Exhibit 10.31


    Exhibit
      10.31


    SONIC
      CORP.

    2006
      LONG-TERM INCENTIVE PLAN

    (as
      amended April 28, 2006)

     

    ARTICLE
      1

    PURPOSE


     

         
      1.1  GENERAL.
      The
      purpose of the Sonic Corp. 2006 Long-Term Incentive Plan (the “Plan”)
      is to
      promote the success, and enhance the value, of Sonic Corp., a Delaware
      corporation (the “Corporation”),
      by
      linking the personal interests of its employees, officers and directors to
      those
      of Corporation shareholders and by providing such persons with an incentive
      for
      outstanding performance. The Plan is further intended to provide flexibility
      to
      the Corporation in its ability to motivate, attract and retain the services
      of
      employees, officers and directors upon whose judgment, interest and special
      effort the successful conduct of the Corporation’s operation is largely
      dependent. Accordingly, the Plan permits the grant of incentive awards from
      time
      to time to selected employees and officers and directors.

     

    The
      Plan
      is intended to replace the 2001 Sonic Corp. Stock Option Plan and the 2001
      Sonic
      Corp. Directors’ Stock Option Plan and upon the Effective Date (as defined
      below), no further awards shall be granted under such plans.

     

    ARTICLE
      2

    EFFECTIVE
      DATE

     

    2.1  EFFECTIVE
      DATE.
      The
      Plan shall be effective as of the date upon which it shall be approved by the
      Board and the shareholders of the Corporation (the “Effective
      Date”).
      In
      the discretion of the Committee, Awards may be made to Covered Employees which
      are intended to constitute qualified performance-based compensation under
      Section 162(m) of the Code. 

     

    ARTICLE
      3

    DEFINITIONS

     

    3.1  DEFINITIONS.
      When a
      word or phrase appears in the Plan with the initial letter capitalized, and
      the
      word or phrase does not commence a sentence and is not otherwise defined in
      the
      Plan, the word or phrase shall generally be given the meaning ascribed to it
      in
      this Section 3.1.
      The
      following words and phrases shall have the following meanings:

     

    (a)  “1933
      Act”
means
      the Securities Act of 1933, as amended from time to time.

     

    (b)  “1934
      Act”
means
      the Securities Exchange Act of 1934, as amended from time to time.

     

    (c)  “Affiliate”
means
      any Parent or Subsidiary and any person that directly, or indirectly through
      one
      or more intermediaries, controls, is controlled by, or is under common control
      with, the Corporation.

     

    (d)  “Award”
means
      any Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock
      Unit Award, Performance Share Award, Performance Share Unit Award, Dividend
      Equivalent Award or Other Stock-Based Award, or any other right or interest
      relating to Stock or cash, granted to a Participant under the Plan.

     

    (e)  “Award
      Agreement”
means
      any written agreement, contract or other instrument or document evidencing
      an
      Award.

     

    (f)  “Board”
means
      the Board of Directors of the Corporation, as constituted from time to
      time.

     

    
      
        
           

        

      

      
        1

        
          

        

      

      
        
        

      

    

    (g)  “Cause”
as
      a
      reason for a Participant’s termination of employment or service shall have the
      meaning assigned such term in the employment agreement, if any, between such
      Participant and the Corporation or an Affiliate, provided,
      however,
      that if
      there is no such employment agreement in which such term is defined,
“Cause”
shall
      mean any of the following acts by the Participant, as determined by the Board:
      gross neglect of duty, prolonged absence from duty without the consent of the
      Corporation, intentionally engaging in any activity that is in conflict with
      or
      adverse to the business or other interests of the Corporation, or willful
      misconduct, misfeasance or malfeasance of duty which is reasonably determined
      to
      be detrimental to the Corporation.

     

    (h)  “Change
      of Control”
means
      and includes the occurrence of any one of the following events:

     

    (i)  individuals
      who, at the Effective Date, constitute the Board (the “Incumbent
      Directors”)
      cease
      for any reason to constitute at least a majority of the Board, provided
      that any
      person becoming a director after the Effective Date and whose election or
      nomination for election was approved by a vote of at least a majority of the
      Incumbent Directors then on the Board (either by a specific vote or by approval
      of the proxy statement of the Corporation in which such person is named as
      a
      nominee for director, without written objection to such nomination) shall be
      an
      Incumbent Director; provided,
      however,
      that no
      individual initially elected or nominated as a director of the Corporation
      as a
      result of an actual or threatened election contest (as described in Rule 14a-11
      under the 1934 Act (“Election
      Contest”))
      or
      other actual or threatened solicitation of proxies or consents by or on behalf
      of any “person” (as such term is defined in Section 3(a)(9) of the 1934 Act and
      as used in Section 13(d)(3) and 14(d)(2) of the 1934 Act) other than the Board
      (“Proxy
      Contest”),
      including by reason of any agreement intended to avoid or settle any Election
      Contest or Proxy Contest, shall be deemed an Incumbent Director;

     

    (ii)  any
      person becomes a “beneficial owner” (as defined in Rule 13d-3 under the 1934
      Act), directly or indirectly, of securities of the Corporation representing
      20%
      or more of the combined voting power of the Corporation’s then outstanding
      securities eligible to vote for the election of the Board (the “Corporation
      Voting Securities”);
      or

     

    (iii)  the
      consummation of a reorganization, merger, consolidation, statutory share
      exchange or similar form of corporate transaction involving the Corporation
      that
      requires the approval of the Corporation’s stockholders, whether for such
      transaction or the issuance of securities in the transaction (a “Reorganization”),
      or
      the sale or other disposition of all or substantially all of the Corporation’s
      assets to an entity that is not an Affiliate (a “Sale”),
      unless immediately following such Reorganization or Sale: (A) more than 50%
      of
      the total voting power of (x) the corporation resulting from such Reorganization
      or the corporation which has acquired all or substantially all of the assets
      of
      the Corporation (in either case, the “Surviving
      Corporation”)
      or (y)
      if applicable, the ultimate parent corporation that directly or indirectly
      has
      beneficial ownership of 100% of the voting securities eligible to elect
      directors of the Surviving Corporation (the “Parent
      Corporation”),
      is
      represented by the Corporation Voting Securities that were outstanding
      immediately prior to such Reorganization or Sale (or, if applicable, is
      represented by shares into which such Corporation Voting Securities were
      converted pursuant to such Reorganization or Sale), and such voting power among
      the holders thereof is in substantially the same proportion as the voting power
      of such Corporation Voting Securities among the holders thereof immediately
      prior to the Reorganization or Sale, (B) no person (other than (x) the
      Corporation, or (y) any employee benefit plan (or related trust) sponsored
      or
      maintained by the Surviving Corporation or the Parent Corporation is the
      beneficial owner, directly or indirectly, of 20% or more of the total voting
      power of the outstanding voting securities eligible to elect directors of the
      Parent Corporation (or, if there is no Parent Corporation, the Surviving
      Corporation) and (C) at least a majority of the members of the board of
      directors of the Parent Corporation (or, if there is no Parent Corporation,
      the
      Surviving Corporation) following the consummation of the Reorganization or
      Sale
      were Incumbent Directors at the time of the Board’s approval of the execution of
      the initial agreement providing for such Reorganization or Sale (any
      Reorganization or Sale which satisfies all of the criteria specified in (A),
      (B)
      and (C) above shall be deemed to be a “Non-Qualifying
      Transaction”);
      

     

    
      
        
          
             

          

        

      

      
        2

        
          

        

      

      
        
        

      

      provided,
        however,
        that
        under no circumstances shall a split-off, spin-off, stock dividend or similar
        transaction as a result of which the voting securities of the Corporation
        are
        distributed to shareholders of the Corporation or its successors constitute
        a
        Change of Control.  Notwithstanding
        the foregoing, with respect to an Award that is subject to Section 409A,
        and the
        payment or settlement of which is to be accelerated in connection with an
        event
        that would otherwise constitute a Change of Control, no event set forth in
        the
        definition of “Change of Control” will constitute a Change of Control for
        purposes of the Plan or any Award Agreement unless such event also constitutes
        a
“change in the ownership”, “change in the effective control” or “change in the
        ownership of a substantial portion of the assets” of the Corporation as defined
        under Section 409A.

    

     

    (i)  “Code”
means
      the Internal Revenue Code of 1986, as amended from time to time, and the
      regulations promulgated thereunder.

     

    (j)  “Committee”
means,
      subject to the last sentence of Section 4.1,
      the
      committee of the Board described in Article
      4.

     

    (k)  “Covered
      Employee”
means
      a
      covered employee as defined in Section 162(m)(3) of the Code.

     

    (l)  “Disability”
has
      the
      meaning ascribed under the long-term disability plan applicable to the
      Participant. Notwithstanding the above, (i) with respect to an Incentive Stock
      Option, Disability shall mean Permanent and Total Disability as defined in
      Section 22(e)(3) of the Code and (ii) to the extent an Award is subject to
      Section 409A, and payment or settlement of the Award is to be accelerated solely
      as a result of the Participant’s Disability, Disability shall have the meaning
      ascribed thereto under Section 409A.

     

    (m)  “Dividend
      Equivalent”
means
      a
      right granted to a Participant under Article
      11.

     

    (n)  “Effective
      Date”
has
      the
      meaning assigned such term in Section 2.1.

     

    (o)  “Eligible
      Individual”
has
      the
      meaning assigned to such term in Section 6.1.

     

    (p)  “Fair
      Market Value”,
      on any
      date, means, with respect to a share of Stock, (i) if the Stock is listed on
      a
      securities exchange or is traded over the Nasdaq National Market, the closing
      sales price on such exchange or over such system on such date or, in the absence
      of reported sales on such date, the closing sales price on the immediately
      preceding date on which sales were reported or (ii) if the Stock is not listed
      on a securities exchange or traded over the Nasdaq National Market, Fair Market
      Value will be determined by such other method as the Committee determines in
      good faith to be reasonable.

     

    (q)  “Incentive
      Stock Option”
means
      an Option that is intended to meet the requirements of Section 422 of the Code
      or any successor provision thereto.

     

    (r)  “Maximum
      Number”
has
      the
      meaning assigned to such term in Section 5.1.

     

    (s)  “Non-Employee
      Director”
means
      a
      member of the Board who is not an employee of the Corporation or any Parent
      or
      Affiliate.

     

    (t)  “Non-Qualified
      Stock Option”
means
      an Option that is not an Incentive Stock Option.

     

    (u)  “Option”
means
      a
      right granted to a Participant under Article
      7
      to
      purchase Stock at a specified price during specified time periods. An Option
      may
      be either an Incentive Stock Option or a Non-Qualified Stock
      Option.

     

    
      
        
           

        

      

      
        3

        
          

        

      

      
        
        

      

    

    (v)  “Other
      Stock-Based Award”
means
      a
      right, granted to a Participant under Article
      12
      that
      relates to or is valued by reference to Stock or other Awards relating to
      Stock.

     

    (w)  “Parent”
means
      a
      corporation which owns or beneficially owns a majority of the outstanding voting
      stock or voting power of the Corporation. Notwithstanding the above, with
      respect to an Incentive Stock Option, Parent shall have the meaning set forth
      in
      Section 424(e) of the Code.

     

    (x)  “Participant”
means
      a
      person who, as an employee, officer or director of the Corporation or any
      Parent, Subsidiary or Affiliate, has been granted an Award under the
      Plan.

     

    (y)  “Performance
      Period”
means
      the period established by the Committee and set forth in the applicable Award
      Agreement over which Performance Targets are measured.

     

    (z)  “Performance
      Target”
means
      the performance targets established by the Committee and set forth in the
      applicable Award Agreement. 

     

    (aa)  “Performance
      Share Award”
means
      Stock granted to a Participant under Article
      9
      that is
      subject to certain restrictions and to risk of forfeiture upon failure to
      achieve Performance Targets.

     

    (bb)  “Performance
      Share Unit Award”
means
      a
      right granted to a Participant under Article
      9,
      to
      receive cash, Stock, or other property in the future that is subject to certain
      restrictions and to risk of forfeiture upon failure to achieve Performance
      Targets.

     

    (cc)  “Restricted
      Stock Award”
means
      Stock granted to a Participant under Article
      10
      that is
      subject to certain restrictions and to risk of forfeiture.

     

    (dd)  “Restricted
      Stock Unit Award”
means
      a
      right granted to a Participant under Article
      10,
      to
      receive cash, Stock, or other Awards in the future that is subject to certain
      restrictions and to risk of forfeiture.

     

    (ee)  “Section
      409A”
means
      Section 409A of the Internal Revenue Code of 1986, as amended, and the rules,
      regulations and guidance issued thereunder.

     

    (ff)  “Stock”
means
      the $.01 par value common stock of the Corporation and such other securities
      of
      the Corporation as may be substituted for Stock pursuant to Article
      14.

     

    (gg)  “Stock
      Appreciation Right”
or
      “SAR”
means
      a
      right granted to a Participant under Article
      8
      to
      receive a payment equal to the difference between the Fair Market Value of
      a
      share of Stock as of the date of exercise of the SAR over the grant price of
      the
      SAR, all as determined pursuant to Article
      8.

     

    (hh)  “Subsidiary”
means
      any corporation, limited liability company, partnership or other entity of
      which
      a majority of the outstanding voting equity securities or voting power is
      beneficially owned directly or indirectly by the Corporation. Notwithstanding
      the above, with respect to an Incentive Stock Option, Subsidiary shall have
      the
      meaning set forth in Section 424(f) of the Code.

     

    (ii)  “Target
      Number”
means
      the target number of shares of Stock established by the Committee and set forth
      in the applicable Award Agreement. 

     

    ARTICLE
      4

    ADMINISTRATION

     

    4.1  COMMITTEE.
      The
      Plan shall be administered by a committee (the “Committee”)
      appointed by the Board (which Committee shall consist of two or more directors)
      or, at the discretion of the Board from time to time, the Plan may be
      administered by the Board. It is intended that the directors appointed to serve
      on the Committee shall be “non-employee directors” (within the meaning of Rule
      16b-3 promulgated under the 1934 Act) 

     

    
      
        
           

        

      

      
        4

        
          

        

      

      
        
        
and
        “outside directors” (within the meaning of Section 162(m) of the Code) to the
        extent that Rule 16b-3 and, if necessary for relief from the limitation under
        Section 162(m) of the Code and such relief is sought by the Corporation,
        Section
        162(m) of the Code, respectively, are applicable. However, the mere fact
        that a
        Committee member shall fail to qualify under either of the foregoing
        requirements shall not invalidate any Award made by the Committee, which
        Award
        is otherwise validly made under the Plan. The members of the Committee shall
        be
        appointed by, and may be changed at any time and from time to time in the
        discretion of, the Board. During any time that the Board is acting as
        administrator of the Plan, it shall have all the powers of the Committee
        hereunder, and any reference herein to the Committee (other than in this
        Section
4.1)
        shall
        include the Board. 

    

     

    4.2  ACTION
      BY THE COMMITTEE.
      For
      purposes of administering the Plan, the following rules of procedure shall
      govern the Committee. A majority of the Committee shall constitute a quorum.
      The
      acts of a majority of the members present at any meeting at which a quorum
      is
      present, and acts approved unanimously in writing by the members of the
      Committee in lieu of a meeting, shall be deemed the acts of the Committee.
      Each
      member of the Committee is entitled to, in good faith, rely or act upon any
      report or other information furnished to that member by any officer or other
      employee of the Corporation or any Parent or Affiliate, the Corporation’s
      independent certified public accountants, or any executive compensation
      consultant or other professional retained by the Corporation to assist in the
      administration of the Plan.

     

    4.3  AUTHORITY
      OF COMMITTEE.
      Except
      as provided below, the Committee has the exclusive power, authority and
      discretion to:

     

    (a)  Designate
      Participants;

     

    (b)  Determine
      the type or types of Awards to be granted to each Participant;

     

    (c)  Determine
      the number of Awards to be granted and the number of shares of Stock to which
      an
      Award will relate;

     

    (d)  Determine
      the terms and conditions of any Award granted under the Plan, including, but
      not
      limited to, the exercise price, grant price or purchase price, any restrictions
      or limitations on the Award, any schedule for lapse of forfeiture restrictions
      or restrictions on the exercisability of an Award, any effect of a Participant’s
      termination of employment with the Corporation or a Parent or Subsidiary, and
      accelerations or waivers thereof, based in each case on such considerations
      as
      the Committee in its sole discretion determines;

     

    (e)  Accelerate
      the vesting or lapse of restrictions of any outstanding Award, based in each
      case on such considerations as the Committee in its sole discretion
      determines;

     

    (f)  Determine
      whether, to what extent, and under what circumstances an Award may be settled
      in, or the exercise price of an Award may be paid in, cash, Stock, other Awards
      or other property, or an Award may be canceled, forfeited or
      surrendered;

     

    (g)  Prescribe
      the form of each Award Agreement, which need not be identical for each
      Participant;

     

    (h)  Decide
      all other matters that must be determined in connection with an
      Award;

     

    (i)  Establish,
      adopt or revise any rules and regulations as it may deem necessary or advisable
      to administer the Plan;

     

    (j)  Make
      all
      other decisions and determinations that may be required under the Plan or as
      the
      Committee deems necessary or advisable to administer the Plan;

    (k)  Construe
      and interpret any Award Agreement delivered under the Plan; 

     

    
      
        
           

        

      

      
        5

        
          

        

      

      
        
        
                (l)  Make
        factual determinations in connection with the administration or interpretation
        of the Plan;

    

     

    (m)  Employ
      such legal counsel, independent auditors and consultants as it deems desirable
      for the administration of the Plan and to rely upon any opinion or computation
      received therefrom; 

     

    (n)  Vary
      the
      terms of Awards to take account of tax, securities law and other regulatory
      requirements of foreign jurisdictions or to procure favorable tax treatment
      for
      Participants; and

     

    (o)  Amend
      the
      Plan or any Award Agreement as provided herein.

     

    4.4  DELEGATION
      OF AUTHORITY.
      To the
      extent not prohibited by applicable laws, rules and regulations, the Board
      or
      the Committee may, from time to time, delegate some or all of its authority
      under the Plan to a subcommittee or subcommittees thereof or to one or more
      directors or executive officers of the Corporation as it deems appropriate
      under
      such conditions or limitations as it may set at the time of such delegation
      or
      thereafter, except that neither the Board nor the Committee may delegate its
      authority pursuant to Article
      15
      to amend
      the Plan. For purposes of the Plan, references to the Committee shall be deemed
      to refer to any subcommittee, subcommittees, directors or executive officers
      to
      whom the Board or the Committee delegates authority pursuant to this Section
      4.4.

     

    4.5  DECISIONS
      BINDING.
      The
      Committee’s interpretation of the Plan, any Awards granted under the Plan, any
      Award Agreement and all decisions and determinations by the Committee with
      respect to the Plan are final, binding and conclusive on all
      parties.

     

    ARTICLE
      5

    SHARES
      SUBJECT TO THE PLAN

     

    5.1  NUMBER
      OF SHARES.
      Subject
      to adjustment as provided in Section 14.1,
      the
      aggregate number of shares of Stock reserved and available for Awards or which
      may be used to provide a basis of measurement for or to determine the value
      of
      an Award (such as with a Stock Appreciation Right or Performance Share Award)
      shall be 6,750,000 shares (the “Maximum
      Number”).
      Not
      more than the
      Maximum Number of shares of Stock shall be granted in the form of Incentive
      Stock Options. 

     

    5.2  PLAN
      SUB-LIMITS.
      Subject
      to adjustment as provided in Section 14.1,
      the
      maximum aggregate number of shares of Stock that may be issued in conjunction
      with (i) Restricted Stock Awards, unrestricted shares of Stock, Performance
      Share Awards, and Dividend Equivalents, and (ii) Restricted Stock Unit
      Awards, Performance Share Unit Awards and Other Awards but only if such Awards
      are paid or settled in shares of Stock, is 1,000,000 shares.

     

    5.3  LAPSED
      AWARDS.
      To the
      fullest extent permissible under Rule 16b-3 under the 1934 Act and Section
      422
      of the Code and any other applicable laws, rules and regulations, (i) if an
      Award is canceled, terminates, expires, is forfeited or lapses for any reason
      without having been exercised or settled, any shares of Stock subject to the
      Award will be added back into the Maximum Number and will again be available
      for
      the grant of an Award under the Plan and (ii) shares of Stock subject to SARs
      or
      other Awards settled in cash shall be added back into the Maximum Number and
      will be available for the grant of an Award under the Plan.

     

    5.4  LIMITED
      DURATION OF CERTAIN RULES.
      Any
      rule set forth in Section 5.2
      that is
      considered a “formula” under the rules of the NASDAQ Stock Market applicable to
      the Corporation shall expire on and not be applied after the tenth anniversary
      of the date on which the Plan is approved by the Corporation’s stockholders. The
      expiration of any such rule shall not affect any calculation of shares of Stock
      available for delivery under the Plan that was made while the rule was in
      effect.

     

    
      5.5  STOCK
        DISTRIBUTED.
        Any
        Stock distributed pursuant to an Award may consist, in whole or in part,
        of
        authorized and unissued Stock, treasury Stock or Stock purchased on the open
        market.

       

      
        
          
             

          

        

        
          6

          
            

          

        

        
          
          

        

      

      5.6  LIMITATION
        ON AWARDS.
        Notwithstanding any provision in the Plan to the contrary (but subject to
        adjustment as provided in Section 14.1),
        the
        maximum number of shares of Stock that may be issued in respect of, or used
        to
        provide a basis of measurement for or to determine the value of, one or more
        Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock
        Unit Awards, Performance Share Awards, Performance Share Unit Awards, Dividend
        Equivalent Awards or Other Stock-Based Awards (regardless of whether such
        Awards
        are settled in cash, Stock or a combination thereof) granted during any one
        calendar year under the Plan to any one Participant shall be 225,000 (all
        of
        which may be granted as Incentive Stock Options). The maximum amount of one
        or
        more Awards denominated in cash that may be received by any one Participant
        during any one calendar year under the Plan shall be
        $1,000,000.

    

     

    ARTICLE
      6

    ELIGIBILITY

     

    6.1  GENERAL.
      Awards
      may be granted only to individuals who are employees, officers or directors
      of
      the Corporation or a Parent or Subsidiary (each, an “Eligible
      Individual”).
      Under
      the Plan, references to “employment” or “employed” include the service of
      Participants who are Non-Employee Directors. 

     

    ARTICLE
      7

    STOCK
      OPTIONS

     

    7.1  GENERAL.
      The
      Committee is authorized to grant Options to Eligible Individuals on the
      following terms and conditions:

     

    (a)  EXERCISE
      PRICE.
      The
      exercise price per share of Stock under an Option shall be determined by the
      Committee at the time of the grant but in no event shall the exercise price
      be
      less than 100% of the Fair Market Value of a share of Stock on the date of
      grant.

     

    (b)  TIME
      AND CONDITIONS OF EXERCISE.
      The
      Committee shall determine the time or times at which an Option may be exercised
      in whole or in part, subject to Section 7.1(e).
      The
      Committee also shall determine the performance or other conditions, if any,
      that
      must be satisfied before all or part of an Option may be exercised. The
      Committee may waive any exercise provisions at any time in whole or in part
      based upon factors as the Committee may determine in its sole discretion so
      that
      the Option becomes exerciseable at an earlier date.

     

    (c)  PAYMENT.
      Unless
      otherwise determined by the Committee, the exercise price of an Option may
      be
      paid (i) in cash, (ii) by actual delivery or attestation to ownership of freely
      transferable shares of stock already owned; provided,
      however,
      that to
      the extent required by applicable accounting rules, such shares shall have
      been
      held by the Participant for at least six months, (iii) by a combination of
      cash and shares of Stock equal in value to the exercise price, (iv) through
      net
      share settlement or a similar procedure involving the withholding of shares
      of
      Stock subject to the Option with a value equal to the exercise price or
      (v) by such other means as the Committee, in its discretion, may authorize.
      In accordance with the rules and procedures authorized by the Committee for
      this
      purpose, an Option may also be exercised through a “cashless exercise” procedure
      authorized by the Committee that permits Participants to exercise Options by
      delivering a properly executed exercise notice to the Corporation together
      with
      a copy of irrevocable instructions to a broker to deliver promptly to the
      Corporation the amount of sale or loan proceeds
      necessary to pay the exercise price and the amount of any required tax or other
      withholding obligations.

     

    (d)  EVIDENCE
      OF GRANT.
      All
      Options shall be evidenced by an Award Agreement between the Corporation and
      the
      Participant. The Award Agreement shall include such provisions not inconsistent
      with the Plan as may be specified by the Committee.

     

    (e)  EXERCISE
      TERM.
      In no
      event may any Option be exercisable for more than ten years from the date of
      its
      grant.

    
       

      
        
          
             

          

        

        
          7

          
            

          

        

        
          
          

        

      

    

    7.2  INCENTIVE
      STOCK OPTIONS.
      The
      terms of any Incentive Stock Options granted under the Plan must comply with
      the
      following additional rules:

     

    (a)  LAPSE
      OF OPTION.
      An
      Incentive Stock Option shall lapse under the earliest of the following
      circumstances; provided,
      however,
      that
      the Committee may, prior to the lapse of the Incentive Stock Option under the
      circumstances described in paragraphs (3), (4) and (5) below, provide in writing
      that the Option will extend until a later date, but if an Option is exercised
      after the dates specified in paragraphs (3), (4) and (5) below, it will
      automatically become a Non-Qualified Stock Option:

     

    (1)  The
      Incentive Stock Option shall lapse as of the option expiration date set forth
      in
      the Award Agreement.

     

    (2)  The
      Incentive Stock Option shall lapse ten years after it is granted, unless an
      earlier time is set in the Award Agreement.

     

    (3)  If
      the
      Participant terminates employment for any reason other than as provided in
      paragraph (4) or (5) below, the Incentive Stock Option shall lapse, unless
      it is
      previously exercised, three months after the Participant’s termination of
      employment; provided,
      however,
      that if
      the Participant’s employment is terminated by the Corporation for Cause, the
      Incentive Stock Option shall (to the extent not previously exercised) lapse
      immediately.

     

    (4)  If
      the
      Participant terminates employment by reason of his Disability, the Incentive
      Stock Option shall lapse, unless it is previously exercised, one year after
      the
      Participant’s termination of employment.

     

    (5)  If
      the
      Participant dies while employed, or during the three-month period described
      in
      paragraph (3) or during the one-year period described in paragraph (4) and
      before the Option otherwise lapses, the Option shall lapse one year after the
      Participant’s death. Upon the Participant’s death, any exercisable Incentive
      Stock Options may be exercised by the Participant’s beneficiary, determined in
      accordance with Section 13.5.

     

    Unless
      the exercisability of the Incentive Stock Option is accelerated as provided
      in
Article
      13,
      if a
      Participant exercises an Option after termination of employment, the Option
      may
      be exercised only with respect to the shares that were otherwise vested on
      the
      Participant’s termination of employment.

     

    (b)  INDIVIDUAL
      DOLLAR LIMITATION.
      The
      aggregate Fair Market Value (determined as of the time an Award is made) of all
      shares of Stock with respect to which Incentive Stock Options are first
      exercisable by a Participant in any calendar year may not exceed $100,000.

     

    (c)  TEN
      PERCENT OWNERS.
      No
      Incentive Stock Option shall be granted to any individual who, at the date
      of
      grant, owns stock possessing more than ten percent of the total combined voting
      power of all classes of stock of the Corporation or any Parent or Affiliate
      unless the exercise price per share of such Option is at least 110% of the
      Fair
      Market Value per share of Stock at the date of grant and the Option expires
      no
      later than five years after the date of grant.

     

    (d)  EXPIRATION
      OF INCENTIVE STOCK OPTIONS.
      No
      Award of an Incentive Stock Option may be made pursuant to the Plan after the
      day immediately prior to the tenth anniversary of the Effective
      Date.

     

    (e)  RIGHT
      TO EXERCISE.
      During
      a Participant’s lifetime, an Incentive Stock Option may be exercised only by the
      Participant or, in the case of the Participant’s Disability, by the
      Participant’s guardian or legal representative.

     

    (f)  DIRECTORS.
      The
      Committee may not grant an Incentive Stock Option to a Non-Employee Director.
      The Committee may grant an Incentive Stock Option to a director who is also
      an
      employee of the Corporation or any Parent or Affiliate but only in that
      individual’s position as an employee and not as a director.

     

    
      
        
           

        

      

      
        8

        
          

        

      

      
        
        

      

    

    
       

    

    7.3  NO
      REPRICING OF OPTIONS.
      The
      Committee may not “reprice” any Option. “Reprice” means any of the following or
      any other action that has the same effect: (i) amending an Option to reduce
      its
      exercise price, (ii) canceling an Option at a time when its exercise price
      exceeds the Fair Market Value of a share of Stock in exchange for an Option,
      Restricted Stock Award or other equity award unless the cancellation and
      exchange occurs in connection with a merger, acquisition, spin-off or other
      similar corporate transaction, or (iii) taking any other action that is treated
      as a repricing under GAAP, provided
      that
      nothing in this Section 7.3
      shall
      prevent the Committee from making adjustments pursuant to Section 14.1.

     

    ARTICLE
      8

    STOCK
      APPRECIATION RIGHTS

     

    8.1  GRANT
      OF STOCK
      APPRECIATION RIGHTS.
      The
      Committee is authorized to grant Stock Appreciation Rights to Participants
      on
      the following terms and conditions:

     

    (a)  RIGHT
      TO PAYMENT.
      Upon
      the exercise of a Stock Appreciation Right, the Participant to whom it is
      granted has the right to receive the excess, if any, of:

     

    (1)  The
      Fair
      Market Value of one share of Stock on the date of exercise; over

     

    (2)  The
      grant
      price of the Stock Appreciation Right as determined by the Committee, which
      shall not be less than the Fair Market Value of one share of Stock on the date
      of grant.

     

    (b)  OTHER
      TERMS.
      All
      awards of Stock Appreciation Rights shall be evidenced by an Award Agreement.
      The terms, methods of exercise, methods of settlement, form of consideration
      payable in settlement, and any other terms and conditions of any Stock
      Appreciation Right shall be determined by the Committee at the time of the
      grant
      of the Award and shall be reflected in the Award Agreement, provided that each
      Stock Appreciation Right shall lapse ten years after it is granted, unless
      an
      earlier time is set in the Award Agreement.

     

    ARTICLE
      9

    PERFORMANCE
      SHARE
      AWARDS AND

    PERFORMANCE
      SHARE UNIT AWARDS

     

    9.1  PERFORMANCE
      SHARE AWARDS.
      The
      Committee is authorized to grant Performance Share Awards to Participants on
      such terms and conditions as may be selected by the Committee. The Committee
      shall have the complete discretion to determine the number of Performance Share
      Awards granted to each Participant, subject to Section 5.6.
      All
      Performance Share Awards shall be evidenced by an Award Agreement. A grant
      of a
      Performance Share Award shall consist of a Target Number of shares of Stock
      granted to an Eligible Individual subject to risk of forfeiture for failure
      to
      achieve the Performance Targets and subject to the terms, conditions and
      restrictions set forth in the Plan and the applicable Award Agreement. The
      Performance Targets will be evaluated at the
      end
      of the applicable Performance Period and a Participant may receive more or
      less
      than the Target Number of shares of Stock subject to a Performance Share Award,
      subject to Section 5.6,
      depending on the extent to which the Performance Targets and other terms and
      conditions to payment are met over the Performance Period.

     

    9.2  PERFORMANCE
      SHARE UNIT AWARDS.
      The
      Committee is authorized to grant Performance Share Unit Awards to Participants
      on such terms and conditions as may be selected by the Committee. The Committee
      shall have the complete discretion to determine the number of Performance Share
      Unit Awards granted to each Participant, subject to Section 5.6.
      All
      Performance Share Unit Awards shall be evidenced by an Award Agreement. A
      Performance Stock Unit Award shall entitle a Participant to receive, subject
      to
      the terms, conditions and restrictions set forth in the Plan and established
      by
      the Committee in connection with the Award and specified in the applicable
      Award
      Agreement, a Target Number of shares of Stock based upon the achievement of
      Performance Targets over the applicable Performance Period. Performance Share
      Unit Awards may be payable in cash, Stock or other 

     

    
      
        
           

        

      

      
        9

        
          

        

      

      
        
        
property,
        as determined by the Committee and reflected in the Award Agreement. The
        Performance Targets will be evaluated at the end of the applicable Performance
        Period and a Participant may receive more or less than the Target Number
        of
        shares of Stock subject to a Performance Share Unit Award, subject to Section
        5.6,
        depending on the extent to which the Performance Targets and other terms
        and
        conditions to payment are met over the Performance Period.

    

     

    ARTICLE
      10

    RESTRICTED
      STOCK AWARDS
      AND

    RESTRICTED
      STOCK UNIT AWARDS

     

    10.1  RESTRICTED
      STOCK AWARDS.
      

     

    (a)  GRANT.
      The
      Committee is authorized to grant Restricted Stock Awards to Participants in
      such
      amounts and subject to such terms and conditions as may be selected by the
      Committee. All Restricted Stock Awards shall be evidenced by an Award Agreement.
      A Restricted Stock Award shall consist of one or more shares of Stock granted
      to
      an Eligible Individual, and shall be subject to the terms, conditions and
      restrictions set forth in the Plan and established by the Committee in
      connection with the Award and specified in the applicable Award Agreement.
      

     

    (b)  ISSUANCE
      AND RESTRICTIONS.
      Restricted Stock shall be subject to such restrictions on transferability and
      other restrictions as the Committee may impose (including, without limitation,
      limitations on the right to vote Restricted Stock or the right to receive
      dividends on the Restricted Stock). These restrictions may lapse separately
      or
      in combination at such times, under such circumstances, in such installments,
      upon the satisfaction of performance goals or otherwise, as the Committee
      determines at the time of the grant of the Award or thereafter.

     

    (c)  FORFEITURE.
      Except
      as otherwise determined by the Committee at the time of the grant of the Award
      or thereafter, upon termination of employment during the applicable restriction
      period or upon failure to satisfy a performance goal during the applicable
      restriction period, Restricted Stock that is at that time subject to
      restrictions shall be forfeited and reacquired by the Corporation; provided,
      however,
      that
      the Committee may provide in any Award Agreement that restrictions or forfeiture
      conditions relating to Restricted Stock will be waived in whole or in part
      in
      the event of terminations resulting from specified causes, and the Committee
      may
      in other cases waive in whole or in part restrictions or forfeiture conditions
      relating to Restricted Stock.

     

    (d)  CERTIFICATES
      FOR RESTRICTED STOCK.
      Restricted Stock granted under the Plan may be evidenced in such manner as
      the
      Committee shall determine. If certificates representing shares of Restricted
      Stock are registered in the name of the Participant, certificates must bear
      an
      appropriate legend referring to the terms, conditions and restrictions
      applicable to such Restricted Stock.

     

    10.2  RESTRICTED
      STOCK UNIT AWARDS.
      The
      Committee is authorized to grant Restricted Stock Unit Awards to Participants
      in
      such amounts and subject to such terms and conditions as may be selected by
      the
Committee.
      All Restricted Stock Unit Awards shall be evidenced by an Award Agreement.
      A
      Restricted Stock Unit shall entitle a Participant to receive, subject to the
      terms, conditions and restrictions set forth in the Plan and established by
      the
      Committee in connection with the Award, one or more shares of Stock. Restricted
      Stock Units may, among other things, be subject to restrictions on
      transferability, vesting requirements or other specified circumstances under
      which they may be canceled. Restricted Stock Units may be payable in cash,
      shares of Stock or other property, as determined by the Committee and reflected
      in the Award Agreement.

     

    ARTICLE
      11

    DIVIDEND
      EQUIVALENTS

     

    11.1  GRANT
      OF DIVIDEND EQUIVALENTS.
      The
      Committee is authorized to grant Dividend Equivalents to Participants subject
      to
      such terms and conditions as may be selected by the Committee. Dividend
      Equivalents shall entitle the Participant to receive payments (in cash, Stock
      or
      other property) equal to dividends with respect to all or a portion of


     

    
      
        
           

        

      

      
        10

        
          

        

      

      
        
        
the
        number of shares of Stock subject to an Award, as determined by the Committee.
        The Committee may provide that Dividend Equivalents be paid or distributed
        when
        accrued, or be deemed to have been reinvested in additional shares of Stock
        or
        otherwise reinvested; provided,
        however,
        that
        the terms of any reinvestment of Dividend Equivalents must comply with all
        applicable laws, rules and regulations, including, without limitation, Section
        409A.

    

     

    ARTICLE
      12

    OTHER
      STOCK-BASED AWARDS

     

    12.1  GRANT
      OF OTHER STOCK-BASED AWARDS.
      The
      Committee is authorized, subject to limitations under applicable law, to grant
      to Participants such other Awards that are payable in, valued in whole or in
      part by reference to, or otherwise based on or related to shares of Stock,
      as
      deemed by the Committee to be consistent with the purposes of the Plan,
      including, without limitation, shares of Stock awarded purely as a “bonus” and
      not subject to any restrictions or conditions, convertible or exchangeable
      debt
      securities, other rights convertible or exchangeable into shares of Stock,
      stock
      units, phantom stock and other Awards valued by reference to book value of
      shares of Stock or the value of securities of or the performance of specified
      Parents or Subsidiaries. The Committee shall determine the terms and conditions
      of such Awards.

     

    ARTICLE
      13

    PROVISIONS
      APPLICABLE TO AWARDS

     

    13.1  STAND-ALONE,
      TANDEM, AND SUBSTITUTE AWARDS.
      Awards
      granted under the Plan may, in the discretion of the Committee, be granted
      either alone or in addition to, in tandem with, or in substitution for, any
      other Award granted under the Plan. If an Award is granted in substitution
      for
      another Award, the Committee may require the surrender of such other Award
      in
      consideration of the grant of the new Award. Awards granted in addition to
      or in
      tandem with other Awards may be granted either at the same time as or at a
      different time from the grant of such other Awards.

     

    13.2  TERM
      OF AWARD.
      The
      term of each Award shall be for the period as determined by the Committee,
      provided
      that in
      no event shall the term of any Incentive Stock Option or a Stock Appreciation
      Right granted in tandem with the Incentive Stock Option exceed a period of
      ten
      years from the date of its grant (or, if Section 7.2(c)
      applies,
      five years from the date of its grant).

     

    13.3  FORM
      OF PAYMENT FOR AWARDS.
      Subject
      to the terms of the Plan and any applicable law or Award Agreement, payments
      or
      transfers to be made by the Corporation or a Parent or Affiliate on the grant
      or
      exercise of an Award may be made in such form as the Committee determines at
      or
      after the time of grant, including, without limitation, cash, Stock, other
      Awards or other property, or any combination thereof, and may be made in a
      single payment or transfer, in installments or on a deferred basis, in each
      case
      determined in accordance with rules adopted by, and at the discretion of, the
      Committee.

     

    13.4  LIMITS
      ON TRANSFER.
      No
      right or interest of a Participant in any unexercised or restricted Award may
      be
      pledged, encumbered or hypothecated to or in favor of any party other than
      the
      Corporation or a Parent or Affiliate, or shall be subject to any lien,
      obligation, or liability of such Participant to any other party other than
      the
      Corporation or a Parent or Affiliate. No unexercised or restricted Award shall
      be assignable or transferable by a Participant other than by will or the laws
      of
      descent and distribution or, except in the case of an Incentive Stock Option,
      pursuant to a domestic relations order that would satisfy Section 414(p)(1)(A)
      of the Code if such Section applied to an Award under the Plan; provided,
      however,
      that
      the Committee may (but need not) permit other transfers where the Committee
      concludes that such transferability (i) does not result in accelerated taxation
      or other adverse tax consequences, (ii) does not cause any Option intended
      to be
      an Incentive Stock Option to fail to be described in Section 422(b) of the
      Code,
      (iii) does not result in cash or any other consideration being exchanged for
      the
      Award, and (iv) is otherwise appropriate and desirable, taking into account
      any
      factors deemed relevant, including, without limitation, state or federal tax
      or
      securities laws applicable to transferable Awards.

     

    
      
        
           

        

      

      
        11

        
          

        

      

      
        
        

      

    

    13.5  BENEFICIARIES.
      Notwithstanding Section 13.4,
      a
      Participant may, in the manner determined by the Committee, designate a
      beneficiary to exercise the rights of the Participant and to receive any
      distribution with respect to any Award upon the Participant’s death. A
      beneficiary, legal guardian, legal representative or other person claiming
      any
      rights under the Plan is subject to all terms and conditions of the Plan and
      any
      Award Agreement applicable to the Participant, except to the extent the Plan
      and
      such Award Agreement otherwise provide, and to any additional restrictions
      deemed necessary or appropriate by the Committee. If no beneficiary has been
      designated or survives the Participant, payment shall be made to the
      Participant’s estate. Subject to the foregoing, a beneficiary designation may be
      changed or revoked by a Participant at any time, provided
      the
      change or revocation is filed with the Committee.

     

    13.6  STOCK
      CERTIFICATES.
      All
      Stock issuable under the Plan is subject to any stop-transfer orders and other
      restrictions as the Committee deems necessary or advisable to comply with
      federal or state securities laws, rules and regulations and the rules of any
      national securities exchange or automated quotation system on which the Stock
      is
      listed, quoted or traded. The Committee may place legends on any Stock
      certificate or issue instructions to the transfer agent to reference
      restrictions applicable to the Stock.

     

    13.7  ACCELERATION
      UPON DEATH OR DISABILITY.
      Unless
      otherwise set forth in an Award Agreement, upon the Participant’s death or
      Disability during his employment or service as a director, all outstanding
      Options, Stock Appreciation Rights, Restricted Stock Awards and other Awards
      in
      the nature of rights that may be exercised shall become fully exercisable and
      all restrictions on outstanding Awards shall lapse. Any Option or Stock
      Appreciation Right shall thereafter continue or lapse in accordance with the
      other provisions of the Plan and the Award Agreement. To the extent that this
      provision causes Incentive Stock Options to exceed the dollar limitation set
      forth in Section 7.2(b),
      the
      excess Options shall be deemed to be Non-Qualified Stock Options.

     

    13.8  ACCELERATION
      OF VESTING AND LAPSE OF RESTRICTIONS.
      The
      Committee may, in its sole discretion, at any time (including, without
      limitation, prior to, coincident with or subsequent to a Change of Control)
      determine that (a) all or a portion of a Participant’s Options, Stock
      Appreciation Rights and other Awards in the nature of rights that may be
      exercised shall become fully or partially exercisable, and/or (b) all or a
      part
      of the restrictions on all or a portion of the outstanding Awards shall lapse,
      in each case, as of such date as the Committee may, in its sole discretion,
      declare; provided,
      however,
      that,
      with respect to Awards that are subject to Section 409A, the Committee shall
      not
      have the authority to accelerate or postpone the timing of payment or settlement
      of an Award in a manner that would cause such Award to become subject to the
      interest and penalty provisions under Section 409A. The Committee may
      discriminate among Participants and among Awards granted to a Participant in
      exercising its discretion pursuant to this Section 13.8.

     

    13.9  OTHER
      ADJUSTMENTS.
      If (i)
      an Award is accelerated under Section 13.8
      or (ii)
      a Change of Control occurs (regardless or whether acceleration under Section
      13.8
      occurs),
      the Committee may, in its sole discretion, provide (a) that the Award will
      expire after a designated period of time after such acceleration or Change
      of
      Control, as applicable, to the extent not then exercised, (b) that the Award
      will be settled in cash rather than Stock, (c) that the Award will be assumed
      by
      another party to a transaction giving rise to the acceleration or a party to
      the
      Change of Control, (d) that the Award will otherwise be equitably converted
      or
      adjusted in connection with such
      transaction or Change of Control, or (e) any combination of the foregoing.
      The
      Committee’s determination need not be uniform and may be different for different
      Participants whether or not such Participants are similarly situated;
provided,
      however,
      that,
      with respect to Awards that are subject to Section 409A, the Committee shall
      not
      have the authority to accelerate or postpone the timing of payment or settlement
      of an Award in a manner that would cause such Award to become subject to the
      interest and penalty provisions under Section 409A.

     

    13.10  PERFORMANCE
      GOALS.
      In
      order to preserve the deductibility of an Award under Section 162(m) of the
      Code, the Committee may determine that any Award granted pursuant to the Plan
      to
      a Participant that is or is expected to become a Covered Employee shall be
      determined solely on the basis of (a) the achievement by the Corporation or
      a
      Parent or Subsidiary of a specified target return, or target growth in return,
      on equity or assets, (b) the Corporation’s stock price, (c) the Corporation’s
      total shareholder return (stock price appreciation plus reinvested dividends)
      relative to a defined comparison group or target over a specific performance
      period, (d) the achievement by the Corporation or a Parent or Subsidiary, or
      a
      business unit of any such entity, of a specified target, or target growth in,
      net income, revenues, earnings per share, earnings before income and taxes,
      and
      earnings before income, taxes, depreciation and amortization, or (e) any
      combination of the goals set forth in (a) through (d) above.  If an Award
      is made on such basis, the Committee shall 

     

    
      
        
           

        

      

      
        
          12

        

        
          

        

      

      
        
        
establish
        goals prior to the beginning of the period for which such performance goal
        relates (or such later date as may be permitted under Section 162(m) of the
        Code
        or the regulations thereunder), and the Committee has the right for any reason
        to reduce (but not increase) the Award, notwithstanding the achievement of
        a
        specified goal. Any payment of an Award granted with performance goals shall
        be
        conditioned on the written certification of the Committee in each case that
        the
        performance goals and any other material conditions were
        satisfied.

    

     

    13.11  TERMINATION
      OF EMPLOYMENT.
      Whether
      military, government or other service or other leave of absence shall constitute
      a termination of employment shall be determined in each case by the Committee
      at
      its discretion, and any determination by the Committee shall be final and
      conclusive. A termination of employment shall not occur (i) in a circumstance
      in
      which a Participant transfers from the Corporation to one of its Parents or
      Subsidiaries, transfers from a Parent or Affiliate to the Corporation, or
      transfers from one Parent or Affiliate to another Parent or Affiliate, or (ii)
      in the discretion of the Committee as specified at or prior to such occurrence,
      in the case of a split-off, spin-off, sale or other disposition of the
      Participant’s employer from the Corporation or any Parent or Affiliate. To the
      extent that this provision causes Incentive Stock Options to extend beyond
      three
      months from the date a Participant is deemed to be an employee of the
      Corporation, a Parent or Affiliate for purposes of Section 424(f) of the Code,
      the Options held by such Participant shall be deemed to be Non-Qualified Stock
      Options.

     

    ARTICLE
      14

    CHANGES
      IN CAPITAL STRUCTURE

     

    14.1  GENERAL.
      In the
      event of a corporate transaction involving the Corporation (including, without
      limitation, any stock dividend, stock split, extraordinary cash dividend,
      recapitalization, reorganization, merger, consolidation, split-up, spin-off,
      combination or exchange of shares), the authorization limits under Sections
      5.1
      and
5.6
      shall be
      adjusted proportionately, and the Committee may adjust Awards to preserve the
      benefits or potential benefits of the Awards. Action by the Committee may
      include: (i) adjustment of the number and kind of shares which may be delivered
      under the Plan; (ii) adjustment of the number and kind of shares subject to
      outstanding Awards; (iii) adjustment of the exercise price of outstanding
      Awards; (iv) adjustments to the type or form of Award; and (v) any other
      adjustments that the Committee determines to be equitable. Without limiting
      the
      foregoing, in the event a stock dividend or stock split is declared upon the
      Stock, the authorization limits under Sections 5.1
      and
5.6
      shall be
      increased proportionately, and the shares of Stock then subject to each Award
      shall be increased proportionately without any change in the aggregate purchase
      price therefor.

     

    ARTICLE
      15

    AMENDMENT,
      MODIFICATION AND TERMINATION

     

    15.1  AMENDMENT,
      MODIFICATION AND TERMINATION.
      The
      Board or the Committee may, at any time and from time to time, amend, modify
      or
      terminate the Plan; provided,
      however,
      that
      the Board or the Committee
      may condition any amendment or modification on the approval of shareholders
      of
      the Corporation if such approval is necessary or deemed advisable with respect
      to tax, securities or other applicable laws, policies or
      regulations.

     

    15.2  AWARDS
      PREVIOUSLY GRANTED.
      At any
      time and from time to time, the Committee may amend, modify or terminate any
      outstanding Award or Award Agreement without approval of the Participant;
provided,
      however,
      that,
      subject to the terms of the applicable Award Agreement, such amendment,
      modification or termination shall not, without the Participant’s consent, reduce
      or diminish the value of such Award determined as if the Award had been
      exercised, vested, cashed in or otherwise settled on the date of such amendment
      or termination; provided further,
      however,
      that
      the original term of any Option may not be extended. No termination, amendment,
      or modification of the Plan shall adversely affect any Award previously granted
      under the Plan, without the written consent of the Participant. Notwithstanding
      any provision herein to the contrary, the Committee shall have broad authority
      to amend the Plan or any outstanding Award under the Plan without approval
      of
      the Participant to the extent necessary or desirable (i) to comply with, or
      take into account changes in, applicable tax laws, securities laws, accounting
      rules and other applicable laws, rules and regulations or (ii) to ensure
      that an Award is not subject to interest and penalties under Section
      409A.

     

    
      
      

      
        13

        
          

        

      

      
        
        

      

    

    ARTICLE
      16

    GENERAL
      PROVISIONS

     

    16.1  NO
      RIGHTS TO AWARDS.
      No
      Participant or any Eligible Individual shall have any claim to be granted any
      Award under the Plan, and neither the Corporation nor the Committee is obligated
      to treat Participants or Eligible Individuals uniformly.

     

    16.2  NO
      STOCKHOLDER RIGHTS.
      No
      Award gives the Participant any of the rights of a shareholder of the
      Corporation unless and until shares of Stock are in fact issued to such person
      in connection with the exercise, payment or settlement of such
      Award.

     

    16.3  WITHHOLDING.
      The
      Corporation or any Subsidiary, Parent or Affiliate shall have the authority
      and
      the right to deduct or withhold, or require a Participant to remit to the
      Corporation, an amount sufficient to satisfy federal, state, local and other
      taxes (including the Participant’s FICA obligation) required by law to be
      withheld with respect to any taxable event arising as a result of the Plan.
      With
      respect to withholding required upon any taxable event under the Plan, the
      Committee may, at the time the Award is granted or thereafter, require or permit
      that any such withholding requirement be satisfied, in whole or in part, by
      (i)
      withholding from the Award shares of Stock or (ii) delivering shares of Stock
      that are already owned, having a Fair Market Value on the date of withholding
      equal to the minimum amount (and not any greater amount) required to be withheld
      for tax purposes, all in accordance with such procedures as the Committee
      establishes. The Corporation or any Subsidiary, Parent or Affiliate, as
      appropriate, shall also have the right to deduct from all cash payments made
      to
      a Participant (whether or not such payment is made in connection with an Award)
      any applicable taxes required to be withheld with respect to such
      payments.

     

    16.4  NO
      RIGHT TO CONTINUED SERVICE.
      Nothing
      in the Plan or any Award Agreement shall interfere with or limit in any way
      the
      right of the Corporation or any Parent or Affiliate to terminate any
      Participant’s employment or status as an officer or director at any time, nor
      confer upon any Participant any right to continue as an employee, officer or
      director of the Corporation or any Parent or Affiliate. In its sole discretion,
      the Board or the Committee may authorize the creation of trusts or other
      arrangements to meet the obligations created under the Plan to deliver shares
      of
      Stock with respect to awards hereunder.

     

    16.5  UNFUNDED
      STATUS OF AWARDS.
      The
      Plan is intended to be an “unfunded” plan for incentive and deferred
      compensation. With respect to any payments not yet made to a Participant
      pursuant to an Award, nothing contained in the Plan or any Award Agreement
      shall
      give the Participant any rights that are greater than those of a general
      creditor of the Corporation or any Parent or Affiliate.

     

    16.6  INDEMNIFICATION.
      To the
      extent allowable under applicable law, each member of the Committee shall be
      indemnified and held harmless by the Corporation from any loss, cost, liability
      or expense that may be imposed upon or reasonably incurred by such member in
      connection with or resulting from any claim, action, suit or proceeding to
      which
      such member may be a party or in which he may be involved by reason of any
      action or failure to act under the Plan and against and from any and all amounts
      paid by such member in satisfaction of judgment in such action, suit or
      proceeding against him; provided
      such
      member shall give the Corporation an opportunity, at its own expense, to handle
      and defend the same before such member undertakes to handle and defend it on
      his
      or her own behalf. The foregoing right of indemnification shall not be exclusive
      of any other rights of indemnification to which such persons may be entitled
      under the Corporation’s Certificate of Incorporation or Bylaws, as a matter of
      law, or otherwise, or any power that the Corporation may have to indemnify
      them
      or hold such persons harmless.

     

    16.7  RELATIONSHIP
      TO OTHER BENEFITS.
      No
      payment under the Plan shall be taken into account in determining any benefits
      under any pension, retirement, savings, profit sharing, group insurance, welfare
      or benefit plan of the Corporation or any Parent or Affiliate unless provided
      otherwise in such other plan.

     

    16.8  EXPENSES;
      APPLICATION OF FUNDS.
      The
      expenses of administering the Plan shall be borne by the Corporation and its
      Parents or Subsidiaries. The proceeds received by the Corporation from the
      sale
      of shares of Stock pursuant to Awards will be used for general corporate
      purposes.

    
       

      
        
          
             

          

        

        
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    16.9  TITLES
      AND HEADINGS.
      The
      titles and headings of the Sections in the Plan are for convenience of reference
      only, and in the event of any conflict, the text of the Plan, rather than such
      titles or headings, shall control.

     

    16.10  GENDER
      AND NUMBER.
      Except
      where otherwise indicated by the context, any masculine term used herein also
      shall include the feminine; the plural shall include the singular and the
      singular shall include the plural.

     

    16.11  FRACTIONAL
      SHARES.
      No
      fractional shares of Stock shall be issued and the Committee shall determine,
      in
      its discretion, whether cash shall be given in lieu of fractional shares or
      whether such fractional shares shall be eliminated by rounding up or
      down.

     

    16.12  GOVERNMENT
      AND OTHER REGULATIONS.
      The
      obligation of the Corporation to make payment of awards in Stock or otherwise
      shall be subject to all applicable laws, rules and regulations, and to such
      approvals by government agencies as may be required. To the extent that Awards
      under the Plan are awarded to individuals who are domiciled or resident outside
      of the United States or to persons who are domiciled or resident in the United
      States but who are subject to the tax laws of a jurisdiction outside of the
      United States, the Committee may adjust the terms of the Awards granted
      hereunder to such person (i) to comply with the laws of such jurisdiction and
      (ii) to avoid adverse tax consequences relating to an Award. The authority
      granted under the previous sentence shall include the discretion for the
      Committee to adopt, on behalf of the Corporation, one or more sub-plans
      applicable to separate classes of Participants who are subject to the laws
      of
      jurisdictions outside of the United States.

     

    16.13  SECURITIES
      LAW RESTRICTIONS.
      An
      Award may not be exercised or settled and no shares of Stock may be issued
      in
      connection with an Award unless the issuance of such shares of Stock has been
      registered under the 1933 Act and qualified under applicable state “blue sky”
laws and any applicable foreign securities laws, or the Corporation has
      determined that an exemption from registration and from qualification under
      such
      state “blue sky” laws is available. The Corporation shall be under no obligation
      to register under the 1933 Act, or any state securities act, any of the shares
      of Stock issued in connection with the Plan. The shares issued in connection
      with the Plan may in certain circumstances be exempt from registration under
      the
      1933 Act, and the Corporation may restrict the transfer of such shares in such
      manner as it deems advisable to ensure the availability of any such exemption.
      The Committee may require each Participant purchasing or acquiring shares of
      Stock pursuant to an Award under the Plan to represent to and agree with the
      Corporation in writing that such Participant is acquiring the shares of Stock
      for investment purposes and not with a view to the distribution thereof. All
      certificates for shares of Stock delivered under the Plan shall be subject
      to
      such stock-transfer orders and other restrictions as the Committee may
      deem
      advisable under the rules, regulations and other requirements of the Securities
      and Exchange Commission, any exchange upon which the Stock is then listed,
      and
      any applicable securities law, and the Committee may cause a legend or legends
      to be put on any such certificates to make appropriate reference to such
      restrictions.

     

    16.14  SATISFACTION
      OF OBLIGATIONS.
      Subject
      to applicable law, the Corporation may apply any cash, shares of Stock,
      securities or other consideration received upon exercise or settlement of an
      Award to any obligations a Participant owes to the Corporation and its Parents,
      Subsidiaries or Affiliates in connection with the Plan or otherwise, including,
      without limitation, any tax obligations or obligations under a currency facility
      established in connection with the Plan.

     

    16.15  SECTION
      409A OF THE CODE.
      If any
      provision of the Plan or an Award Agreement contravenes any regulations or
      Treasury guidance promulgated under Section 409A or could cause an Award to
      be
      subject to the interest and penalties under Section 409A, such provision of
      the
      Plan or any Award Agreement shall be modified to maintain, to the maximum extent
      practicable, the original intent of the applicable provision without violating
      the provisions of Section 409A. Moreover, any discretionary authority that
      the
      Board or the Committee may have pursuant to the Plan shall not be applicable
      to
      an Award that is subject to Section 409A to the extent such discretionary
      authority will contravene Section 409A.

     

    16.16  GOVERNING
      LAW.
      To the
      extent not governed by federal law, the Plan and all Award Agreements shall
      be
      construed in accordance with and governed by the laws of the State of
      Delaware.

     

    
      
        
           

        

      

      
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    16.17  ADDITIONAL
      PROVISIONS.
      Each
      Award Agreement may contain such other terms and conditions as the Board or
      the
      Committee may determine, provided
      that
      such other terms and conditions are not inconsistent with the provisions of
      the
      Plan. In the event of any conflict or inconsistency between the Plan and an
      Award Agreement, the Plan shall govern and the Award Agreement shall be
      interpreted to minimize or eliminate such conflict or
      inconsistency.

     

    
      
        
           

        

      

      
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