exv4w1






Exhibit 4.1




WESCO INTERNATIONAL, INC.

1999 LONG-TERM INCENTIVE PLAN

(As Restated to be Effective May 21, 2008)




ARTICLE I

PURPOSE AND ADOPTION OF THE PLAN




          1.01 Purpose. The purpose of the WESCO International, Inc. 1999 Long-Term Incentive Plan (as
the same may be amended from time to time, the “Plan”) is to assist WESCO International, Inc., a
Delaware corporation (the “Company”), and its Subsidiaries (as defined below) in attracting and
retaining highly competent key employees and non-employee directors and to act as an incentive in
motivating selected key employees and non-employee directors of the Company and its Subsidiaries
(as defined below) to achieve long-term corporate objectives.




          1.02 Adoption and Term. The Plan was initially approved by the Board of Directors of the
Company (the “Board”) and the stockholders of the Company to be effective as of May 11, 1999, the
effective date of the initial public offering of the Company’s Common Stock. This is a complete
restatement of the Plan to be effective as of May 21, 2008 (the “Effective Date”), the date of
approval of the Plan as restated herein by the stockholders of the Company. The Plan shall remain
in effect until the tenth anniversary of the Effective Date, unless terminated earlier by the
Board. In addition, the Performance Goals (as defined below) must be reapproved by the Company’s
stockholders at least every five (5) years for purposes of complying with the deductibility
requirements of Section 162(m) of the Code (as defined below) applicable to performance-based
awards to “covered employees” as defined in Section 162(m) and the regulations thereunder.




ARTICLE II

DEFINITIONS




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




          2.01 Accelerated Ownership Options shall have the meaning given to such term in Section 6.04.




          2.02 Acquiring Corporation shall have the meaning given to such term in Section 11.08(b).




          2.03 Award means any grant to a Participant of one or a combination of Non-Qualified Stock
Options, Incentive Stock Options, Stock Appreciation Rights or Stock Units described in Article VI,
Restricted Shares or Restricted Units described in Article VII, Performance Awards described in
Article VIII, other stock-based Awards described in Article IX and short-term cash incentive Awards
described in Article X.




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




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




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




          2.07 Board shall have the meaning given to such term in Section 1.02.




          2.08 Change in Control means the first to occur of the following events after the Effective
Date: (a) the acquisition by any person, entity or “group” (as defined in Section 13(d) of the
Securities Exchange Act of 1934, as amended), other than the Company, its Subsidiaries, any
employee benefit plan of the Company or its Subsidiaries, or Cypress Merchant Banking Partners L.P.
or any successor investment vehicle, of 30% or more of the combined voting power of the Company’s
then outstanding voting securities; (b) the merger or consolidation of the Company, as a result of
which persons who were stockholders of the Company immediately prior to such merger or
consolidation, do not, immediately thereafter, own, directly or indirectly, more than 70% of the
combined voting power entitled to






 









 







vote generally in the election of directors of the merged or consolidated company; (c) the
liquidation or dissolution of the Company; (d) the sale, transfer or other disposition of all or
substantially all of the assets of the Company to one or more persons or entities that are not,
immediately prior to such sale, transfer or other disposition, affiliates of the Company; and (e)
during any period of not more than two years, individuals who constitute the Board as of the
beginning of the period and any new director (other than a director designated by a person who has
entered into an agreement with the Company to effect a transaction described in clause (a) or (b)
of this sentence) whose election by the Board or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in
office who were directors at such time or whose election or nomination for election was previously
so approved, cease for any reason to constitute a majority of the Board.




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




          2.10 Committee means the Compensation Committee of the Board.




          2.11 Company shall have the meaning given to such term in Section 1.01.




          2.12 Common Stock means Common Stock of the Company.




          2.13 Date of Grant means the date as of which the Committee grants an Award. If the Committee
contemplates an immediate grant to a Participant, the Date of Grant shall be the date of the
Committee’s action. If the Committee contemplates a date on which the grant is to be made other
than the date of the Committee’s action, the Date of Grant shall be the date so contemplated and
set forth in or determinable from the records of action of the Committee; provided, however, that
the Date of Grant shall not precede the date of the Committee’s action.




          2.14 Effective Date shall have the meaning given to such term in Section 1.02.




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




          2.16 Exercise Price shall have the meaning given to such term in Section 6.01(b).




          2.17 Extraordinary Termination shall have the meaning given to such term in Section 6.03(e).




          2.18 Fair Market Value means a price that is based on the opening, closing, actual, high, low,
or average selling prices of a share of Common Stock on the New York Stock Exchange (“NYSE”) or
other established stock exchange (or exchanges) on the applicable date, the preceding trading day,
the next succeeding trading day, or an average of trading days, as determined by the Committee in
its discretion. Such definition of Fair Market Value shall be specified in the Award Agreement and
may differ depending on whether Fair Market Value is in reference to the grant, exercise, vesting,
or settlement or payout of an Award. If, however, the accounting standards used to account for
equity awards granted to Participants are substantially modified subsequent to the Effective Date
of the Plan, the Committee shall have the ability to determine Fair Market Value based on the
relevant facts and circumstances. If shares of Common Stock are not traded on an established stock
exchange, Fair Market Value shall be determined by the Committee in good faith.




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




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




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




          2.22 Options means all Non-Qualified Stock Options and Incentive Stock Options.




          2.23 Original Option shall have the meaning given to such term in Section 6.04.




          2.24 Participant means a person designated to receive an Award under the Plan in accordance
with Section 5.01.




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





- 2 -









 








          2.26 Performance Goals means any of the following (in absolute terms or relative to one or
more other companies or indices): operating income, return on stockholders’ equity, return on
investment, return on invested assets, stock price appreciation, earnings before interest, taxes,
depreciation and amortization, cash flow, sales growth, margin improvement, income before taxes
(IBT), IBT margin, working capital performance, earnings per share, growth in earnings per share,
expense targets, productivity targets or ratios, attainment of specific milestones in connection
with strategic initiatives and/or customer satisfaction.




          2.27 Permanent Disability means a physical or mental disability or infirmity that prevents the
performance of a Participant’s employment-related duties lasting (or likely to last, based on
competent medical evidence presented to the Board) for a period of six months or longer.
Notwithstanding the foregoing, for purposes of the provisions of the Plan relating to Incentive
Stock Options, “Permanent Disability” shall have the same meaning as under Section 22(e)(3) of the
Code. The Board’s reasoned and good faith judgment of Permanent Disability shall be final and shall
be based on such competent medical evidence as shall be presented to it by such Participant or by
any physician or group of physicians or other competent medical expert employed by the Participant
or the Company to advise the Board.




          2.28 Plan shall have the meaning given to such term in Section 1.01.




          2.29 Prior Plans shall have the meaning given to such term in Section 4.01.




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




          2.31 Restricted Unit means units representing the right to receive Common Stock in the future
subject to restrictions imposed in connection with Awards granted under Section 8.




          2.32 Retirement means a Participant’s retirement at or after age 65.




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




          2.34 Stock Units means Awards consisting of the right to receive shares of Common Stock in the
future.




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




ARTICLE III

ADMINISTRATION




          3.01 Committee. The Plan shall be administered by the Committee. The Committee shall have
exclusive and final authority in each determination, interpretation or other action affecting the
Plan and its Participants. The Committee shall have the sole discretionary authority to interpret
the Plan, to establish and modify administrative rules for the Plan, to impose such conditions and
restrictions on Awards as it determines appropriate, and to take such steps in connection with the
Plan and Awards granted hereunder as it may deem necessary or advisable. The Committee may, subject
to compliance with applicable legal requirements, with respect to Participants who are not subject
to Section 16(b) of the Exchange Act or Section 162(m) of the Code, delegate such of its powers and
authority under the Plan as it deems appropriate to designated officers or employees of the
Company. In addition, the Board may exercise any of the authority conferred upon the Committee
hereunder. In the event of any such delegation of authority or exercise of authority by the Board,
references in the Plan to the Committee shall be deemed to refer to the delegate of the Committee
or the Board, as the case may be.




          3.02 Indemnification. Each person who is or shall have been a member of the Board, or a
Committee appointed by the Board, or an officer of the Company to whom authority was delegated in
accordance with the Plan 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; provided, however, that the foregoing indemnification shall not apply
to any loss, cost, liability, or expense that is a result of his






- 3 -









 







or her own willful misconduct. The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such persons may be entitled under the Company’s
Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the
Company may have to indemnify them or hold them harmless.




ARTICLE IV

SHARES




          4.01 Number of Shares Issuable. The total number of shares of Common Stock authorized to be
issued under the Plan shall be the sum of (a) 6,936,000 shares, (b) the number of shares of Common
Stock covered by any unexercised portions of stock options granted under the Company’s 1994 Stock
Option Plan, 1998 Stock Option Plan or Stock Option Plan for Branch Employees (the “Prior Plans”)
that are canceled or terminated after the Effective Date and (c) the number of shares of Common
Stock surrendered by Participants after the Effective Date to pay all or a portion of the exercise
price and/or withholding taxes with respect to the exercise of stock options granted under any of
the Prior Plans. Notwithstanding the foregoing, no more than a total of 800,000 shares of Common
Stock may be awarded as Incentive Stock Options or issued under the Plan as Awards under Articles
VII, VIII and IX. The number of shares available for issuance under the Plan and as specific types
of Awards shall be subject to adjustment in accordance with Section 11.08. The shares to be offered
under the Plan shall be authorized and unissued shares of Common Stock, or issued shares of Common
Stock which will have been reacquired by the Company.




          4.02 Shares Subject to Terminated Awards. Shares of Common Stock covered by any unexercised
portions of terminated Options (including canceled Options), Stock Appreciation Rights or Stock
Units granted under Article VI, terminated Restricted Units or shares of Common Stock forfeited as
provided in Article VII and shares of Common Stock subject to any Award that are otherwise
surrendered by a Participant or terminated may be subject to new Awards under the Plan.




ARTICLE V

PARTICIPATION




          5.01 Eligible Participants. Participants in the Plan shall be such key employees and
non-employee directors of the Company and its Subsidiaries as the Committee, in its sole
discretion, may designate from time to time. The Committee’s designation of a Participant in any
year shall not require the Committee to designate such person to receive Awards in any other year.
The designation of a Participant to receive an Award under one portion of the Plan does not require
the Committee to include such Participant under other portions of the Plan. The Committee shall
consider such factors as it deems pertinent in selecting Participants and in determining the types
and amounts of their respective Awards. The Committee may grant Awards from time to time on a
discretionary basis and/or provide for automatic Awards on a formula basis to a Participant or
designated group of Participants. Subject to adjustment in accordance with Section 11.08, during
any calendar year no Participant shall be granted Awards in respect of more than 1,000,000 shares
of Common Stock (whether through grants of Options, Stock Appreciation Rights or other Awards of
Common Stock or rights with respect thereto) and $2 million in cash; provided, however, that if it
is the Committee’s intention as of the Date of Grant of an Award, as evidenced by the applicable
Award Agreement, that such Award shall be earned by the Participant over a period of more than one
calendar year, then for purposes of applying the foregoing per calendar year limitations, the
shares of Common Stock and/or cash subject to such Award shall be allocated to the first calendar
year in which such shares and/or cash may be earned (determined without regard to possible vesting
as a result of a Change in Control or pursuant to any provision of this Plan authorizing the
Committee to accelerate the vesting of an Award).




ARTICLE VI

STOCK OPTIONS




          6.01 Option Awards.




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




          (b) Exercise Price of Options. The exercise price of each share of Common Stock which may be
purchased upon exercise of any Option granted under the Plan (the “Exercise Price”) shall be
determined by the






- 4 -









 







Committee; provided, however, that, except in the case of any substituted Options described in
Section 11.08(c), the Exercise Price shall in all cases be equal to or greater than the Fair Market
Value on the Date of Grant.




          (c) Designation of Options. Except as otherwise expressly provided in the Plan, the Committee
may designate, at the time of the grant of an Option, such Option as an Incentive Stock Option or a
Non-Qualified Stock Option; provided, however, that an Option may be designated as an Incentive
Stock Option only if the applicable Participant is an employee of the Company or a Subsidiary on
the Date of Grant.




          (d) Special Incentive Stock Option Rules. No Participant may be granted Incentive Stock
Options under the Plan (or any other plans of the Company and its Subsidiaries) that would result
in Incentive Stock Options to purchase shares of Common Stock with an aggregate Fair Market Value
(measured on the Date of Grant) of more than $100,000 first becoming exercisable by such
Participant in any one calendar year. Notwithstanding any other provision of the Plan to the
contrary, no Incentive Stock Option shall be granted to any person who, at the time the Option is
granted, owns stock (including stock owned by application of the constructive ownership rules in
Section 424(d) of the Code) possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any Subsidiary, unless at the time the Incentive Stock Option is
granted the Exercise Price is at least 110% of the Fair Market Value on the Date of Grant of the
Common Stock subject to the Incentive Stock Option and the Incentive Stock Option by its terms is
not exercisable for more than five (5) years from the Date of Grant.




          (e) Rights as a Stockholder. A Participant or a transferee of an Option pursuant to Section
11.04 shall have no rights as a stockholder with respect to the shares of Common Stock covered by
an Option until that Participant or transferee shall have become the holder of record of any such
shares, and no adjustment shall be made with respect to any such shares of Common Stock for
dividends in cash or other property or distributions of other rights on the Common Stock for which
the record date is prior to the date on which that Participant or transferee shall have become the
holder of record of any shares covered by such Option; provided, however, that Participants are
entitled to the adjustments set forth in Section 11.08.




          6.02 Stock Appreciation Rights.




          (a) Stock Appreciation Right Awards. The Committee is authorized to grant to any Participant
one or more Stock Appreciation Rights. Such Stock Appreciation Rights may be granted either
independent of or in tandem with Options granted to the same Participant (including Options granted
under this Plan or any other plans of the Company). Stock Appreciation Rights granted in tandem
with Options may be granted simultaneously with, or, in the case of Non-Qualified Stock Options,
subsequent to, the grant to such Participant of the related Option; provided, however, that: (i)
any Option covering any share of Common Stock shall expire and not be exercisable upon the exercise
of any Stock Appreciation Right with respect to the same share, (ii) any Stock Appreciation Right
covering any share of Common Stock shall expire and not be exercisable upon the exercise of any
related Option with respect to the same share, and (iii) an Option and Stock Appreciation Right
covering the same share of Common Stock may not be exercised simultaneously. Upon exercise of a
Stock Appreciation Right with respect to a share of Common Stock, the Participant shall be entitled
to receive an amount equal to the excess, if any, of (A) the Fair Market Value of a share of Common
Stock on the date of exercise over (B) the Exercise Price of such Stock Appreciation Right
established in the Award Agreement, which amount shall be payable as provided in Section 6.02(c).




          (b) Exercise Price. The Exercise Price established under any Stock Appreciation Right granted
under this Plan shall be determined by the Committee; provided, however, that in any event the
Exercise Price shall be equal to or greater than the Fair Market Value on the Date of Grant and, in
the case of Stock Appreciation Rights granted in tandem with Options, the Exercise Price shall not
be less than the Exercise Price of the related Option and, upon exercise of Stock Appreciation
Rights, the number of shares subject to exercise under any related Option shall automatically be
reduced by the number of shares of Common Stock represented by the Option or portion thereof which
are surrendered as a result of the exercise of such Stock Appreciation Rights.




          (c) Payment of Incremental Value. Any payment which may become due from the Company by reason of a
Participant’s exercise of a Stock Appreciation Right may be paid to the Participant as determined
by the Committee (i) all in cash, (ii) all in Common Stock, or (iii) in any combination of cash and
Common Stock. In the event that all or a portion of the payment is made in Common Stock, the number
of shares of Common Stock delivered in satisfaction of such payment shall be determined by dividing
the amount of such payment or portion thereof by the Fair Market Value on the Exercise Date. No
fractional share of Common Stock shall be issued to make any payment in respect of Stock
Appreciation Rights; if any fractional share would be issuable, the combination of cash and Common
Stock payable to the Participant shall be adjusted as directed by the Committee to avoid the
issuance of any fractional share.








- 5 -









 








          (d) Substitution of Stock Appreciation Rights for Options. The Committee shall have the
ability, without Participant consent, to substitute Stock Appreciation Rights paid only in shares
of Common Stock for outstanding Options (including Options granted under this Plan or any other
plans of the Company); provided, the terms of the substituted Stock Appreciation Rights are the
same as the terms for the Options and the difference between the Fair Market Value of the
underlying shares of Common Stock and the Exercise Price of the Stock Appreciation Rights is
equivalent to the difference between the Fair Market Value of the underlying shares of Common Stock
and the Exercise Price of the Options. If this provision creates material adverse accounting
consequences for the Company, it shall be considered null and void.




          (e) Rights as a Stockholder. A Participant shall have no rights as a stockholder with respect
to the shares of Common Stock covered by an Award of Stock Appreciation Rights unless and until
that Participant shall have become the holder of record of any such shares, and no adjustment shall
be made with respect to any such shares of Common Stock for dividends in cash or other property or
distributions of other rights on the Common Stock for which the record date is prior to the date on
which that Participant shall have become the holder of record of any shares covered by such Stock
Appreciation Rights; provided, however, that Participants are entitled to the adjustments set forth
in Section 11.08.




          6.03 Terms of Stock Options and Stock Appreciation Rights




          (a) Conditions on Exercise. An Award Agreement with respect to Options and Stock Appreciation
Rights may contain such waiting periods, exercise dates and restrictions on exercise (including,
but not limited to, periodic installments) as may be determined by the Committee at the time of
grant; provided, that, for Awards granted after the Effective Date, and subject to the provisions
of any applicable retirement, severance or employment agreement or such terms as may be approved by
the Committee relating to the Participant’s Permanent Disability, death or other termination of
service, the vesting schedule (i) for a non-performance-based Option or Stock Appreciation Right
Award shall not be less than three years or (ii) for a performance-based Option or Stock
Appreciation Right Award shall not be less than one year. Notwithstanding the foregoing, the
vesting of an Option or a Stock Appreciation Right may, but need not, lapse in installments.




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




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



     (ii) Termination of the Award as provided in Section 6.03(e) following the Participant’s
Termination of Employment; or



     (iii) Ten years from the Date of Grant.



          (c) Acceleration of Exercise Time. The Committee, in its sole discretion, shall have the right
(but shall not in any case be obligated), exercisable at any time after the Date of Grant, to
permit the exercise of any Option and Stock Appreciation Rights prior to the time such Option and
Stock Appreciation Rights would otherwise become exercisable under the terms of the related Award
Agreement.




          (d) Extension of Exercise Time. In addition to the extensions permitted under Section 6.03(e)
in the event of Termination of Employment, the Committee, in its sole discretion, shall have the
right (but shall not in any case be obligated), exercisable on or at any time after the Date of
Grant, to permit the exercise of any Option or Stock Appreciation Right after its expiration date
described in Section 6.03(e), subject, however, to the limitations described in Sections 6.03(b)(i)
and (iii).




          (e) Exercise of Options and Stock Appreciation Rights Upon Termination of Employment.




     (i) Extraordinary Termination. Unless otherwise provided in the Award Agreement or otherwise
determined by the Committee at the Date of Grant, in the event that a Participant’s employment with
the Company and the Subsidiaries terminates by reason of the Participant’s death, Permanent
Disability or Retirement (each an “Extraordinary Termination”), then any Options and Stock
Appreciation Rights held by the Participant and then exercisable shall remain exercisable solely
until the first to occur of (A) the first anniversary of the Participant’s termination of
employment or (B) the expiration of the term of the Option or Stock Appreciation Rights unless the
exercise period is extended by the Committee in accordance with Section 6.03(d). Any Options and
Stock Appreciation Rights held by the Participant that are not exercisable at the date of the
Extraordinary Termination shall terminate and be cancelled immediately upon such Extraordinary
Termination, and any Options and Stock



- 6 -









 




Appreciation Rights described in the preceding sentence that are not exercised within the
period described in such sentence shall terminate and be cancelled upon the expiration of such
period.




     (ii) Other Termination of Employment. Unless otherwise provided in the Award Agreement or
otherwise determined by the Committee at or after the Date of Grant, in the event that a
Participant’s employment with the Company and the Subsidiaries terminates for any reason other than
an Extraordinary Termination, any Options and Stock Appreciation Rights held by such Participant
that are exercisable as of the date of such termination shall remain exercisable for a period of 60
days (or, if shorter, during the remaining term of the Options and Stock Appreciation Rights),
unless the exercise period is extended by the Committee in accordance with Section 6.03(d). Any
Options and Stock Appreciation Rights held by the Participant that are not exercisable at the date
of the Participant’s termination of employment shall terminate and be cancelled immediately upon
such termination, and any Options and Stock Appreciation Rights described in the preceding sentence
that are not exercised within the period described in such sentence shall terminate and be
cancelled upon the expiration of such period.



     (iii) Treatment of Incentive Stock Options. Notwithstanding the foregoing, in the case of an
Incentive Stock Option that may be exercisable under the terms of this Section 6.03(e) or the
provisions of the applicable Award Agreement beyond the maximum periods permitted under Section 422
of the Code, such Options shall be deemed to be Non-Qualified Stock Options.



          6.04 Accelerated Ownership Options. With respect to any Option or any stock option granted
under the terms of one of the Prior Plans or otherwise (an “Original Option”), the Committee shall
have the authority to specify, at or after the time of grant of such Original Option, that, subject
to the availability of shares of Common Stock under the Plan, a Participant shall be granted a new
option (referred to as an “Accelerated Ownership Option”) in the event (i) such Participant
exercises all or a part of such Original Option by surrendering previously acquired shares of
Common Stock in full or partial payment of the exercise price under such Original Option, and/or
(ii) a Participant’s withholding tax obligation with respect to the exercise of an Original Option
is satisfied in whole or in part by the delivery of previously acquired shares of Common Stock by
the Participant to the Company or the withholding of shares of Common Stock from the shares
otherwise issuable to the Participant upon the exercise of the Original Option. Each such
Accelerated Ownership Option shall cover a number of shares of Common Stock equal to the number of
shares of Common Stock surrendered in payment of the exercise price under such Original Option
and/or surrendered or withheld to pay withholding taxes with respect to such Original Option. Each
such Accelerated Ownership Option shall have an Exercise Price per share of Common Stock equal to
the Fair Market Value of the Common Stock on the date of exercise of the Original Option in respect
of which the Accelerated Ownership Option was granted and shall expire on the stated expiration
date of the Original Option. An Accelerated Ownership Option shall be exercisable at any time and
from time to time from and after the Date of Grant of such Accelerated Ownership Option, subject to
such restrictions on exercisability as may be imposed in the discretion of the Committee. Any
Accelerated Ownership Option may provide for the grant, when exercised, of subsequent Accelerated
Ownership Options to the extent and upon such terms and conditions, consistent with this Section
6.04, as the Committee in its sole discretion shall specify at or after the time of grant of such
Accelerated Ownership Option. An Accelerated Ownership Option shall contain such other terms and
conditions, which may include a restriction on the transferability of the shares of Common Stock
received upon exercise of the Accelerated Ownership Option, as the Committee in its sole discretion
shall deem desirable and which may be set forth in rules or guidelines adopted by the Committee or
in the Award Agreements evidencing the Accelerated Ownership Options.




          6.05 Option Exercise Procedures. Each Option and Stock Appreciation Right granted under the
Plan shall be exercised by written notice to the Company which must be received by the officer or
employee of the Company designated in the Award Agreement at or before the close of business on the
expiration date of the Award. The Exercise Price of shares purchased upon exercise of an Option
granted under the Plan shall be paid in full in cash by the Participant pursuant to the Award
Agreement; provided, however, that in lieu of such cash a Participant may (if authorized by the
Committee) pay the Exercise Price in whole or in part by delivering (actually or by attestation) to
the Company shares of the Common Stock (which may include Restricted Shares or shares otherwise
issuable in connection with the exercise of the Option, subject to such rules as the Committee
deems appropriate) having a Fair Market Value on the date of exercise of the Option equal to the
Exercise Price for the shares being purchased; except that any portion of the Exercise Price
representing a fraction of a share shall in any event be paid in cash. Payment may also be made, in
the discretion of the Committee and subject to applicable law, by the delivery (including, without
limitation, by fax) to the Company or its designated agent of an executed irrevocable option
exercise form together with irrevocable instructions to a broker-dealer to sell or margin a
sufficient portion of the shares and deliver the sale or margin loan proceeds directly to the
Company to pay for the Exercise Price. The date of exercise of an Option shall be determined under
procedures established by the Committee, and as of the date of exercise the person exercising the
Option shall, as between the Company and such person, be considered for all purposes to be the
owner of the shares of Common Stock with respect to which the Option has been exercised. Any part
of the Exercise Price paid in cash upon the exercise of any Option shall be added to the general
funds of the






- 7 -









 







Company and may be used for any proper corporate purpose. Unless the Committee shall otherwise
determine, any shares of Common Stock transferred to the Company as payment of all or part of the
Exercise Price upon the exercise of any Option shall be held as treasury shares.




          6.06 Deferred Delivery of Option Shares. In lieu of exercising an Option for the immediate
delivery of the underlying shares of Common Stock, a Participant shall have the right, in
accordance with procedures established by the Committee, to elect to receive Stock Units which do
not reflect current ownership of shares of Common Stock, but rather the right to receive delivery
of shares at a later date. Upon such an exercise of an Option, a book account maintained by the
Company for the Participant shall be credited with the shares of Common Stock otherwise issuable
upon the exercise. The number of shares of Common Stock credited to the account shall be delivered
to the Participant at a later date specified by the Participant at the time of the election. During
the deferral period, in the discretion of the Committee, either (i) the account shall be credited
with additional Stock Units reflecting the dividends that would have been received on the Stock
Units if those dividends were reinvested in additional shares of Common Stock or (ii) the deemed
dividends shall be paid to the Participant currently in cash. During the deferral period, the
Company’s obligation to the Participant shall be an unfunded, unsecured promise to deliver shares
of Common Stock at the end of the deferral period.




          6.07 Change in Control. Unless otherwise provided by the Committee in the applicable Award
Agreement, in the event of a Change in Control, all Options and Stock Appreciation Rights
outstanding on the date of such Change in Control shall become immediately and fully exercisable.
Unless otherwise determined by the Committee, the provisions of this Section 6.07 shall not be
applicable to any Options and Stock Appreciation Rights granted to a Participant if any Change in
Control results from such Participant’s beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act) of Common Stock.




ARTICLE VII

RESTRICTED SHARES AND RESTRICTED UNITS




          7.01 Restricted Share and Restricted Unit Awards. The Committee may grant to any Participant a
Restricted Share Award consisting of such number of shares of Common Stock on such terms,
conditions and restrictions, whether based on performance standards, periods of service, retention
by the Participant of ownership of specified shares of Common Stock or other criteria, as the
Committee shall establish. The Committee may also grant Restricted Stock Units representing the
right to receive shares of Common Stock in the future subject to the achievement of one or more
goals relating to the completion of service by the Participant and/or the achievement of
performance or other objectives. With respect to performance-based Awards of Restricted Shares or
Restricted Units intended to qualify for deductibility under the “performance-based” compensation
exception contained in Section 162(m) of the Code, performance targets will consist of specified
levels of one or more of the Performance Goals. The terms of any Restricted Share and Restricted
Unit Awards granted under this Plan shall be set forth in an Award Agreement which shall contain
provisions determined by the Committee and not inconsistent with this Plan.




          (a) Issuance of Restricted Shares. As soon as practicable after the Date of Grant of a
Restricted Share Award by the Committee, the Company shall cause to be transferred on the books of
the Company or its agent, shares of Common Stock, registered on behalf of the Participant,
evidencing the Restricted Shares covered by the Award, subject to forfeiture to the Company as of
the Date of Grant if an Award Agreement with respect to the Restricted Shares covered by the Award
is not duly executed by the Participant and timely returned to the Company. All shares of Common
Stock covered by Awards under this Article VII shall be subject to the restrictions, terms and
conditions contained in the Plan and the applicable Award Agreements entered into by the
appropriate Participants. Until the lapse or release of all restrictions applicable to an Award of
Restricted Shares the share certificates representing such Restricted Shares may be held in custody
by the Company, its designee, or, if the certificates bear a restrictive legend, by the
Participant. Upon the lapse or release of all restrictions with respect to an Award as described in
Section 7.01(d), one or more share certificates, registered in the name of the Participant, for an
appropriate number of shares as provided in Section 7.01(d), free of any restrictions set forth in
the Plan and the related Award Agreement shall be delivered to the Participant.




          (b) Stockholder Rights. Beginning on the Date of Grant of a Restricted Share Award and subject
to execution of the related Award Agreement as provided in Section 7.01(a), and except as otherwise
provided in such Award Agreement, the Participant shall become a stockholder of the Company with
respect to all shares subject to the Award Agreement and shall have all of the rights of a
stockholder, including, but not limited to, the right to vote such shares and the right to receive
dividends; provided, however, that any shares of Common Stock distributed as a dividend or
otherwise with respect to any Restricted Shares as to which the restrictions have not yet lapsed,
shall be subject to the same restrictions as such Restricted Shares and held or restricted as
provided in Section 7.01(a).








- 8 -









 








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




          (d) Delivery of Shares Upon Vesting. Upon expiration or earlier termination of the forfeiture
period without a forfeiture and the satisfaction of or release from any other conditions prescribed
by the Committee, or at such earlier time as provided under the provisions of Section 7.03, the
restrictions applicable to the Restricted Shares shall lapse. As promptly as administratively
feasible thereafter, subject to the requirements of Section 11.05, the Company shall deliver to the
Participant or, in case of the Participant’s death, to the Participant’s Beneficiary, one or more
share certificates for the appropriate number of shares of Common Stock, free of all such
restrictions, except for any restrictions that may be imposed by law.




          7.02 Terms of Restricted Shares.




          (a) Forfeiture of Restricted Shares. Subject to Sections 7.02(b) and 7.03, Restricted Shares
shall be forfeited and returned to the Company and all rights of the Participant with respect to
such Restricted Shares shall terminate unless the Participant continues in the service of the
Company or a Subsidiary until the expiration of the forfeiture period for such Restricted Shares
and satisfies any and all other conditions set forth in the Award Agreement. The Committee shall
determine the forfeiture period and any other terms and conditions applicable with respect to any
Restricted Share Award; provided, that, for Awards granted after the Effective Date, and subject to
the provisions of any applicable retirement, severance or employment agreement or such terms as may
be approved by the Committee relating to the Participant’s Permanent Disability, death or other
termination of service, the forfeiture period (i) for a non-performance-based Restricted Share
Award shall not be less than three years or (ii) for a performance-based Restricted Share Award
shall not be less than one year. Notwithstanding the foregoing, the forfeiture period of a
Restricted Share Award may, but need not, lapse in installments.




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




          7.03 Restricted Stock Units. Restricted Unit Awards shall be subject to the restrictions,
terms and conditions contained in the Plan and the applicable Award Agreements entered into by the
appropriate Participants; provided, that, for Awards granted after the Effective Date, and subject
to the provisions of any applicable retirement, severance or employment agreement or such terms as
may be approved by the Committee relating to the Participant’s Permanent Disability, death or other
termination of service, the forfeiture period (i) for a non-performance-based Restricted Unit Award
shall not be less than three years or (ii) for a performance-based Restricted Unit Award shall not
be less than one year. Notwithstanding the foregoing, the forfeiture period of a Restricted Unit
Award may, but need not, lapse in installments. Until the lapse or release of all restrictions
applicable to an Award of Restricted Units, no shares of Common Stock shall be issued in respect of
such Awards and no Participant shall have any rights as a stockholder of the Company with respect
to the shares of Common Stock covered by such Restricted Unit Award. Upon the lapse or release of
all restrictions with respect to a Restricted Unit Award, one or more share certificates,
registered in the name of the Participant, for an appropriate number of shares, free of any
restrictions set forth in the Plan and the related Award Agreement shall be delivered to the
Participant. A Participant’s Restricted Unit Award shall not be contingent on any payment by or
consideration from the Participant other than the rendering of services. Notwithstanding anything
contained in this Section 7.03 to the contrary, the Committee may, in its sole discretion, waive
the forfeiture period and any other conditions set forth in any Award Agreement under appropriate
circumstances (including the death, Permanent Disability or Retirement of the Participant or a
material change in circumstances arising after the date of an Award) and subject to such terms and
conditions (including forfeiture of a proportionate number of the Restricted Units) as the
Committee shall deem appropriate.




          7.04 Change in Control. Unless otherwise provided by the Committee in the applicable Award
Agreement, in the event of a Change in Control, all restrictions applicable to Restricted Share and
Restricted Unit Awards shall terminate fully and the Participant shall immediately have the right
to the delivery of share certificates. Unless otherwise determined by the Committee, the provisions
of this Section 7.04 shall not be applicable to any Restricted Shares and Restricted Units granted
to a Participant if any Change in Control results from such Participant’s beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act) of Common Stock.








- 9 -









 








ARTICLE VIII

PERFORMANCE AWARDS




          8.01 Performance Awards.




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




          (b) Performance Targets. The performance targets may include such goals related to the
performance of the Company and/or the performance of a Participant as may be established by the
Committee in its discretion. In the case of Performance Awards intended to qualify for
deductibility under the “performance-based” compensation exception contained in Section 162(m) of
the Code, the targets will consist of specified levels of one or more of the Performance Goals. The
performance targets established by the Committee may vary for different Award Periods and need not
be the same for each Participant receiving a Performance Award in an Award Period. Except to the
extent inconsistent with the performance-based compensation exception under Section 162(m) of the
Code, in the case of Performance Awards granted to Participants to whom such section is applicable,
the Committee, in its discretion, but only under extraordinary circumstances as determined by the
Committee, may change any prior determination of performance targets for any Award Period at any
time prior to the final determination of the value of a related Performance Award when events or
transactions occur to cause such performance targets to be an inappropriate measure of achievement.




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




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




          8.02 Terms of Performance Awards.




          (a) Termination of Employment. Unless otherwise provided below or in Section 8.03, in the case
of a Participant’s Termination of Employment prior to the end of an Award Period, the Participant
will not have earned any Performance Awards for that Award Period.




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




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




          (d) Pro-Rata Payment. The amount of any payment to be made to a Participant whose employment
is terminated by Retirement, death or disability (under the circumstances described in subsections
(b) and (c)) will be the amount determined by multiplying (i) the amount of the Performance Award
that would have been earned through the end of the Award Period had such employment not been
terminated by (ii) a fraction, the numerator of which is the number of whole months such
Participant was employed during the Award Period, and the denominator of which is the total number
of months of the Award Period. Any such payment made to a Participant whose employment is
terminated prior to the end of an Award Period shall be made at the end of such Award Period,
unless otherwise determined by the Committee in its sole discretion. Any partial payment previously
made or credited to a deferred






- 10 -









 







account for the benefit of a Participant in accordance with Section 8.01(d) of the Plan shall
be subtracted from the amount otherwise determined as payable as provided in this Section 8.02(d).




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




          8.03 Change in Control. Unless otherwise provided by the Committee in the applicable Award
Agreement, in the event of a Change in Control, all Performance Awards for all Award Periods shall
immediately become fully payable (at the maximum level) to all Participants and shall be paid to
Participants within thirty (30) days after such Change in Control. Unless otherwise determined by
the Committee, the provisions of this Section 8.03 shall not be applicable to any Performance
Awards granted to a Participant if any Change in Control results from such Participant’s beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of Common Stock.




ARTICLE IX

OTHER STOCK-BASED AWARDS




          9.01 Grant of Other Stock-Based Awards. Other stock-based awards, consisting of stock purchase
rights, Awards of Common Stock, or Awards valued in whole or in part by reference to, or otherwise
based on, Common Stock, may be granted either alone or in addition to or in conjunction with other
Awards under the Plan. Subject to the provisions of the Plan, the Committee shall have sole and
complete authority to determine the persons to whom and the time or times at which such Awards
shall be made, the number of shares of Common Stock to be granted pursuant to such Awards, and all
other conditions of the Awards. Any such Award shall be confirmed by an Award Agreement executed by
the Company and the Participant, which Award Agreement shall contain such provisions as the
Committee determines to be necessary or appropriate to carry out the intent of this Plan with
respect to such Award.




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




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




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




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




          (d) Performance-Based Awards. With respect to Awards under this Article IX intended to qualify
for deductibility under the “performance-based” compensation exception contained in Section 162(m)
of the Code, performance targets will consist of specified levels of one or more of the Performance
Goals.




          (e) Vesting or Forfeiture of Other Stock-Based Awards. For Awards granted under this Article
IX after the Effective Date, and subject to the provisions of any applicable retirement, severance
or employment agreement or such terms as may be approved by the Committee relating to the
Participant’s Permanent Disability, death or other termination of service, the vesting schedule or
forfeiture period (i) for a non-performance-based Award shall not be less than three years or (ii)
for a performance-based Award shall not be less than one year. Notwithstanding the foregoing, the
vesting schedule or forfeiture period of an Award may, but need not, lapse in installments.




- 11 -









 








ARTICLE X

SHORT-TERM CASH INCENTIVE AWARDS




          10.01 Eligibility. This Article X is a limited purpose provision that shall apply only in the
event the Committee deems it appropriate that the Company’s short-term cash incentives for
executive officers of the Company who are from time to time determined by the Committee to be
“covered employees” for purposes of Section 162(m) of the Code qualify for deductibility under the
“performance-based” compensation exception contained in Section 162(m).




          10.02 Awards.




          (a) Performance Targets. For each fiscal year of the Company with respect to which the
Committee determines this Article X to be in effect, the Committee shall establish objective
performance targets based on specified levels of one or more of the Performance Goals. Such
performance targets shall be established by the Committee on a timely basis to ensure that the
targets are considered “pre-established” for purposes of Section 162(m) of the Code.




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




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




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




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




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




ARTICLE XI

TERMS APPLICABLE TO ALL AWARDS GRANTED UNDER THE PLAN




          11.01 Plan Provisions Control Award Terms; Successors. The terms of the Plan shall govern all
Awards granted under the Plan, and in no event shall the Committee have the power to grant any
Award under the Plan the terms of which are contrary to any of the provisions of the Plan. In the
event any provision of any Award granted under the Plan shall conflict with any term in the Plan as
constituted on the Date of Grant of such Award, the term in the Plan as constituted on the Date of
Grant of such Award shall control. 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.




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




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








- 12 -









 








          11.04 Limitation on Transfer. Except as provided in Section 7.01(c) in the case of Restricted
Shares, a Participant’s rights and interest under the Plan may not be assigned or transferred other
than by will or the laws of descent and distribution and, during the lifetime of a Participant,
only the Participant personally (or the Participant’s personal representative) may exercise rights
under the Plan. The Participant’s Beneficiary may exercise the Participant’s rights to the extent
they are exercisable under the Plan following the death of the Participant. Notwithstanding the
foregoing, the Committee may grant Non-Qualified Stock Options that are transferable, without
payment of consideration, to immediate family members of the Participant, to trusts or partnerships
for such family members, or to such other parties as the Committee may approve (as evidenced by the
applicable Award Agreement or an amendment thereto), and the Committee may also amend outstanding
Non-Qualified Stock Options to provide for such transferability.




          11.05 Withholding Taxes. The Company shall be entitled, if the Committee deems it necessary or
desirable, to withhold (or secure payment from the Participant in lieu of withholding) the amount
of any withholding or other tax required by law to be withheld or paid by the Company with respect
to any amount payable and/or shares issuable under such Participant’s Award or with respect to any
income recognized upon a disqualifying disposition of shares received pursuant to the exercise of
an Incentive Stock Option, and the Company may defer payment of cash or issuance of shares upon
exercise or vesting of an Award unless indemnified to its satisfaction against any liability for
any such tax. The amount of such withholding or tax payment shall be determined by the Committee
and shall be payable by the Participant at such time as the Committee determines. With the approval
of the Committee, the Participant may elect to meet his or her withholding requirement (i) by
having withheld from such Award at the appropriate time that number of shares of Common Stock the
Fair Market Value of which is equal to the amount of withholding taxes due (the amount of
withholding that may be satisfied in this manner may be limited by the Committee, in its
discretion, in order to avoid adverse financial accounting consequences to the Company), (ii) by
direct payment to the Company in cash of the minimum amount of any taxes required to be withheld
with respect to such Award or (iii) by a combination of withholding such shares and paying cash.




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




          11.07 Cancellation and Rescission of Awards.




          (a) Detrimental Activities. Unless the Award Agreement specifies otherwise, the Committee may
cancel, rescind, suspend, withhold or otherwise limit or restrict any unexpired, unpaid, or
deferred Awards at any time if the Participant is not in compliance with all applicable provisions
of the Award Agreement and the Plan, or if the Participant engages in any “Detrimental Activity.”
For purposes of this Section 11.07, “Detrimental Activity” shall include: (i) the rendering of
services for any organization or engaging directly or indirectly in any business which is or
becomes competitive with the Company, or which organization or business, or the rendering of
services to such organization or business, is or becomes otherwise prejudicial to or in conflict
with the interests of the Company; (ii) the disclosure to anyone outside the Company, or the use in
other than the Company’s business, without prior written authorization from the Company, of any
confidential information or material relating to the business of the Company, acquired by the
Participant either during or after employment with the Company; (iii) any attempt directly or
indirectly to induce any employee of the Company to be employed or perform services elsewhere or
any attempt directly or indirectly to solicit the trade or business of any current or prospective
customer, supplier or partner of the Company; or (iv) any other conduct or act determined to be
injurious, detrimental or prejudicial to any interest of the Company.




          (b) Enforcement. Upon exercise, payment or delivery pursuant to an Award, the Participant
shall certify in a manner acceptable to the Company that he or she is in compliance with the terms
and conditions of the Plan. In the event a Participant fails to comply with the provisions of
paragraphs (a)(i)-(iv) of this Section 11.07, if applicable, prior to, or during the six months
after, any exercise, payment or delivery pursuant to an Award, such exercise, payment or delivery
may be rescinded within two years thereafter. In the event of any such rescission, the Participant
shall pay to the Company the amount of any gain realized or payment received as a result of the
rescinded exercise, payment or delivery, in such manner and on such terms and conditions as may be
required, and the Company shall be entitled to set-off against the amount of any such gain any
amount owed to the Participant by the Company.




          11.08 Adjustments to Reflect Capital Changes.




          (a) Recapitalization. The number and kind of shares subject to outstanding Awards, the
Exercise Price for such shares, the number and kind of shares available for Awards subsequently
granted under the Plan, the maximum number of shares in respect of which Awards can be made to any
Participant in any calendar year and the Performance Goals and Award Periods applicable to
outstanding Awards shall be appropriately adjusted to reflect





- 13 -









 







any stock dividend, stock split, or
share combination or any recapitalization, merger, consolidation, exchange of
shares, liquidation or dissolution of the Company or other change in capitalization with a
similar substantive effect upon the Plan or the Awards granted under the Plan. The Committee shall
have the power and sole discretion to determine the amount of the adjustment to be made in each
case.




          (b) Certain Mergers. After any Merger in which the Company is not the surviving corporation or
pursuant to which a majority of the shares which are of the same class as the shares that are
subject to outstanding Options are exchanged for, or converted into, or otherwise become shares of
another corporation, the surviving, continuing, successor or purchasing corporation, as the case
may be (the “Acquiring Corporation”), will either assume the Company’s rights and obligations under
outstanding Award Agreements or substitute awards in respect of the Acquiring Corporation’s stock
for outstanding Awards, provided, however, that if the Acquiring Corporation does not assume or
substitute for such outstanding Awards, the Board shall provide prior to the Merger that any
unexercisable and/or unvested portion of the outstanding Awards shall be immediately exercisable
and vested as of a date prior to such Merger, as the Board so determines. The exercise and/or
vesting of any Award that was permissible solely by reason of this Section 11.08 shall be
conditioned upon the consummation of the Merger. Any Awards which are neither assumed by the
Acquiring Corporation nor exercised as of the date of the Merger shall terminate effective as of
the effective date of the Merger. Comparable rights shall accrue to each Participant in the event
of successive Mergers of the character described above.




          (c) Options to Purchase Shares or Stock of Acquired Companies. After any Merger in which the
Company or a Subsidiary shall be a surviving corporation, the Committee may grant Options or other
Awards under the provisions of the Plan, pursuant to Section 424 of the Code or as is otherwise
permitted under the Code, in full or partial replacement of or substitution for old stock options
granted under a plan of another party to the merger whose shares of stock subject to the old
options may no longer be issued following the Merger. The manner of application of the foregoing
provisions to such options and any appropriate adjustments in the terms of such stock options shall
be determined by the Committee in its sole discretion. Any such adjustments may provide for the
elimination of any fractional shares which might otherwise become subject to any Options. The
foregoing shall not be deemed to preclude the Company from assuming or substituting for stock
options of acquired companies other than pursuant to this Plan.




          11.09 Legal Compliance. Shares of Common Stock shall not be issued hereunder unless the
issuance and delivery of such shares shall comply with applicable laws and shall be further subject
to the approval of counsel for the Company with respect to such compliance. Notwithstanding any
provision of this Plan or any applicable Award Agreement to the contrary, the Committee shall have
the sole discretion to impose such conditions, restrictions and limitations (including suspending
exercises of Options or Stock Appreciation Rights and the tolling of any applicable exercise period
during such suspension) on the issuance of shares with respect to any Award unless and until the
Committee determines that such issuance complies with (i) any applicable securities registration
requirements or the Committee has determined that an exemption therefrom is available, (ii) any
applicable listing requirement of any stock exchange on which the Common Stock is listed, (iii) any
applicable Company policy or administrative rules, and (iv) any other applicable provision of law,
including foreign securities laws where applicable.




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




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




          11.12 Governing Law. All determinations made and actions taken pursuant to the Plan shall be
governed by the laws of the State of Delaware, other than the conflict of laws provisions thereof,
and construed in accordance therewith.




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




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








- 14 -









 








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




          11.16 Amendment and Termination.




          (a) Amendment. The Board shall have complete power and authority to amend the Plan at any
time; provided, that no termination or amendment of the Plan may, without the consent of the
Participant to whom any Award shall theretofore have been granted under the Plan, materially
adversely affect the right of such individual under such Award; and provided further, that the
Board shall not, without approval by the stockholders of the Company, make any amendment which
requires stockholder approval under the Code or under any other applicable law or rule of any stock
exchange on which the Common Stock is listed. Notwithstanding any other provision of this Plan,
except in connection with adjustments to reflect changes in capitalization in accordance with
Section 11.08, the terms of outstanding Options and Stock Appreciation Rights may not be amended or
modified, without approval by the stockholders of the Company, to reduce the Exercise Price, to
cancel the Option or Stock Appreciation Rights when the Exercise Price exceeds the Fair Market
Value of the underlying Common Stock in exchange for another Award, or in any other circumstance
meeting the definition of a “repricing” under the rules of the New York Stock Exchange (or any
similar rule of a stock exchange on which the Common Stock is then listed).




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




          11.17 Employees Based Outside of the United States. Notwithstanding any provision of the Plan
to the contrary, in order to comply with the laws in other countries in which the Company and its
Subsidiaries operate or have employees or directors, the Board, in its sole discretion, shall have
the power and authority to:




          (a) Determine which Subsidiaries shall be covered by the Plan;




          (b) Determine which employees or directors outside the United States are eligible to
participate in the Plan;




          (c) Modify the terms and conditions of any Award granted to employees or directors outside the
United States to comply with applicable foreign laws;




          (d) Establish subplans and modify exercise procedures and other terms and procedures, to the
extent such actions may be necessary or advisable. Any subplans and modifications to Plan terms and
procedures established under this Section 11.17 by the Board shall be attached to this Plan
document as appendices; and




          (e) Take any action, before or after an Award is made, that it deems advisable to obtain
approval or comply with any necessary local government regulatory exemptions or approvals.



Notwithstanding the above, the Board may not take any actions hereunder, and no Awards shall be
granted, that would violate the Exchange Act, the Code, any securities law, or governing statute or
any other applicable law.




          11.18 Deferred Compensation. No Award shall provide for a deferral of compensation under
Section 409A of the Code unless the Committee specifically provides that the Award is intended to
be subject to Section 409A of the Code and the Committee shall interpret this Plan in a manner
consistent with an Award’s designation as either subject to or exempt from Section 409A of the
Code, as applicable.




          11.19 Leaves of Absence. Unless the Committee provides otherwise, vesting of Awards granted
hereunder will be suspended during any unpaid leave of absence, but such leave of absence (if
approved by the Company) shall not be deemed a termination of employment or service for purposes of
the Plan. For purposes of Incentive Stock Options, no such leave may exceed 90 days unless
reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment
upon expiration of a leave of absence approved by the Company






- 15 -









 







is not so guaranteed, then three (3)
months following the 91st day of such leave any Incentive Stock Option held by
the Participant will cease to be treated as an Incentive Stock Option and will be treated for
tax purposes as a Non-Qualified Stock Option.




          11.20 Electronic Delivery of Plan Information and Electronic Signatures. To the extent
permitted by applicable law, the Company may deliver by email or other electronic means (including
posting on a web site maintained by the Company or by a third party under contract with the
Company) all documents relating to the Plan or any Award thereunder (including without limitation,
prospectuses required by applicable securities law) and all other documents that the Company is
required to deliver to its security holders (including without limitation, annual reports and proxy
statements). To the extent permitted by applicable law, the Participant’s execution of an Award
Agreement may be made by electronic facsimile or other method of recording of the Participant’s
signature in a manner that is acceptable to the Committee.




* * * * * *





- 16 -