Exhibit No (10)m

 

KIMBERLY-CLARK CORPORATION

2001 EQUITY PARTICIPATION PLAN

(as amended effective July 18, 2005)

 

1. PURPOSE

 

This 2001 Equity Participation Plan (the “Plan”) of Kimberly-Clark Corporation
(the “Corporation”) is intended to aid in attracting and retaining highly
qualified personnel and to encourage those employees who materially contribute,
by managerial, scientific or other innovative means to the success of the
Corporation or of an Affiliate, to acquire an ownership interest in the
Corporation, thereby increasing their motivation for and interest in the
Corporation’s or Affiliate’s long-term success.

 

2. EFFECTIVE DATE

 

The Plan is amended effective as of January 1, 2004 upon (a) approval of the
Board and (b) approval by the stockholders of the Corporation at the 2004 Annual
Meeting of Stockholders.

 

3. DEFINITIONS

 

“Affiliate” means any company in which the Corporation owns 20% or more of the
equity interest (collectively, the “Affiliates”).

 

“Award” has the meaning set forth in Section 6 of this Plan.

 

“Award Agreement” means an agreement entered into between the Corporation and a
Participant setting forth the terms and conditions applicable to the Award
granted to the Participant.

 

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

 

“Cause” means any of the following: (i) the commission by the Participant of a
felony; (ii) the Participant’s dishonesty, habitual neglect or incompetence in
the management of the affairs of the Corporation; or (iii) the refusal or
failure by the Participant to act in accordance with any lawful directive or
order of the Corporation, or an act or failure to act by the Participant which
is in bad faith and which is detrimental to the Corporation.

 

“Change of Control” means an event deemed to have taken place if: (i) a third
person, including a “group” as defined in section 13(d)(3) of the Securities
Exchange Act of 1934, acquires shares of the Corporation having 20% or more of
the total number of votes that may be cast for the election of directors of the
Corporation; or (ii) as the result of any cash tender or exchange offer, merger
or other business combination, sale of assets or contested election, or any
combination of the foregoing transactions (a “Transaction”), the persons who
were directors of the Corporation before the Transaction shall cease to
constitute a majority of the Board of the Corporation or any successor to the
Corporation.

 

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

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“Committee” means the Compensation Committee of the Board, provided that if the
requisite number of members of the Compensation Committee are not Disinterested
Persons, the Plan shall be administered by a committee, all of whom are
Disinterested Persons, appointed by the Board and consisting of two or more
directors with full authority to act in the matter. The term “Committee” shall
mean the Compensation Committee or the committee appointed by the Board, as the
case may be. Furthermore, the term “Committee” shall include any delegate to the
extent authority is delegated pursuant to Section 4 hereunder.

 

“Committee Rules” means the interpretative guidelines approved by the Committee
providing the foundation for administration of this Plan.

 

“Common Stock” means the common stock, par value $1.25 per share, of the
Corporation and shall include both treasury shares and authorized but unissued
shares and shall also include any security of the Corporation issued in
substitution, in exchange for, or in lieu of the Common Stock.

 

“Disinterested Person” means a person who is a “Non-Employee Director” for
purposes of rule 16b-3 under the Exchange Act, or any successor provision, and
who is also an “outside director” for purposes of section 162(m) of the Code or
any successor section.

 

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

 

“Fair Market Value” means the reported closing price of the Common Stock, on the
relevant date as reported on the composite list used by The Wall Street Journal
for reporting stock prices, or if no such sale shall have been made on that day,
on the last preceding day on which there was such a sale.

 

“Incentive Stock Option” means an Option which is so defined for purposes of
section 422 of the Code or any successor section.

 

“Nonqualified Stock Option” means any Option which is not an Incentive Stock
Option.

 

“Option” means a right to purchase a specified number of shares of Common Stock
at a fixed option price equal to no less than 100% of the Fair Market Value of
the Common Stock on the date the Award is granted.

 

“Option Price” has the meaning set forth in subsection 7(b) of this Plan.

 

“Participant” means an employee who the Committee selects to participate in and
receive Awards under the Plan (collectively, the “Participants”).

 

“Performance Goal” means the specific performance objectives as established by
the Committee, which, if achieved, will result in the amount of payment, or the
early payment, of the Award. The Performance Goal may consist of one or more or
any combination of the following criteria: return on invested capital, stock
price, market share, sales revenue, cash flow, earnings per share, return on
equity, total shareholder return, gross margin, and/or costs. The performance
goals may be described in terms that are related to the individual Participant,
to the Company as a whole, or to a subsidiary, division, department, region,
function or business unit of the Company in which the Participant is employed.
The Committee, in its discretion, may change or modify these criteria; however,
at all times the criteria must meet the requirements of Section 162(m) of the
Code, or any successor section, to the extent applicable.

 

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“Qualified Termination of Employment” means the termination of a Participant’s
employment with the Corporation and/or its Affiliates within the two (2) year
period following a Change of Control of the Corporation for any reason (whether
voluntary or involuntary) unless such termination is by reason of death or
disability or unless such termination is (i) by the Corporation for Cause or
(ii) by the Participant without Good Reason. Subject to the definition of
“Termination by the Participant for Good Reason,” transfers of employment for
administrative purposes among the Corporation and its Affiliates shall not be
deemed a Qualified Termination of Employment.

 

“Restricted Period” shall mean the period of time during which the
Transferability Restrictions applicable to Awards will be in force.

 

“Restricted Share” shall mean a share of Common Stock which may not be traded or
sold, until the date the Transferability Restrictions expire.

 

“Restricted Share Unit” means the right, as described in Section 9, to receive
an amount, payable in either cash or shares of Common Stock, equal to the value
of a specified number of shares of Common Stock. No certificates shall be issued
with respect to such Restricted Share Unit, except as provided in subsection
9(d), and the Corporation shall maintain a bookkeeping account in the name of
the Participant to which the Restricted Share Unit shall relate.

 

“Retirement” and “Retires” for Awards granted after December 31, 2003 means the
termination of employment on or after the date the Participant has attained age
55. For Awards granted prior to January 1, 2004 “Retirement” and “Retires” means
the termination of employment on or after the date the Participant is entitled
to receive immediate payments under a qualified retirement plan of the
Corporation or an Affiliate; provided, however, if the Participant is not
eligible to participate under a qualified retirement plan of the Corporation or
its Affiliates then such Participant shall be deemed to have retired if his
termination of employment is on or after the date such Participant has attained
age 55.

 

“Stock Appreciation Right (SAR)” has the meaning set forth in subsection 7(i)(i)
of this Plan.

 

“Termination by the Participant for Good Reason” shall mean the occurrence
(without the Participant’s express written consent) of any one of the following
acts by the Corporation, or failures by the Corporation to act, unless, in the
case of any act or failure to act described below, such act or failure to act is
corrected prior to the Participant’s termination date:

 

(a) the assignment to the Participant of any duties inconsistent with the
Participant’s status with the Corporation or a substantial adverse alteration in
the nature or status of the Participant’s responsibilities from those in effect
immediately prior to the Change of Control other than such alteration primarily
attributable to the fact that the Corporation may no longer be a public company;

 

(b) a reduction by the Corporation of the Participant’s annual base salary by
five percent or more as in effect immediately prior to the Change of Control,
except for across-the-board salary reductions similarly affecting all similarly
situated employees of the Corporation;

 

(c) the Corporation requiring the Participant to be based at a location more
than 50 miles from the location of the Participant’s office as of the date of
the Change of Control except for required travel on the Corporation’s business
to an extent substantially consistent with the Participant’s business travel
obligations as of the date of the Change of Control;

 

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(d) the failure of the Corporation to pay as soon as administratively feasible,
after notice from the Participant, any portion of the Participant’s current
compensation;

 

(e) the failure of the Corporation to continue in effect any compensation plan
in which the Participant participates immediately prior to the Change of Control
which is material to the Participant’s total compensation, including but not
limited to the Corporation’s stock option, incentive compensation, and bonus
plans, or any substitute plans adopted prior to the Change of Control, unless an
equitable arrangement (which is embodied in an ongoing substitute or alternative
plan but which need not provide the Participant with equity-based incentives)
has been made with respect to such plan, or the failure by the Corporation to
continue the Participant’s participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable than the benefits
provided to other participants; or

 

(f) the failure by the Corporation to continue to provide the Participant with
benefits substantially similar to those enjoyed by the Participant under any of
the Corporation’s pension, life insurance, medical, health and accident, or
disability plans in which the Participant was participating at the time of the
Change of Control, the taking of any action by the Corporation which would
directly or indirectly materially reduce any of such benefits or deprive the
Participant of any material fringe benefit enjoyed by the Participant at the
time of the Change of Control, or the failure by the Corporation to provide the
Participant with the number of paid vacation days to which the Participant is
entitled on the basis of years of service with the Corporation in accordance
with the Corporation’s normal vacation policy in effect at the time of the
Change of Control.

 

The Participant’s right to terminate the Participant’s employment for Good
Reason shall not be affected by the Participant’s incapacity due to physical or
mental illness. The Participant’s continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.

 

“Total and Permanent Disability” means Totally and Permanently Disabled as
defined in the Kimberly-Clark Corporation Pension Plan.

 

“Transferability Restrictions” means the restrictions on transferability imposed
on Awards of Restricted Shares or Restricted Share Units.

 

4. ADMINISTRATION

 

The Plan and all Awards granted pursuant thereto shall be administered by the
Committee. The Committee, in its absolute discretion, shall have the power to
interpret and construe the Plan and any Award Agreements; provided, however,
that no such action or determination may increase the amount of compensation
payable that would otherwise be due in a manner that would result in the
disallowance of a deduction to the Corporation under section 162(m) of the Code
or any successor section. Any interpretation or construction of any provisions
of this Plan or the Award Agreements by the Committee shall be final and
conclusive upon all persons. No member of the Board or the Committee shall be
liable for any action or determination made in good faith.

 

Within 60 days following the close of each calendar year that the Plan is in
operation, the Committee shall make a report to the Board. The report shall
specify the employees who received Awards under the Plan during the prior year,
the form and size of the Awards to the individual employees, and the status of
prior Awards.

 

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The Committee shall have the power to promulgate Committee Rules and other
guidelines in connection with the performance of its obligations, powers and
duties under the Plan, including its duty to administer and construe the Plan
and the Award Agreements.

 

The Committee may authorize persons other than its members to carry out its
policies and directives subject to the limitations and guidelines set by the
Committee, and may delegate its authority under the Plan, provided, however, the
delegation of authority to grant Awards shall be limited to grants by the Chief
Executive Officer to newly hired employees, or to respond to special recognition
or retention needs, and any such grants shall be limited to eligible
Participants who are not subject to section 16 of the Exchange Act. The
delegation of authority shall be limited as follows: (a) with respect to persons
who are subject to section 16 of the Exchange Act, the authority to grant
Awards, the selection for participation, decisions concerning the timing,
pricing and amount of a grant or Award and authority to administer Awards shall
not be delegated by the Committee; (b) the maximum number of shares of Common
Stock covered by Awards which may be granted by the Chief Executive Officer
within any calendar year period shall not exceed 200,000; (c) any delegation
shall satisfy all applicable requirements of rule 16b-3 of the Exchange Act, or
any successor provision; and (d) no such delegation shall result in the
disallowance of a deduction to the Corporation under section 162(m) of the Code
or any successor section. Any person to whom such authority is granted shall
continue to be eligible to receive Awards under the Plan.

 

5. ELIGIBILITY

 

The Committee shall from time to time select the Participants from those
employees whom the Committee determines either to be in a position to contribute
materially to the success of the Corporation or Affiliate or to have in the past
so contributed. Only employees (including officers and directors who are
employees) of the Corporation and its Affiliates are eligible to participate in
the Plan.

 

6. FORM OF GRANTS

 

All Awards under the Plan shall be made in the form of Options, Restricted
Shares or Restricted Share Units, or any combination thereof. Notwithstanding
anything in this Plan to the contrary, any Awards shall contain the restriction
on assignability in subsection 16(g) of this Plan to the extent required under
rule 16b-3 of the Exchange Act.

 

7. STOCK OPTIONS

 

The Committee or its delegate shall determine and designate from time to time
those Participants to whom Options are to be granted and the number of shares of
Common Stock to be optioned to each and the periods the Option shall be
exercisable. Such Options may be in the form of Incentive Stock Options or in
the form of Nonqualified Stock Options. The Committee in its discretion at the
time of grant may establish performance goals that may affect the grant,
exercise and/or settlement of an Option. After granting an Option to a
Participant, the Committee shall cause to be delivered to the Participant an
Award Agreement evidencing the granting of the Option. The Award Agreement shall
be in such form as the Committee shall from time to time approve. The terms and
conditions of all Options granted under the Plan need not be the same, but all
Options must meet the applicable terms and conditions specified in subsections
7(a) through 7(h).

 

(a) Period of Option. The Period of each Option shall be no more than 10 years
from the date it is granted.

 

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(b) Option Price. The Option price shall be determined by the Committee, but
shall not in any instance be less than the Fair Market Value of the Common Stock
at the time that the Option is granted (the “Option Price”).

 

(c) Limitations on Exercise. The Option shall not be exercisable until at least
one year has expired after the granting of the Option, during which time the
Participant shall have been in the continuous employ of the Corporation or an
Affiliate; provided, however, that the Option shall become exercisable
immediately in the event of a Qualified Termination of Employment of a
Participant, without regard to the limitations set forth below in this
subsection 7(c). Unless otherwise determined by the Committee or its delegate at
the time of grant, at any time during the period of the Option after the end of
the first year, the Participant may purchase up to 30 percent of the shares
covered by the Option; after the end of the second year, an additional 30
percent; and after the end of the third year, the remaining 40 percent of the
total number of shares covered by the Option; provided, however, that if the
Participant’s employment is terminated for any reason other than death,
Retirement or Total and Permanent Disability, the Option shall be exercisable
only for three months following such termination and only for the number of
shares of Common Stock which were exercisable on the date of such termination.
In no event, however, may an Option be exercised more than 10 years after the
date of its grant.

 

(d) Exercise after Death, Retirement, or Disability. Unless otherwise determined
by the Committee or its delegate at the time of grant, if a Participant dies,
becomes Totally and Permanently Disabled, or Retires without having exercised
the Option in full, the remaining portion of such Option may be exercised,
without regard to the limitations in subsection 7(c), as follows. If a
Participant dies or becomes Totally and Permanently Disabled the remaining
portion of such Option may be exercised within (i) three years from the date of
any such event or (ii) the remaining period of the Option, whichever is earlier.
Upon a Participant’s death, the Option may be exercised by the person or persons
to whom such Participant’s rights under the Option shall pass by will or by
applicable law or, if no such person has such rights, by his executor or
administrator. If a Participant Retires the remaining portion of such Option may
be exercised within (i) five years from the date of any such event or (ii) the
remaining period of the Option, whichever is earlier.

 

(e) Non-transferability. During the Participant’s lifetime, Options shall be
exercisable only by such Participant. Options shall not be transferable other
than by will or the laws of descent and distribution upon the Participant’s
death. Notwithstanding anything in this subsection 7(e) to the contrary, the
Committee may grant to designated Participants the right to transfer
Nonqualified Stock Options, to the extent allowed under rule 16b-3 of the
Exchange Act, subject to the terms and conditions of the Committee Rules.

 

(f) Exercise; Notice Thereof. Options shall be exercised by delivering to the
Corporation, or an agent designated by the Corporation, written notice of the
number of shares with respect to which Option rights are being exercised and by
paying in full the Option Price of the shares at the time being acquired. As
determined by the Committee, payment may be made in cash, a check payable to the
Corporation or in shares of Common Stock transferable to the Corporation and
having a fair market value on the transfer date equal to the amount payable to
the Corporation. A Participant shall have none of the rights of a stockholder
with respect to shares covered by such Option until the Participant becomes the
record holder of such shares.

 

(g) Purchase for Investment. It is contemplated that the Corporation will
register shares sold to Participants pursuant to the Plan under the Securities
Act of 1933. In the absence of an effective registration, however, a Participant
exercising an Option hereunder may be required to give a representation that
he/she is acquiring such shares as an investment and not with a view to
distribution thereof.

 

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(h) Limitations on Incentive Stock Option Grants.

 

(i) An Incentive Stock Option shall be granted only to an individual who, at the
time the Option is granted, does not own stock possessing more than 10 percent
of the total combined voting power of all classes of stock of the Corporation or
Affiliates.

 

(ii) The aggregate Fair Market Value of all shares with respect to which
Incentive Stock Options are exercisable by a Participant for the first time
during any year shall not exceed $100,000. The aggregate Fair Market Value of
such shares shall be determined at the time the Option is granted.

 

(i) Election to Receive Cash Rather than Stock.

 

(i) At the same time as Nonqualified Stock Options are granted the Committee may
also grant to designated Participants the right to convert a specified number of
shares of Common Stock covered by such Nonqualified Stock Options to cash,
subject to the terms and conditions of this subsection 7(i). For each such
Option so converted, the Participant shall be entitled to receive cash equal to
the difference between the Participant’s Option Price and the Fair Market Value
of the Common Stock on the date of conversion. Such a right shall be referred to
herein as a Stock Appreciation Right (“SAR”). Participants to whom an SAR has
been granted shall be notified of such grant and of the Options to which such
SAR pertains. An SAR may be revoked by the Committee, in its sole discretion, at
any time, provided, however, that no such revocation may be taken hereunder if
such action would result in the disallowance of a deduction to the Corporation
under section 162(m) of the Code or any successor section.

 

(ii) A person who has been granted an SAR may exercise such SAR during such
periods as provided for in the rules promulgated under section 16 of the
Exchange Act. The SAR shall expire when the period of the subject Option
expires.

 

(iii) At the time a Participant converts one or more shares of Common Stock
covered by an Option to cash pursuant to an SAR, such Participant must exercise
one or more Nonqualified Stock Options, which were granted at the same time as
the Option subject to such SAR, for an equal number of shares of Common Stock.
In the event that the number of shares and the Option Price per share of all
shares of Common Stock subject to outstanding Options is adjusted as provided in
the Plan, the above SARs shall automatically be adjusted in the same ratio which
reflects the adjustment to the number of shares and the Option Price per share
of all shares of Common Stock subject to outstanding Options.

 

8. RESTRICTED SHARES

 

The Committee or its delegate may from time to time designate those Participants
who shall receive Restricted Share Awards. Each grant of Restricted Shares under
the Plan shall be evidenced by an agreement which shall be executed by the
Corporation and the Participant. The agreement shall contain such terms and
conditions, not inconsistent with the Plan, as shall be determined by the
Committee and shall indicate the number of Restricted Shares awarded and the
following terms and conditions of the award.

 

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(a) Grant of Restricted Shares. The Committee shall determine the number of
Restricted Shares to be included in the grant and the period or periods during
which the Transferability Restrictions applicable to the Restricted Shares will
be in force (the “Restricted Period”). Unless otherwise determined by the
Committee at the time of grant, the Restricted Period shall be for a minimum of
three years and shall not exceed ten years from the date of grant, as determined
by the Committee at the time of grant. The Restricted Period may be the same for
all Restricted Shares granted at a particular time to any one Participant or may
be different with respect to different Participants or with respect to various
of the Restricted Shares granted to the same Participant, all as determined by
the Committee at the time of grant.

 

(b) Transferability Restrictions. During the Restricted Period, Restricted
Shares may not be sold, assigned, transferred or otherwise disposed of, or
mortgaged, pledged or otherwise encumbered. Furthermore, a Participant’s right,
if any, to receive Common Stock upon termination of the Restricted Period may
not be assigned or transferred except by will or by the laws of descent and
distribution. In order to enforce the limitations imposed upon the Restricted
Shares the Committee may (i) cause a legend or legends to be placed on any such
certificates, and/or (ii) issue “stop transfer” instructions as it deems
necessary or appropriate. Holders of Restricted Shares limited as to sale under
this subsection 8(b) shall have rights as a shareholder with respect to such
shares to receive dividends in cash or other property or other distribution or
rights in respect of such shares, and to vote such shares as the record owner
thereof. With respect to each grant of Restricted Shares, the Committee shall
determine the Transferability Restrictions which will apply to the Restricted
Shares for all or part of the Restricted Period. By way of illustration but not
by way of limitation, the Committee may provide (i) that the Participant will
not be entitled to receive any shares of Common Stock unless he or she is still
employed by the Corporation or its Affiliates at the end of the Restricted
Period, (ii) that the Participant will become vested in Restricted Shares
according to a schedule determined by the Committee, or under other terms and
conditions determined by the Committee, and (iii) how any Transferability
Restrictions will be applied, modified or accelerated in the case of the
Participant’s death or Total and Permanent Disability.

 

(c) Manner of Holding and Delivering Restricted Shares. Each certificate issued
for Restricted Shares shall be registered in the name of the Participant and
deposited with the Corporation or its designee. These certificates shall remain
in the possession of the Corporation or its designee until the end of the
applicable Restricted Period or, if the Committee has provided for earlier
termination of the Transferability Restrictions following a Participant’s death,
Total and Permanent Disability or earlier vesting of the shares of Common Stock,
such earlier termination of the Transferability Restrictions. At whichever time
is applicable, certificates representing the number of shares to which the
Participant is then entitled shall be delivered to the Participant free and
clear of the Transferability Restrictions; provided that in the case of a
Participant who is not entitled to receive the full number of Shares evidenced
by the certificates then being released from escrow because of the application
of the Transferability Restrictions, those certificates shall be returned to the
Corporation and canceled and a new certificate representing the shares of Common
Stock, if any, to which the Participant is entitled pursuant to the
Transferability Restrictions shall be issued and delivered to the Participant,
free and clear of the Transferability Restrictions.

 

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9. RESTRICTED SHARE UNITS

 

The Committee or its delegate shall from time to time designate those
Participants who shall receive Restricted Share Unit Awards. The Committee shall
advise such Participants of their Awards by a letter indicating the number of
Restricted Share Units awarded and the following terms and conditions of the
award.

 

(a) Restricted Share Units may be granted to Participants as of the first day of
a Restricted Period. The number of Restricted Share Units to be granted to each
Participant and the Restricted Period shall be determined by the Committee in
its sole discretion.

 

(b) Transferability Restrictions. During the Restricted Period, Restricted Share
Units may not be sold, assigned, transferred or otherwise disposed of, or
mortgaged, pledged or otherwise encumbered. Furthermore, a Participant’s right,
if any, to receive cash or Common Stock upon termination of the Restricted
Period may not be assigned or transferred except by will or by the laws of
descent and distribution. With respect to each grant of Restricted Share Units,
the Committee shall determine the Transferability Restrictions which will apply
to the Restricted Share Units for all or part of the Restricted Period. By way
of illustration but not by way of limitation, the Committee may provide (i) that
the Participant will forfeit any Restricted Share Units unless he or she is
still employed by the Corporation or its Subsidiaries at the end of the
Restricted Period, (ii) that the Participant will forfeit any or all Restricted
Share Units unless he or she has met the Performance Goals according to the
schedule determined by the Committee, (iii) that the Participant will become
vested in Restricted Share Units according to a schedule determined by the
Committee, or under other terms and conditions determined by the Committee, and
(iv) how any Transferability Restrictions will be applied, modified or
accelerated in the case of the Participant’s death or Total and Permanent
Disability.

 

(c) Unless otherwise determined by the Committee, during the Restricted Period,
Participants will be credited with dividends, equivalent in value to those
declared and paid on shares of Common Stock, on all Restricted Share Units
granted to them, and these dividends will be regarded as having been reinvested
in Restricted Share Units on the date of the Common Stock dividend payments
based on the then Fair Market Value of the Common Stock thereby increasing the
number of Restricted Share Units held by a Participant. Holders of Restricted
Share Units under this subsection 9(c) shall have none of the rights of a
shareholder with respect to such shares. Holders of Restricted Share Units are
not entitled to receive distribution of rights in respect of such shares, nor to
vote such shares as the record owner thereof.

 

(d) Payment of Restricted Share Units. The payment of Restricted Share Units
shall be made in cash or shares of Common Stock, or a combination of both, as
determined by the Committee at the time of grant. The payment of Restricted
Share Units shall be made within 90 days following the end of the Restricted
Period.

 

10. GOVERNMENT SERVICE, LEAVES OF ABSENCE AND OTHER TERMINATIONS

 

(a) In the event the Participant’s employment with the Corporation or an
Affiliate is terminated by reason of a shutdown or divestiture of all or a
portion of the Corporation’s or its Affiliate’s business, a proportion of the
Restricted Shares or Restricted Share Unit Award shall be considered to vest as
of the Participant’s termination of employment. The number of shares that shall
vest shall be prorated for the number of full years of employment during the
Restricted Period prior to the Participant’s termination of employment. In the
event the number of Restricted Shares or Restricted Share Units was to be
determined by the attainment of Performance Goals according to a schedule
determined by the Committee the number of shares that are considered to vest
shall be determined at the end of the Restricted Period, prorated for

 

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the number of full years of employment during the Restricted Period prior to the
Participant’s termination of employment, and shall be paid within 90 days
following the end of the Restricted Period.

 

(b) In the event of a Qualified Termination of Employment of a Participant, all
of the Options, Restricted Shares or Restricted Share Unit Awards shall be
considered to vest immediately. In the event the number of Restricted Shares or
Restricted Share Units was to be determined by the attainment of Performance
Goals according to a schedule determined by the Committee, the number of shares
that shall be considered to vest shall be the greater of the target level
established or the number of shares which would have vested based on the
attainment of the Performance Goal as of the end of the prior calendar year.

 

(c) An authorized leave of absence, or qualified military leave in accordance
with section 414(u) of the Code, shall not be deemed to be a termination of
employment for purposes of the Plan. A termination of employment with the
Corporation or an Affiliate to accept immediate reemployment with the
Corporation or an Affiliate likewise shall not be deemed to be a termination of
employment for purposes of the Plan. A Participant who is classified as an
intermittent employee shall be deemed to have a termination of employment for
purposes of the Plan.

 

11. SHARES SUBJECT TO THE PLAN

 

The number of shares of Common Stock available with respect to all Awards
granted under this Plan shall not exceed 50,000,000 in the aggregate, of which
not more than 50,000,000 shall be available for option and sale, and of which
not more than 18,000,000 shall be available for grant as Restricted Shares and
Restricted Share Units, subject to the adjustment provision set forth in
Section 13 hereof. The shares of Common Stock subject to the Plan may consist in
whole or in part of authorized but unissued shares or of treasury shares, as the
Board may from time to time determine. Shares subject to Options which become
ineligible for purchase, Restricted Share Units which are retired through
forfeiture or maturity, other than those Restricted Share Units which are
retired through the payment of Common Stock, and Restricted Shares which are
forfeited during the Restricted Period due to any applicable Transferability
Restrictions will be available for Awards under the Plan to the extent permitted
by section 16 of the Exchange Act (or the rules and regulations promulgated
thereunder) and to the extent determined to be appropriate by the Committee.

 

12. INDIVIDUAL LIMITS

 

The maximum number of shares of Common Stock covered by Awards which may be
granted to any Participant within any two consecutive calendar year period shall
not exceed 1,500,000 in the aggregate. If an Option which had been granted to a
Participant is canceled, the shares of Common Stock which had been subject to
such canceled Option shall continue to be counted against the maximum number of
shares for which Options may be granted to the Participant. In the event that
the number of Options which may be granted is adjusted as provided in the Plan,
the above limits shall automatically be adjusted in the same ratio which
reflects the adjustment to the number of Options available under the Plan.

 

13. CHANGES IN CAPITALIZATION

 

In the event there are any changes in the Common Stock or the capitalization of
the Corporation through a corporate transaction, such as any merger, any
acquisition through the issuance of capital stock of the Corporation, any
consolidation, any separation of the Corporation (including a spin-off or

 

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other distribution of stock of the Corporation), any reorganization of the
Corporation (whether or not such reorganization comes within the definition of
such term in section 368 of the Code), or any partial or complete liquidation by
the Corporation, recapitalization, stock dividend, stock split or other change
in the corporate structure, appropriate adjustments and changes shall be made by
the Committee, to the extent necessary to preserve the benefit to the
Participant contemplated hereby, to reflect such changes in (a) the aggregate
number of shares subject to the Plan, (b) the maximum number of shares subject
to the Plan, (c) the maximum number of shares for which Awards may be granted to
any Participant, (d) the number of shares and the Option Price per share of all
shares of Common Stock subject to outstanding Options, (e) the maximum number of
shares of Common Stock covered by Awards which may be granted by the Chief
Executive Officer within any calendar year period, (f) the maximum number of
shares of Common Stock available for option and sale and available for grant as
Restricted Shares and Restricted Share Units, (g) the number of Restricted
Shares and Restricted Share Units awarded to Participants, and (h) such other
provisions of the Plan as may be necessary and equitable to carry out the
foregoing purposes, provided, however that no such adjustment or change may be
made to the extent that such adjustment or change will result in the
disallowance of a deduction to the Corporation under section 162(m) of the Code
or any successor section.

 

14. EFFECT ON OTHER PLANS

 

All payments and benefits under the Plan shall constitute special compensation
and shall not affect the level of benefits provided to or received by any
Participant (or the Participant’s estate or beneficiaries) as part of any
employee benefit plan of the Corporation or an Affiliate. The Plan shall not be
construed to affect in any way a Participant’s rights and obligations under any
other plan maintained by the Corporation or an Affiliate on behalf of employees.

 

15. TERM OF THE PLAN

 

The term of the Plan shall be ten years, beginning April 26, 2001, and ending
April 25, 2011, unless the Plan is terminated prior thereto by the Committee. No
Award may be granted or awarded after the termination date of the Plan, but
Awards theretofore granted or awarded shall continue in force beyond that date
pursuant to their terms.

 

16. GENERAL PROVISIONS

 

(a) Designated Beneficiary. Each Participant who shall be granted Restricted
Shares and/or Restricted Share Units under the Plan may designate a beneficiary
or beneficiaries with the Committee; provided that no such designation shall be
effective unless so filed prior to the death of such Participant.

 

(b) No Right of Continued Employment. Neither the establishment of the Plan nor
the payment of any benefits hereunder nor any action of the Corporation, its
Affiliates, the Board of Directors of the Corporation or its Affiliates, or the
Committee shall be held or construed to confer upon any person any legal right
to be continued in the employ of the Corporation or its Affiliates, and the
Corporation and its Affiliates expressly reserve the right to discharge any
Participant without liability to the Corporation, its Affiliates, the Board of
Directors of the Corporation or its Affiliates or the Committee, except as to
any rights which may be expressly conferred upon a Participant under the Plan.

 

(c) Binding Effect. Any decision made or action taken by the Corporation, the
Board or by the Committee arising out of or in connection with the construction,
administration, interpretation and effect of the Plan shall be conclusive and
binding upon all persons.

 

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Notwithstanding anything in section 3 to the contrary, the Committee may
determine in its sole discretion whether a termination of employment for
purposes of this Plan is caused by disability, retirement or for other reasons.

 

(d) Modification of Awards. The Committee may in its sole and absolute
discretion, by written notice to a Participant, (i) limit the period in which an
Option may be exercised to a period ending at least three months following the
date of such notice, (ii) limit or eliminate the number of shares subject to
Option after a period ending at least three months following the date of such
notice, and/or (iii) accelerate the Restricted Period with respect to the
Restricted Share and Restricted Share Unit Awards granted under this Plan.
Notwithstanding anything in this subsection 16(d) to the contrary, the Committee
may not take any action to the extent that such action would result in the
disallowance of a deduction to the Corporation under section 162(m) of the Code
or any successor section.

 

(e) Nonresident Aliens. In the case of any Award granted to a Participant who is
not a resident of the United States or who is employed by an Affiliate other
than an Affiliate that is incorporated, or whose place of business is, in a
State of the United States, the Committee may (i) waive or alter the terms and
conditions of any Awards to the extent that such action is necessary to conform
such Award to applicable foreign law, (ii) determine which Participants,
countries and Affiliates are eligible to participate in the Plan, (iii) modify
the terms and conditions of any Awards granted to Participants who are employed
outside the United States, (iv) establish subplans, each of which shall be
attached as an appendix hereto, modify Option exercise procedures and other
terms and procedures to the extent such actions may be necessary or advisable,
and (v) take any action, either before or after the Award is made, which is
deemed advisable to obtain approval of such Award by an appropriate governmental
entity; provided, however, that no action may be taken hereunder if such action
would (i) materially increase any benefits accruing to any Participants under
the Plan, (ii) increase the number of securities which may be issued under the
Plan, (iii) modify the requirements for eligibility to participate in the Plan,
(iv) result in a failure to comply with applicable provisions of the Securities
Act of 1933, the Exchange Act or the Code or (v) result in the disallowance of a
deduction to the Corporation under section 162(m) of the Code or any successor
section.

 

(f) No Segregation of Cash or Stock. The Restricted Share Unit accounts
established for Participants are merely a bookkeeping convenience and neither
the Corporation nor its Affiliates shall be required to segregate any cash or
stock which may at any time be represented by Awards. Nor shall anything
provided herein be construed as providing for such segregation. Neither the
Corporation, its Affiliates, the Board nor the Committee shall, by any
provisions of the Plan, be deemed to be a trustee of any property, and the
liability of the Corporation or its Affiliates to any Participant pursuant to
the Plan shall be those of a debtor pursuant to such contract obligations as are
created by the Plan, and no such obligation of the Corporation or its Affiliates
shall be deemed to be secured by any pledge or other encumbrance on any property
of the Corporation or its Affiliates.

 

(g) Inalienability of Benefits and Interest. Except as otherwise provided in
this Plan, no benefit payable under or interest in the Plan shall be subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and any such attempted action shall be void and no such
benefit or interest shall be in any manner liable for or subject to debts,
contracts, liabilities, engagements, or torts of any Participant or beneficiary.

 

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(h) Delaware Law to Govern. All questions pertaining to the construction,
interpretation, regulation, validity and effect of the provisions of the Plan
shall be determined in accordance with the laws of the State of Delaware.

 

(i) Purchase of Common Stock. The Corporation and its Affiliates may purchase
from time to time shares of Common Stock in such amounts as they may determine
for purposes of the Plan. The Corporation and its Affiliates shall have no
obligation to retain, and shall have the unlimited right to sell or otherwise
deal with for their own account, any shares of Common Stock purchased pursuant
to this paragraph.

 

(j) Use of Proceeds. The proceeds received by the Corporation from the sale of
Common Stock pursuant to the exercise of Options shall be used for general
corporate purposes.

 

(k) Deferral of Award Payment. The Committee may establish one or more programs
under the Plan to permit selected Participants the opportunity to elect to defer
receipt of consideration upon exercise of an Award or other event that absent
the election would entitle the Participant to payment or receipt of Common Stock
or other consideration under an Award. The Committee may establish the election
procedures, the timing of such elections, the mechanisms for payments of, and
accrual of interest or other earnings, if any, on amounts so deferred, and such
other terms, conditions, rules and procedures that the Committee deems advisable
for the administration of any such deferral program.

 

(l) Withholding. The Committee shall require the withholding of all taxes as
required by law. In the case of exercise of an Option or payments of Awards
whether in cash or in shares of Common Stock or other securities, withholding
shall be as required by law and in the Committee Rules.

 

(m) Amendments. The Committee may at any time amend, suspend, or discontinue the
Plan or alter or amend any or all Awards and Award Agreements under the Plan to
the extent (1) permitted by law, (2) permitted by the rules of any stock
exchange on which the Common Stock or any other security of the Corporation is
listed, (3) permitted under applicable provisions of the Securities Act of 1933,
as amended, the Exchange Act (including rule 16b-3 thereof) and (4) that such
action would not result in the disallowance of a deduction to the Corporation
under section 162(m) of the Code or any successor section (including the rules
and regulations promulgated thereunder); and (5) that no Option may be
re-priced, replaced, re-granted though cancellation, or modified without
shareholder approval (except in connection with a change in the Common Stock or
the capitalization of the Corporation as provided in Section 13 hereof) if the
effect would be to reduce the exercise price for the shares underlying such
Option; provided, however, that if any of the foregoing requires the approval by
stockholders of any such amendment, suspension or discontinuance, then the
Committee may take such action subject to the approval of the stockholders.
Except as provided in subsections 16(d) and 16(e) no such amendment, suspension,
or termination of the Plan shall, without the consent of the Participant,
adversely alter or change any of the rights or obligations under any Awards or
other rights previously granted the Participant.

 

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