exv10w6





Exhibit 10.6




COMPOSITE VERSION

Reflects all Amendments through March 13, 2009




 





CAPITALSOURCE INC.




THIRD AMENDED AND RESTATED EQUITY INCENTIVE PLAN




 
















 









TABLE OF CONTENTS




	 	 	 	 	 
	 	 	 	Page	 
	1. PURPOSE 
	 	 	1	 
	2. DEFINITIONS 
	 	 	1	 
	3. ADMINISTRATION OF THE PLAN 
	 	 	5	 
	3.1. Board 
	 	 	5	 
	3.2. Committee 
	 	 	6	 
	3.3. Terms of Awards 
	 	 	6	 
	3.4. Deferral Arrangement 
	 	 	7	 
	3.5. No Liability 
	 	 	8	 
	3.6. Share Issuance/Book-Entry
	 	 	8	 
	3.7. No Repricing
	 	 	8	 
	4. STOCK SUBJECT TO THE PLAN 
	 	 	8	 
	4.1. Number of Shares of Stock Available for Awards and Share Usage 
	 	 	8	 
	4.2. Adjustments in Authorized Shares
	 	 	9	 
	5. DURATION AND AMENDMENTS 
	 	 	9	 
	5.1. [Reserved] 
	 	 	9	 
	5.2. Term 
	 	 	9	 
	5.3. Amendment and Termination of the Plan 
	 	 	9	 
	6. AWARD ELIGIBILITY AND LIMITATIONS 
	 	 	10	 
	6.1. Service Providers; Outside Directors; Other Persons 
	 	 	10	 
	6.2. Successive Awards 
	 	 	10	 
	6.3. Limitation on Shares of Stock Subject to Awards and Cash Awards 
	 	 	10	 
	6.4. Stand-Alone, Additional, Tandem, and Substitute Awards 
	 	 	10	 
	7. AWARD AGREEMENT 
	 	 	11	 
	8. TERMS AND CONDITIONS OF OPTIONS 
	 	 	11	 
	8.1. Option Price 
	 	 	11	 
	8.2. Vesting 
	 	 	11	 
	8.3. Term 
	 	 	11	 
	8.4. Termination of Service 
	 	 	12	 
	8.5. Limitations on Exercise of Option 
	 	 	12	 
	8.6. Method of Exercise 
	 	 	12	 
	8.7. Rights of Holders of Options 
	 	 	12	 
	8.8. Delivery of Stock Certificates 
	 	 	12	 
	8.9. Limitations on Incentive Stock Options 
	 	 	13	 
	8.10. Notice of Disqualifying Disposition
	 	 	13	 
	9. TRANSFERABILITY OF OPTIONS 
	 	 	13	 
	9.1. Transferability of Options 
	 	 	13	 
	9.2. Transfers 
	 	 	13	 
	10. STOCK APPRECIATION RIGHTS 
	 	 	14	 






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	 	 	 	Page	 
	10.1. Right to Payment 
	 	 	14	 
	10.2. Other Terms 
	 	 	14	 
	11. RESTRICTED STOCK AND STOCK UNITS 
	 	 	14	 
	11.1. Grant of Restricted Stock or Stock Units 
	 	 	14	 
	11.2. Restrictions 
	 	 	15	 
	11.3. Restricted Stock Certificates 
	 	 	15	 
	11.4. Rights of Holders of Restricted Stock 
	 	 	15	 
	11.5. Rights of Holders of Stock Units 
	 	 	15	 
	11.5.1. No Voting and Dividend Rights 
	 	 	15	 
	11.5.2. Creditor’s Rights 
	 	 	16	 
	11.6. Termination of Service 
	 	 	16	 
	11.7. Purchase of Restricted Stock 
	 	 	16	 
	11.8. Delivery of Stock 
	 	 	16	 
	12. UNRESTRICTED STOCK AWARDS 
	 	 	17	 
	13. FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK AND STOCK UNITS
	 	 	17	 
	13.1. General Rule 
	 	 	17	 
	13.2. Surrender of Stock 
	 	 	17	 
	13.3. Cashless Exercise 
	 	 	17	 
	13.4. Other Forms of Payment 
	 	 	18	 
	14. DIVIDEND EQUIVALENT RIGHTS 
	 	 	18	 
	14.1. Dividend Equivalent Rights 
	 	 	18	 
	14.2. Termination of Service 
	 	 	18	 
	15. PERFORMANCE AND ANNUAL INCENTIVE AWARDS 
	 	 	19	 
	15.1. Performance Conditions 
	 	 	19	 
	15.2. Performance or Annual Incentive Awards Granted to Designated Covered
Employees
	 	 	19	 
	15.2.1. Performance Goals Generally 
	 	 	19	 
	15.2.2. Business Criteria 
	 	 	19	 
	15.2.3. Timing For Establishing Performance Goals 
	 	 	20	 
	15.2.4. Performance or Annual Incentive Award Pool 
	 	 	20	 
	15.2.5. Settlement of Performance or Annual Incentive Awards; Other
Terms
	 	 	20	 
	15.3. Written Determinations 
	 	 	20	 
	15.4. Status of Section 15.2 Awards Under Code Section 162(m) 
	 	 	21	 
	16. PARACHUTE LIMITATIONS 
	 	 	21	 
	17. REQUIREMENTS OF LAW 
	 	 	22	 
	17.1. General 
	 	 	22	 






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	 	 	 	Page	 
	17.2. Rule 16b-3 
	 	 	22	 
	18. EFFECT OF CHANGES IN CAPITALIZATION 
	 	 	23	 
	18.1. Changes in Stock 
	 	 	23	 
	18.2. Changes in Capitalization; Merger; Liquidation 
	 	 	23	 
	18.3. Adjustments 
	 	 	24	 
	18.4. No Limitations on Company 
	 	 	24	 
	19. GENERAL PROVISIONS 
	 	 	24	 
	19.1. Disclaimer of Rights 
	 	 	24	 
	19.2. Nonexclusivity of the Plan 
	 	 	25	 
	19.3. Withholding Taxes 
	 	 	25	 
	19.4. Captions 
	 	 	26	 
	19.5. Other Provisions 
	 	 	26	 
	19.6. Number And Gender 
	 	 	26	 
	19.7. Severability 
	 	 	26	 
	19.8. Governing Law 
	 	 	26	 
	19.9. Code Section 409A 
	 	 	26	 











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CAPITALSOURCE INC.




THIRD AMENDED AND RESTATED EQUITY INCENTIVE PLAN




     CapitalSource Inc., a Delaware corporation (the “Company”), sets forth herein the terms of its
Third Amended and Restated Equity Incentive Plan (as amended, the “Plan”) as of March 13, 2009, as
follows:



1. PURPOSE




     This Plan is intended to (a) provide incentive to eligible persons to stimulate their efforts
toward the continued success of the Company and to operate and manage their businesses in a manner
that will provide for the long-term growth and profitability of the Company; and (b) provide a
means of obtaining, rewarding and retaining key personnel. To this end, the Plan provides for the
grant of stock options, stock appreciation rights, restricted stock, stock units, unrestricted
stock, dividend equivalent rights and cash awards. Any of these awards may, but need not, be made
as performance incentives to reward attainment of annual or long-term performance goals in
accordance with the terms hereof. Stock options granted under the Plan may be non-qualified stock
options or incentive stock options, as provided herein.



2. DEFINITIONS




     For purposes of interpreting the Plan and related documents (including Award Agreements), the
following definitions shall apply:



     2.1 “Affiliate” means, with respect to the Company, any company or other trade or business
that controls, is controlled by or is under common control with the Company within the meaning of
Rule 405 of Regulation C under the Securities Act, including, without limitation, any Subsidiary.
For purposes of granting stock options or stock appreciation rights, an entity may not be
considered an Affiliate unless the Company holds a “controlling interest” in such entity, where the
term “controlling interest” has the same meaning as provided in Treasury Regulations section
1.414(c)-2(b)(2)(i), provided that the language “at least 50 percent” is used instead of “at least
80 percent” and, provided further, that where granting of stock options or stock appreciation
rights is based upon a legitimate business criteria, the language “at least 20 percent” is used
instead of “at least 80 percent” each place it appears in Treasury Regulations section
1.414(c)-2(b)(2)(i).



     2.2 “Annual Incentive Award” means an Award made subject to attainment of performance goals
(as described in Section 15) over a performance period of up to and including one year (the fiscal
year, unless otherwise specified by the Committee).



     2.3 “Award” means a grant of an Option, Stock Appreciation Right, Restricted Stock,
Unrestricted Stock, Stock Unit, Dividend Equivalent Rights, or cash award under the Plan.



     2.4 “Award Agreement” means the written or electronic agreement between the Company and a
Grantee that evidences and sets out the terms and conditions of an Award.



     2.5 “Benefit Arrangement” shall have the meaning set forth in Section 16 hereof.



 









 





     2.6 “Board” means the Board of Directors of the Company.



     2.7 “Cause” unless otherwise provided by the Board or the Committee in the Award Agreement,
has the same meaning as provided in the employment agreement between the Service Provider and the
Company or any Affiliate of the Company, on the date of Termination of Employment, or if no such
definition or employment agreement exists, “Cause” means conduct amounting to (i) fraud or
dishonesty against the Company or any Affiliate of the Company, (ii) Service Provider’s willful
misconduct, repeated refusal to follow the reasonable directions of the Board, any executive
officer or departmental head of the Company or any Affiliate, or knowing violation of law in the
course of performance of the duties of Service Provider’s employment with the Company or any
Affiliate of the Company, (iii) repeated absences from work without a reasonable excuse, (iv)
intoxication with alcohol or drugs while on the Company’s or any Affiliate of the Company’s
premises or while performing Services for the Company or any of its Affiliates, (v) a conviction or
plea of guilty or nolo contendere to a felony or a crime involving dishonesty, or (vi) a material
breach or violation of the terms of any employment or other agreement to which Service Provider and
the Company, or, if applicable, any Affiliate of the Company are parties.



     2.8 “Code” means the Internal Revenue Code of 1986, as now in effect or as hereafter amended.



     2.9 “Committee” means the Compensation Committee of the Board or other committee of the Board
to which authority has been delegated pursuant to Section 3.2.



     2.10 “Company” means CapitalSource Inc.



     2.11 “Corporate Transaction” means (i) the dissolution or liquidation of the Company or a
merger, consolidation, or reorganization of the Company with one or more other entities in which
the Company is not the surviving entity, (ii) a sale of substantially all of the assets of the
Company to another person or entity, or (iii) any transaction (including without limitation a
merger or reorganization in which the Company is the surviving entity) which results in any person
or entity (other than persons who are shareholders or Affiliates of the Company or Affiliates of
such shareholders immediately prior to the transaction) owning 50% or more of the combined voting
power of all classes of stock of the Company.



     2.12 “Covered Employee” means a Grantee who is a Covered Employee within the meaning of
Section 162(m)(3) of the Code.



     2.13 “Disability” has the same meaning as provided in the long-term disability plan or policy
maintained by the Company or, if applicable, any Affiliate of the Company for the Service Provider.
If no long-term disability plan or policy was ever maintained on behalf of the Service Provider,
Disability shall mean that condition described in Code Section 22(e)(3), as amended from time to
time. In the event
of a dispute, the determination of Disability shall be made by the Board and shall be
supported by advice of a physician competent in the area to which such Disability relates.



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     2.14 “Dividend Equivalent” means a right, granted to a Grantee under Section 14 hereof, to
receive cash, Stock, other Awards or other property equal in value to dividends paid with respect
to a specified number of shares of Stock, or other periodic payments.



     2.15 “Exchange Act” means the Securities Exchange Act of 1934, as now in effect or as
hereafter amended.



     2.16 “Fair Market Value” means the value of a share of Stock, determined as follows: if on
the Grant Date or other determination date the Stock is listed on an established national or
regional stock exchange, or is publicly traded on an established securities market, the Fair Market
Value of a share of Stock shall be the closing price of the Stock on such exchange or in such
market (if there is more than one such exchange or market, the principal exchange or market on
which the shares of Stock are listed) on the Grant Date or such other determination date or, if no
sale of Stock is reported for such date, the Fair Market Value shall be the Fair Market Value on
the next preceding day on which any sale shall have been reported. If the Stock is not listed on
such an exchange, quoted on such system or traded on such a market, Fair Market Value shall be the
value of the Stock as determined by the Board in good faith. Notwithstanding the foregoing, for
Options with a Grant Date of the date of the assumption of the Plan by the Company from
CapitalSource Holdings LLC, Fair Market Value on such Grant Date shall be the price per share at
which the Company sold Stock in the Company’s initial public offering as set forth in the
underwriting agreement among the Company, the selling stockholders named therein and the
representatives of the several underwriters named in a schedule thereto.



     2.17 “Family Member” means a person who is a spouse, former spouse, child, stepchild,
grandchild, parent, stepparent, grandparent, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother, sister, brother-in-law, or sister-in-law, including adoptive
relationships, of the Grantee, any person sharing the Grantee’s household (other than a tenant or
employee), a trust in which any one or more of these persons have more than fifty percent of the
beneficial interest, a foundation in which any one or more of these persons (or the Grantee)
control the management of assets, and any other entity in which one or more of these persons (or
the Grantee) own more than fifty percent of the voting interests.



     2.18 “Grant Date” means, as determined by the Board or the Committee, the latest to occur of
(i) the date as of which the Board or such Committee approves an Award, (ii) the date on which the
recipient of an Award first becomes eligible to receive an Award under Section 6 hereof, or (iii)
such other date as may be specified by the Board or such Committee.



     2.19 “Grantee” means a person who receives or holds an Award under the Plan.



     2.20 “Incentive Stock Option” means an “incentive stock option” within the meaning of Section
422 of the Code, or the corresponding provision of any subsequently enacted tax statute, as amended
from time to time.



     2.21 “Non-qualified Stock Option” means an Option that is not an Incentive Stock Option.



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     2.22 “Option” means an option to purchase one or more shares of Stock pursuant to the Plan.



     2.23 “Option Price” means the purchase price for each share of Stock subject to an Option.



     2.24 “Other Agreement” shall have the meaning set forth in Section 16 hereof.



     2.25 “Outside Director” means a member of the Board who is not an officer or employee of the
Company.



     2.26 “Performance Award” means an Award made subject to the attainment of performance goals
(as described in Section 15) over a performance period of more than one year.



     2.27 “Plan” means this CapitalSource Inc. Third Amended and Restated Equity Incentive Plan, as
amended, modified or restated from time to time.



     2.28 “Purchase Price” means the purchase price for each share of Stock pursuant to a grant of
Restricted Stock or Stock Units.



     2.29 “Reporting Person” means a person who is required to file reports under Section 16(a) of
the Exchange Act.



     2.30 “Restricted Stock” means shares of Stock, awarded to a Grantee pursuant to Section 11
hereof.



     2.31 “SAR Exercise Price” means the per share exercise price of an SAR granted to a Grantee
under Section 10 hereof.



     2.32 “Securities Act” means the Securities Act of 1933, as now in effect or as hereafter
amended.



     2.33 “Service” means service as an employee, officer, Outside Director or other Service
Provider of the Company or an Affiliate. Unless otherwise stated in the applicable Award
Agreement, a Grantee’s change in position or duties shall not result in interrupted or terminated
Service, so long as such Grantee continues to be an employee, officer, Outside Director or other
Service Provider of the Company or an Affiliate. Subject to the preceding sentence, whether a
termination of Service shall have occurred for purposes of the Plan shall be determined by the
Board, which determination shall be final, binding and conclusive.



     2.34 “Service Provider” means an employee, officer or Outside Director of the Company or an
Affiliate, or an individual who is a consultant or adviser providing services to the Company or an
Affiliate.



     2.35 “Stock” means the common stock, par value $.01 per share, of the Company.



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     2.36 “Stock Appreciation Right” or “SAR” means a right granted to a Grantee under Section 10
hereof.



     2.37 “Stock Unit” means a bookkeeping entry representing the equivalent of a share of Stock,
awarded to a Grantee pursuant to Section 11 hereof.



     2.38 “Subsidiary” means any “subsidiary corporation” of the Company within the meaning of
Section 424(f) of the Code.



     2.39 “Substitute Award” means an Award granted upon assumption of, or in substitution for, an
outstanding award previously granted by a company or other entity acquired by the Company or any
Affiliate with which the Company or any Affiliate combines.



     2.40 “Termination Date” means the date upon which an Option or SAR shall terminate or expire,
as set forth in Section 8.3 hereof.



     2.41 “Ten Percent Stockholder” means an employee who owns more than ten percent (10%) of the
total combined voting power of all classes of outstanding stock of the Company, its parent or any
of its Subsidiaries. In determining stock ownership, the attribution rules of Section 424(d) of
the Code shall be applied.



     2.42 “Unrestricted Stock” means an Award pursuant to Section 12 hereof.



3. ADMINISTRATION OF THE PLAN




     3.1. Board



     The Board shall have such powers and authorities related to the administration of the Plan as
are consistent with the Company’s amended and restated certificate of incorporation and amended and
restated by-laws, in each case, as amended, modified or supplemented from time to time, and
applicable law. The Board shall have full power and authority to take all actions and to make all
determinations required or provided for under the Plan, any Award or any Award Agreement, and shall
have full power and authority to take all such other actions and make all such other determinations
not inconsistent with the specific terms and provisions of the Plan that the Board deems to be
necessary or appropriate to the administration of the Plan, any Award or any Award Agreement. All
such actions and determinations shall be by the affirmative
vote of a majority of the members of the Board present at a meeting or by unanimous consent of the
Board executed in writing in accordance with the Company’s amended and restated certificate of
incorporation and amended and restated by-laws, in each case, as amended, modified or supplemented
from time to time, and applicable law. The interpretation and construction by the Board of any
provision of the Plan, any Award or any Award Agreement shall be final and conclusive.



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     3.2. Committee



     The Board from time to time may delegate to the Committee such powers and authorities related
to the administration and implementation of the Plan, as set forth in Section 3.1 above and other
applicable provisions, as the Board shall determine, consistent with the amended and restated
certificate of incorporation and amended and restated by-laws of the Company, in each case, as
amended, modified or supplemented from time to time, and applicable law. The Board may also
appoint one or more separate committees of the Board, each composed of one or more directors of the
Company who need not be Outside Directors, who may administer the Plan with respect to employees or
other Service Providers who are not executive officers or directors of the Company or its
Affiliates, may grant Awards under the Plan to such employees or other Service Providers, and may
determine all terms of such Awards. In addition, the Committee may delegate to one or more
executive officers of the Company or its Affiliates the authority to grant Awards to employees or
other Service Providers who are not executive officers or directors of the Company. Such
delegation shall specify the maximum number of shares of Stock that may be granted by such
officer(s), as well as the time period during which the delegation shall remain in effect. In the
event that the Plan, any Award or any Award Agreement entered into hereunder provides for any
action to be taken by or determination to be made by the Board, such action may be taken or such
determination may be made by the Committee if the power and authority to do so has been delegated
to the Committee by the Board as provided for in this Section. Unless otherwise expressly
determined by the Board, any such action or determination by the Committee shall be final, binding
and conclusive. To the extent permitted by law, the Committee may delegate its authority under the
Plan to a member of the Board.



     3.3. Terms of Awards



     Subject to the other terms and conditions of the Plan, the Board shall have full and final
authority to:



     (i) designate Grantees,



     (ii) determine the type or types of Awards to be made to a Grantee,



     (iii) determine the number of shares of Stock to be subject to an Award,



     (iv) establish the terms and conditions of each Award (including, but not limited to, the
exercise price of any Option, the nature and duration of any restriction or condition (or provision
for lapse thereof) relating to the vesting, exercise, transfer, or forfeiture of an Award or the
shares of Stock subject thereto, the
treatment of an Award in the event of a Corporate Transaction and any terms or conditions that
may be necessary to qualify Options as Incentive Stock Options),



     (v) prescribe the form of each Award Agreement evidencing an Award, and



     (vi) amend, modify, or supplement the terms of any outstanding Award, subject to Section 3.7.
Such authority specifically includes the authority, in order to effectuate the purposes of the Plan
but without amending the Plan, to make or modify Awards to eligible individuals who are foreign
nationals or are



- 6 -









 







individuals who are employed outside the United States to recognize differences in
local law, tax policy, or custom.



     The Board shall have the right, in its discretion, to make Awards in substitution or exchange
for any other award under another plan of the Company, any Affiliate, or any business entity to be
acquired by the Company or an Affiliate. The Committee may retain the right in an Award Agreement
to cause a forfeiture of the gain realized by a Grantee on account of actions taken by the Grantee
in violation or breach of or in conflict with any non-competition agreement, any agreement
prohibiting solicitation of employees or clients of the Company or any Affiliate thereof or any
confidentiality obligation with respect to the Company or any Affiliate thereof, to the extent
specified in such Award Agreement applicable to the Grantee. Furthermore, the Company may annul an
Award if the Grantee is an employee of the Company or an Affiliate thereof and is terminated for
Cause as defined in the applicable Award Agreement or the Plan or any other agreement with the
Grantee, as applicable.



     Furthermore, if the Company is required to prepare an accounting restatement due to the
material noncompliance of the Company as a result of misconduct, with regard to any financial
reporting requirement under the securities laws, the individuals subject to automatic forfeiture
under Section 304 of the Sarbanes-Oxley Act of 2002 and any Grantee who knowingly engaged in the
misconduct, was grossly negligent in engaging in the misconduct, knowingly failed to prevent the
misconduct or was grossly negligent in failing to prevent the misconduct, shall reimburse the
Company the amount of any payment in settlement of an Award earned or accrued during the 12-month
period following the first public issuance or filing with the United States Securities and Exchange
Commission (whichever first occurred) of the financial document that contained such material
noncompliance.



     Notwithstanding any other provision of this Plan or any provision of any Award Agreement, if
the Company is required to prepare an accounting restatement, then Grantees shall forfeit any cash
or Stock received in connection with an Award having a Grant Date on or after April 30, 2009 (or an
amount equal to the fair market value of such Stock on the date of delivery if the Grantee no
longer holds the shares of Stock) if pursuant to the terms of the Award Agreement for such Award,
the amount of the Award earned or the vesting in the Award was explicitly based on the achievement
of pre-established performance goals set forth in the Award Agreement (including earnings, gains,
or other criteria) that are later determined, as a result of the accounting restatement, not to
have been achieved.



     3.4. Deferral Arrangement



     The Board may permit or require the deferral of any award payment into a deferred compensation
arrangement, subject to such rules and procedures as it may establish, which may include provisions
for the payment or crediting of interest or dividend equivalents, including converting such credits
into deferred Stock equivalents and restricting deferrals to comply with hardship distribution
rules affecting 401(k) plans. Any such deferrals shall be made in a manner that complies with Code
Section 409A.



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     3.5. No Liability



     No member of the Board or of the Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any Award or Award Agreement.



     3.6. Share Issuance/Book-Entry.



     Notwithstanding any other provision of this Plan to the contrary, the issuance of the shares
of Stock under the Plan may be evidenced in such a manner as the Board, in its discretion, deems
appropriate, including, without limitation, book-entry registration or issuance of one or more
share certificates.



     3.7. No Repricing.



     Other than pursuant to Section 18 and except in connection with a Corporate Transaction
involving the Company and/or any stock dividend, stock split, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or
exchange of shares, notwithstanding any other provision in the Plan to the contrary, the terms of
outstanding Options or SARs may not be amended without stockholder approval to (i) reduce their
Option Price or SAR Exercise Price, as applicable or (ii) cancel, exchange, substitute, buyout or
surrender such outstanding Options or SARs in exchange for cash, other Awards or Options or SARs
with an Option Price or SAR Exercise Price, as applicable, that is less than the Option Price or
SAR Exercise Price, as applicable, of the original Options or SARs.



4. STOCK SUBJECT TO THE PLAN




     4.1. Number of Shares of Stock Available for Awards and Share Usage



     Subject to adjustment as provided in Section 18 hereof, the number of shares of Stock
available for issuance under the Plan shall be thirty three million (33,000,000). Any shares of
Stock that are subject to Awards of Options shall be counted against this limit as one (1) share
for every one (1) share issued. With respect to Stock Appreciation Rights, when a stock-settled
Stock Appreciation Right grant is exercised, the shares subject to such award will be counted
against the maximum share limitations as one (1) share for every share subject thereto, regardless
of the number of shares actually issued to settle the Stock Appreciation Right upon exercise. Any
shares that are subject to Awards other than Options or
Stock Appreciation Rights shall be counted against this limit as one and one-half (11/2) shares for
every one (1) share granted. Stock issued or to be issued under the Plan shall be authorized but
unissued shares or treasury shares. If any shares covered by an Award are not purchased or are
forfeited, if an Award is settled in cash or if an Award otherwise terminates without delivery of
any Stock subject thereto, then the number of shares of Stock counted against the aggregate number
of shares available under the Plan with respect to such Award shall, to the extent of any such
forfeiture, cash payment or termination, again be available for making Awards under the Plan. Any
shares of Stock that again become available for grant pursuant to this Article 4 shall be added
back as one (1) share if such shares were subject to Options or Stock Appreciation Rights granted
under the Plan, and as one and one-half (11/2) shares if such shares were subject to Awards other
than Options or Stock Appreciation Rights



- 8 -









 







granted under the Plan. Shares issued pursuant to
Awards granted in substitution for awards held by employees of a business entity acquired by the
Company or an Affiliate shall not count against the shares available for issuance under the Plan.



     4.2. Adjustments in Authorized Shares.



     The Board shall have the right to substitute or assume Awards in connection with mergers,
reorganizations, separations, or other transactions to which Section 424(a) of the Code applies.
The number of shares of Stock reserved pursuant to Section 4.1 shall be increased by the
corresponding number of awards assumed and, in the case of a substitution, by the net increase in
the number of Shares subject to awards before and after the substitution. Available shares under a
stockholder approved plan of an acquired company (as appropriately adjusted to reflect the
transaction) may be used for Awards under the Plan and do not reduce the number of Shares available
under the Plan, subject to applicable stock exchange requirements.



5. DURATION AND AMENDMENTS




     5.1. [Reserved]



     5.2. Term



     The Plan shall terminate automatically on August 6, 2016 and may be terminated on any earlier
date as provided in Section 5.3.



     5.3. Amendment and Termination of the Plan



     The Board may, at any time and from time to time, amend, suspend, or terminate the Plan as to
any shares of Stock as to which Awards have not been made. An amendment shall be contingent on
approval of the Company’s stockholders to the extent stated by the Board or required by applicable
law. In addition, an amendment will be contingent on approval of the Company’s stockholders if the
amendment would (i) materially increase the benefits accruing to participants under the Plan, (ii)
materially increase the aggregate number of shares of Stock that may be issued under the Plan, or
(iii) materially modify the requirements as
to eligibility for participation in the Plan. No Awards shall be made after termination of the
Plan. No amendment, suspension, or termination of the Plan shall, without the consent of the
Grantee, impair rights or obligations under any Award theretofore awarded under the Plan.



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6. AWARD ELIGIBILITY AND LIMITATIONS




     6.1. Service Providers; Outside Directors; Other Persons



     Subject to this Section 6, Awards may be made under the Plan to: (i) any Service Provider to
the Company or of any Affiliate, including any such Service Provider who is an officer or director
of the Company, or of any Affiliate, as the Board shall determine and designate from time to time
and (ii) any other individual whose participation in the Plan is determined to be in the best
interests of the Company by the Board.



     6.2. Successive Awards



     An eligible person may receive more than one Award, subject to such restrictions as are
provided herein.



     6.3. Limitation on Shares of Stock Subject to Awards and Cash Awards



     (i) the maximum number of shares of Stock subject to Options or SARs that can be issued under
the Plan to any person eligible for an Award under Section 6 hereof is ten million (10,000,000) in
any three consecutive calendar years;



     (ii) the maximum number of shares that can be issued under the Plan, other than pursuant to an
Option, SAR, or Restricted Stock or Stock Unit grant that is not performance based, to any person
eligible for an Award under Section 6 hereof is one million (1,000,000) in any three consecutive
calendar years;



     (iii) the maximum amount that may be earned as an Annual Incentive Award or other cash Award
in any fiscal year by any one Grantee shall be $5,000,000 and the maximum amount that may be earned
as a Performance Award or other cash Award in respect of a performance period by any one Grantee
shall be $5,000,000.



     The preceding limitations in this Section 6.3 are subject to adjustment as provided in Section
18 hereof.



     6.4. Stand-Alone, Additional, Tandem, and Substitute Awards



     Subject to Section 3.7, Awards granted under the Plan may, in the discretion of the Board, be
granted either alone or in addition to, in tandem with, or in substitution or exchange for, any
other Award or any award granted under another plan of the Company, any Affiliate, or any business
entity to be acquired by the Company or an Affiliate, or any other right of a Grantee to receive
payment from the
Company or any Affiliate. Such additional, tandem, and substitute or exchange Awards may be
granted at any time. If an Award is granted in substitution or exchange for another Award, the
Board shall require the surrender of such other Award in consideration for the grant of the new
Award. In addition, Awards may be granted in lieu of cash compensation, including in lieu of cash
amounts payable under other plans of the Company or any Affiliate. Notwithstanding Sections 8.1
and 10.1 but subject to Section 3.7, the Option Price of an Option or the grant price of an SAR
that is a Substitute Award may be less than 100%



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of the Fair Market Value of a share of Common
Stock on the original date of grant; provided, that, the Option Price or grant price is determined
in accordance with the principles of Code Section 424 and the regulations thereunder for any
Incentive Stock Option and consistent with Code Section 409A for any other Option or SAR.



7. AWARD AGREEMENT




     Each Award granted pursuant to the Plan shall be evidenced by an Award Agreement, in such form
or forms as the Board shall from time to time determine. Award Agreements granted from time to
time or at the same time need not contain similar provisions but shall be consistent with the terms
of the Plan. Each Award Agreement evidencing an Award of Options shall specify whether such
Options are intended to be Non-qualified Stock Options or Incentive Stock Options, and in the
absence of such specification such options shall be deemed Non-qualified Stock Options.



8. TERMS AND CONDITIONS OF OPTIONS




     8.1. Option Price



     The Option Price of each Option shall be fixed by the Board and stated in the Award Agreement
evidencing such Option. The Option Price of each Option shall be at least the Fair Market Value on
the Grant Date of a share of Stock; provided, however, that in the event that a
Grantee is a Ten Percent Stockholder, the Option Price of an Option granted to such Grantee that is
intended to be an Incentive Stock Option shall be not less than 110 percent of the Fair Market
Value of a share of Stock on the Grant Date. In no case shall the Option Price of any Option be
less than the par value of a share of Stock.



     8.2. Vesting



     Subject to Sections 8.3 and 18 hereof, each Option granted under the Plan shall become
exercisable at such times and under such conditions as shall be determined by the Board and stated
in the Award Agreement.



     8.3. Term



     Each Option granted under the Plan shall terminate, and all rights to purchase shares of Stock
thereunder shall cease, upon the expiration of ten years from the date such Option is granted, or
under such circumstances and on such date prior thereto as is set forth in the Plan or as may be
fixed by the Board and
stated in the Award Agreement relating to such Option (the “Termination Date”); provided,
however, that in the event that the Grantee is a Ten Percent Stockholder, an Option granted
to such Grantee that is intended to be an Incentive Stock Option shall not be exercisable after the
expiration of five years from its Grant Date.



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     8.4. Termination of Service



     Each Award Agreement shall set forth the extent to which the Grantee shall have the right to
exercise the Option following termination of the Grantee’s Service. Such provisions shall be
determined in the sole discretion of the Board, need not be uniform among all Options issued
pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service.
An Option that is intended to be an Incentive Stock Option shall no longer be exercisable as an
Incentive Stock Option ninety (90) days after the termination of the Grantee’s Service.



     8.5. Limitations on Exercise of Option



     Notwithstanding any other provision of the Plan, in no event may any Option be exercised, in
whole or in part, more than ten years following the Grant Date, or after the occurrence of an event
referred to which results in termination of the Option.



     8.6. Method of Exercise



     An Option that is exercisable may be exercised by the Grantee’s delivery to the Company of
written or electronic notice of exercise on any business day , on the form specified by the
Company. Such notice shall specify the number of shares of Stock with respect to which the Option
is being exercised and shall be accompanied by payment in full of the Option Price of the shares
for which the Option is being exercised plus the amount (if any) of federal and/or other taxes
which the Company many, in its sole and absolute judgment, determine to be required to withhold
with respect to an Award pursuant to Section 19.3.



     8.7. Rights of Holders of Options



     Unless otherwise stated in the applicable Award Agreement, an individual holding or exercising
an Option shall have none of the rights of a stockholder (for example, the right to receive cash or
dividend payments or distributions attributable to the subject shares of Stock or to direct the
voting of the subject shares of Stock ) until the shares of Stock covered thereby are fully paid
and issued to him. Except as provided in Section 18 hereof, no adjustment shall be made for
dividends, distributions or other rights for which the record date is prior to the date of such
issuance.



     8.8. Delivery of Stock Certificates



     Promptly after the exercise of an Option by a Grantee and the payment in full of the Option
Price, such Grantee shall be entitled to the issuance of a stock certificate or certificates
evidencing his or her ownership of the shares of Stock subject to the Option. Notwithstanding any
other provision of this Plan to
the contrary, the Company may elect to satisfy any requirement under this Plan for the delivery of
stock certificates through the use of book-entry.



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     8.9. Limitations on Incentive Stock Options



     An Option shall constitute an Incentive Stock Option only (i) if the Grantee of such Option is
an employee of the Company or any Subsidiary of the Company; (ii) to the extent specifically
provided in the related Award Agreement; and (iii) to the extent that the aggregate Fair Market
Value (determined at the time the Option is granted) of the shares of Stock with respect to which
all Incentive Stock Options held by such Grantee become exercisable for the first time during any
calendar year (under the Plan and all other plans of the Grantee’s employer and its Affiliates)
does not exceed $100,000. This limitation shall be applied by taking Options into account in the
order in which they were granted.



     8.10. Notice of Disqualifying Disposition.



     If any Grantee shall make any disposition of shares of Stock issued pursuant to the exercise
of an Incentive Stock Option under the circumstances described in Code Section 421(b) (relating to
certain disqualifying dispositions), such Grantee shall notify the Company of such disposition
within ten (10) days thereof.



9. TRANSFERABILITY OF OPTIONS




     9.1. Transferability of Options



     Except as provided in Section 9.2, during the lifetime of a Grantee, only the Grantee (or, in
the event of legal incapacity or incompetency, the Grantee’s guardian or legal representative) may
exercise an Option. Except as provided in Section 9.2, no Option shall be assignable or
transferable by the Grantee to whom it is granted, other than by will or the laws of descent and
distribution.



     9.2. Transfers



     If authorized in the applicable Award Agreement, a Grantee may transfer, not for value, all or
part of an Option which is not an Incentive Stock Option to any Family Member or to any entity that
is exempt from income tax pursuant to Section 501(c)(3) of the Code, or any successor provision.
For the purpose of this Section 9.2, a “not for value” transfer is a transfer which is (i) a gift,
(ii) a transfer under a domestic relations order in settlement of marital property rights; or (iii)
a transfer to an entity in which more than fifty percent of the voting interests are owned by
Family Members (or the Grantee) in exchange for an interest in that entity. Following a transfer
under this Section 9.2, any such Option shall continue to be subject to the same terms and
conditions as were applicable immediately prior to transfer. Subsequent transfers of transferred
Options are prohibited except to Family Members of the original Grantee in accordance with this
Section 9.2 or by will or the laws of descent and distribution. The events of termination of
Service of Section 8.4 hereof shall continue to be applied with respect to the
original Grantee, following which the Option shall be exercisable by the transferee only to the
extent, and for the periods specified, in Section 8.4.



Yes.



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10. STOCK APPRECIATION RIGHTS




     The Board is authorized to grant Stock Appreciation Rights (“SARs”) to Grantees on the
following terms and conditions:



     10.1. Right to Payment



     A SAR shall confer on the Grantee to whom it is granted a right to receive, upon exercise
thereof, an amount not greater than the excess of (A) the Fair Market Value of one share of Stock
on the date of exercise over (B) the grant price of the SAR, as determined by the Board. The Award
Agreement for an SAR shall specify the SAR Exercise Price of the SAR, which shall be at least the
Fair Market Value of a share of Stock on the Grant Date. The Award Agreement for a SAR shall
specify the SAR Exercise Price, which shall be at least the Fair Market Value of a Share on the
Grant Date. SARs may be granted in conjunction with all or part of an Option granted under the
Plan or at any subsequent time during the term of such Option, in conjunction with all or part of
any other Award or without regard to any Option or other Award; provided that a SAR that is granted
subsequent to the Grant Date of a related Option must have a SAR Exercise Price that is no less
than the Fair Market Value of a Share on the Option Grant Date.



     10.2. Other Terms



     Each SAR granted under the Plan shall terminate upon the expiration of ten years from the
Grant Date of such SAR or under such circumstances and on such date prior thereto as is set forth
in the Plan or as may be fixed by the Board and stated in the Award Agreement relating to such SAR.
The Board shall determine at the Grant Date or thereafter, the time or times at which and the
circumstances under which a SAR may be exercised in whole or in part (including based on
achievement of performance goals and/or future service requirements), the time or times at which
SARs shall cease to be or become exercisable following termination of Service or upon other
conditions, the method of exercise, method of settlement, form of consideration payable in
settlement which may be cash or shares of Stock, method by or forms in which shares of Stock will
be delivered or deemed to be delivered to Grantees, whether or not a SAR shall be in tandem or in
combination with any other Award, and any other terms and conditions of any SAR, provided, however,
that each SAR granted under the Plan shall terminate under such circumstances and on such date
prior thereto as is set forth in the Plan or as may be fixed by the Board and stated in the Award
Agreement relating to such SAR.



11. RESTRICTED STOCK AND STOCK UNITS




     11.1. Grant of Restricted Stock or Stock Units



     The Board may from time to time grant Restricted Stock or Stock Units to persons eligible to
receive Awards under Section 6 hereof, subject to such restrictions, conditions and other terms, if
any, as the Board may determine.



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     11.2. Restrictions



          At the time a grant of Restricted Stock or Stock Units is made, the Board may, in its sole
discretion, establish a period of time (a “restricted period”) applicable to such Restricted Stock
or Stock Units. Each Award of Restricted Stock or Stock Units may be subject to a different
restricted period. The Board may, in its sole discretion, at the time a grant of Restricted Stock
or Stock Units is made, prescribe restrictions in addition to or other than the expiration of the
restricted period, including the satisfaction of corporate or individual performance objectives,
which may be applicable to all or any portion of the Restricted Stock or Stock Units in accordance
with Section 15.1 and 15.2. Neither Restricted Stock nor Stock Units may be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of during the restricted period or prior to
the satisfaction of any other restrictions prescribed by the Board with respect to such Restricted
Stock or Stock Units.



     11.3. Restricted Stock Certificates



     The Company shall issue, in the name of each Grantee to whom Restricted Stock has been
granted, stock certificates representing the total number of shares of Restricted Stock granted to
the Grantee, as soon as reasonably practicable after the Grant Date. The Board may provide in an
Award Agreement that either (i) the Secretary of the Company, or his delegate, shall hold such
certificates for the Grantee’s benefit until such time as the Restricted Stock is forfeited to the
Company or the restrictions lapse, or (ii) such certificates shall be delivered to the Grantee,
provided, however, that all such certificates, regardless of whether held by the
Secretary, his delegate or delivered to the Grantee, shall bear a legend or legends that comply
with the applicable securities laws and regulations and makes appropriate reference to the
restrictions imposed under the Plan and the Award Agreement. If the Company utilizes book-entry
form with appropriate restrictions noted in the Company records, and the Grantee so requests, the
Company will furnish without charge the powers, designations, preferences and relative,
participating, optional, or other special rights of the share of Stock and the qualifications,
limitations or restrictions of such preferences and/or rights. Such requests shall be made in
writing to the Company’s Secretary.



     11.4. Rights of Holders of Restricted Stock



     Unless the Board otherwise provides in an Award Agreement, holders of Restricted Stock shall
have the right to vote such Stock and the right to receive any dividends declared or paid with
respect to such Stock. The Board may provide that any dividends paid on Restricted Stock must be
reinvested in shares of Stock, which may or may not be subject to the same vesting conditions and
restrictions applicable to such Restricted Stock. All distributions, if any, received by a Grantee
with respect to Restricted Stock as a result
of any stock split, stock dividend, combination of shares, or other similar transaction shall be
subject to the restrictions applicable to the original Grant.



     11.5. Rights of Holders of Stock Units



          11.5.1. No Voting and Dividend Rights




     Unless the Board otherwise provides in an Award Agreement, holders of Stock Units shall have
no rights as stockholders of the Company. The Board may provide in an Award Agreement evidencing a
grant



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of Stock Units that the holder of such Stock Units shall be entitled to receive, upon the
Company’s payment of a cash dividend on its outstanding Stock, a cash payment for each Stock Unit
held equal to the per-share dividend paid on the Stock. Such Award Agreement may also provide that
such cash payment will be deemed reinvested in additional Stock Units at a price per unit equal to
the Fair Market Value of a share of Stock on the date that such dividend is paid.



          11.5.2. Creditor’s Rights




          A holder of Stock Units shall have no rights other than those of a general creditor of the
Company. Stock Units represent an unfunded and unsecured obligation of the Company, subject to the
terms and conditions of the applicable Award Agreement.




     11.6. Termination of Service



     Unless the Board otherwise provides in an Award Agreement or in writing after the Award
Agreement is issued, upon the termination of a Grantee’s Service, any Restricted Stock or Stock
Units held by such Grantee that have not vested, or with respect to which all applicable
restrictions and conditions have not lapsed, shall immediately be deemed forfeited. Upon
forfeiture of Restricted Stock or Stock Units, the Grantee shall have no further rights with
respect to such Award, including but not limited to any right to vote Restricted Stock or any right
to receive dividends with respect to shares of Restricted Stock or Stock Units



     11.7. Purchase of Restricted Stock



     The Grantee shall be required, to the extent required by applicable law, to purchase the
Restricted Stock from the Company at a Purchase Price equal to the greater of (i) the aggregate par
value of the shares of Stock represented by such Restricted Stock or (ii) the Purchase Price, if
any, specified in the Award Agreement relating to such Restricted Stock. The Purchase Price shall
be payable in a form described in Section 13 or, in the discretion of the Board, in consideration
for past Services rendered to the Company or an Affiliate.



     11.8. Delivery of Stock



     Upon the expiration or termination of any restricted period and the satisfaction of any other
conditions or restrictions prescribed by the Board as set forth in the Award agreement, the
restrictions applicable to shares of Restricted Stock or Stock Units settled in Stock shall lapse,
and, unless otherwise
provided in the Award Agreement, a stock certificate for such shares shall be delivered, free of
all such restrictions, to the Grantee or the Grantee’s beneficiary or estate, as the case may be.
In the alternative, a book-entry no longer reflecting any restrictions may be made. Neither the
Grantee, nor the Grantee’s beneficiary or estate, shall have any further rights with respect to a
Stock Unit once the shares of Stock represented by the Stock Unit have been delivered. Stock Units
may also be settled in cash upon the determination of the Board or as specified in the applicable
Award Agreement.



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12. UNRESTRICTED STOCK AWARDS




     The Board may, in its sole discretion, grant to any Grantee under the Plan (or sell at par
value or such other higher purchase price determined by the Board) Unrestricted Stock Awards
pursuant to which Grantees may receive shares of Stock free of any restrictions (“Unrestricted
Stock”). Unrestricted Stock Awards may be granted or sold in respect of past services, performance
and other valid consideration, or in lieu of, or in addition to, any cash compensation due to such
Grantee. A stock certificate for such shares of Stock shall be delivered, free of all restrictions,
to the Grantee or the Grantee’s beneficiary or estate, as the case may be. In the alternative, a
book-entry may be made.



13. FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK AND STOCK UNITS




     13.1. General Rule



     Payment of the Option Price for the shares purchased pursuant to the exercise of an Option or
the Purchase Price for Restricted Stock and Stock Units shall be made in cash or in cash
equivalents acceptable to the Company.



     13.2. Surrender of Stock



     To the extent the Award Agreement so provides, payment of the Option Price for shares
purchased pursuant to the exercise of an Option or the Purchase Price for Restricted Stock may be
made all or in part through the tender or attestation to the Company of shares of Stock, which
shall be valued, for purposes of determining the extent to which the Option Price or Purchase Price
has been paid thereby, at their Fair Market Value on the date of exercise or surrender. In
addition, and also only to the extent the Award Agreement so provides, payment of the Option Price
may be made by requesting that the Company withhold shares of Stock that would otherwise be
deliverable pursuant to the exercise of the Option, which shares shall be valued at their Fair
Market Value on the date of exercise.



     13.3. Cashless Exercise



     With respect to an Option only (and not with respect to Restricted Stock), to the extent the
Award Agreement so provides and subject to compliance with applicable law, payment of the Option
Price for shares purchased pursuant to the exercise of an Option may be made all or in part by
delivery (on a form acceptable to the Board) of an irrevocable direction to a licensed securities
broker acceptable to the Company to sell shares of Stock and to deliver all or part of the sales
proceeds to the Company in payment of the Option Price and any withholding taxes described in
Section 19.3 or, with the consent of the Company, by issuing the number of shares of Stock equal in
value to the difference between the Option Price and the Fair Market Value of the shares of Stock
subject to the portion of the Option being exercised.



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     13.4. Other Forms of Payment



     To the extent the Award Agreement so provides, payment of the Option Price for shares
purchased pursuant to exercise of an Option or the Purchase Price for Restricted Stock may be made
in any other form that is consistent with applicable laws, regulations and rules.



14. DIVIDEND EQUIVALENT RIGHTS




     14.1. Dividend Equivalent Rights



     A Dividend Equivalent Right is an Award entitling the recipient to receive credits based on
cash distributions that would have been paid on the shares of Stock specified in the Dividend
Equivalent Right (or other Award to which it relates) if such shares had been issued to and held by
the recipient. A Dividend Equivalent Right may be granted hereunder to any Grantee as a component
of another Award other than an Option or SAR or as a freestanding award. The terms and conditions
of Dividend Equivalent Rights shall be specified in the grant. Dividend Equivalents credited to
the holder of a Dividend Equivalent Right may be paid currently or may be deemed to be reinvested
in additional shares of Stock, which may thereafter accrue additional equivalents. Any such
reinvestment shall be at Fair Market Value on the date of reinvestment. Dividend Equivalent Rights
may be settled in cash or Stock or a combination thereof, in a single installment or installments,
all determined in the sole discretion of the Board. Subject to Code Section 409A, a Dividend
Equivalent Right granted as a component of another Award may provide that such Dividend Equivalent
Right shall be settled upon exercise, settlement, or payment of, or lapse of restrictions on, such
other Award, and that such Dividend Equivalent Right shall expire or be forfeited or annulled under
the same conditions as such other Award. A Dividend Equivalent Right granted as a component of
another Award may also contain terms and conditions different from such other Award; provided,
however, that Dividend Equivalents credited pursuant to a Dividend Equivalents Right granted as a
component of another Award which vests or is earned based upon achievement of performance goals
shall not vest or be paid unless the performance goals for such underlying Award are achieved.



     14.2. Termination of Service



     Except as may otherwise be provided by the Board either in the Award Agreement or in writing
after the Award Agreement is issued, a Grantee’s rights in all Dividend Equivalent Rights or
interest equivalents shall automatically terminate upon the Grantee’s termination of Service for
any reason.



- 18 -









 





15. PERFORMANCE AND ANNUAL INCENTIVE AWARDS




     15.1. Performance Conditions



          The right of a Grantee to exercise or receive a grant or settlement of any Award, and the
timing thereof, may be subject to such performance conditions as may be specified by the Board.
The Board may use such business criteria and other measures of performance as it may deem
appropriate in establishing any performance conditions, and may exercise its discretion to reduce
the amounts payable under any Award subject to performance conditions, except as limited under
Sections 15.2 hereof in the case of a Performance Award or Annual Incentive Award intended to
qualify under Code Section 162(m). If and to the extent required under Code Section 162(m), any
power or authority relating to a Performance Award or Annual Incentive Award intended to qualify
under Code Section 162(m), shall be exercised by the Committee and not the Board.




     15.2. Performance or Annual Incentive Awards Granted to Designated Covered Employees



          If and to the extent that the Committee determines that a Performance or Annual Incentive
Award to be granted to a Grantee who is designated by the Committee as likely to be a Covered
Employee should qualify as “performance-based compensation” for purposes of Code Section 162(m),
the grant, exercise and/or settlement of such Performance or Annual Incentive Award shall be
contingent upon achievement of pre-established performance goals and other terms set forth in this
Section 15.2.




          15.2.1. Performance Goals Generally




     The performance goals for such Performance or Annual Incentive Awards shall consist of one or
more business criteria and a targeted level or levels of performance with respect to each of such
criteria, as specified by the Committee consistent with this Section 15.2. Performance goals shall
be objective and shall otherwise meet the requirements of Code Section 162(m) and regulations
thereunder including the requirement that the level or levels of performance targeted by the
Committee result in the achievement of performance goals being “substantially uncertain.” The
Committee may determine that such Performance or Annual Incentive Awards shall be granted,
exercised and/or settled upon achievement of any one performance goal or that two or more of the
performance goals must be achieved as a condition to grant, exercise and/or settlement of such
Performance or Annual Incentive Awards. Performance goals may differ for Performance or Annual
Incentive Awards granted to any one Grantee or to different Grantees.



          15.2.2. Business Criteria




     One or more of the following business criteria for the Company, on a consolidated basis,
and/or specified subsidiaries or business units of the Company (except with respect to the total
stockholder return and earnings per share criteria), shall be used exclusively by the Committee in
establishing performance goals for such Performance or Annual Incentive Awards: (1) total
stockholder return; (2) such total stockholder return as compared to total return (on a comparable
basis) of a publicly available



- 19 -









 




index such as, but not limited to, the Standard & Poor’s 500 Stock
Index; (3) net income; (4) pretax earnings; (5) earnings before interest expense and taxes (EBIT),
(6) earnings before interest expense, taxes, depreciation and amortization (EBITDA); (7) pretax
operating earnings after interest expense and before bonuses, service fees, and extraordinary or
special items; (8) operating margin; (9) earnings per share; (10) return on equity; (11) return on
assets, (12) return on capital; (13) return on investment; (14) operating earnings; (15) working
capital; (16) ratio of debt to stockholders’ equity, (17) revenue; (18) book value and (19) funds
from operations (FFO).




          15.2.3. Timing For Establishing Performance Goals




     Performance goals shall be established not later than the earlier of (i) 90 days after the
beginning of any performance period applicable to such Performance or Annual Incentive Awards, (ii)
the day on which 25% of any performance period applicable to such Awards has expired, and (iii) at
such other date as may be required or permitted for “performance-based compensation” under Code
Section 162(m).



          15.2.4. Performance or Annual Incentive Award Pool




     The Committee may establish a Performance or Annual Incentive Award pool, which shall be an
unfunded pool, for purposes of measuring performance in connection with Performance or Annual
Incentive Awards.



          15.2.5. Settlement of Performance or Annual Incentive Awards; Other Terms




     Settlement of such Performance or Annual Incentive Awards shall be in cash, Stock, Restricted
Stock, Stock Units, other Awards or other property, in the discretion of the Committee. The
Committee may, in its discretion, reduce the amount of a settlement otherwise to be made in
connection with such Performance or Annual Incentive Awards. The Committee shall specify the
circumstances in which such Performance or Annual Incentive Awards shall be paid or forfeited in
the event of termination of Service by the Grantee prior to the end of a performance period or
settlement of Performance Awards.



     15.3. Written Determinations



          All determinations by the Committee as to the establishment of performance goals, the amount
of any Performance Award pool or potential individual Performance Awards and as to the achievement
of performance goals relating to Performance Awards, and the amount of any Annual
Incentive Award pool or potential individual Annual Incentive Awards and the amount of final
Annual Incentive Awards, shall be made in writing in the case of any Award intended to qualify
under Code Section 162(m). To the extent required to comply with Code Section 162(m), the
Committee may delegate any responsibility relating to such Performance Awards or Annual Incentive
Awards.




- 20 -









 








     15.4. Status of Section 15.2 Awards Under Code Section 162(m)



          It is the intent of the Company that Performance Awards and Annual Incentive Awards under
Section 15.2 hereof granted to persons who are designated by the Committee as likely to be Covered
Employees within the meaning of Code Section 162(m) and regulations thereunder shall, if so
designated by the Committee, constitute “qualified performance-based compensation” within the
meaning of Code Section 162(m) and regulations thereunder. Accordingly, the terms of Section 15.2,
including the definitions of Covered Employee and other terms used therein, shall be interpreted in
a manner consistent with Code Section 162(m) and regulations thereunder. The foregoing
notwithstanding, because the Committee cannot determine with certainty whether a given Grantee will
be a Covered Employee with respect to a fiscal year that has not yet been completed, the term
Covered Employee as used herein shall mean only a person designated by the Committee, at the time
of grant of Performance Awards or an Annual Incentive Award, as likely to be a Covered Employee
with respect to that fiscal year. If any provision of the Plan or any Award Agreement relating to
such Performance Awards or Annual Incentive Awards does not comply or is inconsistent with the
requirements of Code Section 162(m) or regulations thereunder, such provision shall be construed or
deemed amended to the extent necessary to conform to such requirements.




16. PARACHUTE LIMITATIONS




     Notwithstanding any other provision of this Plan or Award Agreement or of any other Award
Agreement or agreement, contract, or understanding heretofore or hereafter entered into by a
Grantee with the Company or any Affiliate, except an agreement, contract or understanding between
the Grantee and the Company or any Affiliate that expressly addresses Section 280G of the Code (an
“Other Agreement”), and notwithstanding any formal or informal plan or other arrangement for the
direct or indirect provision of compensation to the Grantee (including groups or classes of
Grantees or beneficiaries of which the Grantee is a member), whether or not such compensation is
deferred, is in cash, or is in the form of a benefit to or for the Grantee (a “Benefit
Arrangement”), if the Grantee is a “disqualified individual,” as defined in Section 280G(c) of the
Code, any Option, Restricted Stock or Stock Unit held by that Grantee and any right to receive any
payment or other benefit under this Plan shall not become exercisable or vested (i) to the extent
that such right to exercise, vesting, payment, or benefit, taking into account all other rights,
payments, or benefits to or for the Grantee under this Plan, all Other Agreements, and all Benefit
Arrangements, would cause any payment or benefit to the Grantee under this Plan to be considered a
“parachute payment” within the meaning of Section 280G(b)(2) of the Code as then in effect (a
“Parachute Payment”) and (ii) if, as a result of receiving a Parachute Payment, the
aggregate after-tax amounts received by the Grantee from the Company under this Plan, all Other
Agreements, and all Benefit Arrangements would be less than the maximum after-tax amount that could
be received by the Grantee
without causing any such payment or benefit to be considered a Parachute Payment. In the event
that the receipt of any such right to exercise, vesting, payment, or benefit under this Plan, in
conjunction with all other rights, payments, or benefits to or for the Grantee under any Other
Agreement or any Benefit Arrangement would cause the Grantee to be considered to have received a
Parachute Payment under this Plan that would have the effect of decreasing the after-tax amount
received by the Grantee as described in clause (ii) of the preceding sentence, then the Grantee
shall have the right, in the Grantee’s sole discretion, to designate those rights, payments, or
benefits



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under this Plan, any Other Agreements, and any Benefit Arrangements that should be reduced
or eliminated so as to avoid having the payment or benefit to the Grantee under this Plan be deemed
to be a Parachute Payment; provided, however, that to comply with Code Section 409A, the reduction
or elimination will be performed in the order in which each dollar of value subject to an Award
reduces the Parachute Payment to the greatest extent.



17. REQUIREMENTS OF LAW




     17.1. General



     The Company shall not be required to sell or issue any shares of Stock under any Award if the
sale or issuance of such shares would constitute a violation by the Grantee, any other individual
exercising an Option, or the Company or any Affiliate of any provision of any law or regulation of
any governmental authority, including without limitation any federal or state securities laws or
regulations. If at any time the Company shall determine, in its discretion, that the listing,
registration or qualification of any shares subject to an Award upon any securities exchange or
under any governmental regulatory body is necessary or desirable as a condition of, or in
connection with, the issuance or purchase of shares hereunder, no shares of Stock may be issued or
sold to the Grantee or any other individual pursuant to such Award unless such listing,
registration, qualification, consent or approval shall have been effected or obtained free of any
conditions not acceptable to the Company, and any delay caused thereby shall in no way affect the
date of termination of the Award or otherwise result in any claim or damages. Without limiting the
generality of the foregoing, specifically, in connection with the Securities Act, upon the exercise
of any Option or any SAR that may be settled in shares of Stock or the delivery of any shares of
Stock underlying an Award, unless a registration statement under such Act is in effect with respect
to the shares of Stock covered by such Award, the Company shall not be required to sell or issue
such shares unless the Board has received evidence satisfactory to it that the Grantee or any other
individual may acquire such shares pursuant to an exemption from registration under the Securities
Act. Any determination in this connection by the Board shall be final, binding, and conclusive.
The Company may, but shall in no event be obligated to, register any securities covered hereby
pursuant to the Securities Act. The Company shall not be obligated to take any affirmative action
in order to cause the exercise of an Option or SAR or the issuance of shares of Stock pursuant to
the Plan to comply with any law or regulation of any governmental authority. As to any
jurisdiction that expressly imposes the requirement that an Option or any SAR that may be settled
in shares of Stock shall not be exercisable until the shares of Stock covered by such Option or SAR
are registered or are exempt from registration, the exercise of such Option or SAR (under
circumstances in which the laws of such jurisdiction apply) shall be deemed conditioned upon the
effectiveness of such registration or the availability of such an exemption.



     17.2. Rule 16b-3



     During any time when the Company has a class of equity security registered under Section 12 of
the Exchange Act, it is the intent of the Company that Awards pursuant to the Plan and the exercise
of Options or SARs granted hereunder will qualify for the exemption provided by Rule 16b-3 under
the Exchange Act. To the extent that any provision of the Plan or action by the Board does not
comply with the requirements of



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Rule 16b-3, it shall be deemed inoperative to the extent permitted
by law and deemed advisable by the Board, and shall not affect the validity of the Plan. In the
event that Rule 16b-3 is revised or replaced, the Board may exercise its discretion to modify this
Plan, Awards and Award Agreements in any respect necessary to satisfy the requirements of, or to
take advantage of any features of, the revised exemption or its replacement.



18. EFFECT OF CHANGES IN CAPITALIZATION




     18.1. Changes in Stock



     If the number of outstanding shares of Stock is increased or decreased or the shares of Stock
are changed into or exchanged for a different number or kind of shares or other securities of the
Company on account of any recapitalization, reclassification, stock split, reverse split,
combination of shares, exchange of shares, stock dividend or other distribution payable in capital
stock, or other increase or decrease in such shares effected without receipt of consideration by
the Company occurring after the Effective Date, the number and kinds of shares for which grants of
Awards may be made under the Plan shall be adjusted proportionately and accordingly by the Board.
In addition, the number and kind of shares for which Awards are outstanding shall be adjusted
proportionately and accordingly so that the proportionate interest of the Grantee immediately
following such event shall, to the extent practicable, be the same as immediately before such
event. Any such adjustment in outstanding Options, SARs, Restricted Stock or Stock Units shall not
change the aggregate Option Price, SAR Exercise Price or Purchase Price payable with respect to
shares that are subject to the unexercised portion of an outstanding Option or SAR, or an unvested
portion of Restricted Stock or Stock Units, as applicable, but shall include a corresponding
proportionate adjustment in the Option Price, SAR Exercise Price or Purchase Price per share;
provided, however, that options that are not Incentive Stock Options and SARs may be adjusted
pursuant to Code Section 409A so that the difference between the aggregate exercise price over the
aggregate fair market value remains the same before and after the adjustment. The conversion of
any convertible securities of the Company shall not be treated as an increase in shares effected
without receipt of consideration. Notwithstanding the foregoing, in the event of any distribution
to the Company’s shareholders of securities of any other entity or other assets (including an
extraordinary dividend but excluding a non-extraordinary dividend) without receipt of consideration
by the Company, the Company shall in such manner as the Company deems appropriate, adjust (i) the
number and kind of shares subject to outstanding Awards and/or (ii) the exercise price or purchase
price of outstanding Options, SARs, Restricted Stock and Stock Units to reflect such distribution



     18.2. Changes in Capitalization; Merger; Liquidation



     (a) In the event of a merger, consolidation, reorganization or other Corporate Transaction of
the Company, the Board may make such adjustments with respect to Awards and take such other action
as it deems necessary or appropriate to reflect such merger, consolidation, reorganization or other
Corporate Transaction, including, without limitation, the substitution of new Awards, the
termination or the adjustment of outstanding Awards, the acceleration of Awards or the removal of
restrictions on outstanding Awards, all



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as may be provided in the applicable Award Agreement or, if
not expressly addressed therein, as the Board subsequently may determine in the event of any such
transaction.



     (b) In addition to or instead of any adjustments authorized in Section 18.1(a) above, in the
event of a merger, consolidation, reorganization or other Corporate Transaction of the Company, the
Board may elect, in its sole discretion, to cancel or repurchase any outstanding Awards issued
under the Plan and pay or deliver, or cause to be paid or delivered, to the holder thereof an
amount in cash or securities having a value (as determined by the Board acting in good faith), in
the case of an Award consisting of Restricted Stock or Stock Units, equal to the formula or fixed
price per share paid to holders of the Stock in connection with such transaction and, in the case
of Options or SARs, equal to the product of the number of shares of Stock subject to the Option or
SAR multiplied by the amount, if any, by which (I) the formula or fixed price per share of Stock
paid to holders of Stock pursuant to such transaction exceeds (II) the Option Price or SAR Exercise
Price applicable to such Option or SAR. Notwithstanding the foregoing, Stock Units subject to Code
Section 409A shall be cancelled on a Corporate Transaction only to the extent such Corporate
Transaction constitutes a “change in control event” within the meaning of Code Section 409A.



     18.3. Adjustments



     Adjustments under this Section 18 related to shares of Stock or securities of the Company
shall be made by the Board, whose determination in that respect shall be final, binding and
conclusive. No fractional shares or other securities shall be issued pursuant to any such
adjustment, and any fractions resulting from any such adjustment shall be eliminated in each case
by rounding downward to the nearest whole share. The Board may provide in the Award Agreements at
the time of grant, or any time thereafter with the consent of the Grantee, for different provisions
to apply to an Award in place of those described in Section 18.



     18.4. No Limitations on Company



     The existence of this Plan and the Awards granted pursuant to this Plan shall not affect in
any way the right or power of the Company to make or authorize any adjustment, reclassification,
reorganization or other change in its capital or business structure, any merger or consolidation of
the Company, any issue of debt or equity securities having preferences or priorities as to the
Stock or the rights thereof, the dissolution or liquidation of the Company, any sale or transfer of
all or any part of its business or assets, or any other act or proceeding.



19. GENERAL PROVISIONS




     19.1. Disclaimer of Rights



     No provision in the Plan or in any Award or Award Agreement shall be construed to confer upon
any individual the right to remain in the employ or service of the Company or any Affiliate, or to
interfere in any way with any contractual or other right or authority of the Company or any
Affiliate either to increase or decrease the compensation or other payments to any individual at
any time, or to terminate any employment or other relationship between any individual and the
Company or any Affiliate. In addition, notwithstanding anything contained in the Plan to the
contrary, unless otherwise stated in the applicable Award Agreement,



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no Award granted under the
Plan shall be affected by any change of duties or position of the Grantee, so long as such Grantee
continues to provide service. The obligation of the Company to pay any benefits pursuant to this
Plan shall be interpreted as a contractual obligation to pay only those amounts described herein,
in the manner and under the conditions prescribed herein. The Plan shall in no way be interpreted
to require the Company to transfer any amounts to a third party trustee or otherwise hold any
amounts in trust or escrow for payment to any Grantee or beneficiary under the terms of the Plan
and Awards.



     19.2. Nonexclusivity of the Plan



     Neither the adoption of the Plan nor the submission of the Plan to the stockholders of the
Company for approval shall be construed as creating any limitations upon the right and authority of
the Board, the Company or its Affiliates to adopt such other incentive compensation arrangements
(which arrangements may be applicable either generally to a class or classes of individuals or
specifically to a particular individual or particular individuals) as the Board , the Company or
its Affiliates in their discretion determines desirable, including, without limitation, the
granting of stock options otherwise than under the Plan.



     19.3. Withholding Taxes



     The Company or an Affiliate, as the case may be, shall have the right to deduct or withhold
from payments of any kind otherwise due to a Grantee (including by withholding shares of Stock
otherwise deliverable under an Award) any Federal, state, or local taxes of any kind required by
law to be withheld with respect to the vesting of or other lapse of restrictions applicable to an
Award or upon the issuance of any shares of Stock upon the exercise of an Option or pursuant to an
Award. At the time of such vesting, lapse, or exercise, the Grantee shall pay to the Company or
the Affiliate, as the case may be, any amount that the Company or the Affiliate may reasonably
determine to be necessary to satisfy such withholding obligation. Subject to the prior approval of
the Company or the Affiliate, which may be withheld by the Company or the Affiliate, as the case
may be, in its sole discretion, the Grantee may elect to satisfy such obligations, in whole or in
part, (i) by causing the Company or the Affiliate to withhold shares of Stock otherwise issuable to
the Grantee or (ii) by delivering to the Company or the Affiliate shares of Stock already owned by
the Grantee. The shares of Stock so delivered or withheld shall have an aggregate Fair Market
Value equal to such withholding obligations. The Fair Market Value of the shares of Stock used to
satisfy such withholding obligation shall be determined by the Company or the Affiliate as of the
date that the amount of tax to be withheld is to be determined. A Grantee who has made an election
pursuant to this
Section 19.3 may satisfy his or her withholding obligation only with shares of Stock that are not
subject to any repurchase, forfeiture, unfulfilled vesting, or other similar requirements. The
maximum number of shares of Stock that may be withheld from any Award to satisfy any federal, state
or local tax withholding requirements upon the exercise, vesting, lapse of restrictions applicable
to such Award or payment of shares pursuant to such Award, as applicable, cannot exceed such number
of shares of Stock having a Fair Market Value equal to the minimum statutory amount required by the
Applicable Entity to be withheld and paid to any such federal, state or local taxing authority with
respect to which such exercise, vesting, lapse of restrictions or payment of shares.



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     19.4. Captions



     The use of captions in this Plan or any Award Agreement is for the convenience of reference
only and shall not affect the meaning of any provision of the Plan or such Award Agreement.



     19.5. Other Provisions



     Each Award granted under the Plan may contain such other terms and conditions not inconsistent
with the Plan as may be determined by the Board, in its sole discretion.



     19.6. Number And Gender



     With respect to words used in this Plan, the singular form shall include the plural form, the
masculine gender shall include the feminine gender, etc., as the context requires.



     19.7. Severability



     If any provision of the Plan or any Award Agreement shall be determined to be illegal or
unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof
shall be severable and enforceable in accordance with their terms, and all provisions shall remain
enforceable in any other jurisdiction.



     19.8. Governing Law



     The validity and construction of this Plan and the instruments evidencing the Award hereunder
shall be governed by the laws of the State of Delaware, other than any conflicts or choice of law
rule or principle that might otherwise refer construction or interpretation of this Plan and the
Award Agreements to the substantive laws of any other jurisdiction.



     19.9. Code Section 409A



     The Board or the Committee, as applicable, intends to comply with Section 409A of the Code, or
an exemption to Section 409A, with regard to Awards hereunder that constitute nonqualified deferred
compensation within the meaning of Section 409A. To the extent that the Board or the Committee, as
applicable, determines that a Grantee would otherwise be subject to the additional 20% tax imposed
on certain nonqualified deferred compensation plans pursuant to Section 409A as a result of any
provision of any Award granted under this Plan, such provision shall be deemed amended to the
minimum extent
necessary to avoid application of such additional tax. The nature of any such amendment shall be
determined by the Board or the Committee, as applicable.




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