrator may approve. The portion of any ISO accelerated in connection
with an event referred to in Section 7.2 (or such other circumstances as may
trigger accelerated vesting of the award) shall remain exercisable as an ISO
only to the extent the applicable $100,000 limitation on ISOs is not exceeded.
To the extent exceeded, the accelerated portion of the option shall be
exercisable as a nonqualified stock option under the Code.

 

7.4                               Definition of Change in Control.   With
respect to a particular award granted under this Plan, a “Change in Control”
shall be deemed to have occurred as of the first day, after the date of grant of
the particular award, that any one or more of the following conditions shall
have been satisfied:

 

(a)                                  The acquisition by any individual, entity
or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act
(a “Person”)) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than 30% of either (1) the
then-outstanding shares of common stock of the Corporation (the “Outstanding
Company Common Stock”) or (2) the combined voting power of the then-outstanding
voting securities of the Corporation entitled to vote generally in the election
of directors (the “Outstanding Company Voting Securities”); provided, however,
that, for purposes of this clause (a), the following acquisitions shall not
constitute a Change in Control Event; (A) any acquisition directly from the
Corporation, (B) any acquisition by the Corporation, (C) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any affiliate of the Corporation or a successor, or (D) any
acquisition by any entity pursuant to a transaction that complies with
Sections (c)(1), (2) and (3) below;

 

(b)                                 Individuals who, as of the Effective Date,
constitute the Board (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that

 

15

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any individual becoming a director subsequent to the Effective Date whose
election, or nomination for election by the Corporation’s stockholders, was
approved by a vote of at least two-thirds of the directors then comprising the
Incumbent Board (including for these purposes, the new members whose election or
nomination was so approved, without counting the member and his predecessor
twice) 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;

 

(c)                                  Consummation of a reorganization, merger,
statutory share exchange or consolidation or similar corporate transaction
involving the Corporation or any of its Subsidiaries, a sale or other
disposition of all or substantially all of the assets of the Corporation, or the
acquisition of assets or stock of another entity by the Corporation or any of
its Subsidiaries (each, a “Business Combination”), in each case unless,
following such Business Combination, (1) all or substantially all of the
individuals and entities that were the beneficial owners of the Outstanding
Company Common Stock and the Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or indirectly,
more than 50% of the then-outstanding shares of common stock and the combined
voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the entity
resulting from such Business Combination (including, without limitation, an
entity that, as a result of such transaction, owns the Corporation or all or
substantially all of the Corporation’s assets directly or through one or more
subsidiaries (a “Parent”)) in substantially the same proportions as their
ownership immediately prior to such Business Combination of the Outstanding
Company Common Stock and the Outstanding Company Voting Securities, as the case
may be, (2) no Person (excluding any entity resulting from such Business
Combination or a Parent or any employee benefit plan (or related trust) of the
Corporation or such entity resulting from such Business Combination or Parent)
beneficially owns, directly or indirectly, more than 30% of, respectively, the
then-outstanding shares of common stock of the entity resulting from such
Business Combination or the combined voting power of the then-outstanding voting
securities of such entity, except to the extent that the ownership in excess of
30% existed prior to the Business Combination, and (3) at least a majority of
the members of the board of directors or trustees of the entity resulting from
such Business Combination or a Parent were members of the Incumbent Board at the
time of the execution of the initial agreement or of the action of the Board
providing for such Business Combination; or

 

(d)                                 Approval by the stockholders of the
Corporation of a complete liquidation or dissolution of the Corporation other
than in the context of a transaction that does not constitute a Change in
Control under clause (c) above.

 

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8.                                      OTHER PROVISIONS

 

8.1                               Compliance with Laws.  This Plan, the granting
and vesting of awards under this Plan, the offer, issuance and delivery of
shares of Common Stock, and/or the payment of money under this Plan or under
awards are subject to compliance with all applicable federal and state laws,
rules and regulations (including but not limited to state and federal securities
law and federal margin requirements) and to such approvals by any listing,
regulatory or governmental authority as may, in the opinion of counsel for the
Corporation, be necessary or advisable in connection therewith. The person
acquiring any securities under this Plan will, if requested by the Corporation
or one of its Subsidiaries, provide such assurances and representations to the
Corporation or one of its Subsidiaries as the Administrator may deem necessary
or desirable to assure compliance with all applicable legal and accounting
requirements.

 

8.2                               No Rights to Award.  No person shall have any
claim or rights to be granted an award (or additional awards, as the case may
be) under this Plan, subject to any express contractual rights (set forth in a
document other than this Plan) to the contrary.

 

8.3                               No Employment/Service Contract.  Nothing
contained in this Plan (or in any other documents under this Plan or in any
award) shall confer upon any Eligible Person or other participant any right to
continue in the employ or other service of the Corporation or one of its
Subsidiaries, constitute any contract or agreement of employment or other
service or affect an employee’s status as an employee at will, nor shall
interfere in any way with the right of the Corporation or one of its
Subsidiaries to change a person’s compensation or other benefits, or to
terminate his or her employment or other service, with or without cause. Nothing
in this Section 8.3, however, is intended to adversely affect any express
independent right of such person under a separate employment or service contract
other than an award agreement.

 

8.4                               Plan Not Funded.  Awards payable under this
Plan shall be payable in shares or from the general assets of the Corporation,
and no special or separate reserve, fund or deposit shall be made to assure
payment of such awards. No participant, beneficiary or other person shall have
any right, title or interest in any fund or in any specific asset (including
shares of Common Stock, except as expressly otherwise provided) of the
Corporation or one of its Subsidiaries by reason of any award hereunder. Neither
the provisions of this Plan (or of any related documents), nor the creation or
adoption of this Plan, nor any action taken pursuant to the provisions of this
Plan shall create, or be construed to create, a trust of any kind or a fiduciary
relationship between the Corporation or one of its Subsidiaries and any
participant, beneficiary or other person. To the extent that a participant,
beneficiary or other person acquires a right to receive payment pursuant to any
award hereunder, such right shall be no greater than the right of any unsecured
general creditor of the Corporation.

 

8.5                               Tax Withholding.  Upon any exercise, vesting,
or payment of any award, or upon the disposition of shares of Common Stock
acquired pursuant to the exercise of an ISO prior to satisfaction of the holding
period requirements of Section 422 of the Code, or upon any other tax
withholding event with respect to any award, the Corporation or one of its
Subsidiaries shall have the right at its option to:

 

(a)                                  require the participant (or the
participant’s personal representative or beneficiary, as the case may be) to pay
or provide for payment of at least the minimum amount of any taxes

 

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which the Corporation or one of its Subsidiaries may be required to withhold
with respect to such award event or payment; or

 

(b)                                 deduct from any amount otherwise payable in
cash (whether related to the award or otherwise) to the participant (or the
participant’s personal representative or beneficiary, as the case may be) the
minimum amount of any taxes which the Corporation or one of its Subsidiaries may
be required to withhold with respect to such award event or payment.

 

In any case where a tax is required to be withheld in connection with the
delivery of shares of Common Stock under this Plan, the Administrator may in its
sole discretion (subject to Section 8.1) require or grant (either at the time of
the award or thereafter) to the participant the right to elect, pursuant to such
rules and subject to such conditions as the Administrator may establish, that
the Corporation reduce the number of shares to be delivered by (or otherwise
reacquire) the appropriate number of shares, valued in a consistent manner at
their fair market value or at the sales price in accordance with authorized
procedures for cashless exercises, necessary to satisfy the minimum applicable
withholding obligation on exercise, vesting or payment. In no event shall the
shares withheld exceed the minimum whole number of shares required for tax
withholding under applicable law.

 

8.6                               Effective Date, Termination and Suspension,
Amendments.

 

8.6.1  Effective Date.  This Plan is effective as of August 15, 2011, the date
of its approval by the Board (the “Effective Date”). This Plan shall be
submitted for and subject to stockholder approval no later than twelve months
after the Effective Date. Unless earlier terminated by the Board, this Plan
shall terminate at the close of business on the day before the tenth anniversary
of the Effective Date. After the termination of this Plan either upon such
stated expiration date or its earlier termination by the Board, no additional
awards may be granted under this Plan, but previously granted awards (and the
authority of the Administrator with respect thereto, including the authority to
amend such awards) shall remain outstanding in accordance with their applicable
terms and conditions and the terms and conditions of this Plan.

 

8.6.2  Board Authorization.  The Board may, at any time, terminate or, from time
to time, amend, modify or suspend this Plan, in whole or in part. No awards may
be granted during any period that the Board suspends this Plan.

 

8.6.3  Stockholder Approval.  To the extent then required by applicable law or
any applicable listing agency or required under Sections 162, 422 or 424 of the
Code to preserve the intended tax consequences of this Plan, or deemed necessary
or advisable by the Board, any amendment to this Plan shall be subject to
stockholder approval.

 

8.6.4  Amendments to Awards.  Without limiting any other express authority of
the Administrator under (but subject to) the express limits of this Plan, the
Administrator by agreement or resolution may waive conditions of or limitations
on awards to participants that the Administrator in the prior exercise of its
discretion has imposed, without the consent of a participant, and (subject to
the requirements of Sections 3.2 and 8.6.5) may make other changes to the terms
and conditions of awards. Any amendment or other action that would constitute a
repricing of an award is subject to the limitations set forth in Section 3.2.

 

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8.6.5  Limitations on Amendments to Plan and Awards.  No amendment, suspension
or termination of this Plan or amendment of any outstanding award agreement
shall, without written consent of the participant, affect in any manner
materially adverse to the participant any rights or benefits of the participant
or obligations of the Corporation under any award granted under this Plan prior
to the effective date of such change. Changes, settlements and other actions
contemplated by Section 7 shall not be deemed to constitute changes or
amendments for purposes of this Section 8.6.

 

8.7                               Privileges of Stock Ownership.  Except as
otherwise expressly authorized by the Administrator, a participant shall not be
entitled to any privilege of stock ownership as to any shares of Common Stock
not actually delivered to and held of record by the participant (subject to the
last sentence of Section 5.1.4). Except as expressly required by Section 7.1 or
otherwise expressly provided by the Administrator, no adjustment will be made
for dividends or other rights as a stockholder for which a record date is prior
to such date of delivery.

 

8.8                               Governing Law; Construction; Severability.

 

8.8.1  Choice of Law.  This Plan, the awards, all documents evidencing awards
and all other related documents shall be governed by, and construed in
accordance with the laws of the State of Delaware.

 

8.8.2  Severability.  If a court of competent jurisdiction holds any provision
invalid and unenforceable, the remaining provisions of this Plan shall continue
in effect.

 

8.8.3  Plan Construction.

 

(a)                                  Rule 16b-3. It is the intent of the
Corporation that the awards and transactions permitted by awards be interpreted
in a manner that, in the case of participants who are or may be subject to
Section 16 of the Exchange Act, qualify, to the maximum extent compatible with
the express terms of the award, for exemption from matching liability under
Rule 16b-3 promulgated under the Exchange Act. Notwithstanding the foregoing,
the Corporation shall have no liability to any participant for Section 16
consequences of awards or events under awards if an award or event does not so
qualify.

 

(b)                                 Section 162(m). Awards under Section 5.1.4
to persons described in Section 5.2 that are either granted or become vested,
exercisable or payable based on attainment of one or more performance goals
related to the Business Criteria, as well as Qualifying Options and Qualifying
SARs granted to persons described in Section 5.2, that are approved by a
committee composed solely of two or more outside directors (as this requirement
is applied under Section 162(m) of the Code) shall be deemed to be intended as
performance-based compensation within the meaning of Section 162(m) of the Code
unless such committee provides otherwise at the time of grant of the award. It
is the further intent of the Corporation that (to the extent the Corporation or
one of its Subsidiaries or awards under this Plan may be or become subject to
limitations on deductibility under Section 162(m) of the Code) any such awards
and any other Performance-Based Awards under Section 5.2 that are granted to or
held by a person subject to Section 162(m) will qualify as

 

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performance-based compensation or otherwise be exempt from deductibility
limitations under Section 162(m).

 

8.9                               Captions.  Captions and headings are given to
the sections and subsections of this Plan solely as a convenience to facilitate
reference. Such headings shall not be deemed in any way material or relevant to
the construction or interpretation of this Plan or any provision thereof.

 

8.10                        Stock-Based Awards in Substitution for Stock Options
or Awards Granted by Other Corporation.  Awards may be granted to Eligible
Persons in substitution for or in connection with an assumption of employee
stock options, SARs, restricted stock or other stock-based awards granted by
other entities to persons who are or who will become Eligible Persons in respect
of the Corporation or one of its Subsidiaries, in connection with a
distribution, merger or other reorganization by or with the granting entity or
an affiliated entity, or the acquisition by the Corporation or one of its
Subsidiaries, directly or indirectly, of all or a substantial part of the stock
or assets of the employing entity. The awards so granted need not comply with
other specific terms of this Plan, provided the awards reflect only adjustments
giving effect to the assumption or substitution consistent with the conversion
applicable to the Common Stock in the transaction and any change in the issuer
of the security. Any shares that are delivered and any awards that are granted
by, or become obligations of, the Corporation, as a result of the assumption by
the Corporation of, or in substitution for, outstanding awards previously
granted by an acquired company (or previously granted by a predecessor employer
(or direct or indirect parent thereof) in the case of persons that become
employed by the Corporation or one of its Subsidiaries in connection with a
business or asset acquisition or similar transaction) shall not be counted
against the Share Limit or other limits on the number of shares available for
issuance under this Plan.

 

8.11                        Non-Exclusivity of Plan.  Nothing in this Plan shall
limit or be deemed to limit the authority of the Board or the Administrator to
grant awards or authorize any other compensation, with or without reference to
the Common Stock, under any other plan or authority.

 

8.12                        No Corporate Action Restriction.  The existence of
this Plan, the award agreements and the awards granted hereunder shall not
limit, affect or restrict in any way the right or power of the Board or the
stockholders of the Corporation to make or authorize: (a) any adjustment,
recapitalization, reorganization or other change in the capital structure or
business of the Corporation or any Subsidiary, (b) any merger, amalgamation,
consolidation or change in the ownership of the Corporation or any Subsidiary,
(c) any issue of bonds, debentures, capital, preferred or prior preference stock
ahead of or affecting the capital stock (or the rights thereof) of the
Corporation or any Subsidiary, (d) any dissolution or liquidation of the
Corporation or any Subsidiary, (e) any sale or transfer of all or any part of
the assets or business of the Corporation or any Subsidiary, or (f) any other
corporate act or proceeding by the Corporation or any Subsidiary. No
participant, beneficiary or any other person shall have any claim under any
award or award agreement against any member of the Board or the Administrator,
or the Corporation or any employees, officers or agents of the Corporation or
any Subsidiary, as a result of any such action.

 

8.13                        Other Company Benefit and Compensation Programs. 
Payments and other benefits received by a participant under an award made
pursuant to this Plan shall not be deemed a part of a

 

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participant’s compensation for purposes of the determination of benefits under
any other employee welfare or benefit plans or arrangements, if any, provided by
the Corporation or any Subsidiary, except where the Administrator expressly
otherwise provides or authorizes in writing. Awards under this Plan may be made
in addition to, in combination with, as alternatives to or in payment of grants,
awards or commitments under any other plans or arrangements of the Corporation
or its Subsidiaries.

 

8.14                        Clawback Policy.  The awards granted under this Plan
are subject to the terms of the Corporation’s recoupment, clawback or similar
policy as it may be in effect from time to time, as well as any similar
provisions of applicable law, any of which could in certain circumstances
require repayment or forfeiture of awards or any shares of Common Stock or other
cash or property received with respect to the awards (including any value
received from a disposition of the shares acquired upon payment of the awards).

 

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