Exhibit
10(q)


 


STORAGEAPPS
INC.


 


2000
STOCK INCENTIVE PLAN


 


(Amended and Restated as of November
21, 2002)


(Amended and Restated as of September
12, 2002)


(Amended
and Restated as of March 31, 2001)


 


ARTICLE 1.          ESTABLISHMENT, PURPOSE, AND DURATION


 


1.1           Establishment of the Plan.  StorageApps Inc., formerly known as RAID
Power Service, Inc., a Delaware corporation (hereinafter referred to as the
“Company”), hereby establishes a stock option and incentive award plan known as
the “StorageApps Inc. 2000 Stock Incentive Plan,” formerly knows as the “RAID
Power Service, Inc. 2000 Stock Incentive Plan” (the “Plan”), as set forth in
this document.  The Plan permits the
grant of Incentive Stock Options, Nonqualified Stock Options, Restricted Stock,
Stock Awards, Performance Share Awards and Stock Appreciation Rights.


 


The Plan shall become
effective on the date it is approved by the Board of Directors (the “Effective
Date”), subject to approval of the Plan by the Company’s shareholders within
the 12-month period immediately thereafter, and shall remain in effect as
provided in Section 1.3.


 


1.2           Purpose of the Plan.  The purpose of the Plan is to secure for the
Company and its shareholders the benefits of the incentive inherent in stock
ownership in the Company by employees, directors, and consultants or other
persons who perform services for the Company, who are responsible for its
future growth and continued success. 
The Plan promotes the success and enhances the value of the Company by
linking the personal interests of Participants (as defined below) to those of
the Company’s shareholders, and by providing Participants with an incentive for
outstanding performance. The Plan is further intended to provide flexibility to
the Company in its ability to motivate, attract and retain the services of
Participants upon whose judgment, interest and special effort the successful
conduct of its operation largely depends.


 


1.3           Duration of the Plan.  The Plan shall commence on the Effective
Date, and shall remain in effect, subject to the right of the Board of
Directors to amend or terminate the Plan at any time pursuant to Article 12,
until the day prior to the tenth (10th) anniversary of the Effective
Date.


 


ARTICLE 2.          DEFINITIONS


 


                Whenever used in the Plan, the
following terms shall have the meanings set forth below:


 


 


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(a)                                  “Agreement” means an agreement
entered into by each Participant and the Company, setting forth the terms and
provisions applicable to Awards granted to Participants under this Plan.


 


(b)                                 “Award” means, individually or
collectively, a grant under this Plan of Incentive Stock Options, Nonqualified
Stock Options, Restricted Stock, Stock Awards, Performance Share Awards or
Stock Appreciation Rights.


 


(c)                                  “Beneficial Owner” or “Beneficial
Ownership” shall have the meaning ascribed to such term in Rule 13d-3 of
the Exchange Act.


 


(d)                                 “Board” or “Board
of Directors” means the Board of Directors of the Company.


 


(e)                                  “Cause” means:  (i) a Participant’s commission of any act
which, if prosecuted, would constitute a felony; (ii) a Participant’s engaging
in willful misconduct or any conduct which is in reckless disregard of the
Company’s business or materially injurious to the Company or its affiliates;
(iii) a Participant’s material or habitual neglect of his duties to the
Company; or (iv) a Participant’s failure to perform or observe any provision of
an existing employment agreement with the Company, any Company policies of
general application, from time to time, in effect, or any other substantial
lawful obligation of his employment with the Company, and such failure has not
been cured within two (2) weeks after written notice from the Company to the
Participant.  The existence of “Cause”
shall be determined by the Committee, in its sole discretion.


 


(f)                                    “Code” means the Internal Revenue
Code of 1986, as amended from time to time, or any successor act thereto.


 


(g)                                 “Committee” means the committee
appointed to administer the Plan with respect to grants of Awards, as specified
in Article 3, and to perform the functions set forth therein.


 


(h)                                 “Common Stock” means the common
stock of the Company, par value $.01 per share.


 


(i)                                     “Company” means StorageApps, Inc.,
a Delaware corporation, or any successor thereto.


 


(j)                                     “Corresponding SAR” means an SAR
that is granted in relation to a particular Option and that can be exercised
only upon the surrender to the Company, unexercised, of that portion of the
Option to which the SAR relates.


 


 


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(k)                                  “Director” means any individual
who is a member of the Board of Directors of the Company.


 


(l)                                     “Disability” shall have the
meaning ascribed to such term in the Company’s long-term disability plan
covering the Participant, or in the absence of such plan, a meaning consistent
with Section 22(e)(3) of the Code.


 


(m)                               “Employee” means any employee of
the Company or the Company’s Subsidiaries. 
Directors who are not otherwise employed by the Company or the Company’s
Subsidiaries are not considered Employees under this Plan.


 


(n)                                 “Effective Date” shall have the
meaning ascribed to such term in Section 1.1.


 


(o)                                 “Exchange Act” means the
Securities Exchange Act of 1934, as amended from time to time, or any successor
act thereto.


 


(p)                                 “Fair Market Value” shall be
determined as follows:


 


(i)                                     Publicly Traded. 
If, on the relevant date, the Shares are traded on a national or
regional securities exchange or on The Nasdaq Stock Market (“Nasdaq”) and
closing sale prices for the Shares are customarily quoted, on the basis of the
closing sale price on the principal securities exchange on which the Shares may
then be traded or, if there is no such sale on the relevant date, then on the
immediately preceding day on which a sale was reported;


 


(ii)                                  Not Listed but Traded. 
If, on the relevant date, the Shares are not listed on any securities
exchange or traded on Nasdaq, but nevertheless are publicly traded and reported
on Nasdaq without closing sale prices for the Shares being customarily quoted,
on the basis of the mean between the closing bid and asked quotations in such
other over-the-counter market as reported by Nasdaq; but, if there are no bid
and asked quotations in the over-the-counter market as reported by Nasdaq on
that date, then the mean between the closing bid and asked quotations in the
over-the-counter market as reported by Nasdaq on the immediately preceding day
such bid and asked prices were quoted; and


 


(iii)                               Not Traded.  If, on the
relevant date, the Shares are not publicly traded as described in (i) or (ii),
on the basis of the 


 


 


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good faith determination
of the Committee, based on all relevant facts and circumstances including any
recent sales or purchases of the stock.


 


(q)                                 “Incentive Stock Option” or “ISO”
means an option to purchase Shares granted under the Plan which is designated
as an Incentive Stock Option and is intended to meet the requirements of
Section 422 of the Code.


 


(r)                                    “Initial Value” means, with
respect to a Corresponding SAR, the Option Price per share of the related
Option, and with respect to an SAR granted independently of an Option, the Fair
Market Value of one share of Common Stock on the date of grant.


 


(s)                                  “Insider” shall mean an Employee
who is, on the relevant date, an officer or a director, or a ten percent (10%)
beneficial owner of any class of the Company’s equity securities that is
registered pursuant to Section 12 of the Exchange Act or any successor
provision, as “officer” and “director” are defined under Section 16 of the Exchange
Act.


 


(t)                                    “Named Executive Officer” means a
Participant who, as of the date of vesting and/or payout of an Award is one of
the group of “covered employees,” as defined in the regulations promulgated
under Code Section 162(m), or any successor statute.


 


(u)                                 “Nonqualified Stock Option” or “NQSO”
means an option to purchase Shares granted under the Plan, and which is not
intended to meet the requirements of Code Section 422.


 


(v)                                 “Option” means an Incentive Stock
Option or a Nonqualified Stock Option.


 


(w)                               “Option Price” means the price at
which a Share may be purchased by a Participant pursuant to an Option, as
determined by the Committee.


 


(x)                                   “Participant” means an Employee, a
Director, a consultant or other person who performs services for the Company or
a Subsidiary, who has been determined by the Committee to contribute
significantly to the profits or growth of the Company and who has been granted
an Award under the Plan which is outstanding.


 


(y)                                 “Performance Share Award” means an
Award, which, in accordance with and subject to an Agreement, will entitle the
Participant, or his estate or beneficiary in the event of the 


 


 


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Participant’s death, to receive cash, Common Stock or
a combination thereof.


 


(z)                                   “Person” shall have the meaning
ascribed to such term in Section 3(a)(9) of the Exchange Act and used in
Sections 13(d) and 14(d) thereof, including a “group” as defined in 13(d)
thereof.


 


(aa)                            “Retirement” shall mean retiring
from employment with the Company or any Subsidiary on or after attaining age
65.


 


(bb)                          “Restricted Stock” means an Award
of Common Stock granted in accordance with the terms of the Plan, and which is
nontransferable and subject to a substantial risk of forfeiture. Shares of Common
Stock shall cease to be Restricted Stock when, in accordance with the terms
hereof and the applicable Agreement, they become transferable and free of
substantial risk of forfeiture.


 


(cc)                            “SAR” means a stock appreciation
right that entitles the holder to receive, with respect to each share of Common
Stock encompassed by the exercise of such SAR, the amount determined by the
Committee and specified in an Agreement. In the absence of such specification,
the holder shall be entitled to receive in cash, with respect to each share of
Common Stock encompassed by the exercise of such SAR, the excess of the Fair
Market Value on the date of exercise over the Initial Value. References to
“SARs” include both Corresponding SARs and SARs granted independently of Options,
unless the context requires otherwise.


 


(dd)                          “Shares” means the shares of
Common Stock of the Company (including any new, additional or different stock
or securities resulting from the changes described in Section 4.3).


 


(ee)                            “Stock Award” means a grant of
Shares under the Plan that is not generally subject to restrictions and
pursuant to which a certificate for the Shares is transferred to the Employee.


 


(ff)                                “Subsidiary” means any company
during any period in which it is a “subsidiary corporation” (as that term is
defined in Code Section 424(f)) with respect to the Company.


 


 


ARTICLE 3. ADMINISTRATION


3.1           The Committee.  The Plan shall be administered by the Board
of Directors or by a Committee designated by the Board from its members, or by
any other committee or subcommittee appointed by the Board that is granted
authority to administer the Plan (the “Committee”). The members of the
Committee shall be 


 


 


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appointed from time to time by, and shall serve at the discretion of,
the Board of Directors.


 


3.2           Authority of the Committee.  Subject to the provisions of the Plan, the
Committee shall have full power to select the Employees, Directors, consultants
and other persons who perform services for the Company or a Subsidiary, who are
responsible for the future growth and success of the Company who shall
participate in the Plan (who may change from year to year); determine the size
and types of Awards; determine the terms and conditions of Awards in a manner
consistent with the Plan (including conditions on the exercisability of all or
a part of an Option or SAR, restrictions on transferability and vesting
provisions on Restricted Stock or Performance Share Awards and the duration of
the Awards); construe and interpret the Plan and any agreement or instrument
entered into under the Plan; establish, amend or waive rules and regulations
for the Plan’s administration; and (subject to the provisions of Article 12)
amend the terms and conditions of any outstanding Award to the extent such
terms and conditions are within the discretion of the Committee as provided in
the Plan, including accelerating the time any Option or SAR may be exercised
and establishing different terms and conditions relating to the effect of the
termination of employment or other services to the Company. Further, the
committee shall make all other determinations which may be necessary or
advisable in the Committee’s opinion for the administration of the Plan. All
expenses of administering this Plan shall be borne by the Company.


 


3.3           Decisions Binding.  All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders and
resolutions of the Board shall be final, conclusive and binding on all Persons,
including the Company, the shareholders, Employees, Participants and their
estates and beneficiaries.


 


3.4           Delegation of Authority for the Day-to-Day
Administration of the Plan.  Except to the
extent prohibited by applicable law or applicable rules of a stock exchange,
the Board or any of its committees as shall be administering the Plan may
delegate to one or more individuals the day-to-day administration of the Plan
and any of the functions assigned to it in this Plan. The delegation may be
revoked at any time.


 


ARTICLE
4.  SHARES SUBJECT TO THE PLAN


 


4.1           Number of Shares.  (a) Subject to adjustment as provided in
Section 4.3, the aggregate number of Shares available for grants of Awards
under the Plan shall not exceed (i) 30,000,000 plus (ii) the additional Shares
described in (b) below, provided, however,
that no more than 30,000,000 Shares of Common Stock may be issued hereunder
pursuant to the exercise of ISOs.


 


(b)           As
of January 1 of each year, commencing with the year 2001, the aggregate number of
Shares that may be awarded under the Plan shall automatically increase by a
number equal to the lesser of (i) 5% of the total number of Shares then
outstanding or (ii) 5,000,000 Shares. The Shares may, in the discretion of the
Company, be either authorized but unissued Shares or Shares held as treasury
shares, including Shares purchased by the Company, whether on the market or
otherwise. The following 


 


 


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rules shall apply for purposes of the determination of the number of
Shares available for grant under the Plan:


 


(1)                                  The grant of an Option, SAR, Stock Award,
Restricted Stock Award or Performance Share Award shall reduce the Shares
available for grant under the Plan by the number of Shares subject to such
Award.


 


(2)                                  While an Option, SAR, Stock Award,
Restricted Stock Award or Performance Share Award is outstanding, it shall be
counted against the authorized pool of Shares, regardless of its vested status.


 


4.2           Lapsed Awards.  If any Award granted under this Plan is
canceled, terminates, expires or lapses for any reason, or if Shares are
withheld in payment of the Option Price or for withholding taxes, any Shares
subject to such Award or that are withheld shall again be available for the
grant of an Award under the Plan. However, in the event that prior to the
Award’s cancellation, termination, expiration or lapse, the holder of the Award
at any time received one or more “benefits of ownership” pursuant to such Award
(as defined by the Securities and Exchange Commission, pursuant to any rule or
interpretation promulgated under Section 16 of the Exchange Act), the Shares
subject to such Award shall not again be made available for regrant under the
Plan.


 


4.3           Adjustments In Authorized Shares.  In the event of any change in corporate
capitalization, such as a stock split, or a corporate transaction, such as an
merger, consolidation, separation, including a spin-off, or other distribution
of stock or property of the Company, any reorganization (whether or not such
reorganization comes within the definition of such term in Code Section 368) or
any partial or complete liquidation of the Company, such adjustment shall be
made in the number and class of Shares which may be delivered under the Plan,
and in the number and class of and/or price of Shares subject to outstanding
Awards granted under the Plan, as may be determined to be appropriate and
equitable by the Committee, in its sole discretion, to prevent dilution or
enlargement of rights; provided, however, that the number of Shares subject to
any Award shall always be a whole number and the Committee shall make such
adjustments as are necessary to insure Awards of whole Shares.


 


ARTICLE
5.  ELIGIBILITY AND PARTICIPATION


 


Any key Employee of the Company or any Subsidiary,
including any such Employee who is also a director of the Company or any
Subsidiary, any non-employee Director, and any consultant or other person who
performs services of the Company or a Subsidiary, whose judgment, initiative
and efforts contribute or may be expected to contribute materially to the
successful performance of the Company or any Subsidiary shall be eligible to
receive an Award under the Plan. In determining the individuals to whom such an
Award shall be granted and the number of Shares which may be granted pursuant
to that Award, the Committee shall take into account the duties of the
respective individual, his or her present and potential contributions to the
success of the Company or any Subsidiary, and such other factors as the Committee
shall deem relevant in connection with accomplishing the purpose of the Plan.


 


 


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ARTICLE 6.  STOCK OPTIONS


 


6.1           Grant of Options.  Subject to the terms and provisions of the
Plan, Options may be granted to Participants at any time and from time to time
as shall be determined by the Committee. The Committee shall have discretion in
determining the number of Shares subject to Options granted to each
Participant. An Option may be granted with or without a Corresponding SAR. No
Participant may be granted ISOs (under the Plan and all other incentive stock
option plans of the Company and any Subsidiary) which are first exercisable in
any calendar year for Common Stock having an aggregate Fair Market Value (determined
as of the date an Option is granted) that exceeds $100,000. The preceding
annual limit shall not apply to NQSOs. The Committee may grant a Participant
ISOs, NQSOs or a combination thereof, and may vary such Awards among
Participants; provided that only an Employee may be granted ISOs.


 


6.2           Agreement.  Each Option grant shall be evidenced by an Agreement that shall
specify the Option Price, the duration of the Option, the number of Shares to
which the Option pertains and such other provisions as the Committee shall
determine. The Option Agreement shall further specify whether the Award is
intended to be an ISO or an NQSO. Any portion of an Option that is not
designated as an ISO or otherwise fails or is not qualified as an ISO (even if
designated as an ISO) shall be a NQSO. If the Option is granted in connection
with a Corresponding SAR, the Agreement shall also specify the terms that apply
to the exercise of the Option and Corresponding SAR.


6.3           Option Price.  The Option Price for each grant of an ISO
shall not be less than one hundred percent (100%) of the Fair Market Value of a
Share on the date the Option is granted. In no event, however, shall any
Participant who owns (within the meaning of Section 424(d) of the Code) stock
of the Company possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company be eligible to receive an
ISO at an Option Price less than one hundred ten percent (110%) of the Fair
Market Value of a share on the date the ISO is granted. The Option Price for
each grant of an NQSO shall be established by the Committee and, in its
discretion, may be less than the Fair Market Value of a Share on the date the
Option is granted.


 


6.4           Duration of Options.  Each Option shall expire at such time as the
Committee shall determine at the time of grant; provided, however, that no
option shall be exercisable later than the tenth (10th) anniversary
date of its grant; provided, further, however, that any ISO granted to any
Participant who at such time owns (within the meaning of Section 424(d) of the
Code) stock of the Company possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company, shall not be
exercisable later than the fifth (5th) anniversary date of its
grant.


 


6.5           Exercise of Options.  Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, including conditions related to
the employment of the Participant with the Company or any Subsidiary, which
need not be the same for each grant or for each Participant. Each Option shall
be exercisable for such 


 


 


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number of Shares
and at such time or times, including periodic installments, as may be
determined by the Committee at the time of the grant. The Committee may provide
in the Agreement for automatic accelerated vesting and other rights upon the
occurrence of a Change in Control of the Company. Except as otherwise provided
in the Agreement, the right to purchase Shares that are exercisable in periodic
installments shall be cumulative so that when the right to purchase any Shares
has accrued, such Shares or any part thereof may be purchased at any time
thereafter until the expiration or termination of the Option. The exercise or
partial exercise of either an Option or its Corresponding SAR shall result in
the termination of the other to the extent of the number of Shares with respect
to which the Option or Corresponding SAR is exercised.


 


6.6           Payment.  Options shall be exercised by the delivery of a written notice of
exercise to the Company, setting forth the number of Shares with respect to
which the Option is to be exercised, accompanied by full payment for the
Shares. The Option Price upon exercise of any Option shall be payable to the
Company in full, either: (a) in cash, (b) cash equivalent approved by the
Committee, (c) if approved by the Committee, by delivering (on a form prescribed
by the Company) a full-recourse promissory note (however, the par value of the
Shares being purchased under the Plan, if newly issued, shall be paid in cash
or cash equivalents), (d) if approved by the Committee, by tendering previously
acquired Shares (or delivering a certification of ownership of such Shares)
having an aggregate Fair Market Value at the time of exercise equal to the
total Option Price (provided that the Shares which are tendered must have been
held by the Participant for six months, if required for accounting purposes,
and for the period required by law, if any, prior to their tender to satisfy
the Option Price), or (e) by a combination of (a), (b), (c) and (d). The
Committee also may allow cashless exercises as permitted under Federal Reserve
Board’s Regulation T, subject to applicable securities law restriction, or by
any other means which the Committee determines to be consistent with the Plan’s
purpose and applicable law. As soon as practicable after receipt of a written
notification of exercise and full payment, the Company shall deliver to the
Participant, in the Participant’s name, Share certificates in an appropriate
amount based upon the number of Shares purchased under the Options(s), and may
place appropriate legends on the certificates representing such Shares.


 


6.7           Limited Transferability.  If permitted by the Committee in the
Agreement, a Participant may transfer an Option granted hereunder, including
but not limited to, transfer to members of his or her Immediate Family (as defined
below), to one or more trusts for the benefits of such Immediate Family
members, or to one or more partnerships where such Immediate Family members are
the only partners, if (i) the Participant does not receive any consideration in
any form whatsoever for such transfer, (ii) such transfer is permitted under
applicable lax laws, and (iii) the Participant is an Insider, such transfer is
permitted under Rule 16b-3 of the Exchange Act as in effect from time to time.
Any Option so transferred shall continue to be subject to the same terms and
conditions in the hands of the transferee as were applicable to said Option
immediately prior to the transfer thereof. Any reference in any such Agreement
to the employment by or performance of services for the Company by the
Participant shall continue to refer to the employment of, or performance by,
the transferring Participant. For purposes hereof, 


 


 


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“Immediate Family”
shall mean the Participant and the Participant’s spouse, children and
grandchildren. Any Option that is granted pursuant to any Agreement that did
not initially expressly allow the transfer of said Option and that has not been
amended to expressly permit such transfer, shall not be transferable by the Participant
other than by will or by the laws of descent and distribution and such Option
thus shall be exercisable in the Participant’s lifetime only by the
Participant.


 


6.8           Shareholder Rights.  No Participant shall have any rights as a
shareholder with respect to Shares subject to his Option until the issuance of
such Shares to the Participant pursuant to the exercise of such Option.


 


6.9           Buyout
Provisions. At any time, the Committee may, but shall not be
required to, authorize the Company to offer to buy out for a payment in cash or
Shares an Option previously granted based on such terms and conditions as the
Committee shall establish and communicate to the Participant at the time in
connection with such offer.


 


ARTICLE
7.  STOCK APPRECIATION RIGHTS


 


7.1           Grants of SARs.  The Committee shall designate Participants
to whom SARs are granted, and will specify the number of Shares of Common Stock
subject to each grant. An SAR may be granted with or without a related Option.
All SARs granted under this Plan shall be subject to an Agreement in accordance
with the terms of this Plan. A payment to the Participant upon the exercise of
a Corresponding SAR may not be more than the difference between the Fair Market
Value of the Shares subject to the ISO on the date of grant and the Fair Market
Value of the Shares on the date of exercise of the Corresponding SAR.


 


7.2           Duration of SARs.  The duration of an SAR shall be set forth in
the Agreement as determined by the Committee. An SAR that is granted as a
Corresponding SAR shall have the same duration as the Option to which it
relates. An SAR shall terminate due to the Participant’s termination of
employment at the same time as the date specified in Article 6 with respect to
Options, regardless of whether the SAR was granted in connection with the grant
of an Option.


 


7.3           Exercise of SAR.  An SAR may be exercised in whole at any time
or in part from time to time and at such times and in compliance with such
requirements as the Committee shall determine as set forth in the Agreement;
provided, however, that a Corresponding SAR that is related to an Incentive
Stock Option may be exercised only to the extent that the related Option is
exercisable and only when the Fair Market Value of the Shares exceeds the
Option Price of the related ISO. An SAR granted under this Plan may be
exercised with respect to any number of whole shares less than the full number
of shares for which the SAR could be exercised. A partial exercise of an SAR
shall not affect the right to exercise the SAR from time to time in accordance
with this Plan and the applicable Agreement with respect to the remaining
shares subject to the SAR. The exercise of either an Option or Corresponding
SAR shall result in the termination of the 


 


 


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other to the
extent of the number of Shares with respect to which the Option or its
Corresponding SAR is exercised.


 


7.4           Determination of Payment of Cash and/or Common Stock
Upon Exercise of SAR. 
At the Committee’s discretion, the amount payable as a result of the
exercise of an SAR may be settled in cash, Common Stock, or a combination of
cash and Common Stock. A fractional share shall not be deliverable upon the
exercise of an SAR, but a cash payment shall be made in lieu thereof.


 


7.5           Nontransferability.  Each SAR granted under the Plan shall be
nontransferable except by will or by the laws of descent and distribution.
During the lifetime of the Participant to whom the SAR is granted, the SAR may
be exercised only by the Participant. No right or interest of a Participant in
any SAR shall be liable for, or subject to any lien, obligation or liability of
such Participant. A Corresponding SAR shall be subject to the same restrictions
on transfer as the ISO to which it relates. Notwithstanding the foregoing, if
that Agreement so provides, a Participant may transfer an SAR (other than a
Corresponding SAR that relates to an Incentive Stock Option) under the same
rules and conditions as are set forth in Section 6.7.


 


7.6           Shareholder Rights.  No Participant shall have any rights as a
shareholder with respect to Shares subject to an SAR until the issuance of
Shares (if any) to the Participant pursuant to the exercise of such SAR.


 


7.7           Buyout
Provisions. At any time,
the Committee may, but shall not be required to, authorize the Company to offer
to buy out for a payment in cash or Shares a SAR previously granted based on
such terms and conditions as the Committee shall establish and communicate to
the Participant in connection with such offer.


 


ARTICLE
8.  RESTRICTED STOCK; STOCK AWARDS


 


8.1           Grants.  The Committee may from time to time in its discretion grant
Restricted Stock and Stock Awards to Participants and may determine the number
of Shares of Restricted Stock or Stock Awards to be granted. The Committee
shall determine the terms and conditions of, and the amount of payment, if any,
to be made by the Employee for such Shares or Restricted Stock. A grant of
Restricted Stock may, in addition to other conditions, require the Participant
to pay for such Shares of Restricted Stock, but the Committee may establish a
price below Fair Market Value at which the Participant can purchase the Shares
of Restricted Stock. Each grant of Restricted Stock shall be evidenced by an
Agreement containing terms and conditions not inconsistent with the Plan as the
Committee shall determine to be appropriate in its sole discretion.


 


8.2           Restricted Period; Lapse of Restrictions.  At the time a grant of Restricted Stock is
made, the Committee shall establish a period or periods of time (the
“Restricted Period”) applicable to such grant which, unless the Committee
otherwise provides, shall not be less than one year. Subject to the other
provisions of this Article 8, at the end of the Restricted Period all
restrictions shall lapse and the Restricted Stock 


 


 


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shall vest in the
Participant. At the time a grant is made, the Committee may, in its discretion,
prescribe conditions for the incremental lapse of restrictions during the
Restricted Period and for the lapse or termination of restrictions upon the
occurrence of other conditions in addition to or other than the expiration of
the Restricted Period with respect to all or any portion of the Restricted
Stock. Such conditions may, but need not, include the following:


 


(a)                                  The death, Disability or Retirement of
the Employee to whom Restricted Stock is granted, or


 


(b)                                 The occurrence of a Change in Control (as
defined in Section 11.1)


 


The Committee may
also, in its discretion, shorten or terminate the Restricted Period, or waive
any conditions for the lapse or termination of restrictions with respect to all
or any portion of the Restricted Stock at any time after the date the grant is
made.


 


8.3           Rights of Holder; Limitations Thereon.  Upon a grant of Restricted Stock, a stock
certificate (or certificates) representing the number of Shares of Restricted
Stock granted to the Participant shall be registered in the Participant’s name
and shall be held in custody by the Company or a bank selected by the Committee
for the Participant’s account. Following such registration, the Participant
shall have the rights and privileges of a shareholder as to such Restricted
Stock, including the right to receive dividends, if and when declared by the
Board of Directors, and to vote such Restricted Stock, except that the right to
receive cash dividends shall be the right to receive such dividends either in
cash currently or by payment in Restricted Stock, as the Committee shall
determine, and except further that, following restrictions shall apply:


 


(a)                                  The Participant shall not be entitled to
delivery of a certificate until the expiration or termination of the Restricted
Period for the Shares represented by such certificate and the satisfaction of
any and all other conditions prescribed by the Committee;


 


(b)                                 None of the shares of Restricted Stock
may be sold, transferred, assigned, pledged, or otherwise encumbered or
disposed of during the Restricted Period and until the satisfaction of any and
all other conditions prescribed by the Committee; and


 


(c)                                  All of the Shares of Restricted Stock
that have not vested shall be forfeited and all rights of the Participant to
such Shares of Restricted Stock shall terminate without further obligation on
the part of the Company, unless the Participant has remained an employee of (or
non-Employee Director of or active consultant providing services to) the
Company or any of its Subsidiaries, until the expiration or termination of the
Restricted Period and the satisfaction of any and all other conditions
prescribed by the Committee applicable to such Shares of Restricted Stock. Upon
the 


 


 


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forfeiture of any Shares of Restricted Stock, such
forfeited Shares shall be transferred to the Company without further action by
the Participant and shall, in accordance with Section 4.2, again be available
for grant under the Plan. If the Participant paid any amount for the Shares of
Restricted Stock that are forfeited, the Company shall pay the Participant the
lesser of the Fair Market Value of the Shares on the date they are forfeited or
the amount paid by the Participant.


 


With respect to any Shares received as a result of
adjustments under Section 4.3 hereof and any Shares received with respect to
cash dividends declared on Restricted Stock, the Participant shall have the
same rights and privileges, and be subject to the same restrictions, as are set
forth in this Article 8.


 


8.4           Delivery of Unrestricted Shares.  Upon the expiration or termination of the
Restricted Period for any Shares of Restricted Stock and the satisfaction of
any and all other conditions prescribed by the Committee, the restrictions
applicable to such Shares of Restricted Stock shall lapse and a stock certificate
for the number of Shares of Restricted Stock with respect to which the
restrictions have lapsed shall be delivered, free of all such restrictions
except any that may be imposed by law, to the holder of the Restricted Stock.
The Company shall not be required to deliver any fractional Share but will pay,
in lieu thereof, the Fair Market Value (determined as of the date the
restrictions lapse) of such fractional Share to the holder thereof.
Concurrently with the delivery of a certificate for Restricted Sock, the holder
shall be required to pay an amount necessary to satisfy any applicable federal,
state and local tax requirements as set out in Article 13 below.


 


8.5           Nonassignability of Restricted Stock.  Unless the Committee provides otherwise in
the Agreement, no grant of, nor any right or interest of a Participant in or
to, any Restricted Stock, or in any instrument evidencing any grant of
Restricted Stock under the Plan, may be assigned, encumbered or transferred
except, in the event of the death of a Participant, by will or the laws of
descent and distribution.


 


8.6           Buyout
Provisions. At any time, the Committee may, but shall not be
required to, authorize the Company to offer to buy out for a payment in cash or
Shares Restricted Stock previously granted based on such terms and conditions
as the Committee shall establish and communicate to the Participant in
connection with such offer.


 


ARTICLE 9.  PERFORMANCE SHARE AWARDS


 


9.1           Award.  The Committee may designate Participants to whom Performance
Share Awards will be granted from time to time for no consideration and specify
the number of shares of Common Stock covered by the Award.


 


9.2           Earning the Award.  A Performance Stock Award, or portion
thereof, will be earned, and the Participant will be entitled to receive Common
Stock, a 


 


 


13

















 


cash payment or a
combination thereof, only upon the achievement by the Participant, the Company,
or a Subsidiary of such performance objectives as the Committee, in its discretion,
shall prescribe on the date of grant. To the extent required, the performance
objectives applicable to awards to Named Executive Officers intended to qualify
under Code Section 162(m) shall be selected from among the following measures:
return on equity or assets, earning per share, total earnings, earnings growth,
return on capital, profit before taxes, profit after taxes, economic value
added and increase in Fair Market Value of the Shares. The determination as to
whether such objectives have been achieved shall be made by the Committee, and
such determination shall be conclusive; provided, however, that the period in
which such performance is measured shall be at least one year.


 


The Committee may in
determining whether performance targets have been met adjust the Company’s
financial results to exclude the effect of unusual charges or income items or
other events, including acquisitions or dispositions of businesses or assets,
restructurings, reductions in force, currency fluctuations or changes in
accounting, which are distortive of financial results (either on a segment or
consolidated basis); provided, that for purposes of determining the Performance
Share Awards of Named Executive Officers, the Committee shall exclude unusual
items whose exclusion has the effect of increasing income or earnings if such
items constitute “extraordinary items” under generally accepted accounting
principles or are significant unusual items. In addition, the Committee will
adjust its calculations to exclude the effect on financial results of changes
in the Code or other tax laws, or the regulations relating thereto.


 


9.3           Payment.  In the discretion of the Committee, the amount payable when a
Performance Share Award is earned may be settled in cash, by the grant of Common
Stock or a combination of cash and Common Stock. The aggregate Fair Market
Value of the Common Stock received by the Participant pursuant to a Performance
Share Award, together with any cash paid to the Participant, shall be equal to
the aggregate Fair Market Value, on the date the Performance Shares are earned,
of the number of Shares of Common Stock equal to each Performance Share earned.
A fractional Share will not be deliverable when a Performance Share Award is
earned, but a cash payment will be made in lieu thereof.


 


9.4           Shareholder Rights.  No Participant shall have, as a result of
receiving a Performance Share Award, any rights as a shareholder until and to
the extent that the Performance Shares are earned and Common Stock is
transferred to such Participant. If the Agreement so provides, a Participant
may receive a cash payment equal to the dividends that would have been payable
with respect to the number of Shares of Common Stock covered by the Award
between (a) the date that the Performance Shares are awarded and (b) the date
that a transfer of Common Stock to the Participant, cash settlement, or
combination thereof is made pursuant to the Performance Share Award. A
Participant may not sell, transfer, pledge, exchange, hypothecate, or otherwise
dispose of a Performance Share Award or the right to receive Common Stock
thereunder other than by will or the laws of descent and distribution. After a
Performance Share Award is 


 


 


14

















 


earned and paid in
Common Stock, a Participant will have all the rights of a shareholder with
respect to the Common Stock so awarded.


 


ARTICLE
10.  RIGHTS OF EMPLOYEES


 


10.1         Employment.  Nothing in the Plan shall interfere with or limit in any way the
right of the Company or a Subsidiary to terminate any Participant’s employment
by, or performance of services for, the Company at any time, nor confer upon
any Participant any right to continue in the employ or service of the Company
or a Subsidiary. For purposes of the Plan, transfer of employment of a
Participant between the Company and any one of its Subsidiaries (or between
Subsidiaries) shall not be deemed a termination of employment.


 


10.2         Participation.  No Employee shall have the right to be selected to receive an
Award under this Plan, or, having been so selected, to be selected to receive a
future Award.


 


ARTICLE
11.  CHANGE IN CONTROL


 


11.1         Definition.  For purposes of the Plan, a “Change in Control” means any of the
following events:


 


(a)                                  The acquisition (other than from the
Company) by any Person of Beneficial Ownership of fifty percent (50%) or more
of the combined voting power of the Company’s then outstanding voting
securities; provided, however, that for purposes of this Section 11.1, Person
shall not include any person who on the date hereof owns 25% or more of the
Company’s outstanding securities, and a Change in Control shall not be deemed
to occur solely because fifty percent (50%) or more of the combined voting
power of the Company’s then outstanding securities is acquired by (i) a trustee
or other fiduciary holding securities under one or more employee benefits plans
maintained by the Company or any of its subsidiaries, or (ii) any corporation,
which, immediately prior to such acquisition, is owned directly or indirectly
by the shareholders of the Company in the same proportion as their ownership of
stock in the Company immediately prior to such acquisition.


 


(b)                                 Approval by shareholders of the Company
of (1) a merger or consolidation involving the Company if the shareholders of
the Company, immediately before such merger or consolidation do not, as a
result of such merger or consolidation, own, directly or indirectly, more than
fifty percent (50%) of the combined voting power of the then outstanding voting
securities of the corporation resulting from such merger or consolidation in
substantially the 


 


 


15

















 


same proportion as their ownership of the combined
voting power of the voting securities of the Company outstanding immediately
before such merger or consolidation, or (2) a complete liquidation or
dissolution of the Company or an agreement for the sale or other disposition of
all or substantially all of the assets of the Company (other than in an initial
public offering of the Company’s Common Stock.


 


(c)                                  When, during any period of 24 consecutive
months, the individuals who, at the beginning of such period, constitute the
Board (the “Incumbent Directors”) cease for any reason other than death to
constitute at least a majority thereof, provided  that a director
who was not a director at the beginning of such 24-month period shall be deemed
to have satisfied such 24-month requirement (and be an Incumbent Director) if
such director was elected by, or on the recommendation of or with the approval
of, at least two-thirds of the directors who then qualified as Incumbent
Directors either actually (because they were directors at the beginning of such
24-month period) or by prior operation of this paragraph (c).


 


11.2         Certain Parachute Payments:  A payment that would otherwise constitute a
“parachute payment” under Section 280G(b)(2) of the Code shall not, to the
extent permitted by such Section 280G and the regulations thereunder, be
considered a parachute payment if such payment is approved by a shareholder
vote of more than 75% of the voting power of all outstanding Shares of the
Company.


 


ARTICLE 12.  AMENDMENT, MODIFICATION AND TERMINATION


 


12.1         Amendment, Modification and Termination.  The Board may, at any time and from time to
time, alter, amend, suspend or terminate the Plan in whole or in part;
provided, that, unless approved by the holders of a majority of the total
number of Shares of the Company represented and voted at a meeting at which a
quorum is present, no amendment shall be made to the Plan if such amendment
would (a) materially modify the eligibility requirements provided in Article 5;
(b) increase the total number of Shares (except as provided in Section 4.3)
which may be granted under the Plan; (c) extend the term of the Plan; or (d)
amend the Plan in any other manner which the Board, in its discretion,
determines should become effective only if approved by the shareholders even if
such shareholder approval is not expressly required by the Plan or by law.


 


12.2         Awards Previously Granted.  No termination, amendment or modification of
the Plan shall adversely affect in any material way any Award previously
granted under the Plan, without the written consent of the Participant holding
such Award. The Committee shall, with the written consent of the Participant
holding such Award, have the authority to cancel Awards outstanding and grant
replacement Awards therefore.


 


 


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12.3       Compliance With Code Section 162(m).  At all times when the Committee determines
that compliance with Code Section 162(m) is required or desired, all Awards
granted under this Plan to Named Executive Officers shall comply with the
requirements of Code Section 162(m). In addition, in the event that changes are
made to Code Section 162(m) to permit greater flexibility with respect to any
Award or Awards under the Plan, the Committee may, subject to this Article 12,
make any adjustments it deem appropriate.


 


ARTICLE 13.  WITHHOLDING


 


13.1       Tax Withholding.  The Company shall have the power and the
right to deduct or withhold, or require a Participant to remit to the Company,
an amount sufficient to satisfy federal, state and local taxes (including the
Participant’s FICA obligation) required by law to be withheld with respect to
any taxable event arising in connection with an Award under this Plan.


 


13.2       Share Withholding.  With respect to withholding required upon
the exercise of Options, or upon any other taxable event arising as a result of
Awards granted hereunder which are to be paid in the form of Shares,
Participants may elect, subject to the approval of the Committee, to satisfy
the withholding requirement, in whole or in part, by having the Company
withhold Shares having a Fair Market Value on the date the tax is to be
determined equal to the minimum statutory total tax which could be imposed on
the transaction. All elections shall be irrevocable, made in writing, signed by
the Participant, and elections by Insiders shall additionally comply with all
legal requirements applicable to Share transactions by such Participants.


 


ARTICLE
14.  INDEMNIFICATION


 


                Each person who is or shall have
been a member of the Committee, or the Board, shall be indemnified and held
harmless by the Company against and from any loss, cost, liability or expense
that may be imposed upon or reasonably incurred by him or her in connection
with or resulting from any claim, action, suit or proceeding to which he or she
may be a party or in which he or she may be involved by reason of any action
taken or failure to act under the Plan and against and from any and all amounts
paid by him or her in settlement thereof, with the Company’s approval, or paid
by him in satisfaction of any judgment in any such action, suit, or proceeding
against him, provided he shall give the Company an opportunity, at its own
expense, to handle and defend the same before he undertakes to handle and
defend it on his own behalf. The foregoing right of indemnification shall be in
addition to any other rights of indemnification to which such person may be
entitled under the Company’s Articles of Incorporation or Bylaws, as a matter
of law, or otherwise, or any power that the Company may have to indemnify them
or hold them harmless.


 


 


17

















 


ARTICLE
15.  SUCCESSORS


 


                All obligations of the Company
under the Plan, with respect to Awards granted hereunder, shall be binding on
any successor to the Company, whether the existence of such successor is the
result of a direct or indirect purchase, merger, consolidation or otherwise, of
all or substantially all of the business and/or assets of the Company.


 


ARTICLE
16.  LEGAL CONSTRUCTION


 


16.1       Gender and Number.  Except when otherwise indicated by the
context, any masculine term used herein shall also include the feminine; the
plural shall include the singular and the singular shall include the plural.


 


16.2       Severability.  If any provision of the Plan shall be held illegal or invalid for
any reason, the illegality or invalidity shall not affect the remaining parts
of the Plan, and the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included.


 


16.3       Requirements of Law.  The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.


 


16.4       Regulatory Approvals and Listing.  The Company shall not be required to issue
any certificate or certificates for Shares under the Plan prior to (i)
obtaining any approval from any governmental agency which the Company shall, in
its discretion, determine to be necessary or advisable, (ii) the admission of
such shares to listing on any national securities exchange or Nasdaq on which
the Company’s Shares may be listed, and (iii) the completion of any
registration or other qualification of such Shares under any state or federal
law or ruling or regulation of any governmental body which the Company shall,
in its sole discretion, determine to be necessary or advisable.


 


                Notwithstanding any other
provision set forth in the Plan, if required by the then-current Section 16 of
the Exchange Act, any “derivative security” or “equity security” offered
pursuant to the Plan to any Insider may not be sold or transferred for at least
six (6) months after the date of grant of such Award. The terms “equity
security” and “derivative security” shall have the meanings ascribed to them in
the then-current Rule 16(a) under the Exchange Act.


 


16.5         Securities Law Compliance.  With respect to Insiders, transactions under
this Plan are intended to comply with all applicable conditions of Rule 16b-3
or its successors under the Exchange Act. To the extent any provision of the
Plan or action by the Committee fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Committee.


 


16.6         Governing Law.  To the extent not preempted by Federal law, the Plan, and all
agreements hereunder, shall be construed in accordance with and governed by the
laws of the State of Delaware.


 


 


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