Exhibit 10.2

Amended and Restated 2002 Executive Performance Plan

Section 1. Purpose of Plan

The purpose of the Plan is to promote the success of the Company by providing
participating executives with incentive compensation that qualifies as
“performance-based compensation” within the meaning of Section 162(m) of the
Code.

Section 2. Definitions and Terms

2.1 Accounting Terms. Except as otherwise expressly provided or the context
otherwise requires, financial and accounting terms are used as defined for
purposes of, and shall be determined in accordance with, generally accepted
accounting principles, as from time to time in effect, as applied and included
in the consolidated financial statements of the Company, prepared in the
ordinary course of business.

2.2 Specific Terms. The following words and phrases as used herein shall have
the following meanings unless a different meaning is plainly required by the
context:

“Adjusted Aggregate Segment Operating Margin” with respect to any Performance
Period means Aggregate Segment Operating Margin, subject to, and/or after giving
effect to, any adjustments applicable pursuant to Section 4.6 at the time
Business Criteria and Performance Target(s) are established for the applicable
Performance Period.

“Adjusted Cash Flow” with respect to any Performance Period means Cash Flow,
subject to, and/or after giving effect to, any adjustments applicable pursuant
to Section 4.6 at the time Business Criteria and Performance Target(s) are
established for the applicable Performance Period.

“Adjusted EBITDA” with respect to any Performance Period means EBITDA, subject
to, and/or after giving effect to, any adjustments applicable pursuant to
Section 4.6 at the time Business Criteria and Performance Target(s) are
established for the applicable Performance Period.

“Adjusted EPS” with respect to any Performance Period means EPS, subject to,
and/or after giving effect to, any adjustments applicable pursuant to
Section 4.6 at the time Business Criteria and Performance Target(s) are
established for the applicable Performance Period.

“Adjusted Financial Statement Objectives” with respect to any Performance Period
means Financial Statement Objectives, subject to, and/or after giving effect to,
any adjustments applicable pursuant to Section 4.6 at the time Business Criteria
and Performance Target(s) are established for the applicable Performance Period.

“Adjusted Net Income” with respect to any Performance Period means Net Income,
subject to, and/or after giving effect to, any adjustments applicable pursuant
to Section 4.6 at the time Business Criteria and Performance Target(s) are
established for the applicable Performance Period.

 

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“Adjusted Return on Assets” with respect to any Performance Period means Return
on Assets, subject to, and/or after giving effect to, any adjustments applicable
pursuant to Section 4.6 at the time Business Criteria and Performance Target(s)
are established for the applicable Performance Period.

“Adjusted Return on Equity” with respect to any Performance Period means Return
on Equity, subject to, and/or after giving effect to, any adjustments applicable
pursuant to Section 4.6 at the time Business Criteria and Performance Target(s)
are established for the applicable Performance Period.

“Aggregate Segment Operating Margin” with respect to any Performance Period
means the aggregate of all segment operating income divided by the aggregate of
all segment revenues, as reported in the Company’s consolidated financial
statements for the applicable Performance Period.

“Award” means an award under this Plan of a conditional opportunity to receive a
Bonus if the applicable Performance Target(s) is (are) satisfied in the
applicable Performance Period, or an award of Restricted Stock or Restricted
Units the vesting of which will occur if the applicable Performance Target(s) is
(are) satisfied in the applicable Performance Period.

“Bonus” means a cash payment or a cash payment opportunity under the Plan, as
the context requires. Bonus shall also include any Award in respect of which the
final payment amount is determined based on a dollar amount, but the ultimate
form of payment is in shares in accordance with Section 4.10. Notwithstanding
the immediately preceding sentence, Bonus shall exclude any award of Restricted
Stock or Restricted Units made pursuant to Section 5 hereof.

“Business Criteria” means any one or any combination of Adjusted Aggregate
Segment Operating Margin, Adjusted Cash Flow, Adjusted EBITDA, Adjusted EPS,
Adjusted Financial Statement Objectives, Adjusted Net Income, Adjusted Return on
Assets, Adjusted Return on Equity, Aggregate Segment Operating Margin, Cash
Flow, EBITDA, EPS, Financial Statement Objectives, Net Income, Return on Assets,
Return on Equity and Total Shareholder Return.

“Cash Flow” with respect to any Performance Period means either operating cash
flow, as reported in the Company’s consolidated financial statements related to
the applicable Performance Period, or operating cash flow less investment in
parks, resorts and other property, as specified by the Committee at the time
Business Criteria and Performance Target(s) are established for the applicable
Performance Period.

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

“Committee” means the Compensation Committee of the Company’s Board of Directors
or such other Committee as from time to time the Board of Directors may
designate to administer the Plan in accordance with Section 3.1 and
Section 162(m).

“Company” means The Walt Disney Company, a Delaware corporation.

“EBITDA” with respect to any Performance Period means Net Income before net
interest, income tax, and depreciation and amortization expense, as reported in
the Company’s consolidated financial statements related to the applicable
Performance Period.

 

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“EPS” with respect to any Performance Period means diluted earnings per share of
the Company, as reported in the Company’s consolidated financial statements
related to the applicable Performance Period.

“Executive” means a key employee (including any officer) of the Company who is
(or in the opinion of the Committee may during the applicable Performance Period
become) a “covered employee” for purposes of Section 162(m).

“Financial Statement Objectives” with respect to any Performance Period means a
positive change in (A) one or more line items of the Company’s balance sheet or
income statement (including revenues), in each case as specified by the
Committee at the time Business Criteria and Performance Target(s) are
established for the applicable Performance Period from (B) the corresponding
line item or items of the Company’s balance sheet or income statement, as
applicable, for the Year or Years or Performance Period immediately prior to the
commencement of the applicable Performance Period, in each case as reported in
the Company’s consolidated financial statements for the relevant period.

“Net Income” with respect to any Performance Period means the consolidated net
income of the Company, as reported in the consolidated financial statements of
the Company related to the applicable Performance Period.

“Participant” means an Executive selected to participate in the Plan by the
Committee.

“Performance Period” means the Year or Years (or portions thereof) with respect
to which the Performance Targets are set by the Committee.

“Performance Target(s)” means the specific objective goal or goals that are
timely set in writing by the Committee pursuant to Section 4.2 for each
Participant for the applicable Performance Period in respect of any one or more
of the Business Criteria.

“Plan” means this Amended and Restated 2002 Executive Performance Plan, as
amended from time to time.

“Restricted Stock” means an Award of Shares under Section 5 that are
nontransferable and subject to forfeiture conditions and other restrictions on
ownership until specific vesting conditions established by the Committee under
the Award are satisfied.

“Restricted Unit” means an Award under Section 5 of notional units of
measurement that are denominated in Shares, payable to the Participant in cash
or in Shares upon the satisfaction of specific conditions established by the
Committee under the Award.

“Return on Assets” with respect to any Performance Period means Net Income
divided by the average of the total assets of the Company for the Performance
Period, as reported by the Company in its consolidated financial statements
related to the applicable Performance Period.

“Return on Equity” with respect to any Performance Period means Net Income
divided by the average of the common shareholders equity of the Company for the
Performance Period, as reported by the Company in its consolidated financial
statements related to the applicable Performance Period.

 

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“Section 162(m)” means Section 162(m) of the Code, and the regulations
promulgated thereunder, all as amended from time to time.

“Section 409A” means Section 409A of the Code, and the regulations and any
interpretative guidance promulgated thereunder, all as amended from time to
time.

“Shares” means shares of common stock of the Company or any securities or
property, including rights into which the same may be converted by operation of
law or otherwise.

“Stock Plan” means the Company’s Amended and Restated 1995 Stock Incentive Plan
or Amended and Restated 2005 Stock Incentive Plan, in each case as amended from
time to time, or any other shareholder approved stock incentive plan of the
Company.

“Total Shareholder Return” with respect to any Performance Period means (i) the
total return to shareholders of the Company or (ii) the average (which may be
weighted or unweighted) of the total returns to shareholders in respect of any
group of publicly traded companies (including the companies in any publicly
reported index of publicly traded companies) as designated by the Committee, in
each case determined on a consistent basis specified by the Committee at the
time the Business Criteria and Performance Target(s) are established for the
applicable Performance Period.

“Year” means a fiscal year of the Company commencing on or after October 1,
2001.

Section 3. Administration of the Plan

3.1 The Committee. The Plan shall be administered by a Committee consisting of
at least three members of the Board of Directors of the Company, duly authorized
by the Board of Directors of the Company to administer the Plan who are “outside
directors” within the meaning of Section 162(m).

3.2 Powers of the Committee. The Committee shall have the sole authority to
establish and administer the Business Criteria and Performance Target(s) and the
responsibility of determining from among the Executives those persons who will
participate in and receive Awards under the Plan and, subject to the terms of
the Plan, the amount or Shares under such Awards, and the time or times at which
and the form and manner in which Awards will be paid (which may include elective
or mandatory deferral alternatives) and shall otherwise be responsible for the
administration of the Plan, in accordance with its terms. The Committee shall
have the authority to construe and interpret the Plan except as otherwise
provided herein) and any agreement or other document relating to any Awards
under the Plan, may adopt rules and regulations governing the administration of
the Plan, and shall exercise all other duties and powers conferred on it by the
Plan, or which are incidental or ancillary thereto.

3.3 Requisite Action. A majority (but not fewer than two) of the members of the
Committee shall constitute a quorum. The vote of a majority of those present at
a meeting at which a quorum is present or the unanimous written consent of the
Committee shall constitute action by the Committee.

 

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3.4 Express Authority (and Limitations on Authority) to Change Terms and
Conditions of Awards; Acceleration or Deferral of Payment. Without limiting the
Committee’s authority under other provisions of the Plan, but subject to any
express limitations of the Plan and compliance with Section 162(m) and
Section 409A, the Committee shall have the authority to accelerate payment of an
Award (after the attainment of the applicable Performance Target(s)) that is not
treated as deferred compensation subject to Section 409A and to waive
restrictive conditions for an Award, in such circumstances as the Committee
deems appropriate. In the case of any acceleration of an Award after the
attainment of the applicable Performance Target(s), the amount payable shall be
discounted to its present value using an interest rate equal to Moody’s Average
Corporate Bond Yield for the month preceding the month in which such
acceleration occurs (or such other rate of interest that is deemed to constitute
a “reasonable rate of interest” for purposes of Section 162(m)). Any deferred
payment shall also be subject to Section 4.9 and, if applicable, Section 4.10.
In addition, and notwithstanding anything elsewhere in the Plan to the contrary,
the Committee shall have the authority to provide under the terms of an Award
that payment or vesting shall be accelerated upon the death or disability of a
Participant, a change in control of the Company, or upon termination of the
Participant’s employment without cause or as a constructive termination, as and
in the manner provided by the Committee, and subject to such provision not
causing the Award to fail to satisfy the requirements for performance-based
compensation under Section 162(m) generally; provided, however, that to the
extent any such award is deferred compensation subject to the provisions of
Section 409A, no such acceleration shall occur unless it occurs pursuant to the
terms of the Award as initially established (or as otherwise permitted under
Section 409A) and the event upon which such acceleration occurs is a permissible
distribution event under Section 409A.

Section 4. Bonus Awards

4.1 Provision for Bonus. Each Participant may receive a Bonus if the Performance
Target(s) established by the Committee, relative to the applicable Business
Criteria, are attained in the applicable Performance Period established by the
Committee. The applicable Performance Period and Performance Target(s) shall be
determined by the Committee consistent with the terms of the Plan and
Section 162(m). Notwithstanding the fact that the Performance Target(s) have
been attained, the Company may pay a Bonus of less than the amount determined by
the formula or standard established pursuant to Section 4.2 or may pay no Bonus
at all, unless the Committee otherwise expressly provides by written contract or
other written commitment.

4.2 Selection of Performance Target(s). The specific Performance Target(s) with
respect to the Business Criteria must be established by the Committee in advance
of the deadlines applicable under Section 162(m) and while the performance
relating to the Performance Target(s) remains substantially uncertain within the
meaning of Section 162(m). The Performance Target(s) with respect to any
Performance Period may be established on a cumulative basis or in the
alternative, and may be established on a stand-alone basis with respect to the
Company or on a relative basis with respect to any peer companies or index
selected by the Committee. At the time the Performance Target(s) are selected,
the Committee shall provide, in terms of an objective formula or standard for
each Participant, and for any person who may become a Participant after the
Performance Target(s) are set, the method of computing the specific amount that
will represent the maximum amount of Bonus payable to the Participant if the
Performance Target(s) are attained, subject to Sections 4.1, 4.3, 4.7, 6.1 and
6.7. The objective formula or standard shall preclude the use of discretion to
increase the amount of any Bonus earned pursuant to the terms of the Award.

 

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4.3 Maximum Annual Bonuses. Notwithstanding any other provision hereof, (i) the
aggregate amount that may be payable as Bonuses to all Executives in respect of
any Year shall not exceed $55 million and (ii) the maximum amount that may be
payable to any single Executive for any one Year shall not exceed 50% of the
maximum aggregate amount payable to all Executives under subclause (i). The
foregoing limits shall be subject to adjustments consistent with Section 3.4 in
the event of acceleration or deferral.

4.4 Selection of Participants. For each Performance Period, the Committee shall
determine, at the time the Business Criteria and the Performance Target(s) are
set, those Executives who will participate in the Plan. At the time that the
Committee establishes the applicable Performance Targets for any Year, the
Committee shall also specify, subject to the limitation specified in subclause
(ii) of Section 4.3, the maximum individual amount payable to each Executive for
such Year such that the aggregate amounts potentially payable to all such
Executives for such Year shall not exceed the aggregate maximum amount that may
be payable to all such Executives for such Year under subclause (i) of
Section 4.3.

4.5 Effect of Mid-Year Commencement of Service; Termination of Employment. To
the extent compatible with Sections 4.2 and 6.7, if services as an Executive
commence after the adoption of the Plan and the Performance Target(s) are
established for a Performance Period, the Committee may grant a Bonus that is
proportionately adjusted based on the period of actual service during the Year;
the amount of any Bonus paid to such person shall not exceed that proportionate
amount of the applicable maximum individual bonus that could have been payable
under Section 4.3 and Section 4.4 to the Executive who, in the judgment of the
Committee, such person replaces as a covered employee under Section 162(m) for
such Year. In the event of the termination of employment of a Participant prior
to the payment of a Bonus, the Participant shall not be entitled to any payment
in respect of the Bonus, unless otherwise expressly provided by the terms of the
Awards or other written contract with the Company.

4.6 Adjustments. To preserve the intended incentives and benefits of an Award
based on Adjusted Aggregate Segment Operating Margin, Adjusted Cash Flow,
Adjusted EBITDA, Adjusted EPS, Adjusted Financial Statement Objectives, Adjusted
Net Income, Adjusted Return on Assets or Adjusted Return on Equity, the
Committee shall apply the objective formula or standard with respect to the
applicable Performance Target in a manner that shall eliminate, in whole or in
part, in such manner as is specified by the Committee, the effects of the
following : (i) the gain, loss, income or expense resulting from changes in
accounting principles that become effective during the Performance Period;
(ii) the gain, loss, income or expense reported by the Company in its public
filings with respect to the Performance Period that are extraordinary or unusual
in nature or infrequent in occurrence, and (iii) the gains or losses resulting
from, and the direct expenses incurred in connection with, the disposition of a
business, in whole or in part. The Committee may, however, provide at the time
the Performance Targets are established that one or more of the foregoing
adjustments will not be made as to a specific Award. In addition, the Committee
may determine at the time the Performance Targets are established that other
adjustments shall apply to the objective formula or standard with respect to the
applicable Performance Target to take into account, in whole or in part, in any
manner specified by the Committee, any one or more of the following with respect
to the Performance Period: (a) gain or

 

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loss from all or certain claims and/or litigation and all or certain insurance
recoveries relating to claims or litigation, (b) the impact of impairment of
tangible or intangible assets, (c) the impact of restructuring activities,
including but not limited to reductions in force, that are reported in the
Company’s public filings covering the Performance Period and (d) the impact of
investments or acquisitions made during the year or, to the extent provided by
the Committee, any prior year. Each of the adjustments described in this
Section 4.6 may relate to the Company as a whole or any part of the Company’s
business or operations, as determined by the Committee at the time the
Performance Targets are established. The adjustments are to be determined in
accordance with generally accepted accounting principles and standards, unless
another objective method of measurement is designated by the Committee. In
addition to the foregoing, the Committee shall adjust any Business Criteria,
Performance Targets or other features of an Award that relate to or are wholly
or partially based on the number of, or the value of, any Shares, to reflect a
change in the Company’s capitalization, such as a stock split or dividend, or a
corporate transaction, such as a merger, consolidation, separation (including a
spin-off or other distribution of stock or property), or a reorganization of the
Company.

4.7 Committee Discretion to Determine Bonuses. The Committee has the sole
discretion to determine the standard or formula pursuant to which each
Participant’s Bonus shall be calculated (in accordance with Sections 4.1 and
4.2), whether all or any portion of the amount so calculated will be paid, and
the specific amount (if any) to be paid to each Participant, subject in all
cases to the terms, conditions and limits of the Plan and of any other written
commitment authorized by the Committee. To this same extent, the Committee may
at any time establish (and, once established, rescind, waive or amend)
additional conditions and terms of payment of Bonuses (including but not limited
to the achievement of other financial, strategic or individual goals, which may
be objective or subjective) as it may deem desirable in carrying out the
purposes of the Plan and may take into account such other factors as it deems
appropriate in administering any aspect of the Plan. Except as provided in
Section 3.4, the Committee may not, however, increase the maximum amount
permitted to be paid to any individual under Section 4.2, 4.3, 4.4 or 4.5 of the
Plan or award a Bonus under this Plan if the applicable Performance Target(s)
have not been satisfied.

4.8 Committee Certification. No Executive shall receive any payment under the
Plan unless the Committee has certified, by resolution or other appropriate
action in writing, that the amount thereof has been accurately determined in
accordance with the terms, conditions and limits of the Plan and that the
Performance Target(s) and any other material terms previously established by the
Committee or set forth in the Plan were in fact satisfied. Unless the Committee
is otherwise prevented from doing so under circumstances where such a delay
would be permitted under Section 409A, in the case of any award the payment of
which is designed to be treated as a short-term deferral within the meaning of
Section 409A of the Code, the Committee shall use its reasonable best commercial
efforts to meet to consider certification of the attainment of the Performance
Target(s) to permit the payment of any amount determined to be payable within
the requisite period to qualify as such a short-term deferral.

4.9 Time of Payment; Deferred Amounts. Any Bonuses granted by the Committee
under the Plan shall be paid as soon as practicable following the Committee’s
determinations under this Section 4 and the certification of the Committee’s
findings under Section 4.8, but in the case of any Bonuses designed not to be
deferred compensation within the meaning of Section 409A of the Code, not later
than the latest date at which such Bonuses would still qualify for the exemption
from Section 409A applicable to short-term deferrals. Any such payment shall be
in cash or cash

 

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equivalent or in such other form of equal value on such payment date (including
Shares or share equivalents as contemplated by Section 4.10) as the Committee
may approve or require, subject to applicable withholding requirements and, if
applicable, Section 4.10. Notwithstanding the foregoing, the Committee, in its
sole discretion (but subject to compliance with Section 162(m) and the
applicable provisions of Section 409A and to any prior written commitments and
to any conditions consistent with Sections 3.4, 4.3, 4.10 and 6.7 that it deems
appropriate), may defer the payout or vesting of any Bonus and/or provide to
Participants the opportunity to elect to defer the payment of any Bonus under a
nonqualified deferred compensation plan and as contemplated by Section 4.10. Any
action by the Committee or any election made by an Executive to defer payment of
any Bonus shall be made not later than the date(s) required to avoid the
acceleration of income and the imposition of an additional rate of tax under
Section 409A. In the case of any deferred payment of a Bonus after the
attainment of the applicable Performance Target(s), any amount in excess of the
amount otherwise payable shall be based on either Moody’s Average Corporate Bond
Yield (or such other rate of interest that is deemed to constitute a “reasonable
rate of interest” for purposes of Section 162(m)) over the deferral period or
the return over the deferral period of one or more predetermined actual
investments (including Shares) such that the amount payable at the later date
will be based upon actual returns, including any decrease or increase in the
value of the investment(s), unless the alternative deferred payment is otherwise
exempt from the limitations under Section 162(m).

4.10 Share Payouts of Bonus. Any Shares payable under a Bonus shall be pursuant
to a combined Award under the Plan and the Stock Plan. The number of Shares or
stock units (or similar deferred award representing a right to receive Shares)
awarded in lieu of all or any portion of a Bonus shall be equal to the largest
whole number of Shares which have an aggregate fair market value no greater than
the amount of cash otherwise payable as of the date the cash payment of the
Bonus would have been made. For this purpose, “fair market value” shall mean the
average of the high and low prices of the Shares on such date. Any such Shares,
stock units (or similar rights) shall thereafter be subject to adjustments for
changes in corporate capitalization as provided in the Stock Plan. Dividend
equivalent rights thereafter earned may be accrued and payable in additional
stock units, cash or Shares or any combination thereof, as determined by the
Committee at or prior to the time at which an Executive attains a legally
binding right to the underlying Award. Notwithstanding anything else in this
Section 4.10 to the contrary, any election to defer the time at which any
payment is made in respect of any Bonus shall be intended to satisfy the
applicable requirements of Section 409A, including, but not limited to, the
provisions related to the timing of initial deferral elections (including the
special rules in respect of performance based compensation) and any subsequent
deferral elections.

Section 5. Restricted Stock and Units

5.1. Awards. The Committee may grant Awards under the Plan in the form of
Restricted Stock or Restricted Units, which shall become vested or payable based
upon the achievement of Performance Target(s) established by the Committee and
upon the continued employment of the Participant for such period or periods as
the Committee shall specify. The selection of Participants, Business Criteria,
Performance Targets and Performance Period and other terms and conditions of the
Award shall be established and administered by the Committee on the same basis
as provided for Bonus Awards under Section 4 hereof (other than Sections 4.3 and
4.4 hereof), except as the

 

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context otherwise requires. Any Shares subject to a Restricted Stock Award or
distributed to a Participant under a Restricted Unit Award shall be pursuant to
a combined Award under the Plan and Stock Plan, and shall be subject to
adjustments for changes in corporate capitalization as provided in the Stock
Plan. Unless otherwise provided by the Committee, any dividends, distributions
and equivalent rights payable with respect to Restricted Stock or Restricted
Units shall be subject to the same vesting or payment conditions established
pursuant to the Award. Notwithstanding the fact that Performance Targets have
been attained with respect to any Award in the form of Restricted Stock or
Restricted Units, the Committee may reduce the amount vesting or payable, or
eliminate vesting or payment, unless the Committee otherwise expressly provides
by written contract or other written commitment.

5.2 Maximum Awards. The maximum number of Shares or share units that may be
subject to Restricted Stock and/or Restricted Units granted to any one
Participant during any single Year shall be limited to 2,000,000 Shares, subject
to adjustment to reflect changes in corporate capitalization in the same manner
as provided in the Stock Plan. An Award of Restricted Stock or Restricted Units
shall not affect the Participant’s maximum Bonus Award under Sections 4.3 and
4.4, and the provisions of Sections 4.3 and 4.4 shall not apply to Awards under
this Section 5.

Section 6. General Provisions

6.1 No Right to Awards or Continued Employment. Neither the establishment of the
Plan nor the provision for or payment of any amounts hereunder nor any action of
the Company (including, for purposes of this Section 6.1, any predecessor or
subsidiary), the Board of Directors of the Company or the Committee in respect
of the Plan shall be held or construed to confer upon any person any legal right
to receive, or any interest in, an Award or any other benefit under the Plan, or
any legal right to be continued in the employ of the Company. The Company
expressly reserves any and all rights to discharge an Executive in its sole
discretion, without liability of any person, entity or governing body under the
Plan or otherwise. Nothing in this Section 6.1, however, is intended to
adversely affect any express independent right of any person under a separate
employment agreement. Notwithstanding any other provision hereof and
notwithstanding the fact that the Performance Target(s) have been attained
and/or the individual maximum amounts hereunder have been calculated, the
Company shall have no obligation to pay any Bonus hereunder nor to pay the
maximum amount so calculated or any prorated amount based on service during the
period, unless the Committee otherwise expressly provides by written contract or
other written commitment.

6.2 Discretion of Company, Board of Directors and Committee. Any decision made
or action taken by the Company or by the Board of Directors of the Company or by
the Committee arising out of or in connection with the creation, amendment,
construction, administration, interpretation and effect of the Plan shall be
within the absolute discretion of such entity and shall be conclusive and
binding upon all persons. No member of the Committee shall have any liability
for actions taken or omitted under the Plan by the member or any other person.

6.3 No Funding of Plan. The Company shall not be required to fund or otherwise
segregate any cash or any other assets which may at any time be paid to
Participants under the Plan. The Plan shall constitute an “unfunded” plan of the
Company. The Company shall not, by any provisions of the Plan, be deemed to be a
trustee of any property, and any rights of any Participant or former Participant
shall be no greater than those of a general unsecured creditor or shareholder of
the Company, as the case may be.

 

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6.4 Non-Transferability of Benefits and Interests. Except as expressly provided
by the Committee, no benefit payable under 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 shall be in any manner liable for or subject to debts, contracts,
liabilities, engagements or torts of any Participant or former Participant. This
Section 6.4 shall not apply to an assignment of a contingency or payment due
(i) after the death of an Participant to the deceased Participant’s legal
representative or beneficiary or (ii) after the disability of a Participant to
the disabled Participant’s personal representative.

6.5 Law to Govern. All questions pertaining to the construction, regulation,
validity and effect of the provisions of the Plan shall be determined in
accordance with the laws of the State of California.

6.6 Non-Exclusivity. The Plan does not limit the authority of the Company, the
Board or the Committee, or any subsidiary of the Company to grant awards or
authorize any other compensation to any person under any other plan or
authority, including, without limitation, the issuance of restricted stock or
restricted stock units or any other awards under the Stock Plan.

6.7 Section 162(m) Conditions; Bifurcation of Plan. It is the intent of the
Company that the Plan and Awards made hereunder satisfy and be interpreted in a
manner, that, in the case of Participants who are persons whose compensation is
subject to Section 162(m), satisfies any applicable requirements as
performance-based compensation. Any provision, application or interpretation of
the Plan inconsistent with this intent to satisfy the standards in
Section 162(m) of the Code shall be disregarded. As and to the extent provided
under Section 162(m), the material terms of the performance criteria under the
Plan must be re-approved by the Company’s shareholders no later than the 2014
annual meeting of shareholders if the Company intends that the Plan continue to
meet the requirements for “performance-based compensation” under Section 162(m)
for Awards made following the date of such annual meeting. Notwithstanding
anything to the contrary in the Plan, the provisions of the Plan may at any time
be bifurcated by the Board or the Committee in any manner so that certain
provisions of the Plan or any Bonus intended (or required in order) to satisfy
the applicable requirements of Section 162(m) are only applicable to persons
whose compensation is subject to Section 162(m).

Section 7. Amendments, Suspension or Termination of Plan

The Board of Directors or the Committee may from time to time amend, suspend or
terminate in whole or in part, and if suspended or terminated, may reinstate,
any or all of the provisions of the Plan. Notwithstanding the foregoing, no
amendment shall be effective without Board of Directors and/or shareholder
approval if such approval is necessary to comply with the applicable provisions
of Section 162(m). To the extent applicable, it is intended that the Plan and
all Awards hereunder comply with the requirements of Section 409A of the Code,
and the Plan and all award agreements shall be interpreted and applied by the
Committee in a manner consistent with this intent in order to avoid the
imposition of any additional tax under Section 409A of the Code. In the event
that any provision of the Plan or an award agreement is determined by the

 

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Committee to not comply with the applicable requirements of Section 409A of the
Code, the Committee shall have the authority to take such actions and to make
such changes to the Plan or an award agreement as the Committee deems necessary
to comply with such requirements, provided that no such action shall adversely
affect any outstanding Award without the consent of the affected Participant.
Notwithstanding the foregoing or anything elsewhere in the Plan or an award
agreement to the contrary, if a Participant is a “specified employee” as defined
in Section 409A of the Code at the time of termination of Service with respect
to an Award, then solely to the extent necessary to avoid the imposition of any
additional tax under Section 409A of the Code in respect of Awards that are
deferred compensation for purposes of such Section 409A, the commencement of any
payments or benefits under the Award shall be deferred until the date that is
six months following the Participant’s separation from service (or such other
period as required to comply with Section 409A).

 

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