exv10w1



 






Exhibit 10.1




WESTERN DIGITAL CORPORATION

AMENDED AND RESTATED

2004 PERFORMANCE INCENTIVE PLAN





	1.	 	PURPOSE OF PLAN






The purpose of this Western Digital Corporation 2004 Performance Incentive Plan (this
“Plan”) of Western Digital Corporation, a Delaware corporation (the “Corporation”), is to
promote the success of the Corporation and to increase stockholder value by providing an
additional means through the grant of awards to attract, motivate, retain and reward
selected employees and other eligible persons.




	2.	 	ELIGIBILITY






The Administrator (as such term is defined in Section 3.1) may grant awards under this Plan
only to those persons that the Administrator determines to be Eligible Persons. An
“Eligible Person” is any person who is either: (a) an officer (whether or not a director) or
employee of the Corporation or one of its Subsidiaries; (b) a director of the Corporation or
one of its Subsidiaries; or (c) an individual consultant or advisor who renders or has
rendered bona fide services (other than services in connection with the offering or sale of
securities of the Corporation or one of its Subsidiaries in a capital-raising transaction or
as a market maker or promoter of securities of the Corporation or one of its Subsidiaries)
to the Corporation or one of its Subsidiaries and who is selected to participate in this
Plan by the Administrator; provided, however, that a person who is otherwise an Eligible
Person under clause (c) above may participate in this Plan only if such participation would
not adversely affect either the Corporation’s eligibility to use Form S-8 to register under
the Securities Act of 1933, as amended (the “Securities Act”), the offering and sale of
shares issuable under this Plan by the Corporation or the Corporation’s compliance with any
other applicable laws. An Eligible Person who has been granted an award (a “participant”)
may, if otherwise eligible, be granted additional awards if the Administrator shall so
determine. As used herein, “Subsidiary” means any corporation or other entity a majority of
whose outstanding voting stock or voting power is beneficially owned directly or indirectly
by the Corporation; and “Board” means the Board of Directors of the Corporation.




	3.	 	PLAN ADMINISTRATION






	 	3.1	 	The Administrator. This Plan shall be administered by and all awards under
this Plan shall be authorized by the Administrator. The “Administrator” means the
Board or one or more committees appointed by the Board or another committee (within its
delegated authority) to administer all or certain aspects of this Plan. Any such
committee shall be comprised solely of one or more directors or such number of
directors as may be required under applicable law. A committee may delegate some or
all of its authority to another committee so constituted. The Board or a committee
comprised solely of directors may also delegate, to the extent permitted by Section
157(c) of the Delaware General Corporation Law and any other applicable law, to one or
more officers of the Corporation, its powers under this Plan (a) to designate the
officers and employees of the Corporation and




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	 	 	 	its Subsidiaries who will receive grants of awards under this Plan, and (b) to
determine the number of shares subject to, and the other terms and conditions of,
such awards. The Board may delegate different levels of authority to different
committees with administrative and grant authority under this Plan. Unless
otherwise provided in the Bylaws of the Corporation or the applicable charter of any
Administrator: (a) a majority of the members of the acting Administrator shall
constitute a quorum, and (b) the vote of a majority of the members present assuming
the presence of a quorum or the unanimous written consent of the members of the
Administrator shall constitute action by the acting Administrator.
	 
	 	 	 	With respect to awards intended to satisfy the requirements for performance-based
compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended
(the “Code”), this Plan shall be administered by a committee consisting solely of
two or more outside directors (as this requirement is applied under Section 162(m)
of the Code); provided, however, that the failure to satisfy such requirement shall
not affect the validity of the action of any committee otherwise duly authorized and
acting in the matter. Award grants to, and transactions in or involving awards held
by persons who the Board or a committee thereof determines are subject to Section 16
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), must be
duly and timely authorized by a Board committee consisting solely of two or more
non-employee directors (as this requirement is applied under Rule 16b-3 promulgated
under the Exchange Act). To the extent required by any applicable listing agency,
this Plan shall be administered by a committee composed entirely of independent
directors (within the meaning of the applicable listing agency).
	 
	 	3.2	 	Powers of the Administrator. Subject to the express provisions of this Plan,
the Administrator is authorized and empowered to do all things necessary or desirable
in connection with the authorization of awards and the administration of this Plan (in
the case of a committee or delegation to one or more officers, within the authority
delegated to that committee or person(s)), including, without limitation, the authority
to:






	 	(a)	 	determine eligibility and, from among those persons determined
to be eligible, the particular Eligible Persons who will receive an award under
this Plan;
	 
	 	(b)	 	grant awards to Eligible Persons, determine the price at which
securities will be offered or awarded and the number of securities to be
offered or awarded to any of such persons, determine the other specific terms
and conditions of such awards consistent with the express limits of this Plan,
establish the installments (if any) in which such awards shall become
exercisable or shall vest (which may include, without limitation, performance
and/or time-based schedules), or determine that no delayed exercisability or
vesting is required (subject to the minimum vesting rules of Section 5.1.5),
establish any applicable performance targets, and establish the events of
termination or reversion of such awards;




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	 	(c)	 	approve the forms of award agreements (which need not be
identical either as to type of award or among participants);
	 
	 	(d)	 	construe and interpret this Plan and any agreements defining
the rights and obligations of the Corporation, its Subsidiaries, and
participants under this Plan, further define the terms used in this Plan, and
prescribe, amend and rescind rules and regulations relating to the
administration of this Plan or the awards granted under this Plan;
	 
	 	(e)	 	cancel, modify, or waive the Corporation’s rights with respect
to, or modify, discontinue, suspend, or terminate any or all outstanding
awards, subject to any required consent under Section 8.6.5;
	 
	 	(f)	 	accelerate or extend the vesting or exercisability or extend
the term of any or all such outstanding awards (in the case of options or stock
appreciation rights, within the maximum ten-year term of such awards) in such
circumstances as the Administrator may deem appropriate (including, without
limitation, in connection with a termination of employment or services or other
events of a personal nature) subject to any required consent under Section
8.6.5 and subject to the minimum vesting rules of Section 5.1.5;
	 
	 	(g)	 	adjust the number of shares of Common Stock subject to any
award, adjust the price of any or all outstanding awards or otherwise change
previously imposed terms and conditions, in such circumstances as the
Administrator may deem appropriate, in each case subject to Sections 4 and 8.6,
and provided that in no case (except due to an adjustment contemplated by
Section 7 or any repricing that may be approved by stockholders) shall such an
adjustment constitute a repricing (by amendment, cancellation and regrant,
exchange or other means) of the per share exercise or base price of any option
or stock appreciation right;
	 
	 	(h)	 	determine the date of grant of an award, which may be a
designated date after but not before the date of the Administrator’s action
(unless otherwise designated by the Administrator, the date of grant of an
award shall be the date upon which the Administrator took the action granting
an award);
	 
	 	(i)	 	determine whether, and the extent to which, adjustments are
required pursuant to Section 7 hereof and authorize the termination,
conversion, substitution or succession of awards upon the occurrence of an
event of the type described in Section 7;
	 
	 	(j)	 	acquire or settle (subject to Sections 7 and 8.6) rights under
awards in cash, stock of equivalent value, or other consideration; and
	 
	 	(k)	 	determine the fair market value of the Common Stock or awards
under this Plan from time to time and/or the manner in which such value will be
determined.




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	 	3.3	 	Binding Determinations. Any action taken by, or inaction of, the Corporation,
any Subsidiary, or the Administrator relating or pursuant to this Plan and within its
authority hereunder or under applicable law shall be within the absolute discretion of
that entity or body and shall be conclusive and binding upon all persons. Neither the
Board nor any Board committee, nor any member thereof or person acting at the direction
thereof, shall be liable for any act, omission, interpretation, construction or
determination made in good faith in connection with this Plan (or any award made under
this Plan), and all such persons shall be entitled to indemnification and reimbursement
by the Corporation in respect of any claim, loss, damage or expense (including, without
limitation, attorneys’ fees) arising or resulting therefrom to the fullest extent
permitted by law and/or under any directors and officers liability insurance coverage
that may be in effect from time to time.
	 
	 	3.4	 	Reliance on Experts. In making any determination or in taking or not taking
any action under this Plan, the Board or a committee, as the case may be, may obtain
and may rely upon the advice of experts, including employees and professional advisors
to the Corporation. No director, officer or agent of the Corporation or any of its
Subsidiaries shall be liable for any such action or determination taken or made or
omitted in good faith.
	 
	 	3.5	 	Delegation. The Administrator may delegate ministerial, non-discretionary
functions to individuals who are officers or employees of the Corporation or any of its
Subsidiaries or to third parties.






	4.	 	SHARES OF COMMON STOCK SUBJECT TO THE PLAN; SHARE LIMITS






	 	4.1	 	Shares Available. Subject to the provisions of Section 7.1, the capital stock
that may be delivered under this Plan shall be shares of the Corporation’s authorized
but unissued Common Stock and any shares of its Common Stock held as treasury shares.
For purposes of this Plan, “Common Stock” shall mean the common stock of the
Corporation and such other securities or property as may become the subject of awards
under this Plan, or may become subject to such awards, pursuant to an adjustment made
under Section 7.1.
	 
	 	4.2	 	Share Limits. The maximum number of shares of Common Stock that may be
delivered pursuant to awards granted to Eligible Persons under this Plan (the “Share
Limit”) is equal to the sum of the following:






	 	(a)	 	17,500,000 shares of Common Stock, plus
	 
	 	(b)	 	the number of shares of Common Stock available for additional
award grant purposes under the Corporation’s Employee Stock Option Plan (the
“Employee Option Plan”) immediately prior to the expiration of that plan on
November 10, 2004; plus
	 
	 	(c)	 	the number of shares of Common Stock available for additional
award grant purposes under the Corporation’s Stock Option Plan for Non-Employee
Directors (the “Director Option Plan”), and the Corporation’s




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	 	 	 	Broad-Based Stock Incentive Plan (the “Broad-Based Plan” and, together with
the Employee Option Plan and the Director Option Plan, the “Option Plans”)
as of the date of stockholder approval of this Plan (the “Stockholder
Approval Date”) and determined immediately prior to the termination of the
authority to grant new awards under the Director Option Plan and the
Broad-Based Plan as of the Stockholder Approval Date, plus
	 
	 	(d)	 	the number of any shares subject to stock options granted under
the Option Plans and outstanding on the Stockholder Approval Date which expire,
or for any reason are cancelled or terminated, after the Stockholder Approval
Date without being exercised; plus
	 
	 	(e)	 	the number of any shares of restricted stock granted under the
Broad-Based Plan that are outstanding and unvested on the Stockholder Approval
Date that are forfeited, terminated, cancelled or otherwise reacquired by the
Corporation without having become vested;






provided that in no event shall the Share Limit exceed 48,199,313 shares (which is
the sum of the 17,500,000 shares set forth above, plus the number of shares
available under the Option Plans for additional award grant purposes as of the
Effective Date (as such term is defined in Section 8.6.1), plus the aggregate number
of shares subject to options previously granted and outstanding under the Option
Plans as of the Effective Date, plus the maximum number of shares subject to
restricted stock awards previously granted and outstanding under the Broad-Based
Plan that had not vested as of the Effective Date).




Shares issued in respect of any “Full-Value Award” granted under this Plan shall be
counted against the foregoing Share Limit as 1.35 shares for every one share
actually issued in connection with such award. (For example, if a stock bonus of
100 shares of Common Stock is granted under this Plan, 135 shares shall be charged
against the Share Limit in connection with that award.) For this purpose, a
“Full-Value Award” means any award under this Plan that is not either: (1) a
delivery of shares in respect of compensation earned but deferred, (2) except as
expressly provided in Section 5.1.1 (which generally provides that “discounted”
stock option grants are Full-Value Awards), a stock option grant, and (3) except as
expressly provided in Section 5.1.3 (which generally provides that “discounted”
stock appreciation right grants are Full-Value Awards), a stock appreciation right
grant.




The following limits also apply with respect to awards granted under this Plan:




	 	(1)	 	The maximum number of shares of Common Stock that may be
delivered pursuant to options qualified as incentive stock options granted
under this Plan is 35,199,313 shares.
	 
	 	(2)	 	The maximum number of shares of Common Stock subject to those
options and stock appreciation rights that are granted during any calendar year
to any individual under this Plan is 1,000,000 shares.




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	 	(3)	 	Additional limits with respect to Performance-Based Awards are
set forth in Section 5.2.3.
	 
	 	(4)	 	In no event will greater than five percent (5%) of the total shares of Common Stock
available for award grant purposes under this Plan be
used for purposes of granting certain “Special Full-Value
Awards” referred to in Sections 5.1.1, 5.1.3 and 5.1.5.






Each of the foregoing numerical limits is subject to adjustment as contemplated by
Section 4.3, Section 7.1, and Section 8.10.




	 	4.3	 	Awards Settled in Cash, Reissue of Awards and Shares. The share limits of this
Plan are subject to adjustment pursuant to the following, subject to any applicable
limitations under Section 162(m) of the Code with respect to awards intended as
performance-based compensation thereunder. Refer to Section 8.10 for application of
this Plan’s share limits with respect to assumed awards.






	 	(a)	 	Shares that are subject to or underlie awards which expire or
for any reason are cancelled or terminated, are forfeited, fail to vest, or for
any other reason are not paid or delivered under this Plan shall again be
available for subsequent awards under this Plan.
	 
	 	(b)	 	To the extent that an award is settled in cash or a form other
than shares of Common Stock, the shares that would have been delivered had
there been no such cash or other settlement shall not be counted against the
shares available for issuance under this Plan.
	 
	 	(c)	 	In the event that shares of Common Stock are delivered in
respect of a dividend equivalent right, only the actual number of shares
delivered with respect to the award shall be counted against the share limits
of this Plan. To the extent that shares of Common Stock are delivered pursuant
to the exercise of a stock appreciation right or stock option, the number of
underlying shares as to which the exercise related shall be counted against the
applicable share limits under Section 4.2, as opposed to only counting the
shares actually issued. (For purposes of clarity, if a stock appreciation
right relates to 100,000 shares and is exercised at a time when the payment due
to the participant is 15,000 shares, 100,000 shares shall be charged against
the applicable share limits under Section 4.2 with respect to such exercise.)






	 	4.4	 	Reservation of Shares; No Fractional Shares; Minimum Issue. The Corporation
shall at all times reserve a number of shares of Common Stock sufficient to cover the
Corporation’s obligations and contingent obligations to deliver shares with respect to
awards then outstanding under this Plan (exclusive of any dividend equivalent
obligations to the extent the Corporation has the right to settle such rights in cash).
No fractional shares shall be delivered under this




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	 	 	 	Plan. The Administrator may pay cash in lieu of any fractional shares in
settlements of awards under this Plan.






	5.	 	AWARDS






	 	5.1	 	Type and Form of Awards. The Administrator shall determine the type or types
of award(s) to be made to each selected Eligible Person. Awards may be granted singly,
in combination or in tandem. Awards also may be made in combination or in tandem with,
in replacement of, as alternatives to, or as the payment form for grants or rights
under any other employee or compensation plan of the Corporation or one of its
Subsidiaries. The types of awards that may be granted under this Plan are:






5.1.1 Stock Options. A stock option is the grant of a right to purchase a specified
number of shares of Common Stock during a specified period as determined by the
Administrator. An option may be intended as an incentive stock option within the
meaning of Section 422 of the Code (an “ISO”) or a nonqualified stock option (an
option not intended to be an ISO). The award agreement for an option will indicate
if the option is intended as an ISO; otherwise it will be deemed to be a
nonqualified stock option. The maximum term of each option (ISO or nonqualified)
shall be ten (10) years. The per share exercise price for each option shall be not
less than 100% of the fair market value of a share of Common Stock on the date of
grant of the option, except as follows: (a) in the case of a stock option granted as a substitution for another award, the per share
exercise price may be no lower than the fair market value of a share of Common Stock
on the date such other award was granted (to the extent consistent with Sections 422
and 424 of the Code in the case of options intended as incentive stock options); and
(b) in any other circumstances, a nonqualified stock option may be granted with a
per share exercise price that is less than the fair market value of a share of
Common Stock on the date of grant, provided that any shares delivered in respect of
such option shall be charged against the Share Limit as a Full-Value Award and
against the other applicable share limits of Section 4.2 as a Special Full-Value
Award. When an option is exercised, the exercise price for the shares to be
purchased shall be paid in full in cash or such other method permitted by the
Administrator consistent with Section 5.5.




5.1.2 Additional Rules Applicable to ISOs. To the extent that the aggregate fair
market value (determined at the time of grant of the applicable option) of stock
with respect to which ISOs first become exercisable by a participant in any calendar
year exceeds $100,000, taking into account both Common Stock subject to ISOs under
this Plan and stock subject to ISOs under all other plans of the Corporation or one
of its Subsidiaries (or any parent or predecessor corporation to the extent required
by and within the meaning of Section 422 of the Code and the regulations promulgated
thereunder), such options shall be treated as nonqualified stock options. In
reducing the number of options treated as ISOs to meet the $100,000 limit, the most
recently granted options shall be reduced first. To the extent a reduction of
simultaneously granted options is necessary to meet the



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$100,000 limit, the Administrator may, in the manner and to the extent permitted by
law, designate which shares of Common Stock are to be treated as shares acquired
pursuant to the exercise of an ISO. ISOs may only be granted to employees of the
Corporation or one of its subsidiaries (for this purpose, the term “subsidiary” is
used as defined in Section 424(f) of the Code, which generally requires an unbroken
chain of ownership of at least 50% of the total combined voting power of all classes
of stock of each subsidiary in the chain beginning with the Corporation and ending
with the subsidiary in question). There shall be imposed in any award agreement
relating to ISOs such other terms and conditions as from time to time are required
in order that the option be an “incentive stock option” as that term is defined in
Section 422 of the Code. No ISO may be granted to any person who, at the time the
option is granted, owns (or is deemed to own under Section 424(d) of the Code)
shares of outstanding Common Stock possessing more than 10% of the total combined
voting power of all classes of stock of the Corporation, unless the exercise price
of such option is at least 110% of the fair market value of the stock subject to the
option and such option by its terms is not exercisable after the expiration of five
years from the date such option is granted.




5.1.3 Stock Appreciation Rights. A stock appreciation right or “SAR” is a right to
receive a payment, in cash and/or Common Stock, equal to the excess of the fair
market value of a specified number of shares of Common Stock on the date the SAR is
exercised over the fair market value of a share of Common Stock on the date the SAR
was granted (the “base price”) as set forth in the applicable award agreement,
except as follows: (a) in the case of a SAR granted as a substitution for another award, the base price may be no lower than the fair
market value of a share of Common Stock on the date such other award was granted;
and (b) in any other circumstances, a SAR may be granted with a base price that is
less than the fair market value of a share of Common Stock on the date of grant,
provided that any shares actually delivered in respect of such award shall be
charged against the Share Limit as a Full-Value Award and against the other
applicable share limits of Section 4.2 as a Special Full-Value Award. The maximum
term of an SAR shall be ten (10) years.




5.1.4 Other Awards. The other types of awards that may be granted under this Plan
include: (a) stock bonuses, restricted stock, performance stock, stock units,
phantom stock, dividend equivalents, or similar rights to purchase or acquire
shares, whether at a fixed or variable price or ratio related to the Common Stock,
upon the passage of time, the occurrence of one or more events, or the satisfaction
of performance criteria or other conditions, or any combination thereof; (b) any
similar securities with a value derived from the value of or related to the Common
Stock and/or returns thereon; or (c) cash awards granted consistent with Section 5.2
below.




5.1.5 Minimum Vesting Requirements. Except for any accelerated vesting required or
permitted pursuant to Section 7 and except as otherwise provided in the following
provisions of this Section 5.1.5, and subject to such additional vesting
requirements or conditions as the Administrator may establish with



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respect to the award, each award granted under this Plan that is a Full-Value Award
and payable in shares of Common Stock shall be subject to the following minimum
vesting requirements: (a) if the award includes a performance-based vesting
condition, the award shall not vest earlier than the first anniversary of the date
of grant of the award and vesting shall occur only if the award holder is employed
by, a director of, or otherwise providing services to the Corporation or one of its
Subsidiaries on such vesting date; and (b) if the award does not include a
performance-based vesting condition, the award shall not vest more rapidly than in
monthly installments over the three-year period immediately following the date of
grant of the award and vesting of any vesting installment of the award shall occur
only if the award holder is employed by, a director of, or otherwise providing
services to the Corporation or one of its Subsidiaries on the date such installment
is scheduled to vest; provided that the Administrator may accelerate or provide in
the applicable award agreement for the accelerated vesting of any Full-Value Award
in connection with a change in control of the award holder’s employer (or a parent
thereof), the termination of the award holder’s employment (including a termination
of employment due to the award holder’s death, disability or retirement, but not
including a termination of employment by the award holder’s employer for cause), or
as consideration or partial consideration for a release by the award holder of
pending or threatened claims against the Company, the award holder’s employer, or
any of their respective officers, directors or other affiliates (regardless of
whether the release is given in connection with a termination of employment by the
award holder’s employer for cause or other circumstances). The Administrator may,
however, accelerate or provide in the applicable award agreement for the accelerated
vesting of any Full-Value Award in circumstances not contemplated by the preceding
sentence, and/or provide for a vesting schedule that is shorter than the minimum
schedule contemplated by the preceding sentence, in such circumstances as the
Administrator may deem appropriate; provided, however, that the portion of any such Full-Value
Award that vests earlier than the minimum vesting dates that would be applicable pursuant to the minimum vesting requirements of the preceding
sentence (or, as to any accelerated vesting, provides for accelerated vesting other
than in the circumstances contemplated by the preceding sentence) shall count
against the applicable share limits of Section 4.2 as a Special Full-Value Award (as
opposed to counting against such limits only as a Full-Value Award).




	 	5.2	 	Section 162(m) Performance-Based Awards. Without limiting the generality of
the foregoing, any of the types of awards listed in Section 5.1.4 above may be, and
options and SARs granted with an exercise or base price not less than the fair market
value of a share of Common Stock at the date of grant (“Qualifying Options” and
“Qualifying SARS,” respectively) typically will be, granted as awards intended to
satisfy the requirements for “performance-based compensation” within the meaning of
Section 162(m) of the Code (“Performance-Based Awards"). The grant, vesting,
exercisability or payment of Performance-Based Awards may depend (or, in the case of
Qualifying Options or Qualifying SARs, may also depend) on the degree of achievement of
one or more performance goals relative to a pre-established targeted level or level
using one or more of the Business Criteria set forth below (on an absolute or relative




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basis) for the Corporation on a consolidated basis or for one or more of the
Corporation’s subsidiaries, segments, divisions or business units, or any
combination of the foregoing. Any Qualifying Option or Qualifying SAR shall be
subject only to the requirements of Section 5.2.1 and 5.2.3 in order for such award
to satisfy the requirements for “performance-based compensation” under Section
162(m) of the Award. Any other Performance-Based Award shall be subject to all of
the following provisions of this Section 5.2.




5.2.1 Class; Administrator. The eligible class of persons for Performance-Based
Awards under this Section 5.2 shall be officers and employees of the Corporation or
one of its Subsidiaries. The Administrator approving Performance-Based Awards or
making any certification required pursuant to Section 5.2.4 must be constituted as
provided in Section 3.1 for awards that are intended as performance-based
compensation under Section 162(m) of the Code.




5.2.2 Performance Goals. The specific performance goals for Performance-Based
Awards (other than Qualifying Options and Qualifying SARs) shall be, on an absolute
or relative basis, established based on one or more of the following business
criteria (“Business Criteria”) as selected by the Administrator in its sole
discretion: earnings per share, cash flow (which means cash and cash equivalents
derived from either net cash flow from operations or net cash flow from operations,
financing and investing activities), total stockholder return, gross revenue,
revenue growth, operating income (before or after taxes), net earnings (before or
after interest, taxes, depreciation and/or amortization), return on equity or on
assets or on net investment, cost containment or reduction, or any combination
thereof. These terms are used as applied under generally accepted accounting
principles or in the financial reporting of the Corporation or of its Subsidiaries.
To qualify awards as performance-based under Section 162(m), the applicable Business
Criterion (or Business Criteria, as the case may be) and specific performance goal
or goals (“targets”) must be established and approved by the Administrator during
the first 90 days of the performance period (and, in the case of performance periods
of less than one year, in no event after 25% or more of the performance period has
elapsed) and while performance relating to such target(s) remains substantially
uncertain within the meaning of Section 162(m) of the Code. Performance targets
shall be adjusted to mitigate the unbudgeted impact of material, unusual or
nonrecurring gains and losses, accounting changes or other extraordinary events not
foreseen at the time the targets were set unless the Administrator provides
otherwise at the time of establishing the targets. The applicable performance
measurement period may not be less than three months nor more than 10 years.




5.2.3 Form of Payment; Maximum Performance-Based Award. Grants or awards under this
Section 5.2 may be paid in cash or shares of Common Stock or any combination
thereof. Grants of Qualifying Options and Qualifying SARs to any one participant in
any one calendar year shall be subject to the limit set forth in Section 4.2(2).
The maximum number of shares of Common Stock which may be delivered pursuant to
Performance-Based Awards (other than Qualifying Options and Qualifying SARs, and
other than cash awards covered by the



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following sentence) that are granted to any one participant in any one calendar year
shall not exceed 800,000 shares, either individually or in the aggregate, subject to
adjustment as provided in Section 7.1. In addition, the aggregate amount of
compensation to be paid to any one participant in respect of all Performance-Based
Awards payable only in cash and not related to shares of Common Stock and granted to
that participant in any one calendar year shall not exceed $5,000,000. Awards that
are cancelled during the year shall be counted against these limits to the extent
permitted by Section 162(m) of the Code.




5.2.4 Certification of Payment. Before any Performance-Based Award under this
Section 5.2 (other than Qualifying Options and Qualifying SARs) is paid and to the
extent required to qualify the award as performance-based compensation within the
meaning of Section 162(m) of the Code, the Administrator must certify in writing
that the performance target(s) and any other material terms of the Performance-Based
Award were in fact timely satisfied.




5.2.5 Reservation of Discretion. The Administrator will have the discretion to
determine the restrictions or other limitations of the individual awards granted
under this Section 5.2 including the authority to reduce awards, payouts or vesting
or to pay no awards, in its sole discretion, if the Administrator preserves such
authority at the time of grant by language to this effect in its authorizing
resolutions or otherwise.




5.2.6 Expiration of Grant Authority. As required pursuant to Section 162(m) of the
Code and the regulations promulgated thereunder, the Administrator’s authority to
grant new awards that are intended to qualify as performance-based compensation
within the meaning of Section 162(m) of the Code (other than Qualifying Options and
Qualifying SARs) shall terminate upon the first meeting of the Corporation’s
stockholders that occurs in the fifth year following the year in which the
Corporation’s stockholders first approve this Plan.




	 	5.3	 	Award Agreements. Each award shall be evidenced by a written award agreement
in the form approved by the Administrator and executed on behalf of the Corporation
and, if required by the Administrator, executed by the recipient of the award. The
Administrator may authorize any officer of the Corporation (other than the particular
award recipient) to execute any or all award agreements on behalf of the Corporation.
The award agreement shall set forth the material terms and conditions of the award as
established by the Administrator consistent with the express limitations of this Plan.
	 
	 	5.4	 	Deferrals and Settlements. Payment of awards may be in the form of cash,
Common Stock, other awards or combinations thereof as the Administrator shall
determine, and with such restrictions as it may impose. The Administrator may also
require or permit participants to elect to defer the issuance of shares or the
settlement of awards in cash under such rules and procedures as it may establish under
this Plan. The Administrator may also provide that deferred settlements include the
payment or crediting of interest or other earnings on the deferral amounts, or the
payment or crediting of dividend equivalents where the deferred




11









 






	 	 	 	amounts are denominated in shares.
	 
	 	5.5	 	Consideration for Common Stock or Awards. The purchase price for any award
granted under this Plan or the Common Stock to be delivered pursuant to an award, as
applicable, may be paid by means of any lawful consideration as determined by the
Administrator, including, without limitation, one or a combination of the following
methods:






	 	•	 	a reduction in compensation otherwise payable to the recipient of such award
for services rendered by the recipient;
	 
	 	•	 	cash, check payable to the order of the Corporation, or electronic funds
transfer;
	 
	 	•	 	notice and third party payment in such manner as may be authorized by the
Administrator;
	 
	 	•	 	the delivery of previously owned shares of Common Stock;
	 
	 	•	 	by a reduction in the number of shares otherwise deliverable pursuant to the
award; or
	 
	 	•	 	subject to such procedures as the Administrator may adopt, pursuant to a
“cashless exercise” with a third party who provides financing for the purposes
of (or who otherwise facilitates) the purchase or exercise of awards.






In no event shall any shares newly-issued by the Corporation be issued for less than
the minimum lawful consideration for such shares or for consideration other than
consideration permitted by applicable state law. In the event that the
Administrator allows a participant to exercise an award by delivering shares of
Common Stock previously owned by such participant and unless otherwise expressly
provided by the Administrator, any shares delivered which were initially acquired by
the participant from the Corporation (upon exercise of a stock option or otherwise)
must have been owned by the participant at least six months as of the date of
delivery. Shares of Common Stock used to satisfy the exercise price of an option
shall be valued at their fair market value on the date of exercise. The Corporation
will not be obligated to deliver any shares unless and until it receives full
payment of the exercise or purchase price therefor and any related withholding
obligations under Section 8.5 and any other conditions to exercise or purchase have
been satisfied. Unless otherwise expressly provided in the applicable award
agreement, the Administrator may at any time eliminate or limit a participant’s
ability to pay the purchase or exercise price of any award or shares by any method
other than cash payment to the Corporation.




	 	5.6	 	Definition of Fair Market Value. For purposes of this Plan, “fair market
value” shall mean, unless otherwise determined or provided by the Administrator in the
circumstances, the closing price of a share of Common Stock as reported on the
composite tape for securities listed on the New York Stock Exchange (the




12









 












"Exchange”) for the date in question or, if no sales of Common Stock were made on
the Exchange on that date, the closing price of a share of Common Stock as reported
on said composite tape for the next preceding day on which sales of Common Stock
were made on the Exchange. The Administrator may, however, provide with respect to
one or more awards that the fair market value shall equal the last closing price of
a share of Common Stock as reported on the composite tape for securities listed on
the Exchange available at the relevant time or the average of the high and low
trading prices of a share of Common Stock as reported on the composite tape for
securities listed on the Exchange for the date in question or the most recent
trading day. If the Common Stock is no longer listed or is no longer actively
traded on the Exchange as of the applicable date, the fair market value of the
Common Stock shall be the value as reasonably determined by the Administrator for
purposes of the award in the circumstances. The Administrator also may adopt a
different methodology for determining fair market value with respect to one or more
awards if a different methodology is necessary or advisable to secure any intended
favorable tax, legal or other treatment for the particular award(s) (for example,
and without limitation, the Administrator may provide that fair market value for
purposes of one or more awards will be based on an average of closing prices (or the
average of high and low daily trading prices) for a specified period preceding the
relevant date).




	 	5.7	 	Transfer Restrictions.






5.7.1 Limitations on Exercise and Transfer. Unless otherwise expressly provided in
(or pursuant to) this Section 5.7, by applicable law and by the award agreement, as
the same may be amended, (a) all awards are non-transferable and shall not be
subject in any manner to sale, transfer, anticipation, alienation, assignment,
pledge, encumbrance or charge; (b) awards shall be exercised only by the
participant; and (c) amounts payable or shares issuable pursuant to any award shall
be delivered only to (or for the account of) the participant.




5.7.2 Exceptions. The Administrator may permit awards to be transferred to other
persons or entities pursuant to such conditions and procedures, including
limitations on subsequent transfers, as the Administrator may, in its sole
discretion, establish in writing; provided, however, that any such transfer shall
only be permitted if it is made by the participant for estate or tax planning or
charitable purposes for no (or nominal) consideration, as determined by the
Administrator. Any permitted transfer shall be subject to compliance with
applicable federal and state securities laws.




5.7.3 Further Exceptions to Limits on Transfer. The exercise and transfer
restrictions in Section 5.7.1 shall not apply to:




	 	(a)	 	transfers to the Corporation,
	 
	 	(b)	 	the designation of a beneficiary to receive benefits in the
event of the participant’s death or, if the participant has died, transfers to
or exercise by the participant’s beneficiary, or, in the absence of a validly
designated




13









 






	 	 	 	beneficiary, transfers by will or the laws of descent and distribution,
	 
	 	(c)	 	subject to any applicable limitations on ISOs, transfers to a
family member (or former family member) pursuant to a domestic relations order
if approved or ratified by the Administrator,
	 
	 	(d)	 	if the participant has suffered a disability, permitted
transfers or exercises on behalf of the participant by his or her legal
representative, or
	 
	 	(e)	 	the authorization by the Administrator of “cashless exercise”
procedures with third parties who provide financing for the purpose of (or who
otherwise facilitate) the exercise of awards consistent with applicable laws
and the express authorization of the Administrator.






	 	5.8	 	International Awards. One or more awards may be granted to Eligible Persons
who provide services to the Corporation or one of its Subsidiaries outside of the
United States. Any awards granted to such persons may be granted pursuant to the terms
and conditions of any applicable sub-plans, if any, appended to this Plan and approved
by the Administrator.






	6.	 	EFFECT OF TERMINATION OF SERVICE ON AWARDS






	 	6.1	 	General. The Administrator shall establish the effect of a termination of
employment or service on the rights and benefits under each award under this Plan and
in so doing may make distinctions based upon, inter alia, the cause of termination and
type of award. If the participant is not an employee of the Corporation or one of its
Subsidiaries and provides other services to the Corporation or one of its Subsidiaries,
the Administrator shall be the sole judge for purposes of this Plan (unless a contract
or the award otherwise provides) of whether the participant continues to render
services to the Corporation or one of its Subsidiaries and the date, if any, upon which
such services shall be deemed to have terminated.
	 
	 	6.2	 	Events Not Deemed Terminations of Service. Unless the express policy of the
Corporation or one of its Subsidiaries, or the Administrator, otherwise provides, the
employment relationship shall not be considered terminated in the case of (a) sick
leave, (b) military leave, or (c) any other leave of absence authorized by the
Corporation or one of its Subsidiaries, or the Administrator; provided that unless
reemployment upon the expiration of such leave is guaranteed by contract or law, such
leave is for a period of not more than 90 days. In the case of any employee of the
Corporation or one of its Subsidiaries on an approved leave of absence, continued
vesting of the award while on leave from the employ of the Corporation or one of its
Subsidiaries may be suspended until the employee returns to service, unless the
Administrator otherwise provides or applicable law otherwise requires. In no event
shall an award be exercised after the expiration of the term set forth in the award
agreement.
	 
	 	6.3	 	Effect of Change of Subsidiary Status. For purposes of this Plan and any
award, if an entity ceases to be a Subsidiary of the Corporation a termination of




14









 






	 	 	 	employment or service shall be deemed to have occurred with respect to each Eligible
Person in respect of such Subsidiary who does not continue as an Eligible Person in
respect of another entity within the Corporation or another Subsidiary that
continues as such after giving effect to the transaction or other event giving rise
to the change in status.






	7.	 	ADJUSTMENTS; ACCELERATION






	 	7.1	 	Adjustments. Upon or in contemplation of: any reclassification,
recapitalization, stock split (including a stock split in the form of a stock dividend)
or reverse stock split (“stock split”); any merger, combination, consolidation, or
other reorganization; any spin-off, split-up, or similar extraordinary dividend
distribution in respect of the Common Stock (whether in the form of securities or
property); any exchange of Common Stock or other securities of the Corporation, or any
similar, unusual or extraordinary corporate transaction in respect of the Common Stock;
or a sale of all or substantially all the business or assets of the Corporation as an
entirety; then the Administrator shall, in such manner, to such extent (if any) and at
such time as it deems appropriate and equitable in the circumstances:






	 	(a)	 	proportionately adjust any or all of (1) the number and type of shares of Common Stock (or other securities) that thereafter may be made the
subject of awards (including the specific share limits, maximums and numbers of shares set forth elsewhere in this Plan), (2) the number, amount and type of shares of Common Stock (or other securities or property) subject to any or all
outstanding awards, (3) the grant, purchase, or exercise price (which term
includes the base price of any SAR or similar right) of any or all outstanding
awards, (4) the securities, cash or other property deliverable upon exercise or
payment of any outstanding awards, or (5) (subject to Sections 7.8 and
8.8.3(a)) the performance standards applicable to any outstanding awards, or
	 
	 	(b)	 	make provision for a cash payment or for the assumption,
substitution or exchange of any or all outstanding share-based awards or the
cash, securities or property deliverable to the holder of any or all
outstanding share-based awards, based upon the distribution or consideration
payable to holders of the Common Stock upon or in respect of such event.






The Administrator may adopt such valuation methodologies for outstanding awards as
it deems reasonable in the event of a cash or property settlement and, in the case
of options, SARs or similar rights, but without limitation on other methodologies,
may base such settlement solely upon the excess if any of the per share amount
payable upon or in respect of such event over the exercise or base price of the
award. With respect to any award of an ISO, the Administrator may make such an
adjustment that causes the option to cease to qualify as an ISO without the consent
of the affected participant.




In any of such events, the Administrator may take such action prior to such event



15









 






to the extent that the Administrator deems the action necessary to permit the
participant to realize the benefits intended to be conveyed with respect to the
underlying shares in the same manner as is or will be available to stockholders
generally. In the case of any stock split or reverse stock split, if no action is
taken by the Administrator, the proportionate adjustments contemplated by clause (a)
above shall nevertheless be made.




	 	7.2	 	Automatic Acceleration of Awards. Upon a dissolution of the Corporation or
other event described in Section 7.1 that the Corporation does not survive (or does not
survive as a public company in respect of its Common Stock), then each then-outstanding
option and SAR shall become fully vested, all shares of restricted stock then
outstanding shall fully vest free of restrictions, and each other award granted under
this Plan that is then outstanding shall become payable to the holder of such award;
provided that such acceleration provision shall not apply, unless otherwise expressly
provided by the Administrator, with respect to any award to the extent that the
Administrator has made a provision for the substitution, assumption, exchange or other
continuation or settlement of the award, or the award would otherwise continue in
accordance with its terms, in the circumstances.
	 
	 	7.3	 	Possible Acceleration of Awards. Without limiting Section 7.2, in the event of
a Change in Control Event (as defined below), the Administrator may, in its discretion,
provide that any outstanding option or SAR shall become fully vested, that any share of
restricted stock then outstanding shall fully vest free of restrictions, and that any
other award granted under this Plan that is then outstanding shall be payable to the
holder of such award. The Administrator may take such action with respect to all
awards then outstanding or only with respect to certain specific awards identified by
the Administrator in the circumstances and may condition any such acceleration upon the
occurrence of another event (such as, without limitation, a termination of the award
holder’s employment). For purposes of this Plan, “Change in Control Event” means any
of the following:






	 	(a)	 	Any “person” (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act, a “Person”), alone or together with its affiliates and
associates, including any group of persons which is deemed a “person” under
Section 13(d)(3) of the Exchange Act (other than the Corporation or any
subsidiary thereof or any employee benefit plan (or related trust) of the
Corporation or any subsidiary thereof, or any underwriter in connection with a
firm commitment public offering of the Corporation’s capital stock), becomes
the “beneficial owner” (as such term is defined in Rule 13d-3 of the Exchange
Act, except that a person shall also be deemed the beneficial owner of all
securities which such person may have a right to acquire, whether or not such
right is presently exercisable, referred to herein as “Beneficially Own” or
“Beneficial Owner” as the context may require) of thirty-three and one third
percent or more of (i) the then outstanding shares of the Corporation’s common
stock (“Outstanding Company Common Stock”) or (ii) securities representing
thirty-three and one-third percent or more of the combined voting power of the




16









 






	 	 	 	Corporation’s then outstanding voting securities (“Outstanding Company
Voting Securities”) (in each case, other than an acquisition in the context
of a merger, consolidation, reorganization, asset sale or other
extraordinary transaction covered by, and which does not constitute a Change
in Control Event under, clause (c) below);
	 
	 	(b)	 	A change, during any period of two consecutive years, of a
majority of the Board as constituted as of the beginning of such period, unless
the election, or nomination for election by the Company’s stockholders, of each
director who was not a director at the beginning of such period was approved by
vote of at least two-thirds of the Incumbent Directors then in office (for
purposes hereof, “Incumbent Directors” shall consist of the directors holding
office as of the Effective Date and any person becoming a director subsequent
to such date whose election, or nomination for election by the Company’s
stockholders, is approved by a vote of at least a majority of the Incumbent
Directors then in office);
	 
	 	(c)	 	Consummation of any merger, consolidation, reorganization or
other extraordinary transaction (or series of related transactions) involving
the Corporation, a sale or other disposition of all or substantially all of the
assets of the Corporation, or the acquisition of assets or stock of another
entity by the Corporation or any of its subsidiaries (each, a “Business
Combination”), in each case unless, following such Business Combination, (1)
all or substantially all of the individuals and entities that were the
Beneficial Owners of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities immediately prior to such Business Combination
Beneficially Own, directly or indirectly, more than 50% of the then-outstanding
shares of common stock and the combined voting power of the then-outstanding
voting securities entitled to vote generally in the election of directors, as
the case may be, of the entity resulting from such Business Combination
(including, without limitation, an entity that, as a result of such
transaction, owns the Corporation or all or substantially all of the
Corporation’s assets directly or through one or more subsidiaries (a
“Parent”)), (2) no Person (excluding any entity resulting from such Business
Combination or a Parent or any employee benefit plan (or related trust) of the
Corporation or such entity resulting from such Business Combination or Parent,
and excluding any underwriter in connection with a firm commitment public
offering of the Corporation’s capital stock) Beneficially Owns, directly or
indirectly, more than thirty-three and one third percent of, respectively, the
then-outstanding shares of common stock of the entity resulting from such
Business Combination or the combined voting power of the then-outstanding
voting securities of such entity, and (3) at least a majority of the members of
the board of directors or trustees of the entity resulting from such Business
Combination or a Parent were Incumbent Directors at the time of the execution
of the initial agreement or of the action of the Board providing for such
Business Combination; or




17









 






	 	(d)	 	The stockholders of the Corporation approve a plan of complete
liquidation or dissolution of the Corporation (other than in the context of a
merger, consolidation, reorganization, asset sale or other extraordinary
transaction covered by, and which does not constitute a Change in Control Event
under, clause (c) above).






	 	7.4	 	Early Termination of Awards. Any award that has been accelerated as required
or contemplated by Section 7.2 or 7.3 (or would have been so accelerated but for
Section 7.5, 7.6 or 7.7) shall terminate upon the related event referred to in Section
7.2 or 7.3, as applicable, subject to any provision that has been expressly made by the
Administrator, through a plan of reorganization or otherwise, for the survival,
substitution, assumption, exchange or other continuation or settlement of such award
and provided that, in the case of options and SARs that will not survive, be
substituted for, assumed, exchanged, or otherwise continued or settled in the
transaction, the holder of such award shall be given reasonable advance notice of the
impending termination and a reasonable opportunity to exercise his or her outstanding
options and SARs in accordance with their terms (subject to Sections 7.5, 7.6 and 7.7
after giving effect to the acceleration of vesting) before the termination of such
awards (except that in no case shall more than ten days’ notice of accelerated vesting
and the impending termination be required and any acceleration may be made contingent
upon the actual occurrence of the event).
	 
	 	7.5	 	Other Acceleration Rules. Any acceleration of awards pursuant to this Section
7 shall comply with applicable legal requirements and, if necessary to accomplish the
purposes of the acceleration or if the circumstances require, may be deemed by the
Administrator to occur a limited period of time not greater than 30 days before the
event. Without limiting the generality of the foregoing, the Administrator may deem an
acceleration to occur immediately prior to the applicable event and/or reinstate the
original terms of an award if an event giving rise to an acceleration does not occur.
The Administrator may override the provisions of Section 7.2, 7.3, 7.4 and/or 7.6 by
express provision in the award agreement and may accord any Eligible Person a right to
refuse any acceleration, whether pursuant to the award agreement or otherwise, in such
circumstances as the Administrator may approve. The portion of any ISO accelerated in
connection with a Change in Control Event or any other action permitted hereunder shall
remain exercisable as an ISO only to the extent the applicable $100,000 limitation on
ISOs is not exceeded. To the extent exceeded, the accelerated portion of the option
shall be exercisable as a nonqualified stock option under the Code.
	 
	 	7.6	 	Possible Rescission of Acceleration. If the vesting of an award has been
accelerated expressly in anticipation of an event or upon stockholder approval of an
event and the Administrator later determines that the event will not occur, the
Administrator may rescind the effect of the acceleration as to any then outstanding and
unexercised or otherwise unvested awards.
	 
	 	7.7	 	Golden Parachute Limitation. Notwithstanding anything else contained in this
Section 7 to the contrary, in no event shall an award be accelerated under this Plan




18









 






	 	 	 	to an extent or in a manner which would not be fully deductible by the Corporation
or one of its Subsidiaries for federal income tax purposes because of Section 280G
of the Code, nor shall any payment hereunder be accelerated to the extent any
portion of such accelerated payment would not be deductible by the Corporation or
one of its Subsidiaries because of Section 280G of the Code. If a participant would
be entitled to benefits or payments hereunder and under any other plan or program
that would constitute “parachute payments” as defined in Section 280G of the Code,
then the participant may by written notice to the Corporation designate the order in
which such parachute payments will be reduced or modified so that the Corporation or
one of its Subsidiaries is not denied federal income tax deductions for any
“parachute payments” because of Section 280G of the Code. Notwithstanding the
foregoing, if a participant is a party to an employment or other agreement with the
Corporation or one of its Subsidiaries, or is a participant in a severance program
sponsored by the Corporation or one of its Subsidiaries, that contains express
provisions regarding Section 280G and/or Section 4999 of the Code (or any similar
successor provision), the Section 280G and/or Section 4999 provisions of such
employment or other agreement or plan, as applicable, shall control as to any awards
held by that participant (for example, and without limitation, a participant may be
a party to an employment agreement with the Corporation or one of its Subsidiaries
that provides for a “gross-up” as opposed to a “cut-back” in the event that the
Section 280G thresholds are reached or exceeded in connection with a change in
control and, in such event, the Section 280G and/or Section 4999 provisions of such
employment agreement shall control as to any awards held by that participant).






	8.	 	OTHER PROVISIONS






	 	8.1	 	Compliance with Laws. This Plan, the granting and vesting of awards under this
Plan, the offer, issuance and delivery of shares of Common Stock, the acceptance of
promissory notes and/or the payment of money under this Plan or under awards are
subject to compliance with all applicable federal and state laws, rules and regulations
(including but not limited to state and federal securities law, federal margin
requirements) and to such approvals by any listing, regulatory or governmental
authority as may, in the opinion of counsel for the Corporation, be necessary or
advisable in connection therewith. The person acquiring any securities under this Plan
will, if requested by the Corporation or one of its Subsidiaries, provide such
assurances and representations to the Corporation or one of its Subsidiaries as the
Administrator may deem necessary or desirable to assure compliance with all applicable
legal and accounting requirements.
	 
	 	8.2	 	Employment Status. No person shall have any claim or rights to be granted an
award (or additional awards, as the case may be) under this Plan, subject to any
express contractual rights (set forth in a document other than this Plan) to the
contrary.
	 
	 	8.3	 	No Employment/Service Contract. Nothing contained in this Plan (or in any
other documents under this Plan or in any award) shall confer upon any Eligible Person
or other participant any right to continue in the employ or other service of




19









 






	 	 	 	the Corporation or one of its Subsidiaries, constitute any contract or agreement of
employment or other service or affect an employee’s status as an employee at will,
nor shall interfere in any way with the right of the Corporation or one of its
Subsidiaries to change a person’s compensation or other benefits, or to terminate
his or her employment or other service, with or without cause. Nothing in this
Section 8.3, however, is intended to adversely affect any express independent right
of such person under a separate employment or service contract other than an award
agreement.
	 
	 	8.4	 	Plan Not Funded. Awards payable under this Plan shall be payable in shares or
from the general assets of the Corporation, and no special or separate reserve, fund or
deposit shall be made to assure payment of such awards. No participant, beneficiary or
other person shall have any right, title or interest in any fund or in any specific
asset (including shares of Common Stock, except as expressly otherwise provided) of the
Corporation or one of its Subsidiaries by reason of any award hereunder. Neither the
provisions of this Plan (or of any related documents), nor the creation or adoption of
this Plan, nor any action taken pursuant to the provisions of this Plan shall create,
or be construed to create, a trust of any kind or a fiduciary relationship between the
Corporation or one of its Subsidiaries and any participant, beneficiary or other
person. To the extent that a participant, beneficiary or other person acquires a right
to receive payment pursuant to any award hereunder, such right shall be no greater than
the right of any unsecured general creditor of the Corporation.
	 
	 	8.5	 	Tax Withholding. Upon any exercise, vesting, or payment of any award or upon
the disposition of shares of Common Stock acquired pursuant to the exercise of an ISO
prior to satisfaction of the holding period requirements of Section 422 of the Code,
the Corporation or one of its Subsidiaries shall have the right at its option to:






	 	(a)	 	require the participant (or the participant’s personal
representative or beneficiary, as the case may be) to pay or provide for
payment of at least the minimum amount of any taxes which the Corporation or
one of its Subsidiaries may be required to withhold with respect to such award
event or payment; or
	 
	 	(b)	 	deduct from any amount otherwise payable in cash to the
participant (or the participant’s personal representative or beneficiary, as
the case may be) the minimum amount of any taxes which the Corporation or one
of its Subsidiaries may be required to withhold with respect to such cash
payment.






In any case where a tax is required to be withheld in connection with the delivery
of shares of Common Stock under this Plan, the Administrator may in its sole
discretion (subject to Section 8.1) grant (either at the time of the award or
thereafter) to the participant the right to elect, pursuant to such rules and
subject to such conditions as the Administrator may establish, to have the
Corporation reduce the number of shares to be delivered by (or otherwise reacquire)
the



20









 






appropriate number of shares, valued in a consistent manner at their fair market
value or at the sales price in accordance with authorized procedures for cashless
exercises, necessary to satisfy the minimum applicable withholding obligation on
exercise, vesting or payment. In no event shall the shares withheld exceed the
minimum whole number of shares required for tax withholding under applicable law.
The Corporation may, with the Administrator’s approval, accept one or more
promissory notes from any Eligible Person in connection with taxes required to be
withheld upon the exercise, vesting or payment of any award under this Plan;
provided that any such note shall be subject to terms and conditions established by
the Administrator and the requirements of applicable law.




	 	8.6	 	Effective Date, Termination and Suspension, Amendments.






8.6.1 Effective Date. This Plan is effective as of September 21, 2004, the date of
its approval by the Board (the “Effective Date”). This Plan shall be submitted for
and subject to stockholder approval no later than twelve months after the Effective
Date. Unless earlier terminated by the Board, this Plan shall terminate at the
close of business on the day before the tenth anniversary of the Effective Date.
After the termination of this Plan either upon such stated expiration date or its
earlier termination by the Board, no additional awards may be granted under this
Plan, but previously granted awards (and the authority of the Administrator with
respect thereto, including the authority to amend such awards) shall remain
outstanding in accordance with their applicable terms and conditions and the terms
and conditions of this Plan.




8.6.2 Board Authorization. The Board may, at any time, terminate or, from time to
time, amend, modify or suspend this Plan, in whole or in part. No awards may be
granted during any period that the Board suspends this Plan.




8.6.3 Stockholder Approval. An amendment to this Plan shall be subject to
stockholder approval: (a) if stockholder approval for the amendment is then
required by applicable law or required under Sections 162, 422 or 424 of the Code to
preserve the intended tax consequences of this Plan; (b) if the amendment
constitutes a “material revision” of this Plan within the meaning of the applicable
New York Stock Exchange listing rules or other applicable listing requirements; (c)
if stockholder approval for the amendment is otherwise deemed necessary or advisable
by the Board; or (d) if the amendment increases any of the share limits set forth in
Section 4.2.




8.6.4 Amendments to Awards. Without limiting any other express authority of the
Administrator under (but subject to) the express limits of this Plan, the
Administrator by agreement or resolution may waive conditions of or limitations on
awards to participants that the Administrator in the prior exercise of its
discretion has imposed, without the consent of a participant, and (subject to the
requirements of Sections 3.2 and 8.6.5) may make other changes to the terms and
conditions of awards. Any amendment or other action that would constitute a
repricing of an award is subject to the limitations set forth in Section 3.2(g).



21









 






8.6.5 Limitations on Amendments to Plan and Awards. No amendment, suspension or
termination of this Plan or change of or affecting any outstanding award shall,
without written consent of the participant, affect in any manner materially adverse
to the participant any rights or benefits of the participant or obligations of the
Corporation under any award granted under this Plan prior to the effective date of
such change. Changes, settlements and other actions contemplated by Section 7 shall
not be deemed to constitute changes or amendments for purposes of this Section 8.6
and shall not require stockholder approval or the consent of the award holder.




	 	8.7	 	Privileges of Stock Ownership. Except as otherwise expressly authorized by the
Administrator or this Plan, a participant shall not be entitled to any privilege of
stock ownership as to any shares of Common Stock not actually delivered to and held of
record by the participant. No adjustment will be made for dividends or other rights as
a stockholder for which a record date is prior to such date of delivery.
	 
	 	8.8	 	Governing Law; Construction; Severability.






8.8.1 Choice of Law. This Plan, the awards, all documents evidencing awards and all
other related documents shall be governed by, and construed in accordance with the
laws of the State of Delaware.




8.8.2 Severability. If a court of competent jurisdiction holds any provision
invalid and unenforceable, the remaining provisions of this Plan shall continue in
effect.




8.8.3 Plan Construction.




	 	(a)	 	Rule 16b-3. It is the intent of the
Corporation that the awards and transactions permitted by awards be
interpreted in a manner that, in the case of participants who are or
may be subject to Section 16 of the Exchange Act, qualify, to the
maximum extent compatible with the express terms of the award, for
exemption from matching liability under Rule 16b-3 promulgated under
the Exchange Act. Notwithstanding the foregoing, the Corporation shall
have no liability to any participant for Section 16 consequences of
awards or events under awards if an award or event does not so qualify.
	 
	 	(b)	 	Section 162(m). Awards under Section
5.1.4 to persons described in Section 5.2 that are either granted or
become vested, exercisable or payable based on attainment of one or
more performance goals related to the Business Criteria, as well as
Qualifying Options and Qualifying SARs granted to persons described in
Section 5.2, that are approved by a committee composed solely of two or
more outside directors (as this requirement is applied under Section
162(m) of the Code) shall be deemed to be intended as performance-based
compensation within the meaning of Section




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	 	 	 	162(m) of the Code unless such committee provides otherwise at the
time of grant of the award. It is the further intent of the
Corporation that (to the extent the Corporation or one of its
Subsidiaries or awards under this Plan may be or become subject to
limitations on deductibility under Section 162(m) of the Code) any
such awards and any other Performance-Based Awards under Section 5.2
that are granted to or held by a person subject to Section 162(m)
will qualify as performance-based compensation or otherwise be exempt
from deductibility limitations under Section 162(m).






	 	8.9	 	Captions. Captions and headings are given to the sections and subsections of
this Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of this
Plan or any provision thereof.
	 
	 	8.10	 	Stock-Based Awards in Substitution for Stock Options or Awards Granted by Other
Corporation. Awards may be granted to Eligible Persons in substitution for or in
connection with an assumption of employee stock options, SARs, restricted stock or
other stock-based awards granted by other entities to persons who are or who will
become Eligible Persons in respect of the Corporation or one of its Subsidiaries, in
connection with a distribution, merger or other reorganization by or with the granting
entity or an affiliated entity, or the acquisition by the Corporation or one of its
Subsidiaries, directly or indirectly, of all or a substantial part of the stock or
assets of the employing entity. The awards so granted need not comply with other
specific terms of this Plan, provided the awards reflect only adjustments giving effect
to the assumption or substitution consistent with the conversion applicable to the
Common Stock in the transaction and any change in the issuer of the security. Any
shares that are delivered and any awards that are granted by, or become obligations of,
the Corporation, as a result of the assumption by the Corporation of, or in
substitution for, outstanding awards previously granted by an acquired company (or
previously granted by a predecessor employer (or direct or indirect parent thereof) in
the case of persons that become employed by the Corporation or one of its Subsidiaries
in connection with a business or asset acquisition or similar transaction) shall not be
counted against the Share Limit or other limits on the number of shares available for
issuance under this Plan.
	 
	 	8.11	 	Non-Exclusivity of Plan. Nothing in this Plan shall limit or be deemed to
limit the authority of the Board or the Administrator to grant awards or authorize any
other compensation, with or without reference to the Common Stock, under any other plan
or authority.
	 
	 	8.12	 	No Corporate Action Restriction. The existence of this Plan, the award
agreements and the awards granted hereunder shall not limit, affect or restrict in any
way the right or power of the Board or the stockholders of the Corporation to make or
authorize: (a) any adjustment, recapitalization, reorganization or other change in the
capital structure or business of the Corporation or any Subsidiary,




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	 	 	 	(b) any merger, amalgamation, consolidation or change in the ownership of the
Corporation or any Subsidiary, (c) any issue of bonds, debentures, capital,
preferred or prior preference stock ahead of or affecting the capital stock (or the
rights thereof) of the Corporation or any Subsidiary, (d) any dissolution or
liquidation of the Corporation or any Subsidiary, (e) any sale or transfer of all or
any part of the assets or business of the Corporation or any Subsidiary, or (f) any
other corporate act or proceeding by the Corporation or any Subsidiary. No
participant, beneficiary or any other person shall have any claim under any award or
award agreement against any member of the Board or the Administrator, or the
Corporation or any employees, officers or agents of the Corporation or any
Subsidiary, as a result of any such action.
	 
	 	8.13	 	Other Company Benefit and Compensation Programs. Payments and other benefits
received by a participant under an award made pursuant to this Plan shall not be deemed
a part of a participant’s compensation for purposes of the determination of benefits
under any other employee welfare or benefit plans or arrangements, if any, provided by
the Corporation or any Subsidiary, except where the Administrator expressly otherwise
provides or authorizes in writing. Awards under this Plan may be made in addition to,
in combination with, as alternatives to or in payment of grants, awards or commitments
under any other plans or arrangements of the Corporation or its Subsidiaries.





###



As amended (Section 4.2) and restated January 21, 2005



As amended
(Sections 3.1, 4.2, 4.3, 5.1.1, 5.1.3, 5.1.5, 5.7.2, 8.6.3,
8.6.5) September 22, 2005





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