**Exhibit 10.2**

 

 

**AMENDEDAND RESTATED**

**2003INCENTIVE PLAN OF ELECTRONIC DATA SYSTEMS CORPORATION**

** **

                1. *Plan*.  ThisAmended and Restated 2003 Incentive Plan of Electronic Data Systems Corporation(the "Plan"), effective as of February 5, 2008, is a further amendment and restatementof the 2003 Incentive Plan of Electronic Data Systems Corporation which becameeffective on May 20, 2003 upon approval by the stockholders of Electronic DataSystems Corporation (the "Company") on that date.

 

                2. *Objectives*.  ThisPlan is designed to attract and retain employees of the Company and itsSubsidiaries (as hereinafter defined), to attract and retain qualifieddirectors of the Company, to encourage the sense of proprietorship of suchemployees and Directors, and to stimulate the active interest of such personsin the development and financial success of the Company and its Subsidiaries. These objectives are to be accomplished by making Awards (as hereinafterdefined) under this Plan and thereby providing Participants (as hereinafter defined)with a proprietary interest in the growth and performance of the Company andits Subsidiaries.

 

                3.*Definitions*.  Asused herein, the terms set forth below shall have the following respectivemeanings:  

 

                "Annual DirectorAward Date" means, for each year, the first business day of the month nextsucceeding the date upon which the annual meeting of stockholders of theCompany is held in such year.

 

                "Authorized Officer" means the Chairmanof the Board or the Chief Executive Officer of the Company (or any other seniorofficer of the Company to whom either of them shall delegate the authority toexecute any Award Agreement).

 

                "Award" means anEmployee Award or a Director Award.

 

                "Award Agreement"means any Employee Award Agreement or Director Award Agreement.

 

                "Board" means theBoard of Directors of the Company.

 

                "Cash Award" means anaward denominated in cash.

 

                "Code" means theInternal Revenue Code of 1986, as amended from time to time.

 

                "Committee" means theCompensation and Benefits Committee of the Board or such other committee of theBoard as is designated by the Board to administer the Plan.  

 

                "Common Stock" meansthe Common Stock, par value $.01 per share, of the Company.

 

                "Director" means anindividual serving as a member of the Board.

 

                "Director Award"means the grant of an Award to a Nonemployee Director, including, but notlimited to, the grant of a Director Option or Director Restricted Stock.

 

                "Director AwardAgreement" means a written agreement between the Company and a Participant whois a Nonemployee Director setting forth the terms, conditions and limitationsapplicable to a Director Award.

 

                "Director Options"means Nonqualified Options granted to Nonemployee Directors pursuant to theapplicable terms, conditions and limitations specified in paragraph 9(a)hereof.

 

                "Director RestrictedStock" means Common Stock granted to Nonemployee Directors pursuant to theapplicable terms, conditions and limitations specified in paragraph 9(b)hereof.

 

 

1

 

----

 

                "Disability" means,with respect to a Nonemployee Director, the inability to perform the duties ofa Director for a continuous period of more than three months by reason of anymedically determinable physical or mental impairment.

 

                "DividendEquivalents" means, with respect to shares of Restricted Stock that are to beissued at the end of the Restriction Period, an amount equal to all dividendsand other distributions (or the economic equivalent thereof) which are payableto stockholders of record during the Restriction Period on a like number ofshares of Common Stock. 

 

                "Employee" means anemployee of the Company or any of its Subsidiaries.

 

                "Employee Award"means the grant of any Option, SAR, Stock Award, Cash Award or PerformanceAward, whether granted singly, in combination or in tandem, to a Participantwho is an Employee pursuant to such applicable terms, conditions andlimitations as the Committee may establish in order to fulfill the objectivesof the Plan.

 

                "Employee AwardAgreement" means a written agreement between the Company and a Participant whois an Employee setting forth the terms, conditions and limitations applicableto an Employee Award.

 

**               **"EmployeeAward Statement" means a written notice to a Participant who is an Employeefrom the Company setting forth the terms, conditions and limitations applicableto an Employee Award.

 

                "Exchange Act" meansthe Securities Exchange Act of 1934, as amended from time to time.

 

                "Fair Market Value"of a share of Common Stock means, as of a particular date, (i) if sharesof Common Stock are listed on a national securities exchange, the mean betweenthe highest and lowest sales price per share of Common Stock on theconsolidated transaction reporting system for the principal national securitiesexchange on which shares of Common Stock are listed on that date, or, if thereshall have been no such sale so reported on that date, on the last precedingdate on which such a sale was so reported, (ii) if shares of Common Stockare not so listed but are quoted on the Nasdaq Stock Market, the mean betweenthe highest and lowest sales price per share of Common Stock reported by theNasdaq Stock Market on that date, or, if there shall have been no such sale soreported on that date, on the last preceding date on which such a sale was soreported or (iii) if the Common Stock is not so listed or quoted but aretraded in the over‐the‐counter market, the mean between the closingbid and asked price on that date, or, if there are no quotations available forsuch date, on the last preceding date on which such quotations shall be available,as reported by the Nasdaq Stock Market, or, if not reported by the Nasdaq StockMarket, by the National Quotation Bureau Incorporated.

 

                "Incentive Option"means an Option that is intended to comply with the requirements set forth inSection 422 of the Code.

 

                "NoncompetitionProvisions" has the meaning set forth in paragraph 8(c) hereof. 

 

                "NonemployeeDirector" has the meaning set forth in paragraph 4(b) hereof. 

 

                "Nonqualified StockOption" means an Option that is not an Incentive Option. 

 

                "Option" means aright to purchase a specified number of shares of Common Stock at a specifiedprice. 

 

                "Participant" meansan Employee or Director to whom an Award has been made under this Plan.

 

                "Performance Award"means an award made pursuant to this Plan to a Participant who is an Employeethat is subject to the attainment of one or more Performance Goals.

 

                "Performance Goal"means a standard established by the Committee, to determine in whole or in partwhether a Performance Award shall be earned.

 

 

2

 

----

 

 

                "Restricted Stock"means any Common Stock that is restricted or subject to forfeiture provisions.

 

                "Restriction Period"means a period of time beginning as of the date upon which an Award ofRestricted Stock is made pursuant to this Plan and ending as of the date uponwhich the Common Stock subject to such Award is no longer restricted or subjectto forfeiture provisions.

 

                "Rule 16b‐3"means Rule 16b‐3 promulgated under the Exchange Act, or anysuccessor rule.

 

                "SAR" means a rightto receive a payment, in cash or Common Stock, equal to the excess of the FairMarket Value or other specified valuation of a specified number of shares ofCommon Stock on the date the right is exercised over a specified strike price(in each case, as determined by the Committee).

 

                "Split‐Off"means the split‐off of the Company from General Motors Corporation ("GM")on June 7, 1996 pursuant to which each outstanding share of Class E CommonStock of GM was converted into one share of Common Stock, and the Companybecame an independent publicly‐traded corporation.

 

                "Stock Award" meansan award in the form of shares of Common Stock or units denominated in sharesof Common Stock. 

 

                "Stock OptionExchange Program" means the Stock Option Exchange Program approved as Proposal3 at the 2003 Annual Meeting of Shareholders of the Company.

 

                "Subsidiary" means(i) in the case of  a corporation, any corporation of which the Companydirectly or indirectly owns shares representing more than 50% of the combinedvoting power of the shares of all classes or series of capital stock of suchcorporation which have the right to vote generally on matters submitted to avote of the stockholders of such corporation and (ii) in the case of apartnership or other business entity not organized as a corporation, any such businessentity of which the Company directly or indirectly owns more than 50% of thevoting, capital or profits interests (whether in the form of partnershipinterests, membership interests or otherwise).

 

                4.  *Eligibility.*

 

                (a)  *Employees. *Employeeseligible for Employee Awards under this Plan shall consist of those Employeeswhose performance or contribution, in the judgment of the Committee, benefitsor will benefit the Company. 

 

                (b)  *Directors. *Directorseligible for Director Awards under this Plan are those who are not employees ofthe Company or any of its Subsidiaries ("Nonemployee Directors"). 

 

                5.  *Common StockAvailable for Awards. *Subject to the provisions of paragraph 15hereof, the aggregate number of shares of Common Stock that may be issued underthe Plan for Awards granted wholly or partly in Common Stock (including rightsor options which may be exercised for or settled in Common Stock) is 66,149,952[1] (in addition to any shares that are the subject of Awards outstanding as of May20, 2003), of which an aggregate of not more than 317, 338 shares shall beavailable for Director Awards (in addition to any shares subject to DirectorAwards as of May 20, 2003) and the remainder shall be available for EmployeeAwards, including Incentive Options (provided, that no Award of an IncentiveOption with respect to such shares shall be made on or after May 20**,**2013]), the date which is 10 years after the Board's approval of this amendedand restated Plan).  The number of shares of Common Stock that are thesubject of any Awards outstanding on or after December 31, 2002 that areforfeited or terminated, expire unexercised, are settled in cash in lieu ofCommon Stock or in a manner such that all or some of the shares covered by theAward are not issued to a Participant or are exchanged for Awards that do notinvolve Common Stock, shall again immediately become available for issuanceunder Awards hereunder.  The Committee may from time to time adopt andobserve such procedures concerning the counting of shares against the Planmaximum as it may deem appropriate.  The Board and the appropriate 

 

----

[1] This number will be subject to adjustment from time to time as follows:  (I)upward as a result of  options forfeited hereunder after 05/20/03 and (II)downward for those options issued pursuant to other equity plans and eligiblefor exchange for options under this plan but subsequently  not exchanged inconnection with the Stock Option Exchange Program.

 

3

 

----

 

 

officers of the Company shallfrom time to time take whatever actions are necessary to file any requireddocuments with governmental authorities, stock exchanges and transactionreporting systems to ensure that shares of Common Stock are available forissuance pursuant to Awards.

 

6.             *Administration. *

 

                (a)  This Planshall be administered by the Committee.  The Board, in its sole discretion mayexercise any authority of the Committee under the Plan in lieu of theCommittee's exercise thereof, in which instances references to the Committeeshall refer to the Board.  To the extent required (i) in order for EmployeeAwards to be exempt from Section 16 of the Exchange Act by virtue of theprovisions of Rule 16b‐3, the Committee shall be the Board or shallconsist of at least two members of the Board who meet the requirements of thedefinition of "non‐employee director" set forth in Rule 16b‐3promulgated under the Exchange Act, and (ii) with respect to any Award that isintended to qualify as "performance‐based compensation" under Section162(m) of the Code, the Committee shall consist of two or more directors, eachof whom meets the definition of "outside director" under said Section 162(m). 

 

                (b)  Subject to theprovisions hereof, the Committee shall have full and exclusive power andauthority to administer this Plan and to take all actions which arespecifically contemplated hereby or are necessary or appropriate in connection withthe administration hereof.  The Committee shall also have full and exclusivepower to interpret this Plan and to adopt, amend and rescind such rules,regulations and guidelines for carrying out this Plan as it may deem necessaryor proper, all of which powers shall be exercised in the best interests of theCompany and in keeping with the objectives of this Plan.  The Committee may, inits discretion, provide for the extension of the exercisability of an Award,accelerate the vesting or exercisability of an Award, eliminate or make lessrestrictive any restrictions contained in an Award, waive any restriction orother provision of this Plan or an Award or otherwise amend or modify an Awardin any manner (except any change which would result in the lowering of thegrant price without shareholder approval) that is either (i) not adverseto the Participant to whom such Award was granted or (ii) consented to bysuch Participant. The Committee may correct any defect or supply any omissionor reconcile any inconsistency in this Plan or in any Award in the manner andto the extent the Committee deems necessary or desirable to carry it intoeffect.  Any decision of the Committee in the interpretation and administrationof this Plan shall lie within its sole and absolute discretion and shall befinal, conclusive and binding on all parties concerned.  

 

                (c)  No member of theCommittee or officer of the Company to whom the Committee has delegatedauthority in accordance with the provisions of paragraph 7 of this Plan shallbe liable for anything done or omitted to be done by him or her, by any memberof the Committee or by any officer of the Company in connection with theperformance of any duties under this Plan, except for his or her own willfulmisconduct or as expressly provided by statute.

 

                7.  *Delegation ofAuthority. *The Committee may delegate to the Chief Executive Officer andto other senior officers of the Company its duties under this Plan pursuant tosuch conditions or limitations as the Committee may establish, except that theCommittee may not delegate to any person the authority to grant Awards to, ortake other action with respect to, Participants who at the time of such awardsor action are subject to Section 16 of the Exchange Act or are "coveredemployees" as defined in Section 162(m) of the Code.  The Committee cannot,however, delegate its duties when it involves Participants who are (1) subjectto Section 16 of the Exchange Act or (2) now or may (in the estimation of theCommittee) be "covered employees" under Section 162(m) of the Code.  

 

8.  *EmployeeAwards.*

 

               (a)  The Committee shall determine the type or types of Employee Awards tobe made under this Plan and shall designate from time to time the Employees whoare to be the recipients of such Awards.  Each Employee Award may beembodied in an Employee Award Agreement or Employee Award Statement, which shallcontain such terms, conditions and limitations as shall be determined by theCommittee in its sole discretion.    Employee Awards may consistof those listed in this paragraph 8(a) hereof and may be granted singly, incombination or in tandem.  Employee Awards may also be made in combinationor in tandem with, in replacement of, or as alternatives to, grants or rightsunder this Plan or any other employee plan of the Company or any of itsSubsidiaries, including the plan of any acquired entity; provided that no Optionmay be issued in exchange for the cancellation of an Option with a lowerexercise price other than in connection with the Stock Option Exchange Program.  An Employee Award may provide for the grant or issuance of additional,replacement or alternative Employee Awards upon the occurrence of specifiedevents, including the exercise of the original Employee Award granted to aParticipant.  All or part of an Employee Award may be subject to 

 

4

 

----

 

 

conditions established by the Committee, which mayinclude, but are not limited to, continuous service with the Company andits Subsidiaries, achievement of specific business objectives, increases in specifiedindices, attainment of specified growth rates and other comparable measurementsof performance.  Upon the termination of employment by a Participant who is anEmployee, any unexercised, deferred, unvested or unpaid Employee Awards shallbe treated as set forth in the applicable Employee Award Agreement or EmployeeAward Statement.

 

                (i)  *StockOption. *An Employee Award may be in the form of an Option.  An Optionawarded pursuant to this Plan may consist of an Incentive Option or aNonqualified Option.  The price at which shares of Common Stock may bepurchased upon the exercise of an Incentive Option shall be not less than theFair Market Value of the Common Stock on the date of grant.  The price at whichshares of Common Stock may be purchased upon the exercise of a NonqualifiedOption shall be not less than, but may exceed, the Fair Market Value of theCommon Stock on the date of grant.  Subject to the foregoing provisions, theterms, conditions and limitations applicable to any Options awarded pursuant tothis Plan, including the term of any Options and the date or dates upon whichthey become exercisable, shall be determined by the Committee. 

 

                (ii)  *StockAppreciation Right. *An Employee Award may be in the form of an SAR.  Theterms, conditions and limitations applicable to any SARs awarded pursuant tothis Plan, including the term of any SARs and the date or dates upon which theybecome exercisable, shall be determined by the Committee. 

 

                (iii)  *StockAward. *An Employee Award may be in the form of a Stock Award.  The terms,conditions and limitations applicable to any Stock Awards granted pursuant tothis Plan shall be determined by the Committee. 

 

                (iv)  *CashAward. *An Employee Award may be in the form of a Cash Award.  The terms,conditions and limitations applicable to any Cash Awards granted pursuant tothis Plan shall be determined by the Committee. 

 

                (v)  *PerformanceAward. *Without limiting the type or number of  Employee Awardsthat may be made under the other provisions of this Plan, an Employee Award maybe in the form of a Performance Award.  A Performance Award shall be paid,vested or otherwise deliverable solely on account of the attainment of one ormore pre‐established, objective Performance Goals established by the Committeeprior to the earlier to occur of (x) 90 days after the commencement of theperiod of service to which the Performance Goal relates and (y) the elapse of25% of the period of service (as scheduled in good faith at the time the goal isestablished), and in any event while the outcome is substantially uncertain. A Performance Goal is objective if a third party having knowledge of therelevant facts could determine whether the goal is met. A Performance Goal maybe based on one or more of business criteria that apply to the individual, oneor more business units of the Company, or the Company as a whole, and mayinclude one or more of the following criteria: revenue, net income, Common Stockprice, stockholder return, stockholder value, economic value, earnings pershare, market performance, return on assets, return on equity, earnings,operating profits, cash flow, working capital, costs, new business contractvalues, and/or such other financial, accounting or quantitative metricdetermined by the Committee.  A Performance Goal may, but need not be,based upon a change or an increase or positive result under a particularbusiness criterion and could include, for example, maintaining the status quo,limiting economic losses, or a relative comparison of performance to theperformance of a peer group or other external or internal measure (measured, in each case, by reference to specific business criteria).  APerformance Goal may include or exclude items to measure specific objectives,including, without limitation, extraordinary or other non‐recurring items,acquisitions and divestitures, internal restructuring and reorganizations,accounting charges and effects of accounting changes.  In interpreting Planprovisions applicable to Performance Goals and Performance Awards applicable toAwards to Employees who are "covered employees" under Section 162(m) of theCode, it is the intent of the Plan to conform with the standards ofSection 162(m) of the Code and Treasury Regulations Section 1.162‐27(e)(2)(i),and the Committee in establishing such goals and interpreting the Plan shall beguided by such provisions.  Prior to the payment of any compensation basedon the achievement of Performance Goals to any such "covered employee", theCommittee must certify in writing that applicable Performance Goals and any ofthe material terms thereof were, in fact, satisfied.  In the case of Employeeswho are or 

 

5

 

----

 

 

may be "covered employees" underSection 162(m) of the Code (in the estimation of the Committee), the Committee has nodiscretion to increase the amount of a Performance Award that is payable, vested, or otherwisedeliverable under this paragraph. Notwithstanding anything herein to thecontrary, in the case of an Employee who is not a "covered employee" underSection 162(m) of the Code, a Performance Award that is payable, vested orotherwise deliverable under this paragraph may be increased or decreaseddepending on such Employee's satisfaction of one or more objective ornon-objective individual goals established from time to time by the Company'smanagement.  .Subject to the foregoing provisions, the terms, conditions andlimitations applicable to any Performance Awards made pursuant to this Planshall be determined by the Committee. 

 

(b)  Notwithstandinganything to the contrary contained in this Plan, the following limitationsshall apply to any Employee Awards made hereunder:

 

                (i)  No Participantmay be granted, during any calendar year period, Employee Awards consisting ofOptions or SARs that are exercisable for more than 2,000,000 shares of CommonStock, subject to adjustment pursuant to the provisions of paragraph 15 hereof;

 

                (ii)  No Participantmay be granted, during any calendar period, Employee Awards consisting ofshares of Common Stock or units denominated in such shares (other than anyEmployee Awards consisting of Options or SARs) covering or relating to morethan 500,000 shares of Common Stock, subject to adjustment pursuant to theprovisions of paragraph 15 hereof (the limitation set forth in thisclause (ii), together with the limitation set forth in clause (i)above, being hereinafter collectively referred to as the "Stock Based AwardsLimitations"); and

 

                (iii)  NoParticipant may be paid under any Employee Awards consisting of Cash Awards orany other form permitted under this Plan (other than Employee Awards consistingof Options or SARs or otherwise consisting of shares of Common Stock or unitsdenominated in such shares) in respect of any calendar‐year period anamount in excess of $6,000,000.

 

                (c)  Prior to theSplit‐Off, certain awards consisting of shares of GM Class E CommonStock or units denominated in such shares (the "Existing Stock Awards") hadbeen made to Employees under the Plan as in effect from time to time prior tothe Split‐Off.  As of the Split‐Off, each Existing Stock Award wasadjusted so that such award consisted of or related to a number of shares ofCommon Stock equal to the number of shares of GM Class E Common Stock thatwere the subject of such Existing Stock Award immediately prior to such date,without any alteration or enlargement of the rights of the holders thereof. Notwithstanding anything to the contrary contained in this Plan, all ExistingStock Awards that were subject to the restrictions and other provisionsrelating to competition by participants and related matters set forth inSection 10 of the Plan as in effect immediately prior to the Split‐Off(the "Noncompetition Provisions") continue to be subject to the NoncompetitionProvisions, as fully and to the same extent as if such Section 10 were setforth herein in its entirety.  Awards made after the Split‐Off shall besubject to such restrictions and other provisions relating to competition orother conduct detrimental to the Company as determined by the Committee.

 

                9.  *DirectorAwards. *Each Nonemployee Director of the Company may be granted DirectorAwards in accordance with this paragraph 9 and subject to the applicableterms, conditions and limitations set forth in this Plan and the applicableDirector Award Agreement.  Notwithstanding anything to the contrary containedherein, Director Awards shall not be made in any year in which a sufficientnumber of shares of Common Stock are not available to make such Awards underthis Plan.

 

(a)  *DirectorOptions*  A Nonemployee Director may make an annual election to receive, inlieu of all or any portion of the Director's fees he or she would otherwise beentitled to receive in cash during the next year (including both annualretainer and meeting fees), Director Options that provide for the purchase of anumber of shares of Common Stock (rounded up to the nearest whole number) equalto the product of (x) three times (y) a fraction the numerator ofwhich is equal to the dollar amount of fees the Nonemployee Director elects toforego in the next year in exchange for Director Options and the denominator ofwhich is equal to the Fair Market Value of the Common Stock on the effectivedate of the election.  Notwithstanding the foregoing, a NonemployeeDirector may not elect to receive Director Options in lieu of all or any portionof the Director's fees he or she would otherwise be entitled to receive in cashin respect of any compensation period commencing on or after the Company's 2005Annual Meeting of 

 

 

6

 

----

 

 

Shareholders. Each annual election made by a Nonemployee Director pursuant tothis paragraph 9(a) (i) shall take the form ofa written document signed by such Nonemployee Director and filed with the Secretary of the Company,(ii) shall designate the dollar amount of the fees the Nonemployee Directorelects to forego in the next year in exchange for Director Options and(iii) to the extent provided by the Committee in order to ensure that theAward of the Director Options is exempt from Section 16 by virtue of Rule 16b‐3,shall be irrevocable and shall be made prior to the date as of which such Awardof Director Options is to be effective.  An Award of Director Options at theelection of a Nonemployee Director shall be effective on the next AnnualDirector Award Date.  Each Director Option shall have a term of ten years fromthe date of grant, notwithstanding any earlier termination of the status of theholder as a Nonemployee Director.  The purchase price of each share of CommonStock subject to a Director Option shall be equal to the Fair Market Value ofthe Common Stock on the date of grant.  All Director Options shall vest andbecome exercisable in increments of one‐third of the total number ofshares of Common Stock that are subject thereto (rounded up to the nearestwhole number) on the first and second anniversaries of the date of grant and ofall remaining shares of Common Stock that are subject thereto on the thirdanniversary of the date of grant.  Any Award of Director Options shall beembodied in a Director Award Agreement, which shall contain the terms,conditions and limitations set forth above and shall be signed by theParticipant to whom the Director Options are granted and by an AuthorizedOfficer for and on behalf of the Company.  

 

                (b)  *DirectorRestricted Stock*  A Nonemployee Director may make an annual election toreceive, in lieu of all or any portion of the Director's fees he or she wouldotherwise be entitled to receive in cash during the next year (including bothannual retainer and meeting fees), a number of shares of Director RestrictedStock (rounded up to the nearest whole number) having a Fair Market Value equalto 110% of a fraction the numerator of which is equal to the dollar amount offees the Nonemployee Director elects to forego in the next year in exchange forDirector Restricted Stock and the denominator of which is equal to the FairMarket Value of the Common Stock on the effective date of the election.  Eachannual election made by a Nonemployee Director pursuant to thisparagraph 9(b) (i) shall take the form of a written document signed bysuch Nonemployee Director and filed with the Secretary of the Company,(ii) shall designate the dollar amount of the fees the NonemployeeDirector elects to forego in the next year in exchange for Director RestrictedStock and (iii) to the extent provided by the Committee in order to ensurethat the Award of the Director Restricted Stock is exempt from Section 16by virtue of Rule 16b‐3, shall be irrevocable and shall be madeprior to the date as of which such Award of Director Restricted Stock is to beeffective. Shares of Director Restricted Stock awarded to a NonemployeeDirector (a) shall vest in increments of one‐third of the totalnumber of shares of Director Restricted Stock (rounded up to the nearest wholenumber) that are the subject of such Award on the first and secondanniversaries of the date of grant and all remaining shares of DirectorRestricted Stock that are the subject of such Award on the third anniversary ofthe date of grant and (b) shall fully vest (to the extent not previouslyvested pursuant to clause (a) above) upon a failure to reelect theNonemployee Director as Director, or the resignation of the Director at therequest of a majority of the other Directors.  An Award of Director RestrictedStock at the election of a Nonemployee Director shall be effective on the nextAnnual Director Award Date. Any Award of Director Restricted Stock shall beembodied in a Director Award Agreement, which shall contain the terms,conditions and limitations set forth above and shall be signed by theParticipant to whom the Director Restricted Stock is granted and by anAuthorized Officer for and on behalf of the Company. 

 

                (c)  *Forfeiture ofDirector Options and Director Restricted Stock.*  In the event a NonemployeeDirector's service as a director ends for any reason (except death or Disability)prior to completing at least twenty-four (24) months of service as a director,the Nonemployee Director will be entitled to retain only a pro-rata portion ofthe Director Options and/or Director Restricted Stock awarded in respect of theBoard of Directors compensation year in which such service as a director ended,based on the number of full months such Nonemployee Director served during suchBoard of Directors compensation year divided by twelve (12) months (or if theNonemployee Director's service began after the commencement of such Board ofDirectors compensation year, the number of full months between suchcommencement date and the end of such Board of Directors compensation year),with the pro-rated amount to be fully vested and the remainder forfeited.  Inthe event a Nonemployee Director's service as a director ends for any reasonafter the completion of at least twenty-four (24) months of service as adirector, or ends as a result of death or Disability at any time regardless ofthe length of the Nonemployee Director's service, all unvested Director Optionsand Director Restricted Stock shall immediately vest. 

 

 

7

 

----

 

10.          *Payment of Awards.*

 

                (a)  *General.* Payment of Employee Awards may be made in the form of cash or Common Stock, ora combination thereof, and may include such restrictions as the Committee shalldetermine, including, in the case of Common Stock, restrictions on transfer andforfeiture provisions.  If payment of an Employee Award is made in the form ofRestricted Stock, the Employee Award Agreement or Employee Award Statementrelating to such shares shall specify whether they are to be issued at thebeginning or end of the Restriction Period.  In the event that shares of RestrictedStock are to be issued at the beginning of the Restriction Period, thecertificates evidencing such shares (to the extent that such shares are soevidenced) shall contain appropriate legends and restrictions that describe theterms and conditions of the restrictions applicable thereto.  In the event thatshares of Restricted Stock are to be issued at the end of the RestrictedPeriod, the right to receive such shares shall be evidenced by book entryregistration or in such other manner as the Committee may determine. 

 

                (b)  *Dividends andInterest. *Rights to dividends or Dividend Equivalents may be extended toand made part of any Employee Award consisting of shares of Common Stock orunits denominated in shares of Common Stock, subject to such terms, conditionsand restrictions as the Committee may establish.  The Committee may alsoestablish rules and procedures for the crediting of interest on deferred cashpayments and Dividend Equivalents for Employee Awards consisting of shares ofCommon Stock or units denominated in shares of Common Stock. 

 

                (c)  *Substitutionof Awards. *At the discretion of the Committee, a Participant who is anEmployee may be offered an election to substitute an Employee Award for anotherEmployee Award or Employee Awards of the same or different type.

 

                11.  *Stock OptionExercise. *The price at which shares of Common Stock may be purchased underan Option shall be paid in full at the time of exercise in cash or, if electedby the optionee, the optionee may purchase such shares by means of tenderingCommon Stock or surrendering another Award, including Restricted Stock orDirector Restricted Stock, valued at Fair Market Value on the date of exercise,or any combination thereof.  The Committee shall determine acceptable methodsfor Participants who are Employees to tender Common Stock (including byattestation of ownership) or other Employee Awards; provided that any CommonStock that is or was the subject of an Employee Award may be so tendered onlyif it has been held by the Participant for six months.  The Committee mayprovide for procedures to permit the exercise or purchase of such Awards by useof the proceeds to be received from the sale of Common Stock issuable pursuantto an Employee Award.  Unless otherwise provided in the applicable AwardAgreement or Employee Award Statement, in the event shares of Restricted Stockare tendered as consideration for the exercise of an Option, a number of theshares issued upon the exercise of the Option, equal to the number of shares ofRestricted Stock or Director Restricted Stock used as consideration therefore,shall be subject to the same restrictions as the Restricted Stock or DirectorRestricted Stock so submitted as well as any additional restrictions that maybe imposed by the Committee.

 

                12.  *TaxWithholding. *The Company shall have the right to deduct applicable taxesfrom any Employee Award payment and withhold, at the time of delivery orvesting of cash or shares of Common Stock under this Plan, or if later, thedate of income recognition, an appropriate amount of cash or number of sharesof Common Stock or a combination thereof for payment of taxes required by lawor to take such other action as may be necessary in the opinion of the Companyto satisfy all obligations for withholding of such taxes.  The Committee mayalso permit withholding to be satisfied by the transfer to the Company ofshares of Common Stock theretofore owned by the holder of the Employee Awardwith respect to which withholding is required.  If shares of Common Stock areused to satisfy tax withholding, such shares shall be valued based on the FairMarket Value when the tax withholding is required to be made.  The Committeemay provide for loans, on either a short term or demand basis, from the Companyto a Participant who is an Employee to permit the payment of taxes required bylaw.  Any income or compensation arising out of the****grant, vesting orexercise of an Employee Award shall not be taken into account in determiningovertime, bonus, life insurance, pension or such other benefits except asprovided in the relevant plan or policy covering such compensation or benefitsor as otherwise required by law.

 

                13.  *Amendment,Modification, Suspension or Termination. *The Board may amend, modify,suspend or terminate this Plan for the purpose of meeting or addressing anychanges in legal requirements or for any other purpose permitted by law, exceptthat no amendment or alteration that would adversely affect the rights ofany Participant under any Award previously granted to such Participant shall bemade without the consent of such Participant.

 

8

 

----

 

 

                14.  *Assignability. *Except as provided below, no Award or any other benefit under this Planshall be assignable or otherwise transferable except by will or the laws of descentand distribution or pursuant to a qualified domestic relations order as definedby the Code or Title I of the Employee Retirement Income Security Act, orthe rules thereunder.  Notwithstanding the foregoing, the Committee may, in itsdiscretion, authorize all or a portion of the Nonqualified Stock Optionsgranted to a Participant to be transferable to:

 
|  
(a) 
the spouse, same-sex domestic partner, parents, children,stepchildren, grandchildren or legal dependents of the Participant ("ImmediateFamily Members");

 

 
(b)
a trust or trusts solely for the    benefit of the Participant and/or such Immediate Family Members, or;

 
 
(c)
a partnership in which the only    partners are the Participant, such Immediate Family Members and/or a trust    or trusts solely for the benefit of the Participant and/or such Immediate    Family Members, provided that:

 
 
 
(i)  
there may be no consideration for    any such transfer;

 
 
 
(ii) 
the Employee Award Agreement or    Employee Award Statement pursuant to which such Options are granted    expressly provides for transferability in a manner consistent with this    paragraph 14; and

 
 
 
(iii) 
subsequent transfers of    transferred Options shall be prohibited except those to the Participant or    individuals or entities described in clauses (a), (b) or (c) above, or by    the laws of descent or distribution.
                                 

Following transfer, any such Optionsshall continue to be subject to the same terms and conditions as wereapplicable immediately prior to transfer, including but not limited to, (i)restrictions or other provisions relating to competition or other conductdetrimental to the Company, and (ii) the obligation of the Participant forpayment of taxes with respect to the exercise of such Options and the rights ofthe Company to withhold such taxes from the Participant or to otherwise requirethe Participant to satisfy all obligations for the withholding of such taxes ascontemplated by paragraph 12 above.  The provisions relating to the period ofexercisability and expiration of the Option shall continue to be applied with respectto the original Participant, and the Options shall be exercisable by thetransferee only to the extent, and for the periods, set forth in the EmployeeAward Agreement or Employee Award Statement.

 

The Committee mayprescribe and include in applicable Award Agreements or Employee AwardStatements other restrictions on transfer.  Any attempted assignment of anAward or any other benefit under this Plan in violation of thisparagraph 14 shall be null and void.

 

                15.*          Adjustments.*

 

                (a)  The existence ofoutstanding Awards shall not affect in any manner the right or power of theCompany or its stockholders to make or authorize any or all adjustments,recapitalizations, reorganizations or other changes in the capital stock of theCompany or its business or any merger or consolidation of the Company, or anyissue of bonds, debentures, preferred or prior preference stock (whether or notsuch issue is prior to, on a parity with or junior to the Common Stock) or thedissolution or liquidation of the Company, or any sale or transfer of all orany part of its assets or business, or any other corporate act or proceeding ofany kind, whether or not of a character similar to that of the acts orproceedings enumerated above.

 

               (b)  In the event of any subdivision or consolidation of outstanding sharesof Common Stock, declaration of a dividend payable in shares of Common Stock orother stock split, then (i) the number of shares of Common Stock reserved underthis Plan, (ii) the number of shares of Common Stock covered by outstandingAwards in the form of Common Stock or units denominated in  

 

 

9

 

 

 

Common Stock, (iii) the exercise or other price in respectof such Awards, (iv) the appropriate FairMarket Value and other price determinations for such Awards, (v) the number ofshares of Common Stock covered by Director Options  granted  pursuantto paragraph 9(a) hereof, (vi) the number of shares of Director Restricted Stockgranted pursuant to paragraph 9(b) hereof and (vii) the Stock Based AwardsLimitations shall each be proportionately adjusted by the Board to reflect suchtransaction.  In the event of any other recapitalization or capitalreorganization of the Company, any consolidation or merger of the Company withanother corporation or entity, the adoption by the Company of any plan ofexchange affecting the Common Stock or any distribution to holders of CommonStock of securities or property (other than normal cash dividends or dividendspayable in Common Stock), the Board or Committee shall make appropriateadjustments to (i) the number of shares of Common Stock covered by Awards in theform of Common Stock or units denominated in Common Stock, (ii) the exercise orother price in respect of such Awards, (iii) the appropriate Fair Market Valueand other price determinations for such Awards, (iv) the number of shares ofCommon Stock covered by Director Options granted pursuant to paragraph 9(a)hereof, (v) the number of shares of Director Restricted Stock  grantedpursuant to paragraph 9(b) hereof and (vi) the Stock Based Awards Limitations togive effect to such transaction shall each be proportionately adjusted by theBoard to reflect such transaction; provided that such adjustments shall only besuch as are necessary to maintain the proportionate interest of the holders ofthe Awards and preserve, without exceeding, the value of such Awards.  Inthe event of a corporate merger, consolidation, acquisition of property orstock, separation, reorganization or liquidation, the Board shall be authorizedto issue or assume Awards by means of substitution of new Awards, asappropriate, for previously issued Awards or an assumption of previously issuedAwards as part of such adjustment.

 

                16.  *Restrictions.  *No Common Stock or other form of payment shall be issued with respect toany Award unless the Company shall be satisfied based on the advice of itscounsel that such issuance will be in compliance with applicable federal andstate and non-U.S.****securities laws.  It is the intent of the Companythat this Plan comply with Rule 16b‐3 with respect to personssubject to Section 16 of the Exchange Act unless otherwise provided hereinor in an Award Agreement or Employee Award Statement, that any ambiguities orinconsistencies in the construction of this Plan be interpreted to give effectto such intention, and that if any provision of this Plan is found not to be incompliance with Rule 16b‐3, such provision shall be null and void tothe extent required to permit this Plan to comply with Rule 16b‐3. Certificates evidencing shares of Common Stock certificates delivered underthis Plan (to the extent that such shares are so evidenced) may be subject tosuch stop transfer orders and other restrictions as the Committee may deemadvisable under the rules, regulations and other requirements of the Securitiesand Exchange Commission, any securities exchange or transaction reportingsystem upon which the Common Stock is then listed or to which it is admittedfor quotation and any applicable federal or state and non-U.S.****securitieslaws.  The Committee may cause a legend or legends to be placed upon suchcertificates (if any) to make appropriate reference to such restrictions.

 

                17.  *UnfundedPlan. *Insofar as it provides for Awards of cash, Common Stock or rightsthereto, this Plan shall be unfunded.  Although bookkeeping accounts may beestablished with respect to Participants who are entitled to cash, Common Stockor rights thereto under this Plan, any such accounts shall be used merely as abookkeeping convenience.  The Company shall not be required to segregate anyassets that may at any time be represented by cash, Common Stock or rightsthereto, nor shall this Plan be construed as providing for such segregation,nor shall the Company, the Board or the Committee be deemed to be a trustee ofany cash, Common Stock or rights thereto to be granted under this Plan.  Anyliability or obligation of the Company to any Participant with respect to anAward of cash, Common Stock or rights thereto under this Plan shall be basedsolely upon any contractual obligations that may be created by this Plan, AwardAgreement or any Employee Award Statement, and no such liability or obligationof the Company shall be deemed to be secured by any pledge or other encumbranceon any property of the Company.  Neither the Company nor the Board or theCommittee shall be required to give any security or bond for the performance ofany obligation that may be created by this Plan.

 

                18. *Governing Law. *This Plan and all determinations made and actions takenpursuant hereto, to the extent not otherwise governed by mandatory provisionsof the Code or the securities laws of the United States, shall be governed byand construed in accordance with the laws of the State of Delaware.

 

 

10 |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|