Exhibit 10.8

LOCKHEED MARTIN CORPORATION AMENDED AND RESTATED

2003 INCENTIVE PERFORMANCE AWARD PLAN

As Amended and Restated June 26, 2008

SECTION 1. Purpose.

The purpose of this Plan is to benefit the Corporation’s stockholders by
encouraging high levels of performance by individuals who contribute to the
success of the Corporation and its Subsidiaries and to enable the Corporation
and its Subsidiaries to attract, motivate, retain and reward talented and
experienced individuals. This purpose is to be accomplished by providing
eligible employees with an opportunity to obtain or increase their proprietary
interest in the Corporation and by providing eligible employees with additional
incentives to join or remain with the Corporation and its Subsidiaries.

SECTION 2. Definitions; Rules of Construction.

(a) Defined Terms. The terms defined in this Section shall have the following
meanings for purposes of this Plan:

“Award” means an award granted pursuant to Section 4.

“Award Agreement” means an agreement described in Section 6 entered into between
the Corporation and a Participant, setting forth the terms and conditions of an
Award granted to a Participant.

“Beneficiary” means a person or persons (including a trust or trusts) validly
designated by a Participant as the Participant’s beneficiary under this Plan,
or, in the absence of a valid designation, the personal representative of the
Participant’s estate in the event of a Participant’s death.

“Board of Directors” or “Board” means the Board of Directors of the Corporation.

“Cash-Based Awards” means Awards that, if paid, must be paid in cash and that
are neither denominated in nor have a value derived from the value of, nor an
exercise or conversion privilege at a price related to, shares of Stock, as
described in Section 4(a)(6).

“Cash Flow” means cash and cash equivalents derived from either (i) net cash
flow from operations or (ii) net cash flow from operations, financings and
investing activities, as determined by the Committee at the time an Award is
granted.

“Change in Control” means a change in control as defined in Section 7(c).

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

“Committee” means the Committee described in Section 8.

“Corporation” means Lockheed Martin Corporation.

“Date of Grant” means the date specified by the Committee as the date on which
an Award is to be granted (which date shall be no earlier than the date the
resolution approving the Award is adopted by the Committee), or if no such date
is specified by the Committee, the date on which the Committee adopts a
resolution making the Award.

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“Employee” means any officer (whether or not also a director) or any key
salaried employee of the Corporation or any of its Subsidiaries, but excludes,
in the case of an Incentive Stock Option, an Employee of any Subsidiary that is
not a “subsidiary corporation” of the Corporation as defined in Code
Section 424(f).

“EPS” means earnings per common share on a fully diluted basis determined in
accordance with generally accepted accounting principles in the United States.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time.

“Executive Officer” means executive officer as defined in Rule 3b-7 under the
Exchange Act, provided that, if the Board has designated the executive officers
of the Corporation for purposes of reporting under the Exchange Act, the
designation by the Board shall be conclusive for purposes of this Plan.

“Fair Market Value” means the closing sale price of the relevant security as
reported by the New York Stock Exchange on its web site as the closing price
(or, if the security is not so listed or if the principal market on which it is
traded is not the New York Stock Exchange, such other reporting system as shall
be selected by the Committee) on the relevant date, or, if no sale of the
security is reported for that date, the next preceding day for which there is a
reported sale. The Committee shall determine the Fair Market Value of any
security that is not publicly traded, using criteria as it shall determine, in
its sole direction, to be appropriate for the valuation.

“Insider” means any person who is subject to the reporting obligations of
Section 16(a) of the Exchange Act.

“Option” means a Nonqualified Stock Option or an Incentive Stock Option as
described in Section 4(a)(1) or (2).

“Participant” means an Employee who is granted an Award pursuant to this Plan so
long as the Award remains outstanding.

“Performance-Based Awards” means an Award contemplated by Section 4(b).

“Performance Goal” means EPS or ROIC or Cash Flow or Total Stockholder Return,
and “Performance Goals” means any combination thereof.

“Plan” means this Lockheed Martin Corporation 2003 Incentive Performance Award
Plan.

“ROIC” means return on invested capital calculated as (A) (i) net income plus
(ii) interest expense times one minus the highest marginal federal corporate tax
rate, divided by (B) (i) the average quarter end debt (including current
maturities of long-term debt) plus (ii) the average quarter end stockholders’
equity, in each case determined in accordance with generally accepted accounting
principles in the United States.

“Rule 16b-3” means Rule 16b-3 under Section 16 of the Exchange Act, as amended
from time to time.

“Share-Based Awards” means Awards that are payable or denominated in or have a
value derived from the value of, or an exercise or conversion privilege at a
price related to, shares of Stock, as described in Sections 4(a)(1) through (5).

 

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“Share Units” means the number of units under a Share-Based Award that is
payable solely in cash or is actually paid in cash, determined by reference to
the number of shares of Stock by which the Share-Based Award is measured.

“Stock” means shares of common stock of the Corporation, par value $1.00 per
share, subject to adjustments made under Section 7 or by operation of law.

“Subsidiary” means, as to any person, any corporation, association, partnership,
joint venture or other business entity of which 50 percent or more of the voting
stock or other equity interests (in the case of entities other than
corporations), is owned or controlled (directly or indirectly) by that entity,
or by one or more of the Subsidiaries of that entity, or by a combination
thereof.

“Total Stockholder Return” means with respect to the Corporation or other
entities (if measured on a relative basis), the (i) change in the market price
of its common stock (as quoted in the principal market on which it is traded as
of the beginning and ending of the period) plus dividends and other
distributions paid, divided by (ii) the beginning quoted market price, all of
which is adjusted for any changes in equity structure, including but not limited
to stock splits and stock dividends.

(b) Financial and Accounting Terms. Except as otherwise expressly provided or
the context otherwise requires, financial and accounting terms, including terms
defined herein as Performance Goals, are used as defined for purposes of, and
shall be determined in accordance with, generally accepted accounting principles
in the United States and as derived from the consolidated financial statements
of the Corporation, prepared in the ordinary course of business and filed with
the Securities and Exchange Commission from time to time.

(c) Rules of Construction. For purposes of this Plan and the Award Agreements,
unless otherwise expressly provided or the context otherwise requires, the terms
defined in this Plan include the plural and the singular, and pronouns of either
gender or neuter shall include, as appropriate, the other pronoun forms.

SECTION 3. Eligibility.

Any one or more Awards may be granted to any individual who is an Employee on
the Date of Grant and who is designated by the Committee to receive an Award,
provided that no individual who beneficially owns Stock possessing five percent
(5 percent) or more of the combined voting power of all classes of stock of the
Corporation shall be eligible to participate in this Plan.

SECTION 4. Awards.

(a) Type of Awards. The Committee may grant any of the following types of
Awards, either singly or in combination with other Awards:

(1) Nonqualified Stock Options. A Nonqualified Stock Option is an Award in the
form of an option to purchase Stock that is not intended to comply with the
requirements of Code Section 422 or any successor provision of the Code. The
exercise price of each Nonqualified Stock Option granted under this Plan shall
be not less than the Fair Market Value of the Stock on the Date of Grant of the
Option. All Nonqualified Stock Options shall be treated as Performance-Based
Awards subject to the applicable restrictions of Section 4(b).

(2) Incentive Stock Options. An Incentive Stock Option is an Award in the form
of an option to purchase Stock that is intended to comply with the requirements
of Code Section 422 or any successor section of the Code. The exercise price of
each Incentive Stock Option granted

 

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under this Plan shall be not less than the Fair Market Value of the Stock on the
Date of Grant of the Option. To the extent that the aggregate “fair market
value” of Stock with respect to which one or more incentive stock options first
become exercisable by a Participant in any calendar year exceeds $100,000,
taking into account both Stock subject to Incentive Stock Options under this
Plan and stock subject to incentive stock options under all other plans of the
Corporation or of other entities referenced in Code Section 422(d)(1), the
options shall be treated as Nonqualified Stock Options. For this purpose, the
“fair market value” of the Stock subject to options shall be determined as of
the Date of Grant of the Options. All Incentive Stock Options shall be treated
as Performance-Based Awards subject to the applicable restrictions of
Section 4(b).

(3) Stock Appreciation Rights. A Stock Appreciation Right is an Award in the
form of a right to receive, upon surrender of the right, but without other
payment, an amount based on appreciation in the value of Stock over a base price
established in the Award, payable in cash, Stock or such other form or
combination of forms of payout, at times and upon conditions (which may include
a Change in Control), as may be approved by the Committee. The minimum base
price of a Stock Appreciation Right granted under this Plan shall be not less
than the Fair Market Value of the underlying Stock on the Date of Grant of the
Stock Appreciation Right, or, in the case of a Stock Appreciation Right related
to an Option (whether already outstanding or concurrently granted), the exercise
price of the related Option. All Stock Appreciation Rights shall be treated as
Performance-Based Awards subject to the applicable restrictions under
Section 4(b).

(4) Restricted Stock. Restricted Stock is an Award of shares of Stock of the
Corporation that are issued, but subject to restrictions on transfer and/or such
other restrictions on incidents of ownership as the Committee may determine.
Awards of Restricted Stock to Executive Officers that are either granted or vest
upon attainment of one or more of the Performance Goals shall only be granted as
Performance-Based Awards subject to the applicable restrictions under
Section 4(b).

(5) Stock Units. A Stock Unit is an Award payable in cash or Stock and
represented by a bookkeeping credit where the amount represented by the
bookkeeping credit for each Stock Unit equals the Fair Market Value of a share
of Stock on the Date of Grant and which amount shall be subsequently increased
or decreased to reflect the Fair Market Value of a share of Stock on any date
from the Date of Grant up to the date the Stock Unit is paid to the Participant
in cash or Stock. Stock Units are not outstanding shares of Stock and do not
entitle a Participant to voting or other rights with respect to Stock; provided,
however, that an Award of Stock Units may provide for a cash payment in an
amount equal to the dividends paid on Stock while the Award is outstanding or
the crediting of additional Stock Units based on the value of dividends paid on
Stock while the Award is outstanding. Stock Unit Awards to Executive Officers
that are either granted or vest upon attainment of one or more of the
Performance Goals shall only be granted as Performance-Based Awards subject to
the applicable restrictions under Section 4(b).

(6) Cash-Based Awards. Cash-Based Awards are Awards that provide Participants
with the opportunity to earn a cash payment based upon the level of performance
of the Corporation relative to one or more Performance Goals established by the
Committee for an award cycle of more than one but not more than five years. For
each award cycle, the Committee shall determine the size of the Awards, the
Performance Goals, the performance targets as to each of the Performance Goals,
the level or levels of achievement necessary for award payments and the
weighting of the Performance Goals, if more than one Performance Goal is
applicable. Cash-Based Awards to Executive Officers that are either granted or
become vested, exercisable or payable based on attainment of one or more
Performance Goals shall only be granted as Performance-Based Awards subject to
the applicable restrictions under Section 4(b).

 

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(b) Special Performance-Based Awards. Without limiting the generality of the
foregoing, any of the types of Awards listed in Section 4(a) may be granted as
awards that satisfy the requirements for “performance-based compensation” within
the meaning of Code Section 162(m) (“Performance-Based Awards”), the grant,
vesting, exercisability or payment of which depends on the degree of achievement
of the Performance Goals relative to preestablished targeted levels for the
Corporation on a consolidated basis. Notwithstanding anything contained in this
Section 4(b) to the contrary, any Option or Stock Appreciation Right shall be
subject only to the requirements of clause (1) and Sections 4(c)(1) and
(2) below in order for such Awards to satisfy the requirements for
Performance-Based Awards under this Section 4(b) (with such Awards hereinafter
referred to as a “Qualifying Option” or a “Qualifying Stock Appreciation Right,”
respectively). With the exception of any Qualifying Option or Qualifying Stock
Appreciation Right, an Award that is intended to satisfy the requirements of
this Section 4(b) shall be designated as a Performance-Based Award at the time
of grant. Nothing in this Plan shall limit the ability of the Committee to grant
Options or Stock Appreciation Rights with an exercise price or a base price
greater than Fair Market Value on the Date of Grant or to make the vesting of
the Options or Stock Appreciation Rights subject to Performance Goals or other
business objectives.

(1) Eligible Class. The eligible class of persons for Awards under this
Section 4(b) shall be all Employees.

(2) Performance Goals. The performance goals for any Awards under this
Section 4(b) (other than Qualifying Options and Qualifying Stock Appreciation
Rights) shall be, on an absolute or relative basis, one or more of the
Performance Goals. The specific performance target(s) with respect to
Performance Goal(s) must be established by the Committee in advance of the
deadlines applicable under Code Section 162(m) and while the performance
relating to the Performance Goal(s) remains substantially uncertain.

(3) Committee Certification. Before any Performance-Based Award under this
Section 4(b) (other than Qualifying Options and Qualifying Stock Appreciation
Rights) is paid, the Committee must certify in writing (by resolution or
otherwise) that the applicable Performance Goal(s) and any other material terms
of the Performance-Based Award were satisfied; provided, however, that a
Performance-Based Award may be paid without regard to the satisfaction of the
applicable Performance Goal in the event of a Change in Control as provided in
Section 7(b).

(4) Terms and Conditions of Awards; Committee Discretion to Reduce Performance
Awards. The Committee shall have discretion to determine the conditions,
restrictions or other limitations, in accordance with and subject to the terms
of this Plan and Code Section 162(m), on the payment of individual
Performance-Based Awards under this Section 4(b). To the extent set forth in an
Award Agreement, the Committee may reserve the right to reduce the amount
payable in accordance with any standards or on any other basis (including the
Committee’s discretion), as the Committee may determine.

(5) Adjustments for Material Changes. The Committee shall have the right to
specify any adjustment that it deems necessary or appropriate to any Performance
Goals and/or performance targets to take into account or exclude any
extraordinary gain or loss or other event that is considered an extraordinary
item under generally accepted accounting principles in the United States,
provided that the Committee exercises this right to specify the adjustment at
the time the Performance Goals and/or performance targets are established under
this Section 4(b). In addition, the Committee shall have the right to specify
any adjustment that it deems necessary or appropriate to take into account or
exclude any other gain or loss or event recognized under any accounting policy
or practice affecting the Corporation and/or any Performance Goals or
performance targets, provided that the Committee exercises this right to exclude
or take such gain or loss or event into account at the time the related
Performance Goals and/or performance targets are established under this
Section 4(b).

 

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(6) Interpretation. Except as specifically provided in this Section 4(b), the
provisions of this Section 4(b) shall be interpreted and administered by the
Committee in a manner consistent with the requirements for exemption of
Performance-Based Awards granted to Executive Officers as “performance-based
compensation” under Code Section 162(m) and the regulations thereunder.

(c) Individual Limits.

(1) Share-Based Awards. The maximum number of shares of Stock or Share Units
that are issuable under the Plan pursuant to Options, Stock Appreciation Rights
payable in shares of Stock, Restricted Stock or Stock Units payable in shares of
Stock (described under Section 4(a)(5)) that are granted as Performance-Based
Awards during any calendar year to any Participant shall not exceed 1,000,000,
subject to adjustment as provided in Section 7; provided, that the maximum
number of shares of Stock that may be granted as Restricted Stock Awards during
any calendar year to any Participant under the Plan (including as
Performance-Based Awards) shall not exceed 250,000 shares, subject to adjustment
as provided in Section 7. Awards that are canceled during the year shall be
counted against this limit.

(2) Share Unit Awards. The maximum number of Share Units that are issuable as
Stock Units payable in cash only or Stock Appreciation Rights payable in cash
only during any calendar year to any Participant as Performance-Based Awards
shall not exceed 300,000, subject to adjustment as provided in Section 7. Awards
that are canceled due to expiration or forfeiture during the year shall be
counted against this limit.

(3) Cash-Based Awards. The aggregate amount of compensation to be paid to any
Participant in respect of those Cash-Based Awards that are granted during any
calendar year as Performance-Based Awards shall not exceed $5,000,000.

(d) Maximum Term of Awards. No Award that contemplates exercise or conversion
may be exercised or converted to any extent, and no other Award that defers
vesting, shall remain outstanding and unexercised, unconverted or unvested more
than ten (10) years after the date the Award was initially granted.

(e) Code Section 409A. It is the intent of the Corporation that no Award under
the Plan be subject to taxation under Section 409A(a)(1) of the Code.
Accordingly, if the Committee determines that an Award granted under the Plan is
subject to Section 409A of the Code, such Award shall be interpreted and
administered to meet the requirements of Sections 409A(a)(2), (3) and (4) of the
Code and thus to be exempt from taxation under Section 409A(a)(1) of the Code.

SECTION 5. Shares of Stock and Share Units Available Under Plan.

(a) Aggregate Share Limit for Share-Based Awards. The maximum number of shares
of Stock that may be subject to Options (including Incentive Stock Options),
Stock Appreciation Rights, Restricted Stock and Stock Units granted or issued
under the Plan is 44,500,000, subject to adjustment as provided in this
Section 5 or Section 7.

(b) Annual Share Limit for Share-Based Awards. Subject to Section 5(a), the
maximum number of shares of Stock that may be subject to Options (including
Incentive Stock Options), Stock Appreciation Rights, Restricted Stock and Stock
Units granted or issued in any calendar year is 1.6 percent of the Corporation’s
outstanding shares of Stock on December 31 of the calendar year immediately
preceding the Date of Grant of the Award, as reported by the Corporation in its
Annual Report on Form 10-K or its Annual Report to Shareholders for such year.
The number of shares of Stock available for grant or issuance under this
Section 5(b) in any calendar year shall be increased by the number of shares of
Stock available under the Plan for grant or issuance under this Section 5(b) in
previous calendar years but not

 

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covered by Awards granted as Options (including Incentive Stock Options), Stock
Appreciation Rights, Restricted Stock and Stock Units in previous calendar
years.

(c) Aggregate Share Unit Limit. The maximum number of Share Units that may be
issued as Stock Units payable in cash only and Stock Appreciation Rights payable
in cash only under the Plan is 22,500,000, subject to adjustment as provided in
this Section 5 or Section 7.

(d) Shares Available For Restricted Stock Grants. The maximum number of shares
of Stock that may be issued as Restricted Stock under the Plan is 28 percent of
the shares authorized under Section 5(a) of the Plan, subject to adjustment as
provided in this Section 5 or Section 7.

(e) Reissue of Shares and Share Units. Any unexercised, unconverted or
undistributed portion of any Award resulting from termination, expiration or
forfeiture of that Award, or any alternative form of consideration under an
Award that is not paid in connection with the settlement of an Award or any
portion of an Award, shall again be available for Award under Section 5(a),
5(b), 5(c) or 5(d), as applicable, whether or not the Participant has received
benefits of ownership (such as dividends or dividend equivalents or voting
rights) during the period in which the Participant’s ownership was restricted or
otherwise not vested. Shares of Stock that are issued pursuant to Restricted
Stock Awards and subsequently reacquired by the Corporation due to termination,
expiration or forfeiture of the Award shall also be available for reissuance
under the Plan.

(f) Interpretive Issues. Additional rules for determining the number of shares
of Stock or Share Units authorized under this Plan or available for grant or
issuance from time to time may be adopted by the Committee, as it deems
necessary or appropriate.

(g) Source of Shares; No Fractional Shares. The Stock that may be issued (which
term includes Stock reissued or otherwise delivered) pursuant to an Award under
this Plan may be authorized but unissued Stock or Stock acquired by the
Corporation or any of its Subsidiaries, subsequently or in anticipation of a
transaction under this Plan, in the open market or in privately negotiated
transactions. No fractional shares of Stock shall be issued under the Plan, but
fractional interests may be accumulated pursuant to the terms of an Award.

(h) Consideration. The Stock issued under this Plan may be issued (subject to
Section 10(d)) for any lawful form of consideration, the value of which equals
the par value of the Stock or such greater or lesser value as the Committee,
consistent with Sections 10(d), may require.

(i) Purchase or Exercise Price; Withholding. The exercise or purchase price (if
any) of the Stock issuable pursuant to any Award and any withholding obligation
under applicable tax laws shall be paid in cash or, subject to the Committee’s
express authorization and the terms, restrictions, conditions and procedures as
the Committee may in its sole discretion impose (subject to Section 10(d)), any
one or combination of (i) cash, (ii) the delivery of shares of Stock, (iii) a
reduction in the amount of Stock or other amounts otherwise issuable or payable
pursuant to such Award, (iv) the delivery of a promissory note, or other
obligation for the future payment in money, or (v) in the case of purchase price
only, labor or service as an Employee to be performed or actually performed. In
the case of a payment by the means described in clause (ii) or (iii) above, the
Stock to be so delivered or offset shall be determined by reference to the Fair
Market Value of the Stock on the date as of which the payment or offset is made.
Notwithstanding the foregoing, no Insider shall be permitted to satisfy the
purchase or exercise price or withholding obligation with respect to an Award by
using a method of payment otherwise authorized under the Plan or an Award
Agreement if such method of payment would constitute a personal loan under
Section 13(k) of the Exchange Act. If an Award Agreement to a Participant who is
not an Insider authorizes a method of payment that would constitute a personal
loan under Section 13(k) of the Exchange Act and the Participant subsequently
becomes an Insider, then the payment method will no longer be available to the
Participant and the Committee shall take whatever steps are necessary to make

 

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such payment method void as to such Participant, including but not limited to
requiring the immediate payment of any note or loan previously obtained in
connection with an Award.

(j) Cashless Exercise. Subject to any restrictions on Insiders pursuant to
Section 13(k) of the Exchange Act, the Committee may permit the exercise of the
Award and payment of any applicable withholding tax in respect of an Award by
delivery of notice, subject to the Corporation’s receipt from a third party of
payment (or commitment to make payment) in full in cash for the exercise price
and the applicable withholding prior to issuance of Stock, in the manner and
subject to the procedures as may be established by the Committee.

SECTION 6. Award Agreements.

Each Award under this Plan shall be evidenced by an Award Agreement in a form
approved by the Committee setting forth, in the case of Share-Based Awards, the
number of shares of Stock or Share Units, as applicable, subject to the Award,
and the price (if any) and term of the Award and, in the case of
Performance-Based Awards, the applicable Performance Goals. The Award Agreement
also shall set forth (or incorporate by reference) other material terms and
conditions applicable to the Award as determined by the Committee consistent
with the limitations of this Plan.

(a) Mandatory Provisions for Options. Award Agreements for Options shall be
deemed to contain the following provisions:

(1) Vesting: A provision providing for a minimum vesting schedule pursuant to
which no Award of Options may become fully exercisable prior to the second
anniversary of the Date of Grant, and to the extent an Award provides for
vesting in installments over a period of no less than two years, no portion of
an Award of Options may become exercisable prior to the first anniversary of the
Date of Grant. In the event that the Participant is not an Employee on the date
on which an Option would otherwise vest and become exercisable, the Options
subject to that vesting date will be forfeited. Notwithstanding the foregoing,
(i) any Award Agreement governing Options may provide for any additional vesting
requirements, including but not limited to longer periods of required employment
or the achievement of Performance Goals; (ii) any Award Agreement may provide
that all or a portion of the Options subject to an Award vest immediately or,
alternatively, vest in accordance with the vesting schedule but without regard
to the requirement for continued employment with the Corporation (or a
Subsidiary) in the event of a Change in Control, or in the case of termination
of employment with the Corporation (or a Subsidiary) due to death, disability,
layoff, retirement or divestiture, or in the case of a vesting period longer
than two years, vest and become exercisable or fail to be forfeited and continue
to vest in accordance with the schedule in the Award Agreement prior to the
expiration of any period longer than two years for any reason designated by the
Committee; (iii) any Award Agreement may provide that employment by another
entity be treated as employment by the Corporation (or a Subsidiary) in the
event a Participant terminates employment with the Corporation (or a Subsidiary)
on account of a divestiture; and (iv) Award Agreements for Options covering, in
the aggregate, up to 1,500,000 shares of Stock may contain a shorter or no
vesting requirement for all or a portion of the Options subject to the Award.
Notwithstanding the foregoing, no Award Agreement may provide for immediate
vesting on account of a layoff.

(2) Option Holding Period: Subject to the authority of the Committee under
Section 7, a minimum six-month period shall elapse between the date of initial
grant of any Option and the sale of the underlying shares of Stock, and the
Corporation may impose legend and other restrictions on the Stock issued on
exercise of the Options to enforce this requirement.

(3) No Waivers: A provision that neither the Committee nor the Board of
Directors has retained the authority to waive the requirements set forth in
Sections 6(a)(1) and (2).

 

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(b) Mandatory Provisions for Restricted Stock and Stock Units Payable in Stock.
Award Agreements for Restricted Stock shall be deemed to contain the following
provisions:

(1) Vesting: A provision prohibiting the sale of any shares of Restricted Stock
granted under an Award prior to the third anniversary of the Date of Grant of
the Award and requiring the forfeiture of all shares of Restricted Stock subject
to the Award in the event that the Participant does not remain an Employee for
at least three years following the Date of Grant of the Restricted Stock;
provided, that (i) any Award Agreement governing Restricted Stock may provide
for any additional vesting requirements, including but not limited to longer
periods of required employment or the achievement of Performance Goals; and
(ii) any Award Agreement may provide that Restricted Stock vests prior to the
third anniversary of the Date of Grant (A) in the event of a Change in Control,
(B) in the case of termination of employment with the Corporation (or a
Subsidiary) due to death, disability, layoff, retirement or divestiture, or
(C) in the case of a vesting period longer than three years, prior to the
expiration of any period longer than three years for any reason designated by
the Committee. Notwithstanding the foregoing, no Award Agreement may provide for
immediate vesting on account of a layoff. The vesting requirements of this
Section 6(b) shall also apply to Award Agreements governing Stock Units payable
in Stock unless the Stock Units are granted in conjunction with, or part of
another Award.

(2) No Waivers: A provision that neither the Committee nor the Board of
Directors has retained the authority to waive the requirements set forth in
Section 6(b)(1).

(c) Mandatory Provisions Applicable to All Award Agreements. Award Agreements
shall be subject to the terms of this Plan and shall be deemed to include the
following terms, unless the Committee in the Award Agreement consistent with
applicable legal considerations, provides otherwise:

(1) Non-assignability: The Award shall not be assignable nor transferable,
except by will or by the laws of descent and distribution, and during the
lifetime of a Participant, the Award shall be exercised only by the Participant
or by his or her guardian or legal representative. The designation of a
Beneficiary hereunder shall not constitute a transfer prohibited by the
foregoing provisions.

(2) Rights as Stockholder: A Participant shall have no rights as a holder of
Stock with respect to any unissued securities covered by an Award until the date
the Participant becomes the holder of record of the securities. Except as
provided in Section 7, no adjustment or other provision shall be made for
dividends or other stockholder rights, except to the extent that the Award
Agreement provides for dividend equivalents or similar economic benefits.

(3) Withholding: The Participant shall be responsible for payment of any taxes
or similar charges required by law to be withheld from an Award, or an amount
paid in satisfaction of an Award and these obligations shall be paid by the
Participant on or prior to the payment of the Award. In the case of an Award
payable in cash, the withholding obligation shall be satisfied by withholding
the applicable amount and paying the net amount in cash to the Participant. In
the case of an Award paid in shares of Stock, a Participant shall satisfy the
withholding obligation as provided in Section 5(i).

(d) Other Provisions. Award Agreements may include other terms and conditions as
the Committee shall approve, including but not limited to the following:

(1) Other Terms and Conditions: Any other terms consistent with the terms of
this Plan as are necessary, appropriate, or desirable to effect the Award to the
Participant, including provisions describing the treatment of an Award in the
event of the death, disability, layoff, retirement, divestiture or other
termination of a Participant’s employment with or services to the Corporation or
a Subsidiary, any provisions relating to the vesting, exercisability, forfeiture
or

 

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cancellation of the Awards, any requirements for continued employment, any other
restrictions or conditions (including performance requirements and holding
periods) of the Award and the method by which the restrictions or conditions
lapse, and the effect on the Award of a Change in Control, subject, in the case
of Performance-Based Awards, to the requirements for “performance-based
compensation” under Code Section 162(m) and in the case of Options and
Restricted Stock, to the requirements of Sections 6(a) (b), and (7).

(2) Non-competition clause: A provision requiring the forfeiture of an Award
(whether or not vested) on account of activities deemed by the Committee in its
sole discretion to be harmful to the Corporation, including but not limited to
employment with a competitor and misuse of the Corporation’s proprietary or
confidential information.

(e) Contract Rights, Forms and Signatures. Any obligation of the Corporation to
any Participant with respect to an Award shall be based solely upon contractual
obligations created by this Plan and an Award Agreement. Subject to the
provisions of Section 8(h), no Award shall be enforceable until the Award
Agreement or an acknowledgement of receipt has been signed by the Participant
and on behalf of the Corporation by an Executive Officer (other than the
recipient) or his or her delegate. By executing the Award Agreement or an
acknowledgement of receipt, a Participant shall be deemed to have accepted and
consented to the terms of this Plan and any action taken in good faith under
this Plan by and within the discretion of the Committee, the Board of Directors
or their delegates. Unless the Award Agreement otherwise expressly provides,
there shall be no third party beneficiaries of the obligations of the
Corporation to the Participant under the Award Agreement.

SECTION 7. Adjustments; Change in Control; Acquisitions.

(a) Adjustments. If there shall occur any recapitalization, stock split
(including a stock split in the form of a stock dividend), reverse stock split,
merger, combination, consolidation, or other reorganization or any extraordinary
dividend or other extraordinary distribution in respect of the Stock (whether in
the form of cash, Stock or other property), or any split-up, spin-off,
split-off, extraordinary redemption, or exchange of outstanding Stock, or there
shall occur any other similar corporate transaction or event in respect of the
Stock, or a sale of substantially all the assets of the Corporation as an
entirety, then the Committee shall, in the manner and to the extent, if any, as
it deems appropriate and equitable to the Participants and consistent with the
terms of this Plan, and taking into consideration the effect of the event on the
holders of the Stock, proportionately adjust any or all of the following:

(1) the number and type of shares of Stock and Share Units that thereafter may
be made the subject of Awards (including the specific maximum and numbers of
shares of Stock or Share Units set forth elsewhere in this Plan),

(2) the number and type of shares of Stock, other property, Share Units or cash
subject to any or all outstanding Awards,

(3) the grant, purchase or exercise price, or conversion ratio of any or all
outstanding Awards, or of the Stock, other property or Share Units underlying
the Awards,

(4) the securities, cash or other property deliverable upon exercise or
conversion of any or all outstanding Awards,

(5) subject to Section 4(b), the performance targets or standards appropriate to
any outstanding Performance-Based Awards, or

(6) any other terms as are affected by the event.

Notwithstanding the foregoing, in the case of an Incentive Stock Option, no
adjustment shall be made that would cause this Plan to violate Section 424(a) of
the Code or any successor provisions thereto, without

 

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the written consent of the Participant adversely affected thereby. The Committee
may act prior to an event described in this Section 7(a) (including at the time
of an Award by means of more specific provisions in the Award Agreement) if
deemed necessary or appropriate to permit the Participant to realize the
benefits intended to be conveyed by an Award in respect of the Stock in the case
of an event described in Section 7(a).

(b) Change in Control. The Committee may, in the Award Agreement, provide for
the effect of a Change in Control on an Award. Such provisions may include but
are not limited to any one or more of the following with respect to any or all
Awards: (i) the specific consequences of a Change in Control on the Awards;
(ii) the acceleration or extension of time periods for purposes of exercising,
vesting in, or realizing gain from, the Awards; (iii) a reservation of the
Committee’s right to determine in its discretion at any time that there shall be
full acceleration or no acceleration of benefits under the Awards; (iv) that
only certain or limited benefits under the Awards shall be accelerated; (v) that
the Awards shall be accelerated for a limited time only; or (vi) that
acceleration of the Awards shall be subject to additional conditions precedent
(such as a termination of employment following a Change in Control).

In addition to any action required or authorized by the terms of an Award, the
Committee may take any other action it deems appropriate to ensure the equitable
treatment of Participants in the event of or in anticipation of a Change in
Control, including but not limited to any one or more of the following with
respect to any or all Awards: (i) the waiver of conditions on the Awards that
were imposed for the benefit of the Corporation; (ii) provision for the cash
settlement of the Awards for their equivalent cash value, as determined by the
Committee, as of the date of the Change in Control; or (iii) such other
modification or adjustment to the Awards as the Committee deems appropriate to
maintain and protect the rights and interests of Participants upon or following
the Change in Control. The Committee also may accord any Participant a right to
refuse any acceleration of exercisability, vesting or benefits, whether pursuant
to the Award Agreement or otherwise, in such circumstances as the Committee may
approve.

Notwithstanding the foregoing provisions of this Section 7(b) or any provision
in an Award Agreement to the contrary, if any Award to any Insider is
accelerated to a date that is less than six months after the Date of Grant, the
Committee may prohibit a sale of the underlying Stock (other than a sale by
operation or law in exchange for or through conversion into other securities),
and the Corporation may impose legend and other restrictions on the Stock to
enforce this prohibition.

(c) Change in Control Definition. For purposes of this Plan, a “Change in
Control” shall include and be deemed to occur upon one or more of the following
events:

(1) A tender offer or exchange offer is consummated for the ownership of
securities of the Corporation representing 25 percent or more of the combined
voting power of the Corporation’s then outstanding voting securities entitled to
vote in the election of directors of the Corporation.

(2) The Corporation is merged, combined, consolidated, recapitalized or
otherwise reorganized with one or more other entities that are not Subsidiaries
and, as a result of the merger, combination, consolidation, recapitalization or
other reorganization, less than 75 percent of the outstanding voting securities
of the surviving or resulting corporation shall immediately after the event be
owned in the aggregate by the stockholders of the Corporation (directly or
indirectly), determined on the basis of record ownership as of the date of
determination of holders entitled to vote on the action (or in the absence of a
vote, the day immediately prior to the event).

(3) Any person (as this term is used in Sections 3(a)(9) and 13(d)(3) of the
Exchange Act, but excluding any person described in and satisfying the
conditions of Rule 13d-1(b)(1) thereunder), becomes the beneficial owner (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing 25 percent or more of the

 

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combined voting power of the Corporation’s then outstanding securities entitled
to vote in the election of directors of the Corporation.

(4) At any time within any period of two years after a tender offer, merger,
combination, consolidation, recapitalization, or other reorganization or a
contested election, or any combination of these events, the “Incumbent
Directors” shall cease to constitute at least a majority of the authorized
number of members of the Board. For purposes hereof, “Incumbent Directors” shall
mean the persons who were members of the Board immediately before the first of
these events and the persons who were elected or nominated as their successors
or pursuant to increases in the size of the Board by a vote of at least
three-fourths of the Board members who were then Board members (or successors or
additional members so elected or nominated).

(5) The stockholders of the Corporation approve a plan of liquidation and
dissolution or the sale or transfer of substantially all of the Corporation’s
business and/or assets as an entirety to an entity that is not a Subsidiary.

With respect to Awards granted on or after April 28, 2005, in the event the
Committee determines that an Award could be subject to taxation under
Section 409A(a)(1) of the Code, a Change in Control shall have no effect on the
Award unless the Change in Control also would constitute a change in the
ownership or effective control of the Corporation or in the ownership of a
substantial portion of the assets of the Corporation within the meaning of
Section 409A(a)(2)(A)(v) of the Code.

(d) Business Acquisitions. Awards may be granted under this Plan on terms and
conditions as the Committee considers appropriate, which may differ from those
otherwise required by this Plan to the extent necessary to reflect a
substitution for or assumption of stock incentive awards held by employees of
other entities who become Employees of the Corporation or a Subsidiary as the
result of a merger of the employing entity with, or the acquisition of the
property or stock of the employing entity by, the Corporation or a Subsidiary,
directly or indirectly.

 

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SECTION 8. Administration.

(a) Committee Authority and Structure. This Plan and all Awards granted under
this Plan shall be administered by the Management Development and Compensation
Committee of the Board or such other committee of the Board as may be designated
by the Board and constituted so as to permit this Plan to comply with the
disinterested administration requirements of Rule 16b-3 under the Exchange Act
and the “outside director” requirement of Code Section 162(m). The Board shall
designate the members of the Committee.

(b) Selection and Grant. The Committee shall have the authority to determine the
Employees to whom Awards will be granted under this Plan, the type of Award or
Awards to be made, and the nature, amount, pricing, timing, and other terms of
Awards to be made to any one or more of these individuals, subject to the terms
of this Plan.

(c) Construction and Interpretation. The Committee shall have the power to
interpret and administer this Plan and Award Agreements, and to adopt, amend and
rescind related rules and procedures. All questions of interpretation and
determinations with respect to this Plan, the number of shares of Stock, Stock
Appreciation Rights, or units or other Awards granted, and the terms of any
Award Agreements, the adjustments required or permitted by Section 7, and other
determinations hereunder shall be made by the Committee and its determination
shall be final and conclusive upon all parties in interest. In the event of any
conflict between an Award Agreement and any non-discretionary provisions of this
Plan, the terms of this Plan shall govern.

(d) Limited Authority of Committee to Change Terms of Awards. In addition to the
Committee’s authority under other provisions of this Plan (including Sections 7
and 9), the Committee shall have the authority to accelerate the exercisability
or vesting of an Award, to extend the term or waive early termination provisions
of an Award (subject to the maximum ten-year term under Section 4(a)), and to
waive the Corporation’s rights with respect to an Award or restrictive
conditions of an Award (including forfeiture conditions), in any case in such
circumstances as the Committee deems appropriate. Notwithstanding the foregoing,
the Committee’s authority under this Section 8(d) is subject to any express
limitations of this Plan (including under Sections 6(a), 6(b), 7 and 9) and this
Section 8(d) does not authorize the Committee to accelerate exercisability or
vesting or waive early termination provisions if that acceleration or waiver
would be inconsistent with the mandatory vesting requirements set forth in
Sections 6(a)(1) and 6(b)(1).

(e) Rule 16b-3 Conditions; Bifurcation of Plan. It is the intent of the
Corporation that this Plan and Share-Based Awards hereunder satisfy and be
interpreted in a manner, that, in the case of Participants who are or may be
Insiders, satisfies any applicable requirements of Rule 16b-3, so that these
persons will be entitled to the benefits of Rule 16b-3 or other exemptive rules
under Section 16 under the Exchange Act and will not be subjected to avoidable
liability thereunder as to Awards intended to be entitled to the benefits of
Rule 16b-3. If any provision of this Plan or of any Award would otherwise
frustrate or conflict with the intent expressed in this Section 8(e), that
provision to the extent possible shall be interpreted and deemed amended so as
to avoid such conflict. To the extent of any remaining irreconcilable conflict
with this intent, the provision shall be deemed disregarded as to Awards
intended as Rule 16b-3 exempt Awards. Notwithstanding anything to the contrary
in this Plan, the provisions of this Plan may at any time be bifurcated by the
Board or the Committee in any manner so that certain provisions of this Plan or
any Award Agreement intended (or required in order) to satisfy the applicable
requirements of Rule 16b-3 are only applicable to Insiders and to those Awards
to Insiders intended to satisfy the requirements of Rule 16b-3.

(f) Delegation and Reliance. The Committee may delegate to the officers or
employees of the Corporation the authority to execute and deliver those
instruments and documents, to do all acts and things, and to take all other
steps deemed necessary, advisable or convenient for the effective administration
of this Plan in accordance with its terms and purpose, except that the Committee
may not

 

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delegate any discretionary authority to grant or amend an Award or with respect
to substantive decisions or functions regarding this Plan or Awards as these
relate to the material terms of Performance-Based Awards to Executive Officers
or to the timing, eligibility, pricing, amount or other material terms of Awards
to Insiders. In making any determination or in taking or not taking any action
under this Plan, the Board and the Committee may obtain and may rely upon the
advice of experts, including professional advisors to the Corporation. No
director, officer, employee or agent of the Corporation shall be liable for any
such action or determination taken or made or omitted in good faith.

(g) Exculpation and Indemnity. Neither the Corporation nor any member of the
Board of Directors or of the Committee, nor any other person participating in
any determination of any question under this Plan, or in the interpretation,
administration or application of this Plan, shall have any liability to any
party for any action taken or not taken in good faith under this Plan or for the
failure of an Award (or action in respect of an Award) to satisfy Code
requirements as to incentive stock options or to realize other intended tax
consequences, to qualify for exemption or relief under Rule 16b-3 or to comply
with any other law, compliance with which is not required on the part of the
Corporation.

(h) Notices, Signature, Delivery. Whenever a signature, notice or delivery of a
document is required or appropriate under the Plan or pursuant to an Award
Agreement, signature, notice or delivery may be accomplished by paper or written
format, or to the extent authorized by the Committee, subject to Section 10(d),
by electronic means. In the event the Committee authorizes electronic means for
the signature, notice or delivery of a document hereunder, the electronic record
or confirmation of that signature, notice or delivery maintained by or on behalf
of the Committee shall for purposes of this Plan and any applicable Award
Agreement be treated as if it was a written signature or notice and was
delivered in the manner provided herein for a written document.

SECTION 9. Amendment and Termination of this Plan.

The Board of Directors may at any time terminate, suspend or discontinue this
Plan. The Board of Directors may amend this Plan at any time, provided that any
material amendment to the Plan will not be effective unless approved by the
Corporation’s stockholders. For this purpose, a material amendment is any
amendment that would (i) materially increase the number of shares of Stock
available under the Plan or issuable to a Participant (other than a change in
the number of shares made pursuant to Section 7); (ii) change the types of
awards that may be granted under the Plan; (iii) expand the class of persons
eligible to receive awards or otherwise participate in the Plan; (iv) reduce the
price at which an Option is exercisable either by amendment of an Award
Agreement or by substitution of a new Option Award at a reduced price (other
than as permitted in Section 7); or (v) require stockholder approval pursuant to
the New Stock Exchange Listed Company Manual (so long as the Corporation is a
listed company on the New York Stock Exchange) or applicable law. The Committee
may at any time alter or amend any or all Award Agreements under this Plan in
any manner that would be authorized for a new Award under this Plan, including
but not limited to any manner set forth in Section 8(d) (subject to any
applicable limitations thereunder), so long as such an amendment would not
require approval of the Corporation’s stockholders, if such amendment was made
to the Plan. Notwithstanding the foregoing, no such action by the Board or the
Committee shall, in any manner adverse to a Participant other than as expressly
permitted by the terms of an Award Agreement, affect any Award then outstanding
and evidenced by an Award Agreement without the consent in writing of the
Participant or a Beneficiary who has become entitled to an Award.

SECTION 10. Miscellaneous.

(a) Unfunded Plan. This Plan shall be unfunded. Neither the Corporation, the
Board of Directors nor the Committee shall be required to segregate any assets
that may at any time be represented by Awards made pursuant to this Plan.
Neither the Corporation, the Board of Directors, nor the Committee shall be
deemed to be a trustee of any amounts to be paid or securities to be issued
under this Plan.

 

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(b) Rights of Employees.

(1) No Right to an Award. Status as an Employee shall not be construed as a
commitment that any one or more Awards will be made under this Plan to an
Employee or to Employees generally. Status as a Participant shall not entitle
the Participant to any additional future Awards.

(2) No Assurance of Employment. Nothing contained in this Plan (or in any other
documents related to this Plan or to any Award) shall confer upon any Employee
or Participant any right to continue in the employ or other service of the
Corporation or any Subsidiary or constitute any contract (of employment or
otherwise) or limit in any way the right of the Corporation or any Subsidiary to
change a person’s compensation or other benefits or to terminate the employment
of a person with or without cause.

(c) Effective Date; Duration. This Plan has been adopted by the Board of
Directors of the Corporation and shall become effective upon and shall be
subject to the approval of the Corporation’s stockholders. This Plan shall
remain in effect until any and all Awards under this Plan have been exercised,
converted or terminated under the terms of this Plan and applicable Award
Agreements. Notwithstanding the foregoing, no Award may be granted under this
Plan after February 28, 2013. Notwithstanding the foregoing, any Award granted
under the Plan on or prior to February 28, 2013 may be amended after such date
in any manner that would have been permitted prior to such date, except that no
such amendment shall increase the number of shares of Stock or Stock Units
subject to, comprising or referenced in such Award (other than in accordance
with Section 7(a)).

(d) Compliance with Laws. This Plan, Award Agreements, and the grant, exercise,
conversion, operation and vesting of Awards, and the issuance and delivery of
shares of Stock and/or other securities or property or the payment of cash under
this Plan, Awards or Award Agreements, are subject to compliance with all
applicable federal and state laws, rules and regulations (including but not
limited to state and federal insider trading, registration, reporting and other
securities laws 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 to comply with all legal
requirements. Any securities delivered under this Plan shall be subject to such
restrictions (and the person acquiring such securities shall, if requested by
the Corporation, provide such evidence, assurance and representations to the
Corporation as to compliance with any thereof) as counsel to the Corporation may
deem necessary or desirable to assure compliance with all applicable legal
requirements.

(e) Applicable Law. This Plan, Award Agreements and any related documents and
matters shall be governed by and in accordance with the laws of the State of
Maryland, except as to matters of federal law.

(f) Non-Exclusivity of Plan. Nothing in this Plan shall limit or be deemed to
limit the authority of the Corporation, the Board of Directors or the Committee
to grant awards or authorize any other compensation, with or without reference
to the Stock, under any other plan or authority.

 

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