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EXHIBIT 10.4




DIGENE CORPORATION




AMENDED AND RESTATED EQUITY INCENTIVE PLAN




Article I



Purpose




     The purpose of the Equity Incentive Plan (the “Plan”) is to enable Digene Corporation (the
“Company”) to offer Employees of the Company and its Subsidiaries equity interests in the Company
and options to acquire equity interests in the Company, thereby helping to attract, retain and
reward such persons and strengthen the mutuality of interests between such persons and the
Company’s stockholders.



Article II



Definitions




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



     2.1 “Award” shall mean an award under the Plan of a Stock Option, Stock Appreciation
Right, Restricted Stock Unit, Unrestricted Stock or Performance Shares.



     2.2 “Board” shall mean the Board of Directors of the Company.



     2.3 “Change of Control” shall mean (a) the reorganization, consolidation or merger of
the Company or any of its Subsidiaries holding or controlling a majority of the assets relating to
the business of the Company, with or into any third party (other than a Subsidiary); (b) the
assignment, sale, transfer, lease or other disposition of all or substantially all, but at least
40%, of the assets of the Company and its Subsidiaries taken as a whole (measured by gross fair
market value without regard to liabilities); or (c) the acquisition by any third party or group of
third parties acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934, as amended)
of shares of voting stock of the Company, the result of which in the case of any transaction
described in clauses (a), (b) and (c) above is that immediately after the transaction the
stockholders of the Company immediately before the transaction, other than the acquiror, own less
than fifty percent (50%) of the combined voting power of the outstanding voting securities entitled
to vote generally in the election of directors of the surviving or resulting corporation in a
transaction specified in clause (a) above, the acquiror in a transaction specified in clause (b)
above, or the Company or the acquiror in a transaction specified in clause (c) above.



     2.4 “Code” shall mean the Internal Revenue Code of 1986, as amended.



     2.5 “Committee” shall mean the Compensation Committee of the Board, or any other
committee of the Board designated by the Board to administer this Plan, with any such Committee
consisting of two or more members of the Board; provided, that if the Compensation Committee or any
other such committee does not meet the applicable independence requirements of Rule 16b-3(d)
promulgated under the Securities Exchange Act of 1934, or NASDAQ, for Awards to Reporting Persons
the term “Committee” shall mean the Board and for purposes of all













 







Awards granted to the Chief Executive Officer of the Company under this Plan the term
“Committee” shall mean the independent members of the Board.



     2.6 “Common Stock” shall mean the Common Stock, par value $0.01 per share, of the
Company.



     2.7 “Date of Grant” shall mean the date designated by the Committee as the date as of
which the Committee grants an Award, which shall not be earlier than the date on which the
Committee approves the granting of such Award.



     2.8 “Disability” shall mean a disability that results in a Participant’s Termination
of Employment with the Company or a Subsidiary, as determined pursuant to standard Company
procedures.



     2.9 “Effective Date” shall mean the date on which the Plan was originally adopted by
the Board.



     2.10 “Employee” shall mean any person engaged or proposed to be engaged as an officer
or employee of the Company or one of its Subsidiaries; provided, however, that in the case of an
Incentive Stock Option, the term “Employee” shall mean any employee of the Company or of a
“subsidiary corporation” (within the meaning of Section 424(f) of the Code) of the Company.



     2.11 “Fair Market Value” for purposes of the Plan, unless otherwise required by any
applicable provision of the Code or any regulations issued thereunder, shall mean with respect to
the Common Stock on any day, (i) the closing sales price (or other exchange-designated daily sales
price) on the immediately preceding business day of a share of Common Stock as reported on the
principal securities exchange on which shares of Common Stock are then listed or admitted to
trading, or (ii) if not so reported, the closing sales price (or other Nasdaq-designated daily
sales price) on the immediately preceding business day of a share of Common Stock as published in
the Nasdaq National Market Issues report in the Eastern Edition of The Wall Street Journal, or
(iii) if not so reported, the average of the closing (or other designated) bid and asked prices on
the immediately preceding business day as reported on the Nasdaq National Market System, or (iv) if
not so reported, as furnished by any member of the National Association of Securities Dealers, Inc.
selected by the Committee. In the event that the price of a share of Common Stock shall not be so
reported or furnished, the Fair Market Value of a share of Common Stock shall be determined by the
Committee in good faith. A “business day” is any day, other than Saturday or Sunday, on which the
relevant market is open for trading.



     2.12 “Incentive Stock Option” shall mean any Stock Option awarded under the Plan to an
Employee that is intended to be and designated as an “Incentive Stock Option” within the meaning of
Section 422 of the Code.



     2.13 “Non-Qualified Stock Option” shall mean any Stock Option granted under the Plan
that is not an Incentive Stock Option.



     2.14 “Participant” shall mean an Employee to whom an Award has been granted.



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     2.15 “Performance Goal” shall mean objective financial or operating goals and measures
established by the Committee in accordance with Section 162(m) of the Code. Such Performance Goals
for any Performance Shares Award must be established in writing not later than ninety (90) days
after the commencement of a Performance Period; provided that the outcome of each Performance Goal
is substantially uncertain at the time the Performance Goal is established. Such Performance Goals
may relate to identified business units, or the Company or any Subsidiary and be based upon such
performance criteria or combination of factors as the Committee may deem appropriate, including,
but not limited to, specified levels of earnings per share, return on investment, return on
stockholders’ equity, sales, costs or other objective measures related to the Company’s
performance.



     2.16 “Performance Period” shall mean the period of time selected by the Committee
during which the achievement of Performance Goals is measured for purposes of determining the
extent to which an applicable Performance Shares Award has been earned or will vest.



     2.17 “Performance Shares” shall mean an Award, granted pursuant to Article VII of this
Plan, of the contingent right to receive a designated number of shares of Common Stock, payable in
Common Stock, cash, or a combination of both (depending on the medium of payment selected by the
Committee), at the end of a specified Performance Period if specified Performance Goals are
achieved. Such rights are subject to forfeiture or reduction if the applicable Performance Goals
are not met within the applicable Performance Period.



     2.18 “Performance Shares Award” shall mean an Award of Performance Shares.



     2.19 “Performance Shares Award Commitment” shall mean the written commitment delivered
by the Company to the Participant evidencing a Performance Shares Award and setting forth such
terms and conditions of the Award as may be deemed appropriate by the Committee. The Performance
Shares Award Commitment shall be in a form approved by the Committee, and once executed, shall be
deemed amended from time to time to include such additional terms and conditions as the Committee
may specify after the execution in the exercise of its powers under the Plan.



     2.20 “Restricted Stock Unit” shall mean an Award granted pursuant to Section 8.1
hereof, subject to such restrictions as the Committee may determine, as evidenced in a Restricted
Stock Unit Agreement. Shares of Common Stock issuable under a Restricted Stock Unit Award will be
issued when, in accordance with the terms of the Restricted Stock Unit Agreement, they become
transferable and free of risk of forfeiture.



     2.21 “Restricted Stock Unit Agreement” shall mean the agreement evidencing the grant
of Restricted Stock Units to an Employee pursuant to this Plan.



     2.22 “Restriction Period” shall have the meaning set forth in Section 8.2(c).



     2.23 “Stock Appreciation Rights” shall mean an Award, granted pursuant to Article IX
of this Plan, of the right to receive an amount equal to the excess of (i) the Fair Market Value
per share of Common Stock at the time of exercise, over (ii) a specified exercise price which shall
not be less than 100% of the Fair Market Value of the Common Stock on the Date of Grant of the
Stock Appreciation Rights Award, multiplied by the number of shares of Common Stock with respect to
which the Stock Appreciation Rights shall have been exercised, payable in



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Common Stock, cash, or a combination of both (depending on the medium of payment selected by
the Committee) upon the exercise thereof.



     2.24 “Stock Option” or “Option” shall mean any option to purchase shares of
Common Stock granted pursuant to Article VI hereof.



     2.25 “Subsidiary” shall mean any subsidiary of the Company, 50% or more of the voting
stock of which is owned, directly or indirectly, by the Company, that is currently existing as of
the Effective Date or formed or acquired by the Company while any Award is outstanding under the
Plan.



     2.26 “Termination of Employment” shall mean a termination of employment with the
Company and all of its Subsidiaries for reasons other than a military or personal leave of absence
granted by the Company or any Subsidiary.



     2.27 “Unrestricted Stock” shall mean Common Stock granted under Section 8.3 hereof.



     2.28 “Unrestricted Stock Agreement” shall mean the agreement evidencing the grant of
Unrestricted Stock to an Employee pursuant to this Plan.



Article III



Administration




     3.1 The Committee. The Plan shall be administered and interpreted by the Committee.



     3.2 Awards. The Committee shall have full authority to grant, pursuant to the terms
of the Plan, Stock Options, Stock Appreciation Rights, Restricted Stock Units, Unrestricted Stock
or Performance Shares to persons eligible under Article V. In particular, the Committee shall have
the authority:



          (a) to select the persons to whom Stock Options, Stock Appreciation Rights, Restricted Stock
Units, Unrestricted Stock or Performance Shares may from time to time be granted;




          (b) to determine whether and to what extent Incentive Stock Options, Non-Qualified Stock
Options, Stock Appreciation Rights, Restricted Stock Units, Unrestricted Stock or Performance
Shares, or any combination thereof, are to be granted to one or more persons eligible to receive
Awards under Article V;




          (c) to determine the number of shares of Common Stock to be covered by each Award granted
hereunder; and




          (d) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any
Award granted hereunder (including, but not limited to, the option price, the option term, and
provisions relating to any restriction or limitation, any vesting schedule or acceleration, any
performance guidelines or criteria or any forfeiture restrictions or waiver provisions of the
Award), and any conditions (in addition to those contained in this Plan) on the




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exercisability of all or any part of an Option or Stock Appreciation Right, or on the
transferability or forfeitability of Restricted Stock Units. Notwithstanding any such conditions,
the Committee may, in its discretion at any time, accelerate the time at which any Option or Stock
Appreciation Right may be exercised or the time at which the Common Stock underlying Restricted
Stock Units may become transferable or nonforfeitable.




     3.3 Guidelines. Subject to Article X hereof, the Committee shall have the authority
to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan
as it shall, from time to time, deem advisable; to interpret the terms and provisions of the Plan
and any Award granted under the Plan (and any agreements relating thereto); and to otherwise
supervise the administration of the Plan. The express grant in the Plan of any specific power to
the Committee shall not be construed as limiting any other power or authority of the Committee.
The Committee may correct any defect, supply any omission or reconcile any inconsistency in the
Plan or in any Award in the manner and to the extent it shall deem necessary or advisable to carry
out the purposes of the Plan. Notwithstanding the foregoing, no action of the Committee under this
Section 3.3 shall impair the rights of any Participant without the Participant’s consent, unless
otherwise required by law.



     A majority of the entire Committee shall constitute a quorum, and the action of a majority of
the members present at any meeting at which a quorum is present shall be deemed the action of the
Committee. In addition, any decision or determination reduced to writing and signed by all of the
members of the Committee shall be fully as effective as if it had been made by a majority vote at a
meeting duly called and held. Subject to the provisions of this Plan and the Company’s Bylaws, and
to any terms and conditions prescribed by the Board, the Committee may make such additional rules
and regulations for the conduct of its business as it shall deem advisable. The Committee shall
hold meetings at such times and places as it may determine.



     3.4 Decisions Final. Any decision, interpretation or other action made or taken in
good faith by the Committee arising out of or in connection with the Plan shall be final, binding
and conclusive on the Company, all Participants and their respective heirs, executors,
administrators, successors and assigns.



Article IV



Share Limitation




     4.1 Shares. The maximum aggregate number of shares of Common Stock that may be issued
under the Plan is 5,600,000 (subject to increase or decrease pursuant to Section 4.3), which may be
either authorized and unissued shares of Common Stock or authorized and issued shares of Common
Stock reacquired by the Company; provided that any grant of Performance Shares, Restricted Stock
Units or Unrestricted Stock under the Plan on or after October 26, 2005 will be counted against the
maximum aggregate number of shares issuable under the Plan as two shares of Common Stock for every
one share of Common Stock subject thereto. If any Option or Stock Appreciation Right granted under
the Plan shall expire, terminate or be canceled for any reason without having been exercised in
full, the number of shares of Common Stock not purchased under such Option or Stock Appreciation
Right shall again be available for the purposes of the Plan. Further, if any Performance Shares
are unearned or forfeited, or Restricted Stock Units are forfeited, the shares subject to the
portion of such Award unearned or forfeited,



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as the case may be, shall again be available under the Plan; provided that, to the extent that
a share of Common Stock that was subject to an Award that counted as two shares against the maximum
aggregate number of shares issuable under the Plan is recycled back into the Plan, the Plan will be
credited with two shares. Notwithstanding anything to the contrary in this Section 4.1, (i) should
the exercise price of a Stock Option be paid with shares of Common Stock or by reducing the number
of shares of Common Stock issuable upon such exercise, or (ii) should shares of Common Stock
otherwise issuable under the Plan be paid in cash or withheld by the Company in satisfaction of the
withholding taxes incurred in connection with the exercise of a Stock Option or the vesting of an
Award, then the number of shares of Common Stock available for issuance under the Plan shall be
reduced by the gross number of shares for which the Stock Option is exercised or which vest under
the Award, and not by the net number of shares of Common Stock issued to the holder of such Stock
Option or Award.




     4.2 Individual Limit. No Employee may be granted Awards covering more than 500,000
shares of Common Stock (subject to increase or decrease pursuant to Section 4.3) during any
calendar year.



     4.3 Changes. In the event of any increase or decrease in the number of issued shares
of Common Stock resulting from a merger, reorganization, consolidation, recapitalization, stock
dividend, stock split or subdivision, such automatic substitution or adjustment shall be made in
the maximum aggregate number of shares which may be issued under this Plan, the maximum number of
shares with respect to which Awards may be granted to any individual during any year, the number
and exercise price of shares subject to outstanding Options and Stock Appreciation Rights, and the
number of shares subject to other outstanding Awards, as the Committee determines shall cause an
equitable adjustment under this Plan, in proportion to the effect of such change to the Common
Stock generally; provided that the number of shares subject to any Award shall be rounded down to
the nearest whole number so that the number of shares subject to any Award shall always be a whole
number. In the event of a change in the Common Stock as presently constituted, which change is
limited to a change of all of the authorized shares with par value into the same number of shares
with a different par value or without par value, the shares resulting from any such change shall be
deemed to be the Common Stock within the meaning of this Plan.



Article V



Eligibility




     5.1 Awards to Employees. All officers and other Employees of the Company and its
Subsidiaries are eligible to be granted Incentive Stock Options, Non-Qualified Stock Options, Stock
Appreciation Rights, Restricted Stock Units, Unrestricted Stock or Performance Shares under the
Plan. A Director who is an Employee of the Company or a Subsidiary shall be eligible to receive
Awards pursuant to this Article V.



Article VI



Stock Options




     6.1 Options. Each Stock Option granted under the Plan shall be either an Incentive
Stock Option or a Non-Qualified Stock Option.



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     6.2 Grants. The Committee shall have the authority to grant to any person eligible
under Section 5.1 one or more Incentive Stock Options, Non-Qualified Stock Options, or both types
of Stock Options. To the extent that any Stock Option does not qualify as an Incentive Stock
Option (whether because of its provisions or the time or manner of its exercise or otherwise), such
Stock Option or the portion thereof which does not qualify as an Incentive Stock Option shall
constitute a separate Non-Qualified Stock Option.



     6.3 Incentive Stock Options. Anything in the Plan to the contrary notwithstanding, no
term of the Plan relating to Incentive Stock Options shall be interpreted, amended or altered, nor
shall any discretion or authority granted under the Plan be exercised, so as to disqualify the Plan
under Section 422 of the Code, or, without the consent of the Participants affected, to disqualify
any Incentive Stock Option under such Section 422 of the Code.



     6.4 Terms of Options. Options granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:



          (a) Stock Option Certificate. Each Stock Option shall be evidenced by, and subject to
the terms of, a Stock Option Certificate evidencing the Stock Option grant. The Stock Option
Certificate shall specify whether the Option is an Incentive Stock Option or a Non-Qualified Stock
Option, the number of shares of Common Stock subject to the Stock Option, the option price, the
option term, and the other terms and conditions applicable to the Stock Option.




          (b) Option Price. Subject to subsection (m) below, the option price per share of
Common Stock purchasable upon exercise of a Stock Option shall be determined by the Committee at
the time of grant, but shall be not less than 100% of the Fair Market Value of the Common Stock on
the Date of Grant.




          (c) Option Term. Subject to subsection (m) below, the term of each Stock Option shall
be fixed by the Committee at the time of grant, but no Stock Option granted prior to September 20,
2005 shall be exercisable more than ten years after the date it is granted and no Stock Option
granted on or after September 20, 2005 shall be exercisable more than seven years after the date it
is granted.




          (d) Exercisability. Stock Options shall be exercisable at such time or times and
subject to such terms and conditions as shall be determined by the Committee at the time of grant;
provided, however, that the Committee may waive any installment exercise or waiting period
provisions, in whole or in part, at any time after the Date of Grant, based on such factors as the
Committee shall deem appropriate in its sole discretion.




          (e) Method of Exercise. Subject to such installment exercise and waiting period
provisions as may be imposed by the Committee, Stock Options may be exercised in whole or in part
at any time during the option term by delivering to the Company written notice of exercise
specifying the number of shares of Common Stock to be purchased and the option price therefor. The
notice of exercise shall be accompanied by payment in full of the option price and, if requested,
by the representation described in Section 12.2. Payment of the option price may be made (i) in
cash or by check payable to the Company, (ii) unless otherwise determined by the Committee on or
after the Date of Grant, in shares of Common Stock duly




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owned by the Participant (and for which the Participant has good title free and clear of any
liens and encumbrances) or (iii) in the case of an Option that is not an Incentive Stock Option,
unless otherwise determined by the Committee on or after the Date of Grant, by reduction in the
number of shares of Common Stock issuable upon such exercise, based, in each case, on the Fair
Market Value of the Common Stock on the date of exercise. Upon satisfaction of the conditions
provided herein, a stock certificate representing the number of shares of Common Stock to which the
Participant is entitled shall be issued and delivered to the Participant, subject to Section 12.3.
For the purpose of assisting a Participant to exercise an Option, the Company may, in the
discretion of the Board, make loans to the Participant or guarantee loans made by third parties to
the Participant, in either case on such terms and conditions as the Board may authorize. Nothing
contained in this Plan shall prevent or prohibit a Participant from exercising his or her Options
under a broker-facilitated cashless exercise transaction.




          (f) Death. Unless otherwise determined by the Committee on or after the Date of
Grant, in the event of a Participant’s Termination of Employment by reason of death, any Stock
Option held by such Participant which was exercisable on the date of death may thereafter be
exercised by the legal representative of the Participant’s estate until the earlier of one year
after the date of death or the expiration of the stated term of such Stock Option, and any Stock
Option not exercisable on the date of death shall be forfeited.




          (g) Disability. Unless otherwise determined by the Committee on or after the Date of
Grant, in the event of a Participant’s Termination of Employment by reason of Disability, any Stock
Option held by such Participant which was exercisable on the date of such Termination of Employment
may thereafter be exercised by the Participant until the earlier of one year after such date or the
expiration of the stated term of such Stock Option, and any Stock Option not exercisable on the
date of such Termination of Employment shall be forfeited. If the Participant dies during such
one-year period, any unexercised Stock Options held by the Participant at the time of death may
thereafter be exercised by the legal representative of the Participant’s estate until the earlier
of one year after the date of the Participant’s death or the expiration of the stated term of such
Stock Option. If an Incentive Stock Option is exercised after the expiration of the exercise
period that applies for purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Non-Qualified Stock Option.




          (h) Termination of Employment. Subject to Section 12.4, in the event of a
Participant’s Termination of Employment by reason of retirement or for any reason other than death
or Disability, all Stock Options held by such Participant that were exercisable on the date of such
Termination of Employment may be exercised by the Participant at any time during the longer of: (i)
the three (3) month period after his or her Termination of Employment; or (ii) in the case of an
Option that is not an Incentive Stock Option and in the sole discretion of the Committee and as
long as such change does not have an adverse affect under Section 409A of the Code, if, at the time
of the Participant’s Termination of Employment, the Participant is engaged as a consultant by the
Company, the period during which the Participant is engaged as a consultant by the Company but not
to exceed twelve (12) months after the Participant’s Termination of Employment; provided, however,
that if the Committee shall determine that the Employee’s employment was terminated for conduct
that in the judgment of the Committee involves dishonesty or action by the Employee that is
detrimental to the best interest of the Company, all Stock Options held by the Employee on the date
of such Termination of Employment shall be forfeited. Notwithstanding anything to the contrary in
this Subsection, but



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subject to the last sentence of this Subsection, a Stock Option shall not terminate upon a
Participant’s Termination of Employment if at the time thereof the Participant serves as a Director
of the Company or its successor. In such event, once the Participant ceases to be a Director of
the Company or its successor, all Stock Options held by such Participant that were exercisable on
the date the Participant ceased to be a Director may be exercised by the Participant at any time
during the three month period after the Participant ceases to be a Director. Notwithstanding
anything to the contrary in this Subsection, no Stock Option may be exercised after the expiration
of the stated term of such Stock Option.




          (i) Change of Control. Notwithstanding the provisions of Section 4.3, in the event of
a Change of Control, all outstanding Stock Options shall immediately become fully exercisable, and
upon payment by the Participant of the option price (and, if requested, delivery of the
representation described in Section 12.2), a stock certificate representing the Common Stock
covered thereby shall be issued and delivered to the Participant. This Section 6.4(i) shall apply
to any outstanding Stock Options which are Incentive Stock Options to the extent permitted by Code
Section 422(d), and any outstanding Incentive Stock Options in excess thereof shall, immediately
upon the occurrence of such a Change of Control be treated for all purposes of the Plan as
Non-Qualified Stock Options and shall be immediately exercisable as set forth in this Section
6.4(i).




          (j) Merger and Other Fundamental Transactions. In the event the Company is succeeded
by another company in a reorganization, merger, consolidation, acquisition of property or stock,
separation or liquidation, the successor company shall assume all of the outstanding Options
granted under this Plan or shall substitute new options for them, which shall provide that each
Participant, at the same cost, shall be entitled upon the exercise of each such option to receive
such securities as the Board of Directors (or equivalent governing body) of the succeeding,
resulting or other company shall determine to be equivalent, as nearly as practicable, to the
nearest whole number and class of shares of stock or other securities to which the Participant
would have been entitled under the terms of the agreement governing the reorganization, merger,
consolidation, acquisition of property or stock, separation or liquidation as if, immediately prior
to such event, the Participant had been the holder of record of the number of shares of Common
Stock which were then subject to the outstanding Option granted under this Plan.




          (k) Non-Transferability of Options. No Stock Option shall be transferable by the
Participant otherwise than by will or by the laws of descent and distribution, to the extent
consistent with the terms of the Plan and the Option, and all Stock Options shall be exercisable,
during the Participant’s lifetime, only by the Participant.




          (l) Incentive Stock Option Limitations. To the extent that the aggregate Fair Market
Value (determined as of the Date of Grant) of the Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by the Participant during any calendar year under
the Plan and/or any other stock option plan of the Company or any subsidiary or parent corporation
(each within the meaning of Section 424 of the Code) exceeds $100,000, such Options shall be
treated as Options which are not Incentive Stock Options.




          (m) Ten-Percent Stockholder Rule. Notwithstanding any other provision of the Plan to
the contrary, no Incentive Stock Option shall be granted to any person who,



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immediately prior to the grant, owns stock possessing more than ten percent of the total
combined voting power of all classes of stock of the Company or any subsidiary or parent
corporation (each within the meaning of Section 424 of the Code), unless the option price is at
least 110% of the Fair Market Value of the Common Stock on the Date of Grant and the Option, by its
terms, expires no later than five years after the Date of Grant.




     Should the foregoing provisions not be necessary in order for the Stock Options to qualify as
Incentive Stock Options, or should any additional provisions be required, the Committee may amend
the Plan accordingly, without the necessity of obtaining the approval of the stockholders of the
Company.



     6.5 Rights as Stockholder. A Participant shall not be deemed to be the holder of
Common Stock, or to have any of the rights of a holder of Common Stock, with respect to shares
subject to the Option, unless and until the Option is exercised and a stock certificate
representing such shares of Common Stock is issued to the Participant.



Article VII



Performance Shares




     7.1 Award of Performance Shares. The Committee shall have the authority to award
Performance Shares to any person eligible under Section 5.1. The Committee shall determine the
eligible Employees to whom, and the time or times at which, Performance Shares shall be awarded,
the number of Performance Shares to be awarded to any Employee, the duration of the Performance
Period with respect to each Performance Shares Award, the medium of payment upon vesting and the
other terms and conditions of the Performance Shares Award, including those set forth in Section
7.2.



     7.2 Terms and Conditions. Performance Shares awarded pursuant to this Article VII
shall be subject to the following terms and conditions and such other terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall deem desirable:



     (a) Performance Period. At the time of a Performance Shares Award, the Committee, in
its sole discretion, shall establish a Performance Period of not less than (1) year nor more than
five (5) years, commencing on the Date of Grant of the Performance Shares Award.



     (b) Performance Goals. A Performance Shares Award will vest and be earned based on
the attainment of one or more identified Performance Goals determined by the Committee. The
Performance Goals (although their measurement, including adjustments, if any, as permitted under
Subsection 7.2(c), will not occur until after the expiration of the applicable Performance Period)
must be met during the continuance of the Participant’s employment with the Company or any
Subsidiary, prior to the expiration of the applicable Performance Period. Performance Goals may
vary among Participants and among Performance Shares Awards to a Participant.



     (c) Revisions for Significant Events. When circumstances occur (including, but not
limited to, unusual or nonrecurring events, changes in tax laws or accounting principles or
practices) that cause any Performance Goal to be inappropriate in the judgment of the



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Committee, the Committee may make such changes as it deems equitable in recognition of any
unforeseen events or changes in circumstances or changed business or economic conditions, as long
as any such changes are consistent with Section 162(m) of the Code.




     (d) Performance Shares Award Commitment. Each Performance Shares Award shall be
evidenced by, and subject to the terms of, a Performance Shares Award Commitment. The Performance
Shares Award Commitment shall specify the number of shares of Common Stock subject to the
Performance Shares Award, the medium of payment, the applicable Performance Period and the other
terms and conditions applicable to such Performance Shares Award.



     (e) Changes. If any change is made in the Common Stock by reason of any merger,
consolidation, reorganization, recapitalization, stock dividend, split up, combination of shares,
exchange of shares, change in corporate structure, or otherwise, the Committee shall be entitled to
determine the impact of such event on outstanding Performance Shares Awards, and to make
adjustments to each Performance Shares Award to the extent necessary to provide that the
Participant receive, to the extent possible, equivalent rights under such Performance Shares Award
after consummation of such event.



     (f) Achievement of Performance Goals. Within a period of time determined by the
Committee, but not to exceed 90 days after the end of a Performance Period, the Committee will
determine if the applicable Performance Goals were met with respect to applicable Performance
Shares Awards. If the Committee certifies in writing, after the expiration of the Performance
Period, that the Performance Goals specified in a Performance Shares Award Commitment and all other
material terms of the Award have been satisfied, the Performance Shares Award shall be vested and
earned in accordance with such Committee certification.



     (g) Payment of Performance Shares Awards. Payment of a vested, earned Performance
Shares Award shall be made either in shares of Common Stock, or in cash, or in some combination
thereof, as determined by the Committee. The medium of payment shall be set forth in the
Committee’s resolution granting the Performance Shares Award and in the Performance Shares Award
Commitment with the Participant. For an earned Performance Shares Award, or portion thereof, to be
settled through the issuance of shares of Common Stock, the number of shares delivered shall be
equal to the number of applicable Performance Shares earned. The holder may elect to reduce this
amount by the number of shares of Common Stock which have, on the date the Performance Shares Award
is settled, a Fair Market Value equal to the applicable federal, state and local withholding tax
due on the receipt of the Common Stock, in lieu of making a cash payment equal to the amount of
such withholding tax due. For an earned Performance Shares Award, or portion thereof, to be
settled in cash, the amount of cash paid shall be equal to the number of applicable Performance
Shares earned multiplied by the Fair Market Value of a share of Common Stock on such date following
the lapse of the Performance Period and the satisfaction of any other applicable conditions
established by the Committee at the time of grant, that the Participant first becomes entitled to
receive such payment. Such amount will be reduced by applicable federal, state and local
withholding tax due. For any earned Performance Shares Award paid in cash, the shares of Common
Stock designated in the Performance Shares Award shall be deemed to have been issued for purposes
of Section 4.1 hereof.



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     (h) Non-Transferability of Performance Shares Awards. No Performance Shares Awards
shall be transferable by the Participant prior to the determination that such Performance Shares
Award is vested and earned, otherwise than by will or by the laws of descent and distribution, to
the extent consistent with the terms of the Plan.



     7.3 Death or Disability. Subject to the provisions of this Plan and the Performance
Shares Award Commitment, in the event of the death or Disability of a Participant, the Participant
or the Participant’s estate, as the case may be, shall be entitled to receive, at the expiration of
the Performance Period, a percentage of Performance Shares that is equal to the percentage of the
Performance Period that had elapsed as of the date of death or date on which such Disability
commenced (as determined by the Committee in its sole discretion); provided that the Committee, in
its sole discretion, determines that the conditions specified in the Performance Shares Awards
Commitment have been satisfied. Payment of such portion of the Performance Shares Award shall be
made to the Participant or the Participant’s estate, as the case may be, in accordance with this
Article VII.



     7.4 Change of Control. At the time a Performance Shares Award is made by the
Committee, the Committee shall be entitled, notwithstanding the provisions of Section 4.3, to
provide for different terms and provisions in the event of a Change in Control, including, but not
limited to, the authority to provide for the settlement of a Performance Shares Award, regardless
of whether the applicable Performance Period has expired or whether the applicable Performance
Goals have been met.



     7.5 Termination of Employment. Subject to Sections 7.4 and 12.4, in the event of a
Participant’s Termination of Employment by reason of retirement or for any reason other than death
or Disability, all Performance Shares Awards held by such Participant that were earned on the date
of such Termination of Employment will be paid to the Participant; provided, however, that if the
Committee shall determine that the Employee’s employment was terminated for conduct that in the
judgment of the Committee involves dishonesty or action by the Employee that is detrimental to the
best interest of the Company, all earned but unpaid Performance Shares held by the Employee on the
date of such Termination of Employment shall be forfeited. Notwithstanding anything to the
contrary in this Subsection, a Performance Shares Award shall not terminate upon a Participant’s
Termination of Employment if at the time thereof the Participant serves as a Director of the
Company or its successor, in which event the Performance Shares Awards shall terminate if the
Participant ceases to be a Director of the Company or its successor, and any earned Performance
Shares Award will be then paid in accordance with this Subsection.



Article VIII



Restricted Stock Units and Unrestricted Stock




     8.1 Awards of Restricted Stock Units. The Committee shall have the authority to grant
to any person eligible under Section 5.1 one or more Restricted Stock Unit Awards. The Committee
shall determine the eligible Employees to whom, and the time or times at which, grants of
Restricted Stock Units will be made, the number of shares to be awarded, the time or times within
which such Awards may be subject to forfeiture, the vesting schedule and rights to



12









 




acceleration thereof, and the other terms and conditions of the Awards in addition to those
set forth in Section 8.2.




     8.2 Terms and Conditions. Restricted Stock Units shall be subject to the following
terms and conditions and such other terms and conditions, not inconsistent with the terms of the
Plan, as the Committee shall deem desirable:



(a) Restricted Stock Unit Agreement. Each Restricted Stock Unit Award shall be
evidenced by, and subject to the terms of, a Restricted Stock Unit Agreement executed by the
Company and the Participant. The Restricted Stock Unit Agreement shall specify the number of
shares of Common Stock subject to the Award, the time or times within which such Award is subject
to forfeiture and the other terms, conditions and restrictions applicable to such Award.



(b) Stock Certificate. Subject to Section 12.3, when the restrictions applicable to a
Restricted Stock Unit Award, or any portion thereof, lapse, a stock certificate representing the
number of shares of Common Stock covered by such Restricted Stock Unit Award, or portion thereof,
shall be issued and delivered to the Participant. A Participant shall not be deemed to be the
holder of Common Stock, or to have any of the rights of a holder of Common Stock, with respect to
shares underlying any Restricted Stock Unit Award, unless and until the forfeiture restrictions
lapse and a stock certificate representing such shares of Common Stock is issued to the
Participant.



(c) Restriction Period. Subject to the provisions of the Plan and the Restricted
Stock Unit Agreement, Restricted Stock Units will be forfeited to the Company in the event of a
Participant’s Termination of Employment during a period (not to exceed five years) set by the
Committee commencing with the date of such Award (the “Restriction Period”). Subject to the
provisions of the Plan, the Committee, in its sole discretion, may provide for the lapse of such
restrictions in installments and may waive such restrictions, in whole or in part, at any time,
based on such factors as the Committee shall deem appropriate in its sole discretion.



(d) Termination of Employment. Subject to Section 12.4, in the event of a
Participant’s Termination of Employment prior to the expiration of the Restriction Period, then he
or she shall forfeit all of his or her Restricted Stock Units with respect to which the Restriction
Period has not yet expired; provided, however, that the terms of the Restricted Stock Unit
Agreement, in the discretion of the Committee and pursuant to such terms and conditions as it may
impose, may provide: (i) that, if such Employee’s employment is terminated for any reason other
than conduct that in the judgment of the Committee involves dishonesty or action by the Employee
that is detrimental to the best interests of the Company, then the Restricted Stock Units or any
related compensation deferral or a portion thereof shall not be forfeited; (ii) that, if such
Employee’s employment is terminated on account of Disability, then the Employee shall not forfeit
his or her Restricted Stock Units or any related compensation deferral or a portion thereof; and
(iii) that, if such Employee dies while employed by the Company or any of its Subsidiaries, then
his or her Restricted Stock Units or any related compensation deferral or a portion thereof is not
forfeited.



(e) Changes. If any change is made in the Common Stock by reason of any merger,
consolidation, reorganization, recapitalization, stock dividend, split up, combination of




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shares, exchange of shares, change in corporate structure, or otherwise, then any shares or
other securities of the Company or succeeding, resulting or other company to be received by the
Employee under the Restricted Stock Unit Agreement shall be subject to the same restrictions
applicable to the Restricted Stock Units.




          (f) Non-Transferability of Restricted Stock Unit Awards. No Restricted Stock Units
shall be transferable by the Participant prior to vesting and/or lapse of the applicable forfeiture
restrictions otherwise than by will or by the laws of descent and distribution, to the extent
consistent with the terms of the Plan.




     8.3 Unrestricted Stock. The Committee shall have the authority to grant to any person
eligible under Section 5.1 one or more Unrestricted Stock Awards. Each Employee who is awarded
Unrestricted Stock shall receive an Unrestricted Stock Agreement from the Company in a form
specified by the Committee and containing the terms and conditions of the award and such other
matters, consistent with this Plan, as the Committee, in its sole discretion, shall determine at
the time the Award is made. Such conditions may include, but shall not be limited to, the deferral
of a percentage of the Employee’s annual cash compensation, not including dividends paid on the
Unrestricted Stock, if any, to be applied toward the purchase of Unrestricted Stock upon such terms
and conditions, including such discounts, as may be set forth in the Unrestricted Stock Agreement.
Upon the issuance of Unrestricted Stock to an Employee hereunder, the Employee shall have the
entire beneficial ownership and all the rights and privileges of a stockholder with respect to the
Unrestricted Stock awarded to him or her, including the right to receive dividends and the right to
vote such Unrestricted Stock. Subject to Section 12.3, each Employee who is awarded Unrestricted
Stock may, but need not, be issued a stock certificate in respect of such shares of Unrestricted
Stock.



Article IX



Stock Appreciation Rights




     9.1 Stock Appreciation Rights. The Committee shall have the authority to grant Stock
Appreciation Rights to any Participant eligible to receive Awards under this Plan. Stock
Appreciation Rights may, but need not, be granted in conjunction with a contemporaneous grant of a
Stock Option. If a Stock Appreciation Rights Award is granted in conjunction with a Stock Option
Award, the terms of the Stock Option Award shall apply to the Stock Appreciation Rights Award as
well, subject to any additional terms as contemplated by this Article IX.



     9.2 Terms. Stock Appreciation Rights shall be subject to the following terms and
conditions, and to such terms and conditions which may be set forth in the certificate evidencing
the Stock Appreciation Rights Award, which certificate may provide such other terms, conditions and
provisions, not inconsistent with the terms of this Plan, as the Committee may direct.



          (a) Award. Stock Appreciation Rights shall entitle the Participant, subject to such
terms and conditions determined by the Committee, to receive upon exercise thereof payment in the
form described in Section 9.2(c) equal to the excess of (i) the Fair Market Value per share of
Common Stock at the time of exercise, over (ii) a specified exercise price which shall not be less
than 100% of the Fair Market Value of the Common Stock on the Date of Grant

14









 








of the Stock Appreciation Rights Award, multiplied by the number of shares of Common Stock
with respect to which the Stock Appreciation Rights shall have been exercised.




          (b) Vesting Period and Term. The period or periods of time within which the Stock
Appreciation Rights will vest and may be exercised, in whole or in part, shall, if the Stock
Appreciation Rights Award is granted in conjunction with a Stock Option Award, be co-extensive with
the vesting schedule of the Stock Option Award. If the Stock Appreciation Rights Award is granted
as a stand-alone Award, the Committee shall determine the vesting schedule, if any, and term of the
Stock Appreciation Rights Award. The Committee shall have the power to permit an acceleration of
previously established vesting periods, subject to the requirements set forth in this Plan, upon
such circumstances and subject to such terms and conditions as the Committee deems appropriate.




          (c) Exercise. Upon exercise of a Stock Appreciation Right, the Participant shall be
entitled to receive payment in the form of shares of Common Stock (rounded down to the next whole
number of shares so that no fractional shares of Common Stock are issued), cash, or any combination
thereof. The form of payment shall be determined by the Committee in its sole discretion. The
Company shall be entitled to withhold tax required to be withheld from the payment upon exercise of
the Stock Appreciation Rights Award. The exercise of Stock Appreciation Rights shall result in the
termination of the Stock Appreciation Rights with respect to the number of shares of Common Stock
covered by the exercise and, if granted in conjunction with a Stock Option Award, shall also result
in the termination of the related Stock Options with respect to the number of shares of Common
Stock covered by the exercise.




          (d) Other Terms. The provisions of Section 6.4(f) (Death), (g) (Disability), (h)
(Termination of Employment), (i) (Change of Control), (j) (Merger and Other Fundamental
Transactions), and (k) (Non-Transferability of Options) of this Plan shall apply to all Stock
Appreciation Rights Awards under this Plan, substituting the reference to “Option” with “Stock
Appreciation Rights” as applicable.




     9.3 Rights as Stockholder. A Participant shall not be deemed to be the holder of
Common Stock, or to have any of the rights of a holder of Common Stock, with respect to shares
subject to any Stock Appreciation Rights Award, unless and until the Stock Appreciation Rights
Award is exercised and paid in shares of Common Stock, if applicable, and a stock certificate
representing such shares of Common Stock is issued by the Participant.



     9.4 Effect of Share Reserve. The number of shares of Common Stock with respect to
which Stock Appreciation Rights are exercised (rather than the number of shares issued by the
Company upon such exercise) shall be deemed for the purpose of Section 4.1 of this Plan to have
been issued upon such exercise, and shall not thereafter be available for issuance under this Plan.



Article X



Termination or Amendment




     10.1 Termination or Amendment of Plan. The Committee may at any time amend,
discontinue or terminate the Plan or any part thereof (including any amendment deemed necessary to
ensure that the Company may comply with any regulatory requirement referred to in Article XII) or
amend any Award previously granted, prospectively or retroactively (subject to



15









 




Article IV); provided, however, that, (i) unless otherwise required by law, the rights of a
Participant with respect to Awards granted prior to such amendment, discontinuance or termination
may not be impaired without the consent of such Participant; (ii) except as otherwise provided in
Section 4.3 hereof, the Committee shall not reduce the exercise price of Stock Options previously
awarded to any Participant, whether through amendment, cancellation and replacement grant, or any
other means, without prior stockholder approval; and (iii) the Company will seek the approval of
the Company’s stockholders for any amendment if such approval is necessary to comply with the Code,
Federal or state securities laws or any other applicable laws or regulations, including the
Marketplace Rules of the National Association of Securities Dealers, Inc.




Article XI



Unfunded Plan




     11.1 Unfunded Plan. The Plan is intended to constitute an “unfunded” plan for
incentive compensation. With respect to any payment not yet made to a Participant by the Company,
nothing contained herein shall give any such Participant any rights that are greater than those of
a general creditor of the Company.



Article XII



General Provisions




     12.1 Nonassignment. Except as otherwise provided in the Plan, any Award granted
hereunder and the rights and privileges conferred thereby shall not be sold, transferred, assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise), and shall not be
subject to execution, attachment or similar process. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of an Award, right or privilege contrary to the provisions hereof,
or upon the levy of any attachment or similar process thereon, such Award and the rights and
privileges conferred hereby shall immediately terminate and the Award shall immediately be
forfeited to the Company.



     12.2 Legend. The Committee may require each person acquiring shares pursuant to an
Award to represent to the Company in writing that the Participant is acquiring the shares without a
view to distribution thereof. The stock certificates representing such shares may include any
legend which the Committee deems appropriate to reflect any restrictions on transfer.



     All certificates representing shares of Common 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 stock
exchange or stock market upon which the Common Stock is then listed or traded, any applicable
Federal or state securities law, and any applicable corporate law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate reference to such
restrictions.



     12.3 Uncertificated Shares. Each Employee who exercises an Option to acquire Common
Stock, is issued Common Stock upon exercise of a Stock Appreciation Rights Award, is issued Common
Stock upon the vesting of a Performance Shares Award or lapse of forfeiture



16









 







restrictions under a Restricted Stock Unit Award or is issued Unrestricted Stock may, but need
not, be issued a stock certificate in respect of the Common Stock so acquired. A “book entry”
(i.e., a computerized or manual entry) shall be made in the records of the Company to
evidence the issuance of shares of Common Stock to an Employee where no certificate is issued in
the name of the Employee. Such Company records, absent manifest error, shall be binding on
Employees. In all instances where the date of issuance of shares may be deemed significant but no
certificate is issued in accordance with this Section 12.3, the date of the book entry shall be the
relevant date for such purposes.



     12.4 Forfeiture for Competition. If a Participant in this Plan provides services to a
competitor of the Company or any of its subsidiaries, whether as an employee, officer, director,
independent contractor, consultant, agent or otherwise, such services being of a nature that can
reasonably be expected to involve the skills and experience used or developed by the Participant
while an Employee, and the Committee determines, in its sole discretion, that the provision of such
services constitutes a breach of the Participant’s non-compete agreement with the Company, then
that Participant’s rights to any Awards hereunder shall automatically be forfeited.



     12.5 Other Plans. Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval if such approval is
required; and such arrangements may be either generally applicable or applicable only in specific
cases.



     12.6 No Right to Employment. Neither the Plan nor the grant of any Award hereunder
shall give any Participant or other Employee any right with respect to continuance of employment by
the Company or any Subsidiary, nor shall the Plan impose any limitation on the right of the Company
or any Subsidiary by which a Participant is employed to terminate such Participant’s employment at
any time.



     12.7 Withholding of Taxes. The Company shall have the right to reduce the number of
shares of Common Stock otherwise deliverable pursuant to an Award under this Plan by an amount that
would have a fair market value equal to the minimum amount of all Federal, state and local taxes
required to be withheld, or to deduct the amount of such taxes from any cash payment otherwise to
be made to the Participant. In connection with such withholding, the Committee may make such
arrangements as are consistent with the Plan as it may deem appropriate.



     12.8 Listing and Other Conditions.



          (a) If the Common Stock is listed on a national securities exchange or The Nasdaq Stock
Market, the issuance of any shares of Common Stock pursuant to an Award shall be conditioned upon
such shares being listed on such exchange or The Nasdaq Stock Market. The Company shall have no
obligation to issue any shares of Common Stock unless and until such shares are so listed, and the
right to exercise any Option or Stock Appreciation Right or vest in any Restricted Stock Unit shall
be suspended until such listing has been effected.




          (b) If at any time counsel to the Company shall be of the opinion that any sale or delivery of
shares of Common Stock pursuant to an Award is or may in the circumstances be unlawful or result in
the imposition of excise taxes under the statutes, rules or regulations of any



17









 







applicable jurisdiction, the Company shall have no obligation to make such sale or delivery,
or to make any application or to effect or to maintain any qualification or registration under the
Securities Act of 1933, as amended, or otherwise with respect to shares of Common Stock or Awards,
and the right to exercise any Option or Stock Appreciation Right or vest in any Restricted Stock
Unit shall be suspended until, in the opinion of such counsel, such sale or delivery shall be
lawful or shall not result in the imposition of excise taxes.




          (c) Upon termination of any period of suspension under this Section 12.8, any Award affected
by such suspension which shall not then have expired or terminated shall be reinstated as to all
shares available before such suspension and as to shares which would otherwise have become
available during the period of such suspension, but no such suspension shall extend the term of any
Option or Stock Appreciation Right.




     12.9 Governing Law. The Plan and actions taken in connection herewith shall be
governed and construed in accordance with the laws of the State of Delaware, without regard to the
conflict of laws principles thereof.



     12.10 Construction. Wherever any words are used in the Plan in the masculine gender
they shall be construed as though they were also used in the feminine gender in all cases where
they would so apply, and wherever any words are used herein in the singular form they shall be
construed as though they were also used in the plural form in all cases where they would so apply.



     12.11 Liability of the Board and the Committee. No member of the Board or the
Committee nor any Employee of the Company or any of its subsidiaries shall be liable for any act or
action hereunder, whether of omission or commission, by any other member or Employee or by any
agent to whom duties in connection with the administration of the Plan have been delegated or,
except in circumstances involving bad faith, gross negligence or fraud, for anything done or
omitted to be done by himself.



     12.12 Other Benefits. No payment pursuant to an Award shall be deemed compensation
for purposes of computing benefits under any retirement plan of the Company or any Subsidiary nor
affect any benefits under any other benefit plan now or hereafter in effect under which the
availability or amount of benefits is related to the level of compensation.



     12.13 Costs. The Company shall bear all expenses incurred in administering the Plan,
including expenses related to the issuance of Common Stock pursuant to Awards.



     12.14 Severability. If any part of the Plan shall be determined to be invalid or void
in any respect, such determination shall not affect, impair, invalidate or nullify the remaining
provisions of the Plan which shall continue in full force and effect.



     12.15 Successors. The Plan shall be binding upon and inure to the benefit of any
successor or successors of the Company.



     12.16 Headings. Article and section headings contained in the Plan are included for
convenience only and are not to be used in construing or interpreting the Plan.



18









 





Article XIII



Term of Plan




     13.1 Effective Date. The Plan shall be effective as of the Effective Date, but the
grant of any Award hereunder is subject to the express condition that the Plan be approved by the
stockholders of the Company within 12 months after the Effective Date.



     13.2 Termination Date. Unless sooner terminated, the Plan shall terminate on October
25, 2011, and no Awards may be granted thereafter. Termination of the Plan shall not affect Awards
granted before such date.


As originally adopted by the Board by unanimous written consent dated September 14, 1999 and
approved by the stockholders at the Annual Meeting held on October 28, 1999.



As revised by the Board by unanimous written consent dated September 21, 2000 and approved by the
stockholders at the Annual Meeting held on October 26, 2000 — the first sentence of Section 4.1 was
amended to increase the maximum aggregate number of shares of Common Stock that may be issued under
the Plan from 1,000,000 to 2,000,000.



As revised by the Board at its October 26, 2000 meeting to clarify the “Change of Control”
definition.



As revised by the Board by unanimous written consent dated September 5, 2001 and approved by the
stockholders at the Annual Meeting held on October 25, 2001 — the first sentence of Section 4.1 was
amended to increase the maximum aggregate number of shares of Common Stock that may be issued under
the Plan from 2,000,000 to 3,000,000.



As revised by the Board at its meeting held February 19, 2002 – sentence was added to the end of
Section 6.4(h), “Termination of Employment”, regarding termination of options if optionee continues
as a Director.



As revised by the Board at its meeting held September 12, 2002 and approved by the stockholders at
the Annual Meeting held on October 24, 2002 — the first sentence of Section 4.1 was amended to
increase the maximum aggregate number of shares of Common Stock that may be issued under the Plan
from 3,000,000 to 4,000,000.



As revised by the Board at its meeting held September 5, 2003 and approved by the stockholders at
the Annual Meeting held on October 30, 2003 – the first sentence of Section 4.1 was amended to
increase the maximum aggregate number of shares of Common Stock that may be issued under the Plan
from 4,000,000 to 4,900,000.



As revised by the Board at its meeting held October 30, 2003 to remove the provisions vesting sole
authority in the Board to grant Awards to Reporting Persons and to amend the definition of
Committee.



As revised by the Board at its meeting held September 9, 2004 and approved by the stockholders at
the Annual Meeting held on October 27, 2004 to include provisions providing for the grant of
Performance Shares under the Plan.



As revised by the Compensation Committee by unanimous written consent, dated March 2, 2005, to add
Exhibit A to provide for additional restrictions and requirements related to the issuance of stock
option awards to eligible French Employees.



As revised by the Board by unanimous written consent dated September 20, 2005 to require
stockholder approval of any reduction of the exercise price of outstanding Stock Options, to limit
the term of Stock Options granted on or after September 20, 2005 to a maximum of seven years, to
require that the exercise


19









 






price of any Stock Options granted under the Plan be no less than 100% of the Fair Market Value of
the Common Stock on the date of grant, to clarify that the number of shares of common stock
available for issuance under the Plan will be reduced by the gross, not net, number of shares of
common stock subject to Awards, and to make certain technical amendments to the Plan to comply with
Section 409A of the Code.



As revised by the Board by unanimous written consent dated September 20, 2005 and approved by the
stockholders at the Annual Meeting held on October 26, 2005 to amend Section 4.1 to increase the
maximum aggregate number of shares of Common Stock that may be issued under the Plan from 4,900,000
to 5,100,000 and to provide that any grant of Performance Shares, Restricted Stock Units or
Unrestricted Stock under the Plan on or after October 26, 2005 will be counted against the Plan’s
share reserve as two shares for every one share subject to such Award and to amend Section 6.4(h)
to extend the period during which vested Stock Options may be exercised following an optionee’s
termination of employment if the optionee is engaged as a consultant by the Company following his
or her termination.



As revised by the Compensation Committee at its meeting on January 25, 2006 to include provisions
regarding the restriction on transferability of Performance Shares Awards and Restricted Stock Unit
Awards, and to modify all references in the Plan to Restricted Stock Awards to be and refer to
Restricted Stock Unit Awards, to more properly reflect the actual nature of the Awards.



As revised by the Compensation Committee at its meeting on July 26, 2006, to amend and restate
Exhibit A — Equity Incentive Awards to Employees Working in France to add restricted stock units to
the types of awards that can be granted to eligible French Employees.



As revised by the Board at its meeting held on September 7, 2006 and approved by the stockholders
at the Annual Meeting held on October 25, 2006 to (i) amend Section 4.1 to increase the maximum
aggregate number of shares of Common Stock that may be issued under the Plan from 5,100,000 to
5,600,000; (ii) add Article IX to the Plan to allow for grants and awards of Stock Appreciation
Rights under the Plan; (iii) amend Section 12.2 to extend the termination date of the Plan to
October 25, 2011; and (iv) approve the Plan for purposes of Section 162(m) of the Internal Revenue
Code.



As revised by the Board at its meeting held on October 26, 2006 to change the name of the Plan to
the Amended and Restated Equity Incentive Plan and to make conforming changes throughout the Plan
to incorporate the amendments and additions to the Plan.



As revised by the Board by unanimous written consent dated November 2, 2006 to amend Section 4.3 to
make any antidilution adjustment automatic.





20