exv10w68



 


Exhibit 10.68




CORINTHIAN COLLEGES, INC.

2003 PERFORMANCE AWARD PLAN





 








 



TABLE OF CONTENTS



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Page
	 	1.	 	 	THE PLAN	 	 	1	 
	 	 	 	 	 	1.1	 	 	Purpose
	 	 	1	 
	 	 	 	 	 	1.2	 	 	Administration and Authorization; Power and Procedure
	 	 	1	 
	 	 	 	 	 	1.3	 	 	Participation
	 	 	3	 
	 	 	 	 	 	1.4	 	 	Shares Available for Awards; Share Limits
	 	 	4	 
	 	 	 	 	 	1.5	 	 	Grant of Awards
	 	 	5	 
	 	 	 	 	 	1.6	 	 	Award Period
	 	 	5	 
	 	 	 	 	 	1.7	 	 	Limitations on Exercise and Vesting of Awards
	 	 	6	 
	 	 	 	 	 	1.8	 	 	No Transferability; Limited Exception to Transfer Restrictions
	 	 	6	 
	 	 	 	 	 	1.9	 	 	Consideration for Common Stock or Awards
	 	 	7	 
	 	2.	 	 	OPTIONS	 	 	8	 
	 	 	 	 	 	2.1	 	 	Grants
	 	 	8	 
	 	 	 	 	 	2.2	 	 	Option Price
	 	 	8	 
	 	 	 	 	 	2.3	 	 	Limitations on Grant and Terms of Incentive Stock Options
	 	 	9	 
	 	3.	 	 	STOCK APPRECIATION RIGHTS (INCLUDING LIMITED STOCK APPRECIATION RIGHTS)	 	 	9	 
	 	 	 	 	 	3.1	 	 	Grants
	 	 	9	 
	 	 	 	 	 	3.2	 	 	Exercise of Stock Appreciation Rights
	 	 	10	 
	 	 	 	 	 	3.3	 	 	Payment
	 	 	10	 
	 	 	 	 	 	3.4	 	 	Limited Stock Appreciation Rights
	 	 	11	 
	 	4.	 	 	RESTRICTED STOCK AND STOCK UNIT AWARDS	 	 	11	 
	 	 	 	 	 	4.1	 	 	Grants
	 	 	11	 
	 	 	 	 	 	4.2	 	 	Restrictions
	 	 	12	 
	 	 	 	 	 	4.3	 	 	Return to the Corporation
	 	 	12	 
	 	5.	 	 	PERFORMANCE SHARE AWARDS AND STOCK BONUSES	 	 	12	 
	 	 	 	 	 	5.1	 	 	Grants of Performance Share Awards
	 	 	12	 
	 	 	 	 	 	5.2	 	 	Section 162(m) Performance-Based Awards
	 	 	13	 
	 	 	 	 	 	5.3	 	 	Grants of Stock Bonuses
	 	 	15	 
	 	 	 	 	 	5.4	 	 	Deferred Payments
	 	 	15	 
	 	 	 	 	 	5.5	 	 	Cash Bonus Awards
	 	 	15	 







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TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Page
	 	6.	 	 	OTHER PROVISIONS	 	 	15	 
	 	 	 	 	 	6.1	 	 	Rights of Eligible Persons, Participants and Beneficiaries
	 	 	15	 
	 	 	 	 	 	6.2	 	 	Effects of Termination of Employment; Termination of Subsidiary Status;
Discretionary Provisions
	 	 	16	 
	 	 	 	 	 	6.3	 	 	Adjustments; Acceleration
	 	 	18	 
	 	 	 	 	 	6.4	 	 	Compliance with Laws
	 	 	22	 
	 	 	 	 	 	6.5	 	 	Tax Withholding
	 	 	22	 
	 	 	 	 	 	6.6	 	 	Plan Amendment, Termination and Suspension
	 	 	22	 
	 	 	 	 	 	6.7	 	 	Privileges of Stock Ownership
	 	 	23	 
	 	 	 	 	 	6.8	 	 	Effective Date of the Plan
	 	 	23	 
	 	 	 	 	 	6.9	 	 	Term of the Plan
	 	 	23	 
	 	 	 	 	 	6.10	 	 	Governing Law/Construction/Severability
	 	 	24	 
	 	 	 	 	 	6.11	 	 	Captions
	 	 	24	 
	 	 	 	 	 	6.12	 	 	Non-Exclusivity of Plan
	 	 	24	 
	 	 	 	 	 	6.13	 	 	No Corporate Action Restriction
	 	 	25	 
	 	 	 	 	 	6.14	 	 	Other Company Benefit and Compensation Programs
	 	 	25	 
	 	 	 	 	 	6.15	 	 	Stock-Based Awards in Substitution for Stock Options or Awards Granted
by Other Corporation
	 	 	25	 
	 	7.	 	 	DEFINITIONS	 	 	26	 







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CORINTHIAN COLLEGES, INC.

2003 PERFORMANCE AWARD PLAN




	1.	 	The Plan.





	 	1.1 	 	Purpose. The purpose of this Plan is to promote the success of the
Company and the interests of its stockholders by attracting, motivating,
retaining and rewarding directors, officers, employees and other eligible
persons with awards and incentives for high levels of individual
performance and improved financial performance of the Company.
Capitalized terms used herein are defined in Section 7.






	 	1.2 	 	Administration and Authorization; Power and Procedure.






	 	1.2.1 	 	The Administrator. This Plan shall be administered by and all
Awards under this Plan shall be authorized by the Administrator. The
“Administrator” means the Board or one or more committees appointed by
the Board or another committee (within its delegated authority) to
administer all or certain aspects of this Plan. Any such committee
shall be comprised solely of one or more directors of the Corporation
or such number of directors as may be required under applicable law. A
committee may delegate some or all of its authority to another
committee so constituted. The Board or a committee comprised solely of
directors of the Corporation may also delegate, to the extent permitted
by Section 157(c) of the Delaware General Corporation Law and any other
applicable law, to one or more officers of the Corporation, its powers
under this Plan (a) to designate the officers and employees of the
Company who will receive grants of rights or options to purchase shares
of Common Stock, and (b) to determine the number of rights or options
to be received by them, pursuant to a resolution that specifies the
total number of rights or options that may be granted under the
delegation, provided that no officer may be delegated the power to
designate himself or herself as a recipient of such options or rights.
The Board may delegate different levels of authority to different
committees with administrative and grant authority under this Plan.
Unless otherwise provided in the Bylaws of the Corporation or the
applicable charter of any Administrator: (a) a majority of the members
of the acting Administrator shall constitute a quorum, and (b) the vote
of a majority of the members present assuming the presence of a quorum
or the unanimous written consent of the members of the Administrator
shall constitute action by the acting Administrator.






	 	 	 	With respect to awards intended to satisfy the requirements for
performance-based compensation under Section 162(m) of the Code, this
Plan shall be administered by a committee consisting solely of two or
more “outside directors” of the Corporation (as this requirement is
applied under Section 162(m) of the Code); provided, however, that the
failure to satisfy such requirement shall not affect the validity of
the action of any committee otherwise duly authorized and acting in
the matter. Award grants, and
transactions in or involving awards, intended to be exempt under Rule
16b-3 under







1








 



	 	 	 	the Exchange Act, must be duly and timely authorized by
the Board or a committee consisting solely of two or more
“non-employee directors” of the Corporation (as this requirement is
applied under Rule 16b-3 promulgated under the Exchange Act). To the
extent required by any applicable listing agency, this Plan shall be
administered by a committee composed entirely of independent directors
of the Corporation (within the meaning of the applicable listing
agency).






	 	1.2.2 	 	Plan Awards; Interpretation; Powers of Administrator. Subject to
the express provisions of this Plan and any express limitations on the
delegated authority of an Administrator, the Administrator will have
the authority to:






	 	(a)	 	determine eligibility and, from the group of Eligible
Persons, select the particular Eligible Persons who will receive
Awards under this Plan;






	 	(b)	 	grant Awards to Eligible Persons, determine the price at
which securities will be offered or awarded and the amount of
securities to be offered or awarded to any of such persons,
determine the other specific terms and conditions of such Awards
consistent with the express limits of this Plan, and establish the
installments (if any) in which such Awards will become exercisable
or will vest (which may include, without limitation, performance
and/or time-based schedules), or determine that no delayed
exercisability or vesting is required, establish any applicable
performance targets, and establish the events of termination or
reversion of such Awards;






	 	(c)	 	approve the forms of Award Agreements (which need not be
identical either as to type of Award or among Participants);






	 	(d)	 	construe and interpret this Plan and any agreements
defining the rights and obligations of the Company and Participants
under this Plan, further define the terms used in this Plan, and
prescribe, amend and rescind rules and regulations relating to the
administration of this Plan or the Awards granted under this Plan;






	 	(e)	 	cancel, modify, or waive the Corporation’s rights with
respect to, or modify, discontinue, suspend, or terminate any or
all outstanding Awards held by Eligible Persons, subject to any
required consent under Section 6.6 and any stockholder approval
required under Section 6.6.5;






	 	(f)	 	accelerate or extend the exercisability or extend the term
of any or all such outstanding Awards within the maximum ten-year
term of Awards under Section 1.6 in such circumstances as the
Administrator may deem appropriate (including, without limitation,
in connection with a termination of employment or services or other
events of a personal nature);






	 	(g)	 	determine the date of grant of an award, which may be a
designated date after but not before the date of the
Administrator’s action (unless otherwise designated by the Administrator, the date of grant of an award shall be the date
upon which the Administrator took the action granting an award);







2








 



	 	(h)	 	determine whether, and the extent to which, adjustments are
required pursuant to Section 6.3 hereof and authorize the
termination, conversion, substitution or succession of awards upon
the occurrence of an event of the type described in Section 6.3;






	 	(i)	 	acquire or settle (subject to Sections 6.3 and 6.6) rights
under awards in cash, stock of equivalent value, or other
consideration; and






	 	(j)	 	determine Fair Market Value for Plan purposes and make all
other determinations and take such other action as contemplated by
this Plan or as may be necessary or advisable for the
administration of this Plan and the effectuation of its purposes.






	 	1.2.3 	 	Binding Determinations. Any action taken by, or inaction of, the
Corporation, any Subsidiary, or the Administrator relating or pursuant
to this Plan and within its authority hereunder or under applicable law
shall be within the absolute discretion of that entity or body and
shall be conclusive and binding upon all persons. Neither the Board
nor any Board committee, nor any member thereof or person acting at the
direction thereof, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in
connection with this Plan (or any Award made under this Plan), and all
such persons shall be entitled to indemnification and reimbursement by
the Company in respect of any claim, loss, damage or expense
(including, without limitation, attorneys’ fees) arising or resulting
therefrom to the fullest extent permitted by law and/or under any
directors and officers liability insurance coverage that may be in
effect from time to time.






	 	1.2.4 	 	Reliance on Experts. In making any determination or in taking or
not taking any action under this Plan, the Administrator or the Board,
as the case may be, may obtain and may rely upon the advice of experts,
including employees of and professional advisors to the Corporation.
No director, officer or agent of the Company will be liable for any
such action or determination taken or made or omitted in good faith.






	 	1.2.5 	 	Delegation. The Administrator may delegate ministerial,
non-discretionary functions to individuals who are officers or
employees of the Company.






	 	1.3 	 	Participation. Discretionary Awards may be granted by the Administrator
only to those persons that the Administrator determines to be Eligible
Persons. An Eligible Person who has been granted an Award may, if
otherwise eligible, be granted additional Awards if the Administrator so
determines.







3








 



	 	1.4 	 	Shares Available for Awards; Share Limits.






	 	1.4.1 	 	Shares Available. Subject to the provisions of Section 6.3, the
capital stock that may be delivered under this Plan will be shares of
the Corporation’s authorized but unissued Common Stock and any shares
of its Common Stock held as treasury shares. The shares may be
delivered for any lawful consideration.






	 	1.4.2 	 	Share Limits. The maximum number of shares of Common Stock that
may be delivered pursuant to Awards granted to Eligible Persons under
this Plan (the “Share Limit”) is equal to the sum of (a) 2,700,000
shares, plus (b) the number of any shares subject to stock options
granted under the Corporation’s 1998 Performance Award Plan (the “1998
Plan”) which expire, or for any reason are cancelled or terminated,
after the Effective Date (as defined in Section 8.6.1) without being
exercised. The following limits also apply with respect to awards
granted under this Plan:






	 	(a)	 	The maximum number of shares of Common Stock that may be
delivered pursuant to options qualified as incentive stock options
granted under this Plan is 2,700,000 shares.






	 	(b)	 	The maximum number of shares of Common Stock subject to
those Options and Stock Appreciation Rights that are granted during
any calendar year to any individual under this Plan is 500,000
shares.






	 	(c)	 	The maximum number of shares of Common Stock subject to all
Awards that are granted during any calendar year to any individual
under this Plan is 500,000 shares. This limit does not apply,
however, to shares delivered in respect of compensation earned but
deferred.






	 	(d)	 	The maximum number of shares of Common Stock that may be
delivered pursuant to awards granted to Non-Employee Directors in
the aggregate is 400,000 shares. This limit does not apply,
however, to shares delivered in respect of compensation earned but
deferred.






	 	(e)	 	The maximum number of shares of Common Stock that may be
delivered pursuant to awards granted under this Plan, other than in
the circumstances described in the next sentence, is 1,000,000
shares. This limit does not apply, however, to the following: (i)
shares delivered in respect of compensation earned but deferred,
and (ii) except as expressly provided in Section 2.2.1 or Section
3.3.1, as applicable (with respect to “discounted” Option or SAR
grants which shall count against this limit to the extent provided
in such Section), shares delivered pursuant to Option or SAR
grants.






	 	(f)	 	Additional limits with respect to Performance-Based Awards
are set forth in Section 5.2.







4








 



Each of the foregoing numerical limits is subject to adjustment as
contemplated by Section 1.4.3, Section 6.4, and Section 6.15.




	 	1.4.3 	 	Awards Settled in Cash, Reissue of Awards and Shares. To the
extent that an Award is settled in cash or a form other than shares of
Common Stock, the shares that would have been delivered had there been
no such cash or other settlement shall not be counted against the
shares available for issuance under this Plan. In the event that
shares are delivered in respect of a dividend equivalent, Stock
Appreciation Right, or other Award, only the actual number of shares
delivered with respect to the Award shall be counted against the share
limits of this Plan. Shares that are subject to or underlie Awards
which expire or for any reason are cancelled or terminated, are
forfeited, fail to vest, or for any other reason are not paid or
delivered under this Plan shall again be available for subsequent
Awards under this Plan. Shares that are exchanged by a Participant or
withheld by the Corporation as full or partial payment in connection
with any Award under this Plan or the 1998 Plan (with respect to such a
payment in connection with any award under the 1998 Plan, only to the
extent such transaction occurs after the Effective Date), as well as
any shares exchanged by a Participant or withheld by the Company to
satisfy the tax withholding obligations related to any award under this
Plan or the 1998 Plan (with respect to such an exchange or withholding
in connection with any award under the 1998 Plan, only to the extent
such transaction occurs after the Effective Date), shall be available
for subsequent awards under this Plan. Refer to Section 6.15 for
application of the foregoing share limits with respect to assumed
awards. The foregoing adjustments to the share limits of this Plan are
subject to any applicable limitations under Section 162(m) of the Code
with respect to awards intended as performance-based compensation
thereunder and are further subject to any applicable limitations under
Section 422 of the Code with respect to awards intended as Incentive
Stock Options.






	 	1.4.4 	 	Reservation of Shares. The Corporation shall at all times reserve
a number of shares of Common Stock sufficient to cover the
Corporation’s obligations and contingent obligations to deliver shares
with respect to Awards then outstanding under this Plan (exclusive of
any dividend equivalent obligations to the extent the Corporation has
the right to settle such rights in cash).






	 	1.5 	 	Grant of Awards. Subject to the express provisions of this Plan, the
Administrator will determine the number of shares of Common Stock subject
to each Award, the price (if any) to be paid for the shares or the Award
and, in the case of performance share awards, in addition to matters
addressed in Section 1.2.2, the specific objectives, goals and “business
criteria” as such term is used in Section 5.2 that further define the
terms of the performance share award. Each Award will be evidenced by an
Award Agreement signed by the Corporation and, if required by the
Administrator, by the Participant.






	 	1.6 	 	Award Period. Any Option, SAR, warrant or similar right shall expire and
any other Award shall either vest or be forfeited not more than 10 years
after the date of grant;
provided, however, that any payment of cash or delivery of stock pursuant to
an Award may be delayed until a future date if specifically authorized by
the Administrator in writing.







5








 



	 	1.7 	 	Limitations on Exercise and Vesting of Awards.






	 	1.7.1 	 	Provisions for Exercise. An Award will be exercisable or will
vest at the time or times provided by the Administrator in the
applicable Award Agreement, and once exercisable an Award will remain
exercisable until the expiration or earlier termination of the Award.






	 	1.7.2 	 	Procedure. Any exercisable Award will be deemed to be exercised
when the Corporation receives written notice of such exercise from the
Participant together with any required payment made in accordance with
Section 1.9.






	 	1.7.3 	 	Fractional Shares/Minimum Issue. Fractional share interests will
be disregarded, but may be accumulated. The Administrator, however, may
determine in the case of Eligible Persons that cash, other securities,
or other property will be paid or transferred in lieu of any fractional
share interests. No fewer than 100* shares may be purchased on
exercise of any Award at one time unless the number purchased is the
total number at the time available for purchase under the Award.






	 	1.8 	 	No Transferability; Limited Exception to Transfer Restrictions.






	 	1.8.1 	 	Limit On Exercise and Transfer. Unless otherwise expressly
provided in (or pursuant to) this Section 1.8, by applicable law and by
the Award Agreement, as the same may be amended, (i) all Awards are
non-transferable and will not be subject in any manner to sale,
transfer, anticipation, alienation, assignment, pledge, encumbrance or
charge; Awards will be exercised only by the Participant; and (ii)
amounts payable or shares issuable pursuant to an Award will be
delivered only to (or for the account of) the Participant.






	 	1.8.2 	 	Exceptions. The Administrator may permit Awards to be exercised
by and paid to certain persons or entities related to the Participant,
including but not limited to members of the Participant’s immediate
family, trusts or other entities controlled by or whose beneficiaries
or beneficial owners are the Participant and/or members of the
Participant’s immediate family, pursuant to such conditions and
procedures, including limitations on subsequent transfers, as the
Administrator may establish. Any permitted transfer shall be subject
to the condition that the Administrator receive evidence satisfactory
to it that the transfer (a) is being made for essentially donative,
estate and/or tax planning purposes on a gratuitous or donative basis
and without consideration (other than nominal consideration or in
exchange for an interest in a qualified transferee), and (b) will not
compromise the Corporation’s ability to register shares issuable under
this Plan on Form S-8 under the Securities Act. Notwithstanding the
foregoing or anything in Section 1.8.3, Incentive Stock Options and
Restricted Stock Awards shall be subject to any and all additional
transfer
restrictions under the Code to the extent necessary to maintain the
intended tax consequences of such awards.







6








 



	 	1.8.3 	 	Further Exceptions to Limits On Transfer. The exercise and
transfer restrictions in Section 1.8.1 will not apply to:






	 	(a)	 	transfers to the Corporation,






	 	(b)	 	the designation of a beneficiary to receive benefits if the
Participant dies or, if the Participant has died, transfers to or
exercises by the Participant’s Beneficiary, or, in the absence of a
validly designated Beneficiary, transfers by will or the laws of
descent and distribution,






	 	(c)	 	subject to any applicable limitations on Incentive Stock
Options, transfers to a family member (or former family member)
pursuant to a domestic relations order if approved or ratified by
the Administrator,






	 	(d)	 	if the Participant has suffered a disability, permitted
transfers or exercises on behalf of the Participant by the
Participant’s legal representative, or






	 	(e)	 	the authorization by the Administrator of “cashless
exercise” procedures with third parties who provide financing for
the purpose of (or who otherwise facilitate) the exercise of Awards
consistent with applicable laws and the express authorization of
the Administrator.






	 	1.9 	 	Consideration for Common Stock or Awards. The purchase price for any
Award granted under this Plan or the Common Stock to be delivered pursuant
to an Award, as applicable, may be paid by means of any lawful
consideration as determined by the Administrator, including, without
limitation, one or a combination of the following methods:






	 	•	 	services rendered by the recipient of such Award;






	 	•	 	cash, check payable to the order of the Corporation, or electronic funds transfer;






	 	•	 	notice and third party payment in such manner as may be authorized
by the Administrator;






	 	•	 	the delivery of previously owned shares of Common Stock;






	 	•	 	by a reduction in the number of shares otherwise deliverable pursuant to the Award; or






	 	•	 	subject to such procedures as the Administrator may adopt, pursuant
to a “cashless exercise” with a third party who provides financing for
the purposes of (or who otherwise facilitates) the purchase or exercise
of awards.







7








 



	 	 	 	In no event, however, shall any shares newly-issued by the Corporation be
issued for less than the minimum lawful consideration for such shares or for
consideration other than consideration permitted by applicable state law.
In the event that the Administrator allows a Participant to exercise an
Award by delivering shares of Common Stock previously owned by such
Participant and unless otherwise expressly provided by the Administrator,
any shares delivered which were initially acquired by the Participant from
the Corporation (upon exercise of an Option or otherwise) must have been
owned by the Participant at least six months as of the date of delivery.
Shares of Common Stock used to satisfy the exercise price of an Option shall
be valued at their Fair Market Value on the date of exercise. The
Corporation will not be obligated to deliver any shares unless and until it
receives full payment of the exercise or purchase price therefor and any
related withholding obligations under Section 6.5 and any other conditions
to exercise or purchase have been satisfied. Unless otherwise expressly
provided in the applicable Award Agreement, the Administrator may at any
time eliminate or limit a participant’s ability to pay the purchase or
exercise price of any Award or shares by any method other than cash payment
to the Corporation.






	2.	 	Options.





	 	2.1	 	 Grants. One or more Options may be granted under this Section 2 to any
Eligible Person. Each Option granted will be designated in the applicable
Award Agreement, by the Administrator, as either an Incentive Stock
Option, subject to Section 2.3, or a Nonqualified Stock Option.






	 	2.2 	 	Option Price.






	 	2.2.1 	 	Pricing Limits. The purchase price per share of the Common Stock
covered by each Option will be determined by the Administrator at the
time of the Award; provided that the purchase price per share of the
Common Stock covered by each Option will not be less than 100% of the
Fair Market Value of the Common Stock on the date of grant of the
Option except as follows: (a) in the case of an Option granted
retroactively in tandem with or as a substitution for another Award,
the per share exercise price may be no lower than the Fair Market Value
of a share of Common Stock on the date such other Award was granted (to
the extent consistent with Sections 422 and 424 of the Code in the case
of Options intended as Incentive Stock Options); and (b) in any other
circumstances, a Nonqualified Stock Option may be granted with a per
share exercise price that is less than the Fair Market Value of a share
of Common Stock on the date of grant, provided that any shares
delivered in respect of such Option shall be charged against the limit
of Section 1.4.2(e) (the limit on full-value awards) as well as any
other applicable limit under Section 1.4.2. In no case shall the
purchase price per share of the Common Stock covered by an Option be
less than the par value of such a share.






	 	2.2.2 	 	Payment Provisions. The purchase price of any shares purchased on
exercise of an Option granted under this Section 2 will be paid in full
at the time of each
purchase in one or a combination of the methods set forth in Section
1.9, as permitted or required by the Administrator.







8








 



	 	2.3 	 	Limitations on Grant and Terms of Incentive Stock Options.






	 	2.3.1 	 	$100,000 Limit. To the extent that the aggregate “Fair Market
Value” of stock with respect to which incentive stock options first
become exercisable by a Participant in any calendar year exceeds
$100,000, taking into account both Common Stock subject to Incentive
Stock Options under this Plan and stock subject to incentive stock
options under all other plans of the Company or any parent corporation,
such options will be treated as Nonqualified Stock Options. For this
purpose, the “Fair Market Value” of the stock subject to options will
be determined as of the date the options were awarded. In reducing the
number of options treated as incentive stock options to meet the
$100,000 limit, the most recently granted options will be reduced
first. To the extent a reduction of simultaneously granted options is
necessary to meet the $100,000 limit, the Administrator may, in the
manner and to the extent permitted by law, designate which shares of
Common Stock are to be treated as shares acquired pursuant to the
exercise of an Incentive Stock Option.






	 	2.3.2 	 	Option Period. Subject to Section 1.6, each Option and all rights
thereunder will expire no later than 10 years after the Award Date.






	 	2.3.3 	 	Other Code Limits. Incentive Stock Options may only be granted to
Eligible Employees of the Corporation or a Subsidiary that satisfies
the other eligibility requirements of the Code. There will be imposed
in any Award Agreement relating to Incentive Stock Options such other
terms and conditions as from time to time are required in order that
the Option be an “incentive stock option” as that term is defined in
Section 422 of the Code.






	 	2.3.4 	 	Limits on 10% Holders. No Incentive Stock Option may be granted
to any person who, at the time the Option is granted, owns (or is
deemed to own under Section 424(d) of the Code) shares of outstanding
Common Stock possessing more than 10% of the total combined voting
power of all classes of stock of the Corporation, unless the exercise
price of such Option is at least 110% of the Fair Market Value of the
stock subject to the Option and such Option by its terms is not
exercisable after the expiration of five years from the date such
Option is granted.






	3.	 	Stock Appreciation Rights (Including Limited Stock Appreciation Rights).





	 	3.1 	 	Grants. The Administrator may grant to any Eligible Person Stock
Appreciation Rights either concurrently with the grant of another Award or
in respect of an outstanding Award, in whole or in part, or independently
of any other Award. Any Stock Appreciation Right granted in connection
with an Incentive Stock Option will contain such terms as may be required
to comply with the provisions of Section 422 of the Code and the
regulations promulgated thereunder, unless the holder otherwise agrees.







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	 	3.2 	 	Exercise of Stock Appreciation Rights.






	 	3.2.1 	 	Exercisability. Unless the Award Agreement or the Administrator
otherwise provides, a Stock Appreciation Right related to another Award
will be exercisable at such time or times, and to the extent, that the
related Award will be exercisable.






	 	3.2.2 	 	Stand-Alone SARs. A Stock Appreciation Right granted
independently of any other Award will be exercisable pursuant to the
terms of the Award Agreement but in no event earlier than six months
after the Award Date, except in the case of death or Total Disability.






	 	3.2.3 	 	Proportionate Reduction If an SAR extends to less than all the
shares covered by the related Award and if a portion of the related
Award is thereafter exercised, the number of shares subject to the
unexercised SAR shall be reduced only if and to the extent that the
remaining number of shares covered by such related Award is less than
the remaining number of shares subject to such SAR.






	 	3.3 	 	Payment.






	 	3.3.1 	 	Amount. Unless the Administrator otherwise provides, upon
exercise of a Stock Appreciation Right and the attendant surrender of
an exercisable portion of any related Award, the Participant will be
entitled to receive, subject to Section 6.5, payment of an amount
determined by multiplying:






	 	(a)	 	the difference (which shall not be less than zero) obtained
by subtracting the Base Price of the Stock Appreciation Right from
the Fair Market Value of a share of Common Stock on the date of
exercise of the Stock Appreciation Right, by






	 	(b)	 	the number of shares with respect to which the Stock
Appreciation Right has been exercised.






	 	 	 	The “Base Price” of a Stock Appreciation Right will be determined by
the Administrator at the time of the Award; provided that the Base
Price per Stock Appreciation Right will not be less than 100% of the
Fair Market Value of the Common Stock on the date of grant of the
Award except as follows: (a) in the case of a Stock Appreciation Right
granted retroactively in tandem with or as a substitution for another
Award, the Base Price may be no lower than the Fair Market Value of a
share of Common Stock on the date such other Award was granted; and
(b) in any other circumstances, a Stock Appreciation Right may be
granted with a Base Price that is less than the Fair Market Value of a
share of Common Stock on the date of grant, provided that any shares
delivered in respect of such Stock Appreciation Right shall be charged
against the limit of Section 1.4.2(e) (the limit on full-value awards)
as well as any other applicable limit under Section 1.4.2.






	 	3.3.2 	 	Form of Payment. The Administrator, in its sole discretion, will
determine the form in which payment will be made of the amount
determined under Section 3.3.1 above,







10








 



	 	 	 	either solely in cash, solely in shares of Common Stock (valued
at Fair Market Value on the date of exercise of the Stock Appreciation
Right), or partly in such shares and partly in cash, but the
Administrator will have determined that such exercise and payment are
consistent with applicable law. If the Administrator permits the
Participant to elect to receive cash or shares (or a combination
thereof) on such exercise, any such election will be subject to such
conditions as the Administrator may impose.






	 	3.4 	 	Limited Stock Appreciation Rights. The Administrator may grant to any
Eligible Person Stock Appreciation Rights exercisable only upon or in
respect of a change in control or any other specified event (“Limited
SARs”) and such Limited SARs may relate to or operate in tandem or
combination with, or substitution for, Options, other SARs or other Awards
(or any combination thereof), and may be payable in cash or shares based
on the spread between the base price of the SAR and a price based upon or
equal to the Fair Market Value of the Common Stock during a specified
period or at a specified time within a specified period before, after or
including the date of such event.






	4.	 	Restricted Stock and Stock Unit Awards.





	 	4.1 	 	Grants. Subject to any applicable limitations under Delaware law and to
such rules and procedures as the Administrator may establish from time to
time:






	 	4.1.1 	 	Restricted Stock. The Administrator may grant one or more
Restricted Stock Awards to any Eligible Person. Each Restricted Stock
Award Agreement will specify the number of shares of Common Stock to be
issued to the Participant, the date of such issuance, the consideration
for such shares (but not less than the minimum lawful consideration
under applicable state law) to be paid by the Participant, the extent
(if any) to which and the time (if ever) at which the Participant will
be entitled to dividends, voting and other rights in respect of the
shares prior to vesting, and the restrictions (which may be based on
performance criteria, passage of time or other factors or any
combination thereof) imposed on such shares and the conditions of
release or lapse of such restrictions. Such restrictions will not
lapse earlier than six months after the Award Date, except to the
extent the Administrator may otherwise provide. Stock certificates
evidencing shares of Restricted Stock pending the lapse of the
restrictions (“Restricted Shares”) will bear a legend making
appropriate reference to the restrictions imposed hereunder and will be
held by the Corporation or by a third party designated by the
Administrator until the restrictions on such shares have lapsed and the
shares have vested in accordance with the provisions of the Award and
Section 1.7. Upon issuance of the Restricted Stock Award, the
Participant may be required to provide such further assurances and
documents as the Administrator may require to enforce the restrictions.






	 	4.1.2 	 	Stock Units. The Administrator may authorize and grant to any
Eligible Person a Stock Unit Award, or the crediting of Stock Units for
services rendered or to be rendered or in lieu of other compensation,
consistent with other applicable terms of







11








 



	 	 	 	this Plan, may permit an Eligible Person to irrevocably elect to defer
by means of Stock Units or receive in Stock Units all or a portion of
any Award hereunder, or may grant Stock Units in lieu of, in exchange
for, in respect of, or in addition to any other compensation or Award
under this Plan. The specific terms, conditions, and provisions
relating to each Stock Unit grant or election, including the
applicable vesting and payout provisions of the Stock Units and the
form of payment to be made at or following the vesting thereof, shall
be set forth in or pursuant to the applicable Award Agreement or and
any relevant Company deferred compensation plan.






	 	4.2 	 	Restrictions.






	 	4.2.1 	 	Pre-Vesting Restraints. Except as provided in Sections 4.1 and
1.8, restricted shares comprising any Restricted Stock Award may not be
sold, assigned, transferred, pledged or otherwise disposed of or
encumbered, either voluntarily or involuntarily, until the restrictions
on such shares have lapsed and the shares have become vested.






	 	4.2.2 	 	Dividend and Voting Rights. Unless otherwise provided in the
applicable Award Agreement, a Participant receiving a Restricted Stock
Award will be entitled to cash dividend and voting rights for all
shares issued even though they are not vested, but such rights will
terminate immediately as to any Restricted Shares which cease to be
eligible for vesting.






	 	4.2.3 	 	Cash Payments. If the Participant has paid or received cash
(including any dividends) in connection with the Restricted Stock
Award, the Award Agreement will specify whether and to what extent such
cash will be returned (with or without an earnings factor) as to any
restricted shares that cease to be eligible for vesting.






	 	4.3 	 	Return to the Corporation. Unless the Administrator otherwise expressly
provides, Restricted Shares or Stock Units that remain subject to vesting
conditions at the time of termination of employment will not vest and will
be returned to the Corporation or cancelled, as the case may be, in such
manner and on such terms as the Administrator provides.






	5.	 	Performance Share Awards and Stock Bonuses.





	 	5.1 	 	Grants of Performance Share Awards. The Administrator may grant
Performance Share Awards to Eligible Employees based upon such factors as
the Administrator deems relevant in light of the specific type and terms
of the award. An Award Agreement will specify the maximum number of
shares of Common Stock (if any) subject to the Performance Share Award,
the consideration (but not less than the minimum lawful consideration) to
be paid for any such shares as may be issuable to the Participant, the
duration of the Award and the conditions upon which delivery of any shares
or cash to the Participant will be based. The amount of cash or shares or
other property that may be deliverable pursuant to such Award will be
based upon the degree of attainment over a specified period of not more
than 10 years (a “performance cycle”) as may be established
by the Administrator of such







12








 



	 	 	 	measure(s) of the performance of the Company
(or any part thereof) or the Participant as may be established by the
Administrator. The Administrator may provide for full or partial credit,
prior to completion of such performance cycle or the attainment of the
performance achievement specified in the Award, in the event of the
Participant’s death, Retirement, or Total Disability, a Change in Control
Event or in such other circumstances as the Administrator (consistent with
Section 6.10.3(b), if applicable) may determine.






	 	5.2 	 	Section 162(m) Performance-Based Awards. Without limiting the generality
of Section 5.1 or any other type of award otherwise authorized under this
Plan, any type of award authorized under this Plan may be, and Options and
Stock Appreciation Rights granted with an exercise or base price not less
than the Fair Market Value of a share of Common Stock at the date of grant
(“Qualifying Options” and “Qualifying SARS,” respectively) typically will
be, granted as awards intended to satisfy the requirements for
“performance-based compensation” within the meaning of Section 162(m) of
the Code (“Performance-Based Awards”). A Performance-Based Award may also
be granted as a cash award that is not related to shares of Common Stock.
The grant, vesting, exercisability or payment of Performance-Based Awards
may depend (or, in the case of Qualifying Options or Qualifying SARs, may
also depend) on the degree of achievement of one or more performance goals
relative to a pre-established targeted level or level using one or more of
the Business Criteria set forth below (on an absolute or relative basis)
for the Corporation on a consolidated basis or for one or more of the
Corporation’s subsidiaries, segments, divisions or business units, or any
combination of the foregoing. Any Qualifying Option or Qualifying SAR
shall be subject only to the requirements of Section 5.2.1 and 5.2.2 in
order for such award to satisfy the requirements for “performance-based
compensation” under Section 162(m) of the Award. Any other
Performance-Based Award shall be subject to all of the following
provisions of this Section 5.2.






	 	5.2.1 	 	Eligible Class. The eligible class of persons for
Performance-Based Awards under this Section 5.2 shall be officers and
employees of the Company. The Administrator approving
Performance-Based Awards or making any certification required pursuant
to Section 5.2.3 must be constituted as provided in Section 1.2.1 for
awards that are intended as performance-based compensation under
Section 162(m) of the Code.






	 	5.2.2 	 	Form of Payment; Maximum Performance-Based Award. Awards under
this Section 5.2 may be paid in cash or shares of Common Stock or any
combination thereof. Grants of Qualifying Options and Qualifying SARs
to any one Participant in any one calendar year shall be subject to the
limit set forth in Section 1.4.2(b). The maximum number of shares of
Common Stock which may be delivered pursuant to all Performance-Based
Awards, Qualifying Options and Qualifying SARs (other than cash awards
covered by the following sentence) that are granted to any one
Participant in any one calendar year, in the aggregate, shall be
subject to the limit set forth in Section 1.4.2(c). In addition, the
aggregate amount of compensation to be paid to any one Participant in
respect of all Performance-Based Awards payable only in cash and
not related to shares of Common Stock and granted to that Participant
in any one calendar year shall not exceed $2,000,000. Awards that are
cancelled during the year shall be counted against these limits to the
extent required by Section 162(m) of the Code.







13








 



	 	5.2.3 	 	Performance Goals. The specific performance goals for
Performance-Based Awards (other than Qualifying Options and Qualifying
SARs) shall be, on an absolute or relative basis, established based on
one or more of the following business criteria (“Business Criteria”) as
selected by the Administrator in its sole discretion: earnings per
share, cash flow (which means cash and cash equivalents derived from
either net cash flow from operations or net cash flow from operations,
financing and investing activities), stock appreciation, total
stockholder return, revenue, revenue growth, operating income (before
or after taxes), growth in operating income (before or after taxes),
earnings (before or after interest, taxes, depreciation and/or
amortization), earnings growth (before or after interest, taxes,
depreciation and/or amortization), return on equity or on assets or on
net investment, cost containment or reduction, or any combination
thereof. These terms are used as applied under generally accepted
accounting principles or in the Company’s financial reporting. To
qualify awards as performance-based under Section 162(m), the
applicable Business Criterion (or Business Criteria, as the case may
be) and specific performance goal or goals (“targets”) must be
established and approved by the Administrator during the first 90 days
of the performance period (and, in the case of performance periods of
less than one year, in no event more than 25% of the performance period
has elapsed) and while performance relating to such target(s) remains
substantially uncertain within the meaning of Section 162(m) of the
Code. Performance targets shall be adjusted to mitigate the unbudgeted
impact of material, unusual or nonrecurring gains and losses,
accounting changes or other extraordinary events not foreseen at the
time the targets were set unless the Administrator provides otherwise
at the time of establishing the targets. The applicable performance
measurement period may not be less than three months nor more than 10
years.






	 	5.2.4 	 	Administrator Certification. Before any Performance-Based Award
under this Section 5.2 (other than Qualifying Options and Qualifying
SARs) is paid and to the extent required to qualify the award as
performance-based compensation within the meaning of Section 162(m) of
the Code, the Administrator must certify in writing that the
performance target(s) and any other material terms of the
Performance-Based Award were in fact timely satisfied.






	 	5.2.5 	 	Administrator Discretion. The Administrator will have the
discretion to determine the restrictions or other limitations of the
individual Awards granted under this Section 5.2 including the
authority to reduce Awards, payouts or vesting or to pay no Awards, in
its sole discretion, if the Administrator expressly preserves such
authority at the time of grant by language to this effect in its
authorizing resolutions or otherwise.






	 	5.2.6 	 	Expiration of Grant Authority. As required pursuant to Section
162(m) of the Code and the regulations promulgated thereunder, the
Administrator’s authority to







14








 



	 	 	 	grant new awards that are intended to
qualify as performance-based compensation within the meaning of Section
162(m) of the Code (other than Qualifying Options and Qualifying SARs)
shall terminate upon the first meeting of the Corporation’s
stockholders that occurs in the fifth year following the year in which
the Corporation’s stockholders first approve this Plan.






	 	5.3 	 	Grants of Stock Bonuses. The Administrator may grant a Stock Bonus to
any Eligible Person to reward exceptional or special services,
contributions or achievements in the manner and on such terms and
conditions (including any restrictions on such shares) as determined from
time to time by the Administrator. The number of shares so awarded will
be determined by the Administrator. The Award may be granted
independently or in lieu of a cash bonus.






	 	5.4 	 	Deferred Payments. The Administrator may authorize for the benefit of
any Eligible Person the deferral of any payment of cash or shares that may
become due or of cash otherwise payable under this Plan, and provide for
accredited benefits thereon (such as the payment or crediting of interest
or other earnings on the deferral amounts, or the payment or crediting of
dividend equivalents where the deferred amounts are denominated in
shares), at the election or at the request of such Participant, subject to
the other terms of this Plan. Such deferral will be subject to such
further conditions, restrictions or requirements as the Administrator may
impose, subject to any then vested rights of Participants.






	 	5.5 	 	Cash Bonus Awards.






	 	5.5.1 	 	Performance Goals. The Administrator may establish a program of
annual incentive awards that are payable in cash to Eligible Persons
based upon the extent to which performance goals are met during the
performance period. The performance goals may depend upon the
performance of the Company on a consolidated, subsidiary division basis
with reference to any one or combination of the business criteria (as
such term is used in Section 5.2). In addition, the award may depend
upon the Eligible Person’s individual performance.






	 	5.5.2 	 	Payment in Restricted Stock. In lieu of cash payment of an Award,
the Administrator may require or allow all or a portion of the Award to
be paid in the form of stock, Restricted Stock, an Option or other
Award.






	6.	 	Other Provisions.





	 	6.1 	 	Rights of Eligible Persons, Participants and Beneficiaries.






	 	6.1.1 	 	Employment Status. Status as an Eligible Person will not be
construed as a commitment that any Award will be made under this Plan
to an Eligible Person or to Eligible Persons generally.






	 	6.1.2 	 	No Employment Contract. Nothing contained in this Plan (or in any
other documents related to this Plan or to any Award) will confer upon
any Eligible Person







15








 



	 	 	 	or other Participant any right to continue in the
employ or other service of the Company or constitute any contract or
agreement of employment or other service, nor will interfere in any way
with the right of the Company to otherwise change such person’s
compensation or other benefits or to terminate the employment or other
service of such person, with or without cause. Nothing in this Section
6.1.2, however, is intended to adversely affect any express independent
right of such person under a separate employment or service contract
other than an Award Agreement.






	 	6.1.3 	 	Plan Not Funded. Awards payable under this Plan will be payable
in shares or from the general assets of the Corporation, and (except
for any reservation of shares by the Corporation pursuant to Section as
provided in Section 1.4.4) no special or separate reserve, fund or
deposit will be made to assure payment of such Awards. No Participant,
Beneficiary or other person will have any right, title or interest in
any fund or in any specific asset (including shares of Common Stock,
except as expressly otherwise provided) of the Company by reason of any
Award hereunder. Neither the provisions of this Plan (or of any
related documents), nor the creation or adoption of this Plan, nor any
action taken pursuant to the provisions of this Plan will create, or be
construed to create, a trust of any kind or a fiduciary relationship
between the Company and any Participant, Beneficiary or other person.
To the extent that a Participant, Beneficiary or other person acquires
a right to receive payment pursuant to any Award hereunder, such right
will be no greater than the right of any unsecured general creditor of
the Company.






	 	6.1.4 	 	Charter Documents. The Articles of Incorporation and By-Laws of
the Corporation, as either of them may be amended from time to time,
may provide for additional restrictions and limitations with respect to
the Common Stock (including additional restrictions and limitations on
the transfer of shares). To the extent that these restrictions and
limitations are greater than those set forth in this Plan or any Award
Agreement, such restrictions and limitations shall apply to any shares
of Common Stock acquired pursuant to the exercise of Awards and are
incorporated herein by reference.






	 	6.2 	 	Effects of Termination of Employment; Termination of Subsidiary Status;
Discretionary Provisions.






	 	6.2.1 	 	Options — Resignation or Dismissal. Unless otherwise provided in
the Award Agreement and subject to earlier termination pursuant to or
as contemplated by Section 1.6 or 6.3, if the Participant’s employment
by (or other service specified in the Award Agreement to) the Company
terminates for any reason (the date of such termination being referred
to as the “Severance Date”) other than due to the Participant’s
Retirement, Total Disability or death, or a termination by the
Corporation or a Subsidiary “for cause” (as determined in the sole
discretion of the Administrator, unless a written employment agreement
by and between the Participant and the Corporation or a Subsidiary defines such term for
purposes of the Participant’s employment and such agreement is in
effect at the time of grant of the







16








 



	 	 	 	Award), the Participant will have
until the date which is three months after the Participant’s Severance
Date to exercise an Option to the extent that it is vested on the
Severance Date. In the case of a termination by the Corporation or a
Subsidiary “for cause” (as determined in the sole discretion of the
Administrator, unless a written employment agreement by and between
the Participant and the Corporation or a Subsidiary defines such term
for purposes of the Participant’s employment and such agreement is in
effect at the time of grant of the Award), the Option will terminate
on the Participant’s Severance Date (whether or not vested and/or
exercisable). In all cases, the Option, to the extent not vested on
the Participant’s Severance Date, will terminate on that date.






	 	6.2.2 	 	Options — Death or Disability. Unless otherwise provided in the
Award Agreement and subject to earlier termination pursuant to or as
contemplated by Section 1.6 or 6.3, if the Participant’s employment by
(or specified service to) the Company terminates as a result of the
Participant’s Total Disability or death, or the Participant suffers a
Total Disability or dies within 30 days after a termination described
in Section 6.2.1, the Participant, the Participant’s Personal
Representative or the Participant’s Beneficiary, as the case may be,
will have until the date which is twelve months after the Participant’s
Severance Date to exercise an Option to the extent that it is vested on
the Participant’s Severance Date. The Option, to the extent not vested
on the Participant’s Severance Date, will terminate on that date.






	 	6.2.3 	 	Options — Retirement. Unless otherwise provided in the Award
Agreement and subject to earlier termination pursuant to or as
contemplated by Section 1.6 or 6.3, if the Participant’s employment by
(or specified service to) the Company terminates as a result of the
Participant’s Retirement, the Participant, the Participant’s Personal
Representative or the Participant’s Beneficiary, as the case may be,
will have until the date which is twelve months after the Participant’s
Severance Date to exercise an Option to the extent that it is vested on
the Participant’s Severance Date. The Option, to the extent not vested
on the Participant’s Severance Date, will terminate on that date.






	 	6.2.4 	 	Certain SARs. Any SAR granted concurrently or in tandem with an
Option will have the same post-termination provisions and
exercisability periods as the Option to which it relates, unless the
Administrator otherwise provides.






	 	6.2.5 	 	Other Awards. The Administrator will establish in respect of each
other Award granted hereunder the Participant’s rights and benefits (if
any) if the Participant’s employment is terminated and in so doing may
make distinctions based upon the cause of termination and the nature of
the Award.






	 	6.2.6 	 	Administrator Discretion. Notwithstanding the foregoing
provisions of this Section 6.2, in the event of, or in anticipation of,
a termination of employment with
the Company for any reason, other than discharge for cause, the
Administrator may increase the portion of the Participant’s Award
available to the Participant, or







17








 



	 	 	 	Participant’s Beneficiary or Personal
Representative, as the case may be, or, subject to the provisions of
Section 1.6 and 6.3, extend the exercisability period upon such terms
as the Administrator determines and expressly sets forth in or by
amendment to the Award Agreement. If the Participant is not an
employee or director of the Company and provides other services to the
Company, the Administrator shall be the sole judge for purposes of
this Plan (unless a contract or the Award otherwise provides) of
whether the Participant continues to render services to the Company
and the date, if any, upon which such services shall be deemed to have
terminated.






	 	6.2.7 	 	Events Not Deemed Terminations of Service. Unless Company policy
or the Administrator otherwise provides, the employment relationship
shall not be considered terminated in the case of (a) sick leave, (b)
military leave, or (c) any other leave of absence authorized by the
Company or the Administrator; provided that unless reemployment upon
the expiration of such leave is guaranteed by contract or law, such
leave is for a period of not more than 90 days. In the case of any
employee of the Company on an approved leave of absence, continued
vesting of the Award while on leave from the employ of the Company may
be suspended until the employee returns to service, unless the
Administrator otherwise provides or applicable law otherwise requires.
In no event shall an Award be exercised after the expiration of the
term set forth in the Award Agreement.






	 	6.2.8 	 	Effect of Change of Subsidiary Status. For purposes of this Plan
and any Award, if an entity ceases to be a Subsidiary of the
Corporation a termination of employment or service shall be deemed to
have occurred with respect to each Eligible Person in respect of such
Subsidiary who does not continue as an Eligible Person in respect of
another entity within the Company after giving effect to the
Subsidiary’s change in status.






	 	6.3 	 	Adjustments; Acceleration.






	 	6.3.1 	 	Adjustments. The following provisions will apply if any
extraordinary dividend or other extraordinary distribution occurs in
respect of the Common Stock (whether in the form of cash, Common Stock,
other securities, or other property), or any reclassification,
recapitalization, stock split (including a stock split in the form of a
stock dividend), reverse stock split, reorganization, merger,
combination, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Common Stock or other securities of the
Corporation, or any similar, unusual or extraordinary corporate
transaction (or event in respect of the Common Stock) or a sale of
substantially all the assets of the Corporation as an entirety occurs.
The Administrator will, in such manner and to such extent (if any) as
it deems appropriate and equitable






	 	(a)	 	proportionately adjust any or all of (i) the number and
type of shares of Common Stock (or other securities) that
thereafter may be made the subject of Awards
(including the specific maxima and numbers of shares set forth
elsewhere in this Plan), (ii) the number, amount and type of shares
of Common Stock (or other







18








 



	 	 	 	securities or property) subject to any or
all outstanding Awards, (iii) the grant, purchase, or exercise
price of any or all outstanding Awards, (iv) the securities, cash
or other property deliverable upon exercise of any outstanding
Awards, or (v) the performance standards appropriate to any
outstanding Awards, or






	 	(b)	 	in the case of an extraordinary dividend or other
distribution, recapitalization, reclassification, merger,
reorganization, consolidation, combination, sale of assets, split
up, exchange, or spin off, make provision for a cash payment or for
the substitution or exchange of any or all outstanding Awards or
the cash, securities or property deliverable to the holder of any
or all outstanding Awards based upon the distribution or
consideration payable to holders of the Common Stock upon or in
respect of such event.






	 	 	 	The Administrator may adopt such valuation methodologies for
outstanding Awards as it deems reasonable in the event of a cash or
property settlement and, in the case of Options, Stock Appreciation
Rights or similar rights, but without limitation on other
methodologies, may base such settlement solely upon the excess if any
of the per share amount payable upon or in respect of such event over
the exercise or base price of the Award. With respect to any award of
an Incentive Stock Option, the Administrator may make such an
adjustment that causes the option to cease to qualify as an Incentive
Stock Option without the consent of the affected Participant.






	 	 	 	In any of such events, the Administrator may take such action prior to
such event to the extent that the Administrator deems the action
necessary to permit the participant to realize the benefits intended
to be conveyed with respect to the underlying shares in the same
manner as is or will be available to stockholders generally. In the
case of any stock split or reverse stock split, if no action is taken
by the Administrator, the proportionate adjustments contemplated by
clause (a) above shall nevertheless be made.






	 	6.3.2 	 	Automatic Acceleration of Awards. Upon a dissolution of the
Corporation or other event described in Section 6.3 that the
Corporation does not survive (or does not survive as a public company
in respect of its Common Stock), then each then outstanding Option and
Stock Appreciation Right shall become fully vested, all shares of
Restricted Stock then outstanding shall fully vest free of
restrictions, and each other Award granted under this Plan that is then
outstanding shall become payable to the holder of such Award; provided
that such acceleration provision shall not apply, unless otherwise
expressly provided by the Administrator, with respect to any Award to
the extent that the Administrator has made a provision for the
substitution, assumption, exchange or other continuation or settlement
of the Award, or the Award would otherwise continue in accordance with
its terms, in the circumstances.






	 	6.3.3 	 	Possible Acceleration of Awards. Without limiting Section 6.3.2,
in the event of a Change in Control Event, the Administrator may, in
its discretion, provide that any outstanding Option or Stock
Appreciation Right shall become fully vested, that any







19








 



	 	 	 	share of Restricted Stock then outstanding shall fully vest free of
restrictions, and that any other Award granted under this Plan that is
then outstanding shall be payable to the holder of such Award. The
Administrator may take such action with respect to all Awards then
outstanding or only with respect to certain specific Awards identified
by the Administrator in the circumstances.






	 	6.3.4 	 	Early Termination of Awards. Any Award that has been accelerated
as required or contemplated by Section 6.3.2 or 6.3.3 (or would have
been so accelerated but for Section 6.3.5, 6.3.7, or 6.3.8) shall
terminate upon the related event referred to in Section 6.3.2 or 6.3.3,
as applicable, subject to any provision that has been expressly made by
the Administrator, through a plan of reorganization or otherwise, for
the survival, substitution, assumption, exchange or other continuation
or settlement of such Award and provided that, in the case of Options
and Stock Appreciation Rights that will not survive, be substituted
for, assumed, exchanged, or otherwise continued or settled in the
transaction, the holder of such Award shall be given reasonable advance
notice of the impending termination and a reasonable opportunity to
exercise his or her outstanding Options and Stock Appreciation Rights
in accordance with their terms before the termination of such Awards
(except that in no case shall more than ten days’ notice of accelerated
vesting and the impending termination be required and any acceleration
may be made contingent upon the actual occurrence of the event).






	 	6.3.5 	 	Other Acceleration Rules. Any acceleration of awards pursuant to
this Section 6.3 shall comply with applicable legal requirements and,
if necessary to accomplish the purposes of the acceleration or if the
circumstances require, may be deemed by the Administrator to occur a
limited period of time not greater than 30 days before the event.
Without limiting the generality of the foregoing, the Administrator may
deem an acceleration to occur immediately prior to the applicable event
and/or reinstate the original terms of an award if an event giving rise
to an acceleration does not occur. The Administrator may override the
provisions of Section 6.3.2, 6.3.3, 6.3.4 and/or 6.3.7 by express
provision in the Award Agreement and may accord any Eligible Person a
right to refuse any acceleration, whether pursuant to the Award
Agreement or otherwise, in such circumstances as the Administrator may
approve. The portion of any Incentive Stock Option accelerated in
connection with a Change in Control Event or any other action permitted
hereunder shall remain exercisable as an Incentive Stock Option only to
the extent the applicable $100,000 limitation on Incentive Stock
Options is not exceeded. To the extent exceeded, the accelerated
portion of the option shall be exercisable as a Nonqualified Stock
Option under the Code.






	 	6.3.6 	 	Possible Rescission of Acceleration. If the vesting of an Award
has been accelerated expressly in anticipation of an event or upon
stockholder approval of an
event and the Administrator later determines that the event will not
occur, the Administrator may rescind the effect of the acceleration as
to any then outstanding and unexercised or otherwise unvested Awards.


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	 	6.3.7 	 	Golden Parachute Limitations. Notwithstanding anything else
contained in this Section 6.3 to the contrary, in no event shall an
Award be accelerated under this Plan to an extent or in a manner which
would not be fully deductible by the Company for federal income tax
purposes because of Section 280G of the Code, nor shall any payment
hereunder be accelerated to the extent any portion of such accelerated
payment would not be deductible by the Company because of Section 280G
of the Code. If a Participant would be entitled to benefits or
payments hereunder and under any other plan or program that would
constitute “parachute payments” as defined in Section 280G of the Code,
then the Participant may by written notice to the Company designate the
order in which such parachute payments will be reduced or modified so
that the Company is not denied federal income tax deductions for any
“parachute payments” because of Section 280G of the Code.
Notwithstanding the foregoing, if a Participant is a party to an
employment or other agreement with the Company, or is a participant in
a severance program sponsored by the Company, that contains express
provisions regarding Section 280G and/or Section 4999 of the Code (or
any similar successor provision), the Section 280G and/or Section 4999
provisions of such employment or other agreement or plan, as
applicable, shall control as to any Awards held by the Participant (for
example, and without limitation, a Participant may be a party to an
employment agreement with the Company that provides for a “gross-up” as
opposed to a “cut-back” in the event that the Section 280G thresholds
are reached or exceeded in connection with a change in control and, in
such event, the Section 280G and/or Section 4999 provisions of such
employment agreement shall control as to any Awards held by the
Participant).






	 	6.3.8 	 	Section 162(m) Limitations. To the extent limited by Section
162(m) of the Code in the case of an Award intended as
performance-based compensation thereunder and necessary to assure the
deductibility of the compensation payable under the Award, the
Administrator shall have no discretion under this Plan (a) to increase
the amount of compensation or the number of shares that would otherwise
be due upon the attainment of the applicable performance target or the
exercise of the Option or Stock Appreciation Right, or (b) to waive the
achievement of any applicable performance goal as a condition to
receiving a benefit or right under the Award.







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	 	6.4 	 	Compliance with Laws. This Plan, the granting and vesting of Awards under
this Plan, the offer, issuance and delivery of shares of Common Stock,
and/or the payment of money under this Plan or under Awards are subject to
compliance with all applicable federal and state laws, rules and regulations
(including but not limited to state and federal securities law) and to such
approvals by any listing, regulatory or governmental authority as may, in
the opinion of counsel for the Company, be necessary or advisable in
connection therewith. The person acquiring any securities under this Plan
will, if requested by the Company, provide such assurances and
representations to the Company as the Administrator may deem necessary or
desirable to assure compliance with all applicable legal and accounting
requirements.






	 	6.5 	 	Tax Withholding. Upon any exercise, vesting, or payment of any Award or
upon the disposition of shares of Common Stock acquired pursuant to the
exercise of an Incentive Stock Option prior to satisfaction of the holding
period requirements of Section 422 of the Code, the Company shall have the
right at its option to:






	 	(a)	 	require the Participant (or the Participant’s Personal
Representative or Beneficiary, as the case may be) to pay or provide
for payment of at least the minimum amount of any taxes which the
Company may be required to withhold with respect to such award event
or payment; or






	 	(b)	 	deduct from any amount otherwise payable in cash to the
Participant (or the Participant’s Personal Representative or
Beneficiary, as the case may be) the minimum amount of any taxes
which the Company may be required to withhold with respect to such
cash payment.






	 	 	 	In any case where a tax is required to be withheld in connection with the
delivery of shares of Common Stock under this Plan, the Administrator may
in its sole discretion (subject to Section 6.4) grant (either at the time
of the Award or thereafter) to the Participant the right to elect,
pursuant to such rules and subject to such conditions as the
Administrator may establish, to have the Corporation reduce the number of
shares to be delivered by (or otherwise reacquire) the appropriate number
of shares, valued in a consistent manner at their Fair Market Value or at
the sales price in accordance with authorized procedures for cashless
exercises, necessary to satisfy the minimum applicable withholding
obligation on exercise, vesting or payment. In no event shall the shares
withheld exceed the minimum whole number of shares required for tax
withholding under applicable law.






	 	6.6 	 	Plan Amendment, Termination and Suspension.






	 	6.6.1 	 	Board Authorization. The Board may, at any time, terminate or,
from time to time, amend, modify or suspend this Plan, in whole or in
part. No Awards may be granted during any suspension of this Plan or
after termination of this Plan, but the Administrator will retain
jurisdiction as to Awards then outstanding in accordance with the terms
of this Plan.







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	 	6.6.2 	 	Stockholder Approval. To the extent then required by applicable
law or any applicable listing agency or required under Sections 162,
422 or 424 of the Code to preserve the intended tax consequences of
this Plan, or deemed necessary or advisable by the Board, any amendment
to this Plan shall be subject to stockholder approval.






	 	6.6.3 	 	Amendments to Awards. Without limiting any other express
authority of the Administrator under but subject to the express limits
of this Plan and further subject to Section 6.6.5, the Administrator by
agreement or resolution may waive conditions of or limitations on
Awards to Eligible Persons that the Administrator in the prior exercise
of its discretion has imposed, without the consent of a Participant,
and may make other changes to the terms and conditions of Awards that
do not affect in any manner materially adverse to the Participant, the
Participant’s rights and benefits under an Award.






	 	6.6.4 	 	Limitations on Amendments to Plan and Awards. No amendment,
suspension or termination of this Plan or change of or affecting any
outstanding Award will, without written consent of the Participant,
affect in any manner materially adverse to the Participant any rights
or benefits of the Participant or obligations of the Corporation under
any Award granted under this Plan prior to the effective date of such
change. Changes, settlements and other actions contemplated by Section
6.3 will not be deemed to constitute changes or amendments for purposes
of this Section 6.6.






	 	6.6.5 	 	Stockholder Approval Required for a Repricing. Subject to Section
6.6.4, the Administrator may adjust the number of shares of Common
Stock subject to any Award and/or adjust the price of any or all
outstanding Awards in such circumstances as the Administrator may deem
appropriate; provided that in no case (except due to an adjustment
contemplated by Section 6.3 or any repricing that may be approved by
stockholders) shall such an adjustment constitute a repricing (by
amendment, cancellation and regrant, exchange or other means) of the
per share exercise or base price of any Option or Stock Appreciation
Right to a price that is less than the Fair Market Value of a share of
Common Stock on the date of the grant of the initial award.






	 	6.7 	 	Privileges of Stock Ownership. Except as otherwise expressly authorized
by the Administrator or this Plan, a Participant will not be entitled to
any privilege of stock ownership as to any shares of Common Stock not
actually delivered to and held of record by the Participant. No
adjustment will be made for dividends or other rights as a stockholder for
which a record date is prior to such date of delivery.






	 	6.8 	 	Effective Date of the Plan. This Plan is effective upon its approval by
the Board (the “Effective Date”), subject to approval by the stockholders
of the Corporation within twelve months after the date of such Board
approval.






	 	6.9 	 	Term of the Plan. Unless earlier terminated by the Board, this Plan will
terminate at the close of business on the day before the tenth anniversary
of the Effective Date (the







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	 		 	"Termination Date”) and no Awards may be
granted under this Plan after that date. Unless otherwise expressly
provided in this Plan or in an applicable Award Agreement, any Award
granted prior to the termination date may extend beyond such date, and all
authority of the Administrator with respect to Awards hereunder, including
the authority to amend an Award, will continue during any suspension of
this Plan and in respect of Awards outstanding on the termination date.






	 	6.10 	 	Governing Law/Construction/Severability.






	 	6.10.1 	 	Choice of Law. This Plan, the Awards, all documents evidencing
Awards and all other related documents will be governed by, and
construed in accordance with, the laws of the state of Delaware.






	 	6.10.2 	 	Severability. If a court of competent jurisdiction holds any
provision invalid and unenforceable, the remaining provisions of this
Plan will continue in effect.






	 	6.10.3 	 	Plan Construction.






	 	(a)	 	Rule 16b-3. It is the intent of the Corporation that the
Awards and transactions permitted by Awards be interpreted in a
manner that, in the case of Participants who are or may be subject
to Section 16 of the Exchange Act, qualify, to the maximum extent
compatible with the express terms of the Award, for exemption from
matching liability under Rule 16b-3 promulgated under the Exchange
Act. Notwithstanding the foregoing, the Corporation shall have no
liability to any Participant or other person for Section 16
consequences of Awards or events under Awards if an Award or event
does not so qualify.






	 	(b)	 	Section 162(m). Awards under Section 5.2 to persons
described in Section 5.2.1 that are either granted or become vested,
exercisable or payable based on attainment of one or more
performance goals related to the Business Criteria, as well as
Qualifying Options and Qualifying SARs granted to persons described
in Section 5.2.1, that are approved by a committee composed solely
of two or more outside directors of the Corporation (as this
requirement is applied under Section 162(m) of the Code) shall be
deemed to be intended as performance-based compensation within the
meaning of Section 162(m) of the Code unless such committee provides
otherwise at the time of grant of the Award.






	 	6.11 	 	Captions. Captions and headings are given to the sections and
subsections of this Plan solely as a convenience to facilitate reference.
Such headings will not be deemed in any way material or relevant to the
construction or interpretation of this Plan or any provision thereof.






	 	6.12 	 	Non-Exclusivity of Plan. Nothing in this Plan will limit or be deemed to
limit the authority of the Board or the Administrator to grant awards or
authorize any other compensation, with or without reference to the Common
Stock, under any other plan or authority.







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	 	6.13 	 	No Corporate Action Restriction. The existence of this Plan, the Award
Agreements and the Awards granted hereunder shall not limit, affect or
restrict in any way the right or power of the Board or the stockholders of
the Corporation to make or authorize: (a) any adjustment,
recapitalization, reorganization or other change in the capital structure
or business of the Corporation or any subsidiary, (b) any merger,
amalgamation, consolidation or change in the ownership of the Corporation
or any subsidiary, (c) any issue of bonds, debentures, capital, preferred
or prior preference stock ahead of or affecting the capital stock (or the
rights thereof) of the Corporation or any subsidiary, (d) any dissolution
or liquidation of the Corporation or any subsidiary, (e) any sale or
transfer of all or any part of the assets or business of the Corporation
or any subsidiary, or (f) any other corporate act or proceeding by the
Corporation or any subsidiary. No Participant, Beneficiary or any other
person shall have any claim under any Award or Award Agreement against any
member of the Board or the Administrator, or the Corporation or any
employees, officers or agents of the Corporation or any subsidiary, as a
result of any such action.






	 	6.14 	 	Other Company Benefit and Compensation Programs. Payments and other
benefits received by a Participant under an Award made pursuant to this
Plan shall not be deemed a part of a Participant’s compensation for
purposes of the determination of benefits under any other employee welfare
or benefit plans or arrangements, if any, provided by the Corporation or
any subsidiary, except where the Administrator expressly otherwise
provides or authorizes in writing. Awards under this Plan may be made in
addition to, in combination with, as alternatives to or in payment of
grants, awards or commitments under any other plans or arrangements of the
Company or its subsidiaries.






	 	6.15 	 	Stock-Based Awards in Substitution for Stock Options or Awards Granted by
Other Corporation. Awards may be granted to Eligible Persons under this
Plan in substitution for or in connection with an assumption of stock
options, stock appreciation rights, restricted stock or other stock-based
awards granted by other entities to persons who are or who will become
Eligible Persons in respect of the Company, in connection with a
distribution, merger or other reorganization by or with the granting
entity or an affiliated entity, or the acquisition by the Company,
directly or indirectly, of all or a substantial part of the stock or
assets of the employing entity. The awards so granted need not comply
with other specific terms of this Plan, provided the awards reflect only
adjustments giving effect to the assumption or substitution consistent
with the conversion applicable to the Common Stock in the transaction and
any change in the issuer of the security. Any shares that are delivered
and any awards that are granted by, or become obligations of, the
Corporation, as a result of the assumption by the Corporation of, or in
substitution for, outstanding awards previously granted by an acquired
company (or previously granted by a predecessor employer (or direct or
indirect parent thereof) in the case of persons that become employed by
the Company in connection with a business or asset acquisition or similar
transaction)
shall not be counted against the Share Limit or other limits on the number
of shares available for issuance under this Plan







25








 



	7.	 	Definitions.




"Award” means an award of any Option, Stock Appreciation Right, Restricted
Stock, Stock Bonus, Stock Unit, performance share award, dividend equivalent or
deferred payment right or other right or security that would constitute a
“derivative security” under Rule 16a-1(c) of the Exchange Act, or any
combination thereof, whether alternative or cumulative, authorized by and
granted under this Plan.



"Award Agreement” means any writing setting forth the terms of an Award that
has been authorized by the Administrator.



"Award Date” means the date upon which the Administrator took the action
granting an Award or such later date as the Administrator designates as the
Award Date at the time of the Award.



"Beneficiary” means the person, persons, trust or trusts designated by a
Participant, or, in the absence of a designation, entitled by will or the laws
of descent and distribution, to receive the benefits specified in the Award
Agreement and under this Plan if the Participant dies, and means the
Participant’s executor or administrator if no other Beneficiary is designated
and able to act under the circumstances.



"Board” means the Board of Directors of the Corporation.



"Change in Control Event” means any of the following:




	 	(a)	 	The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a
“Person”)) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 30% or more of either (1) the
then-outstanding shares of common stock of the Corporation (the
“Outstanding Company Common Stock”) or (2) the combined voting power
of the then-outstanding voting securities of the Corporation
entitled to vote generally in the election of directors of the
Corporation (the “Outstanding Company Voting Securities”); provided,
however, that, for purposes of this definition, the following
acquisitions shall not constitute a Change in Control Event; (A) any
acquisition directly from the Corporation, (B) any acquisition by
the Corporation, (C) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Corporation or any
affiliate of the Corporation or a successor, or (D) any acquisition
by any entity pursuant to a transaction that complies with clauses
(c)(1), (2) and (3) below;






	 	(b)	 	Individuals who, as of the Effective Date, constitute the
Board (the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board; provided, however, that any
individual becoming a director of the Corporation
subsequent to the Effective Date whose election, or nomination for
election by the Corporation’s stockholders, was approved by a vote
of at least three-fourths of the directors of the Corporation then
comprising the Incumbent Board (including for







26








 



	 	 	 	these purposes, the
new members whose election or nomination was so approved, without
counting the member and his predecessor twice) shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of
directors of the Corporation or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board;






	 	(c)	 	Consummation of a reorganization, merger, statutory share
exchange or consolidation or similar corporate transaction involving
the Corporation or any of its Subsidiaries, a sale or other
disposition of all or substantially all of the assets of the
Corporation, or the acquisition of assets or stock of another entity
by the Corporation or any of its Subsidiaries (each, a “Business
Combination”), in each case unless, following such Business
Combination, (1) all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of the then-outstanding shares
of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the entity resulting
from such Business Combination (including, without limitation, an
entity that, as a result of such transaction, owns the Corporation
or all or substantially all of the Corporation’s assets directly or
through one or more subsidiaries (a “Parent”)) in substantially the
same proportions as their ownership immediately prior to such
Business Combination of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities, as the case may be, (2) no
Person (excluding any entity resulting from such Business
Combination or a Parent or any employee benefit plan (or related
trust) of the Corporation or such entity resulting from such
Business Combination or Parent) beneficially owns, directly or
indirectly, 30% or more of, respectively, the then-outstanding
shares of common stock of the entity resulting from such Business
Combination or the combined voting power of the then-outstanding
voting securities of such entity, except to the extent that the
ownership in excess of 30% existed prior to the Business
Combination, and (3) at least a majority of the members of the board
of directors or trustees of the entity resulting from such Business
Combination or a Parent were members of the Incumbent Board at the
time of the execution of the initial agreement or of the action of
the Board providing for such Business Combination; or






	 	(d)	 	Approval by the stockholders of the Corporation of a complete
liquidation or dissolution of the Corporation other than in the
context of a transaction that does not constitute a Change in
Control Event under clause (c) above.





"Code” means the Internal Revenue Code of 1986, as amended from time to time.





27








 


"Commission” means the Securities and Exchange Commission.



"Common Stock” means the Common Stock of the Corporation and such other
securities or property as may become the subject of Awards, or become subject
to Awards, pursuant to an adjustment made under Section 6.3 of this Plan.



"Company” means, collectively, the Corporation and its Subsidiaries.



"Corporation” means Corinthian Colleges, Inc., a Delaware corporation, and its
successors.



"Eligible Employee” means an officer (whether or not a director) or employee of
the Company.



"Eligible Person” means an Eligible Employee, or any Other Eligible Person, as
determined by the Administrator.



"Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time.



"Fair Market Value” on any date means (a) if the stock is listed or admitted to
trade on a national securities exchange, the closing price of the stock on the
Composite Tape, as published in the Western Edition of The Wall Street Journal,
of the principal national securities exchange on which the stock is so listed
or admitted to trade, on such date, or, if there is no trading of the stock on
such date, then the closing price of the stock as quoted on such Composite Tape
on the next preceding date on which there was trading in such shares; (b) if
the stock is not listed or admitted to trade on a national securities exchange,
the last/closing price for the stock on such date, as furnished by the National
Association of Securities Dealers, Inc. (“NASD”) through the NASDAQ National
Market Reporting System or a similar organization if the NASD is no longer
reporting such information; (c) if the stock is not listed or admitted to trade
on a national securities exchange and is not reported on the National Market
Reporting System, the mean between the bid and asked price for the stock on
such date, as furnished by the NASD or a similar organization; or (d) if the
stock is not listed or admitted to trade on a national securities exchange, is
not reported on the National Market Reporting System and if bid and asked
prices for the stock are not furnished by the NASD or a similar organization,
the value as established by the Administrator at such time for purposes of this
Plan. Any determination as to fair market value made pursuant to this Plan
shall be determined without regard to any restriction other than a restriction
which, by its terms, will never lapse, and shall be conclusive and binding on
all persons. The Administrator may, however, provide with respect to one or
more Awards that the Fair Market Value shall equal the last closing price of a
share of Common Stock as reported on the composite tape for securities listed
on a national securities exchange or as furnished by the NASD and available on
the date in question or the average of the high and low prices of a share of
Common Stock as reported on the composite tape for securities listed on a
national securities exchange or as furnished by the NASD for the date in
question or the most recent trading day. The Administrator also may adopt a
different methodology for determining Fair Market Value with respect to one or
more Awards if a different methodology is necessary or advisable to secure
any intended favorable tax, legal or other treatment for the particular
Award(s) (for example, and without limitation, the Administrator may provide
that Fair Market Value for purposes of one or more Awards will be based on an
average of closing prices (or the average of high and low daily trading prices)
for a specified period preceding the relevant date).





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"Incentive Stock Option” means an Option that is designated and intended as an
incentive stock option within the meaning of Section 422 of the Code, the award
of that contains such provisions (including but not limited to the receipt of
stockholder approval of this Plan, if the award is made prior to such approval)
and is made under such circumstances and to such persons as may be necessary to
comply with that section.



"Nonqualified Stock Option” means an Option that is designated as a
Nonqualified Stock Option and will include any Option intended as an Incentive
Stock Option that fails to meet the applicable legal requirements thereof. Any
Option granted hereunder that is not designated as an incentive stock option
will be deemed to be designated a nonqualified stock option under this Plan and
not an incentive stock option under the Code.



"Non-Employee Director” means a member of the Board of Directors of the
Corporation who is not an officer or employee of the Company.



"Option” means an option to purchase Common Stock granted under this Plan. The
Administrator will designate any Option granted to an Eligible Person as a
Nonqualified Stock Option or an Incentive Stock Option.



"Other Eligible Person” means any individual consultant or advisor or agent who
renders or has rendered bona fide services (other than services in connection
with the offering or sale of securities of the Company in a capital raising
transaction) to the Company or any Non-Employee Director, and who (to the
extent provided in the next sentence) is selected to participate in this Plan
by the Administrator. A person who is neither an employee, officer, nor
director who provides bona fide services to the Company may be selected as an
Other Eligible Person only if such person’s participation in this Plan would
not adversely affect (a) the Corporation’s eligibility to use Form S-8 to
register under the Securities Act, the offering of shares issuable under this
Plan by the Company, or (b) the Corporation’s compliance with any other
applicable laws.



"Participant” means an Eligible Person who has been granted an Award under this
Plan.



"Performance Share Award” means an Award of a right to receive shares of Common
Stock under Section 5.1, or to receive shares of Common Stock or other
compensation (including cash) under Section 5.2, the issuance or payment of
which is contingent upon, among other conditions, the attainment of performance
objectives specified by the Administrator.



"Personal Representative” means the person or persons who, upon the disability
or incompetence of a Participant, has acquired on behalf of the Participant, by
legal proceeding or
otherwise, the power to exercise the rights or receive benefits under this Plan
by virtue of having become the legal representative of the Participant.





29








 


"Plan” means this Corinthian Colleges, Inc. 2003 Performance Award Plan, as it
may hereafter be amended from time to time.



"QDRO” means a qualified domestic relations order.



"Restricted Shares” or “Restricted Stock” means shares of Common Stock awarded
to a Participant under this Plan, subject to payment of such consideration, if
any, and such conditions on vesting (which may include, among others, the
passage of time, specified performance objectives or other factors) and such
transfer and other restrictions as are established in or pursuant to this Plan
and the related Award Agreement, for so long as such shares remain unvested
under the terms of the applicable Award Agreement.



"Retirement” means retirement with the consent of the Company or, from active
service as an employee or officer of the Company on or after attaining (a) age
55 with ten or more years of employment with the Company, or (b) age 65.



"Rule 16b-3” means Rule 16b-3 as promulgated by the Commission pursuant to the
Exchange Act, as amended from time to time.



"Section 16 Person” means a person subject to Section 16(a) of the Exchange
Act.



"Section 162(m)” means Section 162(m) of the Code and the regulations
promulgated thereunder.



"Securities Act” means the Securities Act of 1933, as amended from time to
time.



"Stock Appreciation Right” or “SAR” means a right authorized under this Plan to
receive a number of shares of Common Stock or an amount of cash, or a
combination of shares and cash, the aggregate amount or value of which is
determined by reference to a change in the Fair Market Value of the Common
Stock.



"Stock Bonus” means an Award of shares of Common Stock granted under this Plan
for no consideration other than past services and without restriction other
than such transfer or other restrictions as the Administrator may deem
advisable to assure compliance with law.



"Stock Unit” means a bookkeeping entry which serves as a unit of measurement
relative to a share of Common Stock for purposes of determining the payment, in
Common Stock or cash, of an Award, including a deferred benefit or right under
this Plan. Stock Units are not outstanding shares and do not entitle a
Participant to any dividend, voting or other rights in respect of any Common
Stock represented thereby or acquirable thereunder. Stock Units, may, however,
by express provision in the applicable Award Agreement, entitle a Participant
to dividend equivalent rights, as determined by the Administrator.



"Subsidiary” means any corporation or other entity a majority of whose
outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Corporation.



"Total Disability” means a “total and permanent disability” within the meaning
of Section 22(e)(3) of the Code and, with respect to Awards other than
Incentive Stock Options, such other disabilities, infirmities, afflictions, or
conditions as the Administrator may include.






30