EX-10.9



 





Exhibit 10.9




CA, INC.




2002 INCENTIVE PLAN




Amended and Restated Effective as of April 27, 2007




 









 





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”
	 	 	1	 
	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	 
	2.20 “Nonqualified Stock Option”
	 	 	5	 






 









 






	 	 	 	 	 
	 	 	Page	 
	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”
	 	 	7	 
	2.32 “Retirement”
	 	 	7	 
	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
	 	 	9	 
	(a)Qualified Performance Awards
	 	 	9	 
	4.4 Annual Performance Bonuses
	 	 	9	 
	(a)Performance Cycles
	 	 	9	 
	(b)Bonus Participants
	 	 	9	 
	(c)Performance Measures; Targets; Payout Formula
	 	 	10	 
	(d)Payment of Bonuses; Certification
	 	 	10	 
	(e)Other Annual Performance Bonuses
	 	 	10	 
	(f)Form of Payment
	 	 	10	 






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	 	 	Page	 
	(g)Amount of Bonus
	 	 	11	 
	4.5 Long-Term Performance Bonuses
	 	 	11	 
	(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
	 	 	13	 
	(b)Performance Measures; Targets and Payout Formulas
	 	 	13	 
	(c)Committee Certification
	 	 	14	 
	(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	 
	5.3 Adjustments
	 	 	20	 
	5.4 Consolidation, Merger or Sale of Assets
	 	 	20	 
	5.5 Fractional Shares
	 	 	21	 






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	 	 	Page	 
	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
	 	 	24	 
	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	 






iv 









 





CA, INC.

2002 INCENTIVE PLAN




Amended and Restated Effective as of April 26, 2007




ARTICLE I



ESTABLISHMENT AND PURPOSE 




     1.1 Purpose. The purpose of this CA, Inc. 2002 Incentive Plan (the “Plan”) is to
enable CA, 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%1 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





 




			
	1	 	With respect to any grants made on or after
April 27, 2007, “25%” shall be replaced by “30%” in
this clause.




2









 









constitute a majority of the Board;
provided, however, for purposes of this Section 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 CA, 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, as adjusted;




     (h) Cash Flow;




     (i) Cash Flow Per Share;




     (j) Revenue (or any component thereof);




     (k) Revenue Growth;



5









 






     (l) Share Performance;




     (m) Relative Share Performance;




     (n) Billings Growth; and/or




     (o) Customer Satisfaction.



     2.24 “Plan” means the CA, Inc. 2002 Incentive Plan (Amended and Restated Effective as
of April 26, 2007), 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.



6









 





     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.



     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,



7









 







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), 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.



8









 





     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 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



9









 







eligible to receive an
Annual Performance Bonus designated as a Qualified Performance Award for such Performance
Cycle.




     (c) Performance Measures; Targets; Payout Formula.




     (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.



10









 






     (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 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.



11









 






     (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, 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



12









 







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 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



13









 







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 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



14









 







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.




     (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:



15









 






     (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;




     (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



16









 







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 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



17









 







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.




     (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



18









 







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 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) from and after the date of the 2005 annual meeting of shareholders no more than
10,000,000 shares may be issued in connection with any Award that is not a Stock Option or
an Other Equity-Based Award that is in the form of a stock appreciation right with an
exercise price at least equal to Fair Market Value on the date of grant; 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



19









 







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 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



20









 







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




     (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.



21









 





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) made prior April 27, 2007 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.2 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





 




			
	2	 	This sentence shall not apply to any grants
made on or after April 27, 2007.




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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 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.



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     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 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



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



     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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