**     **Service****Assurance****Consulting**and implementation & monitoring services,including the implementation ofsolutions such as PKI, Single Sign-On,and Information Security technologies.internal controls expertise be required.Assurance may contract with consultingproviders to provide technical servicesto ensure integration of these servicesinto the client’s overall technical andapplication architecture whererequired.• Systems ControlsAssurance provides systems controlsservices to clients implementing ERP orother large systems initiatives.These services tend to be functional innature and focus on internal controlissues such as data integrity,security, operations, and businesscontrols.Consulting may contract with assurance providers wherebyassurance providers will provide functional systemscontrol services on ERP and other large systemsintegration projects.Assurance may contract with consultingproviders should the implementation ofthese controls require systemsintegration support.

**Exhibit 10.5**
**KPMG CONSULTING, INC.**
**2000 LONG-TERM INCENTIVE PLAN**
**(as amended through March 30, 2001)**
**I. INTRODUCTION**
      **1.1 Purposes.** The purposes of the 2000 Long-Term Incentive Plan (this“Plan”) of KPMG Consulting, Inc., a Delaware corporation (the “Company”), are(i) to align the interests of the Company’s stockholders and the recipients ofawards under this Plan by providing a means to increase the proprietaryinterest of such recipients in the Company’s growth and success, (ii) toadvance the interests of the Company by increasing its ability to attract andretain highly competent officers, other employees, non-employee directors andconsultants and (iii) to motivate such persons to act in the long-term bestinterests of the Company and its stockholders.
      **1.2 Certain Definitions.**
      **“Affiliate”**shall mean (i) any subsidiary corporation (other than theCompany) in an unbroken chain of corporations beginning with the Company, asdescribed in Section 424(f) of the Code and (ii) any other entity in which theCompany has an equity interest or with which the Company has a significantbusiness relationship.
      **“Agreement”**shall mean the written agreement evidencing an award hereunderbetween the Company and the recipient of such award.
      **“Board”**shall mean the Board of Directors of the Company.
      **“Bonus Stock”**shall mean shares of Common Stock which are not subject to aRestriction Period or Performance Measures.
      **“Bonus Stock Award”**shall mean an award of Bonus Stock under this Plan.
      **“Change in Control”**shall have the meaning set forth in Section 6.8(b).
      **“Code”**shall mean the Internal Revenue Code of 1986, as amended.
      **“Committee”**shall mean the committee designated by the Board which,following an IPO, shall consist of two or more members of the Board, each ofwhom may be a “Non-Employee Director” within the meaning of Rule 16b-3 underthe Exchange Act.
      **“Common Stock”**shall mean the common stock, $0.01 par value, of theCompany.
      **“Company”**shall have the meaning set forth in Section 1.1.

      **“Disability”**shall mean the inability of the recipient of an award toperform substantially such recipient’s duties and responsibilities for acontinuous period of at least six months, as determined solely by theCommittee.
      **“Discretionary Director Options”**shall have the meaning set forth inSection 5.4.
      **“Exchange Act”**shall mean the Securities Exchange Act of 1934, as amended.
      **“Fair Market Value”**shall mean the last sale price of a share of CommonStock as reported on the Nasdaq National Market on the date as of which suchvalue is being determined or, if there shall be no reported transactions onsuch date, on the next preceding date for which a transaction was reported;provided, however, that if the Common Stock is not traded on the NasdaqNational Market, Fair Market Value may be determined by the Committee bywhatever means or method as the Committee, in the good faith exercise of itsdiscretion, shall at such time deem appropriate.
      **“Free-Standing SAR”**shall mean an SAR which is not issued in tandem with,or by reference to, an option, which entitles the holder thereof to receive,upon exercise, shares of Common Stock (which may be Restricted Stock), cash ora combination thereof with an aggregate value equal to the excess of the FairMarket Value of one share of Common Stock on the date of exercise over the baseprice of such SAR, multiplied by the number of such SARs which are exercised.
      **“Incentive Stock Option”**shall mean an option to purchase shares of CommonStock that meets the requirements of Section 422 of the Code, or any successorprovision, which is intended by the Committee to constitute an Incentive StockOption.
      **“Incumbent Board”**shall have the meaning set forth in Section 6.8(b)(3).
      "**IPO”**shall mean an initial public offering of Common Stock pursuant to aneffective registration statement under the Securities Act of 1933, as amended.
      **“Mature Shares”**shall mean previously-acquired shares of Common Stock forwhich the holder thereof has good title, free and clear of all liens andencumbrances and which such holder either (i) has held for at least six monthsor (ii) has purchased on the open market.
      **“Non-Employee Director”**shall mean any director of the Company who is notan officer or employee of the Company or any subsidiary of the Company and whois not a partner, principal or employee of KPMG LLP.
      **“Non-Statutory Stock Option”**shall mean an option to purchase shares ofCommon Stock which is not an Incentive Stock Option.
      **“Performance Measures”**shall mean the criteria and objectives, establishedby the Committee, which shall be satisfied or met (i) as a condition to theexercisability of all or a portion of an option or SAR, (ii) as a condition tothe grant of a Stock Award or (iii) during the applicable Restriction Period orPerformance Period as a condition to the holder’s receipt, in the case of aRestricted Stock Award, of the shares of Common Stock subject to such award,or, in
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the case of a Performance Share Award, of the shares of Common Stocksubject to such award and/or of payment with respect to such award. Suchcriteria and objectives may include one or more of the following: theattainment by a share of Common Stock of a specified Fair Market Value for aspecified period of time, earnings per share, return to stockholders (includingdividends), return on equity, earnings of the Company, revenues, market share,cash flow or cost reduction goals, or any combination of the foregoing. In thesole discretion of the Committee, the Committee may amend or adjust thePerformance Measures or other terms and conditions of an outstanding award inrecognition of unusual or nonrecurring events affecting the Company or itsfinancial statements or changes in law or accounting principles.
      **“Performance Period”**shall mean any period designated by the Committeeduring which the Performance Measures applicable to a Performance Share Awardshall be measured.
      **“Performance Share”**shall mean a right, contingent upon the attainment ofspecified Performance Measures within a specified Performance Period, toreceive one share of Common Stock, which may be Restricted Stock or, in lieu ofall or a portion thereof, the Fair Market Value of such share of Common Stockin cash.
      **“Performance Share Award”**shall mean an award of Performance Shares underthis Plan.
      **“Person”**shall have the meaning set forth in Section 6.8(b)(3).
      **“Restricted Stock”**shall mean shares of Common Stock which are subject toa Restriction Period.
      **“Restricted Stock Award”**shall mean an award of Restricted Stock underthis Plan.
      **“Restriction Period”**shall mean any period designated by the Committeeduring which the Common Stock subject to a Restricted Stock Award may not besold, transferred, assigned, pledged, hypothecated or otherwise encumbered ordisposed of, except as provided in this Plan or the Agreement relating to suchaward.
      **“Retirement”**shall mean termination of employment with or service to theCompany by reason of retirement on or after age 65.
      **“SAR”**shall mean a stock appreciation right which may be a Free-StandingSAR or a Tandem SAR.
      **“Stock Award”**shall mean a Restricted Stock Award or a Bonus Stock Award.
      **“Tandem SAR”**shall mean an SAR which is granted in tandem with, or byreference to, an option (including a Non-Statutory Stock Option granted priorto the date of grant of the SAR), which entitles the holder thereof to receive,upon exercise of such SAR and surrender for cancellation of all or a portion ofsuch option, shares of Common Stock (which may be Restricted Stock), cash or acombination thereof with an aggregate value equal to the excess of the FairMarket Value of one share of Common Stock on the date of exercise over the baseprice
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of such SAR, multiplied by the number of shares of Common Stock subject tosuch option, or portion thereof, which is surrendered.
      **“Tax Date”**shall have the meaning set forth in Section 6.5.
      **“Ten Percent Holder”**shall have the meaning set forth in Section 2.1(a).
      **1.3 Administration.**This Plan shall be administered by the Committee.Any one or a combination of the following awards may be made under this Plan toeligible persons: (i) options to purchase shares of Common Stock in the formof Incentive Stock Options or Non-Statutory Stock Options, (ii) SARs in theform of Tandem SARs or Free-Standing SARs, (iii) Stock Awards in the form ofRestricted Stock or Bonus Stock and (iv) Performance Shares. The Committeeshall, subject to the terms of this Plan, select eligible persons forparticipation in this Plan and determine the form, amount and timing of eachaward to such persons and, if applicable, the number of shares of Common Stock,the number of SARs and the number of Performance Shares subject to such anaward, the exercise price or base price associated with the award, the time andconditions of exercise or settlement of the award and all other terms andconditions of the award, including, without limitation, the form of theAgreement evidencing the award. The Committee may, in its sole discretion andfor any reason at any time, take action such that (i) any or all outstandingoptions and SARs shall become exercisable in part or in full, (ii) all or aportion of the Restriction Period applicable to any outstanding RestrictedStock Award shall lapse, (iii) all or a portion of the Performance Periodapplicable to any outstanding Performance Share Award shall lapse and (iv) thePerformance Measures applicable to any outstanding award (if any) shall bedeemed to be satisfied at the maximum or any other level. The Committee shall,subject to the terms of this Plan, interpret this Plan and the applicationthereof, establish rules and regulations it deems necessary or desirable forthe administration of this Plan and may impose, incidental to the grant of anaward, conditions with respect to the award, such as limiting competitiveemployment or other activities. All such interpretations, rules, regulationsand conditions shall be final, binding and conclusive.
      The Committee may delegate some or all of its power and authorityhereunder to the Board or either of the Co-Chief Executive Officers or otherexecutive officer of the Company as the Committee deems appropriate; provided,however, that the Committee may not delegate its power and authority to eitherof the Co-Chief Executive Officers or other executive officer of the Companywith regard to the selection for participation in this Plan of an officer orother person subject to Section 16 of the Exchange Act or decisions concerningthe timing, pricing or amount of an award to such an officer or other person.
      No member of the Board or Committee, and neither a Co-Chief ExecutiveOfficer nor any other executive officer to whom the Committee delegates any ofits power and authority hereunder, shall be liable for any act, omission,interpretation, construction or determination made in connection with this Planin good faith, and the members of the Board and the Committee and the Co-ChiefExecutive Officers or other executive officer shall be entitled toindemnification and reimbursement by the Company in respect of any claim, loss,damage or expense (including attorneys’ fees) arising therefrom to the fullextent permitted by law, except as otherwise may be provided in the Company’sCertificate of Incorporation and/or By-laws, and under any directors’ andofficers’ liability insurance that may be in effect from time to time.
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      A majority of the Committee shall constitute a quorum. The acts of theCommittee shall be either (i) acts of a majority of the members of theCommittee present at any meeting at which a quorum is present or (ii) actsapproved in writing by all of the members of the Committee without a meeting.
      **1.4 Eligibility.**Participants in this Plan shall consist of suchofficers, other employees and consultants, and persons expected to becomeofficers, other employees and consultants, of the Company and its Affiliates,as the Committee in its sole discretion may select from time to time, and suchother persons designated by the Committee pursuant to Section 6.13. Forpurposes of this Plan, references to employment also shall mean a consultingrelationship and references to employment by the Company also shall meanemployment by an Affiliate. The Committee’s selection of a person toparticipate in this Plan at any time shall not require the Committee to selectsuch person to participate in this Plan at any other time. Non-EmployeeDirectors of the Company shall be eligible to participate in this Plan inaccordance with Article V.
      **1.5 Shares Available.**
      (a) Shares Available. The number of shares of Common Stock that areauthorized for grants or awards under this Plan (the “Authorized Shares”) shallat all times be equal to the greater of (i) subject to adjustment as providedin Section 6.7, 177,000,000 shares and (ii) 25% of the sum of (x) the number ofissued and outstanding shares of Common Stock of the Company plus (y) theAuthorized Shares, provided, however, that the number of Authorized Sharesshall never be reduced below the number of shares that are then issuable underall outstanding grants or awards. The number of shares of Common Stock thatshall be available for grants or awards under this Plan (the “AvailableShares”) shall be equal to the number of Authorized Shares reduced by the sumof the aggregate number of shares of Common Stock, adjusted as provided inSection 6.7, which become subject to outstanding options, includingDiscretionary Director Options, outstanding Free-Standing SARs, outstandingStock Awards and outstanding Performance Share Awards.
      (b) Maximum Grants of Incentive Stock Options. Subject to adjustment asprovided in Section 6.7, the maximum number of shares that may be granted asIncentive Stock Options shall be 177,000,000.
      (c) Restoration of Available Shares. To the extent that shares of CommonStock subject to an outstanding option (except to the extent shares of CommonStock are issued or delivered by the Company in connection with the exercise ofa Tandem SAR), Free-Standing SAR, Stock Award or Performance Share Award arenot issued or delivered by reason of the expiration, termination, cancellationor forfeiture of such award or by reason of the delivery or withholding ofshares of Common Stock to pay all or a portion of the purchase price of anaward, if any, or to satisfy all or a portion of the tax withholdingobligations relating to an award, then such shares of Common Stock shall againbe available under this Plan.
      (d) Available Common Stock. Shares of Common Stock shall be madeavailable from authorized and unissued shares of Common Stock, or authorizedand issued shares of Common Stock reacquired and held as treasury shares orotherwise or a combination thereof.
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**II. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS**
      **2.1 Stock Options.**The Committee may, in its discretion, grant options topurchase shares of Common Stock to such eligible persons as may be selected bythe Committee. Each option, or portion thereof, that is not an Incentive StockOption shall be a Non-Statutory Stock Option. An Incentive Stock Option maynot be granted to any person who is not an employee of the Company or anyparent or subsidiary (as defined in Section 424 of the Code). Each IncentiveStock Option shall be granted within ten years of the date this Plan is adoptedby the Board. To the extent that the aggregate Fair Market Value (determinedas of the date of grant) of shares of Common Stock with respect to whichoptions designated as Incentive Stock Options are exercisable for the firsttime by a participant during any calendar year (under this Plan or any otherplan of the Company or any parent or subsidiary as defined in Section 424 ofthe Code) exceeds the amount (currently $100,000) established by the Code, suchoptions shall constitute Non-Statutory Stock Options.
      Options shall be subject to the following terms and conditions and shallcontain such additional terms and conditions, not inconsistent with the termsof this Plan, as the Committee shall deem advisable:
      (a) Number of Shares and Purchase Price. The number of shares of CommonStock subject to an option and the purchase price per share of Common Stockpurchasable upon exercise of the option shall be determined by the Committee;provided, however, that the purchase price per share of Common Stockpurchasable upon exercise of the option shall not be less than 100% of the FairMarket Value of a share of Common Stock on the date of grant of such option;and provided further, that if an Incentive Stock Option shall be granted to anyperson who, at the time such option is granted, owns capital stock possessingmore than ten percent of the total combined voting power of all classes ofcapital stock of the Company (or of any parent or subsidiary as defined inSection 424 of the Code) (a “Ten Percent Holder”), the purchase price per shareof Common Stock shall not be less than the price (currently 110% of Fair MarketValue) required by the Code in order to constitute an Incentive Stock Option.
      (b) Exercise Period and Exercisability. The period during which an optionmay be exercised shall be determined by the Committee; provided, however, thatno Incentive Stock Option shall be exercised later than ten years after itsdate of grant; and provided further, that if an Incentive Stock Option shall begranted to a Ten Percent Holder, such option shall not be exercised later thanfive years after its date of grant. The Committee may, in its discretion,establish Performance Measures which shall be satisfied or met as a conditionto the grant of an option or to the exercisability of all or a portion of anoption. The Committee shall determine whether an option shall becomeexercisable in cumulative or non-cumulative installments and in part or in fullat any time. An exercisable option, or portion thereof, may be exercised onlywith respect to whole shares of Common Stock.
      (c) Method of Exercise. An option may be exercised (i) by giving writtennotice to the Company specifying the number of whole shares of Common Stock tobe purchased and by accompanying such notice with payment therefor in full (orby arranging for such payment to the Company’s satisfaction) either (A) incash, (B) by delivery (either actual delivery or by attestation proceduresestablished by the Company) of Mature Shares having an aggregate Fair
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Market Value, determined as of the date of exercise, equal to theaggregate purchase price payable by reason of such exercise, (C) in cash by abroker-dealer acceptable to the Company to whom the optionee has submitted anirrevocable notice of exercise or (D) a combination of (A) and (B), in eachcase to the extent set forth in the Agreement relating to the option, (ii) ifapplicable, by surrendering to the Company any Tandem SARs which are cancelledby reason of the exercise of the option and (iii) by executing such documentsas the Company may reasonably request. The Company shall have sole discretionto disapprove of an election pursuant to any of clauses (i)(B)-(D). Anyfraction of a share of Common Stock which would be required to pay suchpurchase price shall be disregarded and the remaining amount due shall be paidin cash by the optionee. No certificate representing Common Stock shall bedelivered until the full purchase price therefor and any withholding taxesthereon, as described in Section 6.5, have been paid (or arrangement made forsuch payment to the Company’s satisfaction).
      **2.2 Stock Appreciation Rights.**The Committee may, in its discretion,grant SARs to such eligible persons as may be selected by the Committee. TheAgreement relating to an SAR shall specify whether the SAR is a Tandem SAR or aFree-Standing SAR.
      SARs shall be subject to the following terms and conditions and shallcontain such additional terms and conditions, not inconsistent with the termsof this Plan, as the Committee shall deem advisable:
      (a) Number of SARs and Base Price. The number of SARs subject to anaward shall be determined by the Committee. Any Tandem SAR related to anIncentive Stock Option shall be granted at the same time that such IncentiveStock Option is granted. The base price of a Tandem SAR shall be the exerciseprice per share of Common Stock of the related option. The base price of aFree-Standing SAR shall be determined by the Committee; provided, however, thatsuch base price shall not be less than 100% of the Fair Market Value of a shareof Common Stock on the date of grant of such SAR.
      (b) Exercise Period and Exercisability. The Agreement relating to anaward of SARs shall specify whether such award may be settled in shares ofCommon Stock (including shares of Restricted Stock) or cash or a combinationthereof. The period for the exercise of an SAR shall be determined by theCommittee; provided, however, that no Tandem SAR shall be exercised later thanthe expiration, cancellation, forfeiture or other termination of the relatedoption. The Committee may, in its discretion, establish Performance Measureswhich shall be satisfied or met as a condition to the grant of an SAR or to theexercisability of all or a portion of an SAR. The Committee shall determinewhether an SAR may be exercised in cumulative or non-cumulative installmentsand in part or in full at any time. An exercisable SAR, or portion thereof,may be exercised, in the case of a Tandem SAR, only with respect to wholeshares of Common Stock and, in the case of a Free-Standing SAR, only withrespect to a whole number of SARs. If an SAR is exercised for shares ofRestricted Stock, a certificate or certificates representing such RestrictedStock shall be issued in accordance with Section 3.2(c) and the holder of suchRestricted Stock shall have such rights of a stockholder of the Company asdetermined pursuant to Section 3.2(d). Prior to the exercise of an SAR forshares of Common Stock, including Restricted Stock, the holder of such SARshall have no rights as a stockholder of the Company with respect to the sharesof Common Stock subject to such SAR.
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      (c) Method of Exercise. A Tandem SAR may be exercised (i) by givingwritten notice to the Company specifying the number of whole SARs which arebeing exercised, (ii) by surrendering to the Company any options which arecancelled by reason of the exercise of the Tandem SAR and (iii) by executingsuch documents as the Company may reasonably request. A Free-Standing SAR maybe exercised (i) by giving written notice to the Company specifying the wholenumber of SARs which are being exercised and (ii) by executing such documentsas the Company may reasonably request.
      **2.3 Termination of Employment or Service**. Subject to the requirements ofthe Code, all of the terms relating to the exercise, cancellation or otherdisposition of an option or SAR upon a termination of employment with orservice to the Company of the recipient of such option or SAR, as the case maybe, whether by reason of Disability, Retirement, death or any other reason,shall be determined by the Committee.
**III. STOCK AWARDS**
      **3.1 Stock Awards.**The Committee may, in its discretion, grant StockAwards to such eligible persons as may be selected by the Committee. TheAgreement relating to a Stock Award shall specify whether the Stock Award is aRestricted Stock Award or Bonus Stock Award.
      **3.2 Terms of Stock Awards.**Stock Awards shall be subject to the followingterms and conditions and shall contain such additional terms and conditions,not inconsistent with the terms of this Plan, as the Committee shall deemadvisable.
      (a) Number of Shares and Other Terms. The number of shares of CommonStock subject to a Restricted Stock Award or Bonus Stock Award and thePerformance Measures (if any) and Restriction Period applicable to a RestrictedStock Award shall be determined by the Committee. Bonus Stock Awards shall notbe subject to any Performance Measures or Restriction Periods.
      (b) Vesting and Forfeiture. The Agreement relating to a Restricted StockAward shall provide, in the manner determined by the Committee, in itsdiscretion, and subject to the provisions of this Plan, for the vesting of theshares of Common Stock subject to such award (i) if specified PerformanceMeasures are satisfied or met during the specified Restriction Period or (ii)if the holder of such award remains continuously in the employment of orservice to the Company during the specified Restriction Period and for theforfeiture of all or a portion of the shares of Common Stock subject to suchaward (x) if specified Performance Measures are not satisfied or met during thespecified Restriction Period or (y) if the holder of such award does not remaincontinuously in the employment of or service to the Company during thespecified Restriction Period.
      (c) Share Certificates. During the Restriction Period, a certificate orcertificates representing a Restricted Stock Award may be registered in theholder’s name or a nominee name at the discretion of the Company and may bear alegend, in addition to any legend which may be required pursuant to Section6.6, indicating that the ownership of the shares of Common Stock represented bysuch certificate is subject to the restrictions, terms and conditions of this
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Plan and the Agreement relating to the Restricted Stock Award. Asdetermined by the Committee, all certificates registered in the holder’s nameshall be deposited with the Company, together with stock powers or otherinstruments of assignment (including a power of attorney), each endorsed inblank with a guarantee of signature if deemed necessary or appropriate by theCompany, which would permit transfer to the Company of all or a portion of theshares of Common Stock subject to the Restricted Stock Award in the event suchaward is forfeited in whole or in part. Upon termination of any applicableRestriction Period (and the satisfaction or attainment of applicablePerformance Measures), or upon the grant of a Bonus Stock Award, in each casesubject to the Company’s right to require payment of any taxes in accordancewith Section 6.5, a certificate or certificates evidencing ownership of therequisite number of shares of Common Stock shall be delivered to the holder ofsuch award.
      (d) Rights with Respect to Restricted Stock Awards. Unless otherwise setforth in the Agreement relating to a Restricted Stock Award, and subject to theterms and conditions of the Agreement relating to a Restricted Stock Award, theholder of such award shall have all rights as a stockholder of the Company,including, but not limited to, voting rights, the right to receive dividendsand the right to participate in any capital adjustment applicable to allholders of Common Stock; provided, however, that a distribution with respect toshares of Common Stock, other than a regular cash dividend, shall be depositedwith the Company and shall be subject to the same restrictions as the shares ofCommon Stock with respect to which such distribution was made.
      **3.3 Termination of Employment or Service**. All of the terms relating tothe satisfaction of Performance Measures and the termination of the RestrictionPeriod relating to a Restricted Stock Award, or any forfeiture and cancellationof such award upon a termination of employment with or service to the Companyof the recipient of such award, whether by reason of Disability, Retirement,death or any other reason, shall be determined by the Committee.
**IV. PERFORMANCE SHARE AWARDS**
      **4.1 Performance Share Awards.**The Committee may, in its discretion, grantPerformance Share Awards to such eligible persons as may be selected by theCommittee.
      **4.2 Terms of Performance Share Awards.**Performance Share Awards shall besubject to the following terms and conditions and shall contain such additionalterms and conditions, not inconsistent with the terms of this Plan, as theCommittee shall deem advisable.
      (a) Number of Performance Shares and Performance Measures. The number ofPerformance Shares subject to any award and the Performance Measures andPerformance Period applicable to such award shall be determined by theCommittee.
      (b) Vesting and Forfeiture. The Agreement relating to a PerformanceShare Award shall provide, in the manner determined by the Committee, in itsdiscretion, and subject to the provisions of this Plan, for the vesting of suchaward, if specified Performance Measures are satisfied or met during thespecified Performance Period, and for the forfeiture of all or a portion ofsuch award, if specified Performance Measures are not satisfied or met duringthe specified Performance Period.
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      (c) Settlement of Vested Performance Share Awards. The Agreementrelating to a Performance Share Award (i) shall specify whether such award maybe settled in shares of Common Stock (including shares of Restricted Stock) orcash or a combination thereof and (ii) may specify whether the holder thereofshall be entitled to receive, on a current or deferred basis, dividendequivalents, and, if determined by the Committee, interest on or the deemedreinvestment of any deferred dividend equivalents, with respect to the numberof shares of Common Stock subject to such award. If a Performance Share Awardis settled in shares of Restricted Stock, a certificate or certificatesrepresenting such Restricted Stock shall be issued in accordance with Section3.2(c) and the holder of such Restricted Stock shall have such rights of astockholder of the Company as determined pursuant to Section 3.2(d). Prior tothe settlement of a Performance Share Award in shares of Common Stock,including Restricted Stock, the holder of such award shall have no rights as astockholder of the Company with respect to the shares of Common Stock subjectto such award.
      **4.3 Termination of Employment or Service.**All of the terms relating tothe satisfaction of Performance Measures and the termination of the PerformancePeriod relating to a Performance Share Award, or any forfeiture andcancellation of such award upon a termination of employment with or service tothe Company of the recipient of such award, whether by reason of Disability,Retirement, death or other termination, shall be determined by the Committee.
**V. PROVISIONS RELATING TO NON-EMPLOYEE DIRECTORS**
      **5.1 Eligibility.**Each Non-Employee Director shall be granted options topurchase shares of Common Stock in accordance with this Article V. All optionsgranted under this Article V shall constitute Non-Statutory Stock Options.
      **5.2 Automatic Grants of Stock Options.**Each Non-Employee Director shallautomatically be granted Non-Statutory Stock Options as follows:
      (a) Time of Grant. Automatic grants of Non-Statutory Stock Options shallbe made on the dates specified below:
      (1) Each person who is serving as a Non-Employee Director as of March 20,2001 shall automatically be granted, on the date that the next Non-EmployeeDirector is elected, an option to purchase 15,000 shares of Common Stock.
      (2) Each person who is first elected or first begins to serve as aNon-Employee Director on or after March 20, 2001 shall automatically begranted, on the date of such initial election or service, an option to purchase15,000 shares of Common Stock.
      (3) Each person who is a Non-Employee Director immediately following anyannual meeting of stockholders of the Company held after 2001 shallautomatically be granted, on the date of such meeting, an option to purchase4,000 shares of Common Stock.
      (b) Purchase Price. The purchase price per share of Common Stockpurchasable upon exercise of an option granted under this Section 5.2 shall be100% of the Fair Market Value of a share of Common Stock on the date of grantof such option.
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      (c) Exercise Period and Exercisability. Each option granted underSection 5.2(a)(1) or Section 5.2(a)(2) shall be fully exercisable on and afterthe one year anniversary of its date of grant and each option granted underSection 5.2(a)(3) shall be fully exercisable on and after the day preceding theday of the next annual meeting of stockholders of the Company following itsdate of grant. Each option granted under this Section 5.2 shall expire 10years after its date of grant. An exercisable option, or portion thereof, maybe exercised in whole or in part only with respect to whole shares of CommonStock. Options granted under this Section 5.2 shall be exercisable inaccordance with Section 2.1(c).
      **5.3 Termination of Directorship.**(a) Disability. If the recipient of anoption granted under Section 5.2 ceases to be a director of the Company byreason of Disability, each such option held by the holder thereof shall beexercisable only to the extent such option is exercisable on the effective dateof such recipient’s ceasing to be a director and may thereafter be exercised bysuch holder (or such holder’s legal representative or similar person) until andincluding the earlier to occur of the (i) date which is one year after theeffective date of such recipient’s ceasing to be a director and (ii) theexpiration date of the term of such option.
      (b) Retirement. If the recipient of an option granted under Section 5.2ceases to be a director of the Company by reason of Retirement, each suchoption held by the holder thereof shall be exercisable only to the extent suchoption is exercisable on the effective date of such recipient’s ceasing to be adirector and may thereafter be exercised by such holder (or such holder’s legalrepresentative or similar person) until and including the earlier to occur ofthe (i) date which is three months after the effective date of such recipient’sceasing to be a director and (ii) the expiration date of the term of suchoption.
      (c) Death. If the recipient of an option granted under Section 5.2ceases to be a director of the Company by reason of death, each such optionheld by the holder thereof shall be exercisable only to the extent such optionis exercisable on the effective date of such recipient’s ceasing to be adirector and may thereafter be exercised by such holder’s executor,administrator, legal representative, beneficiary or similar person until andincluding the earlier to occur of the (i) date which is one year after the dateof such recipient’s death and (ii) the expiration date of the term of suchoption.
      (d) Other Termination. If the recipient of an option granted underSection 5.2 ceases to be a director of the Company for any reason other thanDisability, Retirement or death, each such option held by the holder thereofshall be exercisable only to the extent such option is exercisable on theeffective date of such recipient’s ceasing to be a director and may thereafterbe exercised by such holder (or such holder’s legal representative or similarperson) until and including the earlier to occur of the (i) date which is threemonths after the effective date of such recipient’s ceasing to be a directorand (ii) the expiration date of the term of such option.
      (e) Death Following Termination of Directorship. If the recipient of anoption granted under Section 5.2 dies during the period set forth in Section5.3(a) following such recipient’s ceasing to be a director of the Company byreason of Disability, or if such recipient dies during the period set forth inSection 5.3(b) following such recipient’s Retirement, or if such a recipientdies during the period set forth in Section 5.3(d) following such recipient’sceasing to be a director for any reason other than by reason of Disability orRetirement, each such option held by
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the holder thereof shall be exercisable only to the extent that suchoption is exercisable on the date of the recipient’s death and may thereafterbe exercised by such holder’s executor, administrator, legal representative,beneficiary or similar person until and including the earlier to occur of the(i) date which is one year after the date of such recipient’s death and (ii)the expiration date of the term of such option.
      **5.4 Discretionary Grants of Stock Options.**The Committee may, in itsdiscretion, grant additional options to purchase shares of Common Stock(“Discretionary Director Options”) to all Non-Employee Directors or to any oneor more of them. Each Discretionary Director Option shall be subject to thefollowing terms and conditions and shall contain such additional terms andconditions, not inconsistent with the terms of this Plan, as the Committeeshall deem advisable:
      (a) Number of Shares and Purchase Price. The number of shares of CommonStock subject to a Discretionary Director Option and the purchase price pershare of Common Stock purchasable upon exercise of the option shall bedetermined by the Committee; provided, however, that the purchase price pershare of Common Stock purchasable upon exercise of the option shall not be lessthan 100% of the Fair Market Value of a share of Common Stock on the date ofgrant of such option.
      (b) Exercise Period and Exercisability. The period during which aDiscretionary Director Option may be exercised shall be determined by theCommittee. The Committee may, in its discretion, establish PerformanceMeasures which shall be satisfied or met as a condition to the grant of aDiscretionary Director Option or to the exercisability of all or a portion of aDiscretionary Director Option. The Committee shall determine whether aDiscretionary Director Option shall become exercisable in cumulative ornon-cumulative installments and in part or in full at any time. An exercisableDirector Discretionary Option, or portion thereof, may be exercised only withrespect to whole shares of Common Stock. Each Discretionary Director Optionshall be exercisable in accordance with Section 2.1(c).
      (c) Termination of Directorship. All of the terms relating to theexercise, cancellation or other disposition of a Discretionary Director Optionupon a termination of service as a director of the Company of the recipient ofa Discretionary Director Option, whether by reason of Disability, Retirement,death or any other reason, shall be determined by the Committee.
**VI. GENERAL**
      **6.1 Effective Date and Term of Plan**. This Plan shall be submitted to thestockholders of the Company for approval within 12 months following itsadoption by the Board and, if approved, shall become effective as of the dateof such adoption by the Board. No option may be exercised prior to the date ofsuch stockholder approval. This Plan shall terminate 10 years after itseffective date, unless terminated earlier by the Board. Termination of thisPlan shall not affect the terms or conditions of any award granted prior tosuch termination.
      **6.2 Amendments.**The Board or the Committee may amend this Plan as itshall deem advisable, subject to any requirement of stockholder approvalrequired by applicable law, rule or regulation, including Section 422 of theCode; provided, however, that no amendment shall be
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made without stockholder approval if such amendment would (a) increase themaximum number of shares of Common Stock available under this Plan (subject toSection 6.7), (b) effect any change inconsistent with Section 422 of the Codeor (c) extend the term of this Plan. No amendment may impair the rights of aholder of an outstanding award without the consent of such holder.
      **6.3 Agreement.**No award shall be valid until an Agreement is executed bythe Company and the recipient of such award and, upon execution by each partyand delivery of the Agreement to the Company, such award shall be effective asof the effective date set forth in the Agreement.
      **6.4 Non-Transferability of Awards.**Unless the Committee provides for thetransferability of a particular award and such transferability is specified inthe Agreement relating to such award, no award shall be transferable other thanby will, the laws of descent and distribution or pursuant to beneficiarydesignation procedures stated in Section 6.11 or otherwise approved by theCompany. Except to the extent permitted by the foregoing sentence or theAgreement relating to the Award, each award may be exercised or settled duringthe recipient’s lifetime only by the recipient or the recipient’s legalrepresentative or similar person. Except to the extent permitted by the secondpreceding sentence or the Agreement relating to the Award, no award may besold, transferred, assigned, pledged, hypothecated, encumbered or otherwisedisposed of (whether by operation of law or otherwise) or be subject toexecution, attachment or similar process. Upon any attempt to so sell,transfer, assign, pledge, hypothecate, encumber or otherwise dispose of anysuch award, such award and all rights thereunder shall immediately become nulland void.
      **6.5 Tax Withholding.**The Company shall have the right to require, priorto the issuance or delivery of any shares of Common Stock or the payment of anycash pursuant to an award made hereunder, payment by the holder of such awardof any federal, state, local or other taxes which may be required to bewithheld or paid in connection with such award. An Agreement may provide that(i) the Company shall withhold whole shares of Common Stock which wouldotherwise be delivered to a holder, having an aggregate Fair Market Valuedetermined as of the date the obligation to withhold or pay taxes arises inconnection with an award (the “Tax Date”), or withhold an amount of cash whichwould otherwise be payable to a holder, in the amount necessary to satisfy anysuch obligation or (ii) the holder may satisfy any such obligation by any ofthe following means: (A) a cash payment to the Company, (B) delivery (eitheractual delivery or by attestation procedures established by the Company) to theCompany of Mature Shares having an aggregate Fair Market Value, determined asof the Tax Date, equal to the amount necessary to satisfy any such obligation,(C) authorizing the Company to withhold whole shares of Common Stock whichwould otherwise be delivered having an aggregate Fair Market Value, determinedas of the Tax Date, or withhold an amount of cash which would otherwise bepayable to a holder, equal to the amount necessary to satisfy any suchobligation, (D) in the case of the exercise of an option, a cash payment by abroker-dealer acceptable to the Company to whom the optionee has submitted anirrevocable notice of exercise or (E) any combination of (A), (B) and (C), ineach case to the extent set forth in the Agreement relating to the award;provided, however, that the Company shall have sole discretion to disapprove ofan election pursuant to any of clauses (ii)(B)-(E). Any fraction of a share of
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Common Stock which would be required to satisfy such an obligation shallbe disregarded and the remaining amount due shall be paid in cash by theholder.
      **6.6 Restrictions on Shares.**Each award made hereunder shall be subject tothe requirement that if at any time the Company determines that the listing,registration or qualification of the shares of Common Stock subject to suchaward upon any securities exchange or under any law, or the consent or approvalof any governmental body, or the taking of any other action is necessary ordesirable as a condition of, or in connection with, the exercise or settlementof such award or the delivery of shares thereunder, such award shall not beexercised or settled and such shares shall not be delivered unless suchlisting, registration, qualification, consent, approval or other action shallhave been effected or obtained, free of any conditions not acceptable to theCompany. The Committee may provide for such restrictions upon thetransferability of shares of Common Stock delivered pursuant to any award madehereunder as it deems appropriate and such restrictions shall be specified inthe Agreement relating to such award. The Company may require thatcertificates evidencing shares of Common Stock delivered pursuant to any awardmade hereunder bear a legend indicating that the sale, transfer or otherdisposition thereof by the holder is prohibited except in compliance with theSecurities Act of 1933, as amended, and the rules and regulations thereunderand such other restrictions, if any, specified in the Agreement relating to theaward pursuant to which such shares were delivered.
      **6.7 Adjustment.**In the event of any stock split, reverse stock split,stock dividend, recapitalization, reorganization, merger, consolidation,combination, exchange of shares, liquidation, spin-off or other similar changein capitalization or event, or any distribution to holders of Common Stockother than a regular cash dividend, the class of securities available underthis Plan, the number and class of securities subject to each outstandingoption and the purchase price per security, the number and class of securitiessubject to each option to be granted to Non-Employee Directors pursuant toSection 5.2, the terms of each outstanding SAR, the number and class ofsecurities subject to each outstanding Stock Award or Performance Share Award,and the terms of each outstanding Restricted Stock Award or Performance ShareAward shall be appropriately adjusted by the Committee, such adjustments to bemade in the case of outstanding options and SARs without an increase in theaggregate purchase price or base price. The decision of the Committeeregarding any such adjustment shall be final, binding and conclusive. If anysuch adjustment would result in a fractional security being (a) available underthis Plan, such fractional security shall be disregarded, or (b) subject to anaward under this Plan, the Company shall pay the holder of such award, inconnection with the first vesting, exercise or settlement of such award inwhole or in part occurring after such adjustment, an amount in cash determinedby multiplying (i) the fraction of such security (rounded to the nearesthundredth) by (ii) the excess, if any, of (A) the Fair Market Value on thevesting, exercise or settlement date over (B) the exercise or base price, ifany, of such award.
      **6.8 Change in Control.**
      (a) (1) Notwithstanding any provision in this Plan or any Agreement, inthe event of a Change in Control in connection with which the holders of CommonStock receive shares of common stock that are registered under Section 12 ofthe Exchange Act, (i) all outstanding options and SARS shall immediately becomeexercisable in full, (ii) the Restriction Period applicable to any outstandingRestricted Stock Award shall lapse, (iii) the Performance Period
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applicable to any outstanding Performance Share Award shall lapse, (iv)the Performance Measures applicable to any outstanding award shall be deemed tobe satisfied at the maximum level and (v) there shall be substituted for eachshare of Common Stock available under this Plan, whether or not then subject toan outstanding award, the number and class of shares into which eachoutstanding share of Common Stock shall be converted pursuant to such Change inControl. In the event of any such substitution, the purchase price per sharein the case of an option and the base price in the case of an SAR shall beappropriately adjusted by the Committee (whose determination shall be final,binding and conclusive), such adjustments to be made in the case of outstandingoptions and SARs without an increase in the aggregate purchase price or baseprice.
      (2) Notwithstanding any provision in this Plan or any Agreement, in theevent of any Change in Control other than a Change in Control in connectionwith which the holders of Common Stock receive shares of common stock that areregistered under Section 12 of the Exchange Act, each outstanding award shallbe surrendered to the Company by the holder thereof, and each such award shallimmediately be cancelled by the Company, and the holder shall receive, withinten days of the occurrence of a Change in Control, a cash payment from theCompany in an amount equal to (i) in the case of an option, the number ofshares of Common Stock then subject to such option, multiplied by the excess,if any, of the greater of (A) the highest per share price offered tostockholders of the Company in any transaction whereby the Change in Controltakes place or (B) the Fair Market Value of a share of Common Stock on the dateof occurrence of the Change in Control, over the purchase price per share ofCommon Stock subject to the option, (ii) in the case of a Free-Standing SAR,the number of shares of Common Stock then subject to such SAR, multiplied bythe excess, if any, of the greater of (A) the highest per share price offeredto stockholders of the Company in any transaction whereby the Change in Controltakes place or (B) the Fair Market Value of a share of Common Stock on the dateof occurrence of the Change in Control, over the base price of the SAR, (iii)in the case of a Restricted Stock Award or Performance Share Award, the numberof shares of Common Stock or the number of Performance Shares, as the case maybe, then subject to such award, multiplied by the greater of (A) the highestper share price offered to stockholders of the Company in any transactionwhereby the Change in Control takes place or (B) the Fair Market Value of ashare of Common Stock on the date of occurrence of the Change in Control. Inthe event of such a Change in Control, each Tandem SAR shall be surrendered bythe holder thereof and shall be cancelled simultaneously with the cancellationof the related option. The Company may, but is not required to, cooperate withany person who is subject to Section 16 of the Exchange Act to assure that anycash payment in accordance with the foregoing to such person is made incompliance with Section 16 and the rules and regulations thereunder.
      (b) “Change in Control” shall mean:
      (1) a sale or transfer of all or substantially all of the assets of theCompany on a consolidated basis in any transaction or series of relatedtransactions;
      (2) any merger, consolidation or reorganization to which the Company is aparty, except for a merger, consolidation or reorganization in which theCompany is the surviving corporation and, after giving effect to such merger,consolidation or reorganization, the holders of the Company’s outstandingequity (on a fully diluted basis) immediately prior to the merger,
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consolidation or reorganization will own in the aggregate immediatelyfollowing the merger, consolidation or reorganization the Company’s outstandingequity (on a fully diluted basis) either (i) having the ordinary voting powerto elect a majority of the members of the Company’s board of directors to beelected by the holders of Common Stock and any other class which votes togetherwith the Common Stock as a single class or (ii) representing at least 50% ofthe equity value of the Company as reasonably determined by the Board;
      (3) individuals who, as of the date hereof, constitute the Board (the“Incumbent Board”) cease for any reason to constitute at least a majority ofsuch Board; provided, however, that any individual who becomes a director ofthe Company subsequent to the date hereof whose election, or nomination forelection by the holders of the Company’s equity, was approved by the vote of atleast a majority of the directors then comprising the Incumbent Board shall bedeemed to have been a member of the Incumbent Board; and provided further, thatno individual who was initially elected as a director of the Company as aresult of an actual or threatened solicitation by any individual, entity orgroup (a “Person”) other than the Board, including any “person” within themeaning of Section 13(d) of the Exchange Act , for the purpose of opposing asolicitation by any other Person with respect to the election or removal ofdirectors, or any other actual or threatened solicitation of proxies orconsents by or on behalf of any Person other than the Board shall be deemed tohave been a member of the Incumbent Board; or
      (4) any Person other than KPMG LLP or its affiliates, acquires beneficialownership of 30% or more of the outstanding equity of the Company generallyentitled to vote on the election of directors.
      **6.9 No Right of Participation or Employment.**No person shall have anyright to participate in this Plan. Neither this Plan nor any award madehereunder shall confer upon any person any right to continued employment by theCompany or any Affiliate of the Company or affect in any manner the right ofthe Company or any Affiliate of the Company to terminate the employment of anyperson at any time without liability hereunder.
      **6.10 Rights as Stockholder.**No person shall have any right as astockholder of the Company with respect to any shares of Common Stock or otherequity security of the Company which is subject to an award hereunder unlessand until such person becomes a stockholder of record with respect to suchshares of Common Stock or equity security.
      **6.11 Designation of Beneficiary.**If permitted by the Company, a holder ofan award may file with the Committee a written designation of one or morepersons as such holder’s beneficiary or beneficiaries (both primary andcontingent) in the event of the holder’s death. To the extent an outstandingoption or SAR granted hereunder is exercisable, such beneficiary orbeneficiaries shall be entitled to exercise such option or SAR. Eachbeneficiary designation shall become effective only when filed in writing withthe Committee during the holder’s lifetime on a form prescribed by theCommittee. The spouse of a married holder domiciled in a community propertyjurisdiction shall join in any designation of a beneficiary other than suchspouse. The filing with the Committee of a new beneficiary designation shallcancel all previously filed beneficiary designations. If a holder fails todesignate a beneficiary, or if all designated beneficiaries of a holderpredecease the holder, then each outstanding option and SAR hereunder
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