Ross Stores,
Inc.


2008 Equity Incentive
Plan

As Amended Through March 18,
2009

 

 

 

 




Ross Stores,
Inc.
2008 Equity Incentive Plan
As Amended Through March 18, 2009

     1. ESTABLISHMENT,
PURPOSE AND
TERM
OF PLAN.

          1.1 Establishment. The Ross Stores, Inc. 2008
Equity Incentive Plan (the “Plan”) is hereby established effective as of May 22, 2008, the
date of its approval by the stockholders of the Company (the “Effective
Date”).

          1.2 Purpose. The purpose of the Plan is
to advance the interests of the Participating Company Group and its stockholders
by providing an incentive to attract, retain and reward persons performing
services for the Participating Company Group and by motivating such persons to
contribute to the growth and profitability of the Participating Company Group.
The Plan seeks to achieve this purpose by providing for Awards in the form of
Options, Stock Appreciation Rights, Restricted Stock Purchase Rights, Restricted
Stock Bonuses, Restricted Stock Units, Performance Shares, Performance Units,
Deferred Compensation Awards and Nonemployee Director Awards.

          1.3 Term of Plan. The Plan shall continue in effect
until its termination by the Committee; provided, however, that all Awards shall
be granted, if at all, within ten (10) years from the Effective Date.

     2. Definitions and
Construction.

          2.1 Definitions. Whenever used herein, the following
terms shall have their respective meanings set forth below:

               (a) “Affiliate” means (i) an
entity, other than a Parent Corporation, that directly, or indirectly through
one or more intermediary entities, controls the Company or (ii) an entity, other
than a Subsidiary Corporation, that is controlled by the Company directly or
indirectly through one or more intermediary entities. For this purpose, the term
“control” (including the term “controlled by”) means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of the relevant entity, whether through the ownership of voting
securities, by contract or otherwise; or shall have such other meaning assigned
such term for the purposes of registration on Form S-8 under the Securities
Act.

               (b) “Award” means any Option,
Stock Appreciation Right, Restricted Stock Purchase Right, Restricted Stock
Bonus, Restricted Stock Unit, Performance Share, Performance Unit, Deferred
Compensation Award or Nonemployee Director Award granted under the
Plan.

               (c) “Award Agreement” means a
written or electronic agreement between the Company and a Participant setting
forth the terms, conditions and restrictions of the Award granted to the
Participant.

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


               (e) “Change in
Control” means, unless such term or an equivalent term is
otherwise defined with respect to an Award by the Participant’s Award Agreement
or by a written contract of employment or service, the occurrence of any of the
following:

                    (i) any “person” (as
such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the
“beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of securities of the Company representing more
than fifty percent (50%) of the total Fair Market Value or total combined voting
power of the Company’s then-outstanding securities entitled to vote generally in
the election of Directors; provided, however, that the following acquisitions
shall not constitute a Change in Control: (1) an acquisition by any person who
on the Effective Date is the beneficial owner of more than fifty percent (50%)
of such Fair Market Value or voting power, (2) an acquisition directly from the
Company, including, without limitation, a public offering of securities, (3) an
acquisition by the Company, (4) an acquisition by a trustee or other fiduciary
under an employee benefit plan of a Participating Company or (5) an acquisition
by an entity owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of the voting securities
of the Company; or

                    (ii) an Ownership
Change Event or series of related Ownership Change Events (collectively,
a “Transaction”) in which the stockholders of
the Company immediately before the Transaction do not retain immediately after
the Transaction direct or indirect beneficial ownership of more than fifty
percent (50%) of the total combined voting power of the outstanding securities
entitled to vote generally in the election of Directors or, in the case of an
Ownership Change Event described in Section 2.1(aa)(iii), the entity to which
the assets of the Company were transferred (the “Transferee”), as the case may be;
or

                    (iii)
a liquidation or dissolution of the
Company;

For purposes of the preceding
sentence, indirect beneficial ownership shall include, without limitation, an
interest resulting from ownership of the voting securities of one or more
corporations or other business entities which own the Company or the Transferee,
as the case may be, either directly or through one or more subsidiary
corporations or other business entities. The Committee shall determine whether
multiple sales or exchanges of the voting securities of the Company or multiple
Ownership Change Events are related, and its determination shall be final,
binding and conclusive.

               (f) “Code” means the Internal Revenue Code of 1986, as amended, and
any applicable regulations or administrative guidelines promulgated
thereunder.

               (g) “Committee”
means the Compensation Committee and such other
committee or subcommittee of the Board, if any, duly appointed to administer the
Plan and having such powers in each instance as shall be specified by the Board.
If, at any time, there is no committee of the Board then authorized or properly
constituted to administer the Plan, the Board shall exercise all of the powers
of the Committee granted herein, and, in any event, the Board may in its
discretion exercise any or all of such powers.

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               (h) “Company” means Ross Stores, Inc., a Delaware corporation, or any
successor corporation thereto.

               (i) “Consultant”
means a person engaged to provide consulting or
advisory services (other than as an Employee or a member of the Board) to a
Participating Company, provided that the identity of such person, the nature of
such services or the entity to which such services are provided would not
preclude the Company from offering or selling securities to such person pursuant
to the Plan in reliance on registration on Form S-8 under the Securities
Act.

               (j) “Covered
Employee” means, at any time the Plan is subject to Section 162(m),
any Employee who is or may reasonably be expected to become a “covered employee”
as defined in Section 162(m), or any successor statute, and who is designated,
either as an individual Employee or a member of a class of Employees, by the
Committee no later than (i) the date ninety (90) days after the beginning of the
Performance Period, or (ii) the date on which twenty-five percent (25%) of the
Performance Period has elapsed, as a “Covered Employee” under this Plan for such
applicable Performance Period.

               (k) “Deferred Compensation
Award” means an award of Stock Units granted to a Participant
pursuant to Section 11.

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

               (m) “Disability”
means the permanent and total disability of the
Participant, within the meaning of Section 22(e)(3) of the Code.

               (n) “Dividend Equivalent
Right” means the right of a Participant, granted at the
discretion of the Committee or as otherwise provided by the Plan, to receive a
credit for the account of such Participant in an amount equal to the cash
dividends paid on one share of Stock for each share of Stock represented by an
Award held by such Participant.

               (o) “Employee” means any person treated as an employee (including an
Officer or a member of the Board who is also treated as an employee) in the
records of a Participating Company and, with respect to any Incentive Stock
Option granted to such person, who is an employee for purposes of Section 422 of
the Code; provided, however, that neither service as a member of the Board nor
payment of a director’s fee shall be sufficient to constitute employment for
purposes of the Plan. The Company shall determine in good faith and in the
exercise of its discretion whether an individual has become or has ceased to be
an Employee and the effective date of such individual’s employment or
termination of employment, as the case may be. For purposes of an individual’s
rights, if any, under the terms of the Plan as of the time of the Company’s
determination of whether or not the individual is an Employee, all such
determinations by the Company shall be final, binding and conclusive as to such
rights, if any, notwithstanding that the Company or any court of law or
governmental agency subsequently makes a contrary determination as to such
individual’s status as an Employee.

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

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               (q) “Fair Market
Value” means, as of any date, the value of a share of Stock or
other property as determined by the Committee, in its discretion, or by the
Company, in its discretion, if such determination is expressly allocated to the
Company herein, subject to the following:

                    (i) Except as
otherwise determined by the Committee, if, on such date, the Stock is listed on
a national or regional securities exchange or market system, the Fair Market
Value of a share of Stock shall be the closing price of a share of Stock as
quoted on the national or regional securities exchange or market system
constituting the primary market for the Stock, as reported in The Wall Street Journal or such other source as the Company deems reliable. If the relevant date
does not fall on a day on which the Stock has traded on such securities exchange
or market system, the date on which the Fair Market Value shall be established
shall be the last day on which the Stock was so traded prior to the relevant
date, or such other appropriate day as shall be determined by the Committee, in
its discretion.

                    (ii) Notwithstanding
the foregoing, the Committee may, in its discretion, determine the Fair Market
Value on the basis of the opening, closing, or average of the high and low sale
prices of a share of Stock on such date or the preceding trading day, the actual
sale price of a share of Stock received by a Participant, any other reasonable
basis using actual transactions in the Stock as reported on a national or
regional securities exchange or market system, or on any other basis consistent
with the requirements of Section 409A. The Committee may also determine the Fair
Market Value upon the average selling price of the Stock during a specified
period that is within thirty (30) days before or thirty (30) days after such
date, provided that, with respect to the grant of an Option or SAR, the
commitment to grant such Award based on such valuation method must be
irrevocable before the beginning of the specified period. The Committee may vary
its method of determination of the Fair Market Value as provided in this Section
for different purposes under the Plan to the extent consistent with the
requirements of Section 409A.

                    (iii) If, on such
date, the Stock is not listed on a national or regional securities exchange or
market system, the Fair Market Value of a share of Stock shall be as determined
by the Committee in good faith without regard to any restriction other than a
restriction which, by its terms, will never lapse, and in a manner consistent
with the requirements of Section 409A.

               (r) “Full Value
Award” means any Award settled in Stock, other than (i) an
Option, (ii) a Stock Appreciation Right, (iii) a Restricted Stock Purchase Right
under which the Company will receive monetary consideration equal to the Fair
Market Value (determined on the effective date of grant) of the shares subject
to such Award, or (iv) a Nonemployee Director Award which is any of the
foregoing types of Awards.

               (s) “Incentive Stock
Option” means an Option intended to be (as set forth in the Award
Agreement) and which qualifies as an incentive stock option within the meaning
of Section 422(b) of the Code.

               (t) “Insider” means an Officer, a Director or any other person whose
transactions in Stock are subject to Section 16 of the Exchange Act.

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               (u) “Insider Trading
Policy” means the written policy of the Company pertaining to the
purchase, sale, transfer or other disposition of the Company’s equity securities
by Directors, Officers, Employees or other service providers who may possess
material, nonpublic information regarding the Company or its
securities.

               (v)
“Nonemployee Director” means a Director who is not an
Employee.

               (w) “Nonemployee Director
Award” means a Nonstatutory Stock Option, Stock Appreciation
Right, Restricted Stock Award or Restricted Stock Unit Award granted to a
Nonemployee Director pursuant to Section 12.

               (x) “Nonstatutory Stock
Option” means an Option not intended to be (as set forth in the
Award Agreement) an incentive stock option within the meaning of Section 422(b)
of the Code.

               (y) “Officer” means any person designated by the Board as an officer of
the Company.

               (z) “Option” means an Incentive Stock Option or a Nonstatutory Stock
Option granted pursuant to the Plan.

               (aa) “Ownership Change
Event” means the occurrence of any of the following with respect
to the Company: (i) the direct or indirect sale or exchange in a single or
series of related transactions by the stockholders of the Company of more than
fifty percent (50%) of the voting stock of the Company; (ii) a merger or
consolidation in which the Company is a party; or (iii) the sale, exchange, or
transfer of all or substantially all of the assets of the Company (other than a
sale, exchange or transfer to one or more subsidiaries of the
Company).

               (bb) “Parent
Corporation” means any present or future “parent corporation” of the
Company, as defined in Section 424(e) of the Code.

               (cc) “Participant”
means any eligible person who has been granted one
or more Awards.

               (dd) “Participating
Company” means the Company or any Parent Corporation, Subsidiary
Corporation or Affiliate.

               (ee) “Participating Company
Group” means, at any point in time, all entities collectively
which are then Participating Companies.

               (ff) “Performance
Award” means an Award of Performance Shares or Performance
Units.

               (gg) “Performance Award
Formula” means, for any Performance Award, a formula or table
established by the Committee pursuant to Section 10.3 which provides the basis
for computing the value of a Performance Award at one or more threshold levels
of attainment of the applicable Performance Goal(s) measured as of the end of
the applicable Performance Period.

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               (hh) “Performance-Based
Compensation” means
compensation under an Award that satisfies the requirements of Section 162(m)
for certain performance-based compensation paid to Covered Employees.

               (ii) “Performance
Goal” means a performance goal established by the Committee
pursuant to Section 10.3.

               (jj) “Performance
Period” means a period established by the Committee pursuant to
Section 10.3 at the end of which one or more Performance Goals are to be
measured.

               (kk) “Performance
Share” means a right granted to a Participant pursuant to
Section 10 to receive a payment equal to the value of a Performance Share, as
determined by the Committee, based on performance.

               (ll) “Performance
Unit” means a right granted to a Participant pursuant to
Section 10 to receive a payment equal to the value of a Performance Unit, as
determined by the Committee, based upon performance.

               (mm)
“Predecessor Plan” means each of the Company’s
1988 Restricted Stock Plan, 1991 Outside
Directors Stock Option Plan, 1992 Stock Option Plan, 2000 Equity Incentive Plan
and 2004 Equity Incentive Plan.

               (nn) “Restricted Stock
Award” means an Award of a Restricted Stock Bonus or a
Restricted Stock Purchase Right.

               (oo) “Restricted Stock
Bonus” means Stock granted to a Participant pursuant to Section
8 or Section 12.

               (pp) “Restricted Stock Purchase
Right” means a right to purchase Stock granted to a Participant
pursuant to Section 8 or Sections 12.

               (qq) “Restricted Stock
Unit” or “Stock
Unit” means a right granted to a Participant pursuant to
Section 9, Section 11 or Section 12 to receive a share of Stock on a date
determined in accordance with the provisions of such Sections, as applicable,
and the Participant’s Award Agreement.

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

               (ss) “SAR” or
“Stock Appreciation Right” means a right granted to a
Participant pursuant to Section 7 or Section 12 to receive payment, for each
share of Stock subject to such Award, of an amount equal to the excess, if any,
of the Fair Market Value of a share of Stock on the date of exercise of the SAR
over the exercise price.

               (tt)
“Section 162(m)”
means Section 162(m) of the Code.

               (uu)
“Section 409A”
means Section 409A of the Code.

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               (vv) “Section 409A Deferred
Compensation” means compensation provided pursuant to an Award that
constitutes deferred compensation subject to and not exempted from the
requirements of Section 409A.

               (ww)
“Securities Act”
means the Securities Act of 1933, as
amended.

               (xx) “Service” means a Participant’s employment or service with the
Participating Company Group, whether in the capacity of an Employee, a Director
or a Consultant. Unless otherwise provided by the Committee, a Participant’s
Service shall not be deemed to have terminated merely because of a change in the
capacity in which the Participant renders such Service or a change in the
Participating Company for which the Participant renders such Service, provided
that there is no interruption or termination of the Participant’s Service.
Furthermore, a Participant’s Service shall not be deemed to have terminated if
the Participant takes any military leave, sick leave, or other bona fide leave
of absence approved by the Company. However, if any such leave taken by a
Participant exceeds ninety (90) days, then on the one hundred eighty-first
(181st) day following the commencement of such leave any Incentive Stock Option
held by the Participant shall cease to be treated as an Incentive Stock Option
and instead shall be treated thereafter as a Nonstatutory Stock Option, unless
the Participant’s right to return to Service with the Participating Company
Group is guaranteed by statute or contract. Notwithstanding the foregoing,
unless otherwise designated by the Company or required by law, an unpaid leave
of absence shall not be treated as Service for purposes of determining vesting
under the Participant’s Award Agreement. A Participant’s Service shall be deemed
to have terminated either upon an actual termination of Service or upon the
business entity for which the Participant performs Service ceasing to be a
Participating Company. Subject to the foregoing, the Company, in its discretion,
shall determine whether the Participant’s Service has terminated and the
effective date of such termination.

               (yy) “Stock” means the common stock of the Company, as adjusted from
time to time in accordance with Section 4.4.

               (zz) “Subsidiary
Corporation” means any present or future “subsidiary corporation” of
the Company, as defined in Section 424(f) of the Code.

               (aaa) “Ten Percent
Owner” means a Participant who, at the time an Option is granted
to the Participant, owns stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of a Participating Company
(other than an Affiliate) within the meaning of Section 422(b)(6) of the
Code.

               (bbb) “Vesting
Conditions” mean those conditions established in accordance with the
Plan prior to the satisfaction of which shares subject to an Award remain
subject to forfeiture or a repurchase option in favor of the Company exercisable
for the Participant’s monetary purchase price, if any, for such shares upon the
Participant’s termination of Service.

          2.2 Construction. Captions and titles
contained herein are for convenience only and shall not affect the meaning or
interpretation of any provision of the Plan. Except when otherwise indicated by
the context, the singular shall include the plural and the plural
shall

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include the singular. Use of the
term “or” is not intended to be exclusive, unless the context clearly requires
otherwise.

     3. ADMINISTRATION.

          3.1 Administration
by the Committee. The Plan shall be
administered by the Committee. All questions of interpretation of the Plan, of
any Award Agreement or of any other form of agreement or other document employed
by the Company in the administration of the Plan or of any Award shall be
determined by the Committee, and such determinations shall be final, binding and
conclusive upon all persons having an interest in the Plan or such Award, unless
fraudulent or made in bad faith. Any and all actions, decisions and
determinations taken or made by the Committee in the exercise of its discretion
pursuant to the Plan or Award Agreement or other agreement thereunder (other
than determining questions of interpretation pursuant to the preceding sentence)
shall be final, binding and conclusive upon all persons having an interest
therein.

          3.2 Authority of
Officers. Any Officer shall have the
authority to act on behalf of the Company with respect to any matter, right,
obligation, determination or election which is the responsibility of or which is
allocated to the Company herein, provided the Officer has apparent authority
with respect to such matter, right, obligation, determination or election. The
Board or Committee may, in its discretion, delegate to a committee comprised of
one or more Officers the authority to grant one or more Awards, without further
approval of the Board or the Committee, to any Employee, other than a person
who, at the time of such grant, is an Insider or a Covered Person; provided,
however, that (a) the exercise price per share of each such Award which is an
Option or SAR shall be not less than the Fair Market Value per share of the
Stock on the effective date of grant (or, if the Stock has not traded on such
date, on the last day preceding the effective date of grant on which the Stock
was traded), (b) each such Award shall be subject to the terms and conditions of
the appropriate standard form of Award Agreement approved by the Board or the
Committee and shall conform to the provisions of the Plan, and (c) each such
Award shall conform to guidelines as shall be established from time to time by
resolution of the Board or the Committee.

          3.3 Administration
with Respect to Insiders. With respect
to participation by Insiders in the Plan, at any time that any class of equity
security of the Company is registered pursuant to Section 12 of the Exchange
Act, the Plan shall be administered in compliance with the requirements, if any,
of Rule 16b-3.

          3.4 Committee
Complying with Section 162(m). If the
Company is a “publicly held corporation” within the meaning of Section 162(m),
the Board may establish a Committee of “outside directors” within the meaning of
Section 162(m) to approve the grant of any Award intended to result in the
payment of Performance-Based Compensation.

          3.5 Powers of the
Committee. In addition to any other powers set forth in the Plan and
subject to the provisions of the Plan, the Committee shall have the full and
final power and authority, in its discretion:

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               (a) to determine the
persons to whom, and the time or times at which, Awards shall be granted and the
number of shares of Stock, units or monetary value to be subject to each
Award;

               (b)
to determine the type of Award granted;

               (c) to determine the
Fair Market Value of shares of Stock or other property;

               (d) to determine the
terms, conditions and restrictions applicable to each Award (which need not be
identical) and any shares acquired pursuant thereto, including, without
limitation, (i) the exercise or purchase price of shares pursuant to any Award,
(ii) the method of payment for shares purchased pursuant to any Award, (iii) the
method for satisfaction of any tax withholding obligation arising in connection
with any Award, including by the withholding or delivery of shares of Stock,
(iv) the timing, terms and conditions of the exercisability or vesting of any
Award or any shares acquired pursuant thereto, (v) the Performance Measures,
Performance Period, Performance Award Formula and Performance Goals applicable
to any Award and the extent to which such Performance Goals have been attained,
(vi) the time of the expiration of any Award, (vii) the effect of the
Participant’s termination of Service on any of the foregoing, and (viii) all
other terms, conditions and restrictions applicable to any Award or shares
acquired pursuant thereto not inconsistent with the terms of the
Plan;

               (e) to determine
whether an Award will be settled in shares of Stock, cash, or in any combination
thereof;

               (f)
to approve one or more forms of Award
Agreement;

               (g) to amend, modify,
extend, cancel or renew any Award or to waive any restrictions or conditions
applicable to any Award or any shares acquired pursuant thereto;

               (h) to accelerate,
continue, extend or defer the exercisability or vesting of any Award or any
shares acquired pursuant thereto, including with respect to the period following
a Participant’s termination of Service;

               (i) to prescribe,
amend or rescind rules, guidelines and policies relating to the Plan, or to
adopt sub-plans or supplements to, or alternative versions of, the Plan,
including, without limitation, as the Committee deems necessary or desirable to
comply with the laws or regulations of or to accommodate the tax policy,
accounting principles or custom of, foreign jurisdictions whose citizens may be
granted Awards; and

               (j) to correct any
defect, supply any omission or reconcile any inconsistency in the Plan or any
Award Agreement and to make all other determinations and take such other actions
with respect to the Plan or any Award as the Committee may deem advisable to the
extent not inconsistent with the provisions of the Plan or applicable
law.

          3.6 Option or SAR
Repricing. Without the affirmative vote
of holders of a majority of the shares of Stock cast in person or by proxy at a
meeting of the stockholders of the

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Company at which a quorum
representing a majority of all outstanding shares of Stock is present or
represented by proxy, the Board shall not approve a program providing for either
(a) the cancellation of outstanding Options or SARs having exercise prices per
share greater than the then Fair Market Value of a share of Stock
(“Underwater Awards”) and the grant in substitution
therefore of new Options or SARs having a lower exercise price, Full Value
Awards or payments in cash, or (b) the amendment of outstanding Underwater
Awards to reduce the exercise price thereof. This paragraph shall not be
construed to apply to “issuing or assuming a stock option in a transaction to
which Section 424(a) applies,” within the meaning of Section 424 of the
Code.

          3.7 Indemnification. In addition to
such other rights of indemnification as they may have as members of the Board or
the Committee or as officers or employees of the Participating Company Group,
members of the Board or the Committee and any officers or employees of the
Participating Company Group to whom authority to act for the Board, the
Committee or the Company is delegated shall be indemnified by the Company
against all reasonable expenses, including attorneys’ fees, actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan, or any right granted hereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such person is liable for gross negligence, bad faith or
intentional misconduct in duties; provided, however, that within sixty (60) days
after the institution of such action, suit or proceeding, such person shall
offer to the Company, in writing, the opportunity at its own expense to handle
and defend the same.

     4. Shares
Subject to Plan.

          4.1 Maximum Number
of Shares Issuable. Subject to
adjustment as provided in Sections 4.2, 4.3 and 4.4, the maximum aggregate
number of shares of Stock that may be issued under the Plan shall be six million
(6,000,000) and shall consist of authorized but unissued or reacquired shares of
Stock or any combination thereof.

          4.2 Adjustment for
Unissued Predecessor Plan Shares. The
maximum aggregate number of shares of Stock that may be issued under the Plan as
set forth in Section 4.1 shall be cumulatively increased from time to time
by:

               (a) the number of
shares of Stock subject to that portion of any option or other award outstanding
pursuant to a Predecessor Plan as of the Effective Date which, on or after the
Effective Date, expires or is terminated or canceled for any reason without
having been exercised or settled in full;

               (b) the number of
shares of Stock acquired pursuant to a Predecessor Plan subject to forfeiture or
repurchase by the Company at the Participant’s purchase price which, on or after
the Effective Date, is so forfeited or repurchased; and

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               (c) the number of
shares Stock that are withheld or reacquired by the Company on or after the
Effective Date in satisfaction of tax withholding obligations pursuant to a
Predecessor Plan;

provided, however, that the
aggregate number of shares of Stock authorized for issuance under the
Predecessor Plans that may become authorized for issuance under the Plan
pursuant to this Section 4.2 shall not exceed 8,492,928.

          4.3 Share
Counting. If an outstanding Award for
any reason expires or is terminated or canceled without having been exercised or
settled in full, or if shares of Stock acquired pursuant to an Award subject to
forfeiture or repurchase are forfeited or repurchased by the Company for an
amount not greater than the Participant’s purchase price, the shares of Stock
allocable to the terminated portion of such Award or such forfeited or
repurchased shares of Stock shall again be available for issuance under the
Plan. Shares of Stock shall not be deemed to have been issued pursuant to the
Plan (a) with respect to any portion of an Award that is settled in cash or (b)
to the extent such shares are withheld or reacquired by the Company in
satisfaction of tax withholding obligations pursuant to Section 17.2. Upon
payment in shares of Stock pursuant to the exercise of an SAR, the number of
shares available for issuance under the Plan shall be reduced only by the number
of shares actually issued in such payment. If the exercise price of an Option is
paid by tender to the Company, or attestation to the ownership, of shares of
Stock owned by the Participant, the number of shares available for issuance
under the Plan shall be reduced by the net number of shares for which the Option
is exercised.

          4.4 Adjustments
for Changes in Capital Structure. Subject to any required
action by the stockholders of the Company and the requirements of Section 409A
and 424 of the Code to the extent applicable, in the event of any change in the
Stock effected without receipt of consideration by the Company, whether through
merger, consolidation, reorganization, reincorporation, recapitalization,
reclassification, stock dividend, stock split, reverse stock split, split-up,
split-off, spin-off, combination of shares, exchange of shares, or similar
change in the capital structure of the Company, or in the event of payment of a
dividend or distribution to the stockholders of the Company in a form other than
Stock (excepting normal cash dividends) that has a material effect on the Fair
Market Value of shares of Stock, appropriate and proportionate adjustments shall
be made in the number and kind of shares subject to the Plan and to any
outstanding Awards, in the Award limits set forth in Section 5.4, and in the
exercise or purchase price per share under any outstanding Award in order to
prevent dilution or enlargement of Participants’ rights under the Plan. For
purposes of the foregoing, conversion of any convertible securities of the
Company shall not be treated as “effected without receipt of consideration by
the Company.” If a majority of the shares which are of the same class as the
shares that are subject to outstanding Awards are exchanged for, converted into,
or otherwise become (whether or not pursuant to an Ownership Change Event)
shares of another corporation (the “New
Shares”), the Committee may unilaterally amend the outstanding
Awards to provide that such Awards are for New Shares. In the event of any such
amendment, the number of shares subject to, and the exercise or purchase price
per share of, the outstanding Awards shall be adjusted in a fair and equitable
manner as determined by the Committee, in its discretion. Any fractional share
resulting from an adjustment pursuant to this Section 4.4 shall be rounded down
to the nearest whole number, and in no event may the exercise or purchase price
under any Award be decreased to an amount less than the par value, if any, of
the stock subject to such Award. The

11




Committee in its discretion, may
also make such adjustments in the terms of any Award to reflect, or related to,
such changes in the capital structure of the Company or distributions as it
deems appropriate, including modification of Performance Goals, Performance
Award Formulas and Performance Periods. The adjustments determined by the
Committee pursuant to this Section 4.4 shall be final, binding and
conclusive.

     The
Committee may, without affecting the number of shares of Stock reserved or
available hereunder, authorize the issuance or assumption of benefits under this
Plan in connection with any merger, consolidation, acquisition of property or
stock, or reorganization upon such terms and conditions as it may deem
appropriate, subject to compliance with Section 409A and any other applicable
provisions of the Code.

     5. Eligibility and Award Limitations.

          5.1
Persons Eligible for Awards. Awards may be granted only to Employees, Consultants and Directors. Nonemployee
Director Awards may be granted only to persons who, at the time of grant, are
Nonemployee Directors.

          5.2 Participation. Awards are granted
solely at the discretion of the Committee. Eligible persons may be granted more
than one Award. However, eligibility in accordance with this Section shall not
entitle any person to be granted an Award, or, having been granted an Award, to
be granted an additional Award.

          5.3
Incentive Stock Option
Limitations.

               (a) Persons
Eligible. An Incentive Stock Option
may be granted only to a person who, on the effective date of grant, is an
Employee of the Company, a Parent Corporation or a Subsidiary Corporation (each
being an “ISO-Qualifying Corporation”). Any person
who is not an Employee of an ISO-Qualifying Corporation on the effective date of
the grant of an Option to such person may be granted only a Nonstatutory Stock
Option.

               (b) Fair Market
Value Limitation. To the extent that
options designated as Incentive Stock Options (granted under all stock option
plans of the Participating Company Group, including the Plan) become exercisable
by a Participant for the first time during any calendar year for stock having a
Fair Market Value greater than One Hundred Thousand Dollars ($100,000), the
portion of such options which exceeds such amount shall be treated as
Nonstatutory Stock Options. For purposes of this Section, options designated as
Incentive Stock Options shall be taken into account in the order in which they
were granted, and the Fair Market Value of stock shall be determined as of the
time the option with respect to such stock is granted. If the Code is amended to
provide for a limitation different from that set forth in this Section, such
different limitation shall be deemed incorporated herein effective as of the
date and with respect to such Options as required or permitted by such amendment
to the Code. If an Option is treated as an Incentive Stock Option in part and as
a Nonstatutory Stock Option in part by reason of the limitation set forth in
this Section, the Participant may designate which portion of such Option the
Participant is exercising. In the absence of such designation, the Participant
shall be deemed to have exercised the Incentive Stock Option portion of the
Option first. Upon exercise, shares issued pursuant to each such portion shall
be separately identified.

12




          5.4
Award Limits.

               (a) Maximum
Number of Shares Issuable Pursuant to Incentive Stock Options.
Subject to adjustment as provided in Section 4.4,
the maximum aggregate number of shares of Stock that may be issued under the
Plan pursuant to the exercise of Incentive Stock Options shall not exceed six
million (6,000,000) shares. The maximum aggregate number of shares of Stock that
may be issued under the Plan pursuant to all Awards other than Incentive Stock
Options shall be the number of shares determined in accordance with Section 4.1,
subject to adjustment as provided in Section 4.2, Section 4.3 and Section 4.4
and further subject to the limitation set forth in Section 5.4(b)
below.

               (b) Aggregate
Limit on Full Value Awards. Subject
to adjustment as provided in Section 4.4, the number of shares issued under the
Plan pursuant to the exercise or settlement of Full Value Awards shall not
exceed the sum of (i) six million (6,000,000) and (ii) the aggregate number of
shares subject to full value awards granted pursuant to a Predecessor Plan which
revert to the Plan in accordance with Section 4.2(a) or 4.2(b).

               (c) Limit on
Full Value Awards without Minimum Vesting. Except with respect to a maximum of five percent (5%) of the maximum
aggregate number of shares of Stock that may be issued under the Plan, as
provided in Section 4.1, Full Value Awards which vest on the basis of the
Participant’s continued Service shall provide for pro rata vesting over a period
of not less than three (3) years, and Full Value Awards which vest on the basis
of the attainment of performance goals shall provide for a performance period of
not less than twelve (12) months. The foregoing limitations shall not preclude
the acceleration of vesting of any such Award upon the death, disability or
termination of Service of the Participant or upon or following a Change in
Control, as determined by the Committee in its discretion.

               (d) Section
162(m) Award Limits. The following
limits shall apply to the grant of any Award if, at the time of grant, the
Company is a “publicly held corporation” within the meaning of Section
162(m).

                    (i) Options and
SARs. Subject to adjustment as provided
in Section 4.4, no Employee shall be granted within any fiscal year of the
Company one or more Options or Freestanding SARs which in the aggregate are for
more than the lesser of (1) seven hundred fifty thousand (750,000) shares or (2)
one percent (1%) of the number of shares of Stock issued and outstanding as
reported in the most recent periodic report filed with the Securities and
Exchange Commission.

                    (ii)
Restricted Stock and Restricted Stock Unit
Awards. Subject to adjustment as
provided in Section 4.4, no Employee shall be granted within any fiscal year of
the Company one or more Restricted Stock Awards or Restricted Stock Unit Awards,
subject to Vesting Conditions based on the attainment of Performance Goals, for
more than the lesser of (1) seven hundred fifty thousand (750,000) shares or (2)
one percent (1%) of the number of shares of Stock issued and outstanding as
reported in the most recent periodic report filed with the Securities and
Exchange Commission.

13




                    (iii) Performance
Awards. Subject to adjustment as
provided in Section 4.4, no Employee shall be granted (1) Performance Shares
which could result in such Employee receiving more than five hundred thousand
(500,000) shares for each full fiscal year of the Company contained in the
Performance Period for such Award, or (2) Performance Units which could result
in such Employee receiving more than five million dollars ($5,000,000) for each
full fiscal year of the Company contained in the Performance Period for such
Award. No Participant may be granted more than one Performance Award for the
same Performance Period.

               (e) Nonemployee
Director Award Limits. Subject to
adjustment as provided in Section 4.4, no Nonemployee Director may be granted
within any fiscal year of the Company one or more Nonemployee Director Awards
for more than 5,000 shares subject to Full Value Awards or 12,000 shares subject
to Options or SARs; provided, however, that the foregoing annual limit shall be
increased by one or more of the following additions, as applicable:

                    (i) in the fiscal
year in which the Nonemployee Director is first appointed or elected to the
Board as a Nonemployee Director, an additional 7,000 shares subject to Full
Value Awards or 17,000 shares subject to Options or SARs; and

                    (ii) in any fiscal
year for each committee of the Board on which the Nonemployee Director is then
serving, an additional 600 shares subject to Full Value Awards or 1,500 shares
subject to Options or SARs.

     6. Stock
Options.

          Options shall be evidenced by Award Agreements specifying
the number of shares of Stock covered thereby, in such form as the Committee
shall from time to time establish. Award Agreements evidencing Options may
incorporate all or any of the terms of the Plan by reference and shall comply
with and be subject to the following terms and conditions:

          6.1 Exercise
Price. The exercise price for each Option shall be established
in the discretion of the Committee; provided, however, that (a) the exercise
price per share shall be not less than the Fair Market Value of a share of Stock
on the effective date of grant of the Option and (b) no Incentive Stock Option
granted to a Ten Percent Owner shall have an exercise price per share less than
one hundred ten percent (110%) of the Fair Market Value of a share of Stock on
the effective date of grant of the Option. Notwithstanding the foregoing, an
Option (whether an Incentive Stock Option or a Nonstatutory Stock Option) may be
granted with an exercise price lower than the minimum exercise price set forth
above if such Option is granted pursuant to an assumption or substitution for
another option in a manner qualifying under the provisions of Section 424(a) of
the Code.

          6.2 Exercisability
and Term of Options. Options shall be
exercisable at such time or times, or upon such event or events, and subject to
such terms, conditions, performance criteria and restrictions as shall be
determined by the Committee and set forth in the Award Agreement evidencing such
Option; provided, however, that (a) no Option shall be exercisable after the
expiration of ten (10) years after the effective date of grant of such Option
and (b) no Incentive Stock Option granted to a Ten Percent Owner shall be
exercisable after the

14




expiration of five (5) years after
the effective date of grant of such Option. Subject to the foregoing, unless
otherwise specified by the Committee in the grant of an Option, each Option
shall terminate ten (10) years after the effective date of grant of the Option,
unless earlier terminated in accordance with its provisions.

          6.3
Payment of Exercise Price.

               (a) Forms of
Consideration Authorized. Except as
otherwise provided below, payment of the exercise price for the number of shares
of Stock being purchased pursuant to any Option shall be made (i) in cash, by
check or in cash equivalent, (ii) by tender to the Company, or attestation to
the ownership, of shares of Stock owned by the Participant having a Fair Market
Value not less than the exercise price, (iii) by delivery of a properly executed
notice of exercise together with irrevocable instructions to a broker providing
for the assignment to the Company of the proceeds of a sale or loan with respect
to some or all of the shares being acquired upon the exercise of the Option
(including, without limitation, through an exercise complying with the
provisions of Regulation T as promulgated from time to time by the Board of
Governors of the Federal Reserve System) (a “Cashless
Exercise”), (iv) by such other consideration as may be approved by
the Committee from time to time to the extent permitted by applicable law, or
(v) by any combination thereof. The Committee may at any time or from time to
time grant Options which do not permit all of the foregoing forms of
consideration to be used in payment of the exercise price or which otherwise
restrict one or more forms of consideration.

               (b)
Limitations on Forms of
Consideration.

                    (i) Tender of
Stock. Notwithstanding the foregoing, an
Option may not be exercised by tender to the Company, or attestation to the
ownership, of shares of Stock to the extent such tender or attestation would
constitute a violation of the provisions of any law, regulation or agreement
restricting the redemption of the Company’s stock. Unless otherwise provided by
the Committee, an Option may not be exercised by tender to the Company, or
attestation to the ownership, of shares of Stock unless such shares either have
been owned by the Participant for more than six (6) months (or such other
period, if any, as the Committee may permit) and not used for another Option
exercise by attestation during such period, or were not acquired, directly or
indirectly, from the Company.

                    (ii) Cashless
Exercise. The Company reserves, at any
and all times, the right, in the Company’s sole and absolute discretion, to
establish, decline to approve or terminate any program or procedures for the
exercise of Options by means of a Cashless Exercise, including with respect to
one or more Participants specified by the Company notwithstanding that such
program or procedures may be available to other Participants.

          6.4
Effect of Termination of Service.

               (a) Option
Exercisability. Subject to earlier termination of the Option as otherwise
provided herein and unless otherwise provided by the Committee, an Option shall
terminate immediately upon the Participant’s termination of Service to the
extent that it is then unvested and shall be exercisable after the Participant’s
termination of Service to the extent it is

15




then vested only during the
applicable time period determined in accordance with this Section and thereafter
shall terminate:

                    (i) Disability. If the Participant’s
Service terminates because of the Disability of the Participant, the Option, to
the extent unexercised and exercisable for vested shares on the date on which
the Participant’s Service terminated, may be exercised by the Participant (or
the Participant’s guardian or legal representative) at any time prior to the
expiration of twelve (12) months after the date on which the Participant’s
Service terminated, but in any event no later than the date of expiration of the
Option’s term as set forth in the Award Agreement evidencing such Option
(the “Option Expiration Date”).

                    (ii) Death. If the Participant’s
Service terminates because of the death of the Participant, the Option, to the
extent unexercised and exercisable for vested shares on the date on which the
Participant’s Service terminated, may be exercised by the Participant’s legal
representative or other person who acquired the right to exercise the Option by
reason of the Participant’s death at any time prior to the expiration of twelve
(12) months after the date on which the Participant’s Service terminated, but in
any event no later than the Option Expiration Date. The Participant’s Service
shall be deemed to have terminated on account of death if the Participant dies
within three (3) months after the Participant’s termination of
Service.

                    (iii) Other
Termination of Service. If the
Participant’s Service terminates for any reason, except Disability or death, the
Option, to the extent unexercised and exercisable for vested shares on the date
on which the Participant’s Service terminated, may be exercised by the
Participant at any time prior to the expiration of three (3) months after the
date on which the Participant’s Service terminated, but in any event no later
than the Option Expiration Date.

               (b) Extension
if Exercise Prevented by Law. Notwithstanding the foregoing,
if the exercise of an Option within the applicable time periods set forth in
Section 6.4(a) is prevented by the provisions of Section 15 below, the Option
shall remain exercisable until the later of (i) thirty (30) days after the date
such exercise first would no longer be prevented by such provisions or (ii) the
end of the applicable time period under Section 6.4(a), but in any event no
later than the Option Expiration Date.

          6.5 Transferability of Options. During the lifetime of the Participant, an Option shall be exercisable
only by the Participant or the Participant’s guardian or legal representative.
An Option shall not be subject in any manner to anticipation, alienation, sale,
exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors
of the Participant or the Participant’s beneficiary, except transfer by will or
by the laws of descent and distribution. Notwithstanding the foregoing, to the
extent permitted by the Committee, in its discretion, and set forth in the Award
Agreement evidencing such Option, a Nonstatutory Stock Option shall be
assignable or transferable subject to the applicable limitations, if any,
described in the General Instructions to Form S-8 under the Securities
Act.

16




     7. Stock
Appreciation Rights.

          Stock Appreciation Rights shall be evidenced by Award
Agreements specifying the number of shares of Stock subject to the Award, in
such form as the Committee shall from time to time establish. Award Agreements
evidencing SARs may incorporate all or any of the terms of the Plan by reference
and shall comply with and be subject to the following terms and
conditions:

          7.1 Types of SARs
Authorized. SARs may be granted in
tandem with all or any portion of a related Option (a “Tandem
SAR”) or may be granted independently of any Option (a
“Freestanding SAR”). A Tandem SAR may only be
granted concurrently with the grant of the related Option.

          7.2 Exercise
Price. The exercise price for each SAR
shall be established in the discretion of the Committee; provided, however, that
(a) the exercise price per share subject to a Tandem SAR shall be the exercise
price per share under the related Option and (b) the exercise price per share
subject to a Freestanding SAR shall be not less than the Fair Market Value of a
share of Stock on the effective date of grant of the SAR.

          7.3
Exercisability and Term of SARs.

               (a) Tandem
SARs. Tandem SARs shall be
exercisable only at the time and to the extent, and only to the extent, that the
related Option is exercisable, subject to such provisions as the Committee may
specify where the Tandem SAR is granted with respect to less than the full
number of shares of Stock subject to the related Option. The Committee may, in
its discretion, provide in any Award Agreement evidencing a Tandem SAR that such
SAR may not be exercised without the advance approval of the Company and, if
such approval is not given, then the Option shall nevertheless remain
exercisable in accordance with its terms. A Tandem SAR shall terminate and cease
to be exercisable no later than the date on which the related Option expires or
is terminated or canceled. Upon the exercise of a Tandem SAR with respect to
some or all of the shares subject to such SAR, the related Option shall be
canceled automatically as to the number of shares with respect to which the
Tandem SAR was exercised. Upon the exercise of an Option related to a Tandem SAR
as to some or all of the shares subject to such Option, the related Tandem SAR
shall be canceled automatically as to the number of shares with respect to which
the related Option was exercised.

               (b) Freestanding SARs. Freestanding SARs shall be exercisable at such time or times, or upon
such event or events, and subject to such terms, conditions, performance
criteria and restrictions as shall be determined by the Committee and set forth
in the Award Agreement evidencing such SAR; provided, however, that no
Freestanding SAR shall be exercisable after the expiration of ten (10) years
after the effective date of grant of such SAR.

          7.4 Exercise of
SARs. Upon the exercise (or deemed
exercise pursuant to Section 7.5) of an SAR, the Participant (or the
Participant’s legal representative or other person who acquired the right to
exercise the SAR by reason of the Participant’s death) shall be entitled to
receive payment of an amount for each share with respect to which the SAR is
exercised equal to the excess, if any, of the Fair Market Value of a share of
Stock on the date of exercise of the

17




SAR over the exercise price.
Payment of such amount shall be made (a) in the case of a Tandem SAR, solely in
shares of Stock in a lump sum upon the date of exercise of the SAR and (b) in
the case of a Freestanding SAR, in cash, shares of Stock, or any combination
thereof as determined by the Committee, in a lump sum upon the date of exercise
of the SAR. When payment is to be made in shares of Stock, the number of shares
to be issued shall be determined on the basis of the Fair Market Value of a
share of Stock on the date of exercise of the SAR. For purposes of Section 7, an
SAR shall be deemed exercised on the date on which the Company receives notice
of exercise from the Participant or as otherwise provided in Section
7.5.

          7.5 Deemed
Exercise of SARs. If, on the date on
which an SAR would otherwise terminate or expire, the SAR by its terms remains
exercisable immediately prior to such termination or expiration and, if so
exercised, would result in a payment to the holder of such SAR, then any portion
of such SAR which has not previously been exercised shall automatically be
deemed to be exercised as of such date with respect to such portion.

          7.6 Effect of
Termination of Service. Subject to
earlier termination of the SAR as otherwise provided herein and unless otherwise
provided by the Committee, an SAR shall be exercisable after a Participant’s
termination of Service only to the extent and during the applicable time period
determined in accordance with Section 6.4 (treating the SAR as if it were an
Option) and thereafter shall terminate.

          7.7 Transferability of SARs. During
the lifetime of the Participant, an SAR shall be exercisable only by the
Participant or the Participant’s guardian or legal representative. An SAR shall
not be subject in any manner to anticipation, alienation, sale, exchange,
transfer, assignment, pledge, encumbrance, or garnishment by creditors of the
Participant or the Participant’s beneficiary, except transfer by will or by the
laws of descent and distribution. Notwithstanding the foregoing, to the extent
permitted by the Committee, in its discretion, and set forth in the Award
Agreement evidencing such Award, a Tandem SAR related to a Nonstatutory Stock
Option or a Freestanding SAR shall be assignable or transferable subject to the
applicable limitations, if any, described in the General Instructions to Form
S-8 under the Securities Act.

     8. Restricted Stock Awards.

          Restricted Stock Awards shall be evidenced by Award
Agreements specifying whether the Award is a Restricted Stock Bonus or a
Restricted Stock Purchase Right and the number of shares of Stock subject to the
Award, in such form as the Committee shall from time to time establish. Award
Agreements evidencing Restricted Stock Awards may incorporate all or any of the
terms of the Plan by reference and shall comply with and be subject to the
following terms and conditions:

          8.1 Types of
Restricted Stock Awards Authorized. Restricted Stock Awards may be granted in the form of either a Restricted
Stock Bonus or a Restricted Stock Purchase Right. Restricted Stock Awards may be
granted upon such conditions as the Committee shall determine, including,
without limitation, upon the attainment of one or more Performance Goals
described in Section 10.4. If either the grant of or satisfaction of Vesting
Conditions applicable to a Restricted Stock Award is to be contingent upon the
attainment of one

18




or more Performance Goals, the
Committee shall follow procedures substantially equivalent to those set forth in
Sections 10.3 through 10.5(a).

          8.2 Purchase
Price. The purchase price for shares of
Stock issuable under each Restricted Stock Purchase Right shall be established
by the Committee in its discretion. No monetary payment (other than applicable
tax withholding) shall be required as a condition of receiving shares of Stock
pursuant to a Restricted Stock Bonus, the consideration for which shall be
services actually rendered to a Participating Company or for its benefit.
Notwithstanding the foregoing, if required by applicable state corporate law,
the Participant shall furnish consideration in the form of cash or past services
rendered to a Participating Company or for its benefit having a value not less
than the par value of the shares of Stock subject to a Restricted Stock
Award.

          8.3 Purchase
Period. A Restricted Stock Purchase
Right shall be exercisable within a period established by the Committee, which
shall in no event exceed thirty (30) days from the effective date of the grant
of the Restricted Stock Purchase Right.

          8.4 Payment of
Purchase Price. Except as otherwise
provided below, payment of the purchase price for the number of shares of Stock
being purchased pursuant to any Restricted Stock Purchase Right shall be made
(a) in cash, by check or in cash equivalent, (b) by such other consideration as
may be approved by the Committee from time to time to the extent permitted by
applicable law, or (c) by any combination thereof.

          8.5 Vesting and
Restrictions on Transfer. Subject to
Section 5.4(c), shares issued pursuant to any Restricted Stock Award may (but
need not) be made subject to Vesting Conditions based upon the satisfaction of
such Service requirements, conditions, restrictions or performance criteria,
including, without limitation, Performance Goals as described in Section 10.4,
as shall be established by the Committee and set forth in the Award Agreement
evidencing such Award. During any period in which shares acquired pursuant to a
Restricted Stock Award remain subject to Vesting Conditions, such shares may not
be sold, exchanged, transferred, pledged, assigned or otherwise disposed of
other than pursuant to an Ownership Change Event or as provided in Section 8.8.
The Committee, in its discretion, may provide in any Award Agreement evidencing
a Restricted Stock Award that, if the satisfaction of Vesting Conditions with
respect to any shares subject to such Restricted Stock Award would otherwise
occur on a day on which the sale of such shares would violate the provisions of
the Insider Trading Policy, then satisfaction of the Vesting Conditions
automatically shall be determined on the next trading day on which the sale of
such shares would not violate the Insider Trading Policy. Upon request by the
Company, each Participant shall execute any agreement evidencing such transfer
restrictions prior to the receipt of shares of Stock hereunder and shall
promptly present to the Company any and all certificates representing shares of
Stock acquired hereunder for the placement on such certificates of appropriate
legends evidencing any such transfer restrictions.

          8.6 Voting Rights;
Dividends and Distributions. Except as
provided in this Section, Section 8.5 and any Award Agreement, during any period
in which shares acquired pursuant to a Restricted Stock Award remain subject to
Vesting Conditions, the Participant shall have all of the rights of a
stockholder of the Company holding shares of Stock, including the

19




right to vote such shares and to
receive all dividends and other distributions paid with respect to such shares;
provided, however, that the Participant shall, at the discretion of the Company,
be obligated to promptly repay to the Company upon termination of the
Participant’s Service any such dividends and other distributions paid to the
Participant in cash with respect to shares that remain subject to Vesting
Conditions at the time of such termination of Service. In the event of a
dividend or distribution paid in shares of Stock or other property or any other
adjustment made upon a change in the capital structure of the Company as
described in Section 4.4, any and all new, substituted or additional securities
or other property (other than normal cash dividends) to which the Participant is
entitled by reason of the Participant’s Restricted Stock Award shall be
immediately subject to the same Vesting Conditions as the shares subject to the
Restricted Stock Award with respect to which such dividends or distributions
were paid or adjustments were made.

          8.7 Effect of
Termination of Service. Unless otherwise
provided by the Committee in the Award Agreement evidencing a Restricted Stock
Award, if a Participant’s Service terminates for any reason, whether voluntary
or involuntary (including the Participant’s death or disability), then (a) the
Company shall have the option to repurchase for the purchase price paid by the
Participant any shares acquired by the Participant pursuant to a Restricted
Stock Purchase Right which remain subject to Vesting Conditions as of the date
of the Participant’s termination of Service and (b) the Participant shall
forfeit to the Company any shares acquired by the Participant pursuant to a
Restricted Stock Bonus which remain subject to Vesting Conditions as of the date
of the Participant’s termination of Service. The Company shall have the right to
assign at any time any repurchase right it may have, whether or not such right
is then exercisable, to one or more persons as may be selected by the
Company.

          8.8 Nontransferability of Restricted Stock Award Rights. Rights to acquire shares of Stock pursuant to a
Restricted Stock Award shall not be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge, encumbrance or
garnishment by creditors of the Participant or the Participant’s beneficiary,
except transfer by will or the laws of descent and distribution. All rights with
respect to a Restricted Stock Award granted to a Participant hereunder shall be
exercisable during his or her lifetime only by such Participant or the
Participant’s guardian or legal representative.

     9. Restricted Stock Unit Awards.

          Restricted Stock Unit Awards shall be evidenced by Award
Agreements specifying the number of Restricted Stock Units subject to the Award,
in such form as the Committee shall from time to time establish. Award
Agreements evidencing Restricted Stock Units may incorporate all or any of the
terms of the Plan by reference and shall comply with and be subject to the
following terms and conditions:

          9.1 Grant of
Restricted Stock Unit Awards. Restricted
Stock Unit Awards may be granted upon such conditions as the Committee shall
determine, including, without limitation, upon the attainment of one or more
Performance Goals described in Section 10.4. If either the grant of a Restricted
Stock Unit Award or the Vesting Conditions with respect to such Award is to be
contingent upon the attainment of one or more Performance Goals, the

20




Committee shall follow procedures
substantially equivalent to those set forth in Sections 10.3 through
10.5(a).

          9.2 Purchase
Price. No monetary payment (other than
applicable tax withholding, if any) shall be required as a condition of
receiving a Restricted Stock Unit Award, the consideration for which shall be
services actually rendered to a Participating Company or for its benefit.
Notwithstanding the foregoing, if required by applicable state corporate law,
the Participant shall furnish consideration in the form of cash or past services
rendered to a Participating Company or for its benefit having a value not less
than the par value of the shares of Stock issued upon settlement of the
Restricted Stock Unit Award.

          9.3 Vesting. Subject to Section
5.4(c), Restricted Stock Unit Awards may (but need not) be made subject to
Vesting Conditions based upon the satisfaction of such Service requirements,
conditions, restrictions or performance criteria, including, without limitation,
Performance Goals as described in Section 10.4, as shall be established by the
Committee and set forth in the Award Agreement evidencing such Award. The
Committee, in its discretion, may provide in any Award Agreement evidencing a
Restricted Stock Unit Award that, if the satisfaction of Vesting Conditions with
respect to any shares subject to the Award would otherwise occur on a day on
which the sale of such shares would violate the provisions of the Insider
Trading Policy, then the satisfaction of the Vesting Conditions automatically
shall be determined on the first to occur of (a) the next trading day on which
the sale of such shares would not violate the Insider Trading Policy or (b) the
later of (i) last day of the calendar year in which the original vesting date
occurred or (ii) the last day of the Company’s taxable year in which the
original vesting date occurred.

          9.4
Voting Rights, Dividend Equivalent Rights and
Distributions. Participants shall have
no voting rights with respect to shares of Stock represented by Restricted Stock
Units until the date of the issuance of such shares (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company). However, the Committee, in its discretion, may provide in
the Award Agreement evidencing any Restricted Stock Unit Award that the
Participant shall be entitled to Dividend Equivalent Rights with respect to the
payment of cash dividends on Stock during the period beginning on the date such
Award is granted and ending, with respect to each share subject to the Award, on
the earlier of the date the Award is settled or the date on which it is
terminated. Such Dividend Equivalent Rights, if any, shall be paid by crediting
the Participant with additional whole Restricted Stock Units as of the date of
payment of such cash dividends on Stock. The number of additional Restricted
Stock Units (rounded to the nearest whole number) to be so credited shall be
determined by dividing (a) the amount of cash dividends paid on such date with
respect to the number of shares of Stock represented by the Restricted Stock
Units previously credited to the Participant by (b) the Fair Market Value per
share of Stock on such date. Such additional Restricted Stock Units shall be
subject to the same terms and conditions and shall be settled in the same manner
and at the same time as the Restricted Stock Units originally subject to the
Restricted Stock Unit Award. In the event of a dividend or distribution paid in
shares of Stock or other property or any other adjustment made upon a change in
the capital structure of the Company as described in Section 4.4, appropriate
adjustments shall be made in the Participant’s Restricted Stock Unit Award so
that it represents the right to receive upon settlement any and all new,
substituted or additional securities or other property (other than normal cash
dividends) to

21




which the Participant would be
entitled by reason of the shares of Stock issuable upon settlement of the Award,
and all such new, substituted or additional securities or other property shall
be immediately subject to the same Vesting Conditions as are applicable to the
Award.

          9.5 Effect of
Termination of Service. Unless otherwise
provided by the Committee and set forth in the Award Agreement evidencing a
Restricted Stock Unit Award, if a Participant’s Service terminates for any
reason, whether voluntary or involuntary (including the Participant’s death or
disability), then the Participant shall forfeit to the Company any Restricted
Stock Units pursuant to the Award which remain subject to Vesting Conditions as
of the date of the Participant’s termination of Service.

          9.6 Settlement of
Restricted Stock Unit Awards. The
Company shall issue to a Participant on the date on which Restricted Stock Units
subject to the Participant’s Restricted Stock Unit Award vest or on such other
date determined by the Committee, in its discretion, and set forth in the Award
Agreement one (1) share of Stock (and/or any other new, substituted or
additional securities or other property pursuant to an adjustment described in
Section 9.4) for each Restricted Stock Unit then becoming vested or otherwise to
be settled on such date, subject to the withholding of applicable taxes, if any.
If permitted by the Committee, the Participant may elect, consistent with the
requirements of Section 409A, to defer receipt of all or any portion of the
shares of Stock or other property otherwise issuable to the Participant pursuant
to this Section, and such deferred issuance date(s) and amount(s) elected by the
Participant shall be set forth in the Award Agreement. Notwithstanding the
foregoing, the Committee, in its discretion, may provide for settlement of any
Restricted Stock Unit Award by payment to the Participant in cash of an amount
equal to the Fair Market Value on the payment date of the shares of Stock or
other property otherwise issuable to the Participant pursuant to this
Section.

          9.7 Nontransferability of Restricted Stock Unit Awards. The right to receive shares pursuant to a Restricted
Stock Unit Award shall not be subject in any manner to anticipation, alienation,
sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by
creditors of the Participant or the Participant’s beneficiary, except transfer
by will or by the laws of descent and distribution. All rights with respect to a
Restricted Stock Unit Award granted to a Participant hereunder shall be
exercisable during his or her lifetime only by such Participant or the
Participant’s guardian or legal representative.

     10. Performance Awards.

          Performance Awards shall be evidenced by Award Agreements
in such form as the Committee shall from time to time establish. Award
Agreements evidencing Performance Awards may incorporate all or any of the terms
of the Plan by reference and shall comply with and be subject to the following
terms and conditions:

          10.1 Types of
Performance Awards Authorized. Performance Awards may be granted in the form of either Performance
Shares or Performance Units. Each Award Agreement evidencing a Performance Award
shall specify the number of Performance Shares or Performance Units subject
thereto, the Performance Award Formula, the Performance Goal(s)

22




and Performance Period applicable
to the Award, and the other terms, conditions and restrictions of the
Award.

          10.2 Initial Value
of Performance Shares and Performance Units. Unless otherwise provided by the Committee in granting a Performance
Award, each Performance Share shall have an initial monetary value equal to the
Fair Market Value of one (1) share of Stock, subject to adjustment as provided
in Section 4.4, on the effective date of grant of the Performance Share, and
each Performance Unit shall have an initial monetary value established by the
Committee at the time of grant. The final value payable to the Participant in
settlement of a Performance Award determined on the basis of the applicable
Performance Award Formula will depend on the extent to which Performance Goals
established by the Committee are attained within the applicable Performance
Period established by the Committee.

          10.3 Establishment
of Performance Period, Performance Goals and Performance Award
Formula. In granting each Performance
Award, the Committee shall establish in writing the applicable Performance
Period (subject to Section 5.4(c)), Performance Award Formula and one or more
Performance Goals which, when measured at the end of the Performance Period,
shall determine on the basis of the Performance Award Formula the final value of
the Performance Award to be paid to the Participant. Unless otherwise permitted
in compliance with the requirements under Section 162(m) with respect to each
Performance Award intended to result in the payment of Performance-Based
Compensation, the Committee shall establish the Performance Goal(s) and
Performance Award Formula applicable to each Performance Award no later than the
earlier of (a) the date ninety (90) days after the commencement of the
applicable Performance Period or (b) the date on which 25% of the Performance
Period has elapsed, and, in any event, at a time when the outcome of the
Performance Goals remains substantially uncertain. Once established, the
Performance Goals and Performance Award Formula applicable to a Covered Employee
shall not be changed during the Performance Period. The Company shall notify
each Participant granted a Performance Award of the terms of such Award,
including the Performance Period, Performance Goal(s) and Performance Award
Formula.

          10.4 Measurement
of Performance Goals. Performance Goals
shall be established by the Committee on the basis of targets to be attained
(“Performance Targets”) with respect to one or more
measures of business or financial performance (each, a “Performance Measure”), subject to the
following:

               (a) Performance
Measures. Performance Measures shall
have the same meanings as used in the Company’s financial statements, or, if
such terms are not used in the Company’s financial statements, they shall have
the meaning applied pursuant to generally accepted accounting principles, or as
used generally in the Company’s industry. Performance Measures shall be
calculated with respect to the Company and each Subsidiary Corporation
consolidated therewith for financial reporting purposes or such division or
other business unit as may be selected by the Committee. For purposes of the
Plan, the Performance Measures applicable to a Performance Award shall be
calculated in accordance with generally accepted accounting principles, if
applicable, but prior to the accrual or payment of any Performance Award for the
same Performance Period and excluding the effect (whether positive or negative)
of any change in accounting standards or any extraordinary, unusual or
nonrecurring item, as

23




determined by the Committee,
occurring after the establishment of the Performance Goals applicable to the
Performance Award. Each such adjustment, if any, shall be made solely for the
purpose of providing a consistent basis from period to period for the
calculation of Performance Measures in order to prevent the dilution or
enlargement of the Participant’s rights with respect to a Performance Award.
Performance Measures may be one or more of the following, as determined by the
Committee:

                    (i)
sales revenue;

                    (ii)
gross margin;

                    (iii)
operating margin;

                    (iv)
operating income;

                    (v)
pre-tax profit;

                    (vi) earnings before interest,
taxes and depreciation and amortization;

                    (vii) net income;

                    (viii)
expenses;

                    (ix)
the market price of the Stock;

                    (x)
earnings per share;

                    (xi)
return on stockholder equity;

                    (xii)
return on capital;

                    (xiii)
return on net assets;

                    (xiv)
economic value added; and

                    (xv)
market share.

               (b) Performance
Targets. Performance Targets may
include a minimum, maximum, target level and intermediate levels of performance,
with the final value of a Performance Award determined under the applicable
Performance Award Formula by the level attained during the applicable
Performance Period. A Performance Target may be stated as an absolute value or
as a value determined relative to an index, budget or other standard selected by
the Committee.

          10.5
Settlement of Performance Awards.

               (a) Determination of Final Value. As soon as practicable following the completion of the Performance Period
applicable to a Performance Award, the Committee

24




shall certify in writing the
extent to which the applicable Performance Goals have been attained and the
resulting final value of the Award earned by the Participant and to be paid upon
its settlement in accordance with the applicable Performance Award
Formula.

               (b) Discretionary Adjustment of Award Formula. In its discretion, the Committee may, either at the time
it grants a Performance Award or at any time thereafter, provide for the
positive or negative adjustment of the Performance Award Formula applicable to a
Performance Award granted to any Participant who is not a Covered Employee to
reflect such Participant’s individual performance in his or her position with
the Company or such other factors as the Committee may determine. If permitted
under a Covered Employee’s Award Agreement, the Committee shall have the
discretion, on the basis of such criteria as may be established by the
Committee, to reduce some or all of the value of the Performance Award that
would otherwise be paid to the Covered Employee upon its settlement
notwithstanding the attainment of any Performance Goal and the resulting value
of the Performance Award determined in accordance with the Performance Award
Formula. No such reduction may result in an increase in the amount payable upon
settlement of another Participant’s Performance Award that is intended to result
in Performance-Based Compensation.

               (c) Notice to
Participants. As soon as practicable
following the Committee’s determination and certification in accordance with
Sections 10.5(a) and (b), the Company shall notify each Participant of the
determination of the Committee.

               (d) Payment in
Settlement of Performance Awards. As
soon as practicable following the Committee’s determination and certification in
accordance with Sections 10.5(a) and (b), but in any event within the Short-Term
Deferral Period described in Section 16.1 (except as otherwise provided below or
consistent with the requirements of Section 409A), payment shall be made to each
eligible Participant (or such Participant’s legal representative or other person
who acquired the right to receive such payment by reason of the Participant’s
death) of the final value of the Participant’s Performance Award. Payment of
such amount shall be made in cash, shares of Stock, or a combination thereof as
determined by the Committee. Unless otherwise provided in the Award Agreement
evidencing a Performance Award, payment shall be made in a lump sum. If
permitted by the Committee, the Participant may elect, consistent with the
requirements of Section 409A, to defer receipt of all or any portion of the
payment to be made to Participant pursuant to this Section, and such deferred
payment date(s) elected by the Participant shall be set forth in the Award
Agreement. If any payment is to be made on a deferred basis, the Committee may,
but shall not be obligated to, provide for the payment during the deferral
period of Dividend Equivalent Rights or interest.

               (e) Provisions
Applicable to Payment in Shares. If
payment is to be made in shares of Stock, the number of such shares shall be
determined by dividing the final value of the Performance Award by the Fair
Market Value of a share of Stock determined by the method specified in the Award
Agreement. Shares of Stock issued in payment of any Performance Award may be fully vested and freely transferable shares or
may be shares of Stock subject to Vesting Conditions as provided in Section 8.5.
Any shares subject to Vesting Conditions shall be evidenced by an appropriate
Award Agreement and shall be subject to the provisions of Sections 8.5 through
8.8 above.

25




          10.6
Voting Rights; Dividend Equivalent Rights and
Distributions. Participants shall have
no voting rights with respect to shares of Stock represented by Performance Share Awards until the date of the issuance
of such shares, if any (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company). However, the
Committee, in its discretion, may provide in the Award Agreement evidencing any
Performance Share Award that the Participant shall be entitled to Dividend
Equivalent Rights with respect to the payment of cash dividends on Stock during
the period beginning on the date the Award is granted and ending, with respect
to each share subject to the Award, on the earlier of the date on which the
Performance Shares are settled or the date on which they are forfeited. Such
Dividend Equivalent Rights, if any, shall be credited to the Participant in the
form of additional whole Performance Shares as of the date of payment of such
cash dividends on Stock. The number of additional Performance Shares (rounded to
the nearest whole number) to be so credited shall be determined by dividing (a)
the amount of cash dividends paid on the dividend payment date with respect to
the number of shares of Stock represented by the Performance Shares previously
credited to the Participant by (b) the Fair Market Value per share of Stock on
such date. Dividend Equivalent Rights may be paid currently or may be
accumulated and paid to the extent that Performance Shares become
nonforfeitable, as determined by the Committee. Settlement of Dividend
Equivalent Rights may be made in cash, shares of Stock, or a combination thereof
as determined by the Committee, and may be paid on the same basis as settlement
of the related Performance Share as provided in Section 10.5. Dividend
Equivalent Rights shall not be paid with respect to Performance Units. In the
event of a dividend or distribution paid in shares of Stock or other property or
any other adjustment made upon a change in the capital structure of the Company
as described in Section 4.4, appropriate adjustments shall be made in the
Participant’s Performance Share Award so that it represents the right to receive
upon settlement any and all new, substituted or additional securities or other
property (other than normal cash dividends) to which the Participant would
entitled by reason of the shares of Stock issuable upon settlement of the
Performance Share Award, and all such new, substituted or additional securities
or other property shall be immediately subject to the same Performance Goals as
are applicable to the Award.

          10.7 Effect of
Termination of Service. Unless otherwise
provided by the Committee and set forth in the Award Agreement evidencing a
Performance Award, the effect of a Participant’s termination of Service on the
Performance Award shall be as follows:

               (a) Death or
Disability. If the Participant’s
Service terminates because of the death or Disability of the Participant before
the completion of the Performance Period applicable to the Performance Award,
the final value of the Participant’s Performance Award shall be determined by
the extent to which the applicable Performance Goals have been attained with
respect to the entire Performance Period and shall be prorated based on the
number of months of the Participant’s Service during the Performance Period.
Payment shall be made following the end of the Performance Period in any manner
permitted by Section 10.5.

               (b) Other
Termination of Service. If the
Participant’s Service terminates for any reason except death or Disability
before the completion of the Performance Period applicable to the Performance
Award, such Award shall be forfeited in its entirety; provided, however, that in
the event of an involuntary termination of the Participant’s Service, the
Committee, in its sole discretion, may waive the automatic forfeiture of all or
any portion of

26




any such Award (e.g., by
determining the final value of the Participant’s Performance Award in the manner
provided by Section 10.7(a)) and provide for payment following the end of the
Performance Period in any manner permitted by Section 10.5.

          10.8 Nontransferability of Performance Awards. Prior to settlement in accordance with the provisions of
the Plan, no Performance Award shall be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or
garnishment by creditors of the Participant or the Participant’s beneficiary,
except transfer by will or by the laws of descent and distribution. All rights
with respect to a Performance Award granted to a Participant hereunder shall be
exercisable during his or her lifetime only by such Participant or the
Participant’s guardian or legal representative.

     11. Deferred
Compensation Awards.

          11.1 Establishment
of Deferred Compensation Award Programs. This Section 11 shall not be effective unless and until the Committee
determines to establish a program pursuant to this Section. The Committee, in
its discretion and upon such terms and conditions as it may determine,
consistent with the requirements of Section 409A, may establish one or more
programs pursuant to the Plan under which:

               (a) Elective
Cash Compensation Reduction Awards. Participants designated by the Committee who are Officers, Directors or
otherwise among a select group of management or highly compensated Employees may
irrevocably elect, prior to a date specified by the Committee in compliance with
Section 409A, to reduce such Participant’s compensation otherwise payable in
cash (subject to any minimum or maximum reductions imposed by the Committee) and
to be granted automatically at such time or times as specified by the Committee
one or more Awards of Stock Units with respect to such numbers of shares of
Stock as determined in accordance with the rules of the program established by
the Committee and having such other terms and conditions as established by the
Committee.

               (b) Stock
Issuance Deferral Awards. Participants designated by the Committee who are Officers, Directors or
otherwise among a select group of management or highly compensated Employees may
irrevocably elect, prior to a date specified by the Committee in compliance with
Section 409A, to be granted automatically an Award of Stock Units with respect
to such number of shares of Stock and upon such other terms and conditions as
established by the Committee in lieu of:

                    (i) shares of Stock
otherwise issuable to such Participant upon the exercise of an
Option;

                    (ii) cash or shares
of Stock otherwise issuable to such Participant upon the exercise of an SAR;
or

                    (iii) cash or shares
of Stock otherwise issuable to such Participant upon the settlement of a
Performance Award.

          11.2 Terms and
Conditions of Deferred Compensation Awards. Deferred Compensation Awards granted pursuant to this Section 11 shall be
evidenced by Award

27




Agreements in such form as the
Committee shall from time to time establish. Award Agreements evidencing Deferred Compensation Awards may incorporate all or
any of the terms of the Plan by reference and, except as provided below, shall
comply with and be subject to the following terms and conditions of Section
9.

               (a)
Voting Rights; Dividend Equivalent Rights and
Distributions. Participants shall have no voting rights with
respect to shares of Stock represented by Stock Units until the date of the
issuance of such shares (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company). However, a
Participant shall be entitled to Dividend Equivalent Rights with respect to the
payment of cash dividends on Stock during the period beginning on the date the
Stock Units are granted automatically to the Participant and ending on the
earlier of the date on which such Stock Units are settled or the date on which
they are forfeited. Such Dividend Equivalent Rights shall be paid by crediting
the Participant with additional whole Stock Units as of the date of payment of
such cash dividends on Stock. The number of additional Stock Units (rounded to
the nearest whole number) to be so credited shall be determined by dividing (A)
the amount of cash dividends paid on the dividend payment date with respect to
the number of shares of Stock represented by the Stock Units previously credited
to the Participant by (B) the Fair Market Value per share of Stock on such date.
Such additional Stock Units shall be subject to the same terms and conditions
and shall be settled in the same manner and at the same time as the Stock Units
originally subject to the Stock Unit Award. In the event of a dividend or
distribution paid in shares of Stock or other property or any other adjustment
made upon a change in the capital structure of the Company as described in
Section 4.4, appropriate adjustments shall be made in the Participant’s Stock
Unit Award so that it represents the right to receive upon settlement any and
all new, substituted or additional securities or other property (other than
normal cash dividends) to which the Participant would entitled by reason of the
shares of Stock issuable upon settlement of the Award.

               (b) Settlement of
Stock Unit Awards. A Participant
electing to receive an Award of Stock Units pursuant to this Section 11 shall
specify at the time of such election a settlement date with respect to such
Award in compliance with the requirements of Section 409A. The Company shall
issue to the Participant on the earlier of the settlement date elected by the
Participant or the date of termination of the Participant’s Service, a number of
whole shares of Stock equal to the number of whole Stock Units subject to the
Stock Unit Award. Such shares of Stock shall be fully vested, and the
Participant shall not be required to pay any additional consideration (other
than applicable tax withholding) to acquire such shares.

     12. Nonemployee Director Awards.

          From time to time, the Board or the Committee shall set
the amount(s) and type(s) of Nonemployee Director Awards that shall be granted
to all Nonemployee Directors on a periodic, nondiscriminatory basis pursuant to
the Plan, as well as the additional amount(s) and type(s) of Nonemployee
Director Awards, if any, to be awarded, also on a periodic, nondiscriminatory
basis, in consideration of one or more of the following: (a) the initial
election or appointment of an individual to the Board as a Nonemployee Director
and (b) a Nonemployee Director’s service on a committee of the Board. The terms
and conditions of each Nonemployee Director Award shall comply with the
applicable provisions of the Plan. Subject to the limits set

28




forth in Section 5.4(b), Section
5.4(c) and Section 5.4(e) and the foregoing, the Board or the Committee shall
grant Nonemployee Director Awards having such terms and conditions as it shall
from time to time determine.

     13. Standard
Forms of Award Agreement.

          13.1 Award
Agreements. Each Award shall comply with and be subject to the terms
and conditions set forth in the appropriate form of Award Agreement approved by
the Committee and as amended from time to time. No Award or purported Award
shall be a valid and binding obligation of the Company unless evidenced by a
fully executed Award Agreement. Any Award Agreement may consist of an
appropriate form of Notice of Grant and a form of Agreement incorporated therein
by reference, or such other form or forms, including electronic media, as the
Committee may approve from time to time.

          13.2 Authority to
Vary Terms. The Committee shall have the authority from time to time
to vary the terms of any standard form of Award Agreement either in connection
with the grant or amendment of an individual Award or in connection with the
authorization of a new standard form or forms; provided, however, that the terms
and conditions of any such new, revised or amended standard form or forms of
Award Agreement are not inconsistent with the terms of the Plan.

     14. Change
in Control.

          14.1 Effect of
Change in Control on Awards. Subject to
the requirements and limitations of Section 409A, if applicable, the Committee
may provide for any one or more of the following:

               (a) Accelerated
Vesting. In its discretion, the
Committee may provide in the grant of any Award or at any other time may take
such action as it deems appropriate to provide for acceleration of the
exercisability, vesting and/or settlement in connection with a Change in Control
of each or any outstanding Award or portion thereof and shares acquired pursuant
thereto upon such conditions, including termination of the Participant’s Service
prior to, upon, or following such Change in Control, to such extent as the
Committee shall determine.

               (b) Assumption,
Continuation or Substitution. In the
event of a Change in Control, the surviving, continuing, successor, or
purchasing corporation or other business entity or parent thereof, as the case
may be (the “Acquiror”), may, without the consent of
any Participant, either assume or continue the Company’s rights and obligations
under each or any Award or portion thereof outstanding immediately prior to the
Change in Control or substitute for each or any such outstanding Award or
portion thereof a substantially equivalent award with respect to the Acquiror’s
stock, as applicable. For purposes of this Section, if so determined by the
Committee, in its discretion, an Award denominated in shares of Stock shall be
deemed assumed if, following the Change in Control, the Award confers the right
to receive, subject to the terms and conditions of the Plan and the applicable
Award Agreement, for each share of Stock subject to the Award immediately prior
to the Change in Control, the consideration (whether stock, cash, other
securities or property or a combination thereof) to which a holder of a share of
Stock on the effective date of the Change in Control was entitled;

29




provided, however, that if such
consideration is not solely common stock of the Acquiror, the Committee may,
with the consent of the Acquiror, provide for the consideration to be received
upon the exercise or settlement of the Award, for each share of Stock subject to
the Award, to consist solely of common stock of the Acquiror equal in Fair
Market Value to the per share consideration received by holders of Stock
pursuant to the Change in Control. Any Award or portion thereof which is neither
assumed or continued by the Acquiror in connection with the Change in Control
nor exercised or settled as of the time of consummation of the Change in Control
shall terminate and cease to be outstanding effective as of the time of
consummation of the Change in Control.

               (c) Cash-Out of
Outstanding Stock-Based Awards. The
Committee may, in its discretion and without the consent of any Participant,
determine that, upon the occurrence of a Change in Control, each or any Award
denominated in shares of Stock or portion thereof outstanding immediately prior
to the Change in Control and not previously exercised or settled shall be
canceled in exchange for a payment with respect to each vested share (and each
unvested share, if so determined by the Committee) of Stock subject to such
canceled Award in (i) cash, (ii) stock of the Company or of a corporation or
other business entity a party to the Change in Control, or (iii) other property
which, in any such case, shall be in an amount having a Fair Market Value equal
to the Fair Market Value of the consideration to be paid per share of Stock in
the Change in Control, reduced (but not below zero) by the exercise or purchase
price per share, if any, under such Award. In the event such determination is
made by the Committee, an Award having an exercise or purchase price per share
equal to or greater than the Fair Market Value of the consideration to be paid
per share of Stock in the Change in Control may be canceled without payment of
consideration to the holder thereof. Payment pursuant to this Section (reduced
by applicable withholding taxes, if any) shall be made to Participants in
respect of the vested portions of their canceled Awards as soon as practicable
following the date of the Change in Control and in respect of the unvested
portions of their canceled Awards in accordance with the vesting schedules
applicable to such Awards.

          14.2
Effect of Change in Control on Nonemployee
Director Awards. Subject to the
requirements and limitations of Section 409A, if applicable, in the event of a
Change in Control, each outstanding Nonemployee Director Award shall become
immediately exercisable and vested in full and, except to the extent assumed,
continued or substituted for by the Acquiror, shall be settled effective
immediately prior to the time of consummation of the Change in
Control.

     15. Compliance With Securities Law.

          The grant of Awards and the issuance of shares of Stock
pursuant to any Award shall be subject to compliance with all applicable
requirements of federal, state and foreign law with respect to such securities
and the requirements of any stock exchange or market system upon which the Stock
may then be listed. In addition, no Award may be exercised or shares issued
pursuant to an Award unless (a) a registration statement under the Securities
Act shall at the time of such exercise or issuance be in effect with respect to
the shares issuable pursuant to the Award or (b) in the opinion of legal counsel
to the Company, the shares issuable pursuant to the Award may be issued in
accordance with the terms of an applicable exemption from the registration
requirements of the Securities Act. The inability of the Company to obtain from
any

30




regulatory body having
jurisdiction the authority, if any, deemed by the Company’s legal counsel to be
necessary to the lawful issuance and sale of any shares hereunder shall relieve
the Company of any liability in respect of the failure to issue or sell such
shares as to which such requisite authority shall not have been obtained. As a
condition to issuance of any Stock, the Company may require the Participant to
satisfy any qualifications that may be necessary or appropriate, to evidence
compliance with any applicable law or regulation and to make any representation
or warranty with respect thereto as may be requested by the Company.

     16. Compliance With Section 409A.

          16.1 Awards
Subject to Section 409A. The Company
intends that Awards granted pursuant to the Plan shall either be exempt from or
comply with Section 409A, and the Plan shall be so construed. The provisions of
this Section 16 shall apply to any Award or portion thereof that constitutes or
provides for payment of Section 409A Deferred Compensation. Such Awards may
include, without limitation:

               (a) A Nonstatutory
Stock Option or SAR that includes any feature for the deferral of compensation
other than the deferral of recognition of income until the later of (i) the
exercise or disposition of the Award or (ii) the time the stock acquired
pursuant to the exercise of the Award first becomes substantially
vested.

               (b) Any Restricted
Stock Unit Award or Performance Award that either (i) provides by its terms for
settlement of all or any portion of the Award at a time or upon an event that
will or may occur later than the end of the Short-Term Deferral Period (as
defined below) or (ii) permits the Participant granted the Award to elect one or
more dates or events upon which the Award will be settled after the end of the
Short-Term Deferral Period.

     Subject to the provisions of Section 409A, the term “Short-Term Deferral Period” means the 21⁄2
month period ending on the later of (i) the 15th day of the third month
following the end of the Participant’s taxable year in which the right to
payment under applicable portion of the Award is no longer subject to a
substantial risk of forfeiture or (ii) the 15th day of the third month following
the end of the Company’s taxable year in which the right to payment under the
applicable portion of the Award is no longer subject to a substantial risk of
forfeiture. For this purpose, the term “substantial risk of forfeiture” shall
have the meaning provided by Section 409A.

          16.2 Deferral
and/or Distribution Elections. Except as
otherwise permitted or required by Section 409A, the following rules shall apply
to any compensation deferral and/or payment elections (each, an
“Election”) that may be permitted or required by the Committee
pursuant to an Award providing Section 409A Deferred Compensation:

               (a) Elections must be
in writing and specify the amount of the payment in settlement of an Award being
deferred, as well as the time and form of payment as permitted by this
Plan.

               (b) Elections shall
be made by the end of the Participant’s taxable year prior to the year in which
services commence for which an Award may be granted to such
Participant.

31




               (c) Elections shall
continue in effect until a written revocation or change in Election is received
by the Company, except that a written revocation or change in Election must be
received by the Company prior to the last day for making the Election determined
in accordance with paragraph (b) above or as permitted by Section
16.3.

          16.3 Subsequent
Elections. Except as otherwise permitted or required by Section
409A, any Award providing Section 409A Deferred Compensation which permits a
subsequent Election to delay the payment or change the form of payment in
settlement of such Award shall comply with the following
requirements:

               (a) No subsequent
Election may take effect until at least twelve (12) months after the date on
which the subsequent Election is made.

               (b) Each subsequent
Election related to a payment in settlement of an Award not described in Section
16.4(b), 16.4(c) or 16.4(f) must result in a delay of the payment for a period
of not less than five (5) years from the date on which such payment would
otherwise have been made.

               (c) No subsequent
Election related to a payment pursuant to Section 16.4(d) shall be made less
than twelve (12) months before the date on which such payment would otherwise
have been made.

               (d) Subsequent
Elections shall continue in effect until a written revocation or change in the
subsequent Election is received by the Company, except that a written revocation
or change in a subsequent Election must be received by the Company prior to the
last day for making the subsequent Election determined in accordance the
preceding paragraphs of this Section 16.3.

          16.4 Payments
Pursuant to Deferral Elections. Except as otherwise
permitted or required by Section 409A, an Award providing Section 409A Deferred
Compensation must provide for payment in settlement of the Award only upon one
or more of the following:

               (a) The Participant’s
separation from service (as defined by Section 409A);

               (b)
The Participant’s becoming Disabled (as defined
below);

               (c)
The Participant’s death;

               (d) A time or fixed
schedule that is either (i) specified by the Committee upon the grant of an
Award and set forth in the Award Agreement evidencing such Award or (ii)
specified by the Participant in an Election complying with the requirements of
Section 16.2 or 16.3, as applicable;

               (e) A change in the
ownership or effective control or the Company or in the ownership of a
substantial portion of the assets of the Company determined in accordance with
Section 409A; or

32




               (f) The occurrence of
an Unforeseeable Emergency (as defined by Section 409A).

     Notwithstanding any provision of the Plan or an Award Agreement to the
contrary, to the extent that any amount constituting Section 409A Deferred
Compensation would become payable under this Plan by reason of a Change in
Control, such amount shall become payable only if the event constituting a
Change in Control would also constitute a change in ownership or effective
control of the Company or a change in the ownership of a substantial portion of
the assets of the Company within the meaning of Section 409A.

     Notwithstanding any provision of the Plan or an Award Agreement to the
contrary, except as otherwise permitted by Section 409A, no payment pursuant to
Section 16.4(a) in settlement of an Award providing for Section 409A Deferred
Compensation may be made to a Participant who is a “specified employee” (as
defined by Section 409A) as of the date of the Participant’s separation from
service before the date (the “Delayed Payment
Date”) that is six (6) months after the date of such
Participant’s separation from service, or, if earlier, the date of the
Participant’s death. All such amounts that would, but for this paragraph, become
payable prior to the Delayed Payment Date shall be accumulated and paid on the
Delayed Payment Date.

          16.5 Unforeseeable
Emergency. The Committee shall have the
authority to provide in the Award Agreement evidencing any Award providing for
Section 409A Deferred Compensation for payment in settlement of all or a portion
of such Award in the event that a Participant establishes, to the satisfaction
of the Committee, the occurrence of an Unforeseeable Emergency. In such event,
the amount(s) distributed with respect to such Unforeseeable Emergency cannot
exceed the amounts reasonably necessary to satisfy the emergency need plus
amounts necessary to pay taxes reasonably anticipated as a result of such
distribution(s), after taking into account the extent to which such emergency
need is or may be relieved through reimbursement or compensation by insurance or
otherwise, by liquidation of the Participant’s assets (to the extent the
liquidation of such assets would not itself cause severe financial hardship) or
by cessation of deferrals under the Award. All distributions with respect to an
Unforeseeable Emergency shall be made in a lump sum as soon as practicable
following the Committee’s determination that an Unforeseeable Emergency has
occurred.

     The
occurrence of an Unforeseeable Emergency shall be judged and determined by the
Committee. The Committee’s decision with respect to whether an Unforeseeable
Emergency has occurred and the manner in which, if at all, the payment in
settlement of an Award shall be altered or modified, shall be final, conclusive,
and not subject to approval or appeal.

          16.6 Disabled. The Committee shall
have the authority to provide in any Award providing Section 409A Deferred
Compensation for payment in settlement of such Award in the event that the
Participant becomes Disabled. A Participant shall be considered “Disabled” if
either:

               (a) the Participant
is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than twelve (12) months, or

33




               (b) the Participant
is, by reason of any medically determinable physical or mental impairment which
can be expected to result in death or can be expected to last for a continuous
period of not less than twelve (12) months, receiving income replacement
benefits for a period of not less than three (3) months under an accident and
health plan covering employees of the Participant’s employer.

     All
distributions payable by reason of a Participant becoming Disabled shall be paid
in a lump sum or in periodic installments as established by the Participant’s
Election. If the Participant has made no Election with respect to distributions
upon becoming Disabled, all such distributions shall be paid in a lump sum upon
the determination that the Participant has become Disabled.

          16.7 Death. If a Participant dies
before complete distribution of amounts payable upon settlement of an Award
subject to Section 409A, such undistributed amounts shall be distributed to his
or her beneficiary under the distribution method for death established by the
Participant’s Election upon receipt by the Committee of satisfactory notice and
confirmation of the Participant’s death. If the Participant has made no Election
with respect to distributions upon death, all such distributions shall be paid
in a lump sum upon receipt by the Committee of satisfactory notice and
confirmation of the Participant’s death.

          16.8 Prohibition
of Acceleration of Payments. Notwithstanding any provision of the Plan or an Award Agreement to the
contrary, this Plan does not permit the acceleration of the time or schedule of
any payment under an Award providing Section 409A Deferred Compensation, except
as permitted by Section 409A.

     17. Tax
Withholding.

          17.1 Tax
Withholding in General. The Company
shall have the right to deduct from any and all payments made under the Plan, or
to require the Participant, through payroll withholding, cash payment or
otherwise, to make adequate provision for, the federal, state, local and foreign
taxes, if any, required by law to be withheld by any Participating Company with
respect to an Award or the shares acquired pursuant thereto. The Company shall
have no obligation to deliver shares of Stock, to release shares of Stock from
an escrow established pursuant to an Award Agreement, or to make any payment in
cash under the Plan until the Participating Company Group’s tax withholding
obligations have been satisfied by the Participant.

          17.2 Withholding
in Shares. The Company shall have the
right, but not the obligation, to deduct from the shares of Stock issuable to a
Participant upon the exercise or settlement of an Award, or to accept from the
Participant the tender of, a number of whole shares of Stock having a Fair
Market Value, as determined by the Company, equal to all or any part of the tax
withholding obligations of any Participating Company. The Fair Market Value of
any shares of Stock withheld or tendered to satisfy any such tax withholding
obligations shall not exceed the amount determined by the applicable minimum
statutory withholding rates.

34




     18. Amendment or Termination
of Plan.

          The Committee may amend, suspend or terminate the Plan at
any time. However, without the approval of the Company’s stockholders, there
shall be (a) no increase in the maximum aggregate number of shares of Stock that
may be issued under the Plan (except by operation of the provisions of Section
4.4), (b) no change in the class of persons eligible to receive Incentive Stock
Options, and (c) no other amendment of the Plan that would require approval of
the Company’s stockholders under any applicable law, regulation or rule,
including the rules of any stock exchange upon which the Stock may then be
listed. No amendment, suspension or termination of the Plan shall affect any
then outstanding Award unless expressly provided by the Committee. Except as
provided by the next sentence, no amendment, suspension or termination of the
Plan may adversely affect any then outstanding Award without the consent of the
Participant. Notwithstanding any other provision of the Plan to the contrary,
the Committee may, in its sole and absolute discretion and without the consent
of any Participant, amend the Plan or any Award Agreement, to take effect
retroactively or otherwise, as it deems necessary or advisable for the purpose
of conforming the Plan or such Award Agreement to any present or future law,
regulation or rule applicable to the Plan, including, but not limited to,
Section 409A.

     19. Miscellaneous Provisions.

          19.1 Repurchase
Rights. Shares issued under the Plan may be subject to one or
more repurchase options, or other conditions and restrictions as determined by
the Committee in its discretion at the time the Award is granted. The Company
shall have the right to assign at any time any repurchase right it may have,
whether or not such right is then exercisable, to one or more persons as may be
selected by the Company. Upon request by the Company, each Participant shall
execute any agreement evidencing such transfer restrictions prior to the receipt
of shares of Stock hereunder and shall promptly present to the Company any and
all certificates representing shares of Stock acquired hereunder for the
placement on such certificates of appropriate legends evidencing any such
transfer restrictions.

          19.2 Forfeiture
Events. The Committee may specify in an
Award Agreement that the Participant’s rights, payments, and benefits with
respect to an Award shall be subject to reduction, cancellation, forfeiture, or
recoupment upon the occurrence of specified events, in addition to any otherwise
applicable vesting or performance conditions of an Award. Such events may
include, but shall not be limited to, termination of Service for Cause or any
act by a Participant, whether before or after termination of Service, that would
constitute cause for termination of Service.

          19.3 Provision of
Information. Each Participant shall be
given access to information concerning the Company equivalent to that
information generally made available to the Company’s common
stockholders.

          19.4 Rights as
Employee, Consultant or Director. No
person, even though eligible pursuant to Section 5, shall have a right to be
selected as a Participant, or, having been so selected, to be selected again as
a Participant. Nothing in the Plan or any Award granted under the Plan shall
confer on any Participant a right to remain an Employee, Consultant or Director
or

35




interfere with or limit in any way
any right of a Participating Company to terminate the Participant’s Service at
any time. To the extent that an Employee of a Participating Company other than
the Company receives an Award under the Plan, that Award shall in no event be
understood or interpreted to mean that the Company is the Employee’s employer or
that the Employee has an employment relationship with the Company.

          19.5 Rights as a
Stockholder. A Participant shall have no
rights as a stockholder with respect to any shares covered by an Award until the
date of the issuance of such shares (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the Company).
No adjustment shall be made for dividends, distributions or other rights for
which the record date is prior to the date such shares are issued, except as
provided in Section 4.4 or another provision of the Plan.

          19.6 Delivery of
Title to Shares. Subject to any
governing rules or regulations, the Company shall issue or cause to be issued
the shares of Stock acquired pursuant to an Award and shall deliver such shares
to or for the benefit of the Participant by means of one or more of the
following: (a) by delivering to the Participant evidence of book entry shares of
Stock credited to the account of the Participant, (b) by depositing such shares
of Stock for the benefit of the Participant with any broker with which the
Participant has an account relationship, or (c) by delivering such shares of
Stock to the Participant in certificate form.

          19.7 Fractional
Shares. The Company shall not be
required to issue fractional shares upon the exercise or settlement of any
Award.

          19.8 Retirement
and Welfare Plans. Neither Awards made
under this Plan nor shares of Stock or cash paid pursuant to such Awards may be
included as “compensation” for purposes of computing the benefits payable to any
Participant under any Participating Company’s retirement plans (both qualified
and non-qualified) or welfare benefit plans unless such other plan expressly
provides that such compensation shall be taken into account in computing a
Participant’s benefit.

          19.9 Beneficiary
Designation. Subject to local laws and
procedures, each Participant may file with the Company a written designation of
a beneficiary who is to receive any benefit under the Plan to which the
Participant is entitled in the event of such Participant’s death before he or
she receives any or all of such benefit. Each designation will revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Company, and will be effective only when filed by the Participant in writing
with the Company during the Participant’s lifetime. If a married Participant
designates a beneficiary other than the Participant’s spouse, the effectiveness
of such designation may be subject to the consent of the Participant’s spouse.
If a Participant dies without an effective designation of a beneficiary who is
living at the time of the Participant’s death, the Company will pay any
remaining unpaid benefits to the Participant’s legal representative.

          19.10 Severability. If any one or more
of the provisions (or any part thereof) of this Plan shall be held invalid,
illegal or unenforceable in any respect, such provision shall be modified so as
to make it valid, legal and enforceable, and the validity, legality
and

36




enforceability of the remaining
provisions (or any part thereof) of the Plan shall not in any way be affected or
impaired thereby.

          19.11 No
Constraint on Corporate Action. Nothing
in this Plan shall be construed to: (a) limit, impair, or otherwise affect the
Company’s or another Participating Company’s right or power to make adjustments,
reclassifications, reorganizations, or changes of its capital or business
structure, or to merge or consolidate, or dissolve, liquidate, sell, or transfer
all or any part of its business or assets; or (b) limit the right or power of
the Company or another Participating Company to take any action which such
entity deems to be necessary or appropriate.

          19.12 Unfunded
Obligation. Participants shall have the
status of general unsecured creditors of the Company. Any amounts payable to
Participants pursuant to the Plan shall be unfunded and unsecured obligations
for all purposes, including, without limitation, Title I of the Employee
Retirement Income Security Act of 1974. No Participating Company shall be
required to segregate any monies from its general funds, or to create any
trusts, or establish any special accounts with respect to such obligations. The
Company shall retain at all times beneficial ownership of any investments,
including trust investments, which the Company may make to fulfill its payment
obligations hereunder. Any investments or the creation or maintenance of any
trust or any Participant account shall not create or constitute a trust or
fiduciary relationship between the Committee or any Participating Company and a
Participant, or otherwise create any vested or beneficial interest in any
Participant or the Participant’s creditors in any assets of any Participating
Company. The Participants shall have no claim against any Participating Company
for any changes in the value of any assets which may be invested or reinvested
by the Company with respect to the Plan.

          19.13 Choice of
Law. Except to the extent governed by
applicable federal law, the validity, interpretation, construction and
performance of the Plan and each Award Agreement shall be governed by the laws
of the State of California, without regard to its conflict of law
rules.

     IN
WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the
foregoing sets forth the Ross Stores, Inc. 2008 Equity Incentive Plan as duly
adopted and amended by the Committee through March 18, 2009.

		 
		Secretary 



37




PLAN HISTORY AND NOTES TO
COMPANY

	March
      20, 2008		
      Board adopts Plan with a reserve
      of 6,000,000 shares, subject to increase by up to 8,492,928 shares from
      Predecessor Plan awards.

	 		
	May 22,
      2008		Stockholders
      approve Plan.
	 		
	March
      18, 2009		
      Committee amends Section 8.6 of
      Plan to add certain cash dividend and distribution repayment obligation
      upon termination of Service.

	 	 	
	 		
	IMPORTANT NOTE:
Implementation of
Section
      11—Deferred
Compensation Awards
      or
Section 9.6—deferral
      of
RSU settlement		
      Upon establishment of a Deferred
      Compensation Award program pursuant to Section 11 or deferral of
      settlement of RSUs pursuant to Section 9.6, determine whether such program
      will constitute a “top-hat” pension plan under ERISA. If so, file notice
      with Dept. of Labor under ERISA Reg. 2520.104-23 within 120 days of
      adoption of resolutions by the Committee to establish the program to
      obtain exemption from reporting and disclosure requirements of
      ERISA.

	
	
	
	
	
	 		
	IMPORTANT NOTE:
IRC 162(m) 5
      year
reapproval of
      performance
goals	 	
      Because the Committee may change
      the targets under performance goals, Section 162(m) requires stockholder
      reapproval of the material terms of performance goals no later than the
      annual meeting in the 5th year following the year in which the public
      company stockholders initially approved such material terms. See Treas.
      Reg. 1.162-27(e)(4)(vi).

	
	
	
	 		
	IMPORTANT NOTE:
Nasdaq/NYSE
      evergreen
formula plan term
      limited
to 10 years		
      Because the Plan has share
      add-back features, the Nasdaq and NYSE stockholder approval rules require
      that the plan term not exceed 10 years without stockholder reapproval. See
      NASD Rule 4350(i)(1)(A) and IM-4320-5; NYSE Listed Company Manual Sec.
      303A(8) and FAQs Regarding New Rules on Stockholder Approval for Equity
      Compensation Plans posted on NYSE website, dated
  12/16/2003.

	
	
	



 




TABLE OF CONTENTS

	 	 	 	Page
	1.     	Establishment, Purpose and Term of
    Plan 	 1
	 	1.1     	Establishment 	 1
	 	1.2 	Purpose 	1
	 	1.3 	Term of
      Plan 	 1
	 
	2. 	Definitions and Construction 	 1
	 	2.1 	Definitions 	 1
	 	2.2 	Construction 	 7
	 
	3. 	Administration 	 8
	 	3.1 	Administration by the Committee 	 8
	 	3.2 	Authority of Officers 	 8
	 	3.3 	Administration with Respect to Insiders 	 8
	 	3.4 	Committee Complying with Section 162(m) 	 8
	 	3.5 	Powers of
      the Committee 	 8
	 	3.6 	Option or SAR Repricing 	 9
	 	3.7 	Indemnification 	 10
	 
	4. 	Shares Subject to Plan 	 10
	 	4.1 	Maximum
      Number of Shares Issuable 	 10
	 	4.2 	Adjustment for Unissued Predecessor Plan Shares 	 10
	 	4.3 	Share
      Counting 	 11
	 	4.4 	Adjustments for Changes in Capital Structure 	 11
	 
	5. 	Eligibility and Award Limitations 	 12
	 	5.1 	Persons
      Eligible for Awards 	 12
	 	5.2 	Participation 	 12
	 	5.3 	Incentive
      Stock Option Limitations 	 12
	 	5.4 	Award Limits 	 13
	 
	6. 	Stock Options 	 14
	 	6.1 	Exercise
      Price 	 14
	 	6.2 	Exercisability and Term of Options 	 14
	 	6.3 	Payment of
      Exercise Price 	 15
	 	6.4 	Effect of Termination of Service 	 15
	 	6.5 	Transferability of Options 	 16
	 
	7. 	Stock Appreciation Rights 	 17
	 	7.1 	Types of
      SARs Authorized 	 17
	 	7.2 	Exercise Price 	 17
	 	7.3 	Exercisability and Term of SARs 	 17



-i-




TABLE OF
CONTENTS
(continued)

	 	 	 	Page
	 	7.4     	Exercise of SARs 	17
	 	7.5 	Deemed
      Exercise of SARs 	 18
	 	7.6 	Effect of Termination of Service 	 18
	 	7.7 	Transferability of SARs 	 18
	 
	8.     	Restricted Stock Awards 	 18
	 	8.1 	Types of
      Restricted Stock Awards Authorized 	 18
	 	8.2 	Purchase Price 	 19
	 	8.3 	Purchase
      Period 	 19
	 	8.4 	Payment of Purchase Price 	 19
	 	8.5 	Vesting and
      Restrictions on Transfer 	 19
	 	8.6 	Voting Rights; Dividends and Distributions 	 19
	 	8.7 	Effect of
      Termination of Service 	 20
	 	8.8 	Nontransferability of Restricted Stock Award Rights 	 20
	 
	9. 	Restricted Stock Unit Awards 	 20
	 	9.1 	Grant of
      Restricted Stock Unit Awards 	 20
	 	9.2 	Purchase Price 	 21
	 	9.3 	Vesting 	 21
	 	9.4 	Voting Rights, Dividend Equivalent Rights and
    Distributions 	 21
	 	9.5 	Effect of
      Termination of Service 	 22
	 	9.6 	Settlement of Restricted Stock Unit Awards 	 22
	 	9.7 	Nontransferability of Restricted Stock Unit Awards 	 22
	 
	10. 	Performance Awards 	 22
	 	10.1 	Types of
      Performance Awards Authorized 	 22
	 	10.2 	Initial Value of Performance Shares and Performance
    Units 	 23
	 	10.3 	Establishment of Performance Period, Performance Goals
    and 	 
	 	 	Performance
      Award Formula 	 23
	 	10.4 	Measurement of Performance Goals 	 23
	 	10.5 	Settlement
      of Performance Awards 	 24
	 	10.6 	Voting Rights; Dividend Equivalent Rights and
    Distributions 	 26
	 	10.7 	Effect of
      Termination of Service 	 26
	 	10.8 	Nontransferability of Performance Awards 	 27
	 
	11. 	Deferred Compensation Awards 	 27
	 	11.1 	Establishment of Deferred Compensation Award
    Programs 	 27
	 	11.2 	Terms and Conditions of Deferred Compensation
Awards 	 27
	 
	12. 	Nonemployee Director Awards 	 28
	 
	13. 	Standard Forms of Award Agreement 	 29



-ii-




TABLE OF
CONTENTS
(continued)

	 	 	 	Page 
	 	13.1     	Award Agreements 	 29
	 	13.2 	Authority
      to Vary Terms 	 29
	 
	14.     	Change in Control 	 29
	 	14.1 	Effect of
      Change in Control on Awards 	 29
	 	14.2 	Effect of Change in Control on Nonemployee Director
    Awards 	 30
	 
	15. 	Compliance with Securities Law 	 30
	 
	16. 	Compliance with Section 409A 	 31
	 	16.1 	Awards
      Subject to Section 409A 	 31
	 	16.2 	Deferral and/or Distribution Elections 	 31
	 	16.3 	Subsequent
      Elections 	 32
	 	16.4 	Payments Pursuant to Deferral Elections 	 32
	 	16.5 	Unforeseeable Emergency 	 33
	 	16.6 	Disabled 	 33
	 	16.7 	Death 	 34
	 	16.8 	Prohibition of Acceleration of Payments 	 34
	 
	17. 	Tax Withholding 	 34
	 	17.1 	Tax
      Withholding in General 	 34
	 	17.2 	Withholding in Shares 	 34
	 
	18. 	Amendment or Termination of Plan 	 35
	 
	19. 	Miscellaneous Provisions 	 35
	 	19.1 	Repurchase
      Rights 	 35
	 	19.2 	Forfeiture Events 	 35
	 	19.3 	Provision
      of Information 	 35
	 	19.4 	Rights as Employee, Consultant or Director 	 35
	 	19.5 	Rights as a
      Stockholder 	 36
	 	19.6 	Delivery of Title to Shares 	 36
	 	19.7 	Fractional
      Shares 	 36
	 	19.8 	Retirement and Welfare Plans 	 36
	 	19.9 	Beneficiary
      Designation 	 36
	 	19.10 	Severability 	 36
	 	19.11 	No
      Constraint on Corporate Action 	 37
	 	19.12 	Unfunded Obligation 	 37
	 	19.13 	Choice of
      Law 	 37



-iii-