EX-10.16: 2002 INCENTIVE PLAN



 





Exhibit 10.16



COMPUTER ASSOCIATES INTERNATIONAL, INC.




2002 INCENTIVE PLAN




Effective April 1, 2002




(Amended and Restated Effective as of March 31, 2004)




 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page

	ARTICLE I

	ESTABLISHMENT AND PURPOSE	 	 	1	 
	1.1	 	Purpose
	 	 	1	 
	1.2	 	Effective Date; Shareholder Approval
	 	 	1	 
	ARTICLE II

	DEFINITIONS	 	 	1	 
	2.1	 	“Annual Performance Bonus”
	 	 	2	 
	2.2	 	“Award”
	 	 	2	 
	 	 	(a)     “Annual Performance Bonuses”
	 	 	2	 
	 	 	(b)     “Long-Term Performance Bonuses”
	 	 	2	 
	 	 	(c)     “Restricted Stock”
	 	 	2	 
	 	 	(d)     “Stock Options”
	 	 	2	 
	 	 	(e)     “Other Equity-Based Awards”
	 	 	2	 
	2.3	 	“Award Certificate”
	 	 	2	 
	2.4	 	“Board”
	 	 	2	 
	2.5	 	“Change in Control”
	 	 	2	 
	2.6	 	“Code”
	 	 	3	 
	2.7	 	“Committee”
	 	 	3	 
	2.8	 	“Common Stock”
	 	 	4	 
	2.9	 	“Company”
	 	 	4	 
	2.10	 	“Consultant”
	 	 	4	 
	2.11	 	“Disabled”
	 	 	4	 
	2.12	 	“Employee”
	 	 	4	 
	2.13	 	“Exercise Price”
	 	 	4	 
	2.14	 	“Fair Market Value”
	 	 	4	 
	2.15	 	“Fair Market Value Stock Option”
	 	 	4	 
	2.16	 	“GAAP”
	 	 	4	 
	2.17	 	“Incentive Stock Option”
	 	 	4	 
	2.18	 	“Key Employee”
	 	 	5	 
	2.19	 	“Long-Term Performance Bonus”
	 	 	5	 







 









 






	 	 	 	 	 	 	 
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	2.20	 	“Nonqualified Stock Option”
	 	 	5	 
	2.21	 	“Participant”
	 	 	5	 
	2.22	 	“Performance Cycle”
	 	 	5	 
	2.23	 	“Performance Measure”
	 	 	5	 
	2.24	 	“Plan”
	 	 	6	 
	2.25	 	“Premium-Priced Stock Option”
	 	 	6	 
	2.26	 	“Prior Plans”
	 	 	6	 
	2.27	 	“Qualified Performance Award”
	 	 	6	 
	2.28	 	“Qualified Performance Award Determination Period”
	 	 	6	 
	2.29	 	“Related Company”
	 	 	6	 
	2.30	 	“Reporting Person”
	 	 	6	 
	2.31	 	“Restricted Stock”
	 	 	6	 
	2.32	 	“Retirement”
	 	 	6	 
	2.33	 	“Rights Agreement”
	 	 	7	 
	2.34	 	“Shares”
	 	 	7	 
	2.35	 	“Stock Option”
	 	 	7	 
	2.36	 	“Termination of Consultancy”
	 	 	7	 
	2.37	 	“Termination of Employment”
	 	 	7	 
	ARTICLE III

	ADMINISTRATION	 	 	7	 
	3.1	 	The Committee
	 	 	7	 
	3.2	 	Authority of the Committee
	 	 	7	 
	3.3	 	Effect of Determinations
	 	 	8	 
	3.4	 	Delegation of Authority
	 	 	8	 
	3.5	 	No Liability
	 	 	8	 
	ARTICLE IV

	AWARDS	 	 	8	 
	4.1	 	Eligibility
	 	 	8	 
	4.2	 	Participation
	 	 	8	 
	4.3	 	Form of Awards
	 	 	8	 
	 	 	(a)     Qualified Performance Awards
	 	 	9	 
	4.4	 	Annual Performance Bonuses
	 	 	9	 
	 	 	(a)     Performance Cycles
	 	 	9	 
	 	 	(b)     Bonus Participants
	 	 	9	 







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	 	 	 	 	Page

	 	 	(c)     Performance Measures; Targets; Payout Formula
	 	 	9	 
	 	 	(d)     Payment of Bonuses; Certification
	 	 	10	 
	 	 	(e)     Other Annual Performance Bonuses
	 	 	10	 
	 	 	(f)     Form of Payment
	 	 	10	 
	 	 	(g)     Amount of Bonus
	 	 	10	 
	4.5	 	Long-Term Performance Bonuses
	 	 	10	 
	 	 	(a)     Performance Cycles
	 	 	11	 
	 	 	(b)     Bonus Participants
	 	 	11	 
	 	 	(c)     Performance Measures; Targets; Payout Formula
	 	 	11	 
	 	 	(d)     Payment of Bonuses; Certification
	 	 	12	 
	 	 	(e)     Other Long-Term Performance Bonuses
	 	 	12	 
	 	 	(f)     Form of Payment
	 	 	12	 
	 	 	(g)     Amount of Bonus
	 	 	12	 
	4.6	 	Restricted Stock
	 	 	12	 
	 	 	(a)     Performance Cycles
	 	 	12	 
	 	 	(b)     Performance Measures; Targets and Payout Formulas
	 	 	13	 
	 	 	(c)     Committee Certification
	 	 	13	 
	 	 	(d)     Other Restricted Stock Awards
	 	 	14	 
	 	 	(e)     Payment of Restricted Stock
	 	 	14	 
	 	 	    (i)     Vesting and Forfeiture
	 	 	14	 
	 	 	   (ii)     Acceleration of Vesting
	 	 	14	 
	 	 	  (iii)     Legend
	 	 	14	 
	 	 	(f)     Amount of Restricted Stock
	 	 	15	 
	4.7	 	Stock Options
	 	 	15	 
	 	 	(a)     Amount of Shares
	 	 	15	 
	 	 	(b)     Exercise Price
	 	 	15	 
	 	 	(c)     Option Term
	 	 	15	 
	 	 	(d)     Timing of Exercise
	 	 	15	 
	 	 	(e)     Payment of Exercise Price
	 	 	16	 
	 	 	(f)     Incentive Stock Options
	 	 	17	 
	 	 	    (i)     Eligibility
	 	 	17	 
	 	 	   (ii)     Timing of Grant
	 	 	17	 
	 	 	  (iii)     Amount of Award
	 	 	17	 
	 	 	  (iv)     Timing of Exercise
	 	 	17	 
	 	 	   (v)     Transfer Restrictions
	 	 	18	 
	 	 	(g)     No Repricing
	 	 	18	 
	4.8	 	Other Equity-Based Awards
	 	 	18	 
	4.9	 	Code Section 162(m)
	 	 	18	 
	ARTICLE V

	SHARES SUBJECT TO THE PLAN; ADJUSTMENTS	 	 	19	 
	5.1	 	Shares Available
	 	 	19	 
	5.2	 	Counting Rules
	 	 	19	 







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	 	 	 	 	Page

	5.3	 	Adjustments
	 	 	20	 
	5.4	 	Consolidation, Merger or Sale of Assets
	 	 	20	 
	5.5	 	Fractional Shares
	 	 	21	 
	ARTICLE VI

	AMENDMENT AND TERMINATION	 	 	21	 
	6.1	 	Amendment
	 	 	21	 
	6.2	 	Termination
	 	 	21	 
	ARTICLE VII

	GENERAL PROVISIONS	 	 	22	 
	7.1	 	Nontransferability of Awards
	 	 	22	 
	7.2	 	Withholding of Taxes
	 	 	23	 
	 	 	(a)     Stock Options
	 	 	23	 
	 	 	(b)     Restricted Stock
	 	 	23	 
	7.3	 	Special Forfeiture Provision
	 	 	23	 
	7.4	 	Code Section 83(b) Elections
	 	 	23	 
	7.5	 	No Implied Rights
	 	 	24	 
	7.6	 	No Obligation to Exercise Options
	 	 	24	 
	7.7	 	No Rights as Stockholders
	 	 	24	 
	7.8	 	Indemnification of Committee
	 	 	24	 
	7.9	 	No Required Segregation of Assets
	 	 	24	 
	7.10	 	Nature of Payments
	 	 	24	 
	7.11	 	Securities Exchange Act Compliance
	 	 	24	 
	7.12	 	Governing Law; Severability
	 	 	25	 








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COMPUTER ASSOCIATES INTERNATIONAL, INC.

2002 INCENTIVE PLAN




(Amended and Restated Effective as of March 31, 2004)




ARTICLE I




ESTABLISHMENT AND PURPOSE




     1.1 Purpose. The purpose of this Computer Associates International, Inc.
2002 Incentive Plan (the “Plan”) is to enable Computer Associates
International, Inc. (the “Company”) to achieve superior financial performance,
as reflected in the performance of its Common Stock and other key financial or
operating indicators by (i) providing incentives and rewards to certain
Employees and Consultants who are in a position to contribute materially to the
success and long-term objectives of the Company, (ii) aiding in the recruitment
and retention of Employees of outstanding ability and (iii) providing Employees
and Consultants an opportunity to acquire or expand equity interests in the
Company, thus aligning the interests of such Employees and Consultants with
those of the Company’s shareholders. Towards these objectives, the Plan
provides for the grant of Annual Performance Bonuses, Stock Options, Restricted
Stock and Other Equity-Based Awards.



     1.2 Effective Date; Shareholder Approval. The Plan is effective as of
April 1, 2002, subject to the approval by a vote at the Company’s 2002 Annual
Meeting of Stockholders, or any adjournment of such meeting, of the holders of
at least a majority of the Shares of the Company, present in person or by proxy
and entitled to vote at such meeting. Any Awards granted under the Plan prior
to the approval of the Plan by the Company’s shareholders, as provided herein,
shall be contingent on such approval; if such approval is not obtained, the
Plan shall have no effect, and any Awards granted under the Plan shall be
rescinded. The Plan was subsequently amended and restated effective as of
March 31, 2004.



ARTICLE II




DEFINITIONS




     For purposes of the Plan, the following terms shall have the following
meanings, unless another definition is clearly indicated by particular usage
and context:



 









 





     2.1 “Annual Performance Bonus” means an Award described in Section 4.4 of
the Plan.



     2.2 “Award” means any form of incentive or performance award granted
under the Plan, whether singly or in combination, to a Participant by the
Committee pursuant to such terms, conditions, restrictions and/or limitations
(if any) as the Committee may establish and as set forth in the applicable
Award Certificate. Awards granted under the Plan may consist of:




     (a) “Annual Performance Bonuses” awarded pursuant to Section 4.4;




     (b) “Long-Term Performance Bonuses” awarded pursuant to Section 4.5;




     (c) “Restricted Stock” awarded pursuant to Section 4.6;




     (d) “Stock Options” awarded pursuant to Section 4.7; and




     (e) “Other Equity-Based Awards” awarded pursuant to Section 4.8.



     2.3 “Award Certificate” means the document issued, either in writing or
by electronic means, by the Company to a Participant evidencing the grant of an
Award.



     2.4 “Board” means the Board of Directors of the Company.



     2.5 “Change in Control” means the happening of any of the following
events:




     (a) an acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”))(a “Person”) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 25% or more of either (i) the then outstanding shares of
common stock of the Company (the “Outstanding Company Common Stock”) or
(ii) the combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of directors
(the “Outstanding Company Voting Securities”); excluding, however, the
following: (i) any acquisition directly from the Company, other than an
acquisition by virtue of the exercise of a conversion privilege unless
the security being so converted was itself directly acquired from the
Company, (ii) any acquisition by the Company, (iii) any acquisition by an
employee benefit plan (or related trust) sponsored or maintained by the
Company or any entity controlled by the Company, or (iv) any acquisition
pursuant to a transaction which complies with clauses (i), (ii) and (iii)
of subsection (c) of this Section 2.5; or




     (b) a change in the composition of the Board such that the
individuals who, as of the effective date of the Plan, constitute the
Board (such Board shall be hereinafter referred to as the “Incumbent
Board”) cease for any reason to constitute a majority of the Board;
provided, however, for purposes of this Section



2









 






2.5, that any individual
who becomes a member of the Board subsequent to the effective date of the
Plan, whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of a majority of those individuals
who are members of the Board and who were also members of the Incumbent
Board (or deemed to be such pursuant to this proviso) shall be considered
as though such individual was a member of the Incumbent Board; but,
provided further, that any such individual whose initial assumption of
office occurs as a result of any actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board
shall not be so considered as a member of the Incumbent Board; or




(c) consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of
the Company (“Corporate Transaction”); excluding, however, such a
Corporate Transaction pursuant to which (i) all or substantially all of
the individuals and entities who are beneficial owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 50% of, respectively,
the outstanding shares of common stock and the combined voting power of
the then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting
from such Corporate Transaction (including, without limitation, a
corporation which as the result of such transaction owns the Company or
all or substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same proportions
as their ownership, immediately prior to such Corporate Transaction, of
the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (ii) no
Person (other than the Company, any employee benefit plan (or related
trust) of the Company or such corporation resulting from such Corporate
Transaction) will beneficially own, directly or indirectly, 25% or more
of, respectively, the outstanding shares of common stock of the
corporation resulting from such Corporate Transaction or the combined
voting power of the outstanding voting securities of such corporation
entitled to vote generally in the election of directors, except to the
extent that such ownership existed prior to the Corporate Transaction,
and (iii) individuals who were members of the Incumbent Board will
constitute at least a majority of the members of the board of directors
of the corporation resulting from such Corporate Transaction; or




     (d) the approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.



     2.6 “Code” means the Internal Revenue Code of 1986, as amended.



     2.7 “Committee” means the Compensation and Human Resource Committee of
the Board formed to act on performance-based compensation for Key Employees, or
any successor committee or subcommittee of the Board which is comprised solely
of two



3









 







or more outside directors (within the meaning of Section 162(m)(4)(C)(i)
of the Code and the applicable regulations).



     2.8 “Common Stock” means the Common Stock, $.10 par value per share, of
the Company.



     2.9 “Company” means Computer Associates International, Inc.



     2.10 “Consultant” means any consultant or adviser if:




     (a) the consultant or advisor renders bona fide services to the
Company;




     (b) the services rendered by the consultant or advisor are not in
connection with the offer or sale of securities in a capital-raising
transaction and do not directly or indirectly promote or maintain a
market for the Company’s securities; and




     (c) the consultant or adviser is a natural person who has
contracted directly with the Company to render such services.



     2.11 “Disabled” or “Disability” means permanently and totally disabled
within the meaning of Section 22(e) of the Code.



     2.12 “Employee” means any individual who performs services as a common
law employee for the Company or a Related Company. “Employee” shall not
include any seasonal or temporary employees.



     2.13 “Exercise Price” means the price per Share, as fixed by the
Committee, at which Shares may be purchased under a Stock Option. In no event
shall the Exercise Price with respect to any Share subject to a Stock Option be
set at a price that is less than the Fair Market Value of a Share as of the
date of grant.



     2.14 “Fair Market Value” of a Share means either (a) the closing sales
price of a Share as reported on the New York Stock Exchange on the applicable
date, (b) if no sales of Shares are reported for such date, for the next
preceding day for which such sales were reported, or (c) the fair market value
of a Share determined in accordance with any other reasonable method approved
by the Committee in its discretion.



     2.15 “Fair Market Value Stock Option” means a Stock Option the Exercise
Price of which is set by the Committee at a price per Share equal to the Fair
Market Value of a Share on the date of grant.



     2.16 “GAAP” means generally accepted accounting principles.



     2.17 “Incentive Stock Option” means a Stock Option granted under Section
4.7 of the Plan that meets the requirements of Section 422 of the Code and any
regulations or rules promulgated thereunder and is designated in the Award
Certificate to be an Incentive Stock Option.



4









 





     2.18 “Key Employee” means an Employee who is a “covered employee” within
the meaning of Section 162(m)(3) of the Code.



     2.19 “Long-Term Performance Bonus” means an Award described in Section
4.5 of the Plan.



     2.20 “Nonqualified Stock Option” means any Stock Option granted under
Section 4.7 of the Plan that is not an Incentive Stock Option.



     2.21 “Participant” means an Employee or Consultant who has been granted
an Award under the Plan.



     2.22 “Performance Cycle” means a period measured by the Company’s fiscal
year or years over which the level of attainment of performance of one or more
Performance Measures shall be determined; provided, however, that the
Committee, in its discretion, may determine to use a period that is less than a
full fiscal year.



     2.23 “Performance Measure” means, with respect to any Award awarded in
connection with a Performance Cycle, the business criteria selected by the
Committee to measure the level of performance of the Company during such
Performance Cycle. The Committee may select as the Performance Measure for a
Performance Cycle any one or combination of the following Company measures, as
interpreted by the Committee, which (to the extent applicable) shall be
determined on a GAAP basis, either pre-tax or after-tax:




     (a) Net Operating Profit After Taxes;




     (b) Net Operating Profit After Taxes, Per Share;




     (c) Return On Invested Capital;




     (d) Total Shareholder Return




     (e) Relative Total Shareholder Return (as compared against a peer
group of the Company, which, unless otherwise specified by the Committee,
shall be the companies comprising the Standard & Poor’s Systems Software
Index, excluding the Company);




     (f) Earnings Per Share;




     (g) Net Income;




     (h) Cash Flow;




     (i) Cash Flow Per Share;




     (j) Revenue (or any component thereof);




     (k) Revenue Growth;



5









 






     (l) Share Performance; and/or




     (m) Relative Share Performance.



     2.24 “Plan” means the Computer Associates International, Inc. 2002
Incentive Plan (Amended and Restated Effective as of March 31, 2004), as set
forth in this document and as may be further amended from time to time.



     2.25 “Premium-Priced Stock Option” means a Stock Option the Exercise
Price of which is set by the Committee at a price per Share that exceeds the
Fair Market Value of a Share on the date of grant. Unless otherwise determined
by the Committee and set forth in the applicable Award Certificate, the
Exercise Price of a Premium-Priced Stock Option shall be based upon the average
Fair Market Value of a Share over the ten trading day period ending on the date
of grant.



     2.26 “Prior Plans” means the Computer Associates International, Inc. 2001
Stock Option Plan; the Computer Associates International, Inc. Year 2000
Employee Stock Purchase Plan; and the Computer Associates International, Inc.
1994 Annual Incentive Compensation Plan.



     2.27 “Qualified Performance Award” means an Annual Performance Bonus,
Long-Term Performance Bonus, Restricted Stock Award or Other Equity-Based Award
that is intended by the Committee to meet the requirements for “qualified
performance-based compensation” within the meaning of Code section 162(m) and
Treasury Regulation section 1.162-27(e).



     2.28 “Qualified Performance Award Determination Period” means the period
within which Committee determinations regarding Performance Measures, targets
and payout formulas in connection with Qualified Performance Awards must be
made. The Qualified Performance Award Determination Period is the period
beginning on the first day of a Performance Cycle and ending no later than
ninety (90) days after commencement of the Performance Cycle; provided,
however, that in the case of a Performance Cycle that is less than 12 months in
duration, the Qualified Performance Award Determination Period shall end no
later than the date on which 25% of the Performance Cycle has elapsed.



     2.29 “Related Company”
means a consolidated subsidiary of the Company for purposes of reporting
in the Company’s consolidated financial statements.



     2.30 “Reporting Person” means an Employee who is subject to the reporting
requirements of Section 16(a) of the Securities Exchange Act of 1934.



     2.31 “Restricted Stock” means Shares issued under a Long-Term Performance
Bonus under Section 4.5 or under a Restricted Stock Award pursuant to Section
4.6, which are subject to such restrictions as the Committee, in its
discretion, shall impose.



     2.32 “Retirement” means retirement (i) at or after age 55 with ten years
of service or (ii) at or after age 65.



6









 





     2.33 “Rights Agreement” means the Rights Agreement dated June 18, 1991,
as amended from time to time, between the Company and Mellon Investor Services
LLC (as successor rights agent to Manufacturers Hanover Trust Company).



     2.34 “Shares” means shares of Common Stock.



     2.35 “Stock Option” means a right granted under Section 4.7 of the Plan
to purchase from the Company a stated number of Shares at a specified price.
Stock Options awarded under the Plan shall be in the form of either Incentive
Stock Options or Nonqualified Stock Options.



     2.36 “Termination of Consultancy” means the date of cessation of a
Consultant’s service relationship with the Company for any reason, with or
without cause, as determined by the Company.



     2.37 “Termination of Employment” means the date of cessation of an
Employee’s employment relationship with the Company and any Related Company for
any reason, with or without cause, as determined by the Company; provided,
however, that, subject to the requirements of applicable law, an Employee’s
employment relationship for purposes of the Plan may be treated as continuing
intact while the Employee is on military leave, sick leave or other bona fide
leave of absence (such as temporary employment with the Government).
Notwithstanding the foregoing, for purposes of Incentive Stock Options
granted under the Plan, an Employee’s employment relationship shall be treated
as continuing intact if the period of such leave does not exceed ninety (90)
days, or if longer, so long as the Employee’s right to reemployment with the
Company or a Related Company is guaranteed either by statute or by contract.



ARTICLE III




ADMINISTRATION




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



     3.2 Authority of the Committee. The Committee shall have authority, in
its sole and absolute discretion and subject to the terms of the Plan, to (1)
interpret the Plan; (2) prescribe such rules and regulations as it deems
necessary for the proper operation and administration of the Plan, and amend or
rescind any existing rules or regulations relating to the Plan; (3) select
Employees and Consultants to receive Awards under the Plan; (4) determine the
form of an Award, the number of Shares subject to an Award, all the terms,
conditions, restrictions and/or limitations, if any, of an Award including,
without limitation, the timing or conditions of exercise or vesting, and the
terms of any Award Certificate; (5) determine whether Awards will be granted
singly, in combination or in tandem; (6) establish and administer Performance
Measures in connection with Awards, including Qualified Performance Awards
granted under the Plan; (7) certify the level of performance attainment for
Performance Measures in connection with Qualified Performance Awards granted
under the Plan; (8) except as provided in Section 4.7(g),



7









 







waive or amend any
terms, conditions, restrictions or limitations of an Award; (9) in accordance
with Article V, make such adjustments to the Plan (including but not limited to
adjustment of the number of shares available under the Plan or any Award)
and/or to any Award granted under the Plan, as may be appropriate; (10)
accelerate the vesting, exercise or payment of an Award when such action or
actions would be in the best interest of the Company; (11) provide for the
deferred payment of Awards in Shares and the extent to which dividend
equivalents shall be paid or credited with respect to such Awards; (12)
determine whether Nonqualified Stock Options may be transferable to family
members, a family trust or a family partnership; (13) establish such subplans
as the Committee may determine to be necessary in order to implement and
administer the Plan in foreign countries; and (14) take any and all other
action it deems necessary or advisable for the proper operation or
administration of the Plan.



     3.3 Effect of Determinations. All determinations of the Committee shall
be final, binding and conclusive on all persons having an interest in the Plan.



     3.4 Delegation of Authority. The Committee, in its discretion, may
delegate its authority and duties under the Plan to such other individual,
individuals or committee as it may deem advisable, under such conditions and
subject to such limitations as the Committee may establish. Notwithstanding
the foregoing, only the Committee shall have authority to grant and administer
Awards to Key Employees and other Reporting Persons, to establish and certify
Performance Measures and to grant Awards to any Employee who is acting as a
delegate of the Committee in respect of the Plan.



     3.5 No Liability. No member of the Committee, nor any person acting as a
delegate of the Committee in respect of the Plan, shall be liable for any
losses incurred by any person resulting from any action, interpretation or
construction made in good faith with respect to the Plan or any Award granted
thereunder.



ARTICLE IV




AWARDS




     4.1 Eligibility. Except as otherwise provided herein with respect to a
specific form of an Award, all Employees and Consultants shall be eligible to
receive Awards granted under the Plan.



     4.2 Participation. The Committee, at its sole discretion, shall select
from time to time Participants from those persons eligible under Section 4.1
above to receive Awards under the Plan.



     4.3 Form of Awards. Awards granted under the Plan shall be in the form of
Annual Performance Bonuses, Long-Term Performance Bonuses, Restricted Stock,
Stock Options, and Other Equity-Based Awards. Awards shall be in the form
determined by the Committee, in its discretion, and shall be evidenced by an
Award Certificate. Awards



8









 







may be granted singly, in combination or in tandem
with other Awards. The terms and conditions applicable to Annual Performance
Bonuses shall be as set forth in Section 4.4. The terms applicable to
Long-Term Performance Bonuses shall be as set forth in Section 4.5. The terms
and conditions applicable to Restricted Stock shall be as set forth in Section
4.6. The terms and conditions applicable to Stock Options shall be as set
forth in Section 4.7. The terms and conditions applicable to Other
Equity-Based Awards shall be as set forth in Section 4.8.




     (a) Qualified Performance Awards.
The Committee shall designate whether an Annual Performance Bonus,
Long-Term Performance Bonus, Restricted Stock Award or Other Equity-Based
Award granted under the Plan is intended to constitute a Qualified
Performance Award. Qualified Performance Awards under the Plan may be
granted either separately, at the same time as other Awards designated as
Qualified Performance Award, or at the same time as Awards that are not
designated as Qualified Performance Awards; provided, however, that in no
event may the payment of an Award that is not a Qualified Performance
Award be contingent upon the failure to attain a specific level of
performance on the Performance Measure(s) applicable to a Qualified
Performance Award for the same Performance Cycle. In the event the
Committee designates an Award as a Qualified Performance Award, any
determinations of the Committee pertaining to Performance Measures and
other terms and conditions of such Qualified Performance Award (other
than a determination under Section 4.4(c)(ii), 4.5(c)(ii) or 4.6(b)(iii)
to reduce the amount of an Award) shall be in writing and made within the
Qualified Performance Award Determination Period.



     4.4 Annual Performance Bonuses. The Committee may grant Annual
Performance Bonuses under the Plan only to such Employees as the Committee may
from time to time select, in such amounts and subject to such terms and
conditions as the Committee, in its discretion, may determine. An Annual
Performance Bonus awarded under the Plan may, at the discretion of the
Committee, be designated as a Qualified Performance Award. An Annual
Performance Bonus that the Committee designates as a Qualified Performance
Award shall be subject to the provisions of paragraphs (a) through (d) below.




     (a) Performance Cycles. Annual Performance Bonuses designated as
Qualified Performance Awards shall be awarded in connection with a
12-month Performance Cycle, which shall be the fiscal year of the
Company; provided, however, that the Committee may, in its discretion,
establish a Performance Cycle of less than 12 months.




     (b) Bonus Participants. Within the Qualified Performance Award
Determination Period, the Committee shall determine the Employees who
shall be eligible to receive an Annual Performance Bonus designated as a
Qualified Performance Award for such Performance Cycle.




     (c) Performance Measures; Targets; Payout Formula.



9









 






     (i) For each Annual Performance Bonus designated as a Qualified
Performance Award, the Committee shall fix and establish, in
writing, within the Qualified Performance Award Determination
Period (A) the Performance Measure(s) that shall apply to such
Annual Performance Bonus; (B) the target amount of such Annual
Performance Bonus that shall be payable to each such Employee; and
(C) subject to paragraph (g) below, the payout formula for computing
the actual amount of such Annual Performance Bonus that shall become
payable with respect to each level of attained performance. Towards
this end, such payout formula shall, based on objective criteria,
set forth for the applicable Performance Measure(s) the minimum
level of performance that must be attained during the Performance
Cycle before any such Annual Performance Bonus shall become payable
and the percentage (which percentage may not exceed 200%) of the
target amount of such Annual Performance Bonus that shall be payable
to each such Employee upon attainment of various levels of
performance that equal or exceed the minimum required level.




     (ii) Notwithstanding anything in this paragraph (c) to the
contrary, the Committee may, on a case by case basis and in its sole
discretion, reduce, but not increase, any Annual Performance Bonus
designated as a Qualified Performance Award that is payable to any
Employee with respect to any given Performance Cycle, provided,
however, that no such reduction shall result in an increase in the
dollar amount of any such Annual Performance Bonus payable to any
Key Employee.




     (d) Payment of Bonuses; Certification. No Annual Performance Bonus
designated as a Qualified Performance Award shall be paid to a Key
Employee under this Section 4.4 unless and until the Committee certifies
in writing the level of attainment of the applicable Performance
Measure(s) for the applicable Performance Cycle.




     (e) Other Annual Performance Bonuses. Annual Performance Bonuses
that are not Qualified Performance Awards shall be based on a Performance
Cycle (which may be less than 12 months) and such Performance Measures
and payout formulas (which may be the same as or different than those
applicable to Annual Performance Bonuses that are designated as Qualified
Performance Awards) as the Committee, in its discretion, may establish
for such purposes.




     (f) Form of Payment. Annual Performance Bonuses shall be paid in
cash.




     (g) Amount of Bonus. The maximum amount that may be paid as an
Annual Performance Bonus to any one Participant during any fiscal year of
the Company shall not exceed $10,000,000.



     4.5 Long-Term Performance Bonuses. The Committee may grant Long-Term
Performance Bonuses under the Plan only to such Employees as the Committee may



10









 







from time to time select, in such amounts and subject to such terms and
conditions as the Committee, in its discretion, may determine. A Long-Term
Performance Bonus awarded under the Plan may, at the discretion of the
Committee, be designated as a Qualified Performance Award. A Long-Term
Performance Bonus that the Committee designates as a Qualified Performance
Award shall be subject to the provisions of paragraphs (a) through (d) below.




     (a) Performance Cycles. Long-Term Performance Bonuses designated as
Qualified Performance Awards shall be awarded in connection with a
Performance Cycle, which shall be at least one fiscal year of the
Company. The Committee shall determine the length of a Performance Cycle
within the Qualified Performance Award Determination Period. In the
event that the Committee determines that a Performance Cycle shall be a
period greater than one fiscal year, a new Long-Term Performance Bonus
Award may be granted and designated as a Qualified Performance Award and
a new Performance Cycle may commence prior to the completion of the
Performance Cycle associated with the prior Long-Term Performance Bonus
Award.




     (b) Bonus Participants. Within the Qualified Performance Award
Determination Period, the Committee shall determine the Employees who
shall be eligible to receive a Long-Term Performance Bonus designated as
a Qualified Performance Award for such Performance Cycle.




     (c) Performance Measures; Targets; Payout Formula.




     (i) For each Long-Term Performance Bonus designated as a
Qualified Performance Award, the Committee shall fix and establish,
in writing, within the Qualified Performance Award Determination
Period (A) the Performance Measure(s) that shall apply to such
Performance Cycle; (B) the target amount of such Long-Term
Performance Bonus that shall be payable to each such Employee; and
(C) subject to paragraph (g) below, the payout formula for computing
the actual amount of such Long-Term Performance Bonus that shall
become payable with respect to each level of attained performance.
Towards this end, such payout formula shall, based on objective
criteria, set forth for the applicable Performance Measure(s) the
minimum level of performance that must be attained during the
Performance Cycle before any such Long-Term Performance Bonus shall
become payable and the percentage (which percentage may not exceed
200%) of the target amount of such Long-Term Performance Bonus that
shall be payable
to each such Employee upon attainment of various levels of
performance that equal or exceed the minimum required level.




     (ii) Notwithstanding anything in this paragraph (c) to the
contrary, the Committee may, on a case by case basis and in its sole
discretion, reduce, but not increase, any Long-Term Performance
Bonus designated as a Qualified Performance Award that is payable to
any Employee with respect to any given Performance Cycle, provided,
however,



11









 






that no such reduction shall result in an increase in the
dollar amount of any such Long-Term Performance Bonus payable to any
Key Employee.




     (d) Payment of Bonuses; Certification. No Long-Term Performance
Bonus designated as a Qualified Performance Award shall be paid to a Key
Employee under this Section 4.5 unless and until the Committee certifies
in writing the level of attainment of the applicable Performance
Measure(s) for the applicable Performance Cycle.




     (e) Other Long-Term Performance Bonuses. Long-Term Performance
Bonuses that are not Qualified Performance Awards shall be based on such
Performance Cycles, Performance Measures and payout formulas (which may
be the same as or different than those applicable to Long Term
Performance Bonuses that are designated as Qualified Performance Awards)
as the Committee, in its discretion, may establish for such purposes.




     (f) Form of Payment. Long-Term Performance Bonuses may be either
paid in cash or the value of the Award may be settled in Shares of
Restricted Stock, Fair Market Value Stock Options and/or Premium-Priced
Options or any combination of the foregoing in such proportions as the
Committee may, in its discretion, determine. To the extent that a
Long-Term Performance Bonus is paid in Shares of Restricted Stock, Fair
Market Value Stock Options and/or Premium-Priced Stock Options, the
number of Shares of Restricted Stock payable and/or the number of Stock
Options granted shall be based on the Fair Market Value of a Share on the
date of grant, subject to such reasonable Restricted Stock discount
factors and/or Stock Option valuation methodology as the Committee may,
in its discretion, apply. Any Shares of Restricted Stock granted in
connection with a Long-Term Performance Bonus shall be subject to the
provisions of Sections 4.6(e) and (f). Any Stock Options granted in
payment of a Long-Term Performance Bonus shall be subject to the
provisions of Sections 4.7(a), (b), (c), (d) and (f).




     (g) Amount of Bonus. Subject to Section 4.6(f), the maximum amount
that may be paid as a Long-Term Performance Bonus in the form of
Restricted Stock to any one Participant during any fiscal year of the
Company shall not exceed $20,000,000.



     4.6 Restricted Stock. The Committee may grant Restricted Stock under the
Plan to such Employees as the Committee may from time to time select, in such
amounts and subject to such terms, conditions and restrictions as the
Committee, in its discretion, may determine. A Restricted Stock Award may, at
the discretion of the Committee, be designated as a Qualified Performance
Award. A Restricted Stock Award that the Committee designates as a Qualified
Performance Award shall be subject to the provisions of paragraphs (a) through
(c) below.




     (a) Performance Cycles. A Restricted Stock Award designated as a
Qualified Performance Award shall be awarded in connection with a
Performance



12









 






Cycle. Unless the Committee determines that some other
period shall apply, the Performance Cycle shall be the fiscal year of the
Company. In the event that the Committee determines that a Performance
Cycle shall be a period greater than a 12-month period, a new Restricted
Stock Award may be granted and designated as a Qualified Performance
Award and a new Performance Cycle may commence prior to the completion of
the Performance Cycle associated with the prior Restricted Stock Award.




     (b) Performance Measures; Targets and Payout Formulas.




     (i) Within the Qualified Performance Award Determination
Period, the Committee shall determine the Employees who shall be
eligible to receive a Restricted Stock Award designated as a
Qualified Performance Award for such Performance Cycle and shall
establish, in writing, the Performance Measure(s) that shall apply
for such Performance Cycle.




     (ii) For each Restricted Stock Award designated as a Qualified
Performance Award, the Committee shall establish, in writing, within
the Qualified Performance Award Determination Period (A) a target
amount of Restricted Stock that shall be payable to each such
Employee and (B) subject to paragraph (f) below, a payout formula
for computing the actual amount of Restricted Stock that shall
become payable with respect to each level of attained performance.
Towards this end, such payout formula shall, based on objective
criteria, set forth for the applicable Performance Measure the
minimum level of performance that must be attained during the
Performance Cycle before any such Restricted Stock shall become
payable and the percentage (which percentage may not exceed 200%) of
the target amount of Restricted Stock that shall be payable to each
such Employee upon attainment of various levels of performance that
equal or exceed the minimum required level.




     (iii) The actual amount of Restricted Stock that shall be paid
to each such Employee for any given Performance Cycle under a
Restricted Stock Award designated as a Qualified Performance Award
shall be determined based on such Employee’s target Restricted Stock
Award, the actual level of achievement of the Performance Measure(s)
and the payout formula determined by the Committee pursuant to this
paragraph (b) for such Performance Cycle. Notwithstanding the
foregoing, the Committee may, on a case by case basis and in its
sole discretion, reduce, but not increase, the actual amount of any
Restricted Stock Award designated as a Qualified Performance Award
that is payable to any Employee with respect to any given
Performance Cycle, provided, however, that no such reduction shall
result in an increase in the amount of such Restricted Stock Award
payable to any Key Employee.




     (c) Committee Certification. No Shares of Restricted Stock payable
under a Restricted Stock Award designated as a Qualified Performance
Award



13









 






shall be paid to a Key Employee under this Section 4.6 unless and
until the Committee certifies in writing the level of attainment of the
applicable Performance Measure(s) for the applicable Performance Cycle.




     (d) Other Restricted Stock Awards. Restricted Stock Awards that are
not Qualified Performance Awards shall be subject to such provisions as
the Committee may, in its discretion, determine, and may be granted at
any time; provided, however, that to the extent that the Committee
determines that a Restricted Stock Award that is not a Qualified
Performance Award shall be performance-based, such Restricted Stock Award
shall be awarded in connection with a Performance Cycle, applying such
Performance Measures and payout formulas (which may be the same as or
different than those applicable to Restricted Stock Awards designated as
Qualified Performance Awards) as the Committee, in its discretion, may
establish for such purposes.




     (e) Payment of Restricted Stock. As soon as practicable after
Restricted Stock has become payable, a certificate or certificates for
all such Shares of Restricted Stock shall be registered in the name of
the Participant and, at the discretion of the Company, be either (i)
delivered to the Participant or (ii) held for the Participant by the
Company. The Participant shall thereupon have all the rights of a
stockholder with respect to such Shares, including the right to vote and
receive dividends or other distributions made or paid with respect to
such Shares, except that such Shares shall be subject to the vesting and
forfeiture provisions of paragraph (e)(i) below. The Committee may, in
its discretion, impose such restrictions on Restricted Stock as it deems
appropriate. Except as the Committee may otherwise
determine, and subject to the Committee’s authority under Section
3.2, such Shares shall be subject to the following vesting provisions:




     (i) Vesting and Forfeiture. Shares of Restricted Stock that
have not yet vested shall be forfeited by a Participant upon the
Participant’s Termination of Employment for any reason other than
death or Disability. Shares of Restricted Stock shall vest in equal
annual installments over a three–year period after the end of the
applicable Performance Cycle (or date of grant, in the case of
Awards that are not Qualified Performance Awards).




     (ii) Acceleration of Vesting. Notwithstanding the foregoing,
all Shares of Restricted Stock shall immediately vest upon a Change
in Control or upon the death or Disability of the Participant.




     (iii) Legend. In order to enforce any restrictions that the
Committee may impose on Restricted Stock, the Committee shall cause
a legend or legends setting forth a specific reference to such
restrictions to be placed on all certificates for Shares of
Restricted Stock. As restrictions are released, a new certificate,
without the legend, for the number of Shares with respect to which
restrictions have been released shall be issued and delivered to the
Participant as soon as possible thereafter.



14









 






     (f) Amount of Restricted Stock. The maximum aggregate number of
Shares of Restricted Stock that may be issued to any one Participant
under Section 4.5 and this Section 4.6 during any fiscal year of the
Company shall not exceed 1,000,000 Shares, subject to adjustment as
provided in Section 5.3.



     4.7 Stock Options. Stock Options granted under the Plan may, at the
discretion of the Committee, be in the form of either Nonqualified Stock
Options, Incentive Stock Options or a combination of the two, subject to the
restrictions set forth in paragraph (e) below. Where both an a Nonqualified
Stock Option and an Incentive Stock Option are granted to a Participant at the
same time, such Awards shall be deemed to have been granted in separate grants,
shall be clearly identified, and in no event will the exercise of one such
Award affect the right to exercise the other Award. The Committee shall
designate the form of the Stock Option at the time of grant and such form shall
be specified in the Award Certificate. Stock Options shall be subject to the
following terms and conditions:




     (a) Amount of Shares.
The Committee may grant Stock Options to a Participant in such
amounts as the Committee may determine, subject to the limitations set
forth in Section 5.1 of the Plan. The number of Shares subject to a
Stock Option shall be set forth in the applicable Award Certificate.




     (b) Exercise Price. Stock Options granted under the Plan shall be
Fair Market Value Stock Options; except, however, that Awards of Stock
Options granted to Key Employees (and such other Employees or Consultants
as the Committee may from time to time select for this purpose) shall
consist of such proportion of Fair Market Value Stock Options to
Premium-Priced Stock Options as the Committee, in its discretion, shall
determine. The Exercise Price of a Stock Option, as determined by the
Committee pursuant to this Section 4.7(b), shall be set forth in the
applicable Award Certificate.




     (c) Option Term. Notwithstanding any provision in the Plan to the
contrary, all Stock Options granted under the Plan shall lapse no later
than the tenth anniversary of the date of grant.




     (d) Timing of Exercise. Except as the Committee may otherwise
determine, and subject to the Committee’s authority under Section 3.2 to
accelerate the vesting of an Award and to waive or amend any terms,
conditions, limitations or restrictions of an Award, each Stock Option
granted under the Plan shall be exercisable in whole or in part, subject
to the following conditions, limitations and restrictions:




     (i) One third of the Shares subject to a Stock Option shall
first become exercisable on the one-year anniversary of the date
of grant, one-third shall first become exercisable on the two-year
anniversary of the date of grant and the remainder shall first
become exercisable on the three-year anniversary of the date of
grant;



15









 






     (ii) All Stock Options subject to the Award shall become
immediately exercisable upon a Change in Control;




     (iii) All Stock Options granted to a Participant shall become
immediately exercisable upon the death or Disability of the
Participant and must be exercised, if at all, within one year
after such Participant’s death or Disability, but in no event
after the date such Stock Options would otherwise lapse. Stock
Options of a deceased Participant may be exercised only by the
estate of the Participant or by the person given authority to
exercise such Stock Options by the Participant’s will or by
operation of law. In the event a Stock Option is exercised by the
executor or administrator of a deceased Participant, or by the
person or persons to
whom the Stock Option has been transferred by the
Participant’s will or the applicable laws of descent and
distribution, the Company shall be under no obligation to deliver
Shares thereunder unless and until the Company is satisfied that
the person or persons exercising the Stock Option is or are the
duly appointed executor(s) or administrator(s) of the deceased
Participant or the person to whom the Stock Option has been
transferred by the Participant’s will or by the applicable laws of
descent and distribution;




     (iv) Upon an Employee’s Retirement, all Stock Options that
have not become exercisable as of the date of Retirement shall be
forfeited and to the extent that Stock Options have become
exercisable as of such date, such Stock Options must be exercised,
if at all, within one year after Retirement; and




     (v) Except as otherwise provided in Section 7.3, upon an
Employee’s Termination of Employment, or a Consultant’s
Termination of Consultancy, for any reason other than death,
Disability or Retirement, all Stock Options that have not become
exercisable as of the date of termination shall be forfeited and
to the extent that Stock Options have become exercisable as of
such date, such Stock Options must be exercised, if at all, within
30 days after such Termination of Employment or Termination of
Consultancy.




     (e) Payment of Exercise Price. The Exercise Price shall be paid in
full when the Stock Option is exercised and stock certificates shall be
registered and delivered only upon receipt of such payment. Payment of
the Exercise Price may be made in cash or by certified check, bank draft,
wire transfer, or postal or express money order. In addition, at the
discretion of the Committee, payment of all or a portion of the Exercise
Price may be made by




     (i) Delivering a properly executed exercise notice to the
Company, or its agent, together with irrevocable instructions to a
broker to deliver promptly to the Company the amount of sale or
loan proceeds with respect to the portion of the Shares to be
acquired upon exercise having a



16









 






Fair Market Value on the date of
exercise equal to the sum of the applicable portion of the
Exercise Price being so paid;




     (ii) Tendering (actually or by attestation) to the Company
previously acquired Shares that have been held by the Participant
for at least six months having a Fair Market Value on the day
prior to the date of exercise equal to the applicable portion of
the Exercise Price being so paid; or




     (iii) any combination of the foregoing.




     (f) Incentive Stock Options. Incentive Stock Options granted under
the Plan shall be subject to the following additional conditions,
limitations and restrictions:




     (i) Eligibility. Incentive Stock Options may only be granted
to Employees of the Company or a Related Company that is a
subsidiary or parent corporation, within the meaning of Code Section
424, of the Company. In no event may an Incentive Stock Option be
granted to an Employee who owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the
Company or such Related Company or to a Consultant.




     (ii) Timing of Grant. No Incentive Stock Option shall be
granted under the Plan after the 10-year anniversary of the date the
Plan is adopted by the Board or, if earlier, the date the Plan is
approved by the Company’s shareholders.




     (iii) Amount of Award. The aggregate Fair Market Value on the
date of grant of the Shares with respect to which such Incentive
Stock Options first become exercisable during any calendar year
under the terms of the Plan for any Participant may not exceed
$100,000. For purposes of this $100,000 limit, the Participant’s
Incentive Stock Options under this Plan and all Plan’s maintained by
the Company and a Related Company shall be aggregated. To the
extent any Incentive Stock Option first becomes exercisable in a
calendar year and such limit would be exceeded, such Incentive Stock
Option shall thereafter be treated as a Nonqualified Stock Option
for all purposes.




     (iv) Timing of Exercise. In the event that the Committee
exercises its discretion to permit an Incentive Stock Option to be
exercised by a Participant more than 30 days after the Participant’s
Termination of Employment and such exercise occurs more than three
months after such Participant has ceased being an Employee (or more
than 12 months after the Participant is Disabled), such Incentive
Stock Option shall thereafter be treated as a Nonqualified Stock
Option for all purposes.



17









 






     (v) Transfer Restrictions. In no event shall the Committee
permit an Incentive Stock Option to be transferred by a Participant
other than by will or the laws of descent and distribution, and any
Incentive Stock Option granted hereunder shall be exercisable,
during his or her lifetime, only by the Participant.




     (g) No Repricing. Except as otherwise provided in Section 5.3, in
no event shall the Committee decrease the Exercise Price of a Stock
Option after the date of grant or cancel outstanding Stock Options and
grant replacement Stock Options with a lower exercise price without first
obtaining the approval of the holders of a majority of the Shares
present in person or by proxy at a meeting of the Company’s shareholders
and entitled to vote at such meeting.



     4.8 Other Equity-Based Awards. The Committee may, from time to time,
grant Awards (other than Performance Bonuses, Restricted Stock or Stock
Options) under this Section 4.8 that consist of, or are denominated in, payable
in, valued in whole or in part by reference to, or otherwise based on or
related to, Shares to any Employee or Consultant. These Awards may include,
among other things Shares, restricted stock options, stock appreciation rights,
phantom or hypothetical Shares and Share units. The Committee shall determine,
in its discretion, the terms, conditions, restrictions and limitations, if any,
that shall apply to Awards granted pursuant to this Section 4.8, including
whether dividend equivalents shall be credited or paid with respect to any
Award, which terms, conditions, restrictions and/or limitations shall be set
forth in the applicable Award Certificate.



     Other Equity Based Awards under the Plan may, in the discretion of the
Committee, be designated as Qualified Performance Awards. In the event the
Committee designates an Other Equity-Based Award as a Qualified Performance
Award, the Committee shall condition the grant of such Other Equity-Based Award
on the attainment during a Performance Cycle of specified levels of performance
of one or more Performance Measures. The Performance Cycle, Performance
Measure(s) and payout schedules applicable to Other Equity-Based Awards that
are designated as Qualified Performance Awards shall be determined by the
Committee at such time and in the manner as set out in paragraphs (a) and (b)
of Section 4.6. In such case, no Other Equity-Based Award designated as a
Qualified Performance Award shall be paid to a Key Employee under this Section
4.8 unless and until the Committee certifies in writing the level of attainment
of the applicable Performance Measure(s) for the applicable Performance Cycle.



     4.9 Code Section 162(m). It is the intent of the Company that Qualified
Performance Awards granted to Key Employees under the Plan satisfy the
applicable requirements of Code Section 162(m) and the regulations thereunder
so that the Company’s tax deduction for Qualified Performance Awards is not
disallowed in whole or in part by operation of Code Section 162(m). If any
provision of this Plan pertaining to Qualified Performance Awards, or any Award
to a Key Employee under the Plan that the Committee designates as a Qualified
Performance Award, would otherwise frustrate



18









 







or conflict with such intent, that
provision or Award shall be interpreted and deemed amended so as to avoid such
conflict.



ARTICLE V




SHARES SUBJECT TO THE PLAN; ADJUSTMENTS




     5.1 Shares Available. The Shares issuable under the Plan shall be
authorized but unissued Shares or Shares held in the Company’s treasury.
Subject to adjustment in accordance with Section 5.3, the total number of
Shares with respect to which Awards may be issued under the Plan may equal but
shall not exceed in the aggregate 45,000,000 Shares; provided, however, that
from the aggregate limit




     (a) no more than 5,000,000 Shares may be issued in connection with
Long-Term Performance Bonuses, Restricted Stock Awards and Other
Equity-Based Awards and no more than 20,000,000 Shares may be issued
under Incentive Stock Options during the term of the Plan; and




     (b) no more than 2,000,000 Shares in the form of Stock Options and
1,000,000 Shares in the form of Restricted Stock (including Shares issued
in connection with Long-Term Performance Bonuses under Section 4.5(e) and
Restricted Stock Awards under Section 4.6) and Other Equity-Based Awards
may be issued to any one Participant during any fiscal year of the
Company, and the maximum aggregate number of Shares with respect to which
Awards may be granted to any one Participant during any such fiscal year
of the Company may not exceed 3,000,000 Shares.



     Notwithstanding the foregoing, any Shares that have been approved by
Company shareholders for issuance under 2001 Stock Option Plan (the “2001
Plan”), but which have not been awarded under such 2001 Plan (or have been
awarded, but will not be issued due to expiration, forfeiture, cancellation,
settlement in cash in lieu of Shares or otherwise) and which are no longer
available for issuance under such 2001 Plan for any reason (including without
limitation, the termination of such 2001 Plan) shall be available for issuance
under this Plan in addition to the 45,000,000 Shares reserved hereunder.



     5.2 Counting Rules. For purposes of determining the number of Shares
remaining available under the Plan (including Shares originally approved under
the 2001 Plan, but made available for issuance under this Plan in accordance
with Section 5.1), only Awards payable in Shares shall be counted. Any Shares
related to Awards, which terminate by expiration, forfeiture, cancellation or
otherwise without issuance of Shares, or are settled in cash in lieu of Shares,
shall be available again for issuance under the Plan. In the event Shares are
tendered or withheld in payment of all or part of the Exercise Price of a Stock
Option, or in satisfaction of the withholding obligations thereunder, the
Shares so tendered or withheld shall become available for issuance under the
Plan. An outstanding stock appreciation right shall not be taken into account
in



19









 







determining the aggregate number of
Shares with respect to which Stock Options may thereafter be granted.
Shares that remain available for grant under Prior Plans shall not be counted
towards the maximum number of shares that may be issued under this Plan as set
forth in Section 5.1.



     5.3 Adjustments. In the event of a change in the outstanding Shares by
reason of any stock split, reverse stock split, dividend or other distribution
(whether in the form of cash, Shares, other securities or other property),
extraordinary cash dividend, recapitalization, merger, consolidation, split-up,
spin-off, reorganization, combination, repurchase or exchange of Shares or
other securities, the exercisability of stock purchase rights received under
the Rights Agreement, the issuance of warrants or other rights to purchase
Shares or other securities, or other similar corporate transaction or event, if
the Committee shall determine, in its sole discretion, that, in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan, such transaction or event equitably
requires an adjustment in the number or kind of Shares that may be issued under
the Plan, in the number or kind of Shares subject to an outstanding Award, or
in the Exercise Price of a Stock Option, stock appreciation right or other
Award, such adjustment shall be made by the Committee and shall be conclusive
and binding for all purposes under the Plan. Notwithstanding the foregoing, no
adjustments shall be made with respect to Qualified Performance Awards granted
to a Key Employee to the extent such adjustment would cause the Award to fail
to qualify as performance-based compensation under Section 162(m) of the Code.



     5.4 Consolidation, Merger or Sale of Assets. Upon the occurrence of (i) a
merger, consolidation, acquisition of property or stock, reorganization or
otherwise involving the Company in which the Company is not to be the surviving
corporation, (ii) a merger, consolidation, acquisition of property or stock,
reorganization or otherwise involving the Company in which the Company is the
surviving corporation but holders of Shares receive securities of another
corporation, or (iii) a sale of all or substantially all of the Company’s
assets (as an entirety) or capital stock to another person, any Award granted
hereunder shall be deemed to apply to the securities, cash or other property
(subject to adjustment by cash payment in lieu of fractional interests) to
which a holder of the number of Shares equal to the number of Shares the
Participant would have been entitled, and proper provisions shall be made to
ensure that this clause is a condition to any such transaction; provided,
however, that the Committee (or, if applicable, the board of directors of the
entity assuming the Company’s obligations under the Plan) shall, in its
discretion, have the power to either:




     (a) provide, upon written notice to Participants, that all Awards
that are currently exercisable must be exercised within the time period
specified in the notice and that all Awards not exercised as of the
expiration of such period shall be terminated without consideration;
provided, however, that the Committee (or successor board of directors)
may provide, in its discretion, that, for purposes of this subsection,
all outstanding Awards are currently exercisable, whether or not vested;
or



20









 






     (b) cancel any or all Awards and, in consideration of such
cancellation, pay to each Participant an amount in cash with respect to
each Share issuable under an Award equal to the difference between the
Fair Market Value of such Share on such date (or, if greater, the value
per Share of the consideration received by holders of Shares as a result
of such merger, consolidation, reorganization or sale) and the Exercise
Price.



     5.5 Fractional Shares. No fractional Shares shall be issued under the
Plan. In the event that a Participant acquires the right to receive a
fractional Share under the Plan, such Participant shall receive, in lieu of
such fractional Share, cash equal to the Fair Market Value of the fractional
Share as of the date of settlement.



ARTICLE VI




AMENDMENT AND TERMINATION




     6.1 Amendment. The Plan may be amended at any time and from time to time
by the Board without the approval of shareholders of the Company, except that
no amendment which increases the aggregate number of Shares which may be issued
pursuant to the Plan, decreases the Exercise Price at which Stock Options may
be granted or materially modifies the eligibility requirements for
participation in the Plan shall be effective unless and until the same is
approved by the shareholders of the Company. No amendment of the Plan shall
adversely affect any right of any Participant with respect to any Award
theretofore granted without such Participant’s written consent.



     6.2 Termination. The Plan shall terminate upon the earlier of the
following dates or events to occur:




     (a) the adoption of a resolution of the Board terminating the Plan;
or




     (b) the 10-year anniversary of the date of the Company’s 2002 Annual
Meeting of Stockholders



     No Awards shall be granted under this Plan after it has been terminated.
However, the termination of the Plan shall not alter or impair any of the
rights or obligations of any person, without such person’s consent, under any
Award theretofore granted under the Plan. After the termination of the Plan,
any previously granted Awards shall remain in effect and shall continue to be
governed by the terms of the Plan and the applicable Award Certificate.



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ARTICLE VII




GENERAL PROVISIONS




     7.1 Nontransferability of Awards. Except as otherwise provided in this
Section 7.1, no Awards under the Plan shall be subject in any manner to
alienation, anticipation, sale, assignment, pledge, encumbrance or transfer,
other than by will or by the laws of descent or distribution, by the
Participant and no other persons shall otherwise acquire any rights therein.
Nothing in the preceding sentence, however, shall bar the transfer of an Award
(other than an Incentive Stock Option) to a Participant’s spouse pursuant to a
qualified domestic relations order as defined by Section 414(p) of the Code or
Section 206(d) of the Employee Retirement Income Security Act or 1974, as
amended. During the lifetime of a Participant, Stock Options (except for
Nonqualified Stock Options that are transferable pursuant to subparagraphs (a)
and (b) below) shall be exercisable only by the Participant and shall not be
assignable or transferable except as provided above.




     (a) In the case of a Nonqualified Stock Option, except as the
Committee may otherwise determine, and subject to the Committee’s
authority under Section 3.2 to waive or amend any terms, conditions,
limitations or restrictions of an Award, all or any part of such
Nonqualified Stock Option may, subject to the prior written consent of
the Committee, be transferred to one or more of a following classes of
donees: family member, a trust for the benefit of a family member, a
limited partnership whose partners are solely family members or any other
legal entity set up for the benefit of family members. For purposes of
this Section 7.1, a family member means a Participant’s spouse, children,
grandchildren, parents, grandparents (natural, step, adopted, or
in-laws), siblings, nieces, nephews and grandnieces and grandnephews.




     (b) Except as the Committee may at any time determine, and subject
to the Committee’s authority under Section 3.2 to waive or amend any
terms, conditions, limitations or restrictions of an Award, any
Nonqualified Stock Option transferred by a Participant pursuant to
paragraph (a) above may be exercised by the transferee only to the extent
such Nonqualified Stock Option would have been exercisable by the
Participant had no transfer occurred. Any such transferred Nonqualified
Stock Option shall be subject to all of the same terms and conditions as
provided in the Plan and in the applicable Award Certificate. The
Participant or the Participant’s estate shall remain liable for any
withholding tax which may be imposed by any federal, state or local tax
authority and the transfer of Shares upon exercise of such Nonqualified
Stock Option shall be conditioned on the payment of such withholding tax.
The Committee may, in its sole discretion, withhold its consent to all
or a part of any transfer of a Nonqualified Stock Option pursuant to this
Section 7.1 unless and until the Participant makes arrangements
satisfactory to the Committee for the payment of any such withholding
tax. The
Participant must immediately notify the Committee, in such form and
manner as



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required by the Committee, of any proposed transfer of a
Nonqualified Stock Option pursuant to this Section and no such transfer
shall be effective until the Committee consents thereto in writing.




     (c) Anything in this Section 7.1 to the contrary notwithstanding, in
no event may the Committee permit an Incentive Stock Option to be
transferred by any Participant other than by will or the laws of descent
and distribution.



     7.2 Withholding of Taxes.




     (a) Stock Options. As a condition to the delivery of any Shares
pursuant to the exercise of a Stock Option, the Committee may require
that the Participant, at the time of such exercise, pay to the Company by
cash or by certified check, bank draft, wire transfer or postal or
express money order an amount sufficient to satisfy any applicable tax
withholding obligations. The Committee may, however, in its discretion,
accept payment of tax withholding obligations through any of the Exercise
Price payment methods described in Section 4.7(e). In addition, the
Committee may, in its discretion, permit payment of tax withholding
obligations to be made by instructing the Company to withhold Shares that
would otherwise be issued on exercise having a Fair Market Value on the
date of exercise equal to the applicable portion of the tax withholding
obligations being so paid. Notwithstanding the foregoing, in no event
may any amount greater than the minimum statutory withholding obligation
be satisfied by tendering or withholding Shares.




     (b) Restricted Stock. The Company shall satisfy tax withholding
obligations arising in connection with the release of restrictions on
Shares of Restricted Stock by withholding Shares that would otherwise be
available for delivery upon such release having a Fair Market Value on
the date of release equal to the minimum statutory withholding
obligation.



     7.3 Special Forfeiture Provision. If the Committee, in its discretion,
determines and the applicable Award Certificate so provides, a Participant who,
without prior written approval of the Company, enters into any employment or
consultation arrangement (including service as an agent, partner, stockholder,
consultant, officer or director) to any entity or person engaged in any
business in which the Company or its affiliates is engaged which, in the sole
judgment of the Company, is competitive with the Company or any subsidiary or
affiliate, (i) shall forfeit all rights under any outstanding Stock Option and
shall return to the Company the amount of any profit realized upon the
exercise, within such period as
the Committee may determine, of any Stock Option and (ii) shall forfeit
and return to the Company all Shares of Restricted Stock which are not then
vested or which vested but remain subject to the restrictions imposed by this
Section 7.3, as provided in the Award Certificate.



     7.4 Code Section 83(b) Elections. Neither the Company, any Related
Company, nor the Committee shall have any responsibility in connection with a
Participant’s election, or attempt to elect, under Code Section 83(b) to
include the value



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of a Restricted Stock Award in the Participant’s gross income
for the year of payment. Any Participant who makes a Code Section 83(b)
election with respect to any such Award shall promptly notify the Committee of
such election and provide the Committee with a copy thereof.



     7.5 No Implied Rights. The establishment and subsequent operation of the
Plan, including eligibility as a Participant, shall not be construed as
conferring any legal or other right upon any Employee for the continuation of
his or her employment, or upon any Consultant for the continuation of his or
her consultancy, for any Performance Cycle or any other period. The Company
expressly reserves the right, which may be exercised at any time and without
regard to when, during a Performance Cycle or other accounting period, such
exercise occurs, to discharge any individual and/or treat him or her without
regard to the effect which such treatment might have upon him or her as a
Participant in the Plan.



     7.6 No Obligation to Exercise Options. The granting of a Stock Option
shall impose no obligation upon the Participant to exercise such Stock Option.



     7.7 No Rights as Stockholders. A Participant granted an Award under the
Plan shall have no rights as a stockholder of the Company with respect to such
Award unless and until such time as certificates for the Shares underlying the
Award are registered in such Participant’s name. The right of any Participant
to receive an Award by virtue of participation in the Plan shall be no greater
than the right of any unsecured general creditor of the Company.



     7.8 Indemnification of Committee. The Company shall indemnify, to the
full extent permitted by law, each person made or threatened to be made a party
to any civil or criminal action or proceeding by reason of the fact that he, or
his testator or intestate, is or was a member of the Committee or a delegate of
the Committee so acting.



     7.9 No Required Segregation of Assets.
Neither the Company nor any Related Company shall be required to segregate
any assets that may at any time be represented by Awards granted pursuant to
the Plan.



     7.10 Nature of Payments. All Awards made pursuant to the Plan are in
consideration of services for the Company or the Related Companies. Any gain
realized pursuant to Awards under the Plan constitutes a special incentive
payment to the Participant and shall not be taken into account as compensation
for purposes of any of the employee benefit plans of the Company or any Related
Company except as may be determined by the Board or by the board of directors
of the applicable Related Company.



     7.11 Securities Exchange Act Compliance. Awards under the Plan are
intended to satisfy the requirements of Rule 16b-3 under the Securities
Exchange Act of 1934. If any provision or this Plan or of any grant of an
Award would otherwise frustrate or conflict with such intent, that provision
shall be interpreted and deemed amended so as to avoid such conflict.



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     7.12 Governing Law; Severability. The Plan and all determinations made
and actions taken thereunder shall be governed by the internal substantive
laws, and not the choice of law rules, of the State of New York and construed
accordingly, to the extent not superseded by applicable federal law. If any
provision of the Plan shall be held unlawful or otherwise invalid or
unenforceable in whole or in part, the unlawfulness, invalidity or
unenforceability shall not affect any other provision of the Plan or part
thereof, each of which shall remain in full force and effect.




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