**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 CoveredEmployees  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; OtherTerms  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 itsThird Amended and Restated Equity Incentive Plan (as amended, the“Plan”) as of August 10, 2009,as follows:**1. PURPOSE**     This Plan is intended to (a) provide incentive to eligible persons to stimulate their effortstoward the continued success of the Company and to operate and manage their businesses in a mannerthat will provide for the long-term growth and profitability of the Company; and (b) provide ameans of obtaining, rewarding and retaining key personnel. To this end, the Plan provides for thegrant of stock options, stock appreciation rights, restricted stock, stock units, unrestrictedstock, dividend equivalent rights and cash awards. Any of these awards may, but need not, be madeas performance incentives to reward attainment of annual or long-term performance goals inaccordance with the terms hereof. Stock options granted under the Plan may be non-qualified stockoptions or incentive stock options, as provided herein.**2. DEFINITIONS**     For purposes of interpreting the Plan and related documents (including Award Agreements), thefollowing definitions shall apply:     2.1 **“Affiliate”**means, with respect to the Company, any company or other trade or businessthat controls, is controlled by or is under common control with the Company within the meaning ofRule 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 beconsidered an Affiliate unless the Company holds a “controlling interest” in such entity, where theterm “controlling interest” has the same meaning as provided in Treasury Regulations section1.414(c)-2(b)(2)(i), provided that the language “at least 50 percent” is used instead of “at least80 percent” and, provided further, that where granting of stock options or stock appreciationrights is based upon a legitimate business criteria, the language “at least 20 percent” is usedinstead of “at least 80 percent” each place it appears in Treasury Regulations section1.414(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 fiscalyear, 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 aGrantee 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 theCompany or any Affiliate of the Company, on the date of Termination of Employment, or if no suchdefinition or employment agreement exists, “Cause” means conduct amounting to (i) fraud ordishonesty against the Company or any Affiliate of the Company, (ii) Service Provider’s willfulmisconduct, repeated refusal to follow the reasonable directions of the Board, any executiveofficer or departmental head of the Company or any Affiliate, or knowing violation of law in thecourse of performance of the duties of Service Provider’s employment with the Company or anyAffiliate 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’spremises or while performing Services for the Company or any of its Affiliates, (v) a conviction orplea of guilty or nolo contendere to a felony or a crime involving dishonesty, or (vi) a materialbreach or violation of the terms of any employment or other agreement to which Service Provider andthe 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 Boardto 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 amerger, consolidation, or reorganization of the Company with one or more other entities in whichthe Company is not the surviving entity, (ii) a sale of substantially all of the assets of theCompany to another person or entity, or (iii) any transaction (including without limitation amerger or reorganization in which the Company is the surviving entity) which results in any personor entity (other than persons who are shareholders or Affiliates of the Company or Affiliates ofsuch shareholders immediately prior to the transaction) owning 50% or more of the combined votingpower of all classes of stock of the Company.     2.12 **“Covered Employee”**means a Grantee who is a Covered Employee within the meaning ofSection 162(m)(3) of the Code.     2.13 **“Disability”**has the same meaning as provided in the long-term disability plan or policymaintained 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 shallmean that condition described in Code Section 22(e)(3), as amended from time to time. In theevent of a dispute, the determination of Disability shall be made by the Board and shall besupported 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, toreceive cash, Stock, other Awards or other property equal in value to dividends paid with respectto 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 ashereafter amended.     2.16 **“Fair Market Value”**means the value of a share of Stock, determined as follows: if onthe Grant Date or other determination date the Stock is listed on an established national orregional stock exchange, or is publicly traded on an established securities market, the Fair MarketValue of a share of Stock shall be the closing price of the Stock on such exchange or in suchmarket (if there is more than one such exchange or market, the principal exchange or market onwhich the shares of Stock are listed) on the Grant Date or such other determination date or, if nosale of Stock is reported for such date, the Fair Market Value shall be the Fair Market Value onthe next preceding day on which any sale shall have been reported. If the Stock is not listed onsuch an exchange, quoted on such system or traded on such a market, Fair Market Value shall be thevalue of the Stock as determined by the Board in good faith. Notwithstanding the foregoing, forOptions with a Grant Date of the date of the assumption of the Plan by the Company fromCapitalSource Holdings LLC, Fair Market Value on such Grant Date shall be the price per share atwhich the Company sold Stock in the Company’s initial public offering as set forth in theunderwriting agreement among the Company, the selling stockholders named therein and therepresentatives of the several underwriters named in a schedule thereto. Effective as of August11, 2009, for purposes of determining taxable income and the amount of the related tax withholdingobligation under Section 19.3, notwithstanding this Section 2.16 or Section 19.3, for any shares ofStock that are sold on the same day that such shares are first legally saleable pursuant to theterms of the applicable award agreement, Fair Market Value shall be determined based upon the saleprice for such shares so long as the grantee has provided the Company with advance written noticeof such sale.     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 adoptiverelationships, of the Grantee, any person sharing the Grantee’s household (other than a tenant oremployee), a trust in which any one or more of these persons have more than fifty percent of thebeneficial 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 (orthe 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 therecipient 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.
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     2.20 **“Incentive Stock Option”**means an “incentive stock option” within the meaning of Section422 of the Code, or the corresponding provision of any subsequently enacted tax statute, as amendedfrom time to time.     2.21 **“Non-qualified Stock Option”**means an Option that is not an Incentive Stock Option.     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 theCompany.     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, asamended, modified or restated from time to time.     2.28 **“Purchase Price”**means the purchase price for each share of Stock pursuant to a grant ofRestricted Stock or Stock Units.     2.29 **“Reporting Person”**means a person who is required to file reports under Section 16(a) ofthe 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 Granteeunder **Section 10**hereof.     2.32 **“Securities Act”**means the Securities Act of 1933, as now in effect or as hereafteramended.     2.33 **“Service”**means service as an employee, officer, Outside Director or other ServiceProvider of the Company or an Affiliate. Unless otherwise stated in the applicable AwardAgreement, a Grantee’s change in position or duties shall not result in interrupted or terminatedService, so long as such Grantee continues to be an employee, officer, Outside Director or otherService Provider of the Company or an Affiliate. Subject to the preceding sentence, whether atermination of Service shall have occurred for purposes of the Plan shall be determined by theBoard, which determination shall be final, binding and conclusive.
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     2.34 **“Service Provider”**means an employee, officer or Outside Director of the Company or anAffiliate, or an individual who is a consultant or adviser providing services to the Company or anAffiliate.     2.35 **“Stock”**means the common stock, par value $.01 per share, of the Company.     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 ofSection 424(f) of the Code.     2.39 **“Substitute Award”**means an Award granted upon assumption of, or in substitution for, anoutstanding award previously granted by a company or other entity acquired by the Company or anyAffiliate 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 thetotal combined voting power of all classes of outstanding stock of the Company, its parent or anyof its Subsidiaries. In determining stock ownership, the attribution rules of Section 424(d) ofthe 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 asare consistent with the Company’s amended and restated certificate of incorporation and amended andrestated by-laws, in each case, as amended, modified or supplemented from time to time, andapplicable law. The Board shall have full power and authority to take all actions and to make alldeterminations required or provided for under the Plan, any Award or any Award Agreement, and shallhave full power and authority to take all such other actions and make all such other determinationsnot inconsistent with the specific terms and provisions of the Plan that the Board deems to benecessary or appropriate to the administration of the Plan, any Award or any Award Agreement. Allsuch actions and determinations shall be by the affirmative vote of a majority of the members ofthe Board present at a meeting or by unanimous consent of the Board
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executed in writing inaccordance with the Company’s amended and restated certificate of incorporation and amended andrestated by-laws, in each case, as amended, modified or supplemented from time to time, andapplicable law. The interpretation and construction by the Board of any provision of the Plan, anyAward or any Award Agreement shall be final and conclusive.     **3.2. Committee**     The Board from time to time may delegate to the Committee such powers and authorities relatedto the administration and implementation of the Plan, as set forth in **Section 3.1**above and otherapplicable provisions, as the Board shall determine, consistent with the amended and restatedcertificate of incorporation and amended and restated by-laws of the Company, in each case, asamended, modified or supplemented from time to time, and applicable law. The Board may alsoappoint one or more separate committees of the Board, each composed of one or more directors of theCompany who need not be Outside Directors, who may administer the Plan with respect to employees orother Service Providers who are not executive officers or directors of the Company or itsAffiliates, may grant Awards under the Plan to such employees or other Service Providers, and maydetermine all terms of such Awards. In addition, the Committee may delegate to one or moreexecutive officers of the Company or its Affiliates the authority to grant Awards to employees orother Service Providers who are not executive officers or directors of the Company. Suchdelegation shall specify the maximum number of shares of Stock that may be granted by suchofficer(s), as well as the time period during which the delegation shall remain in effect. In theevent that the Plan, any Award or any Award Agreement entered into hereunder provides for anyaction to be taken by or determination to be made by the Board, such action may be taken or suchdetermination may be made by the Committee if the power and authority to do so has been delegatedto the Committee by the Board as provided for in this Section. Unless otherwise expresslydetermined by the Board, any such action or determination by the Committee shall be final, bindingand conclusive. To the extent permitted by law, the Committee may delegate its authority under thePlan 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 finalauthority 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, theexercise price of any Option, the nature and duration of any restriction or condition (or provisionfor lapse thereof) relating to the vesting, exercise, transfer, or forfeiture of an Award or theshares of Stock subject thereto, the treatment of an Award in the event of a Corporate Transactionand 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
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     (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 Planbut without amending the Plan, to make or modify Awards to eligible individuals who are foreignnationals or are individuals who are employed outside the United States to recognize differences inlocal law, tax policy, or custom.     The Board shall have the right, in its discretion, to make Awards in substitution or exchangefor any other award under another plan of the Company, any Affiliate, or any business entity to beacquired by the Company or an Affiliate. The Committee may retain the right in an Award Agreementto cause a forfeiture of the gain realized by a Grantee on account of actions taken by the Granteein violation or breach of or in conflict with any non-competition agreement, any agreementprohibiting solicitation of employees or clients of the Company or any Affiliate thereof or anyconfidentiality obligation with respect to the Company or any Affiliate thereof, to the extentspecified in such Award Agreement applicable to the Grantee. Furthermore, the Company may annul anAward if the Grantee is an employee of the Company or an Affiliate thereof and is terminated forCause as defined in the applicable Award Agreement or the Plan or any other agreement with theGrantee, as applicable.     Furthermore, if the Company is required to prepare an accounting restatement due to thematerial noncompliance of the Company as a result of misconduct, with regard to any financialreporting requirement under the securities laws, the individuals subject to automatic forfeitureunder Section 304 of the Sarbanes-Oxley Act of 2002 and any Grantee who knowingly engaged in themisconduct, was grossly negligent in engaging in the misconduct, knowingly failed to prevent themisconduct or was grossly negligent in failing to prevent the misconduct, shall reimburse theCompany the amount of any payment in settlement of an Award earned or accrued during the 12-monthperiod following the first public issuance orfiling with the United States Securities and Exchange Commission (whichever first occurred) ofthe financial document that contained such material noncompliance.     Notwithstanding any other provision of this Plan or any provision of any Award Agreement, ifthe Company is required to prepare an accounting restatement, then Grantees shall forfeit any cashor Stock received in connection with an Award having a Grant Date on or after April 30, 2009 (or anamount equal to the fair market value of such Stock on the date of delivery if the Grantee nolonger 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 achievementof 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 tohave been achieved.     **3.4. Deferral Arrangement**     The Board may permit or require the deferral of any award payment into a deferred compensationarrangement, subject to such rules and procedures as it may establish, which may include provisionsfor the payment or crediting of interest or dividend equivalents, including converting such creditsinto deferred Stock equivalents and restricting deferrals to comply with hardship distributionrules affecting 401(k) plans. Any such deferrals shall be made in a manner that complies with CodeSection 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 determinationmade 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 sharesof Stock under the Plan may be evidenced in such a manner as the Board, in its discretion, deemsappropriate, including, without limitation, book-entry registration or issuance of one or moreshare certificates.     **3.7. No Repricing.**     Other than pursuant to **Section 18**and except in connection with a Corporate Transactioninvolving the Company and/or any stock dividend, stock split, extraordinary cash dividend,recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, orexchange of shares, notwithstanding any other provision in the Plan to the contrary, the terms ofoutstanding Options or SARs may not be amended without stockholder approval to (i) reduce theirOption Price or SAR Exercise Price, as applicable or (ii) cancel, exchange, substitute, buyout orsurrender such outstanding Options or SARs in exchange for cash, other Awards or Options or SARswith an Option Price or SAR Exercise Price, as applicable, that is less than the Option Price orSAR 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**Error! Reference source not found. hereof, thenumber 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 againstthis limit as one (1) share for every one (1) share issued. With respect to Stock AppreciationRights, when a stock-settled Stock Appreciation Right grant is exercised, the shares subject tosuch award will be counted against the maximum share limitations as one (1) share for every sharesubject thereto, regardless of the number of shares actually issued to settle the StockAppreciation Right upon exercise. Any shares that are subject to Awards other than Options orStock Appreciation Rights shall be counted against this limit as one and one-half (11/2) shares forevery one (1) share granted. Stock issued or to be issued under the Plan shall be authorized butunissued shares or treasury shares. If any shares covered by an Award are not purchased or areforfeited, if an Award is settled in cash or if an Award otherwise terminates without delivery ofany Stock subject thereto, then the number of shares of Stock counted against the aggregate numberof shares available under the Plan with respect to such Award shall, to the extent of any suchforfeiture, cash payment or termination, again be available for making Awards under the Plan. Anyshares of Stock that again become available for grant pursuant to this Article 4 shall be addedback as one (1) share if such shares were subject to Options or Stock Appreciation Rights grantedunder the Plan, and as one and one-half (11/2) shares if such shares were subject to Awards otherthan Options or Stock Appreciation Rights
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granted under the Plan. Shares issued pursuant toAwards granted in substitution for awards held by employees of a business entity acquired by theCompany 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 thecorresponding number of awards assumed and, in the case of a substitution, by the net increase inthe number of Shares subject to awards before and after the substitution. Available shares under astockholder approved plan of an acquired company (as appropriately adjusted to reflect thetransaction) may be used for Awards under the Plan and do not reduce the number of Shares availableunder 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 earlierdate 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 toany shares of Stock as to which Awards have not been made. An amendment shall be contingent onapproval of the Company’s stockholders to the extent stated by the Board or required by applicablelaw. In addition, an amendment will be contingent on approval of the Company’s stockholders if theamendment 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. NoAwards shall be made after termination of the Plan. No amendment, suspension, or termination ofthe Plan shall, without the consent of the Grantee, impair rights or obligations under any Awardtheretofore 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 tothe Company or of any Affiliate, including any such Service Provider who is an officer or directorof the Company, or of any Affiliate, as the Board shall determine and designate from time to timeand (ii) any other individual whose participation in the Plan is determined to be in the bestinterests of the Company by the Board.     **6.2. Successive Awards**     An eligible person may receive more than one Award, subject to such restrictions as areprovided 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 underthe Plan to any person eligible for an Award under **Section**Error! Reference source not found.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 anOption, SAR, or Restricted Stock or Stock Unit grant that is not performance based, to any personeligible for an Award under **Section 6**hereof is one million (1,000,000) in any three consecutivecalendar years;     (iii) the maximum amount that may be earned as an Annual Incentive Award or other cash Awardin any fiscal year by any one Grantee shall be $5,000,000 and the maximum amount that may be earnedas a Performance Award or other cash Award in respect of a performance period by any one Granteeshall be $5,000,000.     The preceding limitations in this **Section 6.3**are subject to adjustment as provided in **Section18**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, begranted either alone or in addition to, in tandem with, or in substitution or exchange for, anyother Award or any award granted under another plan of the Company, any Affiliate, or any businessentity to be acquired by the Company or an Affiliate, or any other right of a Grantee to receivepayment from the Company or any Affiliate. Such additional, tandem, and substitute or exchangeAwards may be granted at any time. If an Award is granted in substitution or exchange for anotherAward, the Board shall require the surrender of such other Award in consideration for the grant ofthe new Award. In addition, Awards may be granted in lieu of cash compensation, including in lieuof 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 priceof an SAR that is a Substitute Award may be less than 100%
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of the Fair Market Value of a share ofCommon Stock on the original date of grant; provided, that, the Option Price or grant price isdetermined in accordance with the principles of Code Section 424 and the regulations thereunder forany 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 formor forms as the Board shall from time to time determine. Award Agreements granted from time totime or at the same time need not contain similar provisions but shall be consistent with the termsof the Plan. Each Award Agreement evidencing an Award of Options shall specify whether suchOptions are intended to be Non-qualified Stock Options or Incentive Stock Options, and in theabsence 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 Agreementevidencing such Option. The Option Price of each Option shall be at least the Fair Market Value onthe Grant Date of a share of Stock; provided, however, that in the event that aGrantee is a Ten Percent Stockholder, the Option Price of an Option granted to such Grantee that isintended to be an Incentive Stock Option shall be not less than 110 percent of the Fair MarketValue of a share of Stock on the Grant Date. In no case shall the Option Price of any Option beless 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 becomeexercisable at such times and under such conditions as shall be determined by the Board and statedin the Award Agreement.     **8.3. Term**     Each Option granted under the Plan shall terminate, and all rights to purchase shares of Stockthereunder shall cease, upon the expiration of ten years from the date such Option is granted, orunder such circumstances and on such date prior thereto as is set forth in the Plan or as may befixed by the Board and stated in the Award Agreement relating to such Option (the “TerminationDate”); provided, however, that in the event that the Grantee is a Ten PercentStockholder, an Option granted to such Grantee that is intended to be an Incentive Stock Optionshall 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 toexercise the Option following termination of the Grantee’s Service. Such provisions shall bedetermined in the sole discretion of the Board, need not be uniform among all Options issuedpursuant 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 anIncentive 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, inwhole or in part, more than ten years following the Grant Date, or after the occurrence of an eventreferred 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 ofwritten or electronic notice of exercise on any business day , on the form specified by theCompany. Such notice shall specify the number of shares of Stock with respect to which the Optionis being exercised and shall be accompanied by payment in full of the Option Price of the sharesfor which the Option is being exercised plus the amount (if any) of federal and/or other taxeswhich the Company many, in its sole and absolute judgment, determine to be required to withholdwith 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 exercisingan Option shall have none of the rights of a stockholder (for example, the right to receive cash ordividend payments or distributions attributable to the subject shares of Stock or to direct thevoting of the subject shares of Stock ) until the shares of Stock covered thereby are fully paidand issued to him. Except as provided in **Section 18**hereof, no adjustment shall be made fordividends, distributions or other rights for which the record date is prior to the date of suchissuance.     **8.8. Delivery of Stock Certificates**     Promptly after the exercise of an Option by a Grantee and the payment in full of the OptionPrice, such Grantee shall be entitled to the issuance of a stock certificate or certificatesevidencing his or her ownership of the shares of Stock subject to the Option. Notwithstanding anyother provision of this Plan to the contrary, the Company may elect to satisfy any requirementunder 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 isan employee of the Company or any Subsidiary of the Company; (ii) to the extent specificallyprovided in the related Award Agreement; and (iii) to the extent that the aggregate Fair MarketValue (determined at the time the Option is granted) of the shares of Stock with respect to whichall Incentive Stock Options held by such Grantee become exercisable for the first time during anycalendar 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 theorder 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 exerciseof an Incentive Stock Option under the circumstances described in Code Section 421(b) (relating tocertain disqualifying dispositions), such Grantee shall notify the Company of such dispositionwithin 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, inthe event of legal incapacity or incompetency, the Grantee’s guardian or legal representative) mayexercise an Option. Except as provided in **Section 9.2**, no Option shall be assignable ortransferable by the Grantee to whom it is granted, other than by will or the laws of descent anddistribution.     **9.2. Transfers**     If authorized in the applicable Award Agreement, a Grantee may transfer, not for value, all orpart of an Option which is not an Incentive Stock Option to any Family Member or to any entity thatis 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 byFamily Members (or the Grantee) in exchange for an interest in that entity. Following a transferunder this **Section 9.2**, any such Option shall continue to be subject to the same terms andconditions as were applicable immediately prior to transfer. Subsequent transfers of transferredOptions 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 ofService 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 theperiods 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 thefollowing 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 exercisethereof, an amount not greater than the excess of (A) the Fair Market Value of one share of Stockon the date of exercise over (B) the grant price of the SAR, as determined by the Board. The AwardAgreement for an SAR shall specify the SAR Exercise Price of the SAR, which shall be at least theFair Market Value of a share of Stock on the Grant Date. The Award Agreement for a SAR shallspecify the SAR Exercise Price, which shall be at least the Fair Market Value of a Share on theGrant Date. SARs may be granted in conjunction with all or part of an Option granted under thePlan or at any subsequent time during the term of such Option, in conjunction with all or part ofany other Award or without regard to any Option or other Award; provided that a SAR that is grantedsubsequent to the Grant Date of a related Option must have a SAR Exercise Price that is no lessthan 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 theGrant Date of such SAR or under such circumstances and on such date prior thereto as is set forthin 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 thecircumstances under which a SAR may be exercised in whole or in part (including based onachievement of performance goals and/or future service requirements), the time or times at whichSARs shall cease to be or become exercisable following termination of Service or upon otherconditions, the method of exercise, method of settlement, form of consideration payable insettlement which may be cash or shares of Stock, method by or forms in which shares of Stock willbe delivered or deemed to be delivered to Grantees, whether or not a SAR shall be in tandem or incombination 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 dateprior thereto as is set forth in the Plan or as may be fixed by the Board and stated in the AwardAgreement 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 toreceive Awards under **Section 6**hereof, subject to such restrictions, conditions and other terms, ifany, 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 solediscretion, establish a period of time (a “restricted period”) applicable to such Restricted Stockor Stock Units. Each Award of Restricted Stock or Stock Units may be subject to a differentrestricted period. The Board may, in its sole discretion, at the time a grant of Restricted Stockor Stock Units is made, prescribe restrictions in addition to or other than the expiration of therestricted 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 accordancewith **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 tothe satisfaction of any other restrictions prescribed by the Board with respect to such RestrictedStock or Stock Units.     **11.3. Restricted Stock Certificates**     The Company shall issue, in the name of each Grantee to whom Restricted Stock has beengranted, stock certificates representing the total number of shares of Restricted Stock granted tothe Grantee, as soon as reasonably practicable after the Grant Date. The Board may provide in anAward Agreement that either (i) the Secretary of the Company, or his delegate, shall hold suchcertificates for the Grantee’sbenefit until such time as the Restricted Stock is forfeited to the Company or the restrictionslapse, or (ii) such certificates shall be delivered to the Grantee, provided,however, that all such certificates, regardless of whether held by the Secretary, hisdelegate or delivered to the Grantee, shall bear a legend or legends that comply with theapplicable securities laws and regulations and makes appropriate reference to the restrictionsimposed under the Plan and the Award Agreement. If the Company utilizes book-entry form withappropriate restrictions noted in the Company records, and the Grantee so requests, the Companywill furnish without charge the powers, designations, preferences and relative, participating,optional, or other special rights of the share of Stock and the qualifications, limitations orrestrictions of such preferences and/or rights. Such requests shall be made in writing to theCompany’s Secretary.     **11.4. Rights of Holders of Restricted Stock**     Unless the Board otherwise provides in an Award Agreement, holders of Restricted Stock shallhave the right to vote such Stock and the right to receive any dividends declared or paid withrespect to such Stock. The Board may provide that any dividends paid on Restricted Stock must bereinvested in shares of Stock, which may or may not be subject to the same vesting conditions andrestrictions applicable to such Restricted Stock. All distributions, if any, received by a Granteewith respect to Restricted Stock as a result of any stock split, stock dividend, combination ofshares, or other similar transaction shall be subject to the restrictions applicable to theoriginal 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 haveno rights as stockholders of the Company. The Board may provide in an Award Agreement evidencing agrant
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of Stock Units that the holder of such Stock Units shall be entitled to receive, upon theCompany’s payment of a cash dividend on its outstanding Stock, a cash payment for each Stock Unitheld equal to the per-share dividend paid on the Stock. Such Award Agreement may also provide thatsuch cash payment will be deemed reinvested in additional Stock Units at a price per unit equal tothe 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 theCompany. Stock Units represent an unfunded and unsecured obligation of the Company, subject to theterms 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 AwardAgreement is issued, upon the termination of a Grantee’s Service, any Restricted Stock or StockUnits held by such Grantee that have not vested, or with respect to which all applicablerestrictions and conditions have not lapsed, shall immediately be deemed forfeited. Uponforfeiture of Restricted Stock or Stock Units,the Grantee shall have no further rights with respect to such Award, including but not limited toany right to vote Restricted Stock or any right to receive dividends with respect to shares ofRestricted Stock or Stock Units     **11.7. Purchase of Restricted Stock**     The Grantee shall be required, to the extent required by applicable law, to purchase theRestricted Stock from the Company at a Purchase Price equal to the greater of (i) the aggregate parvalue of the shares of Stock represented by such Restricted Stock or (ii) the Purchase Price, ifany, specified in the Award Agreement relating to such Restricted Stock. The Purchase Price shallbe payable in a form described in **Section 13**or, in the discretion of the Board, in considerationfor 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 otherconditions or restrictions prescribed by the Board as set forth in the Award agreement, therestrictions 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 bedelivered, free of all such restrictions, to the Grantee or the Grantee’s beneficiary or estate, asthe case may be. In the alternative, a book-entry no longer reflecting any restrictions may bemade. Neither the Grantee, nor the Grantee’s beneficiary or estate, shall have any further rightswith respect to a Stock Unit once the shares of Stock represented by the Stock Unit have beendelivered. Stock Units may also be settled in cash upon the determination of the Board or asspecified 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 parvalue or such other higher purchase price determined by the Board) Unrestricted Stock Awardspursuant to which Grantees may receive shares of Stock free of any restrictions (“UnrestrictedStock”). Unrestricted Stock Awards may be granted or sold in respect of past services, performanceand other valid consideration, or in lieu of, or in addition to, any cash compensation due to suchGrantee. 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, abook-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 orthe Purchase Price for Restricted Stock and Stock Units shall be made in cash or in cashequivalents acceptable to the Company.     **13.2. Surrender of Stock**     To the extent the Award Agreement so provides, payment of the Option Price for sharespurchased pursuant to the exercise of an Option or the Purchase Price for Restricted Stock may bemade all or in part through the tender or attestation to the Company of shares of Stock, whichshall be valued, for purposes of determining the extent to which the Option Price or Purchase Pricehas been paid thereby, at their Fair Market Value on the date of exercise or surrender. Inaddition, and also only to the extent the Award Agreement so provides, payment of the Option Pricemay be made by requesting that the Company withhold shares of Stock that would otherwise bedeliverable pursuant to the exercise of the Option, which shares shall be valued at their FairMarket 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 theAward Agreement so provides and subject to compliance with applicable law, payment of the OptionPrice for shares purchased pursuant to the exercise of an Option may be made all or in part bydelivery (on a form acceptable to the Board) of an irrevocable direction to a licensed securitiesbroker acceptable to the Company to sell shares of Stock and to deliver all or part of the salesproceeds 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 invalue to the difference between the Option Price and the Fair Market Value of the shares of Stocksubject 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 sharespurchased pursuant to exercise of an Option or the Purchase Price for Restricted Stock may be madein 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 oncash distributions that would have been paid on the shares of Stock specified in the DividendEquivalent Right (or other Award to which it relates) if such shares had been issued to and held bythe recipient. A Dividend Equivalent Right may be granted hereunder to any Grantee as a componentof another Award other than an Option or SAR or as a freestanding award. The terms and conditionsof Dividend Equivalent Rights shall be specified in the grant. Dividend Equivalents credited tothe holder of a Dividend Equivalent Right may be paid currently or may be deemed to be reinvestedin additional shares of Stock, which may thereafter accrue additional equivalents. Any suchreinvestment shall be at Fair Market Value on the date of reinvestment. Dividend Equivalent Rightsmay 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 DividendEquivalent Right granted as a component of another Award may provide that such Dividend EquivalentRight shall be settled upon exercise, settlement, or payment of, or lapse of restrictions on, suchother Award, and that such Dividend Equivalent Right shall expire or be forfeited or annulled underthe same conditions as such other Award. A Dividend Equivalent Right granted as a component ofanother 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 acomponent of another Award which vests or is earned based upon achievement of performance goalsshall 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 writingafter the Award Agreement is issued, a Grantee’s rights in all Dividend Equivalent Rights orinterest equivalents shall automatically terminate upon the Grantee’s termination of Service forany reason.
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**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 thetiming 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 deemappropriate in establishing any performance conditions, and may exercise its discretion to reducethe 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 toqualify under Code Section 162(m). If and to the extent required under Code Section 162(m), anypower or authority relating to a PerformanceAward or Annual Incentive Award intended to qualify under Code Section 162(m), shall beexercised 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 IncentiveAward to be granted to a Grantee who is designated by the Committee as likely to be a CoveredEmployee 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 becontingent 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 ormore business criteria and a targeted level or levels of performance with respect to each of suchcriteria, as specified by the Committee consistent with this **Section 15.2**. Performance goals shallbe objective and shall otherwise meet the requirements of Code Section 162(m) and regulationsthereunder including the requirement that the level or levels of performance targeted by theCommittee result in the achievement of performance goals being “substantially uncertain.” TheCommittee 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 theperformance goals must be achieved as a condition to grant, exercise and/or settlement of suchPerformance or Annual Incentive Awards. Performance goals may differ for Performance or AnnualIncentive 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 totalstockholder return and earnings per share criteria), shall be used exclusively by the Committee inestablishing performance goals for such Performance or Annual Incentive Awards: (1) totalstockholder return; (2) such total stockholder return as compared to total return (on a comparablebasis) of a publicly available
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index such as, but not limited to, the Standard & Poor’s 500 StockIndex; (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) pretaxoperating earnings after interest expense and before bonuses, service fees, and extraordinary orspecial items; (8) operating margin; (9) earnings per share; (10) return on equity; (11) return onassets, (12) return on capital; (13) return on investment; (14) operating earnings; (15) workingcapital; (16) ratio of debt to stockholders’ equity, (17) revenue; (18) book value and (19) fundsfrom 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 thebeginning 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) atsuch other date as may be required or permitted for “performance-based compensation” under CodeSection 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 anunfunded pool, for purposes of measuring performance in connection with Performance or AnnualIncentive 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, RestrictedStock, Stock Units, other Awards or other property, in the discretion of the Committee. TheCommittee may, in its discretion, reduce the amount of a settlement otherwise to be made inconnection with such Performance or Annual Incentive Awards. The Committee shall specify thecircumstances in which such Performance or Annual Incentive Awards shall be paid or forfeited inthe event of termination of Service by the Grantee prior to the end of a performance period orsettlement of Performance Awards.     **15.3. Written Determinations**          All determinations by the Committee as to the establishment of performance goals, the amountof any Performance Award pool or potential individual Performance Awards and as to the achievementof performance goals relating to Performance Awards, and the amount of any Annual Incentive Awardpool or potential individual Annual Incentive Awards and the amount of final Annual IncentiveAwards, shall be made in writing in the case of any Award intended to qualify under Code Section162(m). To the extent required to comply with Code Section 162(m), the Committee may delegate anyresponsibility relating to such Performance Awards or Annual Incentive Awards.
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     **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 CoveredEmployees within the meaning of Code Section 162(m) and regulations thereunder shall, if sodesignated by the Committee, constitute “qualified performance-based compensation” within themeaning 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 ina manner consistent with Code Section 162(m) and regulations thereunder. The foregoingnotwithstanding, because the Committee cannot determine with certainty whether a given Grantee willbe a Covered Employee with respect to a fiscal yearthat has not yet been completed, the term Covered Employee as used herein shall mean only aperson designated by the Committee, at the time of grant of Performance Awards or an AnnualIncentive Award, as likely to be a Covered Employee with respect to that fiscal year. If anyprovision of the Plan or any Award Agreement relating to such Performance Awards or AnnualIncentive Awards does not comply or is inconsistent with the requirements of Code Section 162(m) orregulations thereunder, such provision shall be construed or deemed amended to the extent necessaryto conform to such requirements.**16. PARACHUTE LIMITATIONS**     Notwithstanding any other provision of this Plan or Award Agreement or of any other AwardAgreement or agreement, contract, or understanding heretofore or hereafter entered into by aGrantee with the Company or any Affiliate, except an agreement, contract or understanding betweenthe 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 thedirect or indirect provision of compensation to the Grantee (including groups or classes ofGrantees or beneficiaries of which the Grantee is a member), whether or not such compensation isdeferred, is in cash, or is in the form of a benefit to or for the Grantee (a “BenefitArrangement”), if the Grantee is a “disqualified individual,” as defined in Section 280G(c) of theCode, any Option, Restricted Stock or Stock Unit held by that Grantee and any right to receive anypayment or other benefit under this Plan shall not become exercisable or vested (i) to the extentthat 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 BenefitArrangements, 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, theaggregate after-tax amounts received by the Grantee from the Company under this Plan, all OtherAgreements, and all Benefit Arrangements would be less than the maximum after-tax amount that couldbe received by the Grantee without causing any such payment or benefit to be considered a ParachutePayment. In the event that the receipt of any such right to exercise, vesting, payment, or benefitunder this Plan, in conjunction with all other rights, payments, or benefits to or for the Granteeunder any Other Agreement or any Benefit Arrangement would cause the Grantee to be considered tohave received a Parachute Payment under this Plan that would have the effect of decreasing theafter-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 thatshould be reduced or eliminated so as to avoid having the payment or benefit to the Grantee underthis Plan be deemed to be a Parachute Payment; provided, however, that to comply with Code Section409A, the reduction or elimination will be performed in the order in which each dollar of valuesubject 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 thesale or issuance of such shares would constitute a violation by the Grantee, any other individualexercising an Option, or the Company or any Affiliate of any provision of any law or regulation ofany governmental authority, including without limitation any federal or state securities laws orregulations. 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 orunder any governmental regulatory body is necessary or desirable as a condition of, or inconnection with, the issuance or purchase of shares hereunder, no shares of Stock may be issued orsold 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 anyconditions not acceptable to the Company, and any delay caused thereby shall in no way affect thedate of termination of the Award or otherwise result in any claim or damages. Without limiting thegenerality of the foregoing, specifically, in connection with the Securities Act, upon the exerciseof any Option or any SAR that may be settled in shares of Stock or the delivery of any shares ofStock underlying an Award, unless a registration statement under such Act is in effect with respectto the shares of Stock covered by such Award, the Company shall not be required to sell or issuesuch shares unless the Board has received evidence satisfactory to it that the Grantee or any otherindividual may acquire such shares pursuant to an exemption from registration under the SecuritiesAct. 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 herebypursuant to the Securities Act. The Company shall not be obligated to take any affirmative actionin order to cause the exercise of an Option or SAR or the issuance of shares of Stock pursuant tothe Plan to comply with any law or regulation of any governmental authority. As to anyjurisdiction that expressly imposes the requirement that an Option or any SAR that may be settledin shares of Stock shall not be exercisable until the shares of Stock covered by such Option or SARare registered or are exempt from registration, the exercise of such Option or SAR (undercircumstances in which the laws of such jurisdiction apply) shall be deemed conditioned upon theeffectiveness 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 ofthe Exchange Act, it is the intent of the Company that Awards pursuant to the Plan and the exerciseof Options or SARs granted hereunder will qualify for the exemption provided by Rule 16b-3 underthe Exchange Act. To the extent that any provision of the Plan or action by the Board does notcomply with the requirements of
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Rule 16b-3, it shall be deemed inoperative to the extent permittedby law and deemed advisable by the Board, and shall not affect the validity of the Plan. In theevent that Rule 16b-3 is revised or replaced, the Board may exercise its discretion to modify thisPlan, Awards and Award Agreements in any respect necessary to satisfy the requirements of, or totake 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 Stockare changed into or exchanged for a different number or kind of shares or other securities of theCompany on account of any recapitalization, reclassification, stock split, reverse split,combination of shares, exchange of shares, stock dividend or other distribution payable in capitalstock, or other increase or decrease in such shares effected without receipt of consideration bythe Company occurring after the Effective Date, the number and kinds of shares for which grants ofAwards 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 adjustedproportionately and accordingly so that the proportionate interest of the Grantee immediatelyfollowing such event shall, to the extent practicable, be the same as immediately before suchevent. Any such adjustment in outstanding Options, SARs, Restricted Stock or Stock Units shall notchange the aggregate Option Price, SAR Exercise Price or Purchase Price payable with respect toshares that are subject to the unexercised portion of an outstanding Option or SAR, or an unvestedportion of Restricted Stock or Stock Units, as applicable, but shall include a correspondingproportionate 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 adjustedpursuant to Code Section 409A so that the difference between the aggregate exercise price over theaggregate fair market value remains the same before and after the adjustment. The conversion ofany convertible securities of the Company shall not be treated as an increase in shares effectedwithout receipt of consideration. Notwithstanding the foregoing, in the event of any distributionto the Company’s shareholders of securities of any other entity or other assets (including anextraordinary dividend but excluding a non-extraordinary dividend) without receipt of considerationby the Company, the Company shall in such manner as the Company deems appropriate, adjust (i) thenumber and kind of shares subject to outstanding Awards and/or (ii) the exercise price or purchaseprice 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 ofthe Company, the Board may make such adjustments with respect to Awards and take such other actionas it deems necessary or appropriate to reflect such merger, consolidation, reorganization or otherCorporate Transaction, including, without limitation, the substitution of new Awards, thetermination or the adjustment of outstanding Awards, the acceleration of Awards or the removal ofrestrictions on outstanding Awards, all
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as may be provided in the applicable Award Agreement or, ifnot expressly addressed therein, as the Board subsequently may determine in the event of any suchtransaction.     (b) In addition to or instead of any adjustments authorized in **Section 18.****1(a)** above, in theevent of a merger, consolidation, reorganization or other Corporate Transaction of the Company, theBoard may elect, in its sole discretion, to cancel or repurchase any outstanding Awards issuedunder the Plan and pay or deliver, or cause to be paid or delivered, to the holder thereof anamount in cash or securities havinga value (as determined by the Board acting in good faith), in the case of an Award consisting ofRestricted Stock or Stock Units, equal to the formula or fixed price per share paid to holders ofthe Stock in connection with such transaction and, in the case of Options or SARs, equal to theproduct of the number of shares of Stock subject to the Option or SAR multiplied by the amount, ifany, by which (I) the formula or fixed price per share of Stock paid to holders of Stock pursuantto such transaction exceeds (II) the Option Price or SAR Exercise Price applicable to such Optionor SAR. Notwithstanding the foregoing, Stock Units subject to Code Section 409A shall be cancelledon a Corporate Transaction only to the extent such Corporate Transaction constitutes a “change incontrol 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 Companyshall be made by the Board, whose determination in that respect shall be final, binding andconclusive. No fractional shares or other securities shall be issued pursuant to any suchadjustment, and any fractions resulting from any such adjustment shall be eliminated in each caseby rounding downward to the nearest whole share. The Board may provide in the Award Agreements atthe time of grant, or any time thereafter with the consent of the Grantee, for different provisionsto 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 inany 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 ofthe Company, any issue of debt or equity securities having preferences or priorities as to theStock or the rights thereof, the dissolution or liquidation of the Company, any sale or transfer ofall 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 uponany individual the right to remain in the employ or service of the Company or any Affiliate, or tointerfere in any way with any contractual or other right or authority of the Company or anyAffiliate either to increase or decrease the compensation or other payments to any individual atany time, or to terminate any employment or other relationship between any individual and theCompany or any Affiliate. In addition, notwithstanding anything contained in the Plan to thecontrary, unless otherwise stated in the applicable Award Agreement,
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no Award granted under thePlan shall be affected by any change of duties or position of the Grantee, so long as such Granteecontinues to provide service. The obligation of the Company to pay any benefits pursuant to thisPlan shall be interpreted as a contractual obligation to pay only thoseamounts described herein, in the manner and under the conditions prescribed herein. The Plan shallin no way be interpreted to require the Company to transfer any amounts to a third party trustee orotherwise hold any amounts in trust or escrow for payment to any Grantee or beneficiary under theterms 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 theCompany for approval shall be construed as creating any limitations upon the right and authority ofthe 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 orspecifically to a particular individual or particular individuals) as the Board , the Company orits Affiliates in their discretion determines desirable, including, without limitation, thegranting 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 withholdfrom payments of any kind otherwise due to a Grantee (including by withholding shares of Stockotherwise deliverable under an Award) any Federal, state, or local taxes of any kind required bylaw to be withheld with respect to the vesting of or other lapse of restrictions applicable to anAward or upon the issuance of any shares of Stock upon the exercise of an Option or pursuant to anAward. At the time of such vesting, lapse, or exercise, the Grantee shall pay to the Company orthe Affiliate, as the case may be, any amount that the Company or the Affiliate may reasonablydetermine to be necessary to satisfy such withholding obligation. Subject to the prior approval ofthe Company or the Affiliate, which may be withheld by the Company or the Affiliate, as the casemay be, in its sole discretion, the Grantee may elect to satisfy such obligations, in whole or inpart, (i) by causing the Company or the Affiliate to withhold shares of Stock otherwise issuable tothe Grantee or (ii) by delivering to the Company or the Affiliate shares of Stock already owned bythe Grantee. The shares of Stock so delivered or withheld shall have an aggregate Fair MarketValue equal to such withholding obligations. The Fair Market Value of the shares of Stock used tosatisfy such withholding obligation shall be determined by the Company or the Affiliate as of thedate that the amount of tax to be withheld is to be determined. A Grantee who has made an electionpursuant to this **Section 19.3**may satisfy his or her withholding obligation only with shares ofStock that are not subject to any repurchase, forfeiture, unfulfilled vesting, or other similarrequirements. The maximum number of shares of Stock that may be withheld from any Award to satisfyany federal, state or local tax withholding requirements upon the exercise, vesting, lapse ofrestrictions 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 minimumstatutory 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 restrictionsor payment of shares. Effective as of August 11, 2009, for purposes of determining taxable incomeand the amount of the related tax withholding obligation under this Section 19.3, notwithstandingSection 2.16 or this Section 19.3, for any shares of Stock that are sold on the same day that suchshares are first legally saleable pursuant to the terms of the applicable award agreement, FairMarket Value shall
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be determined based upon the sale price for such shares so long as the granteehas provided the Company with advance written notice of such sale.     **19.4. Captions**     The use of captions in this Plan or any Award Agreement is for the convenience of referenceonly 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 inconsistentwith 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, themasculine 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 orunenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereofshall be severable and enforceable in accordance with their terms, and all provisions shall remainenforceable in any other jurisdiction.     **19.8. Governing Law**     The validity and construction of this Plan and the instruments evidencing the Award hereundershall be governed by the laws of the State of Delaware, other than any conflicts or choice of lawrule or principle that might otherwise refer construction or interpretation of this Plan and theAward 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, oran exemption to Section 409A, with regard to Awards hereunder that constitute nonqualified deferredcompensation within the meaning of Section 409A. To the extent that the Board or the Committee, asapplicable, determines that a Grantee would otherwise be subject to the additional 20% tax imposedon certain nonqualified deferred compensation plans pursuant to Section 409A as a result of anyprovision of any Award granted under this Plan, such provision shall be deemed amended to theminimum extent necessary to avoid application of such additional tax. The nature of any suchamendment shall be determined by the Board or the Committee, as applicable.
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