EX-10.3






Exhibit 10.3




MYLAN INC.

AMENDED AND RESTATED 2003 LONG-TERM INCENTIVE PLAN




ARTICLE I

PURPOSE AND ADOPTION OF THE PLAN




     1.01 Purpose. The purpose of the Mylan Inc. Amended and Restated 2003 Long-Term Incentive
Plan (as the same may be amended from time to time, the “Plan”) is to assist Mylan Inc., a
Pennsylvania corporation (previously known as Mylan Laboratories Inc.) (the “Company”), and its
Subsidiaries (as defined below) in attracting and retaining highly competent key employees,
consultants, independent contractors and non-employee directors and to act as an incentive in
motivating selected key employees, consultants, independent contractors and non-employee directors
of the Company and its Subsidiaries (as defined below) to achieve long-term corporate objectives.



     1.02 Adoption and Term. The Plan was approved by the Board of Directors of the Company (the
“Board”) and became effective upon such approval and upon approval by the shareholders of the
Company at the 2003 annual meeting of shareholders (the “Effective Date”). The Plan was amended on
December 2, 2004 and again on April 3, 2006, and the Plan was amended and restated on March 24,
2008 by the Board, subject to the approval by shareholders of the Company at the 2008 annual
meeting of shareholders (the “Re-Approval Date”), and further amended May 7, 2009. The Plan shall
remain in effect until terminated by action of the Board; provided, however, that no Incentive
Stock Option (as defined below) may be granted hereunder after the tenth anniversary of the
Effective Date and the provisions of Articles VII and VIII with respect to the Performance Goals
(as defined below) applicable to performance-based awards to “covered employees” under Section
162(m) of the Code (as defined below) shall expire as of the fifth anniversary of the Re-Approval
Date unless such provisions are re-approved by the shareholders before such date.



ARTICLE II

DEFINITIONS




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



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



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



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



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



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



     2.06 Change in Control means (a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (A) the then-outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to
vote



 









 







generally in the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that, for purposes of this Section 2.06(a), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from the Company or any of its
subsidiaries, (ii) any acquisition by the Company or any of its subsidiaries, (iii) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by the Company or any
Affiliate, (iv) any acquisition by a Person that is permitted to, and actually does, report its
beneficial ownership on Schedule 13G (or any successor schedule); provided that, if such Person
subsequently becomes required to or does report its beneficial ownership on Schedule 13D (or any
successor schedule), then, for purposes of this paragraph, such Person shall be deemed to have
first acquired, on the first date on which such Person becomes required to or does so report,
beneficial ownership of all of the Outstanding Company Common Stock and Outstanding Company Voting
Securities beneficially owned by it on such date or (v) any acquisition pursuant to a transaction
that complies with Section 2.06 (c)(1), (c)(2) and (c)(3); or (b) Individuals who, as of December
2, 2004, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a director subsequent to
December 2, 2004 whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least two-thirds of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office occurs as a result of, an
actual or threatened election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the
Board; or (c) consummation of a reorganization, merger, statutory share exchange or consolidation
or similar corporate transaction involving the Company or any of its subsidiaries, a sale or other
disposition of all or substantially all of the assets of the Company, or the acquisition of assets
or stock of another entity by the Company or any of its subsidiaries (each, a “Business
Combination”), in each case unless, following such Business Combination, (1) the Outstanding
Company Common Stock and the Outstanding Company Voting Securities immediately prior to such
Business Combination continue to represent (either by remaining outstanding or being converted into
voting securities of the resulting or surviving entity or any parent thereof) more than 50% of the
then-outstanding shares of common stock and the combined voting power of the then-outstanding
voting securities entitled to vote generally in the election of directors, as the case may be, of
the corporation resulting from such Business Combination (including, without limitation, a
corporation that, as a result of such transaction, owns the Company or all or substantially all of
the Company’s assets either directly or through one or more subsidiaries), (2) no Person (excluding
any employee benefit plan (or related trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the
then-outstanding shares of common stock of the corporation resulting from such Business Combination
or the combined voting power of the then-outstanding voting securities of such corporation, except
to the extent that such ownership existed prior to the Business Combination, and (3) individuals
who comprise the Incumbent Board immediately prior to such Business Combination constitute at least
a majority of the members of the board of directors of the corporation resulting from such Business
Combination (including, without limitation, a corporation that, as a result of such transaction,
owns the Company or all or substantially of the Company’s assets either directly or through one or
more subsidiaries); or (d) Approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.



     Notwithstanding the above, that for each Award subject to Section 409A of the Code, a Change
in Control shall be deemed to have occurred under this Plan with respect to such Award only if a
change in the ownership or effective control of the Company or a change in the ownership of a
substantial portion of the assets of the Company shall also be deemed to have occurred under
Section 409A of the Code.



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



     2.08 Committee means the Stock Option Committee of the Board or any successor committee that
performs a similar function.



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



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     2.10 Common Stock means Common Stock of the Company.



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



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



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



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



     2.15 Fair Market Value means a price that is based on the opening, closing, actual, high,
low, or average selling prices of a share of Common Stock on the New York Stock Exchange (“NYSE”)
or other established stock exchange (or exchanges) on the applicable date, the preceding trading
day, the next succeeding trading day, or an average of trading days, as determined by the Committee
in its discretion. Such definition of Fair Market Value shall be specified in the Award Agreement
and may differ depending on whether Fair Market Value is in reference to the grant, exercise,
vesting, or settlement or payout of an Award. If shares of Common Stock are not traded on an
established stock exchange, Fair Market Value shall be determined by the Committee in good faith.



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



     2.17 Incumbent Board shall have the meaning given to such term in Section 2.06.



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



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



     2.20 Options means all Non-Qualified Stock Options and Incentive Stock Options granted at any
time under the Plan.



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



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



     2.23 Performance Goals” means any of the following: revenue, economic value added (EVA),
operating income, return on stockholders’ equity, return on sales, stock price, earnings per share,
earnings before interest, taxes, depreciation and amortization (EBITDA), cash flow, sales growth,
margin improvement, income before taxes (IBT), IBT margin, return on investment, return on capital,
return on assets, values of assets, market share, market penetration goals, personnel performance
goals, business development goals (including without limitation regulatory submissions, product
launches and other business development-related opportunities), regulatory compliance goals,
international business expansion goals, customer retention goals, customer satisfaction goals,
goals relating to acquisitions or divestitures, gross or operating margins, operating efficiency,
working capital performance, earnings per share, growth in earnings per share, expense targets
and/or productivity targets or ratios. Where applicable, the Performance Goals may be expressed in
terms of attaining a specified level of the particular criteria, and may be applied to one or more
of the Company, a subsidiary, or affiliate, or a division of or strategic business unit of the
Company or may be applied to the performance of the Company relative to a market
index, a group of other companies or a combination thereof, all as determined by the
Committee. The



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Committee shall have the authority to make equitable adjustments to Performance Goals in
recognition of unusual or non-recurring events affecting the Company or any subsidiary or affiliate
or the financial statements of the Company or any subsidiary or affiliate, in response to changes
in applicable laws or regulations, or to account for items of gain, loss or expense determined to
be extraordinary or unusual in nature or infrequent in occurrence or related to the disposal of a
segment of a business or related to a change in accounting principles.



     2.24 Permanent Disability means the Participant is permanently and totally disabled within
the meaning of Code Section 22(e)(3).



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



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



     2.27 Restricted Unit means units representing the right to receive Common Stock in the future
subject to restrictions imposed in connection with Awards granted under Article VII.



     2.28 Retirement means a Participant’s termination of employment after the Participant has
reached age 55 and accumulated at least 10 years of continuous service with the Company; provided,
however, that the Committee, in its sole discretion, may determine that a Participant has retired
regardless of age and service with the Company.



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



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



ARTICLE III

ADMINISTRATION




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



     3.02 Indemnification. Each person who is or shall have been a member of the Board, or a
Committee appointed by the Board, or an officer of the Company to whom authority was delegated in
accordance with the Plan shall be indemnified and held harmless by the Company against and from any
loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in
connection with or resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or failure to act under
the Plan and against and from any and all amounts paid by him or her in settlement thereof, with
the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action,
suit, or proceeding against him or her, provided he or she shall give the Company an opportunity,
at its own expense, to handle and defend the same before he or she undertakes to handle and defend
it on his or her own behalf; provided, however, that the foregoing indemnification shall not apply
to any loss, cost, liability, or expense that is a result of his or her own willful misconduct.
The foregoing right of indemnification shall not be



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exclusive of any other rights of indemnification to which such persons may be entitled under
the Company’s Certificate of Incorporation or Bylaws, conferred in a separate agreement with the
Company, as a matter of law, or otherwise, or any power that the Company may have to indemnify them
or hold them harmless.



ARTICLE IV

SHARES




     4.01 Number of Shares Issuable. The total number of shares of Common Stock authorized to be
issued under the Plan shall be an aggregate of 37,500,000 shares. No more than an aggregate of
8,000,000 shares of Common Stock shall be issued under the Plan as Restricted Shares or Restricted
Stock Units under Article VII, Performance Awards under Article VIII and other stock-based awards
under Article IX. The foregoing share limitations shall be subject to adjustment in accordance with
Section 11.08. The shares to be offered under the Plan shall be authorized and unissued shares of
Common Stock, or issued shares of Common Stock which will have been reacquired by the Company.



     4.02 Shares Subject to Terminated Awards. Shares of Common Stock covered by any unexercised
portions of terminated Options (including canceled Options), Stock Appreciation Rights or Stock
Units granted under Article VI, terminated Restricted Units or shares of Common Stock forfeited as
provided in Article VII and shares of Common Stock subject to any Award that are otherwise
surrendered by a Participant or terminated may be subject to new Awards under the Plan. If any
shares of Common Stock are withheld from those otherwise issuable or are tendered to the Company,
by attestation or otherwise, in connection with the exercise of an Option, only the net number of
shares of Common Stock issued as a result of such exercise shall be deemed delivered for purposes
of determining the maximum number of shares available for delivery under the Plan.



ARTICLE V

PARTICIPATION




     5.01 Eligible Participants. Participants in the Plan shall be such key employees,
consultants, independent contractors and non-employee directors of the Company and its Subsidiaries
as the Committee, in its sole discretion, may designate from time to time. The Committee’s
designation of a Participant in any year shall not require the Committee to designate such person
to receive Awards in any other year. The designation of a Participant to receive an Award under one
portion of the Plan does not require the Committee to include such Participant under other portions
of the Plan. The Committee shall consider such factors as it deems pertinent in selecting
Participants and in determining the types and amounts of their respective Awards. The Committee may
grant Awards from time to time on a discretionary basis and/or provide for automatic Awards on a
formula basis to a Participant or designated group of Participants. Subject to adjustment in
accordance with Section 11.08 and subject to limits on performance-based awards in Section 7.01,
during any calendar year no Participant shall be granted Awards in respect of more than 800,000
shares of Common Stock (whether through grants of Options, Stock Appreciation Rights or other
Awards of Common Stock or rights with respect thereto); provided, however, that if it is the
Committee’s intention as of the Date of Grant of an Award, as evidenced by the applicable Award
Agreement, that such Award shall be earned by the Participant over a period of more than one
calendar year, then for purposes of applying the foregoing per calendar year limitation, the shares
of Common Stock subject to such Award shall be allocated, as determined by the Committee in its
discretion, to the first calendar year in which such shares and/or cash may be earned (determined
without regard to possible acceleration of vesting as a result of a Change in Control or pursuant
to any provision of this Plan or an applicable Award Agreement authorizing the Committee to
accelerate the vesting of an Award).



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ARTICLE VI

STOCK OPTIONS




     6.01 Option Awards.



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



     (b) Exercise Price of Options. The exercise price of each share of Common Stock which may be
purchased upon exercise of any Option granted under the Plan (the “Exercise Price”) shall be
determined by the Committee; provided, however, that, except in the case of any substituted Options
described in Section 11.08(c) (provided that the grant of a substitute Option is made in a manner
that will not result in the substitute Option being subject to the requirements of Section 409A of
the Code), the Exercise Price shall in all cases be equal to or greater than the Fair Market Value
on the Date of Grant. Except for adjustments pursuant to Section 11.08 or any action approved by
the shareholders of the Company, the Exercise Price for any outstanding Option granted under the
Plan may not be decreased after the Date of Grant.



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



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



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



     6.02 Stock Appreciation Rights.



     (a) Stock Appreciation Right Awards. The Committee is authorized to grant to any Participant
one or more Stock Appreciation Rights. Such Stock Appreciation Rights may be granted either
independent of or in tandem with Options granted to the same Participant. Stock Appreciation Rights
granted in tandem with Options may be granted simultaneously with, or, in the case of Non-Qualified
Stock Options, subsequent to, the grant to such Participant of the related Option; provided,
however, that: (i) any Option covering any share of Common Stock shall expire and not be
exercisable upon the exercise of any Stock Appreciation Right with respect to the same share, (ii)
any Stock Appreciation Right covering any share of Common Stock shall expire and not be exercisable
upon the exercise of any related Option with respect to the same



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share, and (iii) an Option and Stock Appreciation Right covering the same share of Common
Stock may not be exercised simultaneously. Upon exercise of a Stock Appreciation Right with respect
to a share of Common Stock, the Participant shall be entitled to receive an amount equal to the
excess, if any, of (A) the Fair Market Value of a share of Common Stock on the date of exercise
over (B) the Exercise Price of such Stock Appreciation Right established in the Award Agreement,
which amount shall be payable as provided in Section 6.02(c).



     (b) Exercise Price. The Exercise Price established under any Stock Appreciation Right granted
under this Plan shall be determined by the Committee provided, however, that, except in the case of
any substituted Awards described in Section 11.08(c) (provided that the grant of the substitute
Award is made in a manner that will not result in the substitute Award being subject to the
requirements of Section 409A of the Code), the Exercise Price shall in all cases be equal to or
greater than the Fair Market Value on the Date of Grant; provided further, however, that in the
case of Stock Appreciation Rights granted in tandem with Options the Exercise Price of the Stock
Appreciation Right shall not be less than the Exercise Price of the related Option. Upon exercise
of Stock Appreciation Rights, the number of shares subject to exercise under any related Option
shall automatically be reduced by the number of shares of Common Stock represented by the Option or
portion thereof which are surrendered as a result of the exercise of such Stock Appreciation
Rights.



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



     6.03 Terms of Stock Options and Stock Appreciation Rights



     (a) Conditions on Exercise. An Award Agreement with respect to Options and Stock Appreciation
Rights may contain such waiting periods, exercise dates and restrictions on exercise (including,
but not limited to, periodic installments) as may be determined by the Committee at the time of
grant.



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



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



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



     (iii) Ten years from the Date of Grant.



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



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



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



     (i) Death. If a Participant who is an employee of the Corporation or its subsidiaries shall
die (A) while an employee of the Company or its Subsidiaries or (B) within two (2) years after
termination of the Participant’s employment with the Company or its Subsidiaries because of the
Participant’s Permanent Disability, any Option and Stock Appreciation Right then held by the
Participant, regardless of whether it was otherwise exercisable on the date of death, may be
exercised by the person or persons to whom the Participant’s rights under the Option and Stock
Appreciation Right pass by will or applicable law or if no person has the right, by the
Participant’s executors or administrators, at any time or from time to time, during the balance of
the exercise period as set forth in Section 6.03(b)(iii).



     (ii) Permanent Disability. If a Participant’s employment by the Company or its Subsidiaries
shall terminate because of Permanent Disability, the Participant may exercise any Option and Stock
Appreciation Right then held by the Participant, regardless of whether it was otherwise exercisable
on the date of such termination of employment, at any time, or from time to time, within two (2)
years of the date of the termination of employment, but in no event later than the expiration date
specified in Section 6.03(b)(iii).



     (iii) Retirement. If a Participant’s employment by the Company or its Subsidiaries shall
terminate because of Retirement, any Option and Stock Appreciation Right then held by the
Participant, regardless of whether it was otherwise exercisable on the date of Retirement, may be
exercised by the Participant at any time, or from time to time, during the balance of the exercise
period as set forth in Section 6.03(b)(iii). If such a Participant dies after Retirement but before
such Participant’s Options have either been exercised or otherwise expired, such Options may be
exercised by the person to whom such options pass by will or applicable law or, if no person has
that right, by the Participant’s executors or administrators at any time, or from time to time,
during the balance of the exercise period set forth in Section 6.03(b)(iii).



     (iv) Reduction in Force. Unless a date of re-employment is identified at the time of a
termination of employment that is the result of a reduction in force, any Options and Stock
Appreciation Rights held by the Participant that are not exercisable at the date of such
termination of employment shall terminate and be cancelled immediately upon such termination, and
the Participant may exercise any Options and Stock Appreciation Rights that are exercisable as of
the date of such termination at any time, or from time to time,

within one (1) year of the date of such termination, but in no event later than the expiration date
specified in Section 6.03(b)(iii).



     (v) Other Termination. Except as provided by paragraphs (i) through (iv) of this Section
6.03(e), if a Participant’s employment shall cease by reason of a voluntary or involuntary
termination, either with or without cause, any Options and Stock Appreciation Rights held by the
Participant that are not exercisable at the date of such termination of employment shall terminate
and be cancelled immediately upon such termination, and the Participant may exercise any Options
and Stock Appreciation Rights that are exercisable as of the date of such termination at any time,
or from time to time, until the later of (A) thirty (30) days after such Participant’s termination
of employment or (B) thirty (30) days after the Participant receives notice from the Committee of
the termination of the Participant’s Options and Stock Appreciation Rights. Notwithstanding the
prior sentence no portion of such Options and Stock Appreciation Rights shall be exercisable later
than the expiration date specified in Section 6.03(b)(iii).



     (vi) Grants to Non-Employees. In the case of grants to persons who are not employees of the
Company or any of its Subsidiaries, the Committee shall establish, and set forth in the applicable
Award Agreement, rules for determining the effect of termination of the Participant’s services on
the Participant’s outstanding Options and Stock Appreciation Rights.



     6.04 Option Exercise Procedures. Each Option and Stock Appreciation Right granted under the
Plan shall be exercised by written notice to the Company which must be received by the officer or
employee of the Company designated in the Award Agreement at or before the close of business on the
expiration date of the Award. The Exercise Price of shares purchased upon exercise of an Option
granted



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under the Plan shall be paid in full in cash by the Participant pursuant to the Award
Agreement; provided, however, that in lieu of such cash a Participant may pay the Exercise Price in
whole or in part by delivering (actually or by attestation) to the Company shares of the Common
Stock having a Fair Market Value on the date of exercise of the Option equal to the Exercise Price
for the shares being purchased; except that (i) any portion of the Exercise Price representing a
fraction of a share shall in any event be paid in cash and (ii) unless the Committee determines
otherwise, no shares of the Common Stock which have been held for less than six months may be
delivered in payment of the Exercise Price of an Option. Payment may also be made, in the
discretion of the Committee, by the delivery (including, without limitation, by fax) to the Company
or its designated agent of an executed irrevocable option exercise form together with irrevocable
instructions to a broker-dealer to sell or margin a sufficient portion of the shares and deliver
the sale or margin loan proceeds directly to the Company to pay for the Exercise Price. The date of
exercise of an Option shall be determined under procedures established by the Committee, and as of
the date of exercise the person exercising the Option shall, as between the Company and such
person, be considered for all purposes to be the owner of the shares of Common Stock with respect
to which the Option has been exercised. Any part of the Exercise Price paid in cash upon the
exercise of any Option shall be added to the general funds of the Company and may be used for any
proper corporate purpose. Unless the Committee shall otherwise determine, any shares of Common
Stock transferred to the Company as payment of all or part of the Exercise Price upon the exercise
of any Option shall be held as treasury shares.



     6.05 Change in Control. Unless otherwise provided by the Committee in the applicable Award
Agreement, in the event of a Change in Control, all Options and Stock Appreciation Rights
outstanding on the date of such Change in Control shall become immediately and fully exercisable.
Unless otherwise determined by the Committee, the provisions of this Section 6.05 shall not be
applicable to any Options and Stock Appreciation Rights granted to a Participant if any Change in
Control results from such Participant’s beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act) of Common Stock. Notwithstanding the above, unless otherwise provided by
the Committee in the applicable Award Agreement, with respect to each Award that is subject to
Section 409A of the Code, if a Change in Control would have occurred under the Plan pursuant to the
definition in Section 2.8 except that such Change in Control does not constitute a change in the
ownership or effective control of the Company or a change in the ownership of a substantial portion
of the assets of the Company under Section 409A, then each such Award shall become vested and
non-forfeitable; provided, however, that the Grantee shall not be able to exercise the Award, and
the Award shall not become payable, except in accordance with the terms of such Award or until such
earlier time as the exercise and/or payment complies with Section 409A of the Code.



ARTICLE VII

RESTRICTED SHARES AND RESTRICTED UNITS




     7.01 Restricted Share and Restricted Unit Awards. The Committee may grant to any Participant
a Restricted Share Award consisting of such number of shares of Common Stock on such terms,
conditions and restrictions, whether based on performance standards, periods of service, retention
by the Participant of ownership of specified shares of Common Stock or other criteria, as the
Committee shall establish. The Committee may also grant Restricted Unit Awards representing the
right to receive shares of Common Stock in the future subject to the achievement of one or more
goals relating to the completion of service by the Participant and/or the achievement of
performance or other objectives. With respect to performance-based Awards of Restricted Shares or
Restricted Units intended to qualify for deductibility under the “performance-based” compensation
exception contained in Section 162(m) of the Code, performance targets will consist of specified
levels of one or more of the Performance Goals. The terms of any Restricted Share and Restricted
Unit Awards granted under this Plan shall be set forth in an Award Agreement which shall contain
provisions determined by the Committee and not inconsistent with this Plan; provided, however, that
with respect to Restricted Units that are subject to Section 409A of the Code, the provisions of
such Restricted Units shall comply with the requirements set forth in Section 409A of the Code.
With respect to Restricted Share, Restricted Unit Awards, Performance Awards (as set forth in
Section 8.01), and Other Stock-Based Awards (as set forth in Section 9.02) intended to qualify for
the “performance-based” compensation exception contained in Section 162(m) of the Code, the
aggregate number of Restricted Shares, Restricted Unit Awards and Performance Awards, and Other
Stock-Based



9









 







Awards granted to a single Participant for any performance period shall not exceed 250,000
Shares, subject to adjustment as prescribed in Section 11.08.



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



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



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



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



     7.02 Terms of Restricted Shares.



     (a) Forfeiture of Restricted Shares. Subject to Sections 7.02(b) and 7.04, Restricted Shares
shall be forfeited and returned to the Company and all rights of the Participant with respect to
such Restricted Shares shall terminate unless the Participant continues in the service of the
Company or a Subsidiary until the expiration of the forfeiture period for such Restricted Shares
and satisfies any and all other conditions set forth in the Award Agreement. The Committee shall
determine the forfeiture period (which may, but need not, lapse in installments) and any other
terms and conditions applicable with respect to any Restricted Share Award.



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



10









 







Shares) as the Committee shall deem appropriate; provided, however, that any performance
conditions applicable to Awards that are intended to qualify for the “performance-based”
compensation exception contained in Section 162(m) of the Code shall not be waived and provided
further that any conditions waived in respect of Restricted Units Awards shall be done in a manner
intended to comply with Section 409A of the Code.



     7.03 Restricted Stock Units. Restricted Unit Awards shall be subject to the restrictions,
terms and conditions contained in the Plan and the applicable Award Agreements entered into by the
appropriate Participants. Until the lapse or release of all restrictions applicable to an Award of
Restricted Units, no shares of Common Stock shall be issued in respect of such Awards and no
Participant shall have any rights as a stockholder of the Company with respect to the shares of
Common Stock covered by such Restricted Unit Award. Upon the lapse or release of all restrictions
with respect to a Restricted Unit Award or at a later date if distribution has been deferred, one
or more share certificates, registered in the name of the Participant, for an appropriate number of
shares, free of any restrictions set forth in the Plan and the related Award Agreement shall be
delivered to the Participant. A Participant’s Restricted Unit Award shall not be contingent on any
payment by or consideration from the Participant other than the rendering of services.
Notwithstanding anything contained in this Section 7.03 to the contrary, the Committee may, in its
sole discretion, waive the forfeiture period and any other conditions set forth in any Award
Agreement under appropriate circumstances (including the death, Permanent Disability or Retirement
of the Participant or a material change in circumstances arising after the date of an Award) and
subject to such terms and conditions (including forfeiture of a proportionate number of the
Restricted Units) as the Committee shall deem appropriate provided that such waiver is done in a
manner intended to comply with Section 409A of the Code.



     7.04 Change in Control. Unless otherwise provided by the Committee in the applicable Award
Agreement, in the event of a Change in Control, all restrictions applicable to Restricted Shares
and Restricted Unit Awards shall terminate fully and the Participant shall immediately have the
right to the delivery of share certificates. Unless otherwise determined by the Committee, the
provisions of this Section 7.04 shall not be applicable to any Restricted Shares and Restricted
Units granted to a Participant if any Change in Control results from such Participant’s beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of Common Stock.
Notwithstanding the above, unless otherwise provided by the Committee in the applicable Award
Agreement, with respect to each Award that is subject to Section 409A of the Code, if a Change in
Control would have occurred under the Plan pursuant to the definition in Section 2.8 except that
such Change in Control does not constitute a change in the ownership or effective control of the
Company or a change in the ownership of a substantial portion of the assets of the Company under
Section 409A, then each such Award shall become vested and non-forfeitable; provided, however, that
the Grantee shall not be able to exercise the Award, and the Award shall not become payable, except
in accordance with the terms of such Award or until such earlier time as the exercise and/or
payment complies with Section 409A of the Code.



ARTICLE VIII

PERFORMANCE AWARDS




     8.01 Performance Awards.



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



11









 





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



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



     (d) Payment of Earned Performance Awards. Payments of earned Performance Awards shall be made
in cash or shares of Common Stock or a combination of cash and shares of Common Stock, in the
discretion of the Committee. The Committee, in its sole discretion, may provide such terms and
conditions with respect to the payment of earned Performance Awards as it may deem desirable,
provided that the terms and conditions with respect to the payment of Performance Awards shall
comply with the requirements set forth in Section 409A of the Code.



     8.02 Terms of Performance Awards.



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



     (b) Retirement. If a Participant’s Termination of Employment is because of Retirement prior
to the end of an Award Period, the Participant will not be paid any Performance Award, unless the
Committee, in its sole and exclusive discretion, determines that an Award should be paid. In such a
case, the Participant shall be entitled to receive a pro-rata portion of his or her Award as
determined under subsection (d), provided, however, that any Performance Award intended to qualify
for the “performance-based” compensation exception contained in Section 162(m) of the Code shall
not be paid unless the performance goals are satisfied and provided further that any payment of
Performance Awards shall be done in a manner intended to comply with Section 409A of the Code.



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



     (d) Pro-Rata Payment. The amount of any payment to be made to a Participant whose employment
is terminated by Retirement, death or Permanent Disability (under the circumstances described in
subsections (b) and (c)) will be the amount determined by multiplying (i) the amount of the
Performance Award that would have been earned through the end of the Award Period had such
employment not been terminated by (ii) a fraction, the numerator of which is the number of whole
months such Participant was employed during the Award Period, and the denominator of which is the
total number of months of the Award Period. Any such payment made to a Participant whose employment
is terminated prior to the end of an Award Period shall be made at the end of such Award Period,
unless otherwise determined by the Committee in its sole discretion. To the extent permitted by
Section 409A of the Code, any partial payment previously made or credited to a deferred account for
the benefit of a Participant in accordance with



12









 







Section 8.01(d) of the Plan shall be subtracted from the amount otherwise determined as payable as
provided in this Section 8.02(d).



     (e) Other Events. Notwithstanding anything to the contrary in this Article VIII, the
Committee may, in its sole and exclusive discretion, determine to pay all or any portion of a
Performance Award to a Participant who has terminated employment prior to the end of an Award
Period under certain circumstances (including the death, Permanent Disability or Retirement of the
Participant or a material change in circumstances arising after the Date of Grant), subject to such
terms and conditions as the Committee shall deem appropriate; provided, however, that any
Performance Award intended to qualify for the “performance-based” compensation exception contained
in Section 162(m) of the Code shall not be paid unless the performance goals are satisfied and
provided further that any payment of Performance Awards shall be done in a manner intended to
comply with Section 409A of the Code.



     8.03 Change in Control. Unless otherwise provided by the Committee in the applicable Award
Agreement, in the event of a Change in Control, all Performance Awards for all Award Periods shall
immediately become fully payable (at the maximum level) to all Participants and shall be paid to
Participants within thirty (30) days after such Change in Control. Unless otherwise determined by
the Committee, the provisions of this Section 8.03 shall not be applicable to any Performance
Awards granted to a Participant if any Change in Control results from such Participant’s beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of Common Stock.
Notwithstanding the above, unless otherwise provided by the Committee in the applicable Award
Agreement, with respect to each Award that is subject to Section 409A of the Code, if a Change in
Control would have occurred under the Plan pursuant to the definition in Section 2.8 except that
such Change in Control does not constitute a change in the ownership or effective control of the
Company or a change in the ownership of a substantial portion of the assets of the Company under
Section 409A, then each such Award shall become vested and non-forfeitable; provided, however, that
the Grantee shall not be able to exercise the Award, and the Award shall not become payable, except
in accordance with the terms of such Award or until such earlier time as the exercise and/or
payment complies with Section 409A of the Code.



ARTICLE IX

OTHER STOCK-BASED AWARDS




     9.01 Grant of Other Stock-Based Awards. Other stock-based awards, consisting of stock
purchase rights (with or without loans to Participants by the Company containing such terms as the
Committee shall determine), Awards of Common Stock, or Awards valued in whole or in part by
reference to, or otherwise based on, Common Stock, may be granted either alone or in addition to or
in conjunction with other Awards under the Plan. Subject to the provisions of the Plan, the
Committee shall have sole and complete authority to determine the persons to whom and the time or
times at which such Awards shall be made, the number of shares of Common Stock to be granted
pursuant to such Awards, and all other conditions of the Awards. Any such Award shall be confirmed
by an Award Agreement executed by the Company and the Participant, which Award Agreement shall
contain such provisions as the Committee determines to be necessary or appropriate to carry out the
intent of this Plan with respect to such Award.



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



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



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



13









 





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



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



     9.03 Change in Control. Unless otherwise provided by the Committee in the applicable Award
Agreement, in the event of a Change in Control, all other stock-based Awards under this Article IX
shall immediately become fully vested and payable to all Participants and shall be paid to
Participants within thirty (30) days after such Change in Control. Unless otherwise determined by
the Committee, the provisions of this Section 9.03 shall not be applicable to any Awards granted to
a Participant if any Change in Control results from such Participant’s beneficial ownership (within
the meaning of Rule 13d-3 under the Exchange Act) of Common Stock. Notwithstanding the above,
unless otherwise provided by the Committee in the applicable Award Agreement, with respect to each
Award that is subject to Section 409A of the Code, if a Change in Control would have occurred under
the Plan pursuant to the definition in Section 2.8 except that such Change in Control does not
constitute a change in the ownership or effective control of the Company or a change in the
ownership of a substantial portion of the assets of the Company under Section 409A, then each such
Award shall become vested and non-forfeitable; provided, however, that the Grantee shall not be
able to exercise the Award, and the Award shall not become payable, except in accordance with the
terms of such Award or until such earlier time as the exercise and/or payment complies with Section
409A of the Code.



ARTICLE X

SHORT-TERM CASH INCENTIVE AWARDS




     10.01 Eligibility. This Article X is a limited purpose provision that shall apply only in
the event the Committee deems it appropriate that the Company’s short-term cash incentives for
executive officers of the Company who are from time to time determined by the Committee to be
“covered employees” for purposes of Section 162(m) of the Code qualify for deductibility under the
“performance-based” compensation exception contained in Section 162(m). Eligibility. This Article X
is a limited purpose provision that shall apply only in the event the Committee deems it
appropriate that the Company’s short-term cash incentives for covered employees (as defined in
Section 162(m)) qualify for deductibility under the “performance-based” compensation exception
contained Section 162(m). The maximum value of such short-term cash incentive for any covered
employee shall not exceed $5 million for any fiscal year.



     10.02 Awards.



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



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



14









 





     (c) Payment of Awards. Awards will be payable to Participants in cash each year upon prior
written certification by the Committee of attainment of the specified performance targets for the
preceding fiscal year and shall in no event be payable after March 15th of the year following the
year in which the award is no longer subject to a substantial risk of forfeiture (within the
meaning of Section 409A of the Code).



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



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



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



ARTICLE XI

TERMS APPLICABLE TO ALL AWARDS GRANTED UNDER THE PLAN




     11.01 Plan Provisions Control Award Terms; Successors. The terms of the Plan shall govern
all Awards granted under the Plan, and in no event shall the Committee have the power to grant any
Award under the Plan the terms of which are contrary to any of the provisions of the Plan. In the
event any provision of any Award granted under the Plan shall conflict with any term in the Plan as
constituted on the Date of Grant of such Award, the term in the Plan as constituted on the Date of
Grant of such Award shall control. All obligations of the Company under the Plan with respect to
Awards granted hereunder shall be binding on any successor to the Company, whether the existence of
such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise,
of all or substantially all of the business and/or assets of the Company.



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



     11.03 Modification of Award After Grant. No Award granted under the Plan to a Participant
may be modified (unless such modification does not materially decrease the value of that Award)
after its Date of Grant except by express written agreement between the Company and such
Participant, provided that any such change (a) may not be inconsistent with the terms of the Plan,
(b) shall be approved by the Committee, and (c) shall be done in a manner that does not result in
the acceleration of income or the imposition of an additional tax under Section 409A of the Code.



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



15









 





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



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



     11.07 Cancellation of Awards. Unless the Award Agreement specifies otherwise, the Committee
may cancel, rescind, suspend, withhold or otherwise limit or restrict any unexpired, unpaid, or
deferred Awards at any time if the Participant is not in compliance with all applicable provisions
of the Award Agreement and the Plan, or if the Participant engages in any “Detrimental Activity.”
For purposes of this Section 11.07, “Detrimental Activity” shall include: (i) the rendering of
services for any organization or engaging directly or indirectly in any business which is or
becomes competitive with the Company, or which organization or business, or the rendering of
services to such organization or business, is or becomes otherwise prejudicial to or in conflict
with the interests of the Company; (ii) the disclosure to anyone outside the Company, or the use in
other than the Company’s business, without prior written authorization from the Company, of any
confidential information or material relating to the business of the Company, acquired by the
Participant either during or after employment with the Company; (iii) any attempt directly or
indirectly to induce any employee of the Company to be employed or perform services elsewhere or
any attempt directly or indirectly to solicit the trade or business of any current or prospective
customer, supplier or partner of the Company; or (iv) any other conduct or act determined to be
injurious, detrimental or prejudicial to any interest of the Company. Notwithstanding anything in
this Plan or in any Award Agreement to the contrary, this Section 11.07 shall be of no force and
effect on or following the occurrence of a Change in Control.



     11.08 Adjustments to Reflect Capital Changes.



     (a) Recapitalization. The number and kind of shares subject to outstanding Awards, the
Exercise Price for such shares, the number and kind of shares available for Awards subsequently
granted under the Plan, the maximum number of shares in respect of which Awards can be made to any
Participant in any calendar year and the Performance Goals and Award Periods applicable to
outstanding Awards shall be appropriately adjusted to reflect any stock dividend, stock split, or
share combination or any recapitalization, merger, consolidation, exchange of shares, liquidation
or dissolution of the Company or other change in capitalization with a similar substantive effect
upon the Plan or the Awards granted under the Plan. The Committee shall have the power and sole
discretion to determine the amount of the adjustment to be made in each case.



     (b) Certain Mergers. In the event the Company is a party to a Merger, each outstanding Award
shall be subject to the applicable agreement governing such Merger. Such agreement, without
Participant’s consent, may provide for, among other things:



     (i) the continuation of such outstanding Awards by the Company (if the Company is the
surviving corporation);



16









 





     (ii) the full vesting of such Award immediately prior to the consummation of such transaction
and the cancellation of any such Award that is not exercised before the actual consummation of such
transaction;



     (iii) the assumption of the Plan and such outstanding Awards by the surviving corporation or
its Parent;



     (iv) the substitution by the surviving corporation or its parent of stock-based awards with
substantially the same terms and conditions for such outstanding Awards; or



     (v) the cancellation of all vested and non-vested outstanding Awards in exchange for a payment
in cash and/or other property in an amount equal to the value imputed to such Award, as determined
by the Committee in its sole discretion, in connection with the Merger transaction (which, in the
case of Options, shall be the amount of the Option “spread”).



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



     11.09 Legal Compliance. Shares of Common Stock shall not be issued hereunder unless the
issuance and delivery of such shares shall comply with applicable laws and shall be further subject
to the approval of counsel for the Company with respect to such compliance.



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



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



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



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



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



     11.15 Severability. Whenever possible, each provision in the Plan and every Award at any
time granted under the Plan shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of the Plan or any Award at any time granted under the Plan
shall be held to be prohibited by or invalid under applicable law, then (a) such provision shall be
deemed amended to



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accomplish the objectives of the provision as originally written to the fullest extent
permitted by law and (b) all other provisions of the Plan, such Award and every other Award at any
time granted under the Plan shall remain in full force and effect.



     11.16 Amendment and Termination.



     (a) Amendment. The Board shall have complete power and authority to amend the Plan at any
time; provided, that no termination or amendment of the Plan may, without the consent of the
Participant to whom any Award shall theretofore have been granted under the Plan, materially
adversely affect the right of such individual under such Award; and provided further, that no such
alteration or amendment of the Plan shall, without approval by the stockholders of the Company (i)
increase the total number of shares of Common Stock which may be issued or delivered under the
Plan, (ii) increase the total number of shares which may be covered by Awards to any one
Participant or (iii) amend Section 6.01(b).



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



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



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



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



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



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



     (e) Take any action, before or after an Award is made, that it deems advisable to obtain
approval or comply with any necessary local government regulatory exemptions or approvals.
Notwithstanding the above, the Board may not take any actions hereunder, and no Awards shall be
granted, that would violate the Exchange Act, the Code, any securities law, or governing statute or
any other applicable law.



     11.18 Code Section 409A Compliance. Notwithstanding any provision of the Plan, to the extent
that any Award would be subject to Section 409A of the Code, no such Award may be granted if it
would fail to comply with the requirements set forth in Section 409A of the Code. To the extent
that the Committee determines that the Plan or any Award is subject to Section 409A of the Code and
fails to comply with the requirements of Section 409A of the Code, notwithstanding anything to the
contrary contained in the Plan or in any Award Agreement, the Committee, reserves the right to
amend or terminate the Plan and/or amend, restructure, terminate or replace the Award in order to
cause the Award to either not be subject to Section 409A of the Code or to comply with the
applicable provisions of such section.




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