EX-10.9



 






Exhibit 10.9




ALLEGHENY TECHNOLOGIES INCORPORATED




2000 INCENTIVE PLAN

(as amended)




ARTICLE I.

PURPOSE AND ADOPTION OF THE PLAN




     1.1. Purpose. The purpose of the Allegheny Technologies Incorporated 2000 Incentive Plan
(hereinafter referred to as the “Plan”) is to assist in attracting and retaining highly competent
employees, to act as an incentive in motivating selected officers and other key employees of
Allegheny Technologies Incorporated and its Subsidiaries to achieve long-term corporate objectives
and to enable cash incentive awards to qualify as performance-based for purposes of the tax
deduction limitations under Section 162(m) of the Code.



     1.2. Adoption and Term. The Plan was approved by the Board of Directors of Allegheny
Technologies Incorporated, to be effective as of January 1, 2000 (the “Effective Date”), and
approved by the stockholders of the Company on May 11, 2000. The Plan shall remain in effect until
the tenth anniversary of the date the stockholders of the Company approve the Plan, unless
terminated by action of the Board prior to that date, and the provisions of Articles VII, VIII, IX
and X with respect to performance-based awards to “covered employees” under Section 162(m) of the
Code shall expire as of the fifth anniversary of the date the stockholders of the Company approved
the Plan, until and unless reapproved by the stockholders of the Company.



     1.3. The Prior Plan. The Company previously adopted the Allegheny Teledyne Incorporated 1996
Incentive Plan (the “Prior Plan”). Awards granted under the Prior Plan prior to the date the
stockholders of the Company approve the Plan shall not be affected by the adoption of this Plan,
and the Prior Plan shall remain the effect following the date the stockholders of the Company
approve the Plan to the extent necessary to administer such awards, but no new Awards shall be
granted under the Prior Plan after the date the stockholders of the Company approve the Plan.



ARTICLE II.

DEFINITIONS




          For the purpose of this Plan, capitalized terms shall have the following meanings:



 









 





        2.1. Award means any one or a combination of Non-Qualified Stock Options or Incentive Stock
Options described in Article VI, Stock Appreciation Rights described in Article VI, Restricted
Shares described in Article VII, Performance Awards described in Article VIII, Awards of cash or
any other Award made under the terms of the Plan.



        2.2. Award Agreement means a written agreement between the Company and a Participant or a
written acknowledgment from the Company to a Participant specifically setting forth the terms and
conditions of an Award granted under the Plan.



        2.3. Award Period means, with respect to an Award, the period of time set forth in the Award
Agreement during which specified target performance goals must be achieved or other conditions set
forth in the Award Agreement must be satisfied.



        2.4. Beneficiary means an individual, trust or estate who or which, by a written designation
of the Participant filed with the Company or by operation of law, succeeds to the rights and
obligations of the Participant under the Plan and the Award Agreement upon the Participant’s death.



        2.5. Board means the Board of Directors of the Company.



        2.6. Change in Control means, and shall be deemed to have occurred upon the occurrence of, any
one of the following events:




          (a) The acquisition in one or more transactions, other than from the Company, by any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of a number of Company Voting Securities in excess of 25% of the Company
Voting Securities unless such acquisition has been approved by the Board;




          (b) Any election has occurred of persons to the Board that causes two-thirds of the
Board to consist of persons other than (i) persons who were members of the Board on the
Effective Date and (ii) persons who were nominated for elections as members of the Board at
a time when two-thirds of the Board consisted of persons who were members of the Board on
the
Effective Date; provided, however, that any person nominated for election by a Board at
least two-thirds of whom constituted persons described in



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clauses (i) and/or (ii) or by persons who were themselves nominated by such Board shall, for
this purpose, be deemed to have been nominated by a Board composed of persons described in
clause (i);




          (c) Approval by the stockholders of the Company of a reorganization, merger or
consolidation, unless, following such reorganization, merger or consolidation, all or
substantially all of the individuals and entities who were the respective beneficial owners
of the Outstanding Common Stock and Company Voting Securities immediately prior to such
reorganization, merger or consolidation, following such reorganization, merger or
consolidation beneficially own, directly or indirectly, more than seventy five (75%) of,
respectively, the then outstanding shares of common stock and the combined voting power of
the then outstanding voting securities entitled to vote generally in the election of
directors or trustees, as the case may be, of the entity resulting from such reorganization,
merger or consolidation in substantially the same proportion as their ownership of the
Outstanding Common Stock and Company Voting Securities immediately prior to such
reorganization, merger or consolidation, as the case may be; or




          (d) Approval by the stockholders of the Company of (i) a complete liquidation or
dissolution of the Company or (ii) a sale or other disposition of all or substantially all
the assets of the Company.



        2.7. Code means the Internal Revenue Code of 1986, as amended. References to a section of the
Code shall include that section and any comparable section or sections of any future legislation
that amends, supplements or supersedes said section.



        2.8. Committee means the Committee defined in Section 3.1.



        2.9. Company or Corporation means Allegheny Technologies Incorporated, a Delaware corporation,
and its successors.



        2.10. Common Stock means Common Stock of the Company, par value $.10 per share.



        2.11. Company Voting Securities means the combined voting power of all outstanding voting
securities of the Company entitled to vote generally in the election of directors to the Board.



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     2.12. Date of Grant means the date designated by the Committee as the date as of which it
grants an Award, which shall not be earlier than the date on which the Committee approves the
granting of such Award.



     2.13. Effective Date shall have the meaning given to such term in Section 1.2.



     2.14. Exchange Act means the Securities Exchange Act of 1934, as amended.



     2.15. Exercise Price means, with respect to a Stock Appreciation Right, the amount established
by the Committee in the Award Agreement which is to be subtracted from the Fair Market Value on the
date of exercise in order to determine the amount of the payment to be made to the Participant, as
further described in Section 6.2(b).



     2.16. Fair Market Value means, on any date, the average of the high and low quoted sales
prices of a share of Common Stock, as reported on the Composite Tape for New York Stock Exchange
Listed Companies, on such date or, if there were no sales on such date, on the last date preceding
such date on which a sale was reported.



     2.17. Incentive Stock Option means a stock option within the meaning of Section 422 of the
Code.



     2.18. Merger means any merger, reorganization, consolidation, exchange, transfer of assets or
other transaction having similar effect involving the Company.



     2.19. Non-Qualified Stock Option means a stock option which is not an Incentive Stock Option.



     2.20. Options means all Non-Qualified Stock Options and Incentive Stock Options granted at any
time under the Plan.



     2.21. Outstanding Common Stock means, at any time, the issued and outstanding shares of Common
Stock.



     2.22. Participant means a person designated to receive an Award under the Plan in accordance
with Section 5.1.



     2.23. Performance Awards means Awards granted in accordance with Article VIII.



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     2.24. Performance Goals means operating income, operating profit, income before taxes,
earnings per share, return on investment or working capital, return on stockholders’ equity,
economic value added (the amount, if any, by which net operating profit after tax exceeds a
reference cost of capital), balanced scorecard, cash flow, reductions in inventory, inventory turns
and on-time delivery performance, any one of which may be measured with respect to the Company or
any one or more of its Subsidiaries or business units and either in absolute terms or as compared
to another company or companies, and safety measures and other quantifiable, objective measures of
individual performance relevant to the particular individual’s job responsibilities.



     2.25. Plan means the Allegheny Technologies Incorporated 2000 Incentive Plan as described
herein, as the same may be amended from time to time.



     2.26. Prior Plan shall have the meaning given to such term in Section 1.3.



     2.27. Purchase Price, with respect to Options, shall have the meaning set forth in Section
6.1(b).



     2.28. Restoration Option means a Non-Qualified Stock Option granted pursuant to Section
6.1(f).



     2.29. Restricted Shares means Common Stock subject to restrictions imposed in connection with
Awards granted under Article VII.



     2.30. Retirement means early or normal retirement under a pension plan or arrangement of the
Company or one of its Subsidiaries in which the Participant participates.



     2.31. Rule 16b-3 means Rule 16b-3 promulgated by the Securities and Exchange Commission under
Section 16 of the Exchange Act, as the same may be amended from time to time, and any successor
rule.



     2.32. Stock Appreciation Rights means Awards granted in accordance with Article VI.



     2.33. Subsidiary means a subsidiary of the Company within the meaning of Section 424(f) of the
Code.



     2.34. Termination of Employment means the voluntary or involuntary termination of a
Participant’s employment with the Company or a Subsidiary for any reason, including death,
disability, retirement or as the result of the divestiture



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of the Participant’s employer or any similar transaction in which the Participant’s employer
ceases to be the Company or one of its Subsidiaries. Whether entering military or other government
service shall constitute Termination of Employment, or whether a Termination of Employment shall
occur as a result of disability, shall be determined in each case by the Committee in its sole
discretion.



ARTICLE III.

ADMINISTRATION




     3.1. Committee. The Plan shall be administered by a committee of the Board (“Committee”)
comprised of at least two persons. The Committee shall have exclusive and final authority in each
determination, interpretation or other action affecting the Plan and its Participants. The
Committee shall have the sole discretionary authority to interpret the Plan, to establish and
modify administrative rules for the Plan, to impose such conditions and restrictions on Awards as
it determines appropriate and to cancel Awards (including those made pursuant to other plans of the
Company), and to take such steps in connection with the Plan and Awards granted hereunder as it may
deem necessary or advisable. The Committee shall not, however, have or exercise any discretion
that would disqualify amounts payable under Article X as performance-based compensation for
purposes of Section 162(m) of the Code. The Committee may delegate such of its powers and
authority under the Plan as it deems appropriate to designated officers or employees of the
Company. In addition, the full Board may exercise any of the powers and authority of the Committee
under the Plan. In the event of such delegation of authority or exercise of authority by the
Board, references in the Plan to the Committee shall be deemed to refer, as appropriate, to the
delegate of the Committee or the Board. The selection of members of the Committee or any
subcommittee thereof, and any delegation by the Committee to designated officers or employees,
under this Section 3.1 shall comply with Section 16(b) of the Exchange Act, the performance-based
provisions of Section 162(m) of the Code, and the regulations promulgated under each of such
statutory provisions, or the respective successors to such statutory provisions or regulations, as
in effect from time to time, except to the extent that the Board determines that such compliance is
not necessary or desirable.



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ARTICLE IV.

SHARES




     4.1. Number of Shares Issuable. The total number of shares authorized to be issued under the
Plan shall equal 10% of the outstanding shares of the Common Stock as of the Effective Date. If
the number of outstanding shares of Common Stock is increased after the Effective Date, the total
number of shares available under the Plan will be increased by 10% of such increase. The number of
shares available for issuance under the Plan shall be further subject to adjustment in accordance
with Section 11.7. The shares to be offered under the Plan shall be authorized and unissued Common
Stock, or issued Common Stock which shall have been reacquired by the Company. Of the total number
of shares authorized for grant under the Plan, the Company may issue
no more than one million
shares as awards of restricted stock, subject to adjustment in accordance with Section 11.7.



     4.2. Shares Subject to Terminated Awards. Common Stock covered by any unexercised portions of
terminated Options (including canceled Options) granted under Article VI, Common Stock forfeited as
provided in Section 7.2(a) and Common Stock subject to any Awards which are otherwise surrendered
by the Participant may again be subject to new Awards under the Plan. Common Stock subject to
Options, or portions thereof, which have been surrendered in connection with the exercise of Stock
Appreciation Rights shall not be available for subsequent Awards under the Plan, but Common Stock
issued in payment of such Stock Appreciation Rights shall not be charged against the number of
shares of Common Stock available for the grant of Awards hereunder. Common Stock covered by awards
granted under the Prior Plan that after the Effective Date are terminated unexercised, forfeited or
otherwise surrendered shall be available for subsequent Awards under this Plan.



ARTICLE V.

PARTICIPATION




     5.1. Eligible Participants. Participants in the Plan shall be such officers and other key
employees of the Company and its Subsidiaries, whether or not members of the Board, as the
Committee, in its sole discretion, may designate from time to time. The Committee’s designation of
a Participant in any year shall not require the Committee to designate such person to receive
Awards or grants in any other year. The designation of a Participant to receive awards or grants
under one portion of the Plan does not require the Committee to include such Participant under
other portions of the Plan. The Committee shall consider such factors as it



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deems pertinent in selecting Participants and in determining the type and amount of their
respective Awards. Notwithstanding any provision herein to the contrary, the Committee may grant
Awards under the Plan, other than Incentive Stock Options, to non-employees who, in the judgment of
the Committee, render significant services to the Company or any of its Subsidiaries, on such terms
and conditions as the Committee deems appropriate and consistent with the intent of the Plan.
Subject to adjustment in accordance with Section 11.7, in any calendar year, no Participant shall
be granted Awards in respect of more than 1 million shares of Common Stock (whether through grants
of Options or Stock Appreciation Rights or other grants of Common Stock or rights with respect
thereto) and $5 million in cash; provided, however, that any Award payable over a period of more
than one year shall be pro-rated over the applicable period in determining the amount of the Award
granted in any calendar year.



ARTICLE VI.

STOCK OPTIONS AND STOCK APPRECIATION RIGHTS




        6.1. Option Awards.




          (a) Grant of Options. The Committee may grant, to such Participants as the Committee
may select, Options entitling the Participant to purchase shares of Common Stock from the
Company in such number, at such price, and on such terms and subject to such conditions, not
inconsistent with the terms of this Plan, as may be established by the Committee. The terms
of any Option granted under this Plan shall be set forth in an Award Agreement.




          (b) Purchase Price of Options. The Purchase Price of each share of Common Stock which
may be purchased upon exercise of any Option granted under the Plan shall be determined by
the Committee; provided, however, that the Purchase Price of the Common Stock purchased
pursuant to Options designated by the Committee as Incentive Stock Options shall be equal to
or greater than the Fair Market Value on the Date of Grant as required under Section 422 of
the Code.




          (c) Designation of Options. Except as otherwise expressly provided in the Plan, the
Committee may designate, at the time of the grant of each Option, the Option as an Incentive
Stock Option or a Non-Qualified Stock Option.



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          (d) Incentive Stock Option Share Limitation. No Participant may be granted Incentive
Stock Options under the Plan (or any other plans of the Company and its Subsidiaries) which
would result in shares with an aggregate Fair Market Value (measured on the Date of Grant)
of more than $100,000 first becoming exercisable in any one calendar year.




          (e) Rights as a Stockholder. A Participant or a transferee of an Option pursuant to
Section 11.4 shall have no rights as a stockholder with respect to Common Stock covered by
an Option until the Participant or transferee shall have become the holder of record of any
such shares, and no adjustment shall be made for dividends in cash or other property or
distributions or other rights with respect to any such Common Stock for which the record
date is prior to the date on which the Participant or a transferee of the Option shall have
become the holder of record of any such shares covered by the Option; provided, however,
that Participants are entitled to share adjustments to reflect capital changes under Section
11.7.




          (f) Restoration Options Upon the Exercise of a Non-Qualified Stock Option. In the
event that any Participant delivers to the Company, or has withheld from the shares
otherwise issuable upon the exercise of a Non-Qualified Stock Option, shares of Common Stock
in payment of the Purchase Price of any Non-Qualified Stock Option granted hereunder in
accordance with Section 6.4, the Committee shall have the authority to grant or provide for
the automatic grant of a Restoration Option to such Participant. The grant of a Restoration
Option shall be subject to the satisfaction of such conditions or criteria as the Committee
in its sole discretion shall establish from time to time. A Restoration Option shall
entitle the holder thereof to purchase a number of shares of Common Stock equal to the
number of such shares so delivered or withheld upon exercise of the original Option and, in
the discretion of the Committee, the number of shares, if any, delivered or withheld to the
Company to satisfy any withholding tax liability arising in connection with the exercise of
the original Option. A Restoration Option shall have a per share Purchase Price of not less
than 100% of the per share Fair Market Value of the Common Stock on the date of grant of
such Restoration Option, a term not longer than the remaining term of the original Option at
the time of exercise thereof, and such other terms and conditions as the Committee in its
sole discretion shall determine.



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        6.2. Stock Appreciation Rights.




          (a) Stock Appreciation Right Awards. The Committee is authorized to grant to any
Participant one or more Stock Appreciation Rights. Such Stock Appreciation Rights may be
granted either independent of or in tandem with Options granted to the same Participant.
Stock Appreciation Rights granted in tandem with Options may be granted simultaneously with,
or, in the case of Non-Qualified Stock Options, subsequent to, the grant to such Participant
of the related Option; provided, however, that: (i) any Option covering any share of Common
Stock shall expire and not be exercisable upon the exercise of any Stock Appreciation Right
with respect to the same share, (ii) any Stock Appreciation Right covering any share of
Common Stock shall expire and not be exercisable upon the exercise of any related Option
with respect to the same share, and (iii) an Option and Stock Appreciation Right covering
the same share of Common Stock may not be exercised simultaneously. Upon exercise of a
Stock Appreciation Right with respect to a share of Common Stock, the Participant shall be
entitled to receive an amount equal to the excess, if any, of (A) the Fair Market Value of a
share of Common Stock on the date of exercise over (B) the Exercise Price of such Stock
Appreciation Right established in the Award Agreement, which amount shall be payable as
provided in Section 6.2(c).




          (b) Exercise Price. The Exercise Price established under any Stock Appreciation Right
granted under this Plan shall be determined by the Committee, but in the case of Stock
Appreciation Rights granted in tandem with Options shall not be less than the Purchase Price
of the related Option. Upon exercise of Stock Appreciation Rights granted in tandem with
Options, the number of shares subject to exercise under any related Option shall
automatically be reduced by the number of shares of Common Stock represented by the Option
or portion thereof which are surrendered as a result of the exercise of such Stock
Appreciation Rights.




          (c) Payment of Incremental Value. Any payment which may become due from the Company by
reason of a Participant’s exercise of a Stock Appreciation Right may be paid to the
Participant as determined by the Committee (i) all in cash, (ii) all in Common Stock, or
(iii) in any combination of cash and Common Stock. In the event that all or a portion of
the payment is made in Common Stock, the number of shares of Common



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Stock delivered in satisfaction of such payment shall be determined by dividing the
amount of such payment or portion thereof by the Fair Market Value on the Exercise Date. No
fractional share of Common Stock shall be issued to make any payment in respect of Stock
Appreciation Rights; if any fractional share would be issuable, the combination of cash and
Common Stock payable to the Participant shall be adjusted as directed by the Committee to
avoid the issuance of any fractional share.



        6.3. Terms of Stock Options and Stock Appreciation Rights.




          (a) Conditions on Exercise. An Award Agreement with respect to Options and/or Stock
Appreciation Rights may contain such waiting periods, exercise dates and restrictions on
exercise (including, but not limited to, periodic installments) as may be determined by the
Committee at the time of grant.




          (b) Duration of Options and Stock Appreciation Rights. Options and Stock Appreciation
Rights shall terminate after the first to occur of the following events:




               (i) Expiration of the Option or Stock Appreciation Right as provided in the
Award Agreement; or




               (ii) Termination of the Award following the Participant’s disability,
Retirement, death or other Termination of Employment as provided in the Award
Agreement; or




               (iii) In the case of an Incentive Stock Option, ten years from the Date of
Grant; or




               (iv) Solely in the case of a Stock Appreciation Right granted in tandem with an
Option, upon the expiration of the related Option.




          (c) Acceleration or Extension of Exercise Time. The Committee may (but shall not be
obligated to) permit the exercise of an Option or Stock Appreciation Right (i) prior to the
time such Option or Stock Appreciation Right would become exercisable under the terms of the
Award Agreement, (ii) after the termination of the Option or Stock Appreciation Right under
the terms of the Award Agreement, or (iii) after the expiration of the Option or Stock
Appreciation Right.



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     6.4. Exercise Procedures. Each Option and Stock Appreciation Right granted under the Plan
shall be exercised by written or electronic notice to the Company or by such other exercise
procedures as may be provided in the Award Agreement which notice or other form of exercise must be
received by the officer or employee of the Company designated in the Award Agreement on or before
the close of business on the expiration date of the Award. The Purchase Price of shares purchased
upon exercise of an Option granted under the Plan shall be paid in full in cash by the Participant
pursuant to the Award Agreement; provided, however, that the Committee may (but shall not be
required to) permit payment to be made by delivery to the Company of either (a) Common Stock (which
may, in the sole discretion of the Committee, include Restricted Shares or shares otherwise
issuable in connection with the exercise of the Option, subject to such rules as the Committee
deems appropriate) or (b) any combination of cash and Common Stock, or (c) such other consideration
as the Committee deems appropriate and in compliance with applicable law (including payment in
accordance with a cashless exercise program under which, if so instructed by the Participant,
Common Stock may be issued directly to the Participant’s broker or dealer upon receipt of an
irrevocable written or electronic notice of exercise from the Participant). In the event that any
Common Stock shall be transferred to the Company to satisfy all or any part of the Purchase Price,
the part of the Purchase Price deemed to have been satisfied by such transfer of Common Stock shall
be equal to the product derived by multiplying the Fair Market Value as of the date of exercise
times the number of shares of Common Stock transferred to the Company. The Participant may not
transfer to the Company in satisfaction of the Purchase Price any fractional share of Common Stock.
Any part of the Purchase Price paid in cash upon the exercise of any Option shall be added to the
general funds of the Company and may be used for any proper corporate purpose. Unless the
Committee shall otherwise determine, any Common Stock transferred to the Company as payment of all
or part of the Purchase Price upon the exercise of any Option shall be held as treasury shares.



     6.5. Change in Control. Unless otherwise provided by the Committee in the applicable Award
Agreement, in the event of a Change in Control, all Options outstanding on the date of such Change
in Control, and all Stock Appreciation Rights shall become immediately and fully exercisable. The
provisions of this Section 6.5 shall not be applicable to any Options or Stock Appreciation Rights
granted to a Participant if any Change in Control results from such Participant’s beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of Common Stock or Company
Voting Securities.



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ARTICLE VII.

RESTRICTED SHARES




        7.1. Restricted Share Awards. The Committee may grant to any Participant an Award of Common
Stock in such number of shares, and on such terms, conditions and restrictions, whether based on
performance standards, periods of service, retention by the Participant of ownership of purchased
or designated shares of Common Stock or other criteria, as the Committee shall establish. With
respect to performance-based Awards of Restricted Shares to “covered employees” (as defined in
Section 162(m) of the Code), performance targets will be limited to specified levels of one or more
of the Performance Goals. The terms of any Restricted Share Award granted under this Plan shall be
set forth in an Award Agreement which shall contain provisions determined by the Committee and not
inconsistent with this Plan.




          (a) Issuance of Restricted Shares. As soon as practicable after the Date of Grant of a
Restricted Share Award by the Committee, the Company shall cause to be transferred on the
books of the Company, or its agent, Common Stock, registered on behalf of the Participant,
evidencing the Restricted Shares covered by the Award, but subject to forfeiture to the
Company as of the Date of Grant if an Award Agreement with respect to the Restricted Shares
covered by the Award is not duly executed by the Participant and timely returned to the
Company. All Common Stock covered by Awards under this Article VII shall be subject to the
restrictions, terms and conditions contained in the Plan and the Award Agreement entered
into by the Participant. Until the lapse or release of all restrictions applicable to an
Award of Restricted Shares the share certificates, if any, representing such Restricted
Shares may be held in custody by the Company, its designee, or, if the certificates bear a
restrictive legend, by the Participant; provided, however, that if the Restricted Shares are
uncertificated, other arrangements may be made, in the discretion of the Committee, to
ensure the enforcement of the restrictions on such Restricted Shares. Upon the lapse or
release of all restrictions with respect to an Award as described in Section 7.1(d), one or
more share certificates, registered in the name of the Participant, for an appropriate
number of shares as provided in Section 7.1(d), free of any restrictions set forth in the
Plan and the Award Agreement shall be delivered to the Participant.



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          (b) Stockholder Rights. Beginning on the Date of Grant of the Restricted Share Award
and subject to execution of the Award Agreement as provided in Section 7.1(a), the
Participant shall become a stockholder of the Company with respect to all shares subject to
the Award Agreement and shall have all of the rights of a stockholder, including, but not
limited to, the right to vote such shares and the right to receive dividends; provided,
however, that any Common Stock distributed as a dividend or otherwise with respect to any
Restricted Shares as to which the restrictions have not yet lapsed, shall be subject to the
same restrictions as such Restricted Shares and held or restricted as provided in Section
7.1(a).




          (c) Restriction on Transferability. None of the Restricted Shares may be assigned or
transferred (other than by will or the laws of descent and distribution, or to an inter
vivos trust with respect to which the Participant is treated as the owner under Sections 671
through 677 of the Code), pledged or sold prior to lapse of the restrictions applicable
thereto.




          (d) Delivery of Shares Upon Vesting. Upon expiration or earlier termination of the
forfeiture period without a forfeiture and the satisfaction of or release from any other
conditions prescribed by the Committee, or at such earlier time as provided under the
provisions of Section 7.3, the restrictions applicable to the Restricted Shares shall lapse.
As promptly as administratively feasible thereafter, subject to the requirements of Section
11.5, the Company shall deliver to the Participant or, in case of the Participant’s death,
to the Participant’s Beneficiary, one or more share certificates for the appropriate number
of shares of Common Stock, free of all such restrictions, except for any restrictions that
may be imposed by law.



        7.2. Terms of Restricted Shares.




          (a) Forfeiture of Restricted Shares. Subject to Sections 7.2(b) and 7.3, all
Restricted Shares shall be forfeited and returned to the Company and all rights of the
Participant with respect to such Restricted Shares shall terminate unless the Participant
continues in the service of the Company or a Subsidiary as an employee until the expiration
of the forfeiture period for such Restricted Shares and satisfies any and all other
conditions set forth in the Award Agreement. The Committee shall determine the forfeiture
period (which may, but need not, lapse in installments) and any other terms and conditions
applicable with respect to any Restricted Share Award.



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          (b) Waiver of Forfeiture Period. Notwithstanding anything contained in this Article
VII to the contrary, the Committee may, in its sole discretion, waive the forfeiture period
and any other conditions set forth in any Award Agreement under appropriate circumstances
(including the death, disability or Retirement of the Participant or a material change in
circumstances arising after the date of an Award) and subject to such terms and conditions
(including forfeiture of a proportionate number of the Restricted Shares) as the Committee
shall deem appropriate.



        7.3. Change in Control. Unless otherwise provided by the Committee in the applicable Award
Agreement, in the event of a Change in Control, all restrictions applicable to the Restricted Share
Award shall terminate fully and the Participant shall immediately have the right to the delivery of
share certificate or certificates for such shares in accordance with Section 7.1(d).



ARTICLE VIII.

PERFORMANCE AWARDS




        8.1. Performance Awards.




          (a) Award Periods and Calculations of Potential Incentive Amounts. The Committee may
grant Performance Awards to Participants. A Performance Award shall consist of the right to
receive a payment (measured by the Fair Market Value of a specified number of shares of
Common Stock, increases in such Fair Market Value during the Award Period and/or a fixed
cash amount) contingent upon the extent to which certain predetermined performance targets
have been met during an Award Period. Performance Awards may be made in conjunction with,
or in addition to, Restricted Share Awards made under Article VII. The Award Period shall
be two or more fiscal or calendar years as determined by the Committee. The Committee, in
its discretion and under such terms as it deems appropriate, may permit newly eligible
employees, such as those who are promoted or newly hired, to receive Performance Awards
after an Award Period has commenced.




          (b) Performance Targets. The performance targets may include such goals related to the
performance of the Company or, where relevant, any one or more of its Subsidiaries or
divisions and/or the performance of a Participant as may be established by the Committee in
its discretion. In the case of Performance Awards to “covered employees” (as defined in
Section 162(m) of the Code), the targets will be limited to specified levels of



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one or more of the Performance Goals. The performance targets established by the
Committee may vary for different Award Periods and need not be the same for each Participant
receiving a Performance Award in an Award Period. Except to the extent inconsistent with
the performance-based compensation exception under Section 162(m) of the Code, in the case
of Performance Awards granted to employees to whom such section is applicable, the
Committee, in its discretion, but only under extraordinary circumstances as determined by
the Committee, may change any prior determination of performance targets for any Award
Period at any time prior to the final determination of the Award when events or transactions
occur to cause the performance targets to be an inappropriate measure of achievement.




          (c) Earning Performance Awards. The Committee, at or as soon as practicable after the
Date of Grant, shall prescribe a formula to determine the percentage of the Performance
Award to be earned based upon the degree of attainment of performance targets.




          (d) Payment of Earned Performance Awards. Subject to the requirements of Section 11.5,
payments of earned Performance Awards shall be made in cash or Common Stock, or a
combination of cash and Common Stock, in the discretion of the Committee. The Committee, in
its sole discretion, may define such terms and conditions with respect to the payment of
earned Performance Awards as it may deem desirable.



        8.2. Terms of Performance Awards.




          (a) Termination of Employment. Unless otherwise provided below or in Section 8.3, in
the case of a Participant’s Termination of Employment prior to the end of an Award Period,
the Participant will not have earned any Performance Awards.




          (b) Retirement. If a Participant’s Termination of Employment is because of Retirement
prior to the end of an Award Period, the Participant will not be paid any Performance
Awards, unless the Committee, in its sole and exclusive discretion, determines that an Award
should be paid. In such a case, the Participant shall be entitled to receive a pro-rata
portion of his or her Award as determined under Subsection (d).



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          (c) Death or Disability. If a Participant’s Termination of Employment is due to death
or disability (as determined in the sole and exclusive discretion of the Committee) prior to
the end of an Award Period, the Participant or the Participant’s personal representative
shall be entitled to receive a pro-rata share of his or her Award as determined under
Subsection (d).




          (d) Pro-Rata Payment. The amount of any payment made to a Participant whose employment
is terminated by Retirement, death or disability (under circumstances described in
Subsections (b) and (c)) will be the amount determined by multiplying the amount of the
Performance Award which would have been earned, determined at the end of the Award Period,
had such employment not been terminated, by a fraction, the numerator of which is the number
of whole months such Participant was employed during the Award Period, and the denominator
of which is the total number of months of the Award Period. Any such payment made to a
Participant whose employment is terminated prior to the end of an Award Period under this
Section 8.2 shall be made at the end of the respective Award Period, unless otherwise
determined by the Committee in its sole discretion. Any partial payment previously made or
credited to a deferred account for the benefit of a Participant as provided under Section
8.1(d) of the Plan shall be subtracted from the amount otherwise determined as payable as
provided in this Section.




          (e) Other Events. Notwithstanding anything to the contrary in this Article VIII, the
Committee may, in its sole and exclusive discretion, determine to pay all or any portion of
a Performance Award to a Participant who has terminated employment prior to the end of an
Award Period under certain circumstances (including the death, disability or Retirement of
the Participant or a material change in circumstances arising after the Date of Grant) and
subject to such terms and conditions as the Committee shall deem appropriate.



        8.3. Change in Control. Unless otherwise provided by the Committee in the applicable Award
Agreement, in the event of a Change in Control, all Performance Awards for all Award Periods shall
immediately become fully payable to all Participants and shall be paid to Participants in
accordance with Section 8.1(d) within 30 days after such Change in Control.



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ARTICLE IX.

OTHER STOCK-BASED AWARDS




        9.1 Grant of Other Stock-Based Awards. Other stock-based awards, consisting of stock purchase
rights (with or without loans to Participants by the Company containing such terms as the Committee
shall determine), Awards of cash, Awards of Common Stock, or Awards valued in whole or in part by
reference to, or otherwise based on, Common Stock, may be granted either alone or in addition to or
in conjunction with other Awards under the Plan. Subject to the provisions of the Plan, the
Committee shall have sole and complete authority to determine the persons to whom and the time or
times at which such Awards shall be made, the number of shares of Common Stock to be granted
pursuant to such Awards, and all other conditions of the Awards. Any such Award shall be confirmed
by an Award Agreement executed by the Company and the Participant, which Award Agreement shall
contain such provisions as the Committee determines to be necessary or appropriate to carry out the
intent of this Plan with respect to such Award.



        9.2 Terms of Other Stock-Based Awards. In addition to the terms and conditions specified in
the Award Agreement, Awards made pursuant to this Article IX shall be subject to the following:




          (a) Any Common Stock subject to Awards made under this Article IX may not be sold,
assigned, transferred, pledged or otherwise encumbered prior to the date on which the shares
are issued, or, if later, the date on which any applicable restriction, performance or
deferral period lapses; and




          (b) If specified by the Committee in the Award Agreement, the recipient of an Award
under this Article IX shall be entitled to receive, currently or on a deferred basis,
interest or dividends or dividend equivalents with respect to the Common Stock or other
securities covered by the Award; and




          (c) The Award Agreement with respect to any Award shall contain provisions dealing with
the disposition of such Award in the event of a Termination of Employment prior to the
exercise, realization or payment of such Award, whether such termination occurs because of
Retirement, disability, death or other reason, with such provisions to take account of the
specific nature and purpose of the Award.



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        9.3 Foreign Qualified Awards. Awards under the Plan may be granted to such employees of the
Company and its Subsidiaries who are residing in foreign jurisdictions as the Committee in its sole
discretion may determine from time to time. The Committee may adopt such supplements to the Plan
as may be necessary or appropriate to comply with the applicable laws of such foreign jurisdictions
and to afford Participants favorable treatment under such laws; provided, however, that no Award
shall be granted under any such supplement with terms or conditions inconsistent with the provision
set forth in the Plan.



ARTICLE X.

SHORT-TERM CASH INCENTIVE AWARDS




        10.1 Eligibility. Executive officers of the Company who are from time to time determined by
the Committee to be “covered employees” for purposes of Section 162(m) of the Code will be eligible
to receive short-term cash incentive awards under this Article X.



        10.2 Awards.




          (a) Performance Targets. For each fiscal year of the Company, the Committee shall
establish objective performance targets based on specified levels of one or more of the
Performance Goals. Such performance targets shall be established by the Committee on a
timely basis to ensure that the targets are considered “preestablished” for purposes of
Section 162(m) of the Code.




          (b) Amounts of Awards. In conjunction with the establishment of performance targets
for a fiscal year, the Committee shall adopt an objective formula (on the basis of
percentages of Participants’ salaries, shares in a bonus pool or otherwise) for computing
the respective amounts payable under the Plan to Participants if and to the extent that the
performance targets are attained. Such formula shall comply with the requirements
applicable to performance-based compensation plans under Section 162(m) of the Code and, to
the extent based on percentages of a bonus pool, such percentages shall not exceed 100% in
the aggregate.




          (c) Payment of Awards. Awards will be payable to Participants in cash each year upon
prior written certification by the Committee of attainment of the specified performance
targets for the preceding fiscal year.



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          (d) Negative Discretion. Notwithstanding the attainment by the Company of the
specified performance targets, the Committee shall have the discretion, which need not be
exercised uniformly among the Participants, to reduce or eliminate the award that would be
otherwise paid.




          (e) Guidelines. The Committee may adopt from time to time written policies for its
implementation of this Article X. Such guidelines shall reflect the intention of the
Company that all payments hereunder qualify as performance-based compensation under Section
162(m) of the Code.




          (f) Non-Exclusive Arrangement. The adoption and operation of this Article X shall not
preclude the Board or the Committee from approving other short-term incentive compensation
arrangements for the benefit of individuals who are Participants hereunder as the Board or
Committee, as the case may be, deems appropriate and in the best interests of the Company.



ARTICLE XI.

TERMS APPLICABLE GENERALLY TO AWARDS

GRANTED UNDER THE PLAN




        11.1. Plan Provisions Control Award Terms. The terms of the Plan shall govern all Awards
granted under the Plan, and in no event shall the Committee have the power to grant any Award under
the Plan which is contrary to any of the provisions of the Plan. In the event any provision of any
Award granted under the Plan shall conflict with any term in the Plan as constituted on the Date of
Grant of such Award, the term in the Plan as constituted on the Date of Grant of such Award shall
control. Except as provided in Section 11.3 and Section 11.7, the terms of any Award granted under
the Plan may not be changed after the Date of Grant of such Award so as to materially decrease the
value of the Award without the express written approval of the holder.



        11.2. Award Agreement. No person shall have any rights under any Award granted under the Plan
unless and until the Company and the Participant to whom such Award shall have been granted shall
have executed and delivered an Award Agreement or received any other Award acknowledgment
authorized by the Committee expressly granting the Award to such person and containing provisions
setting forth the terms of the Award.



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        11.3. Modification of Award After Grant. No Award granted under the Plan to a Participant may
be modified (unless such modification does not materially decrease the value of the Award) after
the Date of Grant except by express written agreement between the Company and the Participant,
provided that any such change (a) shall not be inconsistent with the terms of the Plan, and (b)
shall be approved by the Committee.



        11.4. Limitation on Transfer. Except as provided in Section 7.1(c) in the case of Restricted
Shares, a Participant’s rights and interest under the Plan may not be assigned or transferred other
than by will or the laws of descent and distribution, and during the lifetime of a Participant,
only the Participant personally (or the Participant’s personal representative) may exercise rights
under the Plan. The Participant’s Beneficiary may exercise the Participant’s rights to the extent
they are exercisable under the Plan following the death of the Participant. Notwithstanding the
foregoing, the Committee may grant Non-Qualified Stock Options that are transferable, without
payment of consideration, to immediate family members of the Participant or to trusts or
partnerships for such family members, and the Committee may also amend outstanding Non-Qualified
Stock Options to provide for such transferability.



        11.5. Taxes. The Company shall be entitled, if the Committee deems it necessary or desirable,
to withhold (or secure payment from the Participant in lieu of withholding) the amount of any
withholding or other tax required by law to be withheld or paid by the Company with respect to any
amount payable and/or shares issuable under such Participant’s Award, or with respect to any income
recognized upon a disqualifying disposition of shares received pursuant to the exercise of an
Incentive Stock Option, and the Company may defer payment or issuance of the cash or shares upon
exercise or vesting of an Award unless indemnified to its satisfaction against any liability for
any such tax. The amount of such withholding or tax payment shall be determined by the Committee
and shall be payable by the Participant at such time as the Committee determines in accordance with
the following rules:




          (a) The Participant shall have the right to elect to meet his or her withholding
requirement (i) by having withheld from such Award at the
appropriate time that number of shares of Common Stock, rounded up to the next whole share, whose Fair Market Value is equal
to the amount of withholding taxes due, (ii) by direct payment to the Company in cash of the
amount of any taxes required to be withheld with respect to such Award or (iii) by a
combination of shares and cash.



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          (b) The Committee shall have the discretion as to any Award, to cause the Company to
pay to tax authorities for the benefit of any Participant, or to reimburse such Participant
for the individual taxes which are due on the grant, exercise or vesting of any share Award,
or the lapse of any restriction on any share Award (whether by reason of a Participant’s
filing of an election under Section 83(b) of the Code or otherwise), including, but not
limited to, Federal income tax, state income tax, local income tax and excise tax under
Section 4999 of the Code, as well as for any such taxes as may be imposed upon such tax
payment or reimbursement.




          (c) In the case of Participants who are subject to Section 16 of the Exchange Act, the
Committee may impose such limitations and restrictions as it deems necessary or appropriate
with respect to the delivery or withholding of shares of Common Stock to meet tax
withholding obligations.



        11.6. Surrender of Awards. Any Award granted under the Plan may be surrendered to the Company
for cancellation on such terms as the Committee and the holder approve.



        11.7 Adjustments to Reflect Capital Changes.




          (a) Recapitalization. The number and kind of shares subject to outstanding Awards, the
Purchase Price or Exercise Price for such shares, the number and kind of shares available
for Awards subsequently granted under the Plan and the maximum number of shares in respect
of which Awards can be made to any Participant in any calendar year shall be appropriately
adjusted to reflect any stock dividend, stock split, combination or exchange of shares,
merger, consolidation or other change in capitalization with a similar substantive effect
upon the Plan or the Awards granted under the Plan. The Committee shall have the power and
sole discretion to determine the amount of the adjustment to be made in each case.




          (b) Merger. After any Merger in which the Company is the surviving corporation, each
Participant shall, at no additional cost, be entitled upon any exercise of all Options or
receipt of other Award to receive (subject to any required action by stockholders), in lieu
of the number of shares of Common Stock receivable or exercisable pursuant to such Award,
the number and class of shares or other securities to which such Participant would have been
entitled pursuant to the terms of the Merger if, at the time



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of the Merger, such Participant had been the holder of record of a number of shares
equal to the number of shares receivable or exercisable pursuant to such Award. Comparable
rights shall accrue to each Participant in the event of successive Mergers of the character
described above. In the event of a Merger in which the Company is not the surviving
corporation, the surviving, continuing, successor, or purchasing corporation, as the case
may be (the “Acquiring Corporation”), shall either assume the Company’s rights and
obligations under outstanding Award Agreements or substitute awards in respect of the
Acquiring Corporation’s stock for such outstanding Awards. In the event the Acquiring
Corporation fails to assume or substitute for such outstanding Awards, the Board shall
provide that any unexercisable and/or unvested portion of the outstanding Awards shall be
immediately exercisable and vested as of a date prior to such Merger, as the Board so
determines. The exercise and/or vesting of any Award that was permissible solely by reason
of this Section 11.7(b) shall be conditioned upon the consummation of the Merger. Any
Options which are neither assumed by the Acquiring Corporation nor exercised as of the date
of the Merger shall terminate effective as of the effective date of the Merger.




          (c) Options to Purchase Shares or Stock of Acquired Companies. After any Merger in
which the Company or a Subsidiary shall be a surviving corporation, the Committee may grant
substituted options under the provisions of the Plan, pursuant to Section 424 of the Code,
replacing old options granted under a plan of another party to the Merger whose shares or
stock subject to the old options may no longer be issued following the Merger. The
foregoing adjustments and manner of application of the foregoing provisions shall be
determined by the Committee in its sole discretion. Any such adjustments may provide for
the elimination of any fractional shares which might otherwise become subject to any
Options.



        11.8. No Right to Employment. No employee or other person shall have any claim of right to be
granted an Award under this Plan. Neither the Plan nor any action taken hereunder shall be
construed as giving any employee any right to be retained in the employ of the Company or any of
its Subsidiaries.



        11.9. Awards Not Includable for Benefit Purposes. Payments received by a Participant pursuant
to the provisions of the Plan shall not be included in the determination of benefits under any
pension, group insurance or other benefit plan applicable to the Participant which is maintained by
the Company or any of its Subsidiaries, except as may be provided under the terms of such plans or
determined by the Board.



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     11.10. Governing Law. All determinations made and actions taken pursuant to the Plan shall be
governed by the laws of the State of Delaware and construed in accordance therewith.



     11.11. No Strict Construction. No rule of strict construction shall be implied against the
Company, the Committee, or any other person in the interpretation of any of the terms of the Plan,
any Award granted under the Plan or any rule or procedure established by the Committee.



     11.12. Compliance with Rule 16b-3. It is intended that unless the Committee determines
otherwise, Awards under the Plan be eligible for exemption under Rule 16b-3. The Board is
authorized to amend the Plan and to make any such modifications to Award Agreements to comply with
Rule 16b-3, as it may be amended from time to time, and to make any other such amendments or
modifications as it deems necessary or appropriate to better accomplish the purposes of the Plan in
light of any amendments made to Rule 16b-3.



     11.13. Captions. The captions (i.e., all Section headings) used in the Plan are for
convenience only, do not constitute a part of the Plan, and shall not be deemed to limit,
characterize or affect in any way any provisions of the Plan, and all provisions of the Plan shall
be construed as if no captions have been used in the Plan.



     11.14. Severability. Whenever possible, each provision in the Plan and every Award at any
time granted under the Plan shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of the Plan or any Award at any time granted under the Plan
shall be held to be prohibited by or invalid under applicable law, then (a) such provision shall be
deemed amended to accomplish the objectives of the provision as originally written to the fullest
extent permitted by law and (b) all other provisions of the Plan and every other Award at any time
granted under the Plan shall remain in full force and effect.



     11.15. Amendment and Termination.




          (a) Amendment. The Board shall have complete power and authority to amend the Plan at
any time; provided, however, that the Board shall not, without the requisite affirmative
approval of stockholders of the Company, make any amendment which requires stockholder
approval under the Code, unless such compliance is no longer desired under the Code, or
under any other applicable law or rule of any stock exchange which lists



24









 







Common Stock or Company Voting Securities. No termination or amendment of the Plan
may, without the consent of the Participant to whom any Award shall theretofore have been
granted under the Plan, adversely affect the right of such individual under such Award.




          (b) Termination. The Board shall have the right and the power to terminate the Plan at
any time. No Award shall be granted under the Plan after the termination of the Plan, but
the termination of the Plan shall not have any other effect and any Award outstanding at the
time of the termination of the Plan may be exercised after termination of the Plan at any
time prior to the expiration date of such Award to the same extent such Award would have
been exercisable had the Plan not terminated.



* * * * * *





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