exv10w5






Exhibit 10.5




JABIL CIRCUIT, INC.

2002 STOCK INCENTIVE PLAN




     1. Purposes of the Plan. The purposes of this Stock Incentive Plan are to attract
and retain the best available personnel for positions of substantial responsibility, to provide
additional incentive to Employees and Consultants, and to promote the success of the Company’s
business. Awards granted under the Plan may be Incentive Stock Options, Nonstatutory Stock Options,
Stock Awards, Performance Units, Performance Shares or Stock Appreciation Rights.



     2. Definitions. As used herein, the following definitions shall apply:



          (a) “Administrator” means the Board or any Committee or person as shall be
administering the Plan, in accordance with Section 4 of the Plan.



          (b) “Applicable Law” means the legal requirements relating to the administration of
the Plan under applicable federal, state, local and foreign corporate, tax and securities laws,
including the Delaware General Corporation Law, and other applicable laws and the rules and
requirements of any stock exchange or quotation system on which the Common Stock is listed or
quoted.



          (c) “Award” means an Option, Stock Appreciation Right, Stock Award, Performance Unit
or Performance Share granted under the Plan.



          (d) “Award Agreement” means the agreement, notice and/or terms or conditions by
which an Award is evidenced, documented in such form (including by electronic communication) as may
be approved by the Administrator.



          (e) “Board” means the Board of Directors of the Company.



          (f) “Change in Control” means the happening of any of the following, unless
otherwise provided by the Award Agreement:



               (i) the direct or indirect sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets of the Company and its
subsidiaries taken as a whole to any person (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) other than the Company or one of its subsidiaries;



               (ii) the adoption of a plan relating to the Company’s liquidation or
dissolution;



               (iii) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any person other than the Company or its
subsidiaries, becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of more than 50% of the combined voting power of the Company’s voting stock
or other voting stock into which the Company’s voting stock is reclassified, consolidated,
exchanged or changed, measured by voting power rather than number of shares;



               (iv) the Company consolidates with, or merges with or into, any person, or any
person consolidates with, or merges with or into, the Company, in any such event pursuant to a
transaction in which any of the voting stock of the Company or such other person is converted into
or exchanged for cash, securities or other property, other than any such transaction where the
shares of voting stock of the Company outstanding immediately prior to such transaction directly or
indirectly constitute, or are converted into or exchanged for, a majority of the voting stock of
the surviving person immediately after giving effect to such transaction; or



               (v) the first day on which a majority of the members of the Board are not
Continuing Directors. “Continuing Director” means, as of any date of determination with respect to
any Award, any member of the Board who (1) was a member of the Board on the Date of Grant of such
Award; or (2) was nominated for election or elected to the Board with the approval of a majority of
the continuing directors who were members of the Board at the time of such nomination or election.”



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          (g) “Change in Control Price” means, as determined by the Board,



               (i) the highest Fair Market Value of a Share within the 60 day period
immediately preceding the date of determination of the Change in Control Price by the Board (the
“60-Day Period”), or



               (ii) the highest price paid or offered per Share, as determined by the Board,
in any bona fide transaction or bona fide offer related to the Change in Control of the Company, at
any time within the 60-Day Period, or



               (iii) some lower price as the Board, in its discretion, determines to be a reasonable estimate
of the fair market value of a Share; provided, however, that in the case of an Option or SAR
granted after October 3, 2004, the Change in Control Price shall be the Fair Market Value of a
Share on the date the Option or SAR is terminated in exchange for a cash payment pursuant to
Section 11(b)(iv).



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



          (i) “Committee” means a Committee appointed by the Board in accordance with
Section 4 of the Plan.



          (j) “Common Stock” means the Common Stock, $.001 par value, of the Company.



          (k) “Company” means Jabil Circuit, Inc., a Delaware corporation.



          (l) “Consultant” means any person, including an advisor, engaged by the Company or a
Parent or Subsidiary to render services and who is compensated for such services, including without
limitation non-Employee Directors who are paid only a director’s fee by the Company or who are
compensated by the Company for their services as non-Employee Directors. In addition, as used
herein, “consulting relationship” shall be deemed to include service by a non-Employee Director as
such.



          (m) “Continuous Status as an Employee or Consultant” means that the employment or
consulting relationship is not interrupted or terminated by the Company, any Parent or Subsidiary.
Continuous Status as an Employee or Consultant shall not be considered interrupted in the case of
(i) any leave of absence approved in writing by the Board, an Officer, or a person designated in
writing by the Board or an Officer as authorized to approve a leave of absence, including sick
leave, military leave, or any other personal leave; provided, however, that for purposes of
Incentive Stock Options, any such leave may not exceed 90 days, unless reemployment upon the
expiration of such leave is guaranteed by contract (including certain Company policies) or
Applicable Law, or (ii) transfers between locations of the Company or between the Company, a
Parent, a Subsidiary or successor of the Company; or (iii) a change in the status of the Grantee
from Employee to Consultant or from Consultant to Employee.



          (n) “Covered Stock” means the Common Stock subject to an Award.



          (o) “Date of Grant” means the date on which the Administrator makes the
determination granting the Award, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Grantee within a reasonable time after the
Date of Grant.



          (p) ““Date of Termination” means the date on which a Grantee’s Continuous Status as
an Employee or Consultant terminates, unless otherwise specified in an Award Agreement. For Awards
granted after September, 2010, the term “immediately before the Date of Termination” means
“immediately before the event of termination on the Date of Termination.”



          (q) “Director” means a member of the Board.



          (r) “Disability” means total and permanent disability as defined in Section 22(e)(3)
of the Code.



          (s) “Employee” means any person, including Officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a
director’s fee by the Company shall be sufficient to constitute “employment” by the Company.



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



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          (u) “Fair Market Value” means, as of any date, the value of Common Stock determined
as follows:



               (i) If the Common Stock is listed on any established stock exchange or a
national market system, including without limitation the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotation (“NASDAQ”) System, the Fair Market
Value of a Share of Common Stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such system or exchange (or the exchange with the
greatest volume of trading in Common Stock) on the day of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable;



               (ii) If the Common Stock is quoted on the NASDAQ System (but not on the
National Market System thereof) or is regularly quoted by a recognized securities dealer but
selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean
between the high bid and low asked prices for the Common Stock on the day of determination, as
reported in The Wall Street Journal or such other source as the Administrator deems reliable;



               (iii) In the absence of an established market for the Common Stock, the Fair
Market Value shall be determined in good faith by the Administrator.



          (v) “Grantee” means an individual who has been granted an Award.



          (w) “Incentive Stock Option” means an Option intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code and the regulations promulgated
thereunder.



          (x) [Reserved]



          (y) “Nonstatutory Stock Option” means an Option not intended to qualify as an
Incentive Stock Option.



          (z) “Officer” means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.



          (aa) “Option” means a stock option granted under the Plan.



          (bb) “Parent” means a corporation, whether now or hereafter existing, in an unbroken
chain of corporations ending with the Company if each of the corporations other than the Company
holds at least 50 percent of the voting shares of one of the other corporations in such chain.



          (cc) “Performance Period” means the time period during which the performance goals
established by the Administrator with respect to a Performance Unit or Performance Share, pursuant
to Section 9 of the Plan, must be met.



          (dd) “Performance Share” has the meaning set forth in Section 9 of the Plan.



          (ee) “Performance Unit” has the meaning set forth in Section 9 of the Plan.



          (ff) “Plan” means this 2002 Stock Incentive Plan.



          (gg) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan.



          (hh) “Share” means a share of the Common Stock, as adjusted in accordance with
Section 11 of the Plan.



          (ii) “Stock Appreciation Right” or “SAR” has the meaning set forth in Section 7 of
the Plan.



          (jj) “Stock Grant” means Shares that are awarded to a Grantee pursuant to Section 8
of the Plan.



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          (kk) “Subsidiary” means a corporation, domestic or foreign, of which not less than
50 percent of the voting shares are held by the Company or a Subsidiary, whether or not such
corporation now exists or is hereafter organized or acquired by the Company or a Subsidiary



     3. Stock Subject to the Plan. Subject to the provisions of Section 11 of the Plan
and except as otherwise provided in this Section 3, the maximum aggregate number of Shares that may
be subject to Awards under the Plan since the Plan became effective is 41,808,726, which includes
Shares that were available on August 31, 2009 to be subject to future Awards, plus Shares that were
subject to Awards on August 31, 2009, and all Shares issued prior to August 31, 2009. The Shares
may be authorized, but unissued, or reacquired Common Stock.



          If an Award expires or becomes unexercisable without having been exercised in full
the remaining Shares that were subject to the Award shall become available for future Awards under
the Plan (unless the Plan has terminated). With respect to Stock Appreciation Rights, if the
payment upon exercise of a SAR is in the form of Shares, the Shares subject to the SAR shall be
counted against the available Shares as one Share for every Share subject to the SAR, regardless of
the number of Shares used to settle the SAR upon exercise.



     4. Administration of the Plan.



          (a) Procedure.



               (i) Multiple Administrative Bodies. The Plan may be administered by
different bodies with respect to different groups of Employees and Consultants. Except as provided
below, the Plan shall be administered by (A) the Board or (B) a committee designated by the Board
and constituted to satisfy Applicable Law.



               (ii) Rule 16b-3. To the extent the Board or the Committee considers it
desirable for transactions relating to Awards to be eligible to qualify for an exemption under
Rule 16b-3, the transactions contemplated under the Plan shall be structured to satisfy the
requirements for exemption under Rule 16b-3.



               (iii) Section 162(m) of the Code. To the extent the Board or the
Committee considers it desirable for compensation delivered pursuant to Awards to be eligible to
qualify for an exemption from the limit on tax deductibility of compensation under Section 162(m)
of the Code, the transactions contemplated under the Plan shall be structured to satisfy the
requirements for exemption under Section 162(m) of the Code.



               (iv) Authorization of Officers to Grant Options. In accordance with
Applicable Law, the Board may, by a resolution adopted by the Board, authorize one or more Officers
to designate Officers and Employees (excluding the Officer so authorized) to be Grantees of Options
and determine the number of Options to be granted to such Officers and Employees; provided,
however, that the resolution adopted by the Board so authorizing such Officer or Officers shall
specify the total number and the terms (including the exercise price, which may include a formula
by which such price may be determined) of Options such Officer or Officers may so grant.



          (b) Powers of the Administrator. Subject to the provisions of the Plan, and
in the case of a Committee or an Officer, subject to the specific duties delegated by the Board to
such Committee or Committee, the Administrator shall have the authority, in its sole and absolute
discretion:



               (i) to determine the Fair Market Value of the Common Stock, in accordance with
Section 2(u) of the Plan;



               (ii) to select the Consultants and Employees to whom Awards will be granted
under the Plan;



               (iii) to determine whether, when, to what extent and in what types and amounts
Awards are granted under the Plan;



               (iv) to determine the number of shares of Common Stock to be covered by each
Award granted under the Plan;



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               (v) to determine the forms of Award Agreements, which need not be the same for
each grant or for each Grantee, and which may be delivered electronically, for use under the Plan;



               (vi) to determine the terms and conditions, not inconsistent with the terms of
the Plan, of any Award granted under the Plan. Such terms and conditions, which need not be the
same for each grant or for each Grantee, include, but are not limited to, the exercise price, the
time or times when Options and SARs may be exercised (which may be based on performance criteria),
the extent to which vesting is suspended during a leave of absence, any vesting acceleration or
waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the
shares of Common Stock relating thereto, based in each case on such factors as the Administrator
shall determine;



               (vii) to construe and interpret the terms of the Plan and Awards;



               (viii) to prescribe, amend and rescind rules and regulations relating to the
Plan, including, without limiting the generality of the foregoing, rules and regulations relating
to the operation and administration of the Plan to accommodate the specific requirements of local
and foreign laws and procedures;



               (ix) to modify or amend each Award (subject to Section 13 of the Plan).
However, the Administrator may not modify or amend any outstanding Option so as to specify a lower
exercise price or accept the surrender of an outstanding Option and authorize the granting of a new
Option with a lower exercise price in substitution for such surrendered Option;



               (x) to authorize any person to execute on behalf of the Company any instrument
required to effect the grant of an Award previously granted by the Administrator;



               (xi) to determine the terms and restrictions applicable to Awards;



               (xii) to make such adjustments or modifications to Awards granted to Grantees
who are Employees of foreign Subsidiaries as are advisable to fulfill the purposes of the Plan or
to comply with Applicable Law;



               (xiii) to delegate its duties and responsibilities under the Plan with respect
to sub-plans applicable to foreign Subsidiaries, except its duties and responsibilities with
respect to Employees who are also Officers or Directors subject to Section 16(b) of the Exchange
Act;



               (xiv) to provide any notice or other communication required or permitted by the
Plan in either written or electronic form; and



               (xv) to make all other determinations deemed necessary or advisable for
administering the Plan.



          (c) Effect of Administrator’s Decision. The Administrator’s decisions,
determinations and interpretations shall be final and binding on all Grantees and any other holders
of Awards.



     5. Eligibility and General Conditions of Awards.



          (a) Eligibility. Awards other than Incentive Stock Options may be granted to
Employees and Consultants. Incentive Stock Options may be granted only to Employees. If otherwise
eligible, an Employee or Consultant who has been granted an Award may be granted additional Awards.



          (b) Maximum Term. Subject to the following provision, the term during which
an Award may be outstanding shall not extend more than ten years after the Date of Grant, and shall
be subject to earlier termination as specified elsewhere in the Plan or Award Agreement; provided,
however, that any deferral of a cash payment or of the delivery of Shares that is permitted or
required by the Administrator pursuant to Section 10 of the Plan may, if so permitted or required
by the Administrator, extend more than ten years after the Date of Grant of the Award to which the
deferral relates.



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          (c) Award Agreement. To the extent not set forth in the Plan, the terms and
conditions of each Award, which need not be the same for each grant or for each Grantee, shall be
set forth in an Award Agreement. The Administrator, in its sole and absolute discretion, may
require as a condition to any Award Agreement’s effectiveness that the Award Agreement be executed
by the Grantee, including by electronic signature or other electronic indication of acceptance, and
that the Grantee agree to such further terms and conditions as specified in the Award Agreement.



          (d) Termination of Employment or Consulting Relationship. In the event that
a Grantee’s Continuous Status as an Employee or Consultant terminates (other than upon the
Grantee’s death or Disability), then, unless otherwise provided by the Award Agreement, and subject
to Section 11 of the Plan:



               (i) the Grantee may exercise his or her unexercised Option or SAR, but only
within such period of time as is determined by the Administrator and set forth in the Award
Agreement, and only to the extent that the Grantee was entitled to exercise it at the Date of
Termination (but in no event later than the expiration of the term of such Option or SAR as set
forth in the Award Agreement). In the case of an Incentive Stock Option, the Administrator shall
determine such period of time (in no event to exceed three months from the Date of Termination)
when the Option is granted. If, at the Date of Termination, the Grantee is not entitled to exercise
his or her entire Option or SAR, the Shares covered by the unexercisable portion of the Option or
SAR shall revert to the Plan. If, after the Date of Termination, the Grantee does not exercise his
or her Option or SAR within the time specified by the Administrator, the Option or SAR shall
terminate, and the Shares covered by such Option or SAR shall revert to the Plan. An Award
Agreement may also provide that if the exercise of an Option following the Date of Termination
would be prohibited at any time because the issuance of Shares would violate Company policy
regarding compliance with Applicable Law, then the exercise period shall terminate on the earlier
of (A) the expiration of the term of the Option set forth in Section 6(b) of the Plan or (B) the
expiration of a period of 10 days after the Date of Termination during which the exercise of the
Option would not be in violation of such requirements;



               (ii) the Grantee’s Stock Awards, to the extent forfeitable immediately before
the Date of Termination, shall thereupon automatically be forfeited;



               (iii) the Grantee’s Stock Awards that were not forfeitable immediately before
the Date of Termination shall promptly be settled by delivery to the Grantee of a number of
unrestricted Shares equal to the aggregate number of the Grantee’s vested Stock Awards;



               (iv) any Performance Shares or Performance Units with respect to which the
Performance Period has not ended as of the Date of Termination shall terminate immediately upon the
Date of Termination.



          (e) Disability of Grantee. In the event that a Grantee’s Continuous Status
as an Employee or Consultant terminates as a result of the Grantee’s Disability, then, unless
otherwise provided by the Award Agreement:



               (i) the Grantee may exercise his or her unexercised Option or SAR at any time
within 12 months from the Date of Termination, but only to the extent that the Grantee was entitled
to exercise the Option or SAR at the Date of Termination (but in no event later than the expiration
of the term of the Option or SAR as set forth in the Award Agreement). If, at the Date of
Termination, the Grantee is not entitled to exercise his or her entire Option or SAR, the Shares
covered by the unexercisable portion of the Option or SAR shall revert to the Plan. If, after the
Date of Termination, the Grantee does not exercise his or her Option or SAR within the time
specified herein, the Option or SAR shall terminate, and the Shares covered by such Option or SAR
shall revert to the Plan.



               (ii) the Grantee’s Stock Awards, to the extent forfeitable immediately before
(or, with respect to Awards granted after September, 2010, as of) the Date of Termination, shall
thereupon automatically be forfeited;



               (iii) the Grantee’s Stock Awards that were not forfeitable immediately before
(or, with respect to Awards granted after September, 2010, as of) the Date of Termination shall
promptly be settled by delivery to the Grantee of a number of unrestricted Shares equal to the
aggregate number of the Grantee’s vested Stock Awards;



               (iv) any Performance Shares or Performance Units with respect to which the
Performance Period has not ended as of the Date of Termination shall terminate immediately upon the
Date of Termination.



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          (f) Death of Grantee. In the event of the death of an Grantee, then, unless
otherwise provided by the Award Agreement,



               (i) the Grantee’s unexercised Option or SAR may be exercised at any time within
12 months following the date of death (but in no event later than the expiration of the term of
such Option or SAR as set forth in the Award Agreement), by the Grantee’s estate or by a person who
acquired the right to exercise the Option or SAR by bequest or inheritance, but only to the extent
that the Grantee was entitled to exercise the Option or SAR at the date of death. If, at the time
of death, the Grantee was not entitled to exercise his or her entire Option or SAR, the Shares
covered by the unexercisable portion of the Option or SAR shall immediately revert to the Plan. If,
after death, the Grantee’s estate or a person who acquired the right to exercise the Option or SAR
by bequest or inheritance does not exercise the Option or SAR within the time specified herein, the
Option or SAR shall terminate, and the Shares covered by such Option or SAR shall revert to the
Plan.



               (ii) the Grantee’s Stock Awards, to the extent forfeitable immediately before
the date of death, shall thereupon automatically be forfeited;



               (iii) the Grantee’s Stock Awards that were not forfeitable immediately before
the date of death shall promptly be settled by delivery to the Grantee’s estate or a person who
acquired the right to hold the Stock Grant by bequest or inheritance, of a number of unrestricted
Shares equal to the aggregate number of the Grantee’s vested Stock Awards;



               (iv) any Performance Shares or Performance Units with respect to which the
Performance Period has not ended as of the date of death shall terminate immediately upon the date
of death.



          (g) Buyout Provisions. Except as otherwise provided in this Section 5(g),
the Administrator may at any time offer to buy out, for a payment in cash or Shares, an Award
previously granted, based on such terms and conditions as the Administrator shall establish and
communicate to the Grantee at the time that such offer is made. No such buy out shall occur without
the prior approval or consent of the Company’s stockholders. Any such cash offer made to an Officer
or Director shall comply with the provisions of Rule 16b-3 relating to cash settlement of stock
appreciation rights. This provision is intended only to clarify the powers of the Administrator and
shall not in any way be deemed to create any rights on the part of Grantees to buyout offers or
payments.



          (h) Nontransferability of Awards.



               (i) Except as provided in Section 5(h)(iii) below, each Award, and each right
under any Award, shall be exercisable only by the Grantee during the Grantee’s lifetime, or, if
permissible under Applicable Law, by the Grantee’s guardian or legal representative.



               (ii) Except as provided in Section 5(h)(iii) below, no Award (prior to the
time, if applicable, Shares are issued in respect of such Award), and no right under any Award, may
be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Grantee
otherwise than by will or by the laws of descent and distribution (or to the Company) and any such
purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void
and unenforceable against the Company or any Subsidiary; provided, that the designation of a
beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or
encumbrance.



               (iii) To the extent and in the manner permitted by Applicable Law, and to the
extent and in the manner permitted by the Administrator, and subject to such terms and conditions
as may be prescribed by the Administrator, a Grantee may transfer an Award to:



                    (A) a child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law of the Grantee (including adoptive
relationships);



                    (B) any person sharing the employee’s household (other than a tenant or
employee);



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                    (C) a trust in which persons described in (A) and (B) have more than
50 percent of the beneficial interest;



                    (D) a foundation in which persons described in (A) or (B) or the Grantee
control the management of assets; or



                    (E) any other entity in which the persons described in (A) or (B) or the
Grantee own more than 50 percent of the voting interests;


provided such transfer is not for value. The following shall not be considered transfers for value:
a transfer under a domestic relations order in settlement of marital property rights, and a
transfer to an entity in which more than 50 percent of the voting interests are owned by persons
described in (A) above or the Grantee, in exchange for an interest in such entity.




     6. Stock Options.



          (a) Limitations.



               (i) Each Option shall be designated in the Award Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. Any Option designated as an Incentive Stock
Option:



                    (A) shall not have an aggregate Fair Market Value (determined for each
Incentive Stock Option at the Date of Grant) of Shares with respect to which Incentive Stock
Options are exercisable for the first time by the Grantee during any calendar year (under the Plan
and any other employee stock option plan of the Company or any Parent or Subsidiary (“Other
Plans”)), determined in accordance with the provisions of Section 422 of the Code, that exceeds
$100,000 (the “$100,000 Limit”);



                    (B) shall, if the aggregate Fair Market Value of Shares (determined on the
Date of Grant) with respect to the portion of such grant that is exercisable for the first time
during any calendar year (“Current Grant”) and all Incentive Stock Options previously granted under
the Plan and any Other Plans that are exercisable for the first time during a calendar year (“Prior
Grants”) would exceed the $100,000 Limit, be exercisable as follows:



                         (1) The portion of the Current Grant that would, when added to any
Prior Grants, be exercisable with respect to Shares that would have an aggregate Fair Market Value
(determined as of the respective Date of Grant for such Options) in excess of the $100,000 Limit
shall, notwithstanding the terms of the Current Grant, be exercisable for the first time by the
Grantee in the first subsequent calendar year or years in which it could be exercisable for the
first time by the Grantee when added to all Prior Grants without exceeding the $100,000 Limit; and



                         (2) If, viewed as of the date of the Current Grant, any portion of a
Current Grant could not be exercised under the preceding provisions of this Section 6(a)(i)(B)
during any calendar year commencing with the calendar year in which it is first exercisable through
and including the last calendar year in which it may by its terms be exercised, such portion of the
Current Grant shall not be an Incentive Stock Option, but shall be exercisable as a separate Option
at such date or dates as are provided in the Current Grant.



               (ii) No Employee shall be granted, in any fiscal year of the Company, Options
to purchase more than 3,000,000 Shares. The limitation described in this Section 6(a)(ii) shall be
adjusted proportionately in connection with any change in the Company’s capitalization as described
in Section 11 of the Plan. If an Option is canceled in the same fiscal year of the Company in which
it was granted (other than in connection with a transaction described in Section 11 of the Plan),
the canceled Option will be counted against the limitation described in this Section 6(a)(ii).



          (b) Term of Option. The term of each Option shall be stated in the Award
Agreement; provided, however, that in the case of an Incentive Stock Option, the term shall be
10 years from the date of grant or such shorter term as may be provided in the Award Agreement.
Moreover, in the case of an Incentive Stock Option granted to a Grantee who, at the time the
Incentive Stock Option is granted, owns stock representing more than 10 percent of the voting



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power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive
Stock Option shall be five years from the date of grant or such shorter term as may be provided in
the Award Agreement.




          (c) Option Exercise Price and Consideration.



               (i) Exercise Price. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the Administrator and, except as
otherwise provided in this Section 6(c)(i), shall be no less than 100 percent of the Fair Market
Value per Share on the Date of Grant.



                    (A) In the case of an Incentive Stock Option granted to an Employee who on
the Date of Grant owns stock representing more than 10 percent of the voting power of all classes
of stock of the Company or any Parent or Subsidiary, the per Share exercise price shall be no less
than 110 percent of the Fair Market Value per Share on the Date of Grant.



                    (B) Any Option that is (1) granted to a Grantee in connection with the
acquisition (“Acquisition”), however effected, by the Company of another corporation or entity
(“Acquired Entity”) or the assets thereof, (2) associated with an option to purchase shares of
stock or other equity interest of the Acquired Entity or an affiliate thereof (“Acquired Entity
Option”) held by such Grantee immediately prior to such Acquisition, and (3) intended to preserve
for the Grantee the economic value of all or a portion of such Acquired Entity Option, may be
granted with such exercise price as the Administrator determines to be necessary to achieve such
preservation of economic value.



          (d) Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator shall fix the period within which the Option may be exercised and shall determine any
conditions that must be satisfied before the Option may be exercised. An Option shall be
exercisable only to the extent that it is vested according to the terms of the Award Agreement.



          (e) Form of Consideration. The Administrator shall determine the acceptable
form of consideration for exercising an Option, including the method of payment. In the case of an
Incentive Stock Option, the Administrator shall determine the acceptable form of consideration at
the time of grant. The acceptable form of consideration may consist of any combination of cash,
personal check, wire transfer or, subject to the approval of the Administrator:



               (i) Shares previously acquired or Shares deliverable upon exercise of the
Option;



               (ii) pursuant to procedures approved by the Committee, (A) through the sale of
the Shares acquired on exercise of the Option through a broker-dealer to whom the Grantee has
submitted an irrevocable notice of exercise and irrevocable instructions to deliver promptly to the
Company the amount of sale or loan proceeds sufficient to pay the exercise price, together with, if
requested by the Company, the amount of federal, state, local or foreign withholding taxes payable
by the Grantee by reason of such exercise, or (B) through simultaneous sale through a broker of
Shares acquired upon exercise; or



               (iii) such other consideration and method of payment for the issuance of Shares
to the extent permitted by Applicable Law.



          (f) Exercise of Option.



               (i) Procedure for Exercise; Rights as a Stockholder.



                    (A) Any Option granted hereunder shall be exercisable according to the
terms of the Plan and at such times and under such conditions as determined by the Administrator
and set forth in the Award Agreement.



                    (B) An Option may not be exercised for a fraction of a Share.



                    (C) An Option shall be deemed exercised when the Company receives:



                         (1) written or electronic notice of exercise (in accordance with the
Award Agreement and any action taken by the Administrator pursuant to Section 4(b) of the Plan or
otherwise) from the person entitled to exercise the Option, and



9









 





                         (2) full payment for the Shares with respect to which the Option is
exercised. Full payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Award Agreement and the Plan.



                         (3) Shares issued upon exercise of an Option shall be issued in the
name of the Grantee or, if requested by the Grantee, in the name of the Grantee and his or her
spouse. Until the stock certificate evidencing such Shares is issued (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such stock certificate promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 11 of the Plan.



                         (4) Exercising an Option in any manner shall decrease the number of
Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the
number of Shares as to which the Option is exercised.



     7. Stock Appreciation Rights.



          (a) Grant of SARs. Subject to the terms and conditions of the Plan, the
Administrator may grant SARs in tandem with an Option or alone and unrelated to an Option. Tandem
SARs shall expire no later than the expiration of the underlying Option. The per share exercise
price (or “base price”) of any SAR shall be determined by the Administrator and shall be no less
than 100 percent of the Fair Market Value per Share on the Date of Grant.



          (b) Limitation. No Employee shall be granted, in any fiscal year of the
Company, SARs covering more than 3,000,000 Shares. The limitation described in this Section 7(b)
shall be adjusted proportionately in connection with any change in the Company’s capitalization as
described in Section 11 of the Plan. If a SAR is canceled in the same fiscal year of the Company in
which it was granted (other than in connection with a transaction described in Section 11 of the
Plan), the canceled SAR will be counted against the limitation described in this Section 7(b).



          (c) Exercise of SARs. SARs shall be exercised by the delivery of a written
or electronic notice of exercise to the Company (in accordance with the Award Agreement and any
action taken by the Administrator pursuant to Section 4(b) of the Plan or otherwise), setting forth
the number of Shares over which the SAR is to be exercised. Tandem SARs may be exercised:



               (i) with respect to all or part of the Shares subject to the related Option
upon the surrender of the right to exercise the equivalent portion of the related Option;



               (ii) only with respect to the Shares for which its related Option is then
exercisable; and



               (iii) only when the Fair Market Value of the Shares subject to the Option
exceeds the exercise price of the Option.


The value of the payment with respect to the tandem SAR may be no more than 100 percent of the
difference between the exercise price of the underlying Option and the Fair Market Value of the
Shares subject to the underlying Option at the time the tandem SAR is exercised.




          (d) Payment of SAR Benefit. Upon exercise of a SAR, the Grantee shall be
entitled to receive payment from the Company in an amount determined by multiplying:



               (i) the excess of the Fair Market Value of a Share on the date of exercise over
the SAR exercise price; by



               (ii) the number of Shares with respect to which the SAR is exercised;



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provided, that the Administrator may provide in the Award Agreement that the benefit payable on
exercise of an SAR shall not exceed such percentage of the Fair Market Value of a Share on the Date
of Grant as the Administrator shall specify. As determined by the Administrator, the payment upon
exercise of an SAR may be in cash, in Shares that have an aggregate Fair Market Value (as of the
date of exercise of the SAR) equal to the amount of the payment, or in some combination thereof, as
set forth in the Award Agreement.




     8. Stock Awards.



          (a) Authorization to Grant Stock Awards. Subject to the terms and conditions
of the Plan, the Administrator may grant Stock Awards to Employees or Consultants from time to
time. A Stock Award may be made in Shares or denominated in units representing rights to receive
Shares. Each Stock Award shall be evidenced by an Award Agreement that shall set forth the
conditions, if any, which will need to be timely satisfied before the Stock Award will be effective
and the conditions, if any, under which the Grantee’s interest in the related Shares or units will
be forfeited. A Stock Award made in Shares that are subject to forfeiture conditions and/or other
restrictions may be designated as an Award of ‘Restricted Stock.’ A Stock Award denominated in
units that are subject to forfeiture conditions and/or other restrictions may be designated as an
Award of ‘Restricted Stock Units.’ No more than 3,000,000 Shares or units may be granted pursuant
to Stock Awards to an individual Grantee in any calendar year.



          (b) Code Section 162(m) Provisions.



               (i) Notwithstanding any other provision of the Plan, if the Compensation
Committee of the Board (the “Compensation Committee”) determines at the time a Stock Award is
granted to a Grantee that such Grantee is, or may be as of the end of the tax year for which the
Company would claim a tax deduction in connection with such Stock Award, a “covered employee”
within the meaning of Section 162(m)(3) of the Code, and to the extent the Compensation Committee
considers it desirable for compensation delivered pursuant to such Stock Award to be eligible to
qualify for an exemption from the limit on tax deductibility of compensation under Section 162(m)
of the Code, then the Compensation Committee may provide that this Section 8(b) is applicable to
such Stock Award under such terms as the Compensation Committee shall determine.



               (ii) If a Stock Award is subject to this Section 8(b), then the lapsing of
restrictions thereon and the distribution of Shares pursuant thereto, as applicable, shall be
subject to satisfaction of one, or more than one, objective performance targets. The Compensation
Committee shall determine the performance targets that will be applied with respect to each Stock
Award subject to this Section 8(b) at the time of grant, but in no event later than 90 days after
the commencement of the period of service to which the performance target(s) relate. The
performance criteria applicable to Stock Awards subject to this Section 8(b) will be one or more of
the following criteria: (A) stock price; (B) market share; (C) sales; (D) earnings per share, core
earnings per share or variations thereof; (E) return on equity; (F) costs; (G) revenue; (H) cash to
cash cycle; (I) days payables outstanding; (J) days of supply; (K) days sales outstanding; (L) cash
flow; (M) operating income; (N) profit after tax; (O) profit before tax; (P) return on assets;
(Q) return on sales; (R) inventory turns; (S) invested capital; (T) net operating profit after tax;
(U) return on invested capital; (V) total shareholder return; (W) earnings; (X) return on equity or
average shareowners’ equity; (Y) total shareowner return; (Z) return on capital; (AA) return on
investment; (BB) income or net income; (CC) operating income or net operating income; (DD)
operating profit or net operating profit; (EE) operating margin; (FF) return on operating revenue;
(GG) contract awards or backlog; (HH) overhead or other expense reduction; (II) growth in
shareowner value relative to the moving average of the S&P 500 Index or a peer group index; (JJ)
credit rating; (KK) strategic plan development and implementation; (LL) net cash provided by
operating activities; (MM) gross margin; (NN) economic value added; (OO) customer satisfaction;
(PP) financial return ratios; and/or (QQ) market performance.



               (iii) Notwithstanding any contrary provision of the Plan, the Compensation
Committee may not increase the number of shares granted pursuant to any Stock Award subject to this
Section 8(b), nor may it waive the achievement of any performance target established pursuant to
this Section 8(b).



               (iv) Prior to the payment of any Stock Award subject to this Section 8(b), the
Compensation Committee shall certify in writing that the performance target(s) applicable to such
Stock Award was met.



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               (v) The Compensation Committee shall have the power to impose such other
restrictions on Stock Awards subject to this Section 8(b) as it may deem necessary or appropriate
to ensure that such Stock Awards satisfy all requirements for “performance-based compensation”
within the meaning of Code section 162(m)(4)(C) of the Code, the regulations promulgated
thereunder, and any successors thereto.



     9. Performance Units and Performance Shares.



          (a) Grant of Performance Units and Performance Shares. Subject to the terms
of the Plan, the Administrator may grant Performance Units or Performance Shares to any Employee or
Consultant in such amounts and upon such terms as the Administrator shall determine.



          (b) Value/Performance Goals. Each Performance Unit shall have an initial
value that is established by the Administrator on the Date of Grant. Each Performance Share shall
have an initial value equal to the Fair Market Value of a Share on the Date of Grant. The
Administrator shall set performance goals that, depending upon the extent to which they are met,
will determine the number or value of Performance Units or Performance Shares that will be paid to
the Grantee.



          (c) Payment of Performance Units and Performance Shares.



               (i) Subject to the terms of the Plan, after the applicable Performance Period
has ended, the holder of Performance Units or Performance Shares shall be entitled to receive a
payment based on the number and value of Performance Units or Performance Shares earned by the
Grantee over the Performance Period, determined as a function of the extent to which the
corresponding performance goals have been achieved.



               (ii) If a Grantee is promoted, demoted or transferred to a different business
unit of the Company during a Performance Period, then, to the extent the Administrator determines
appropriate, the Administrator may adjust, change or eliminate the performance goals or the
applicable Performance Period as it deems appropriate in order to make them appropriate and
comparable to the initial performance goals or Performance Period.



          (d) Form and Timing of Payment of Performance Units and Performance Shares.
Payment of earned Performance Units or Performance Shares shall be made in a lump sum following the
close of the applicable Performance Period. The Administrator may pay earned Performance Units or
Performance Shares in cash or in Shares (or in a combination thereof) that have an aggregate Fair
Market Value equal to the value of the earned Performance Units or Performance Shares at the close
of the applicable Performance Period. Such Shares may be granted subject to any restrictions deemed
appropriate by the Administrator. The form of payout of such Awards shall be set forth in the Award
Agreement pertaining to the grant of the Award including any provisions necessary to comply with
Section 409A of the Code.



     10. Deferral of Receipt of Payment. The Administrator may permit or require a
Grantee to defer receipt of the payment of cash or the delivery of Shares that would otherwise be
due by virtue of the exercise of an Option or SAR, the grant of or the lapse or waiver of
restrictions with respect to Stock Awards or the satisfaction of any requirements or goals with
respect to Performance Units or Performance Shares. If any such deferral is required or permitted,
the Administrator shall establish such rules and procedures for such deferral.



     11. Adjustments Upon Changes in Capitalization or Change of Control.



          (a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of Shares of Covered Stock, and the number of Shares which
have been authorized for issuance under the Plan but as to which no Awards have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an Award, and the annual
per-person limitations on equity Awards, as well as the price per share of Covered Stock and
share-based performance conditions of Awards, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock, or any other increase
or decrease in the number of issued shares of Common Stock effected without receipt of
consideration by the Company, and in the event of an extraordinary dividend, spinoff or similar
event affecting the value of Common Stock; provided, however, that conversion of any convertible
securities of the Company shall not be deemed to have been “effected without receipt of
consideration.” Such adjustment shall be made by the Board, whose determination in that respect



12









 




shall be final, binding and conclusive. In furtherance of the foregoing, a Grantee shall have a
legal right to an adjustment to an Award which constitutes “share-based equity” in the event of an
“equity restructuring,” as such terms are defined under Financial Accounting Standards Board
Accounting Standards Codification Topic 718, which adjustment shall preserve without enlarging the
value of the Award to the Grantee. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the number or price of
shares of Covered Stock. No adjustment shall be made pursuant to this Section 11 in a manner that
would cause Incentive Stock Options to violate Section 422(b) of the Code or cause an Award to be
subject to adverse tax consequences under Section 409A of the Code.




          (b) Change in Control. In the event of a Change in Control, then the
following provisions shall apply, unless otherwise provided in the Grantee’s Award Agreement:



               (i) Vesting. Any Award outstanding on the date such Change in Control
is determined to have occurred that is not yet exercisable and vested on such date:



                    (A) shall become fully exercisable and vested on the first anniversary of
the date of such Change in Control (the “Change in Control Anniversary”) if the Grantee’s
Continuous Status as an Employee or Consultant does not terminate prior to the Change in Control
Anniversary;



                    (B) shall become fully exercisable and vested on the Date of Termination
if the Grantee’s Continuous Status as an Employee or Consultant terminates prior to the Change in
Control Anniversary as a result of termination by the Company without Cause or resignation by the
Grantee for Good Reason; or



                    (C) shall not become full exercisable and vested if the Grantee’s
Continuous Status as an Employee or Consultant terminates prior to the Change in Control
Anniversary as a result of termination by the Company for Cause or resignation by the Grantee
without Good Reason.


For purposes of this Section 11(b)(i), the following definitions shall apply:




                    (D) “Cause” means:



                         (1) A Grantee’s conviction of a crime involving fraud or dishonesty;
or



                         (2) A Grantee’s continued willful or reckless material misconduct in
the performance of the Grantee’s duties after receipt of written notice from the Company concerning
such misconduct;


provided, however, that for purposes of Section 11(b)(i)(D)(2), Cause shall not include any one or
more of the following: bad judgment, negligence or any act or omission believed by the Grantee in
good faith to have been in or not opposed to the interest of the Company (without intent of the
Grantee to gain, directly or indirectly, a profit to which the Grantee was not legally entitled).




                    (E) “Good Reason” means:



                         (1) The assignment to the Grantee of any duties inconsistent in any
respect with the Grantee’s position (including status, titles and reporting requirement),
authority, duties or responsibilities, or any other action by the Company that results in a
diminution in such position, authority, duties or responsibilities, excluding for this purpose an
isolated, insubstantial and inadvertent action that is not taken in bad faith and that is remedied
by the Company promptly after receipt of written notice thereof given by the Grantee within 30 days
following the assignment or other action by the Company;



                         (2) Any reduction in compensation; or



                         (3) Change in location of office of more than 35 miles without prior
consent of the Grantee.



               (ii) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Award is outstanding, it will
terminate immediately prior to the consummation of such proposed action. The Board may, in the
exercise of its sole discretion in such instances, declare that any Option or SAR shall



13









 




terminate as of a date fixed by the Board and give each Grantee the right to exercise his or her
Option or SAR as to all or any part of the Covered Stock, including Shares as to which the Option
or SAR would not otherwise be exercisable.




               (iii) Merger or Asset Sale. Except as otherwise determined by the
Board, in its discretion, prior to the occurrence of a merger of the Company with or into another
corporation, or the sale of substantially all of the assets of the Company, in the event of such a
merger or sale each outstanding Option or SAR shall be assumed or an equivalent option or right
shall be substituted by the successor corporation or a Parent or Subsidiary of the successor
corporation. In the event that the successor corporation or a Parent or Subsidiary of the successor
corporation does not agree to assume the Option or SAR or to substitute an equivalent option or
right, the Administrator shall, in lieu of such assumption or substitution, provide for the Grantee
to have the right to exercise the Option or SAR as to all or a portion of the Covered Stock,
including Shares as to which it would not otherwise be exercisable. If the Administrator makes an
Option or SAR exercisable in lieu of assumption or substitution in the event of a merger or sale of
assets, the Administrator shall notify the Grantee that the Option or SAR shall be fully
exercisable for a period of 15 days from the date of such notice, and the Option or SAR will
terminate upon the expiration of such period. For the purposes of this paragraph, the Option or SAR
shall be considered assumed if, following the merger or sale of assets, the option or right confers
the right to purchase, for each Share of Covered Stock subject to the Option or SAR immediately
prior to the merger or sale of assets, the consideration (whether stock, cash, or other securities
or property) received in the merger or sale of assets by holders of Common Stock for each Share
held on the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the merger or sale of assets was
not solely common stock of the successor corporation or its Parent, the Administrator may, with the
consent of the successor corporation and the participant, provide for the consideration to be
received upon the exercise of the Option or SAR, for each Share of Optioned Stock subject to the
Option or SAR, to be solely common stock of the successor corporation or its Parent equal in Fair
Market Value to the per Share consideration received by holders of Common Stock in the merger or
sale of assets.



               (iv) Except as otherwise determined by the Board, in its discretion, prior to
the occurrence of a Change in Control other than the dissolution or liquidation of the Company, a
merger of the Company with or into another corporation, or the sale of substantially all of the
assets of the Company, in the event of such a Change in Control, all outstanding Options and SARs,
to the extent they are exercisable and vested (including Options and SARs that shall become
exercisable and vested pursuant to Section 11(b)(i) above), shall be terminated in exchange for a
cash payment equal to the Change in Control Price reduced by the exercise price applicable to such
Options or SARs. These cash proceeds shall be paid to the Grantee or, in the event of death of an
Grantee prior to payment, to the estate of the Grantee or to a person who acquired the right to
exercise the Option or SAR by bequest or inheritance.



     12. Term of Plan. The Plan shall become effective upon its approval by the
stockholders of the Company within 12 months after the date the Plan is adopted by the Board. Such
stockholder approval shall be obtained in the manner and to the degree required under applicable
federal and state law. The Plan shall continue in effect until October 17, 2011, unless terminated
earlier under Section 13 of the Plan.



     13. Amendment and Termination of the Plan.



          (a) Amendment and Termination. The Board may at any time amend, alter,
suspend or terminate the Plan. The Committee may amend, alter, suspend or terminate the Plan so
long as such action complies with Applicable Law, except that any Plan amendment to be presented to
the stockholders for approval shall first be approved by the Board. The Administrator may at any
time amend, alter, suspend or terminate an outstanding Award.



          (b) Stockholder Approval. The Company shall obtain stockholder approval of
any Plan amendment to the extent necessary and desirable to comply with Rule 16b-3 or with
Section 422 of the Code (or any successor rule or statute or other applicable law, rule or
regulation, including the requirements of any exchange or quotation system on which the Common
Stock is listed or quoted). Furthermore, the Company shall obtain stockholder approval of any
modification or amendment of the Plan to the extent that the Board, in its sole and absolute
discretion, reasonably determines, in accordance with the requirements of any exchange or quotation
system on which the Common Stock is listed or quoted, that such modification or amendment
constitutes a material revision or material amendment of the Plan. Such stockholder approval, if
required, shall be obtained in such a manner and to such a



14









 




degree as is required by Applicable Law. Without the approval of stockholders, no amendment or
alteration of the Plan or any outstanding Option or SAR will have the effect of amending or
replacing such an Option or SAR in a transaction that constitutes a “repricing.” For this purpose,
a “repricing” means: (1) amending the terms of an Option or SAR after it is granted to lower its
exercise price or base price; (2) any other action that is treated as a repricing under generally
accepted accounting principles; and (3) canceling an Option or SAR at a time when its strike price
is equal to or greater than the fair market value of the underlying Stock, in exchange or
substitution for another Option, SAR, Stock Award, other equity, or cash or other property. A
cancellation and exchange or substitution described in clause (3) of the preceding sentence will be
considered a repricing regardless of whether the Option, SAR, Stock Award or other equity is
delivered simultaneously with the cancellation, regardless of whether it is treated as a repricing
under generally accepted accounting principles, and regardless of whether it is voluntary on the
part of the Grantee. Adjustments to awards under Section 11 will not be deemed “repricings,”
however. The Administrator shall have no authority to amend, alter or modify any Award term after
the Award has been granted to the extent that the effect is to waive a term that otherwise at that
time would be mandatory for a new Award of the same type under the Plan.




          (c) Effect of Amendment or Termination. No amendment, alteration, suspension
or termination of the Plan shall impair the rights of any Grantee, unless mutually agreed otherwise
between the Grantee and the Administrator, which agreement must be in writing and signed by the
Grantee and the Company; provided, however, that for Awards granted after September, 2010, the
requirements of this Section 13(c) will apply only if such impairment is material.



     14. Conditions Upon Issuance of Shares.



          (a) Legal Compliance. The Company shall not be obligated to issue Shares
pursuant to an Award unless the exercise, if applicable, of such Award and the issuance and
delivery of such Shares shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, Applicable Law, and the requirements of any stock exchange or quotation
system upon which the Shares may then be listed or quoted, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.



          (b) Investment Representations. As a condition to the exercise of an Award,
the Company may require the person exercising such Award to represent and warrant at the time of
any such exercise that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.



          (c) Withholding. The Company and its Subsidiaries and affiliates are authorized to
withhold from any Award granted, any payment relating to an Award under the Plan, including from a
distribution of Shares, or any payroll or other payment to a Grantee, amounts of withholding and
other taxes due or potentially payable in connection with any transaction involving an Award, and
to take such other action as the Administrator may deem advisable to enable the Company, its
Subsidiaries and affiliates, and Grantees to satisfy obligations for the payment of withholding
taxes and other tax obligations relating to any Award. This authority shall include authority to
withhold or receive Stock or other property and to make cash payments in respect thereof in
satisfaction of a Grantee’s withholding obligations, either on a mandatory or elective basis in the
discretion of the Administrator. Other provisions of the Plan notwithstanding, only the minimum
number of Shares deliverable in connection with an Award necessary to satisfy statutory withholding
requirements will be withheld, except a greater amount of Stock may be withheld provided that any
such withholding transaction that will result in additional accounting expense to the Company must
be expressly authorized by the Administrator.



     15. Liability of Company.



          (a) Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s
counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the
Company of any liability in respect of the failure to issue or sell such Shares as to which such
requisite authority shall not have been obtained.



15









 





          (b) Grants Exceeding Allotted Shares. If the Covered Stock covered by an
Award exceeds, as of the date of grant, the number of Shares that may be issued under the Plan
without additional stockholder approval, such Award shall be void with respect to such excess
Covered Stock, unless stockholder approval of an amendment sufficiently increasing the number of
Shares subject to the Plan is timely obtained in accordance with Section 13 of the Plan.



     16. Reservation of Shares. The Company, during the term of this Plan, will at all
times reserve and keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.



     17. Rights of Employees and Consultants. Neither the Plan nor any Award shall
confer upon an Grantee any right with respect to continuing the Grantee’s employment or consulting
relationship with the Company, nor shall they interfere in any way with the Grantee’s right or the
Company’s right to terminate such employment or consulting relationship at any time, with or
without cause.



     18. Sub-plans for Foreign Subsidiaries. The Board may adopt sub-plans applicable
to particular foreign Subsidiaries. All Awards granted under such sub-plans shall be treated as
grants under the Plan. The rules of such sub-plans may take precedence over other provisions of the
Plan, with the exception of Section 3, but unless otherwise superseded by the terms of such
sub-plan, the provisions of the Plan shall govern the operation of such sub-plan.




16