Exhibit 4.3


 


KEMET
Corporation

2004 LONG-TERM EQUITY INCENTIVE PLAN


 


1.                                       Purpose.


 


This plan shall be
known as the KEMET Corporation 2004 Long-Term Equity Incentive Plan (the “Plan”).  The purpose of the Plan shall be to promote
the long-term growth and profitability of KEMET Corporation (the “Company”) and
its Subsidiaries by (i) providing certain directors, officers and employees of, and certain other individuals to whom an
offer of employment has been extended by, the Company and its
Subsidiaries with incentives to maximize stockholder value and otherwise
contribute to the success of the Company and (ii) enabling the Company to
attract, retain and reward the best available persons for positions of
responsibility.  Grants of incentive or
non-qualified stock options, stock appreciation rights (“SARs”), either alone
or in tandem with options, restricted stock, performance awards, or any
combination of the foregoing may be made under the Plan.


 


2.                                       Definitions.


 


(a)                                  “Board
of Directors” and “Board” mean the board of directors of the Company.


 


(b)                                 “Cause”
means the occurrence of one or more of the following events:


 


(i)                                     Conviction
of a felony or any crime or offense lesser than a felony involving the property
of the Company or a Subsidiary; or


 


(ii)                                  Conduct
that has caused demonstrable and serious injury to the Company or a Subsidiary,
monetary or otherwise; or


 


(iii)                               Willful refusal to
perform or substantial disregard of duties properly assigned, as determined by
the Company; or


 


(iv)                              Breach
of duty of loyalty to the Company or a Subsidiary or other act of fraud or
dishonesty with respect to the Company or a Subsidiary.


 


(c)                                  “Change
in Control” means the occurrence of one of the following events:


 


(i)                                     if
any “person” or “group” as those terms are used in Sections 13(d) and 14(d) of
the Exchange Act or any successors thereto, other than an Exempt Person, is or becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act or any successor thereto), directly or indirectly,
of securities of the Company representing 50% or more of the combined voting power of the Company’s then
outstanding securities; or


 


(ii)                                  during
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board and any new directors whose election by the Board
or nomination for election by the Company’s stockholders was approved by at
least two-thirds of


 





















 


the directors then still in office who either were
directors at the beginning of the period or whose election was previously so
approved, cease for any reason to constitute a majority thereof; or


 


(iii)                               the consummation by the
Company of a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation (A) which would result in all or a portion
of the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation or (B) by which the
corporate existence of the Company is not affected and following which the
Company’s chief executive officer and directors retain their positions with the
Company (and constitute at least a majority of the Board); or


 


(iv)                              the
consummation by the Company of a plan of complete liquidation of the Company or
the sale or disposition by the Company of all or substantially all the Company’s
assets, other than a sale to an Exempt Person.


 


(d)                                 “Code”  means the Internal Revenue Code of 1986, as
amended.


 


(e)                                  “Committee”
means the Compensation Committee
of the Board, which shall consist solely of two or more members of the Board.


 


(f)                                    “Common
Stock” means the Common Stock, par
value $.01 per share, of the
Company, and any other shares into which such stock may be changed by reason of
a recapitalization, reorganization, merger, consolidation or any other change
in the corporate structure or capital stock of the Company.


 


(g)                                 “Competition”
is deemed to occur if a person whose employment with the Company or its
Subsidiaries has terminated obtains a position as a full-time or part-time
employee of, as a member of the board of directors of, or as a consultant or
advisor with or to, or acquires an ownership interest in excess of 5% of, a
corporation, partnership, firm or other entity that engages in any of the
businesses of the Company or any Subsidiary with which the person was involved
in a management role at any time during his or her last five years of
employment with or other service for the Company or any Subsidiaries.


 


(h)                                 “Disability”
means a disability that would entitle an eligible participant to payment of
monthly disability payments under any Company disability plan or as otherwise
determined by the Committee.


 


(i)                                     “Exchange
Act” means the Securities Exchange Act of 1934, as amended.


 


(j)                                     “Exempt Person” means any employee benefit
plan of the Company or a trustee or other administrator or fiduciary holding
securities under an employee benefit plan of the Company.


 


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(k)                                  Family Member” has the meaning given to such
term in General Instructions A.1(a)(5) to Form S-8 under the Securities Act of
1933, as amended, and any successor thereto.


 


(l)                                     “Fair
Market Value” of a share of Common Stock of the Company means, as of the date
in question, the officially-quoted closing selling price of the stock (or if no
selling price is quoted, the bid price) on the principal securities exchange on
which the Common Stock is then listed for trading (including for this purpose
the Nasdaq National Market) (the “Market”) for the applicable trading day or,
if the Common Stock is not then listed or quoted in the Market, the Fair Market
Value shall be the fair value of the Common Stock determined in good faith by
the Board; provided, however, that when shares received upon exercise of an
option are immediately sold in the open market, the net sale price received may
be used to determine the Fair Market Value of any shares used to pay the
exercise price or applicable withholding taxes and to compute the withholding
taxes; provided, further that if the date in question is not a business day,
the date of determination of the Fair Market Value shall be the next business
day.


 


(m)                               “Incentive
Stock Option” means an option conforming to the requirements of Section 422 of
the Code and any successor thereto.


 


(n)                                 “Non-Employee
Director” has the meaning given to such term in Rule 16b-3 under the Exchange
Act and any successor thereto.


 


(o)                                 “Non-qualified
Stock Option” means any stock option other than an Incentive Stock Option.


 


(p)                                 “Other
Company Securities” mean securities of the Company other than Common Stock,
which may include, without limitation, unbundled stock units or components
thereof, debentures, preferred stock, warrants and securities convertible into
or exchangeable for Common Stock or other property.


 


(q)                                 “Retirement”
means retirement as defined under any then-existing Company pension plan or
retirement program or termination of one’s employment on retirement with the
approval of the Committee.


 


(r)                                    “Subsidiary”
means a corporation or other entity of which outstanding shares or ownership
interests representing 50% or more of the combined voting power of such
corporation or other entity entitled to elect the management thereof, or such
lesser percentage as may be approved by the Committee, are owned directly or
indirectly by the Company.


 


3.                                       Administration.


 


The Plan shall be administered by the Committee;
provided that the Board may, in its discretion, at any time and from time to
time, resolve to administer the Plan, in which case the term “Committee” shall
be deemed to mean the Board for all purposes herein.  Subject to the provisions of the Plan, the
Committee shall be authorized to (i) select persons to participate in the Plan,
(ii) determine the form and substance of grants made under the Plan to each
participant, and the conditions and restrictions, if any, subject to which such
grants will be made, (iii) certify that


 


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the conditions and
restrictions applicable to any grant have been met, (iv) modify the terms of
grants made under the Plan, (v) interpret the Plan and grants made thereunder,
(vi) make any adjustments necessary or desirable in connection with grants made
under the Plan to eligible participants located outside the United States and
(vii) adopt, amend, or rescind such rules and regulations, and make such other
determinations, for carrying out the Plan as it may deem appropriate.  Decisions of the Committee on all matters
relating to the Plan shall be in the Committee’s sole discretion and shall be
conclusive and binding on all parties. 
The validity, construction, and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with
applicable federal and state laws and rules and regulations promulgated
pursuant thereto.  No member of the
Committee and no officer of the Company shall be liable for any action taken or
omitted to be taken by such member, by any other member of the Committee or by
any officer of the Company in connection with the performance of duties under
the Plan, except for such person’s own willful misconduct or as expressly
provided by statute.


 


The expenses of the Plan shall be borne by the
Company.  The Plan shall not be required
to establish any special or separate fund or make any other segregation of
assets to assume the payment of any award under the Plan, and rights to the
payment of such awards shall be no greater than the rights of the Company’s
general creditors.


 


4.                                       Shares
Available for the Plan.


 


Subject to adjustments as provided in Section 15, an
aggregate of 4,000,000 shares of Common Stock (the “Shares”) may be issued
pursuant to the Plan.  Such Shares may be
in whole or in part authorized and unissued or held by the Company as treasury
shares.  If any grant under the Plan expires
or terminates unexercised, becomes unexercisable or is forfeited as to any
Shares, or is tendered or withheld as to any shares in payment of the exercise
price of the grant or the taxes payable with respect to the exercise, then such
unpurchased, forfeited, tendered or withheld Shares shall thereafter be available
for further grants under the Plan unless, in the case of options granted under
the Plan, related SARs are exercised.


 


Without limiting the generality of the foregoing
provisions of this Section 4 or the generality of the provisions of Sections 3,
6 or 17 or any other section of this Plan, the Committee may, at any time or
from time to time, and on such terms and conditions (that are consistent with
and not in contravention of the other provisions of this Plan) as the Committee
may, in its sole discretion, determine, enter into agreements (or take other
actions with respect to the options) for new options containing terms
(including exercise prices) more (or less) favorable than the outstanding
options.


 


5.                                       Participation.


 


Participation in the Plan shall be limited to those
directors (including Non-Employee Directors), officers (including non-employee
officers) and employees of, and other individuals to whom an offer of
employment has been extended by, the Company and its Subsidiaries selected by
the Committee (including participants located outside the United States).  Nothing in the Plan or in any grant
thereunder shall confer any right on a participant to continue


 


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in the employ as a
director or officer of the Company or shall interfere in any way with the right
of the Company to terminate the employment or to reduce the compensation or
responsibilities of a participant at any time. 
By accepting any award under the Plan, each participant and each person
claiming under or through him or her shall be conclusively deemed to have
indicated his or her acceptance and ratification of, and consent to, any action
taken under the Plan by the Company, the Board or the Committee.


 


Incentive Stock Options or Non-qualified Stock
Options, SARs alone or in tandem with options, restricted stock awards,
performance awards, or any combination thereof, may be granted to such persons
and for such number of Shares as the Committee shall determine (such
individuals to whom grants are made being sometimes herein called “optionees”
or “grantees,” as the case may be). 
Determinations made by the Committee under the Plan need not be uniform
and may be made selectively among eligible individuals under the Plan, whether
or not such individuals are similarly situated. 
A grant of any type made hereunder in any one year to an eligible
participant shall neither guarantee nor preclude a further grant of that or any
other type to such participant in that year or subsequent years.


 


6.                                       Incentive
and Non-qualified Options and SARs.


 


The Committee may from time to time grant to eligible
participants Incentive Stock Options, Non-qualified Stock Options, or any
combination thereof; provided that the Committee may grant Incentive Stock
Options only to eligible employees of the Company or its subsidiaries (as
defined for this purpose in Section 424(f) of the Code or any successor
thereto).  In any one calendar year, the
Committee shall not grant to any one participant options or SARs to purchase a
number of shares of Common Stock in excess of 10% of the total number of Shares
authorized under the Plan pursuant to Section 4.  The options granted shall take such form as
the Committee shall determine, subject to the following terms and conditions.


 


It is the Company’s intent that Non-qualified Stock
Options granted under the Plan not be classified as Incentive Stock Options,
that Incentive Stock Options be consistent with and contain or be deemed to
contain all provisions required under Section 422 of the Code and any successor
thereto, and that any ambiguities in construction be interpreted in order to
effectuate such intent.  If an Incentive
Stock Option granted under the Plan does not qualify as such for any reason,
then to the extent of such non-qualification, the stock option represented
thereby shall be regarded as a Non-qualified Stock Option duly granted under
the Plan, provided that such stock option otherwise meets the Plan’s
requirements for Non-qualified Stock Options.


 


(a)                                  Price.
 The price per Share deliverable upon the
exercise of each option (“exercise price”) shall be established by the
Committee, except that in the case of the grant of any Incentive Stock Option, the exercise price may not be less than
100% of the Fair Market Value of a share of Common Stock as of the date of
grant of the option, and in the case of the grant of any Incentive Stock Option
to an employee who, at the time of the grant, owns more than 10% of the total
combined voting power of all classes of stock of the Company or any of its
Subsidiaries, the exercise price may not be less than 110% of the Fair Market
Value of a share of Common Stock as of the date of grant of the option, in each
case unless otherwise permitted by Section 422 of the Code or any successor thereto.


 


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(b)                                 Payment.  Options may be exercised, in whole or in
part, upon payment of the exercise price of the Shares to be acquired. Unless
otherwise determined by the Committee, which determination may be made at any
time prior to an exercise of any option granted under this Plan, payment shall
be made (i) in cash (including check, bank draft, money order or wire transfer
of immediately available funds), (ii) by delivery of outstanding shares of
Common Stock with a Fair Market Value on the date of exercise equal to the
aggregate exercise price payable with respect to the options’ exercise, (iii)
by simultaneous sale through a broker on terms and conditions reasonably
acceptable to the Committee of Shares acquired on exercise, as permitted under
Regulation T of the Federal Reserve Board, (iv) by authorizing the Company to
withhold from issuance a number of Shares issuable upon exercise of the options
which, when multiplied by the Fair Market Value of a share of Common Stock on
the date of exercise, is equal to the aggregate exercise price payable with
respect to the options so exercised or (v) by any combination of the foregoing.


 


In the event a grantee elects to pay the exercise
price payable with respect to an option pursuant to clause (ii) above, (A) only
a whole number of share(s) of Common Stock (and not fractional shares of Common
Stock) may be tendered in payment, (B) such grantee must present evidence
acceptable to the Company that he or she has owned any such shares of Common
Stock tendered in payment of the exercise price (and that such tendered shares
of Common Stock have not been subject to any substantial risk of forfeiture)
for at least six months prior to the date of exercise, and (C) Common Stock must
be delivered to the Company.  Delivery
for this purpose may, at the election of the grantee, be made either by (A)
physical delivery of the certificate(s) for all such shares of Common Stock
tendered in payment of the price, accompanied by duly executed instruments of
transfer in a form acceptable to the Company, or (B) direction to the grantee’s
broker to transfer, by book entry, such shares of Common Stock from a brokerage
account of the grantee to a brokerage account specified by the Company.  When payment of the exercise price is made by
delivery of Common Stock, the difference, if any, between the aggregate
exercise price payable with respect to the option being exercised and the Fair
Market Value of the shares of Common Stock tendered in payment (plus any
applicable taxes) shall be paid in cash. 
No grantee may tender shares of Common Stock having a Fair Market Value
exceeding the aggregate exercise price payable with respect to the option being
exercised (plus any applicable taxes).


 


In the event a grantee elects to pay the exercise
price payable with respect to an option pursuant to clause (iv) above, (A) only
a whole number of Share(s) (and not fractional Shares) may be withheld in
payment and (B) such grantee must present evidence acceptable to the Company
that he or she has owned a number of shares of Common Stock at least equal to
the number of Shares to be withheld in payment of the exercise price (and that
such owned shares of Common Stock have not been subject to any substantial risk
of forfeiture) for at least six months prior to the date of exercise.  When payment of the exercise price is made by
withholding of Shares, the difference, if any, between the aggregate exercise
price payable with respect to the option being exercised and the Fair Market
Value of the Shares withheld in payment (plus any applicable taxes) shall be
paid in cash.  No grantee may authorize
the withholding of Shares having a Fair Market Value exceeding the aggregate
exercise price payable with respect to the option being exercised (plus any
applicable taxes).  Any withheld Shares
shall no longer be issuable under such option.


 


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(c)                                  Terms
of Options.  The term during which
each option may be exercised shall be determined by the Committee, but if
required by the Code and except as otherwise provided herein, no option shall
be exercisable in whole or in part more than ten years from the date it is
granted, and no Incentive Stock Option granted to an employee who at the time of
the grant owns more than 10% of the total combined voting power of all classes
of stock of the Company or any of its Subsidiaries shall be exercisable more
than five years from the date it is granted. 
All rights to purchase Shares pursuant to an option shall, unless sooner
terminated, expire at the date designated by the Committee.  The Committee shall determine the date on
which each option shall become exercisable and may provide that an option shall
become exercisable in installments.  The
Shares constituting each installment may be purchased in whole or in part at
any time after such installment becomes exercisable, subject to such minimum
exercise requirements as may be designated by the Committee.  Prior to the exercise of an option and
delivery of the Shares represented thereby, the optionee shall have no rights
as a stockholder with respect to any Shares covered by such outstanding option
(including any dividend or voting rights).


 


(d)                                 Limitations
on Grants.  If required by the Code,
the aggregate Fair Market Value (determined as of the grant date) of Shares for
which an Incentive Stock Option is exercisable for the first time during any
calendar year under all equity incentive plans of the Company and its
Subsidiaries (as defined in Section 422 of the Code or any successor thereto)
may not exceed $100,000.


 


(e)                                  Termination;
Forfeiture.


 


(i)                                     Death
or Disability.  If a participant
ceases to be a director, officer
or employee of the Company and any Subsidiary due to death or Disability, all
of the participant’s options and SARs shall
become fully vested and exercisable and shall remain so for a period of
180 days from the date of such death or Disability, but in no event after the
expiration date of the options or SARs; provided that in the event of a Disability,
the participant does not engage in Competition during such 180-day period
unless he or she received written consent to do so from the Board or the
Committee.  Notwithstanding the foregoing, if the Disability giving rise to the
termination of employment is not within the meaning of Section 22(e)(3) of the
Code or any successor thereto, Incentive Stock Options not exercised by such
participant within 90 days after the date of termination of employment will
cease to qualify as Incentive Stock Options and will be treated as
Non-qualified Stock Options under the Plan if required to be so treated under
the Code.


 


(ii)                                  Retirement.  If a participant ceases to be a director, officer or employee of the
Company and any Subsidiary upon the occurrence of his or her Retirement, (A)
all of the participant’s options and SARs that were exercisable on the date of
Retirement shall remain exercisable for, and shall otherwise terminate at the
end of, a period of 90 days
after the date of Retirement, but in no event after the expiration date of the
options or SARs; provided that the participant does not engage in Competition
during such 90-day period unless
he or she receives written consent to do so from the Board or the Committee,
and (B) all of the participant’s options and SARs that were not exercisable on
the date of Retirement shall be forfeited immediately upon such Retirement;
provided, however, that such options and SARs


 


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may become fully vested and exercisable in the
discretion of the Committee.  Notwithstanding the foregoing, Incentive
Stock Options not exercised by such participant within 90 days after Retirement
will cease to qualify as Incentive Stock Options and will be treated as
Non-qualified Stock Options under the Plan if required to be so treated under
the Code.


 


(iii)                               Discharge for Cause.  If a participant ceases to be a director, officer or employee of the
Company or a Subsidiary due to Cause, or
if a participant does not become a director, officer or employee of the Company
or a Subsidiary for any reason, all of the participant’s options and
SARs shall expire and be forfeited immediately upon such cessation or non-commencement, whether or not
then exercisable.


 


(iv)                              Other
Termination.  Unless otherwise
determined by the Committee, if a participant ceases to be a director, officer or employee of the
Company or a Subsidiary for any reason other than death, Disability, Retirement
or Cause, (A) all of the participant’s options and SARs that were exercisable
on the date of such cessation shall remain exercisable for, and shall otherwise
terminate at the end of, a period of 30
days after the date of such cessation, but in no event after the
expiration date of the options or SARs; provided that the participant does not
engage in Competition during such 30-day
period unless he or she receives written consent to do so from the Board
or the Committee, and (B) all of the participant’s options and SARs that were
not exercisable on the date of such cessation shall be forfeited immediately
upon such cessation.


 


(v)                                 Change
in Control.  If there is a Change in
Control of the Company and a participant is terminated from being a director,
officer or employee of the Company or a subsidiary within one year after such
Change in Control, all of the participant’s options and SARs shall become fully
vested and exercisable upon such termination and shall remain so for up to one
year after the date of termination, but in no event after the expiration date
of the options or SARS.  In addition, the
Compensation Committee shall have the authority to grant options that become
fully vested and exercisable automatically upon a Change in Control, whether or
not the grantee is subsequently terminated.


 


(f)   Forfeiture.  If a participant
exercises any of his or her options or SARs and, within one year thereafter,
either (i) is terminated from the Company or a Subsidiary for any of the
reasons specified in the definition of “Cause” set forth in Section 2(b)(i),
(ii) or (iv), or (ii) engages in Competition without having received written
consent to do so from the Board or the Committee, then the participant may, in
the discretion of the Committee, be required to pay the Company the gain
represented by the difference between the aggregate selling price of the Shares
acquired upon the options’ exercise (or, if the Shares were not then sold,
their aggregate Fair Market Value on the date of exercise) and the aggregate
exercise price of the options exercised (the “Option Gain”), without regard to
any subsequent increase or decrease in the Fair Market Value of the Common
Stock.  In addition, the Company may, in
its discretion, deduct from any payment of any kind (including salary or bonus)
otherwise due to any such participant an amount equal to the Option Gain.


 


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7.                                       Stock
Appreciation Rights.


 


The Committee shall have the authority to grant SARs
under this Plan, either alone or to any optionee in tandem with options (either
at the time of grant of the related option or thereafter by amendment to an
outstanding option).  SARs shall be
subject to such terms and conditions as the Committee may specify.


 


No SAR may be exercised unless the Fair Market Value
of a share of Common Stock of the Company on the date of exercise exceeds the
exercise price of the SAR or, in the case of SARs granted in tandem with
options, any options to which the SARs correspond.  Prior to the exercise of the SAR and delivery
of the cash and/or Shares represented thereby, the participant shall have no
rights as a stockholder with respect to Shares covered by such outstanding SAR
(including any dividend or voting rights).


 


SARs granted in tandem with options shall be
exercisable only when, to the extent and on the conditions that any related
option is exercisable.  The exercise of
an option shall result in an immediate forfeiture of any related SAR to the
extent the option is exercised, and the exercise of an SAR shall cause an
immediate forfeiture of any related option to the extent the SAR is exercised.


 


Upon the exercise of an SAR, the participant shall be
entitled to a distribution in an amount equal to the difference between the
Fair Market Value of a share of Common Stock on the date of exercise and the
exercise price of the SAR or, in the case of SARs granted in tandem with
options, any option to which the SAR is related, multiplied by the number of
Shares as to which the SAR is exercised. 
The Committee shall decide whether such distribution shall be in cash,
in Shares having a Fair Market Value equal to such amount, in Other Company
Securities having a Fair Market Value equal to such amount or in a combination
thereof.


 


All SARs will be exercised automatically on the last
day prior to the expiration date of the SAR or, in the case of SARs granted in
tandem with options, any related option, so long as the Fair Market Value of a
share of Common Stock on that date exceeds the exercise price of the SAR or any
related option, as applicable.  An SAR granted
in tandem with options shall expire at the same time as any related option
expires and shall be transferable only when, and under the same conditions as,
any related option is transferable.


 


8.                                       Restricted
Stock.


 


The Committee may at any time and from time to time
grant Shares of restricted stock under the Plan to such participants and in
such amounts as it determines.  Each
grant of restricted stock shall specify the applicable restrictions on such
Shares, the duration of such restrictions (which shall be at least six months
except as otherwise determined by the Committee or provided in the third
paragraph of this Section 8), and the time or times at which such restrictions
shall lapse with respect to all or a specified number of Shares that are part
of the grant.


 


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The participant will be required to pay the Company
the aggregate par value of any Shares of restricted stock (or such larger
amount as the Board may determine to constitute capital under Section 154 of
the Delaware General Corporation Law, as amended, or any successor thereto)
within ten days of the date of grant, unless such Shares of restricted stock
are treasury shares.  Unless otherwise
determined by the Committee, certificates representing Shares of restricted
stock granted under the Plan will be held in escrow by the Company on the
participant’s behalf during any period of restriction thereon and will bear an
appropriate legend specifying the applicable restrictions thereon, and the
participant will be required to execute a blank stock power therefor.  Except as otherwise provided by the
Committee, during such period of restriction the participant shall have all of
the rights of a holder of Common Stock, including but not limited to the rights
to receive dividends and to vote, and any stock or other securities received as
a distribution with respect to such participant’s restricted stock shall be
subject to the same restrictions as then in effect for the restricted stock.


 


Except as otherwise provided by the Committee, immediately prior to a Change in Control or
at such time as a participant ceases to be a director, officer or employee of the Company and its
Subsidiaries due to death, Disability or Retirement during any period of
restriction, all restrictions on Shares granted to such participant shall
lapse. At such time as a participant ceases to be, or in the event a participant does not
become, a director, officer or employee of the Company or its Subsidiaries
for any other reason, all Shares of restricted stock granted to such
participant on which the restrictions have not lapsed shall be immediately
forfeited to the Company.


 


9.                                       Performance
Awards.


 


Performance awards may be granted to participants at
any time and from time to time as determined by the Committee.  The Committee shall have complete discretion
in determining the size and composition of performance awards granted to a
participant and the appropriate period over which performance is to be measured
(a “performance cycle”).  Performance
awards may include (i) specific dollar-value target awards (ii) performance
units, the value of each such unit being determined by the Committee at the
time of issuance, and/or (iii) performance Shares, the value of each such Share
being equal to the Fair Market Value of a share of Common Stock.


 


The value of each performance award may be fixed or it
may be permitted to fluctuate based on a performance factor (e.g., return on
equity) selected by the Committee.


 


The Committee shall establish performance goals and
objectives for each performance cycle on the basis of such criteria and
objectives as the Committee may select from time to time, including, without
limitation, the performance of the participant, the Company, one or more of its
Subsidiaries or divisions or any combination of the foregoing.  During any performance cycle, the Committee
shall have the authority to adjust the performance goals and objectives for
such cycle for such reasons as it deems equitable.


 


The Committee shall determine the portion of each
performance award that is earned by a participant on the basis of the Company’s
performance over the performance cycle in


 


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relation to the
performance goals for such cycle. The earned portion of a performance award may
be paid out in Shares, cash, Other Company Securities, or any combination
thereof, as the Committee may determine.


 


A participant must be a director, officer or employee of the Company or its Subsidiaries
at the end of the performance cycle in order to be entitled to payment of a
performance award issued in respect of such cycle; provided, however, that
except as otherwise determined by the Committee, if a participant ceases to be a director, officer or employee of the Company and its
Subsidiaries upon his or her death, Retirement, or Disability prior to the end
of the performance cycle, the participant shall earn a proportionate portion of
the performance award based upon the elapsed portion of the performance cycle
and the Company’s performance over that portion of such cycle.


 


In the event of a Change in Control, a participant
shall earn no less than the portion of the performance award that the
participant would have earned if the applicable performance cycle(s) had
terminated as of the date of the Change in Control.


 


10.                                 Withholding
Taxes.


 


(a)                                  Participant
Election.  Unless otherwise
determined by the Committee, a participant may elect to deliver shares of
Common Stock (or have the Company withhold shares acquired upon exercise of an
option or SAR or deliverable upon grant or vesting of restricted stock, as the
case may be) to satisfy, in whole or in part, the amount the Company is
required to withhold for taxes in connection with the exercise of an option or
SAR or the delivery of restricted stock upon grant or vesting, as the case may
be.  Such election must be made on or
before the date the amount of tax to be withheld is determined.  Once made, the election shall be irrevocable.  The fair market value of the shares to be
withheld or delivered will be the Fair Market Value as of the date the amount
of tax to be withheld is determined. In the event a participant elects to
deliver or have the Company withhold shares of Common Stock pursuant to this
Section 10(a), such delivery or withholding must be made subject to the
conditions and pursuant to the procedures set forth in Section 6(b) with
respect to the delivery or withholding of Common Stock in payment of the
exercise price of options.


 


(b)                                 Company
Requirement.  The Company may
require, as a condition to any grant or exercise under the Plan or to the
delivery of certificates for Shares issued hereunder, that the grantee make
provision for the payment to the Company, either pursuant to Section 10(a) or
this Section 10(b), of federal, state or local taxes of any kind required by
law to be withheld with respect to any grant or delivery of Shares.  The Company, to the extent permitted or
required by law, shall have the right to deduct from any payment of any kind
(including salary or bonus) otherwise due to a grantee, an amount equal to any
federal, state or local taxes of any kind required by law to be withheld with
respect to any grant or delivery of Shares under the Plan.


 


11.                                 Written
Agreement; Notice of Grant; Vesting.


 


Each employee to whom a grant is made under the Plan
shall enter into a written agreement
with, or receive written notice from, the Company that shall contain
such provisions,


 


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including without
limitation vesting requirements, consistent with the provisions of the Plan, as
may be approved by the Committee.  Unless
the Committee determines otherwise and except as otherwise provided in Sections
6, 7, 8 and 9 in connection with a Change of Control or certain occurrences of
termination, no grant under this Plan may be exercised, and no restrictions
relating thereto may lapse, within six months of the date such grant is made.


 


12.                                 Transferability.


 


Unless the Committee
determines otherwise, no option, SAR, performance award or restricted
stock granted under the Plan shall be transferable by a participant other than
by will or the laws of descent and distribution or to a participant’s Family Member by gift or a qualified domestic
relations order as defined by the Code. 
Unless the Committee determines otherwise, an option, SAR or performance
award may be exercised only by the optionee or grantee thereof; by his or her Family Member if such person
has acquired the option, SAR or performance award by gift or qualified domestic
relations order by the executor
or administrator of the estate of any of the foregoing or any person to
whom the Option is transferred by will or the laws of descent and distribution;
or by the guardian or legal
representative of any of the foregoing; provided that Incentive Stock Options
may be exercised by any Family Member, guardian or legal representative only if
permitted by the Code and any regulations thereunder.  All provisions of this Plan shall in any
event continue to apply to any option, SAR, performance award or restricted
stock granted under the Plan and transferred as permitted by this Section 12,
and any transferee of any such option, SAR, performance award or restricted
stock shall be bound by all provisions of this Plan as and to the same extent
as the applicable original grantee.


 


13.                                 Listing,
Registration and Qualification.


 


If the Committee determines that the listing,
registration or qualification upon any securities exchange or under any law of
Shares subject to any option, SAR, performance award or restricted stock grant
is necessary or desirable as a condition of, or in connection with, the
granting of same or the issue or purchase of Shares thereunder, no such option
or SAR may be exercised in whole or in part, no such performance award may be
paid out, and no Shares may be issued, unless such listing, registration or
qualification is effected free of any conditions not acceptable to the
Committee.


 


14.                                 Transfer
of Employee.


 


The transfer of an employee from the Company to a
Subsidiary, from a Subsidiary to the Company, or from one Subsidiary to another
shall not be considered a termination of employment; nor shall it be considered
a termination of employment if an employee is placed on military or sick leave
or such other leave of absence which is considered by the Committee as
continuing intact the employment relationship.


 


15.                                 Adjustments.


 


In the event of a reorganization, recapitalization,
stock split, stock dividend, combination of shares, merger, consolidation,
distribution of assets, or any other change in the


 


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corporate structure or
shares of the Company, the Committee shall make such adjustment as it deems
appropriate in the number and kind of Shares or other property available for
issuance under the Plan (including, without limitation, the total number of
Shares available for issuance under the Plan pursuant to Section 4), in the
number and kind of options, SARs, Shares or other property covered by grants
previously made under the Plan, and in the exercise price of outstanding
options and SARs.  Any such adjustment
shall be final, conclusive and binding for all purposes of the Plan.  In the event of any merger, consolidation or other
reorganization in which the Company is not the surviving or continuing corporation
or in which a Change in Control is to occur, all of the Company’s obligations
regarding options, SARs, performance awards, and restricted stock that were
granted hereunder and that are outstanding on the date of such event shall, on
such terms as may be approved by the Committee prior to such event, be assumed
by the surviving or continuing corporation or canceled in exchange for property
(including cash).


 


Without limitation of the foregoing, in connection
with any transaction of the type specified by clause (iii) of the definition of
a Change in Control in Section 2(c), the Committee may, in its discretion, (i)
cancel any or all outstanding options under the Plan in consideration for
payment to the holders thereof of an amount equal to the portion of the
consideration that would have been payable to such holders pursuant to such
transaction if their options had been fully exercised immediately prior to such
transaction, less the aggregate exercise price that would have been payable
therefor, or (ii) if the amount that would have been payable to the option
holders pursuant to such transaction if their options had been fully exercised
immediately prior thereto would be equal to or less than the aggregate exercise
price that would have been payable therefor, cancel any or all such options for
no consideration or payment of any kind. 
Payment of any amount payable pursuant to the preceding sentence may be
made in cash or, in the event that the consideration to be received in such
transaction includes securities or other property, in cash and/or securities or
other property in the Committee’s discretion.


 


16.                                 Amendment
and Termination of the Plan.


 


The Board of Directors or the Committee, without
approval of the stockholders, may amend or terminate the Plan, except that no
amendment shall become effective without prior approval of the stockholders of
the Company if stockholder approval would be required by applicable law or
regulations, including if required for continued compliance with the
performance-based compensation exception of Section 162(m) of the Code or any
successor thereto, under the provisions of Section 422 of the Code or any
successor thereto, or by any listing requirement of the principal stock
exchange on which the Common Stock is then listed.


 


17.                                 Amendment
or Substitution of Awards under the Plan.


 


The terms of any outstanding award under the Plan may
be amended from time to time by the Committee in its discretion in any manner
that it deems appropriate (including, but not limited to, acceleration of the
date of exercise of any award and/or payments thereunder or of the date of
lapse of restrictions on Shares); provided that, except as otherwise provided
in Section 15, no such amendment shall adversely affect in a material manner
any right of a participant under the award without his or her written consent,
and provided further that the Committee shall


 


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not reduce the exercise
price of any options or SARs awarded under the Plan without approval of the
stockholders of the Company.  The
Committee may, in its discretion, permit holders of awards under the Plan to
surrender outstanding awards in order to exercise or realize rights under other
awards, or in exchange for the grant of new awards, or require holders of
awards to surrender outstanding awards as a condition precedent to the grant of
new awards under the Plan.


 


18.                                 Commencement
Date; Termination Date.


 


The date of commencement of the Plan shall be April
28, 2004, subject to approval by the shareholders of the Company at the first
Annual Meeting of Stockholders of the Company occurring after such date.


 


Unless previously terminated upon the adoption of a
resolution of the Board terminating the Plan, the Plan shall terminate at the
close of business on April 28, 2014.  No
termination of the Plan shall materially and adversely affect any of the rights
or obligations of any person, without his or her written consent, under any
grant of options or other incentives theretofore granted under the Plan.


 


19.                                 Severability.


 


Whenever possible, each provision of the Plan shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of the Plan is held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of the Plan.


 


20.                                 Governing
Law.


 


The Plan shall be governed by the corporate laws of
the State of Delaware, without giving effect to any choice of law provisions
that might otherwise refer construction or interpretation of the Plan to the
substantive law of another jurisdiction.


 


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