exv10w31wa











 




    Exhibit 10.31(a)



 




    JETBLUE
    AIRWAYS CORPORATION

    2011 INCENTIVE COMPENSATION PLAN



 



    1. Establishment; Effective Date; Purposes; and
    Duration.



 



    (a) Establishment of the Plan; Effective Date.
    JetBlue Airways Corporation, a Delaware corporation (the
    “Company”), hereby establishes this incentive
    compensation plan to be known as the “JetBlue Airways
    Corporation 2011 Incentive Compensation Plan,” as set forth
    in this document (the “Plan”). The Plan permits
    the grant of Nonqualified Stock Options, Incentive Stock
    Options, Stock Appreciation Rights, Restricted Stock, Restricted
    Stock Units, Other Stock-Based Awards, Dividend Equivalents and
    Cash-Based Awards. The Plan shall become effective upon the date
    on which the Plan is approved by the affirmative vote of the
    holders of a majority of the Shares which are present or
    represented and entitled to vote and voted at a meeting (the
    “Effective Date”), which approval must occur
    within the period ending twelve (12) months before or after
    the date the Plan is adopted by the Board. The Plan shall remain
    in effect as provided in Section 1(c).



 



    (b) Purposes of the Plan. The purposes of the Plan
    are: (i) to enhance the Company’s and the
    Affiliates’ ability to attract highly qualified personnel;
    (ii) to strengthen their retention capabilities;
    (iii) to enhance the long-term performance and
    competitiveness of the Company and the Affiliates; and
    (iv) to align the interests of Plan participants with those
    of the Company’s shareholders. To accomplish such purposes,
    the Plan provides that the Company may grant Nonqualified Stock
    Options, Incentive Stock Options, Stock Appreciation Rights,
    Restricted Stock, Restricted Stock Units, Other Stock-Based
    Awards, Dividend Equivalents and Cash-Based Awards.



 



    (c) Duration of the Plan. The Plan shall commence on
    the Effective Date and shall remain in effect, subject to the
    right of the Board of Directors to amend or terminate the Plan
    at any time pursuant to Section 16, until all Shares
    subject to it shall have been delivered, and any restrictions on
    such Shares have lapsed, pursuant to the Plan’s provisions.
    However, in no event may an Award be granted under the Plan on
    or after ten years from the Effective Date.



 



    2. Definitions.



 



    Certain terms used herein have the definitions given to them in
    the first instance in which they are used. In addition, for
    purposes of the Plan, the following terms are defined as set
    forth below:



 



    (a) “Affiliate” (i) any Subsidiary;
    (ii) any Person that directly or indirectly controls, is
    controlled by or is under common control with the Company;
    and/or
    (iii) to the extent provided by the Committee, any Person
    in which the Company has a significant interest. The term
    “control” (including, with correlative meaning, the
    terms “controlled by” and “under common control
    with”), as applied to any Person, means the possession,
    directly or indirectly, of the power to direct or cause the
    direction of the management and policies of such Person, whether
    through the ownership of voting or other securities, by contract
    or otherwise.



 



    (b) “Applicable Exchange” means the Nasdaq
    Stock Exchange or such other securities exchange or inter-dealer
    quotation system as may at the applicable time be the principal
    market for the Common Stock.



 



    (c) “Award” means, individually or
    collectively, a grant under the Plan of Nonqualified Stock
    Options, Incentive Stock Options, Stock Appreciation Rights,
    Restricted Stock Awards, Restricted Stock Units, Other
    Stock-Based Awards, Dividend Equivalents and Cash-Based Awards.



 



    (d) “Award Agreement” means either:
    (a) a written agreement entered into by the Company and a
    Participant setting forth the terms and provisions applicable to
    an Award granted under the Plan, or (b) a written or
    electronic statement issued by the Company to a Participant
    describing the terms and provisions of such Award, including any
    amendment or modification thereof. The Committee may provide for
    the use of electronic, internet or other non-paper Award
    Agreements, and the use of






    

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    electronic, internet or other non-paper means for the acceptance
    thereof and actions thereunder by a Participant.



 



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



 



    (f) “Cash-Based Award” means an Award,
    whose value is determined by the Committee, granted to a
    Participant, as described in Section 11.



 



    (g) “Cause” means a Participant’s
    (i) conviction of, or plea of no contest to, a felony or
    other crime involving moral turpitude or dishonesty;
    (ii) participation in a fraud or willful act of dishonesty
    against the Company or an Affiliate that adversely affects the
    Company or such Affiliate in a material way; (iii) willful
    breach of the Company’s or an Affiliate’s policies
    that affects the Company or such Affiliate in a material way;
    (iv) causing intentional damage to the Company’s or an
    Affiliate’s property or business; (v) habitual conduct
    that constitutes gross insubordination; or (vi) habitual
    neglect of his or her duties with the Company or an Affiliate.



 



    (h) “Change in Control” means the
    occurrence of any of the following:



 



    (i) Any individual, entity or group (within the meaning of
    Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
    “Person”) becomes the beneficial owner (within
    the meaning of
    Rule 13d-3
    promulgated under the Exchange Act) of 30% or more of either
    (A) the then-outstanding shares of common stock of the
    Company (the “Outstanding Company Common
    Stock”) or (B) the combined voting power of the
    then-outstanding voting securities of the Company entitled to
    vote generally in the election of directors (the
    “Outstanding Company Voting Securities”);
    provided, however, that, for purposes of this
    Section 2(h), the following acquisitions shall not
    constitute a Change in Control: (i) any acquisition
    directly from the Company, (ii) any acquisition by the
    Company, or (iii) any acquisition by any employee benefit
    plan (or related trust) sponsored or maintained by the Company
    or any Affiliate;



 



    (ii) Any time at which individuals who, as of the Effective
    Date, constitute the Board (the “Incumbent
    Board”) cease for any reason to constitute at least a
    majority of the Board; provided, however, that any
    individual becoming a director subsequent to the Effective Date
    whose election, or nomination for election by the Company’s
    stockholders, was approved by a vote of at least a majority of
    the directors then comprising the Incumbent Board shall be
    considered as though such individual were a member of the
    Incumbent Board, but excluding, for this purpose, any such
    individual whose initial assumption of office occurs as a result
    of an actual or threatened election contest with respect to the
    election or removal of directors or other actual or threatened
    solicitation of proxies or consents by or on behalf of a Person
    other than the Board;



 



    (iii) Consummation of a reorganization, merger, statutory
    share exchange or consolidation or similar transaction involving
    the Company or any Affiliate, a sale or other disposition of all
    or substantially all of the assets of the Company, or the
    acquisition of assets or stock of another entity by the Company
    or any Affiliate (each, a “Business
    Combination”), in each case unless, following such
    Business Combination, all or substantially all of the
    individuals and entities that were the beneficial owners of the
    Outstanding Company Common Stock and the Outstanding Company
    Voting Securities immediately prior to such Business Combination
    beneficially own, directly or indirectly, more than 50% of the
    then-outstanding shares of common stock (or, for a non-corporate
    entity, equivalent securities) and the combined voting power of
    the then-outstanding voting securities entitled to vote
    generally in the election of directors (or, for a non-corporate
    entity, equivalent governing body), as the case may be, of the
    entity resulting from such Business Combination (including,
    without limitation, an entity that, as a result of such
    transaction, owns the Company or all or substantially all of the
    Company’s assets either directly or through one or more
    subsidiaries) in substantially the same proportions as their
    ownership immediately prior to such Business Combination of the
    Outstanding Company Common Stock and the Outstanding Company
    Voting Securities, as the case may be; or





    

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    (iv) The consummation of a plan of complete liquidation or
    dissolution of the Company.



 



    (i) “Change in Control Price” means the
    price per share offered in respect of the Common Stock in
    conjunction with any transaction resulting in a Change in
    Control on a fully-diluted basis (as determined by the Board or
    the Committee as constituted before the Change in Control, if
    any part of the offered price is payable other than in cash) or,
    in the case of a Change in Control occurring solely by reason of
    a change in the composition of the Board, the highest Fair
    Market Value of a Share on any of the 30 trading days
    immediately preceding the date on which a Change in Control
    occurs, provided that if the use of such highest Fair
    Market Value in respect of a particular Award would cause an
    additional tax to be due and payable by the Participant under
    Section 409A of the Code, the Board or Committee shall
    determine the Change in Control Price in respect of such Award
    in a manner that does not have such result.



 



    (j) “Code” means the Internal Revenue Code
    of 1986, as it may be amended from time to time, including rules
    and regulations promulgated thereunder and successor provisions
    and rules and regulations thereto.



 



    (k) “Committee” means the Compensation
    Committee of the Board of Directors or a subcommittee thereof,
    or such other committee designated by the Board to administer
    the Plan.



 



    (l) “Common Stock” means common stock, par
    value $0.01 per share, of the Company. In the event of any
    adjustment pursuant to Section 4(d), the stock or security
    resulting from such adjustment shall be deemed to be Common
    Stock within the meaning of the Plan.



 



    (m) “Consultant” means a consultant,
    advisor or other independent contractor who is a natural person
    and performs services for the Company or an Affiliate in a
    capacity other than as an Employee or Director.



 



    (n) “Director” means any individual who is
    a member of the Board of Directors of the Company.



 



    (o) “Disaffiliation” means an
    Affiliate’s ceasing to be an Affiliate for any reason
    (including as a result of a public offering, or a spin-off or
    sale by the Company, of the stock of the Affiliate) or a sale of
    a division of the Company or an Affiliate.



 



    (p) “Dividend Equivalent” means a right to
    receive the equivalent value (in cash or Shares) of dividends
    that would otherwise be paid on the Shares subject to an Award
    but that have not been issued or delivered, awarded under
    Section 10.



 



    (q) “Effective Date” shall have the
    meaning ascribed to such term in Section 1(a).



 



    (r) “Eligible Individual” means any
    Employee, Non-Employee Director or Consultant, and any
    prospective Employee and Consultant who has accepted an offer of
    employment or consultancy from the Company or any Affiliate.



 



    (s) “Employee” means any person designated
    as an employee of the Company
    and/or an
    Affiliate on the payroll records thereof. An Employee shall not
    include any individual during any period he or she is classified
    or treated by the Company or an Affiliate as an independent
    contractor, a consultant, or any employee of an employment,
    consulting, or temporary agency or any other entity other than
    the Company
    and/or an
    Affiliate without regard to whether such individual is
    subsequently determined to have been, or is subsequently
    retroactively reclassified as a common-law employee of the
    Company
    and/or an
    Affiliate during such period. For the avoidance of doubt, a
    Director who would otherwise be an “Employee” within
    the meaning of this Section 2(s) shall be considered an
    Employee for purposes of the Plan.



 



    (t) “Exchange Act” means the Securities
    Exchange Act of 1934, as it may be amended from time to time,
    including the rules and regulations promulgated thereunder and
    successor provisions and rules and regulations thereto.





    

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    (u) “Fair Market Value” means, if the
    Common Stock is listed on a national securities exchange, as of
    any given date, the closing price for the Common Stock on such
    date on the Applicable Exchange, or if Shares were not traded on
    the Applicable Exchange on such measurement date, then on the
    next preceding date on which Shares are traded, all as reported
    by such source as the Committee may select. If the Common Stock
    is not listed on a national securities exchange, Fair Market
    Value shall be determined by the Committee in its good faith
    discretion.



 



    (v) “Fiscal Year” means the calendar year,
    or such other consecutive twelve-month period as the Committee
    may select.



 



    (w) “Freestanding SAR” means an SAR that
    is granted independently of any Options, as described in
    Section 7.



 



    (x) “Good Reason” means the termination of
    employment by a Participant because of any of the following
    events: (i) a 10% reduction by the Company or an Affiliate
    (other than in connection with a Company or Affiliate-wide
    across the board reduction), in (x) his or her annual base
    pay or bonus opportunity as in effect immediately prior to the
    date of a Change in Control or (y) his or her bonus
    opportunity or 12 times his or her average monthly Salary, or as
    same may be increased from time to time thereafter; (ii) a
    material reduction in the duties or responsibilities of the
    Participant from those in effect prior to the date of a Change
    in Control; or (iii) the Company or an Affiliate requiring
    the Participant to relocate from the office of the Company or
    such Affiliate where the Participant is principally employed
    immediately prior to the date of a Change in Control to a
    location that is more than 50 miles from such office of the
    Company or such Affiliate (except for required travel on the
    Company’s or Affiliate’s business to an extent
    substantially consistent with such Participant’s customary
    business travel obligations in the ordinary course of business
    prior to the date of such Change in Control.



 



    (y) “Grant Date” means the later of:
    (a) the date on which the Committee (or its designee) by
    resolution, written consent or other appropriate action selects
    an Eligible Individual to receive a grant of an Award,
    determines the number of Shares or other amount to be subject to
    such Award and, if applicable, determines the Option Price or
    Grant Price of such Award, provided that as soon reasonably
    practical thereafter the Committee (or its designee) both
    notifies the Eligible Individual of the Award and enters into an
    Award Agreement with the Eligible Individual, or (b) the
    date designated as the “grant date” in an Award
    Agreement.



 



    (z) “Grant Price” means the price
    established as of the Grant Date of an SAR pursuant to
    Section 7 used to determine whether there is any payment
    due upon exercise of the SAR.



 



    (aa) “Incentive Stock Option” or
    “ISO” means a right to purchase Shares under
    the Plan in accordance with the terms and conditions set forth
    in Section 6 and which is designated as an Incentive Stock
    Option and which is intended to meet the requirements of
    Section 422 of the Code.



 



    (bb) “Individual Agreement” means an
    employment, change of control, consulting or similar agreement
    between a Participant and the Company or an Affiliate that is in
    effect as of the Grant Date of an Award hereunder.



 



    (cc) “Insider” means an individual who is,
    on the relevant date, an officer, director or ten percent (10%)
    beneficial owner (within the meaning of
    Rule 13d-3
    promulgated under the Exchange Act) of any class of the
    Company’s equity securities that is registered pursuant to
    Section 12 of the Exchange Act, as determined by the
    Committee in accordance with Section 16 of the Exchange Act.



 



    (dd) “New Employer” means, after a Change
    in Control, a Participant’s employer, or any direct or
    indirect parent or any direct or indirect majority-owned
    subsidiary of such employer.



 



    (ee) “Non-Employee Director” means a
    Director who is not an Employee.





    

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    (ff) “Nonqualified Stock Option” or
    “NQSO” means a right to purchase Shares under
    the Plan in accordance with the terms and conditions set forth
    in Section 6 and which is not intended to meet the
    requirements of Section 422 of the Code or otherwise does
    not meet such requirements.



 



    (gg) “Notice” means notice provided by a
    Participant to the Company in a manner prescribed by the
    Committee.



 



    (hh) “Option” or “Stock
    Option” means an Incentive Stock Option or a
    Nonqualified Stock Option, as described in Section 6.



 



    (ii) “Option Price” means the price at
    which a Share may be purchased by a Participant pursuant to an
    Option.



 



    (jj) “Other Stock-Based Award” means an
    equity-based or equity-related Award, other than an Option, SAR,
    Restricted Stock, Restricted Stock Unit or Dividend Equivalent,
    granted in accordance with the terms and conditions set forth in
    Section 9.



 



    (kk) “Participant” means any eligible
    individual as set forth in Section 5 who holds one or more
    outstanding Awards.



 



    (ll) “Performance Compensation Award”
    means any Award designated by the Committee as a Performance
    Compensation Award pursuant to Section 12 of the Plan.



 



    (mm) “Performance Formula” shall mean, for
    a Performance Period, the one or more objective formulae applied
    against the relevant Performance Goal to determine, with regard
    to the Performance Compensation Award of a particular
    Participant, whether all, some portion but less than all, or
    none of the Performance Compensation Award has been earned for
    the Performance Period.



 



    (nn) “Performance Goals” shall mean, for a
    Performance Period, the one or more goals established by the
    Committee for the Performance Period based upon the relevant
    Performance Measures.



 



    (oo) “Performance Measure” means any
    performance criteria or measures as described in
    Section 12(c) on which the performance goals described in
    Section 12 for Performance Compensation Awards are based,
    and which criteria or measures are approved by the
    Company’s shareholders pursuant to the Plan.



 



    (pp) “Performance Period” means the period
    of time, as determined in the discretion of the Committee,
    during which the performance goals must be met in order to
    determine the degree of payout
    and/or
    vesting with respect to, or the amount or entitlement to, an
    Award.



 



    (qq) “Period of Restriction” means the
    period of time during which Shares of Restricted Stock or
    Restricted Stock Units are subject to a substantial risk of
    forfeiture
    and/or other
    restrictions, or, as applicable, the period of time within which
    performance is measured for purposes of determining whether such
    an Award has been earned, and, in the case of Restricted Stock,
    the transfer of Shares of Restricted Stock is limited in some
    way, in each case in accordance with Section 8.



 



    (rr) “Restricted Stock” means an Award of
    Shares granted to a Participant, subject to the applicable
    Period of Restriction, pursuant to Section 8.



 



    (ss) “Restricted Stock Unit” means an
    unfunded and unsecured promise to deliver Shares, subject to the
    applicable Period of Restriction, granted pursuant to
    Section 8.



 



    (tt) “Rule 16b-3”
    means
    Rule 16b-3
    under the Exchange Act, or any successor rule, as the same may
    be amended from time to time.



 



    (uu) “Salary” means the higher of a
    Participant’s annual base salary or hourly wages on an
    annualized basis based on a normal basic work schedule
    immediately prior to (or 12 times a Participant’s average
    monthly salary during the six (6) month period, excluding
    any month(s) during which he or she worked less than a normal
    schedule, immediately prior to) (i) the date of such
    Participant’s Termination of Service, or (ii) the date
    of a Change in Control.





    

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    (vv) “SEC” means the Securities and
    Exchange Commission.



 



    (ww) “Securities Act” means the Securities
    Act of 1933, as it may be amended from time to time, including
    the rules and regulations promulgated thereunder and successor
    provisions and rules and regulations thereto.



 



    (xx) “Share” means a share of Common Stock.



 



    (yy) “Stock Appreciation Right” or
    “SAR” means an Award, granted alone (a
    “Freestanding SAR”) or in connection with a
    related Option (a “Tandem SAR”), designated as
    an SAR, pursuant to the terms of Section 7.



 



    (zz) “Subsidiary” means any present or
    future corporation which is or would be a “subsidiary
    corporation” of the Company as the term is defined in
    Section 424(f) of the Code.



 



    (aaa) “Substitute Awards” means Awards granted
    or Shares issued by the Company in assumption of, or in
    substitution or exchange for, options or other awards previously
    granted, or the right or obligation to grant future options or
    other awards, by a company acquired by the Company
    and/or an
    Affiliate or with which the Company
    and/or an
    Affiliate combines, or otherwise in connection with any merger,
    consolidation, acquisition of property or stock, or
    reorganization involving the Company or an Affiliate, including
    a transaction described in Code Section 424(a).



 



    (bbb) “Termination of Service” means the
    termination of the applicable Participant’s employment
    with, or performance of services for, the Company or any
    Affiliate under any circumstances. Unless otherwise determined
    by the Committee (and subject to the limitations applicable to
    ISOs under the Code), a Termination of Service shall not be
    considered to have occurred in the case of: (i) sick leave;
    (ii) military leave; (iii) any other leave of absence
    approved by the Committee, provided that such leave is
    for a period of not more than 90 days, unless reemployment
    upon the expiration of such leave is guaranteed by contract or
    statute, or unless provided otherwise pursuant to an applicable
    Company or Affiliate policy adopted from time to time;
    (iv) changes in status from Director to advisory director
    or emeritus status; or (v) transfers between locations of
    the Company or between or among the Company
    and/or an
    Affiliate or Affiliates. Changes in status between service as an
    Employee, Director, and a Consultant will not constitute a
    Termination of Service if the individual continues to perform
    bona fide services for the Company or an Affiliate
    (subject to the limitations applicable to ISOs under the Code).
    A Participant employed by, or performing services for, an
    Affiliate or a division of the Company or of an Affiliate shall
    be deemed to incur a Termination of Service if, as a result of a
    Disaffiliation, such Affiliate or division ceases to be an
    Affiliate or such a division, as the case may be, and the
    Participant does not immediately thereafter become an employee
    of, or service provider for, the Company or another Affiliate.
    The Committee shall have the discretion to determine whether and
    to what extent the vesting of any Awards shall be tolled during
    any paid or unpaid leave of absence; provided,
    however, that, in the absence of such determination,
    vesting for all Awards shall be tolled during any such unpaid
    leave (but not for a paid leave).



 



    3. Administration.



 



    (a) General. The Committee shall have exclusive
    authority to operate, manage and administer the Plan in
    accordance with its terms and conditions. Notwithstanding the
    foregoing, in its absolute discretion, the Board may at any time
    and from time to time exercise any and all rights, duties and
    responsibilities of the Committee under the Plan, including
    establishing procedures to be followed by the Committee, but
    excluding matters which under any applicable law, regulation or
    rule, including any exemptive rule under Section 16 of the
    Exchange Act (including
    Rule 16b-3),
    are required to be determined in the sole discretion of the
    Committee. If and to the extent that the Committee does not
    exist or cannot function, the Board may take any action under
    the Plan that would otherwise be the responsibility of the
    Committee, subject to the limitations set forth in the
    immediately preceding sentence.





    

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    (b) Committee. The members of the Committee shall be
    appointed from time to time by, and shall serve at the
    discretion of, the Board of Directors. The Committee shall
    consist of not less than two (2) non-employee members of
    the Board, each of whom satisfies such criteria of independence
    as the Board may establish and such additional regulatory or
    listing requirements as the Board may determine to be applicable
    or appropriate. Appointment of Committee members shall be
    effective upon their acceptance of such appointment. Committee
    members may be removed by the Board at any time either with or
    without cause, and such members may resign at any time by
    delivering notice thereof to the Board. Any vacancy on the
    Committee, whether due to action of the Board or any other
    reason, shall be filled by the Board. The Committee shall keep
    minutes of its meetings. A majority of the Committee shall
    constitute a quorum and a majority of a quorum may authorize any
    action. Any decision reduced to writing and signed by a majority
    of the members of the Committee shall be fully effective as if
    it has been made at a meeting duly held.



 



    (c) Authority of the Committee. The Committee shall
    have full discretionary authority to grant, pursuant to the
    terms of the Plan, Awards to those individuals who are eligible
    to receive Awards under the Plan. Except as limited by law or by
    the Certificate of Incorporation or By-Laws of the Company, and
    subject to the provisions herein, the Committee shall have full
    power, in accordance with the other terms and provisions of the
    Plan, to:



 



    (i) select Eligible Individuals who may receive Awards
    under the Plan and become Participants;



 



    (ii) determine eligibility for participation in the Plan
    and decide all questions concerning eligibility for, and the
    amount of, Awards under the Plan;



 



    (iii) determine the sizes and types of Awards;



 



    (iv) determine the terms and conditions of Awards,
    including the Option Prices of Options and the Grant Prices of
    SARs;



 



    (v) grant Awards as an alternative to, or as the form of
    payment for grants or rights earned or payable under, other
    bonus or compensation plans, arrangements or policies of the
    Company or an Affiliate;



 



    (vi) grant Substitute Awards on such terms and conditions
    as the Committee may prescribe, subject to compliance with the
    ISO rules under Code Section 422 and the nonqualified
    deferred compensation rules under Code Section 409A, where
    applicable;



 



    (vii) make all determinations under the Plan concerning
    Termination of Service of any Participant’s employment or
    service with the Company or an Affiliate, including whether such
    Termination of Service occurs by reason of Cause, Good Reason,
    disability, retirement or in connection with a Change in
    Control, and whether a leave constitutes a Termination of
    Service;



 



    (viii) determine whether a Change in Control shall have
    occurred;



 



    (ix) construe and interpret the Plan and any agreement or
    instrument entered into under the Plan, including any Award
    Agreement;



 



    (x) establish and administer any terms, conditions,
    restrictions, limitations, forfeiture, vesting or exercise
    schedule, and other provisions of or relating to any Award;



 



    (xi) establish and administer any performance goals in
    connection with any Awards, including related Performance Goals
    and Performance Measures or other performance criteria and
    applicable Performance Periods, determine the extent to which
    any performance goals
    and/or other
    terms and conditions of an Award are attained or are not
    attained, and certify whether, and to what extent, any such
    performance goals and other material terms applicable to any
    Award intended to qualify as a Performance Compensation Award
    were in fact satisfied;





    

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    (xii) construe any ambiguous provisions, correct any
    defects, supply any omissions and reconcile any inconsistencies
    in the Plan
    and/or any
    Award Agreement or any other instrument relating to any Awards;



 



    (xiii) establish, adopt, amend, waive
    and/or
    rescind rules, regulations, procedures, guidelines, forms
    and/or
    instruments for the Plan’s operation or administration;



 



    (xiv) make all valuation determinations relating to Awards
    and the payment or settlement thereof;



 



    (xv) grant waivers of terms, conditions, restrictions and
    limitations under the Plan or applicable to any Award, or
    accelerate the vesting or exercisability of any Award;



 



    (xvi) amend or adjust the terms and conditions of any
    outstanding Award
    and/or
    adjust the number
    and/or class
    of shares of stock subject to any outstanding Award;



 



    (xvii) at any time and from time to time after the granting
    of an Award, specify such additional terms, conditions and
    restrictions with respect to such Award as may be deemed
    necessary or appropriate to ensure compliance with any and all
    applicable laws or rules, including terms, restrictions and
    conditions for compliance with applicable securities laws or
    listing rules, methods of withholding or providing for the
    payment of required taxes and restrictions regarding a
    Participant’s ability to exercise Options through a
    cashless (broker-assisted) exercise;



 



    (xviii) establish any “blackout” period that the
    Committee in its sole discretion deems necessary or advisable
    (without derogating from any authority of the Board or any
    Company official to establish any blackout period); and



 



    (xix) exercise all such other authorities, take all such
    other actions and make all such other determinations as it deems
    necessary or advisable for the proper operation
    and/or
    administration of the Plan.



 



    (d) Award Agreements. The Committee shall, subject
    to applicable laws and rules, determine the date an Award is
    granted. Each Award shall be evidenced by an Award Agreement;
    however, two or more Awards granted to a single
    Participant may be combined in a single Award Agreement. An
    Award Agreement shall not be a precondition to the granting of
    an Award; provided, however, that (i) the
    Committee may, but need not, require as a condition to any Award
    Agreement’s effectiveness, that such Award Agreement be
    executed on behalf of the Company
    and/or by
    the Participant to whom the Award evidenced thereby shall have
    been granted (including by electronic signature or other
    electronic indication of acceptance), and such executed Award
    Agreement be delivered to the Company, and (ii) no person
    shall have any rights under any Award unless and until the
    Participant to whom such Award shall have been granted has
    complied with the applicable terms and conditions of the Award.
    The Committee shall prescribe the form of all Award Agreements,
    and, subject to the terms and conditions of the Plan, shall
    determine the content of all Award Agreements. Subject to the
    other provisions of the Plan, any Award Agreement may be
    supplemented or amended in writing from time to time as approved
    by the Committee; provided that the terms and conditions
    of any such Award Agreement as supplemented or amended are not
    inconsistent with the provisions of the Plan. In the event of
    any dispute or discrepancy concerning the terms of an Award, the
    records of the Committee or its designee shall be determinative.



 



    (e) Discretionary Authority; Decisions Binding. The
    Committee shall have full discretionary authority in all matters
    related to the discharge of its responsibilities and the
    exercise of its authority under the Plan. All determinations,
    decisions, actions and interpretations by the Committee with
    respect to the Plan and any Award Agreement, and all related
    orders and resolutions of the Committee shall be final,
    conclusive and binding on all Participants, the Company and its
    stockholders, any Affiliate and all persons having or claiming
    to have any right or interest in or under the Plan
    and/or any
    Award Agreement. The Committee shall consider such factors as it
    deems relevant to making or taking such decisions,
    determinations, actions and interpretations, including the
    recommendations or






    

    8








 







    advice of any Director or officer or employee of the Company,
    any director, officer or employee of an Affiliate and such
    attorneys, consultants and accountants as the Committee may
    select. A Participant or other holder of an Award may contest a
    decision or action by the Committee with respect to such person
    or Award only on the grounds that such decision or action was
    arbitrary or capricious or was unlawful, and any review of such
    decision or action shall be limited to determining whether the
    Committee’s decision or action was arbitrary or capricious
    or was unlawful.



 



    (f) Attorneys; Consultants. The Committee may
    consult with counsel who may be counsel to the Company. The
    Committee may, with the approval of the Board, employ such other
    attorneys
    and/or
    consultants, accountants, appraisers, brokers, agents and other
    persons, any of whom may be an Eligible Individual, as the
    Committee deems necessary or appropriate. The Committee, the
    Company and its officers and Directors shall be entitled to rely
    upon the advice, opinions or valuations of any such persons. The
    Committee shall not incur any liability for any action taken in
    good faith in reliance upon the advice of such counsel or other
    persons.



 



    (g) Delegation of Administration. Except to the
    extent prohibited by applicable law, including any applicable
    exemptive rule under Section 16 of the Exchange Act
    (including
    Rule 16b-3)
    and the rules of Code Section 162(m) applicable to any
    Performance Compensation Award, or the applicable rules of a
    stock exchange, the Committee may, in its discretion, allocate
    all or any portion of its responsibilities and powers under this
    Section 3 to any one or more of its members
    and/or
    delegate all or any part of its responsibilities and powers
    under this Section 3 to any person or persons selected by
    it; provided, however, that the Committee may not
    (i) delegate to any executive officer of the Company or an
    Affiliate, or a committee that includes any such executive
    officer, the Committee’s authority to grant Awards, or the
    Committee’s authority otherwise concerning Awards, awarded
    to executive officers of the Company or an Affiliate;
    (ii) delegate the Committee’s authority to grant
    Awards to consultants unless any such Award is subject to
    approval by the Committee; or (iii) delegate its authority
    to correct defects, omissions or inconsistencies in the Plan.
    Any such authority delegated or allocated by the Committee under
    this Section 3(g) shall be exercised in accordance with the
    terms and conditions of the Plan and any rules, regulations or
    administrative guidelines that may from time to time be
    established by the Committee, and any such allocation or
    delegation may be revoked by the Committee at any time.



 



    4. Shares Subject To The Plan.



 



    (a) Number of Shares Available for Grants. The
    shares of stock subject to Awards granted under the Plan shall
    be Shares. Such Shares subject to the Plan may be authorized and
    unissued shares (which will not be subject to preemptive
    rights), Shares held in treasury by the Company, Shares
    purchased on the open market or by private purchase or any
    combination of the foregoing. Subject to adjustment as provided
    in Section 4(d), the total number of Shares that may be
    issued pursuant to Awards under the Plan shall be
    15,000,000 Shares. From and after the Effective Date, no
    further grants or awards shall be made under the Company’s
    Amended and Restated 2002 Stock Incentive Plan (the “Prior
    Plan”); however, grants or awards made under the
    Prior Plan before the Effective Date shall continue in effect in
    accordance with their terms.



 



    (b) Rules for Calculating Shares Issued.



 



    (i) Shares underlying Awards that are forfeited (including
    any Shares subject to an Award that are repurchased by the
    Company due to failure to meet any applicable condition),
    cancelled, expire unexercised or are settled for cash shall be
    available for issuance pursuant to future Awards.



 



    (ii) Any Shares used to pay the Option Price of an Option
    or other purchase price of an Award, or withholding tax
    obligations with respect to an Award, shall not be available for
    issuance pursuant to future Awards.



 



    (iii) If any Shares subject to an Award are not delivered
    to a Participant because (A) such Shares are withheld to
    pay the Option Price or other purchase price of such Award, or
    withholding






    

    9








 







    tax obligations with respect to such Award, or (B) a
    payment upon exercise of a Stock Appreciation Right is made in
    Shares, the number of Shares subject to the exercised or
    purchased portion of any such Award that are not delivered to
    the Participant shall not be available for issuance pursuant to
    future Awards.



 



    (iv) Any Shares delivered under the Plan upon exercise or
    satisfaction of Substitute Awards shall not reduce the Shares
    available for issuance under the Plan; provided,
    however, that the total number of Shares that may be
    issued pursuant to Incentive Stock Options granted under the
    Plan shall be 15,000,000, as adjusted pursuant to this
    Section 4(b), but without application of the foregoing
    provisions of this sentence.



 



    (c) Award Limits. The following limits shall apply
    to grants of the following Awards under the Plan (subject to
    adjustment as provided in Section 4(d)):



 



    (i) Options: The maximum aggregate number of Shares
    that may be subject to Options granted in any Fiscal Year to any
    one Participant shall be 2,500,000 Shares.



 



    (ii) SARs: The maximum aggregate number of Shares
    that may be subject to Stock Appreciation Rights granted in any
    Fiscal Year to any one Participant shall be
    2,500,000 Shares. Any Shares covered by Options which
    include Tandem SARs granted to one Participant in any Fiscal
    Year shall reduce this limit on the number of Shares subject to
    SARs that can be granted to such Participant in such Fiscal Year.



 



    (iii) Performance Compensation Awards: No more than
    2,000,000 Shares may be earned in respect of Performance
    Compensation Awards granted to any one Participant for a single
    Fiscal Year during a Performance Period (or, in the event such
    Performance Compensation Award is settled in cash, other
    securities, other Awards or other property, no more than the
    Fair Market Value of such number of Shares, calculated as of the
    last day of the Performance Period to which such Award relates).
    If a Performance Compensation Award is not denominated in
    Shares, the maximum amount that can be paid to any one
    Participant in any one Fiscal Year in respect of such Award
    shall be $4,000,000.



 



    To the extent required by Section 162(m) of the Code,
    Shares subject to Options or SARs which are canceled shall
    continue to be counted against the limits set forth in
    paragraphs (i) and (ii) immediately preceding.



 



    (d) Adjustment Provisions. In the event of
    (i) any dividend (excluding any ordinary dividend) or other
    distribution (whether in the form of cash, Shares, other
    securities or other property), recapitalization, stock split,
    reverse stock split, reorganization, merger, consolidation,
    split-up,
    split-off, combination, repurchase or exchange of Shares or
    other securities of the Company, issuance of warrants or other
    rights to acquire Shares or other securities of the Company, or
    other similar corporate transaction or event (including a Change
    in Control) that affects the shares of Common Stock, or
    (ii) any unusual or nonrecurring events (including a Change
    in Control) affecting the Company, any Affiliate, or the
    financial statements of the Company or any Affiliate, or changes
    in applicable rules, rulings, regulations or other requirements
    of any governmental body or securities exchange or inter-dealer
    quotation system, accounting principles or law, such that in
    either case an adjustment is determined by the Committee in its
    sole discretion to be necessary or appropriate, then the
    Committee shall make any such adjustments in such manner as it
    may deem equitable, including any or all of the following:



 



    (i) adjusting any or all of (A) the number of Shares
    or other securities of the Company (or number and kind of other
    securities or other property) that may be delivered in respect
    of Awards or with respect to which Awards may be granted under
    the Plan (including adjusting any or all of the limits under
    Section 4(c)) and (B) the terms of any outstanding
    Award, including (1) the number of Shares or other
    securities of the Company (or number and kind of other
    securities or other property) subject to outstanding Awards or
    to which outstanding Awards relate, (2) the Option Price or
    Grant Price with respect to any Award or (3) any applicable
    performance measures (including Performance Measures and
    Performance Goals);





    

    10








 







    (ii) providing for a substitution or assumption of Awards,
    accelerating the exercisability of, lapse of restrictions
    (including any Period of Restriction) on, or termination of,
    Awards or providing for a period of time for exercise prior to
    the occurrence of such event; and



 



    (iii) cancelling any one or more outstanding Awards and
    causing to be paid to the holders thereof, in cash, Shares,
    other securities or other property, or any combination thereof,
    the value of such Awards, if any, as determined by the Committee
    (which, if applicable, may be based upon the price per Share
    received or to be received by other stockholders of the Company
    in such event), including, in the case of an outstanding Option
    or SAR, a cash payment in an amount equal to the excess, if any,
    of the Fair Market Value (as of a date specified by the
    Committee) of the Shares subject to such Option or SAR over the
    aggregate Option Price or Grant Price of such Option or SAR,
    respectively (it being understood that, in such event, any
    Option or SAR having a per share Option Price or Grant Price
    equal to, or in excess of, the Fair Market Value of a Share may
    be canceled and terminated without any payment or consideration
    therefor);



 



    provided, however, that in the case of any
    “equity restructuring” (within the meaning of
    Financial Accounting Standards Board Accounting Standards
    Codification Topic 718, Compensation— Stock
    Compensation (or any successor pronouncement)), the Committee
    shall make an equitable or proportionate adjustment to
    outstanding Awards to reflect such equity restructuring. The
    Committee shall determine any adjustment pursuant to this
    Section 4(d): (i) after taking into account, among
    other things, to the extent applicable, the provisions of the
    Code applicable to Incentive Stock Options and Performance
    Compensation Awards and (ii) subject to
    Section 17(g)(v). Any adjustments under this
    Section 4(d) shall be made in a manner that does not
    adversely affect the exemption provided pursuant to
    Rule 16b-3
    under the Exchange Act, to the extent applicable. All
    determinations of the Committee as to adjustments, if any, under
    this Section 4(d) shall be conclusive and binding for all
    purposes.



 



    (e) No Limitation on Corporate Actions. The
    existence of the Plan and any Awards granted hereunder shall not
    affect in any way the right or power of the Company or any
    Affiliate to make or authorize any adjustment, recapitalization,
    reorganization or other change in its capital structure or
    business structure, any merger or consolidation, any issuance of
    debt, preferred or prior preference stock ahead of or affecting
    the Shares, additional shares of capital stock or other
    securities or subscription rights thereto, any dissolution or
    liquidation, any sale or transfer of all or part of its assets
    or business or any other corporate act or proceeding.



 



    5. Eligibility and Participation.



 



    (a) Eligibility. Eligible Individuals shall be
    eligible to become Participants and receive Awards in accordance
    with the terms and conditions of the Plan, subject to the
    limitations on the granting of ISOs set forth in
    Section 6(i)(i).



 



    (b) Actual Participation. Subject to the provisions
    of the Plan, the Committee may, from time to time, select
    Participants from all Eligible Individuals and shall determine
    the nature and amount of each Award.



 



    6. Stock Options.



 



    (a) Grant of Options. Subject to the terms and
    provisions of the Plan, Options may be granted to Participants
    in such number (subject to Section 4), and upon such terms,
    and at any time and from time to time as shall be determined by
    the Committee. The Committee may grant an Option or provide for
    the grant of an Option, either from time to time in the
    discretion of the Committee or automatically upon the occurrence
    of specified events, including the achievement of performance
    goals, the satisfaction of an event or condition within the
    control of the recipient of the Option or within the control of
    others.



 



    (b) Award Agreement. Each Option grant shall be
    evidenced by an Award Agreement that shall specify the Option
    Price, the maximum duration of the Option, the number of Shares
    to which the Option pertains, the conditions upon which the
    Option shall become exercisable and such other






    

    11








 







    provisions as the Committee shall determine, which are not
    inconsistent with the terms of the Plan. The Award Agreement
    also shall specify whether the Option is intended to be an ISO
    or an NQSO. To the extent that any Option does not qualify as an
    ISO (whether because of its provisions or the time or manner of
    its exercise or otherwise), such Option, or the portion thereof
    which does not so qualify, shall constitute a separate NQSO.



 



    (c) Option Price. The Option Price for each Option
    shall be determined by the Committee and set forth in the Award
    Agreement; provided that, subject to
    Section 6(i)(iii), the Option Price of an Option shall be
    not less than one hundred percent (100%) of the Fair Market
    Value of a Share on the Grant Date of such Option;
    provided further, that Substitute Awards or Awards
    granted in connection with an adjustment provided for in
    Section 4(d), in the form of stock options, shall have an
    Option Price per Share that is intended to maintain the economic
    value of the Award that was replaced or adjusted, as determined
    by the Committee.



 



    (d) Duration of Options. Each Option granted to a
    Participant shall expire at such time as the Committee shall
    determine as of the Grant Date and set forth in the Award
    Agreement; provided, however, that no Incentive
    Stock Option shall be exercisable later than the tenth (10th)
    anniversary of its Grant Date. The period of time over which a
    Nonqualified Stock Option may be exercised shall be
    automatically extended if on the scheduled expiration date of
    such Option the Participant’s exercise of such Option would
    violate an applicable law; provided, however, that
    during such extended exercise period the Option may only be
    exercised to the extent the Option was exercisable in accordance
    with its terms immediately prior to such scheduled expiration
    date; provided further, however, that such
    extended exercise period shall end not later than thirty
    (30) days after the exercise of such Option first would no
    longer violate such law.



 



    (e) Exercise of Options. Options shall be
    exercisable at such times and be subject to such restrictions
    and conditions as the Committee shall in each instance determine
    and set forth in the Award Agreement, which need not be the same
    for each grant or for each Option or Participant. The Committee,
    in its discretion, may allow a Participant to exercise an Option
    that has not otherwise become exercisable pursuant to the
    applicable Award Agreement, in which case the Shares then issued
    shall be Shares of Restricted Stock having a Period of
    Restriction analogous to the exercisability provisions of the
    Option.



 



    (f) Payment. Options shall be exercised by the
    delivery of a written notice of exercise to the Company, in a
    form specified or accepted by the Committee, or by complying
    with any alternative exercise procedures that may be authorized
    by the Committee, setting forth the number of Shares with
    respect to which the Option is to be exercised, accompanied by
    full payment for such Shares, which shall include applicable
    taxes, if any, in accordance with Section 17. The Option
    Price upon exercise of any Option shall be payable to the
    Company in full by cash, check or such cash equivalent as the
    Committee may accept. If approved by the Committee, and subject
    to any such terms, conditions and limitations as the Committee
    may prescribe and to the extent permitted by applicable law,
    payment of the Option Price, in full or in part, may also be
    made as follows:



 



    (i) Payment may be made in the form of unrestricted and
    unencumbered Shares (by actual delivery of such Shares or by
    attestation) already owned by the Participant exercising such
    Option, or by such Participant and his or her spouse jointly
    (based on the Fair Market Value of the Common Stock on the date
    the Option is exercised); provided, however, that,
    in the case of an Incentive Stock Option, the right to make a
    payment in the form of such already owned Shares may be
    authorized only as of the Grant Date of such Incentive Stock
    Option and provided further that such already
    owned Shares must have been either previously acquired by the
    Participant on the open market or held by the Participant for at
    least six (6) months at the time of exercise (or meet any
    such other requirements as the Committee may determine are
    necessary in order to avoid an accounting earnings charge on
    account of the use of such Shares to pay the Option Price).





    

    12








 







    (ii) Payment may be made by means of a broker-assisted
    “cashless exercise” pursuant to which a Participant
    may elect to deliver a properly executed exercise notice to the
    Company, together with a copy of irrevocable instructions to a
    broker to deliver promptly to the Company the amount of Share
    sale or loan proceeds necessary to pay the Option Price, and, if
    requested, the amount of any federal, state, local or
    non-United
    States withholding taxes.



 



    (iii) Payment may be made by instructing the Company to
    withhold a number of Shares otherwise deliverable to the
    Participant pursuant to the Option having an aggregate Fair
    Market Value on the date of exercise equal to the product of:
    (1) Option Price multiplied by (2) the number of
    Shares in respect of which the Option shall have been exercised.



 



    (iv) Payment may be made by any other method approved or
    accepted by the Committee in its discretion.



 



    Subject to any governing rules or regulations, as soon as
    practicable after receipt of a written notification of exercise
    and full payment in accordance with the preceding provisions of
    this Section 6(f) and satisfaction of tax obligations in
    accordance with Section 17, the Company shall deliver to
    the Participant exercising an Option, in the Participant’s
    name, evidence of book entry Shares, or, upon the
    Participant’s request, Share certificates, in an
    appropriate amount based upon the number of Shares purchased
    under the Option, subject to Section 22(g). Unless
    otherwise determined by the Committee, all payments under all of
    the methods described above shall be paid in United States
    dollars.



 



    (g) Rights as a Stockholder. No Participant or other
    person shall become the beneficial owner of any Shares subject
    to an Option, nor have any rights to dividends or other rights
    of a stockholder with respect to any such Shares, until the
    Participant has actually received such Shares following exercise
    of his or her Option in accordance with the provisions of the
    Plan and the applicable Award Agreement.



 



    (h) Termination of Service. The Committee may
    establish and set forth in the applicable Award Agreement the
    terms and conditions on which an Option shall remain
    exercisable, if at all, upon a Participant’s Termination of
    Service. To the extent that a Participant is not entitled to
    exercise an Option at the date of his or her Termination of
    Service, or if the Participant (or other person entitled to
    exercise the Option) does not exercise the Option to the extent
    so entitled within the time period specified in the Award
    Agreement or below (as applicable), effective as of the date of
    such Termination of Service or expiration of such time period
    (as applicable), the Option shall terminate and cease to be
    exercisable. Notwithstanding the foregoing provisions of this
    Section 6(h) to the contrary, the Committee may determine
    in its discretion that an Option may be exercised following any
    such Termination of Service, whether or not exercisable at the
    time of such Termination of Service. If there is an SEC blackout
    period (or a Committee-imposed blackout period) that prohibits
    the buying or selling of Shares during any part of the ten day
    period before termination of any Option based on the Termination
    of Service of a Participant, the period for exercising such
    Option shall be automatically extended until ten days beyond
    when such blackout period ends. Notwithstanding any provision of
    the Plan or an Award Agreement, in no event may an Option be
    exercised after the expiration date of the original term of such
    Option set forth in the applicable Award Agreement, except as
    provided in the last sentence of Section 6(d). Subject to
    the last sentence of this Section 6(h), a
    Participant’s Option shall be forfeited upon his or her
    Termination of Service, except as set forth below:



 



    (i) Not for Cause. Upon a Participant’s
    Termination of Service for any reason other than for Cause, any
    Option held by such Participant that was exercisable immediately
    before such Termination of Service may be exercised at any time
    until the earlier of (A) the ninetieth (90th) day following
    such Termination of Service and (B) the expiration date of
    the original term of such Option set forth in the applicable
    Award Agreement. The Committee may, in its discretion, extend
    the period of time over which a Nonqualified Stock Option may be
    exercised beyond the period specified in the immediately
    preceding sentence, but not beyond the earlier to occur of
    (I) one (1) year following the time specified in
    clause (A) of such sentence and (II) the expiration
    date of the original term of such Option set forth in the
    applicable Award Agreement.





    

    13








 







    (ii) Cause. Upon a Participant’s Termination of
    Service for Cause, any Option held by such Participant shall be
    forfeited, effective as of such Termination of Service.



 



    Notwithstanding the foregoing provisions of this
    Section 6(h), the Committee shall have the power, in its
    discretion, to apply different rules concerning the consequences
    of a Termination of Service; provided, however,
    that such rules shall be set forth in the applicable Award
    Agreement.



 



    (i) Limitations on Incentive Stock Options.



 



    (i) General. No ISO shall be granted to any Eligible
    Individual who is not an Employee of the Company or a Subsidiary
    on the Grant Date of such Option. Any ISO granted under the Plan
    shall contain such terms and conditions, consistent with the
    Plan, as the Committee may determine to be necessary to qualify
    such Option as an “incentive stock option” under
    Section 422 of the Code. Any ISO granted under the Plan may
    be modified by the Committee to disqualify such Option from
    treatment as an “incentive stock option” under
    Section 422 of the Code.



 



    (ii) $100,000 Per Year Limitation. Notwithstanding
    any intent to grant ISOs, an Option granted under the Plan will
    not be considered an ISO to the extent that it, together with
    any other “incentive stock options” (within the
    meaning of Section 422 of the Code, but without regard to
    subsection (d) of such Section) under the Plan and any
    other “incentive stock option” plans of the Company,
    any Subsidiary and any “parent corporation” of the
    Company within the meaning of Section 424(e) of the Code,
    are exercisable for the first time by any Participant during any
    calendar year with respect to Shares having an aggregate Fair
    Market Value in excess of $100,000 (or such other limit as may
    be required by the Code) as of the Grant Date of the Option with
    respect to such Shares. The rule set forth in the preceding
    sentence shall be applied by taking Options into account in the
    order in which they were granted.



 



    (iii) Options Granted to Certain Stockholders. No
    ISO shall be granted to an individual otherwise eligible to
    participate in the Plan who owns (within the meaning of
    Section 424(d) of the Code), at the Grant Date of such
    Option, more than ten percent (10%) of the total combined voting
    power of all classes of stock of the Company or a Subsidiary or
    any “parent corporation” of the Company within the
    meaning of Section 424(e) of the Code. This restriction
    does not apply if at the Grant Date of such ISO the Option Price
    of the ISO is at least 110% of the Fair Market Value of a Share
    on the Grant Date such ISO, and the ISO by its terms is not
    exercisable after the expiration of five years from such Grant
    Date.



 



    7. Stock Appreciation Rights.



 



    (a) Grant of SARs. Subject to the terms and
    conditions of the Plan, SARs may be granted to Participants at
    any time and from time to time as shall be determined by the
    Committee. The Committee may grant an SAR (i) in connection
    with, and at the Grant Date of, a related Option (a
    “Tandem SAR”), or (ii) independent of, and
    unrelated to, an Option (a “Freestanding SAR”).
    The Committee shall have complete discretion in determining the
    number of Shares to which a SAR pertains (subject to
    Section 4) and, consistent with the provisions of the
    Plan, in determining the terms and conditions pertaining to any
    SAR.



 



    (b) Grant Price. The Grant Price for each SAR shall
    be determined by the Committee and set forth in the Award
    Agreement, subject to the limitations of this Section 7(b).
    The Grant Price for each Freestanding SAR shall be not less than
    one hundred percent (100%) of the Fair Market Value of a Share
    on the Grant Date of such Freestanding SAR, except in the case
    of Substitute Awards or Awards granted in connection with an
    adjustment provided for in Section 4(d). The Grant Price of
    a Tandem SAR shall be equal to the Option Price of the related
    Option.



 



    (c) Exercise of Tandem SARs. Tandem SARs may be
    exercised for 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. A Tandem SAR shall be
    exercisable only when and to the extent the related Option is
    exercisable and may be exercised only with respect to the Shares
    for which the related Option is then






    

    14








 







    exercisable. A Tandem SAR shall entitle a Participant to elect,
    in the manner set forth in the Plan and the applicable Award
    Agreement, in lieu of exercising his or her unexercised related
    Option for all or a portion of the Shares for which such Option
    is then exercisable pursuant to its terms, to surrender such
    Option to the Company with respect to any or all of such Shares
    and to receive from the Company in exchange therefor a payment
    described in Section 7(g). An Option with respect to which
    a Participant has elected to exercise a Tandem SAR shall, to the
    extent of the Shares covered by such exercise, be canceled
    automatically and surrendered to the Company. Such Option shall
    thereafter remain exercisable according to its terms only with
    respect to the number of Shares as to which it would otherwise
    be exercisable, less the number of Shares with respect to which
    such Tandem SAR has been so exercised. Notwithstanding any other
    provision of the Plan to the contrary, with respect to a Tandem
    SAR granted in connection with an ISO: (i) the Tandem SAR
    will expire no later than the expiration of the related ISO;
    (ii) the value of the payment with respect to the Tandem
    SAR may not exceed the difference between the Fair Market Value
    of the Shares subject to the related ISO at the time the Tandem
    SAR is exercised and the Option Price of the related ISO; and
    (iii) the Tandem SAR may be exercised only when the Fair
    Market Value of the Shares subject to the ISO exceeds the Option
    Price of the ISO.



 



    (d) Exercise of Freestanding SARs. Freestanding SARs
    may be exercised upon whatever terms and conditions the
    Committee, in its sole discretion, in accordance with the Plan,
    determines and sets forth in the Award Agreement. An Agreement
    may provide that the period of time over which a Freestanding
    SAR may be exercised shall be automatically extended if on the
    scheduled expiration date of such SAR the Participant’s
    exercise of such SAR would violate an applicable law;
    provided, however, that during such extended
    exercise period the SAR may only be exercised to the extent the
    SAR was exercisable in accordance with its terms immediately
    prior to such scheduled expiration date; provided
    further, however, that such extended exercise
    period shall end not later than thirty (30) days after the
    exercise of such SAR first would no longer violate such law.



 



    (e) Award Agreement. Each SAR grant shall be
    evidenced by an Award Agreement that shall specify the number of
    Shares to which the SAR pertains, the Grant Price, the term of
    the SAR, and such other terms and conditions as the Committee
    shall determine in accordance with the Plan.



 



    (f) Term of SARs. The term of a SAR granted under
    the Plan shall be determined by the Committee, in its sole
    discretion; provided, however, that the term of
    any Tandem SAR shall be the same as the related Option.



 



    (g) Payment of SAR Amount. An election to exercise
    SARs shall be deemed to have been made on the date of Notice of
    such election to the Company. As soon as practicable following
    such Notice, the Participant 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 Grant Price of the SAR; by



 



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



 



    Notwithstanding the foregoing provisions of this
    Section 7(g) to the contrary, the Committee may establish
    and set forth in the applicable Award Agreement a maximum amount
    per Share that will be payable upon the exercise of a SAR. At
    the discretion of the Committee, such payment upon exercise of a
    SAR shall be in cash, in Shares of equivalent Fair Market Value
    as of the date of such exercise or in some combination thereof.



 



    (h) Rights as a Stockholder. A Participant receiving
    a SAR shall have the rights of a stockholder only as to Shares,
    if any, actually issued to such Participant upon satisfaction or
    achievement of the terms and conditions of the Award, and in
    accordance with the provisions of the Plan and the






    

    15








 







    applicable Award Agreement, and not with respect to Shares to
    which such Award relates but which are not actually issued to
    such Participant.



 



    (i) Termination of Service. The provisions of
    Section 6(h) above shall apply to any SAR upon and after
    the Termination of Service of the Participant holding such SAR,
    except that in the case of any Freestanding SAR, the reference
    to the last sentence of Section 6(d) therein shall be
    deemed a reference to Section 7(d).



 



    8. Restricted Stock and Restricted Stock
    Units.



 



    (a) Awards of Restricted Stock and Restricted Stock
    Units. Subject to the terms and provisions of the Plan, the
    Committee, at any time and from time to time, may grant Shares
    of Restricted Stock
    and/or
    Restricted Stock Units to Participants in such amounts as the
    Committee shall determine. Awards of Restricted Stock may be
    made with or without the requirement of a cash payment from the
    Participant to whom such Award is made in exchange for, or as a
    condition precedent to, the completion of such Award and the
    issuance of Shares of Restricted Stock, and any such required
    cash payment shall be set forth in the applicable Agreement.
    Subject to the terms and conditions of this Section 8 and
    the Award Agreement, upon delivery of Shares of Restricted Stock
    to a Participant, or creation of a book entry evidencing a
    Participant’s ownership of Shares of Restricted Stock,
    pursuant to Section 8(f), the Participant shall have all of
    the rights of a stockholder with respect to such Shares, subject
    to the terms and restrictions set forth in this Section 8
    or the applicable Award Agreement or as determined by the
    Committee.



 



    (b) Award Agreement. Each Restricted Stock
    and/or
    Restricted Stock Unit Award shall be evidenced by an Award
    Agreement that shall specify the Period of Restriction, the
    number of Shares of Restricted Stock or the number of Restricted
    Stock Units granted, and such other provisions as the Committee
    shall determine in accordance with the Plan.



 



    (c) Nontransferability of Restricted Stock. Except
    as provided in this Section 8, Shares of Restricted Stock
    may not be sold, transferred, pledged, assigned, encumbered,
    alienated, hypothecated or otherwise disposed of until the end
    of the applicable Period of Restriction established by the
    Committee and specified in the Restricted Stock Award Agreement.



 



    (d) Period of Restriction and Other Restrictions.
    The Period of Restriction shall lapse with respect to an Award
    of Restricted Stock or Restricted Stock Units based on a
    Participant’s continuing service or employment with the
    Company or an Affiliate, the achievement of performance goals,
    the satisfaction of other conditions or restrictions or upon the
    occurrence of other events, in each case, as determined by the
    Committee, at its discretion, and stated in the Award Agreement;
    provided, however, that, except with respect to
    Awards of Restricted Stock
    and/or
    Restricted Stock Units of up to an aggregate of
    1,500,000 Shares granted during the term of the Plan, such
    Period of Restriction shall lapse: (i) in full with respect
    to all Shares underlying such Award at the expiration of a
    period not less than three years from the Grant Date of such
    Award; (y) proportionally in equal installments of the
    Shares underlying such Award over a period not less than three
    years from the Grant Date of such Award; or (z) in the case
    an Award subject to the achievement of performance goals, a
    Performance Period of not less than one year with respect to
    which it is to be determined whether the performance goals
    applicable to such Award have been achieved, except that the
    Period of Restriction may lapse earlier in the event of the
    death or disability of the Participant, on such terms as the
    Committee shall determine, or in accordance with Section 15
    hereof. The Committee shall not have the authority to otherwise
    accelerate the lapse of the Period of Restriction with respect
    to an Award of Restricted Stock or Restricted Stock Units.



 



    (e) Delivery of Shares and Settlement of Restricted
    Stock Units. Upon the expiration of the Period of
    Restriction with respect to any Shares of Restricted Stock, the
    restrictions set forth in the applicable Award Agreement shall
    be of no further force or effect with respect to such Shares,
    except as set forth in such Award Agreement. If applicable stock
    certificates are held by the Secretary of the Company or an
    escrow holder, upon such expiration, the Company shall deliver
    to the Participant, or






    

    16








 







    his beneficiary, without charge, the stock certificate
    evidencing the Shares of Restricted Stock that have not then
    been forfeited and with respect to which the Period of
    Restriction has expired. Unless otherwise provided by the
    Committee in an Award Agreement, upon the expiration of the
    Period of Restriction with respect to any outstanding Restricted
    Stock Units, the Company shall deliver to the Participant, or
    his beneficiary, without charge, one Share for each such
    outstanding Restricted Stock Unit; provided,
    however, that the Committee may, in its discretion, elect
    to: (i) pay cash or part cash and part Shares in lieu
    of delivering only Shares in respect of such Restricted Stock
    Units or (ii) defer the delivery of Shares beyond the
    expiration of the Period of Restriction. If a cash payment is
    made in lieu of delivering Shares, the amount of such payment
    shall be equal to the Fair Market Value of such Shares as of the
    date on which the Period of Restriction lapsed with respect to
    such Restricted Stock Units less applicable tax withholdings in
    accordance with Section 17.



 



    (f) Forms of Restricted Stock Awards. Each
    Participant who receives an Award of Shares of Restricted Stock
    shall be issued a stock certificate or certificates evidencing
    the Shares covered by such Award registered in the name of such
    Participant, which certificate or certificates shall bear an
    appropriate legend, and, if the Committee determines that the
    Shares of Restricted Stock shall be held by the Company or in
    escrow rather than delivered to the Participant pending
    expiration of the Period of Restriction, the Committee may
    require the Participant to additionally execute and deliver to
    the Company: (i) an escrow agreement satisfactory to the
    Committee, if applicable, and (ii) the appropriate stock
    power (endorsed in blank) with respect to such Shares of
    Restricted Stock. If a Participant shall fail to execute an
    Award Agreement evidencing an Award of Restricted Stock and, if
    applicable, an escrow agreement and blank stock power within the
    amount of time specified by the Committee, the Award shall be
    null and void. The Committee may require a Participant who
    receives a certificate or certificates evidencing a Restricted
    Stock Award to immediately deposit such certificate or
    certificates, together with a stock power or other appropriate
    instrument of transfer, endorsed in blank by the Participant,
    with signatures guaranteed in accordance with the Exchange Act
    if required by the Committee, with the Secretary of the Company
    or an escrow holder as provided in the immediately following
    sentence. The Secretary of the Company or such escrow holder as
    the Committee may appoint shall retain physical custody of each
    certificate representing a Restricted Stock Award until the
    Period of Restriction and any other restrictions imposed by the
    Committee or under the Award Agreement with respect to the
    Shares evidenced by such certificate expire or shall have been
    removed. The foregoing to the contrary notwithstanding, the
    Committee may, in its discretion, provide that a
    Participant’s ownership of Shares of Restricted Stock prior
    to the lapse of the Period of Restriction or any other
    applicable restrictions shall, in lieu of such certificates, be
    evidenced by a “book entry” (i.e., a
    computerized or manual entry) in the records of the Company or
    its designated agent in the name of the Participant who has
    received such Award. Such records of the Company or such agent
    shall, absent manifest error, be binding on all Participants who
    receive Restricted Stock Awards evidenced in such manner. The
    holding of Shares of Restricted Stock by the Company or such an
    escrow holder, or the use of book entries to evidence the
    ownership of Shares of Restricted Stock, in accordance with this
    Section 8(f), shall not affect the rights of Participants
    as owners of the Shares of Restricted Stock awarded to them, nor
    affect the restrictions applicable to such shares under the
    Award Agreement or the Plan, including the Period of Restriction.



 



    (g) Rights as a Stockholder. Unless otherwise
    determined by the Committee and set forth in a
    Participant’s Award Agreement, to the extent permitted or
    required by law, as determined by the Committee, Participants
    holding Shares of Restricted Stock shall have the right to
    exercise full voting rights with respect to those Shares during
    the Period of Restriction. A Participant receiving Restricted
    Stock Units shall have the rights of a stockholder only as to
    Shares, if any, actually issued to such Participant upon
    expiration of the Period of Restriction and satisfaction or
    achievement of the terms and conditions of the Award, and in
    accordance with the provisions of the Plan and the applicable
    Award Agreement, and not with respect to Shares to which such
    Award relates but which are not actually issued to such
    Participant.





    

    17








 







    (h) Dividends and Other Distributions. During the
    Period of Restriction, Participants holding Shares of Restricted
    Stock shall be credited with any cash dividends paid with
    respect to such Shares while they are so held, unless determined
    otherwise by the Committee and set forth in the Award Agreement.
    The Committee may apply any restrictions to such dividends that
    the Committee deems appropriate. Except as set forth in the
    Award Agreement, in the event of (i) any adjustment as
    provided in Section 4(d), or (ii) any shares or
    securities are received as a dividend, or an extraordinary
    dividend is paid in cash, on Shares of Restricted Stock, any new
    or additional Shares or securities or any extraordinary
    dividends paid in cash received by a recipient of Restricted
    Stock shall be subject to the same terms and conditions,
    including the Period of Restriction, as relate to the original
    Shares of Restricted Stock.



 



    (i) Termination of Service; Forfeiture. Except as
    otherwise provided in this Section 8(i), during the Period
    of Restriction, any Restricted Stock Units
    and/or
    Shares of Restricted Stock held by a Participant shall be
    forfeited and revert to the Company (or, if Shares of Restricted
    Sock were sold to the Participant, the Participant shall be
    required to resell such Shares to the Company at cost) upon the
    Participant’s Termination of Service or the failure to meet
    or satisfy any applicable performance goals or other terms,
    conditions and restrictions to the extent set forth in the
    applicable Award Agreement. To the extent Shares of Restricted
    Stock are forfeited, any stock certificates issued to the
    Participant evidencing such Shares shall be returned to the
    Company, and all rights of the Participant to such Shares and as
    a stockholder with respect thereto shall terminate without
    further obligation on the part of the Company. Each applicable
    Award Agreement shall set forth the extent to which, if any, the
    Participant shall have the right to retain Restricted Stock
    Units and/or
    Shares of Restricted Stock, then subject to the Period of
    Restriction, following such Participant’s Termination of
    Service. Such provisions shall be determined in the sole
    discretion of the Committee, shall be included in the applicable
    Award Agreement, need not be uniform among all such Awards
    issued pursuant to the Plan, and may reflect distinctions based
    on the reasons for, or circumstances of, such Termination of
    Service.



 



    9. Other Stock-Based Awards.



 



    (a) Other Stock-Based Awards. The Committee may
    grant types of equity-based or equity-related Awards not
    otherwise described by the terms of the Plan (including the
    grant or offer for sale of unrestricted Shares), in such amounts
    and subject to such terms and conditions, as the Committee shall
    determine. Such Other Stock-Based Awards may involve the
    transfer of actual Shares to Participants, or payment in cash or
    otherwise of amounts based on the value of Shares. The terms and
    conditions of such Awards shall be consistent with the Plan and
    set forth in the Award Agreement and need not be uniform among
    all such Awards or all Participants receiving such Awards.



 



    (b) Value of Other Stock-Based Awards. Each Other
    Stock-Based Award shall be expressed in terms of Shares or units
    based on Shares, as determined by the Committee. The Committee
    may establish performance goals in its discretion, and any such
    performance goals shall be set forth in the applicable Award
    Agreement. If the Committee exercises its discretion to
    establish performance goals, the number
    and/or value
    of Other Stock-Based Awards that will be paid out to the
    Participant will depend on the extent to which such performance
    goals are met.



 



    (c) Payment of Other Stock-Based Awards. Payment, if
    any, with respect to an Other Stock-Based Award shall be made in
    accordance with the terms of the Award, as set forth in the
    Award Agreement, in cash, Shares or a combination of cash and
    Shares, as the Committee determines.



 



    (d) Rights as a Stockholder. A Participant receiving
    an Other Stock-Based Award shall have the rights of a
    stockholder only as to Shares, if any, actually issued to such
    Participant upon satisfaction or achievement of the terms and
    conditions of the Award, and in accordance with the provisions
    of the Plan and the applicable Award Agreement, and not with
    respect to Shares to which such Award relates but which are not
    actually issued to such Participant.



 



    (e) Termination of Service. The Committee shall
    determine the extent to which the Participant shall have the
    right to receive Other Stock-Based Awards following the
    Participant’s Termination of






    

    18








 







    Service. Such provisions shall be determined in the sole
    discretion of the Committee, such provisions may be included in
    the applicable Award Agreement, but need not be uniform among
    all Other Stock-Based Awards issued pursuant to the Plan, and
    may reflect distinctions based on the reasons for Termination of
    Service.



 



    10. Dividend Equivalents. Unless otherwise
    provided by the Committee, no adjustment shall be made in the
    Shares issuable or taken into account under Awards on account of
    cash dividends that may be paid or other rights that may be
    issued to the holders of Shares prior to issuance of such Shares
    under such Award. The Committee may grant Dividend Equivalents
    based on the dividends declared on Shares that are subject to
    any Award, including any Award the payment or settlement of
    which is deferred pursuant to Section 22(d). Any Award of
    Dividend Equivalents may be credited as of the dividend payment
    dates, during the period between the Grant Date of the Award and
    the date the Award becomes payable or terminates or expires, as
    determined by the Committee. Dividend Equivalents may be subject
    to any limitations
    and/or
    restrictions determined by the Committee. Dividend Equivalents
    shall be converted to cash or additional Shares by such formula
    and at such time, and shall be paid at such times, as may be
    determined by the Committee.



 



    11. Cash-Based Awards.



 



    (a) Grant of Cash-Based Awards. Subject to the terms
    of the Plan, Cash-Based Awards may be granted to Participants in
    such amounts and upon such terms, and at any time and from time
    to time, as shall be determined by the Committee, in accordance
    with the Plan. A Cash-Based Award entitles the Participant who
    receives such Award to receive a payment in cash upon the
    attainment of applicable performance goals for the applicable
    Performance Period,
    and/or
    satisfaction of other terms and conditions, in each case
    determined by the Committee, and which shall be set forth in the
    Award Agreement. The terms and conditions of such Awards shall
    be consistent with the Plan and set forth in the Award Agreement
    and need not be uniform among all such Awards or all
    Participants receiving such Awards.



 



    (b) Earning and Payment of Cash-Based Awards.
    Cash-Based Awards shall become earned, in whole or in part,
    based upon the attainment of performance goals specified by the
    Committee
    and/or the
    occurrence of any event or events
    and/or
    satisfaction of such terms and conditions, including a Change in
    Control, as the Committee shall determine, either at or after
    the Grant Date. The Committee shall determine the extent to
    which any applicable performance goals
    and/or other
    terms and conditions of a Cash-Based Award are attained or not
    attained following conclusion of the applicable Performance
    Period. The Committee may, in its discretion, waive any such
    performance goals
    and/or other
    terms and conditions relating to any such Award, subject to
    Section 12, if applicable. Payment of earned Cash-Based
    Awards shall be as determined by the Committee and set forth in
    the Award Agreement.



 



    (c) Termination of Service. Each Award Agreement
    shall set forth the extent to which the Participant shall have
    the right to retain any Cash-Based Award following such
    Participant’s Termination of Service. Such provisions shall
    be determined in the sole discretion of the Committee, shall be
    included in the applicable Award Agreement, need not be uniform
    among all such Awards issued pursuant to the Plan, and may
    reflect distinctions based on the reasons for Termination of
    Service.



 



    12. Performance Compensation Awards.



 



    (a) Generally. The Committee shall have authority,
    at the time of grant of any Award under Sections 8, 9 and
    11 of the Plan to designate such Award as a Performance
    Compensation Award. A Performance Compensation Award is intended
    to qualify as “qualified performance-based
    compensation” under Section 162(m) of the Code. In the
    event that the Committee determines, in its discretion, to grant
    Awards that are not designated as Performance Compensation
    Awards, the Committee may make such grants without satisfying
    the requirements of Code Section 162(m) and may, in its
    discretion, base earning of such Awards on performance measures
    other than those set forth in Section 12(c).





    

    19








 







    (b) Discretion of Committee with Respect to Performance
    Compensation Awards. With regard to a particular Performance
    Period, the Committee shall have discretion to select the length
    of such Performance Period, the type or types of Performance
    Compensation Awards to be issued, the Performance Measure or
    Performance Measures that will be used to establish the
    Performance Goal or Performance Goals, the kinds
    and/or
    levels of the Performance Goal or Performance Goals that is or
    are to apply and the Performance Formula. Within the first
    90 days of a Performance Period (or, if longer or shorter,
    within the maximum period allowed under Section 162(m) of
    the Code), the Committee shall, with regard to the Performance
    Compensation Awards to be issued for such Performance Period,
    exercise its discretion with respect to each of the matters
    enumerated in the immediately preceding sentence and record the
    same in writing.



 



    (c) Performance Measures. The Performance Measures
    that shall be used to establish the Performance Goals shall be
    based on the attainment of specific levels of performance of the
    Company (and/or one or more Affiliates, divisions or operational
    units, or any combination of the foregoing) and shall include
    the following: (i) net earnings or net income (before or
    after interest, taxes
    and/or other
    adjustments); (ii) basic or diluted earnings per share
    (before or after interest, taxes
    and/or other
    adjustments); (iii) book value per share; (iv) net
    revenue or revenue growth; (v) net interest margin;
    (vi) operating profit (before or after taxes);
    (vii) return on assets, equity, capital, revenue or similar
    measure; (viii) cash flow (including operating cash flow
    and free cash flow); (ix) share price (including growth
    measures and total shareholder return); (x) working
    capital; (xi) expense targets, including fuel;
    (xii) margins; (xiii) operating efficiency;
    (xiv) measures of economic value added; (xv) asset
    quality; (xvi) enterprise value; (xvii) employee
    retention; (xviii) attainment of strategic or operational
    initiatives; (xix) asset growth; (xx) dividend yield;
    (xxi) market share, mergers, acquisitions, or sales of
    assets; (xxii) cost per available seat mile;
    (xxiii) revenue per seat mile available;
    (xxiv) revenue per seat mile; (xxv) percentage of
    flights completed on time; (xxvi) percentage of scheduled
    flights completed; (xxvii) lost passenger baggage;
    (xxviii) aircraft utilization; (xxix) revenue per
    employee; (xxx) employee satisfaction/engagement/net
    promoter score; (xxxi) customer
    satisfaction / net promoter score; or (xxxii) any
    combination of the foregoing. Any one or more of the Performance
    Measures may be used on an absolute or relative basis to measure
    the performance of the Company
    and/or one
    or more Affiliates as a whole or any business unit(s) of the
    Company
    and/or one
    or more Affiliates or any combination thereof, as the Committee
    may determine in its discretion, or any of the above Performance
    Measures may be compared to the performance of a selected group
    of comparison companies, or a published or special index that
    the Committee, in its discretion, determines, or as compared to
    various stock market indices. To the extent required under
    Section 162(m) of the Code, the Committee shall, within the
    first 90 days of a Performance Period (or, if longer or
    shorter, within the maximum period allowed under
    Section 162(m) of the Code), define in an objective fashion
    the manner of calculating the relevant Performance Measures and
    Performance Goals it selects to use for such Performance Period
    and thereafter communicate such Performance Measures and
    Performance Goals to the Participant.



 



    (d) Modification of Performance Goals. In the event
    that applicable tax
    and/or
    securities laws change to permit Committee discretion to alter
    the governing Performance Measures without obtaining stockholder
    approval of such alterations, the Committee shall have
    discretion to make such alterations without obtaining
    stockholder approval. The Committee is authorized at any time
    during the first 90 days of a Performance Period (or, if
    longer or shorter, within the maximum period allowed under
    Section 162(m) of the Code), or at any time thereafter to
    the extent the exercise of such authority at such time would not
    cause the Performance Compensation Awards granted to any
    Participant for such Performance Period to fail to qualify as
    “qualified performance-based compensation” under
    Section 162(m) of the Code, in its discretion, to adjust or
    modify the calculation of a Performance Goal for such
    Performance Period, based on and in order to appropriately
    reflect the following events: (i) asset write-downs;
    (ii) litigation or claim judgments or settlements;
    (iii) the effect of changes in tax laws, accounting
    principles, or other laws or regulatory rules affecting reported
    results; (iv) any reorganization and restructuring
    programs; (v) the cumulative effect of changes in
    accounting principles; (vi) extraordinary nonrecurring
    items as described in Accounting Principles Board Opinion






    

    20








 







    No. 30 (or any successor pronouncement thereto);
    (vii) acquisitions, divestitures or discontinued
    operations; (viii) gains or losses on refinancing or
    extinguishment of debt; (ix) foreign exchange gains and
    losses; (x) a change in the Company’s fiscal year;
    (xi) any other specific unusual events, or objectively
    determinable category thereof and (xii) any other specific
    nonrecurring events, or objectively determinable category
    thereof.



 



    (e) Payment of Performance Compensation Awards. A
    Participant shall be eligible to receive payment in respect of a
    Performance Compensation Award only to the extent that the
    Performance Goals for such Award are achieved and the
    Performance Formula as applied against such Performance Goals
    determines that all or some portion of such Participant’s
    Award has been earned for the Performance Period. After the
    close of each Performance Period, the Committee shall review and
    certify in writing whether, and to what extent, the Performance
    Goals for such Performance Period have been achieved and, if so,
    determine and certify in writing the amount of the Performance
    Compensation Award to be paid to the Participant and, in so
    doing, the Committee may use negative discretion, consistent
    with Section 162(m), to eliminate or reduce, but not
    increase, the amount of the Award otherwise payable to the
    Participant based upon such performance. The Committee shall not
    have discretion to (i) waive the achievement of Performance
    Goals applicable to any Performance Compensation Award, except
    in the case of the Participant’s death, disability or a
    Change in Control or (ii) increase a Performance
    Compensation Award above the applicable limits set forth in
    Section 4(c), except as otherwise provided in the Plan.



 



    13. Transferability Of Awards; Beneficiary
    Designation.



 



    (a) Transferability of Incentive Stock Options. No
    ISO or Tandem SAR granted in connection with an ISO may be sold,
    transferred, pledged, assigned, or otherwise alienated or
    hypothecated, other than by will or by the laws of descent and
    distribution or in accordance with Section 13(c). Further,
    all ISOs and Tandem SARs granted in connection with ISOs granted
    to a Participant shall be exercisable during his or her lifetime
    only by such Participant.



 



    (b) All Other Awards. Except as otherwise provided
    in Section 8(e) or Section 13(c) or a
    Participant’s Award Agreement or otherwise determined at
    any time by the Committee, no Award granted under the Plan may
    be sold, transferred, pledged, assigned, or otherwise alienated
    or hypothecated, other than by will or by the laws of descent
    and distribution; provided that the Committee may permit
    further transferability, on a general or a specific basis, and
    may impose conditions and limitations on any permitted
    transferability, subject to Section 13(a) and any
    applicable Period of Restriction; provided
    further, however, that no Award may be transferred
    for value or other consideration without first obtaining
    approval thereof by the stockholders of the Company. Further,
    except as otherwise provided in a Participant’s Award
    Agreement or otherwise determined at any time by the Committee,
    or unless the Committee decides to permit further
    transferability, subject to Section 13(a) and any
    applicable Period of Restriction, all Awards granted to a
    Participant under the Plan, and all rights with respect to such
    Awards, shall be exercisable or available during his or her
    lifetime only by or to such Participant. With respect to those
    Awards, if any, that are permitted to be transferred to another
    individual, references in the Plan to exercise or payment
    related to such Awards by or to the Participant shall be deemed
    to include, as determined by the Committee, the
    Participant’s permitted transferee. In the event any Award
    is exercised by or otherwise paid to the executors,
    administrators, heirs or distributees of the estate of a
    deceased Participant, or such a Participant’s beneficiary,
    or the transferee of an Award, in any such case, pursuant to the
    terms and conditions of the Plan and the applicable Agreement
    and in accordance with such terms and conditions as may be
    specified from time to time by the Committee, the Company shall
    be under no obligation to issue Shares thereunder unless and
    until the Company is satisfied, as determined in the discretion
    of the Committee, that the person or persons exercising such
    Award, or to receive such payment, are the duly appointed legal
    representative of the deceased Participant’s estate or the
    proper legatees or distributees thereof or the named beneficiary
    of such Participant, or the valid transferee of such Award, as
    applicable. Any purported assignment, transfer or encumbrance of
    an Award that does not comply with this Section 13(b) shall
    be void and unenforceable against the Company.





    

    21








 







    (c) Beneficiary Designation. Each Participant may,
    from time to time, name any beneficiary or beneficiaries who
    shall be permitted to exercise his or her Option or SAR or to
    whom any benefit under the Plan is to be paid in case of the
    Participant’s death before he or she fully exercises his or
    her Option or SAR or receives any or all of such benefit. Each
    such designation shall revoke all prior designations by the same
    Participant, shall be in a form prescribed by the Company, and
    will be effective only when filed by the Participant in writing
    with the Company during the Participant’s lifetime. In the
    absence of any such beneficiary designation, a
    Participant’s unexercised Option or SAR, or amounts due but
    remaining unpaid to such Participant, at the Participant’s
    death, shall be exercised or paid as designated by the
    Participant by will or by the laws of descent and distribution.



 



    14. Rights of Participants.



 



    (a) Rights or Claims. No person shall have any
    rights or claims under the Plan except in accordance with the
    provisions of the Plan and any applicable Award Agreement. The
    liability of the Company and any Affiliate under the Plan is
    limited to the obligations expressly set forth in the Plan, and
    no term or provision of the Plan may be construed to impose any
    further or additional duties, obligations, or costs on the
    Company or any Affiliate thereof or the Board or the Committee
    not expressly set forth in the Plan. The grant of an Award under
    the Plan shall not confer any rights upon the Participant
    holding such Award other than such terms, and subject to such
    conditions, as are specified in the Plan as being applicable to
    such type of Award, or to all Awards, or as are expressly set
    forth in the Award Agreement evidencing such Award. Without
    limiting the generality of the foregoing, neither the existence
    of the Plan nor anything contained in the Plan or in any Award
    Agreement shall be deemed to:



 



    (i) Give any Eligible Individual the right to be retained
    in the employment or service of the Company
    and/or an
    Affiliate, whether in any particular position, at any particular
    rate of compensation, for any particular period of time or
    otherwise;



 



    (ii) Restrict in any way the right of the Company
    and/or an
    Affiliate to terminate, change or modify any Eligible
    Individual’s employment or service at any time with or
    without Cause;



 



    (iii) Confer on any Eligible Individual any right of
    continued relationship with the Company
    and/or an
    Affiliate, or alter any relationship between them, including any
    right of the Company or an Affiliate to terminate, change or
    modify its relationship with an Eligible Individual;



 



    (iv) Constitute a contract of employment or service between
    the Company or any Affiliate and any Eligible Individual, nor
    shall it constitute a right to remain in the employ or service
    of the Company or any Affiliate;



 



    (v) Give any Eligible Individual the right to receive any
    bonus, whether payable in cash or in Shares, or in any
    combination thereof, from the Company
    and/or an
    Affiliate, nor be construed as limiting in any way the right of
    the Company
    and/or an
    Affiliate to determine, in its sole discretion, whether or not
    it shall pay any Eligible Individual bonuses, and, if so paid,
    the amount thereof and the manner of such payment; or



 



    (vi) Give any Participant any rights whatsoever with
    respect to an Award except as specifically provided in the Plan
    and the Award Agreement.



 



    (b) Adoption of the Plan. The adoption of the Plan
    shall not be deemed to give any Eligible Individual or any other
    individual any right to be selected as a Participant or to be
    granted an Award, or, having been so selected, to be selected to
    receive a future Award.



 



    (c) Vesting. Notwithstanding any other provision of
    the Plan, a Participant’s right or entitlement to exercise
    or otherwise vest in any Award not exercisable or vested at the
    Grant Date thereof shall only result from continued services as
    a Non-Employee Director or Consultant or continued employment,
    as the case may be, with the Company or any Affiliate, or
    satisfaction of any other performance goals or other conditions
    or restrictions applicable, by its terms, to such Award, except,
    in each such case, as the Committee may, in its discretion,
    expressly determine otherwise.





    

    22








 







    (d) No Effects on Benefits; No Damages. Payments and
    other compensation received by a Participant under an Award are
    not part of such Participant’s normal or expected
    compensation or salary for any purpose, including calculating
    termination, indemnity, severance, resignation, redundancy, end
    of service payments, bonuses, long-service awards, pension or
    retirement benefits or similar payments under any laws, plans,
    contracts, policies, programs, arrangements or otherwise. A
    Participant shall, by participating in the Plan, waive any and
    all rights to compensation or damages in consequence of
    Termination of Service of such Participant for any reason
    whatsoever, whether lawfully or otherwise, insofar as those
    rights arise or may arise from such Participant ceasing to have
    rights under the Plan as a result of such Termination of
    Service, or from the loss or diminution in value of such rights
    or entitlements, including by reason of the operation of the
    terms of the Plan or the provisions of any statute or law
    relating to taxation. No claim or entitlement to compensation or
    damages arises from the termination of the Plan or diminution in
    value of any Award or Shares purchased or otherwise received
    under the Plan.



 



    (e) One or More Types of Awards. A particular type
    of Award may be granted to a Participant either alone or in
    addition to other Awards under the Plan.



 



    15. Change In Control.



 



    (a) Alternative Awards. The occurrence of a Change
    in Control will not itself result in the cancellation,
    acceleration of exercisability or vesting, lapse of any Period
    of Restriction or settlement or other payment with respect to
    any outstanding Award to the extent that the Board or the
    Committee determines in its discretion, prior to such Change in
    Control, that such outstanding Award shall be honored or
    assumed, or new rights substituted therefor (such honored,
    assumed or substituted Award being hereinafter referred to as an
    “Alternative Award”) by the New Employer,
    provided that any Alternative Award must:



 



    (i) be based on securities that are traded on an
    established United States securities market, or which will be so
    traded within sixty (60) days following the Change in
    Control;



 



    (ii) provide the Participant (or each Participant in a
    class of Participants) with rights and entitlements
    substantially equivalent to or better than the rights, terms and
    conditions applicable under such Award, including an identical
    or better exercise or vesting schedule and identical or better
    timing and methods of payment;



 



    (iii) have substantially equivalent economic value to such
    Award immediately prior to the Change in Control (as determined
    by the Board or the Committee (as constituted prior to the
    Change in Control), in its discretion);



 



    (iv) have terms and conditions which provide that if the
    Participant incurs a Termination of Service by the New Employer
    under any circumstances other than involuntary Termination of
    Service for Cause or resignation without Good Reason within
    eighteen (18) months following the Change in Control,
    (1) any conditions on a Participant’s rights under, or
    any restrictions on transfer or exercisability applicable to,
    such Alternative Award shall be waived or shall lapse in full,
    and such Alternative Award shall become fully vested and
    exercisable, as the case may be, and (2) to the extent
    applicable, each such Alternative Award outstanding as of the
    date of such Termination of Service may thereafter be exercised
    until the later of (A) the last date on which such Award
    would have been exercisable in the absence of this
    Section 15(a), and (B) the earlier of (I) the
    third anniversary of such Change in Control and
    (II) expiration of the term of such Award; and



 



    (v) not subject the Participant to the assessment of
    additional taxes under Section 409A of the Code.



 



    (b) Accelerated Vesting and Payment.



 



    (i) In the event Section 15(a) does not apply, upon a
    Change in Control, (1) all outstanding Awards shall become
    fully vested, nonforfeitable and, to the extent applicable,
    exercisable






    

    23








 







    immediately prior to the Change in Control; (2) the Board
    or the Committee (as constituted prior the Change in Control)
    shall provide that in connection with the Change in Control
    (A) each outstanding Option and Stock Appreciation Right
    shall be cancelled in exchange for an amount (payable in
    accordance with Section 15(b)(ii)) equal to the excess, if
    any, of the Fair Market Value of the Common Stock on the date of
    the Change in Control over the Option Price or Grant Price
    applicable to such Option or Stock Appreciation Right,
    (B) each Share of Restricted Stock, each Restricted Stock
    Unit and each other Award denominated in Shares shall be
    cancelled in exchange for an amount (payable in accordance with
    Section 15(b)(ii)) equal to the Change in Control Price
    multiplied by the number of Shares covered by such Award,
    (C) each Award not denominated in Shares shall be cancelled
    in exchange for the full amount of such Award (payable in
    accordance with Section 15(b)), and (D) any Award the
    payment or settlement of which was deferred under Section 22(d)
    or otherwise shall be cancelled in exchange for the full amount
    of such deferred Award (payable in accordance with
    Section 15(b)(ii)); (3) the target performance goals
    applicable to any outstanding Awards shall be deemed to have
    been attained in full (unless actual performance exceeds the
    target, in which case actual performance shall be used) for the
    entire applicable Performance Period then outstanding; and
    (4) the Board or the Committee (as constituted prior the
    Change in Control) may, in addition to the consequences
    otherwise set forth in this Section 15(b)(i), make adjustments
    and / or settlements of outstanding Awards as it deems
    appropriate and consistent with the Plan’s purposes.



 



    (ii) Payments. Payment of any amounts in accordance
    with this Section 15(b) shall be made in cash or, if
    determined by the Board or the Committee (as constituted prior
    to the Change in Control), in securities of the New Employer
    that are traded on an established United States securities
    market, or which will be so traded within sixty (60) days
    following the Change in Control, having an aggregate fair market
    value (as determined by such Board or Committee) equal to such
    amount or in a combination of such securities and cash. All
    amounts payable hereunder shall be payable in full, as soon as
    reasonably practicable, but in no event later than ten
    (10) business days, following the Change in Control.



 



    (c) Certain Terminations of Service Prior to Change in
    Control. Any Participant who incurs a Termination of Service
    under any circumstances other than involuntary Termination of
    Service for Cause or resignation without Good Reason on or after
    the date on which the Company entered into an agreement in
    principle the consummation of which would constitute a Change in
    Control, but prior to such consummation, and such Change in
    Control actually occurs, shall be treated, solely for purposes
    of the Plan (including this Section 15), as continuing in
    the Company’s, or the applicable Affiliate’s,
    employment or service until the occurrence of such Change in
    Control and to have been Terminated under such circumstances
    immediately thereafter.



 



    (d) Termination, Amendment, and Modifications of Change
    in Control Provisions. Notwithstanding any other provision
    of the Plan or any Award Agreement provision, the provisions of
    this Section 15 may not be terminated, amended, or modified
    on or after the date of a Change in Control to materially impair
    any Participant’s Award theretofore granted and then
    outstanding under the Plan without the prior written consent of
    such Participant.



 



    (e) No Implied Rights; Other Limitations. No
    Participant shall have any right to prevent the consummation of
    any of the acts described in Section 4(d) or this
    Section 15 affecting the number of Shares available to, or
    other entitlement of, such Participant under the Plan or such
    Participant’s Award. Any actions or determinations of the
    Committee under this Section 15 need not be uniform as to
    all outstanding Awards, nor treat all Participants identically.
    Notwithstanding the foregoing provisions of this
    Section 15, the Committee shall determine the adjustments
    provided in this Section 15: (i) subject to
    Section 17(g)(vi), and (ii) after taking into account,
    among other things, to the extent applicable, the provisions of
    the Code applicable to Incentive Stock Options, and in no event
    may any ISO be exercised after ten (10) years from the
    Grant Date thereof.





    

    24








 







    16. Amendment and Termination.



 



    (a) Amendment and Termination of the Plan. The Board
    may, at any time and with or without prior notice, amend, alter,
    suspend or terminate the Plan, retroactively or otherwise, but
    no such amendment, alteration, suspension or termination of the
    Plan shall be made which would materially impair the previously
    accrued rights of any Participant with respect to a previously
    granted Award without such Participant’s consent, except
    any such amendment made to comply with applicable law, tax
    rules, stock exchange rules or accounting rules. In addition, no
    such amendment shall be made without the approval of the
    Company’s stockholders to the extent such approval is
    required by any applicable law, tax rules, stock exchange rules
    or accounting rules (including as necessary to comply with any
    rules or requirements of any securities exchange or inter-dealer
    quotation system on which the Shares may be listed or quoted or
    to prevent the Company from being denied a tax deduction under
    Section 162(m) of the Code).



 



    (b) Amendment of Awards. Subject to the immediately
    following sentence, the Committee may unilaterally amend or
    alter the terms of any Award theretofore granted, including any
    Award Agreement, retroactively or otherwise, but no such
    amendment shall cause an Award that is intended to qualify as a
    Performance Compensation Award not to so qualify or otherwise be
    inconsistent with the terms and conditions of the Plan or
    materially impair the previously accrued rights of the
    Participant to whom such Award was granted with respect to such
    Award without his or her consent, except such an amendment made
    to cause the Plan or such Award to comply with applicable law,
    tax rules, stock exchange rules or accounting rules. Except
    pursuant to Section 4(d) or as approved by the
    Company’s stockholders, during any period that the Company
    is subject to the reporting requirements of the Exchange Act,
    the terms of an outstanding Option or SAR may not be amended to
    reduce the Option Price or Grant Price thereof, an outstanding
    Option or SAR may not be cancelled in exchange for cash, the
    granting of an Option or SAR to the Participant at a lower
    Option Price or Grant Price, or the granting to the Participant
    another Award of a different type, and no Option or SAR shall
    otherwise be subject to any action that is considered a
    “repricing” for purposes of the stockholder approval
    rules of the Applicable Exchange.



 



    17. Tax Withholding and Other Tax Matters.



 



    (a) Tax Withholding. The Company
    and/or any
    Affiliate are authorized to withhold from any Award granted or
    payment due under the Plan the amount of all Federal, state,
    local and
    non-United
    States taxes due in respect of such Award or payment and take
    any such other action as may be necessary or appropriate, as
    determined by the Committee, to satisfy all obligations for the
    payment of such taxes. No later than the date as of which an
    amount first becomes includible in the gross income or wages of
    a Participant for federal, state, local, or
    non-U.S. tax
    purposes with respect to any Award, such Participant shall pay
    to the Company, or make arrangements satisfactory to the
    Committee regarding the payment of, any federal, state, local or
    non-U.S. taxes
    or social security (or similar) contributions of any kind
    required by law to be withheld with respect to such amount. The
    obligations of the Company under the Plan shall be conditional
    on such payment or satisfactory arrangements (as determined by
    the Committee in its discretion), and the Company and the
    Affiliates shall, to the extent permitted by law, have the right
    to deduct any such taxes from any payment otherwise due to such
    Participant, whether or not under the Plan.



 



    (b) Withholding or Tendering Shares. Without
    limiting the generality of Section 17(a), subject to any
    applicable laws, a Participant may (unless disallowed by the
    Committee) elect to satisfy or arrange to satisfy, in whole or
    in part, the tax obligations incident to an Award by:
    (i) electing to have the Company withhold Shares or other
    property otherwise deliverable to such Participant pursuant to
    his or her Award (provided, however, that the
    amount of any Shares so withheld shall not exceed the amount
    necessary to satisfy required Federal, state, local and
    non-United
    States withholding obligations using the minimum statutory
    withholding rates for Federal, state, local
    and/or
    non-U.S. tax
    purposes, including payroll taxes, that are applicable to
    supplemental taxable income)
    and/or
    (ii) tendering to the Company Shares already owned by such
    Participant (or by such Participant and his or her spouse






    

    25








 







    jointly) and either previously acquired by the Participant on
    the open market or held by the Participant for at least six
    (6) months at the time of exercise or payment (or which
    meet any such other requirements as the Committee may determine
    are necessary in order to avoid an accounting earnings charge on
    account of the use of such Shares to satisfy such tax
    obligations), based, in each case, on the Fair Market Value of
    the Common Stock on the payment date as determined by the
    Committee. All such elections shall be irrevocable, made in
    writing, signed by the Participant, and shall be subject to any
    restrictions or limitations that the Committee, in its sole
    discretion, deems appropriate. The Committee may establish such
    procedures as it deems appropriate, including making irrevocable
    elections, for settlement of withholding obligations with Common
    Stock.



 



    (c) Restrictions. The satisfaction of tax
    obligations pursuant to this Section 17 shall be subject to
    such restrictions as the Committee may impose, including any
    restrictions required by applicable law or the rules and
    regulations of the SEC, and shall be construed consistent with
    an intent to comply with any such applicable laws, rule and
    regulations.



 



    (d) Special ISO Obligations. The Committee may
    require a Participant to give prompt written notice to the
    Company concerning any disposition of Shares received upon the
    exercise of an ISO within: (i) two (2) years from the
    Grant Date such ISO to such Participant or (ii) one
    (1) year from the transfer of such Shares to such
    Participant or (iii) such other period as the Committee may
    from time to time determine. The Committee may direct that a
    Participant with respect to an ISO undertake in the applicable
    Award Agreement to give such written notice described in the
    preceding sentence, at such time and containing such information
    as the Committee may prescribe,
    and/or that
    the certificates evidencing Shares acquired by exercise of an
    ISO refer to such requirement to give such notice.



 



    (e) Section 83(b) Election. If a Participant
    makes an election under Section 83(b) of the Code to be
    taxed with respect to an Award as of the date of transfer of
    Shares rather than as of the date or dates upon which the
    Participant would otherwise be taxable under Section 83(a)
    of the Code, such Participant shall deliver a copy of such
    election to the Company upon or prior to the filing such
    election with the Internal Revenue Service. Neither the Company
    nor any Affiliate shall have any liability or responsibility
    relating to or arising out of the filing or not filing of any
    such election or any defects in its construction.



 



    (f) No Guarantee of Favorable Tax Treatment.
    Although the Company intends to administer the Plan so that
    Awards will be exempt from, or will comply with, the
    requirements of Code Section 409A, the Company does not
    warrant that any Award under the Plan will qualify for favorable
    tax treatment under Code Section 409A or any other
    provision of federal, state, local, or
    non-United
    States law. The Company shall not be liable to any Participant
    for any tax, interest, or penalties the Participant might owe as
    a result of the grant, holding, vesting, exercise, or payment of
    any Award under the Plan.



 



    (g) Nonqualified Deferred Compensation.



 



    (i) It is the intention of the Company that no Award shall
    be deferred compensation subject to Code Section 409A
    unless and to the extent that the Committee specifically
    determines otherwise as provided in paragraph (ii) of this
    Section 17(g), and the Plan and the terms and conditions of
    all Awards shall be interpreted and administered accordingly.



 



    (ii) The terms and conditions governing any Awards that the
    Committee determines will be subject to Section 409A of the
    Code, including any rules for payment or elective or mandatory
    deferral of the payment or delivery of Shares or cash pursuant
    thereto, and any rules regarding treatment of such Awards in the
    event of a Change in Control, shall be set forth in the
    applicable Award Agreement and shall be intended to comply in
    all respects with Section 409A of the Code, and the Plan
    and the terms and conditions of such Awards shall be interpreted
    and administered accordingly.



 



    (iii) The Committee shall not extend the period to exercise
    an Option or Stock Appreciation Right to the extent that such
    extension would cause the Option or Stock Appreciation Right to
    become subject to Code Section 409A.





    

    26








 







    (iv) No Dividend Equivalents shall relate to Shares
    underlying an Option or SAR unless such Dividend Equivalent
    rights are explicitly set forth as a separate arrangement and do
    not cause any such Option or SAR to be subject to Code
    Section 409A.



 



    (v) Notwithstanding the provisions of Section 4(d) to
    the contrary, (1) any adjustments made pursuant to
    Section 4(d) to Awards that are considered “deferred
    compensation” subject to Section 409A of the Code
    shall be made in compliance with the requirements of
    Section 409A of the Code; (2) any adjustments made
    pursuant to Section 4(d) to Awards that are not considered
    “deferred compensation” subject to Section 409A
    of the Code shall be made in such a manner as to ensure that
    after such adjustment, the Awards either (A) continue not
    to be subject to Section 409A of the Code or (B) comply
    with the requirements of Section 409A of the Code; and
    (3) in any event, neither the Committee nor the Board shall
    have any authority to make any adjustments, substitutions or
    changes pursuant to Section 4(d) to the extent the
    existence of such authority would cause an Award that is not
    intended to be subject to Section 409A of the Code at the
    Grant Date thereof to be subject to Section 409A of the
    Code.



 



    (vi) If any Award is subject to Section 409A of the
    Code, the provisions of Section 15 shall be applicable to
    such Award only to the extent specifically provided in the Award
    Agreement and permitted pursuant to paragraph (ii) of this
    Section 17(g).



 



    18. Limits Of Liability; Indemnification.



 



    (a) Limits of Liability. Any liability of the
    Company or an Affiliate to any Participant with respect to any
    Award shall be based solely upon contractual obligations created
    by the Plan and the Award Agreement.



 



    (i) None of the Company, any Affiliate, any member of the
    Board or the Committee or any other person participating in any
    determination of any question under the Plan, or in the
    interpretation, administration or application of the Plan, shall
    have any liability, in the absence of bad faith, to any party
    for any action taken or not taken in connection with the Plan,
    except as may expressly be provided by statute.



 



    (ii) Each member of the Committee, while serving as such,
    shall be considered to be acting in his or her capacity as a
    director of the Company. Members of the Board of Directors and
    members of the Committee acting under the Plan shall be fully
    protected in relying in good faith upon the advice of counsel
    and shall incur no liability except for gross negligence or
    willful misconduct in the performance of their duties.



 



    (iii) The Company shall not be liable to a Participant or
    any other person as to: (i) the non-issuance of Shares as
    to which the Company has been unable to obtain from any
    regulatory body having relevant jurisdiction the authority
    deemed by the Committee or the Company’s counsel to be
    necessary to the lawful issuance and sale of any Shares
    hereunder, and (ii) any tax consequence expected, but not
    realized, by any Participant or other person due to the receipt,
    exercise or settlement of any Option or other Award.



 



    (b) Indemnification. Subject to the requirements of
    Delaware law, each individual who is or shall have been a member
    of the Committee or of the Board, or an officer of the Company
    to whom authority was delegated in accordance with
    Section 3, shall be indemnified and held harmless by the
    Company against and from any loss, cost, liability, or expense
    that may be imposed upon or reasonably incurred by him or her in
    connection with or resulting from any claim, action, suit, or
    proceeding to which he or she may be a party or in which he or
    she may be involved by reason of any action taken or failure to
    act under the Plan and against and from any and all amounts paid
    by him or her in settlement thereof, with the Company’s
    approval, or paid by him or her in satisfaction of any judgment
    in any such action, suit, or proceeding against him or her,
    provided he or she shall give the Company an opportunity,
    at its own expense, to handle and defend the same before he or
    she undertakes to handle and defend it on his or her own behalf,
    unless such loss, cost, liability, or expense is a result of the
    individual’s own willful misconduct or except as provided
    by statute. The foregoing right of






    

    27








 







    indemnification shall not be exclusive of any other rights of
    indemnification to which such individual may be entitled under
    the Company’s Certificate of Incorporation or By-Laws, as a
    matter of law, or otherwise, or any power that the Company may
    have to indemnify or hold harmless such individual.



 



    19. Successors. All obligations of the
    Company under the Plan with respect to Awards granted hereunder
    shall be binding on any successor to the Company, whether the
    existence of such successor is the result of a direct or
    indirect purchase, merger, consolidation, or otherwise, of all
    or substantially all of the business
    and/or
    assets of the Company.



 



    20. Termination, Rescission and Recapture of
    Awards.



 



    (a) Each Award under the Plan is intended to align the
    Participant’s long-term interests with those of the
    Company. Accordingly, the Company may terminate any outstanding,
    unexercised, unexpired, unpaid, or deferred Awards
    (“Termination”), rescind any exercise, payment
    or delivery pursuant to the Award
    (“Rescission”), or recapture any Shares
    (whether restricted or unrestricted) or proceeds from the
    Participant’s sale of Shares issued pursuant to the Award
    (“Recapture”), if the Participant does not
    comply with the conditions of subsections (b) and
    (c) of this Section 20 (collectively, the
    “Conditions”).



 



    (b) A Participant shall not, without the Company’s
    prior written authorization, disclose to anyone outside the
    Company, or use in other than the Company’s business, any
    proprietary or confidential information or material, as those or
    other similar terms are used in any applicable patent,
    confidentiality, inventions, secrecy, or other agreement between
    the Participant and the Company or an Affiliate with regard to
    any such proprietary or confidential information or material.



 



    (c) If the Company determines, in its sole and absolute
    discretion, that (i) a Participant has violated any of the
    Conditions or (ii) during his or her employment or service
    with the Company or any Affiliate, a Participant (x) has
    rendered services to or otherwise directly or indirectly engaged
    in or assisted, any organization or business that, in the
    judgment of the Company in its sole and absolute discretion, is
    or is working to become competitive with the Company or an
    Affiliate; (y) has solicited any non-administrative
    employee of the Company or any Affiliate to terminate employment
    with the Company or such Affiliate; or (z) has engaged in
    activities which are materially prejudicial to or in conflict
    with the interests of the Company or an Affiliate, including any
    breaches of fiduciary duty or the duty of loyalty, then the
    Company may, in its sole and absolute discretion, impose a
    Termination, Rescission,
    and/or
    Recapture with respect to any or all of the Participant’s
    relevant Awards, Shares, and the proceeds thereof.



 



    (d) Within ten days after receiving notice from the Company
    of any such activity described in Section 20(c) above, the
    Participant shall deliver to the Company the Shares acquired
    pursuant to the Award, or, if Participant has sold the Shares,
    the gain realized, or payment received as a result of the
    rescinded exercise, payment, or delivery; provided that
    if the Participant returns Shares that the Participant purchased
    pursuant to the exercise of an Option (or the gains realized
    from the sale of such Common Stock), the Company shall promptly
    refund the exercise price, without earnings, that the
    Participant paid for the Shares. Any payment by the Participant
    to the Company pursuant to this Section shall be made either in
    cash or by returning to the Company the number of Shares that
    the Participant received in connection with the rescinded
    exercise, payment, or delivery. It shall not be a basis for
    Termination, Rescission or Recapture if after a
    Participant’s Termination of Service, the Participant
    purchases, as an investment or otherwise, stock or other
    securities of an organization or business, so long as
    (i) such stock or other securities are listed upon a
    recognized securities exchange or traded over-the-counter, and
    (ii) such investment does not represent more than a five
    percent (5%) equity interest in the organization or business.



 



    (e) Notwithstanding the foregoing provisions of this
    Section, the Company has sole discretion not to require
    Termination, Rescission
    and/or
    Recapture, and its determination not to require Termination,
    Rescission
    and/or
    Recapture with respect to any particular act by a particular
    Participant or Award shall not in any way reduce or eliminate
    the Company’s authority to require Termination, Rescission
    and/or
    Recapture with respect to any other act or Participant or Award.
    Nothing in this Section shall






    

    28








 







    be construed to impose obligations on the Participant to refrain
    from engaging in lawful competition with the Company after the
    termination of employment that does not violate
    subsections (b) or (c) of this Section, other than any
    obligations that are part of any separate agreement between the
    Company or an Affiliate and the Participant or that arise under
    applicable law.



 



    (f) All administrative and discretionary authority given to
    the Company under this Section shall be exercised by the most
    senior human resources executive of the Company or such other
    person or committee (including the Committee) as the Committee
    may designate from time to time.



 



    (g) If any provision within this Section is determined to
    be unenforceable or invalid under any applicable law, such
    provision will be applied to the maximum extent permitted by
    applicable law, and shall automatically be deemed amended in a
    manner consistent with its objectives and any limitations
    required under applicable law. Notwithstanding the foregoing,
    but subject to any contrary terms set forth in any Award
    Agreement, this Section shall not be applicable to any
    Participant from and after his or her Termination of Service
    after a Change in Control.



 



    21. Recoupment of Awards. To the extent
    permitted or required by applicable law, and without obtaining
    the approval or consent of the Company’s shareholders or of
    any Participant, a Participant may be required by the Committee
    to reimburse the Company for all or any portion of any Awards
    granted under the Plan (“Reimbursement”), or
    the Termination, Rescission or Recapture of any Award may be
    required by the Committee, if and to the extent:



 



    (a) the granting, vesting, or payment of such Award was
    based on financial results that were subsequently the subject of
    an accounting restatement due to material noncompliance of the
    Company with any financial reporting requirement under the
    securities laws; and



 



    (b) a lower granting, vesting, or payment of such Award
    would have occurred based on the restated results;



 



    provided that the Company will not seek Reimbursement,
    Termination, Rescission or Recapture of any such Awards that
    were granted, paid and vested under the Plan more than three
    years prior to the date on which the Company is required to
    prepare the relevant restatement.



 



    22. Miscellaneous.



 



    (a) Drafting Context; Captions. Except where
    otherwise indicated by the context, any masculine term used
    herein also shall include the feminine; the plural shall include
    the singular and the singular shall include the plural. The
    words “Section,” and “paragraph” herein
    shall refer to provisions of the Plan, unless expressly
    indicated otherwise. The words “include,”
    “includes,” and “including” herein shall be
    deemed to be followed by “without limitation” whether
    or not they are in fact followed by such words or words of
    similar import, unless the context otherwise requires. The
    headings and captions appearing herein are inserted only as a
    matter of convenience. They do not define, limit, construe, or
    describe the scope or intent of the provisions of the Plan.



 



    (b) Severability. In the event any provision of the Plan
    shall be held illegal or invalid for any reason, the illegality
    or invalidity shall not affect the remaining parts of the Plan,
    and the Plan shall be construed and enforced as if the illegal
    or invalid provision had not been included.



 



    (c) Exercise and Payment of Awards. An Award shall
    be deemed exercised or claimed when the Secretary of the Company
    or any other Company official or other person designated by the
    Committee for such purpose receives appropriate Notice from a
    Participant, in form acceptable to the Committee, together with
    payment of the applicable Option Price, Grant Price or other
    purchase price, if any, and compliance with Section 17, in
    accordance with the Plan and such Participant’s Award
    Agreement.



 



    (d) Deferrals. Subject to applicable law, the
    Committee may from time to time establish procedures pursuant to
    which a Participant may defer on an elective or mandatory basis
    receipt of all or a portion of the cash or Shares subject to an
    Award on such terms and conditions as the Committee






    

    29








 







    shall determine, including those of any deferred compensation
    plan of the Company or any Affiliate specified by the Committee
    for such purpose.



 



    (e) No Effect on Other Plans. Neither the adoption
    of the Plan nor anything contained herein shall affect any other
    compensation or incentive plans or arrangements of the Company
    or any Affiliate, or prevent or limit the right of the Company
    or any Affiliate to establish any other forms of incentives or
    compensation for their directors, officers, eligible employees
    or consultants or grant or assume options or other rights
    otherwise than under the Plan.



 



    (f) Section 16 of Exchange Act and
    Section 162(m) of the Code. The provisions and
    operation of the Plan are intended to ensure that no transaction
    under the Plan is subject to (and not exempt from) the
    short-swing profit recovery rules of Section 16(b) of the
    Exchange Act. Unless otherwise stated in the Award Agreement,
    notwithstanding any other provision of the Plan, any Award
    granted to an Insider shall be subject to any additional
    limitations set forth in any applicable exemptive rule under
    Section 16(b) of the Exchange Act (including
    Rule 16b-3)
    that are requirements for the application of such exemptive
    rule, and the Plan and the Award Agreement shall be deemed
    amended to the extent necessary to conform to such limitations.
    Furthermore, notwithstanding any other provision of the Plan or
    an Award Agreement, any Performance Compensation Award shall be
    subject to any applicable limitations set forth in Code
    Section 162(m) or any regulations or rulings issued
    thereunder (including any amendment to the foregoing) that are
    requirements for qualification as “other performance-based
    compensation” as described in Code
    Section 162(m)(4)(C), and the Plan and the Award Agreement
    shall be deemed amended to the extent necessary to conform to
    such requirements and no action of the Committee that would
    cause such Award not to so qualify shall be effective



 



    (g) Requirements of Law; Limitations on Awards.



 



    (i) The granting of Awards and the issuance of Shares under
    the Plan shall be subject to all applicable laws, rules, and
    regulations, and to such approvals by any governmental agencies
    or national securities exchanges as may be required.



 



    (ii) If at any time the Committee shall determine, in its
    discretion, that the listing, registration
    and/or
    qualification of Shares upon any securities exchange or under
    any state, Federal or
    non-United
    States law, or the consent or approval of any governmental
    regulatory body, is necessary or desirable as a condition of, or
    in connection with, the sale or purchase of Shares hereunder,
    the Company shall have no obligation to allow the grant,
    exercise or payment of any Award, or to issue or deliver
    evidence of title for Shares issued under the Plan, in whole or
    in part, unless and until such listing, registration,
    qualification, consent
    and/or
    approval shall have been effected or obtained, or otherwise
    provided for, free of any conditions not acceptable to the
    Committee.



 



    (iii) If at any time counsel to the Company shall be of the
    opinion that any sale or delivery of Shares pursuant to an Award
    is or may be in the circumstances unlawful or result in the
    imposition of excise taxes on the Company or any Affiliate under
    the statutes, rules or regulations of any applicable
    jurisdiction, the Company shall have no obligation to make such
    sale or delivery, or to make any application or to effect or to
    maintain any qualification or registration under the Securities
    Act, or otherwise with respect to Shares or Awards and the right
    to exercise or payment of any Option or Award shall be suspended
    until, in the opinion of such counsel, such sale or delivery
    shall be lawful or will not result in the imposition of excise
    taxes on the Company or any Affiliate.



 



    (iv) Upon termination of any period of suspension under
    this Section 22(g), any Award affected by such suspension
    which shall not then have expired or terminated shall be
    reinstated as to all Shares available before such suspension and
    as to the Shares which would otherwise have become available
    during the period of such suspension, but no suspension shall
    extend the term of any Award.





    

    30








 







    (v) The Committee may require each person receiving Shares
    in connection with any Award under the Plan to represent and
    agree with the Company in writing that such person is acquiring
    such Shares for investment without a view to the distribution
    thereof,
    and/or
    provide such other representations and agreements as the
    Committee may prescribe. The Committee, in its absolute
    discretion, may impose such restrictions on the ownership and
    transferability of the Shares purchasable or otherwise
    receivable by any person under any Award as it deems
    appropriate. Any such restrictions shall be set forth in the
    applicable Award Agreement, and the certificates evidencing such
    shares may include any legend that the Committee deems
    appropriate to reflect any such restrictions.



 



    (vi) An Award and any Shares received upon the exercise or
    payment of an Award shall be subject to such other transfer
    and/or
    ownership restrictions
    and/or
    legending requirements as the Committee may establish in its
    discretion and may be referred to on the certificates evidencing
    such Shares, including restrictions under applicable Federal
    securities laws, under the requirements of any stock exchange or
    market upon which such Shares are then listed
    and/or
    traded, and under any blue sky or state securities laws
    applicable to such Shares.



 



    (h) Participants Deemed to Accept Plan. By accepting
    any benefit under the Plan, each Participant and each person
    claiming under or through any such Participant shall be
    conclusively deemed to have indicated their acceptance and
    ratification of, and consent to, all of the terms and conditions
    of the Plan and any action taken under the Plan by the Board,
    the Committee or the Company, in any case in accordance with the
    terms and conditions of the Plan.



 



    (i) Governing Law. The Plan and each Award Agreement
    shall be governed by the laws of the State of Delaware,
    excluding any conflicts or choice of law rule or principle that
    might otherwise refer construction or interpretation of the Plan
    or an Award Agreement to the substantive law of another
    jurisdiction.



 



    (j) Plan Unfunded. The Plan shall be an unfunded
    plan for incentive compensation. The Company shall not be
    required to establish any special or separate fund or to make
    any other segregation of assets to assure the issuance of Shares
    or the payment of cash upon exercise or payment of any Award.
    Proceeds from the sale of Shares pursuant to Options or other
    Awards granted under the Plan shall constitute general funds of
    the Company. With respect to any payments not yet made to any
    person pursuant to an Award, nothing contained in the Plan or
    any Award Agreement shall give such person any rights that are
    greater than those of a general creditor of the Company or any
    Affiliate, and a Participant’s rights under the Plan at all
    times constitute an unsecured claim against the general assets
    of the Company for the payment any amounts as they come due
    under the Plan. Neither the Participant nor the
    Participant’s duly-authorized transferee or beneficiaries
    shall have any claim against or rights in any specific assets,
    Shares, or other funds of the Company or any Affiliate.



 



    (k) Administration Costs. The Company shall bear all
    costs and expenses incurred in administering the Plan, including
    expenses of issuing Shares pursuant to any Options or other
    Awards granted hereunder.



 



    (l) Uncertificated Shares. To the extent that the
    Plan provides for issuance of certificates to reflect the
    transfer of Shares, the transfer of such Shares may nevertheless
    be effected on a noncertificated basis, to the extent not
    prohibited by applicable law or the rules of any stock exchange.



 



    (m) No Fractional Shares. An Option or other Award
    shall not be exercisable with respect to a fractional Share or
    the lesser of fifty (50) shares or the full number of
    Shares then subject to the Option or other Award. No fractional
    Shares shall be issued upon the exercise or payment of an Option
    or other Award.



 



    (n) Affiliate Eligible Individuals. In the case of a
    grant of an Award to any Eligible Individual of an Affiliate,
    the Company may, if the Committee so directs, issue or transfer
    the Shares, if any, covered by the Award to such Affiliate, for
    such lawful consideration as the Committee may specify, upon the
    condition or understanding that such Affiliate will transfer
    such Shares to such Eligible Individual in






    

    31








 







    accordance with the terms and conditions of such Award and those
    of the Plan. The Committee may also adopt procedures regarding
    treatment of any Shares so transferred to an Affiliate that are
    subsequently forfeited or canceled.



 



    (o) Data Protection. By participating in the Plan, each
    Participant consents to the collection, processing, transmission
    and storage by the Company, in any form whatsoever, of any data
    of a professional or personal nature which is necessary for the
    purposes of administering the Plan. The Company may share such
    information with any Affiliate, any trustee, its registrars,
    brokers, other third-party administrator or any person who
    obtains control of the Company or any Affiliate or any division
    respectively thereof.



 



    (p) Right of Offset. The Company and the Affiliates
    shall have the right to offset against the obligations to make
    payment or issue any Shares to any Participant under the Plan,
    any outstanding amounts (including travel and entertainment
    advance balances, loans, tax withholding amounts paid by the
    employer or amounts repayable to the Company or any Affiliate
    pursuant to tax equalization, housing, automobile or other
    employee programs) such Participant then owes to the Company or
    any Affiliate and any amounts the Committee otherwise deems
    appropriate pursuant to any tax equalization policy or
    agreement, in each case to the extent permitted by applicable
    law and not in violation of Code Section 409A.



 



    (q) Participants Based Outside of the United States.
    The Committee may grant awards to Eligible Individuals who are
    non-United
    States nationals, or who reside outside the United States or who
    are not compensated from a payroll maintained in the United
    States or who are otherwise subject to (or could cause the
    Company to be subject to) legal or regulatory provisions of
    countries or jurisdictions outside the United States (and, in
    any case, who are not and are not expected to be “covered
    employees” within the meaning of Code Section 162(m)),
    on such terms and conditions different from those specified in
    the Plan as may, in the judgment of the Committee, be necessary
    or desirable to foster and promote achievement of the purposes
    of the Plan and comply with such legal or regulatory provisions,
    and, in furtherance of such purposes, the Committee may make or
    establish such modifications, amendments, procedures or subplans
    as may be necessary or advisable to comply with such legal or
    regulatory requirements (including to maximize tax efficiency).





    

    32