Exhibit 10.20


 


TYCO
INTERNATIONAL LTD.


2004 STOCK
AND INCENTIVE PLAN


(AMENDED
AND RESTATED AS OF MAY 10, 2007)


 


ARTICLE I


 


PURPOSE


 


1.1     Purpose. The purposes of this Tyco
International Ltd. 2004 Stock and Incentive Plan (the “Plan”) are to promote
the interests of Tyco International Ltd. (and any successor thereto) by (i) aiding
in the recruitment and retention of Directors and Employees, (ii) providing
incentives to such Directors and Employees by means of performance-related
incentives to achieve short-term and long-term performance goals, (iii) providing
Directors and Employees an opportunity to participate in the growth and
financial success of the Company, and (iv) promoting the growth and
success of the Company’s business by aligning the financial interests of
Directors and Employees with that of the other stockholders of the Company.
Toward these objectives, the Plan provides for the grant of Stock Options,
Stock Appreciation Rights, Annual Performance Bonuses, Long Term Performance
Awards and other Stock-Based Awards.


 


1.2     Effective Date; Shareholder Approval. The
Plan was effective as of January 1, 2004 
 The Plan was approved by the
Company’s shareholders on March 25,  2004. The effective date of this amended and
restated Plan is May 10, 2007.


 


ARTICLE II


DEFINITIONS


 


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


 


“Acquired Company”  means any business, corporation or
other entity acquired by the Company or any Subsidiary.


 


“Acquired Grantee”  means the grantee of a stock-based
award of an Acquired Company and may include a current or former Director
of an Acquired Company.


 


“Annual Performance Bonus”  means an Award
of cash or Shares granted under Section 4.4 of the Plan that is paid
solely on account of the attainment of a specified performance target in
relation to one or more Performance Measures.


 


“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 any terms and conditions that the
Committee may establish and set forth in the applicable Award Certificate.
Awards granted under the Plan may consist of:


 


(a)    “Stock
Options” awarded
pursuant to Section 4.3;


 


(b)    “Stock
Appreciation Rights”  awarded pursuant to Section 4.3;


 


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


 


(d)    “Long
Term Performance Awards”  awarded pursuant to Section 4.5;


 


(e)    “Other
Stock-Based Awards”  awarded pursuant to Section 4.6;


 


(f)    “Director
Awards”  awarded pursuant to Section 4.7;
and


 


(g)    “Substitute
Awards”  awarded pursuant to Section 4.8.


 


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


 


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


 


“Cause”  means misconduct that is willfully
or wantonly harmful to the Company or any of its Subsidiaries, monetarily or
otherwise.


 


“Change in Control”  means the first to occur of any of
the following events:


 


(a)    any “person” (as defined in Section 13(d) and
14(d) of the Exchange Act, excluding for this purpose, (i) the Company
or any Subsidiary or (ii) any employee benefit plan of the Company or any
Subsidiary (or any person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan that acquires beneficial
ownership of voting securities of the Company), is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act) directly or
indirectly of securities of the Company representing more than 30 percent of
the combined voting power of the Company’s then outstanding securities;
provided, however, that no Change in Control will be deemed to have occurred as
a result of a change in ownership percentage resulting solely from an
acquisition of securities by the Company; or


 


(b)    persons who, as of the Effective Date
constitute the Board (the “Incumbent Directors”) cease for any reason
(including without limitation, as a result of a tender offer, proxy contest,
merger or similar transaction) to constitute at least a majority thereof,
provided that any person becoming a Director of the Company subsequent to the
Effective Date shall be considered an Incumbent Director if such person’s
election or nomination for election was approved by a vote of at least 50
percent of the Incumbent Directors; but provided further, that any such person
whose initial assumption of office is in connection with an actual or
threatened proxy contest relating to the election of members of the Board or
other actual or threatened solicitation of proxies or consents by or on behalf
of a “person” (as defined in Section 13(d) and 14(d) of the
Exchange Act) other than the Board, including by reason of agreement intended
to avoid or settle any such actual or threatened contest or solicitation, shall
not be considered an Incumbent Director; or


 


(c)    consummation of a reorganization, merger or
consolidation or sale or other disposition of at least 80 percent of the assets
of the Company (a “Business Combination”), in each case, unless, following such
Business Combination, all or substantially all of the individuals and entities
who were the beneficial owners of outstanding voting securities of the Company
immediately prior to such Business Combination beneficially own directly or
indirectly more than 50 percent of the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, of the company resulting from such Business Combination (including,
without limitation, a company which, as a 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 Business Combination, of the
outstanding voting securities of the Company; or


 


(d)    approval by the stockholders of the Company
of a complete liquidation or dissolution of the Company;


 


provided, however, that if and to the extent that
any provision of this Plan or an Award Certificate applicable to a Long Term
Performance Award, a Restricted Unit Award or a Deferred Stock Unit Award would
cause a payment of deferred compensation that is subject to Code Section 409A(a)(2) to
be made upon the occurrence of a “Change in Control,” then such payment shall
not be made unless such “Change in Control” satisfies the requirements of Code Section 409A(2)(A)(v) and
applicable regulations and rulings thereunder.


 


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


 


“Committee”  means the Compensation Committee
of the Board or any successor committee or subcommittee of the Board, which
Committee is comprised solely of two or more persons who are outside directors
within the meaning of Section 162(m)(4)(C)(i) of the Code and the
applicable regulations and nonemployee directors within the meaning of Rule 16b-3(b)(3) under
the Exchange Act.


 


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“Common Stock”  means the common stock of the
Company, $0.20 (U.S.) par value, and such other securities or property as may become
subject to Awards pursuant to an adjustment made under Section 5.3 of the
Plan.


 


“Company”  means Tyco International Ltd., a
Bermuda company, or any successor thereto.


 


“Deferred Stock Unit”  means a Unit granted under Section 4.6
to acquire Shares upon Termination of Directorship or Termination of
Employment, subject to any restrictions that the Committee, in its discretion, may determine.


 


“Director”  means a member of the Board who is
a “non-employee director” within the meaning of Rule 16b-3(b)(3) under
the Exchange Act.


 


“Disabled”  or “Disability”  means the inability of the
Director or Employee to perform the material duties pertaining to such
Director’s directorship or such Employee’s employment due to a physical or
mental injury, infirmity or incapacity for 180 days (including weekends and
holidays) in any 365-day period. The existence or nonexistence of a Disability
shall be determined by an independent physician selected by the Company and
reasonably acceptable to the Director or Employee. Notwithstanding the above,
if and to the extent that any provision of this Plan or an Award Certificate
applicable to a Long Term Performance Award, a Restricted Unit Award or a
Deferred Stock Unit Award would cause a payment of deferred compensation that
is subject to Code Section 409A(a)(2) to be made upon the occurrence
of a “Disability” or upon a person becoming “Disabled,” then such payment shall
not be made unless such “Disability” or condition of being “Disabled” satisfies
the requirements of Code Section 409A(2)(C) and applicable
regulations and rulings thereunder.


 


“Dividend Equivalent”  means an amount equal to the cash
dividend or the Fair Market Value of the stock dividend that would be paid on
each Share underlying an Award if the Share were duly issued and outstanding on
the date on which the dividend is payable.


 


“Effective Date”  means January 1,, 2004. The
effective date of this amended and restated Plan is May 10, 2007.


 


“Employee”  means any individual who performs
services as an officer or employee of the Company or a Subsidiary.


 


“Exchange Act”  means the United States Securities
Exchange Act of 1934, as amended.


 


“Exercise Price”  means the price of a Share, as
fixed by the Committee, which may be purchased under a Stock Option or
with respect to which the amount of any payment pursuant to a Stock
Appreciation Right is determined.


 


“Fair Market Value”  of a Share means the closing sales
price on the New York Stock Exchange on the date as of which the determination
of Fair Market Value is being made or, if no sale is reported for such day, on
the next preceding day on which a sale of Shares was reported. Notwithstanding
anything to the contrary herein, the Fair Market Value of a Share will in no
event be determined to be less than par value.


 


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


 


“GAAP”  means United States generally
accepted accounting principles.


 


“Incentive Stock Option”  means a Stock Option granted under
Section 4.3 of the Plan that meets the requirements of Section 422 of
the Code and any related regulations and is designated in the Award Certificate
to be an Incentive Stock Option.


 


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


 


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“Long Term Performance Award”  means an Award
granted under Section 4.5 of the Plan that is paid solely on account of
the attainment of a specified performance target in relation to one or more
Performance Measures.


 


“Non-Employee Director”  means any member of the Board,
elected or appointed, who is not otherwise an Employee of the Company or a
Subsidiary. An individual who is elected to the Board at an annual meeting of
the stockholders of the Company will be deemed to be a member of the Board as
of the date of the meeting.


 


“Nonqualified Stock Option”  means any Stock
Option granted under Section 4.3 of the Plan that is not an Incentive
Stock Option.


 


“Normal Retirement”  means Termination of Employment on
or after a Participant has attained age 60, provided that the sum of the
Participant’s age and years of service with the Company is 70 or higher.


 


“Participant”  means a Director, Employee or
Acquired Grantee who has been granted an Award under the Plan.


 


“Performance Cycle”  means, with respect to any Award
that vests based on Performance Measures, the period of 12 months or longer
over which the level of performance will be assessed. The first Performance
Cycle under the Plan will begin on such date as is set by the Committee, in its
discretion.


 


“Performance Measure”  means, with respect to any Annual
Performance Bonus or Long Term Performance Award, the business criteria
selected by the Committee to measure the level of performance of the Company
during the 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 measures (to the extent
applicable) will be determined in accordance with GAAP:


 


(a)  Net operating
profit after taxes;


 


(b)  Net operating
profit after taxes, per Share;


 


(c)  Return on invested
capital;


 


(d)  Return on assets
or net assets;


 


(e)  Total shareholder
return;


 


(f)  Relative total
shareholder return (as compared with a peer group of the Company);


 


(g)  Earnings before
income taxes;


 


(h)  Earnings per
Share;


 


(i)  Net income;


 


(j)  Free cash flow;


 


(k)  Free cash flow per Share;


 


(l)  Revenue (or any component thereof); or


 


(m)  Revenue growth.


 


“Performance Unit”  means a Long Term Performance
Award denominated in dollar Units.


 


“Plan”  means the Tyco  International Ltd. 2004 Stock and Incentive
Plan, as it may be amended from time to


 


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time.


 


“Premium-Priced Stock Option”  means a Stock
Option the Exercise Price of which is fixed by the Committee at a price that
exceeds the Fair Market Value of a Share on the date of grant.


 


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


 


“Restricted Stock”  means Shares issued pursuant to Section 4.6
that are subject to any restrictions that the Committee, in its discretion, may impose.


 


“Restricted Unit”  means a Unit granted under Section 4.6
to acquire Shares or an equivalent amount in cash, which Unit is subject to any
restrictions that the Committee, in its discretion, may impose.


 


“Securities Act”  means the United States Securities
Act of 1933, as amended.


 


“Share”  means a share of Common Stock.


 


“Stock Appreciation Right”  means a right
granted under Section 4.3 of the Plan to an amount in cash or Shares equal
to any difference between the Fair Market Value of the Shares as of the date on
which the right is exercised and the Exercise Price.


 


“Stock-Based Award”  means an Award granted under Section 4.6
of the Plan and denominated in Shares.


 


“Stock Option”  means a right granted under Section 4.3
of the Plan to purchase from the Company a stated number of Shares at a
specified price. Stock Options awarded under the Plan may be in the form of
Incentive Stock Options or Nonqualified Stock Options.


 


“Subsidiary”  means a subsidiary company
(wherever incorporated) of the Company, as defined by Section 86 of the
Companies Act 1981 of Bermuda, as amended.


 


“Target Amount”  means the amount of Performance
Units that will be paid if the Performance Measure is fully (100%) attained, as
determined by the Committee.


 


“Target Vesting Percentage”  means the
percentage of performance-based Restricted Units or Shares of Restricted Stock
that will vest if the Performance Measure is fully (100%) attained, as
determined by the Committee.


 


“Termination of Directorship”  means the date
of cessation of a Director’s membership on the Board for any reason, with or
without Cause, as determined by the Company.


 


“Termination of Employment”  means the date
of cessation of an Employee’s employment relationship with the Company or a
Subsidiary for any reason, with or without Cause, as determined by the Company.


 


“Unit”  means, for purposes of Performance
Units, the potential right to an Award equal to a specified amount denominated
in such form as is deemed appropriate in the discretion of the Committee
and, for purposes of Restricted Units or Deferred Stock Units, the potential
right to acquire one Share.


 


ARTICLE III


ADMINISTRATION


 


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


 


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3.2    Authority of the Committee. The
Committee or, to the extent required by applicable law, the Board will havethe authority,
in its sole and absolute discretion and subject to the terms of the Plan, to:


 


(a)  Interpret and
administer the Plan and any instrument or agreement relating to the Plan;


 


(b)  Prescribe the rules and
regulations that 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;


 


(c)  Select Employees
to receive Awards under the Plan;


 


(d)  Determine the form of
an Award, the number of Shares subject to each Award, all the terms and
conditions of an Award, including, without limitation, the conditions on
exercise or vesting, the designation of Stock Options as Incentive Stock
Options or Nonqualified Stock Options, and the circumstances in which an Award may be
settled in cash or Shares or may be cancelled, forfeited or suspended, and
the terms of the Award Certificate;


 


(e)  Determine whether
Awards will be granted singly, in combination or in tandem;


 


(f)  Establish and
interpret Performance Measures in connection with Annual Performance Bonuses
and Long Term Performance Awards, evaluate the level of performance over a
Performance Cycle and certify the level of performance attained with respect to
Performance Measures;


 


(g)  Waive or amend any
terms, conditions, restriction or limitation on an Award, except that the
prohibition on the repricing of Stock Options and Stock Appreciation Rights, as
described in Section 4.3(g), may not be waived;


 


(h)  Make any
adjustments to the Plan (including but not limited to adjustment of the number
of Shares available under the Plan or any Award) and any Award granted under
the Plan as may be appropriate pursuant to Section 5.3;


 


(i)  Determine under
which circumstances Awards may be deferred and the extent to which a
deferral will be credited with Dividend Equivalents and interest thereon;


 


(j)  Determine whether a Nonqualified Stock Option
or Restricted Share may be transferable to family members, a family trust
or a family partnership;


 


(k)  Establish any subplans and make any
modifications to the Plan or to Awards made hereunder (including the
establishment of terms and conditions not otherwise inconsistent with the terms
of the Plan) that the Committee  may determine to be necessary or
advisable for grants made in countries outside the United States to comply
with, or to achieve favorable tax treatment under, applicable foreign laws or
regulations;


 


(l)  Appoint such agents as it shall deem
appropriate for proper administration of the Plan; and


 


(m)  Take any and all other actions it deems
necessary or advisable for the proper operation or administration of the Plan.


 


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


 


3.4    Delegation of Authority. The
Board or, if permitted under applicable corporate law, the Committee, in its
discretion and consistent with applicable law and regulations, may delegate
to the Chief Executive Officer of the Company or any other officer or group of
officers as it deems to be advisable, the authority to select Employees to
receive an Award and to determine the number of Shares under any such Award,
subject to any terms and conditions that the Board or the Committee may establish.
When the Board or the Committee delegates authority pursuant to the foregoing
sentence, it will limit, in its discretion, the number of Shares that may be
subject to Awards that the delegate may grant. Only the Committee will
have authority to grant and administer Awards to Directors, Key Employees and
other Reporting Persons or


 


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to
delegates of the Committee, and to establish and certify Performance Measures.


 


3.5    Employment of Advisors. The
Committee may employ attorneys, consultants, accountants and other
advisors, and the Committee, the Company and the officers and directors of the
Company may rely upon the advice, opinions or valuations of the advisors
employed.


 


3.6    No Liability. No member of the
Committee or any person acting as a delegate of the Committee with respect to
the Plan will be liable for any losses resulting from any action,
interpretation or construction made in good faith with respect to the Plan or
any Award granted under the Plan.


 


ARTICLE IV


AWARDS


 


4.1    Eligibility. All Participants and
Employees are eligible to be designated to receive Awards granted under the
Plan, except as otherwise provided in this Article IV.


 


4.2    Form of Awards. Awards will
be in the form determined by the Committee, in its discretion, and will be
evidenced by an Award Certificate. Awards may be granted singly or in
combination or in tandem with other Awards.


 


4.3    Stock Options and Stock Appreciation Rights.
The Committee may grant Stock Options and Stock Appreciation
Rights under the Plan to those Employees whom the Committee may from time
to time select, in the amounts and pursuant to the other terms and conditions
that the Committee, in its discretion, may determine and set forth in the
Award Certificate, subject to the provisions below:


 


(a)    Form. Stock
Options granted under the Plan will, at the discretion of the Committee and as
set forth in the Award Certificate, be in the form of Incentive Stock
Options, Nonqualified Stock Options or a combination of the two. If an
Incentive Stock Option and a Nonqualified Stock Option are granted to the same
Participant under the Plan at the same time, the form of each will be
clearly identified, and they will be deemed to have been granted in separate
grants. In no event will the exercise of one Award affect the right to exercise
the other Award. Stock Appreciation Rights may be granted either alone or
in connection with concurrently or previously granted Nonqualified Stock
Options.


 


(b)    Exercise
Price. The Committee will set the Exercise Price of Fair Market
Value Stock Options or Stock Appreciation Rights granted under the Plan at a
price that is equal to the Fair Market Value of a Share on the date of grant,
subject to adjustment as provided in Section 5.3. The Committee will set
the Exercise Price of Premium-Priced Stock Options at a price that is higher
than the Fair Market Value of a Share as of the date of grant, provided that
such price is no higher than 150 percent of such Fair Market Value. The
Exercise Price of Incentive Stock Options will be equal to or greater than 110
percent of the Fair Market Value of a Share as of the date of grant if the
Participant receiving the Stock Options owns stock possessing more than 10
percent of the total combined voting power of all classes of stock of the
Company or any subsidiary or parent corporation of the Company, as defined in Section 424
of the Code. The Exercise Price of a Stock Appreciation Right granted in tandem
with a Stock Option will equal the Exercise Price of the related Stock Option.
The Committee will set forth the Exercise Price of a Stock Option or Stock
Appreciation Right in the Award Certificate. Stock Options granted under the
Plan will, at the discretion of the Committee and as set forth in the Award
Certificate, be Fair Market Value Stock Options, Premium-Priced Stock Options
or a combination of Fair Market Value Stock Options and Premium-Priced Stock
Options.


 


(c)    Term and
Timing of Exercise. Each Stock Option or Stock Appreciation Right
granted under the Plan will be exercisable in whole or in part, subject to the
following conditions, unless determined otherwise by the Committee:


 


(i)    The Committee will determine and set forth
in the Award Certificate the date on which any Award of Stock Options or Stock
Appreciation Rights to a Participant may first be exercised. Unless the
applicable Award Certificate provides otherwise, a Stock Option or Stock
Appreciation Right will become exercisable in equal annual installments over a
period of four years beginning immediately after the date on which the Stock
Option or Stock Appreciation Right was granted, and will lapse 10 years after
the date of grant, except as otherwise provided herein.


 


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(ii)    Unless the applicable Award Certificate
provides otherwise, upon the death, Disability or Normal Retirement of a
Participant who has outstanding Stock Options or Stock Appreciation Rights, the
unvested Stock Options or Stock Appreciation Rights will vest. Unless the
applicable Award Certificate provides otherwise, the Participant’s Stock
Options and Stock Appreciation Rights will lapse, and will not thereafter be
exercisable, upon the earlier of (A) their original expiration date or (B) the
date that is three years after the date on which the Participant dies, incurs a
Disability or retires.


 


(iii)    Unless the applicable Award Certificate
provides otherwise, upon the Termination of Employment of a Participant for any
reason other than the Participant’s death, Disability or Normal Retirement or a
Change in Control, if the Participant has attained age 55, and the sum of the
Participant’s age and years of service with the Company is 60 or higher, a pro
rata portion of the Participant’s Stock Options and Stock Appreciation Rights
will vest so that the total number of vested Stock Options or Stock
Appreciation Rights held by the Participant at Termination of Employment
(including those that have already vested as of such date) will be equal to (A) the
total number of Stock Options or Stock Appreciation Rights originally granted
to the Participant under each Award multiplied by (ii) a fraction, the
numerator of which is the period of time (in whole months) that have elapsed
since the date of grant, and the denominator of which is four years (or such
other applicable vesting term as is set forth in the Award Certificate). Unless
the Award Certificate provides otherwise, such Participant’s Stock Options and
Stock Appreciation Rights will lapse, and will not thereafter be exercisable,
upon the earlier of (A) their original expiration date or (B) the
date that is three years after the date of Termination of Employment.


 


(iv)  Upon the
Termination of Employment of a Participant that does not meet the requirements
of paragraphs (ii) or (iii) above, any unvested Stock Options or
Stock Appreciation Rights will be forfeited unless the Award Certificate
provides otherwise. Any Stock Options or Stock Appreciation Rights that are
vested as of such Termination of Employment will lapse, and will not thereafter
be exercisable, upon the earlier of (A) their original expiration date or (B) the
date that is six months after the date of such Termination of Employment unless
the Award Certificate provides otherwise.


 


(v)  Stock Options and
Stock Appreciation Rights of a deceased Participant may be exercised only
by the estate of the Participant or by the person given authority to exercise
the Stock Options or Stock Appreciation Rights by the Participant’s will or by
operation of law. If a Stock Option or Stock Appreciation Right is exercised by
the executor or administrator of a deceased Participant, or by the person or
persons to whom the Stock Option or Stock Appreciation Right has been
transferred by the Participant’s will or the applicable laws of descent and
distribution, the Company will be under no obligation to deliver Shares or cash
until the Company is satisfied that the person exercising the Stock Option or
Stock Appreciation Right is the duly appointed executor or administrator of the
deceased Participant or the person to whom the Stock Option or Stock
Appreciation Right has been transferred by the Participant’s will or by
applicable laws of descent and distribution.


 


(vi)  A Stock
Appreciation Right granted in tandem with a Stock Option is subject to the same
terms and conditions as the related Stock Option and will be exercisable only
to the extent that the related Stock Option is exercisable.


 


(vii)  Stock Options
and Stock Appreciation Rights will become immediately exercisable upon a Change
in Control.


 


(d)    Payment of
Exercise Price. The Exercise Price of a Stock Option must be paid in
full when the Stock Option is exercised. Stock certificates will be registered
and delivered only upon receipt of payment. Payment of the Exercise Price may be
made in cash or by certified check, bank draft, wire transfer, or postal or
express money order, provided that the format is approved by the Company or a
designated third-party administrator. The Committee, in its discretion may also
allow payment to be made by any of the following methods, as set forth in the
Award Certificate:


 


(i)    Delivering a properly executed exercise
notice to the Company or its agent, together with irrevocable instructions to a
broker to deliver to the Company, within the typical settlement cycle for the
sale of equity securities on the relevant trading market (or otherwise in accordance
with the provisions of


 


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Regulation T issued by the Federal Reserve Board),
the amount of sale proceeds with respect to the portion of the Shares to be
acquired 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, subject to paragraph (iv), and that have 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, provided that the Board has specifically
approved the repurchase of such Shares (unless such approval is not required by
the terms of the bye-laws of the Company) and the Committee has determined
that, as of the date of repurchase, the Company is, and after the repurchase
will continue to be, able to pay its liabilities as they become due; or


 


(iii)    Provided such payment method has been
expressly authorized by the Board or the Committee in advance and subject to
any requirements of applicable law and regulations, instructing the Company to
reduce the number of Shares that would otherwise be issued by such number of
Shares as have in the aggregate a Fair Market Value on the date of exercise
equal to the applicable portion of the Exercise Price being so paid.


 


(iv)    The Committee, in consideration of
applicable accounting standards, may waive any holding period on Shares
required to tender pursuant to clause (ii).


 


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


 


(i)    Eligibility.
Incentive Stock Options may be granted only to Employees of the
Company or a Subsidiary that is a subsidiary or parent corporation of the
Company, within the meaning of Section 424 of the Code.


 


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


 


(iii)    Amount of
Award. Subject to Section 5.3 of the Plan, no more than 10
million Shares may be available for grant in the form of Incentive
Stock Options. The aggregate Fair Market Value (as of the date of grant) of the
Shares with respect to which the Incentive Stock Options awarded to any
Employee first become exercisable during any calendar year may not exceed
$100,000 (U.S.). For purposes of this $100,000 (U.S.) limit, the Employee’s
Incentive Stock Options under this Plan and all other plans maintained by the
Company and its Subsidiaries will be aggregated. To the extent any Incentive
Stock Option would exceed the $100,000 (U.S.) limit, the Incentive Stock Option
will afterwards be treated as a Nonqualified Stock Option for all purposes.


 


(iv)    Timing of
Exercise. If the Committee exercises its discretion in the Award
Certificate to permit an Incentive Stock Option to be exercised by a
Participant more than three months after the Participant has ceased being an
Employee (or more than 12 months if the Participant is permanently and totally
disabled, within the meaning of Section 22(e) of the Code), the
Incentive Stock Option will afterwards be treated as a Nonqualified Stock
Option for all purposes. For purposes of this paragraph (iv), an Employee’s
employment relationship will be treated as continuing intact while the Employee
is on military leave, sick leave or another approved leave of absence if the
period of leave does not exceed 90 days, or a longer period to the extent that
the Employee’s right to reemployment with the Company or a Subsidiary is
guaranteed by statute or by contract. If the period of leave exceeds 90 days
and the Employee’s right to reemployment is not guaranteed by statute or
contract, the employment relationship will be deemed to have ceased on the 91st
day of the leave.


 


(v)    Transfer
Restrictions. In no event will the Committee permit an Incentive
Stock Option to be transferred by an Employee other than by will or the laws of
descent and distribution, and any Incentive Stock Option awarded under this
Plan will be exercisable only by the Employee during the Employee’s lifetime.


 


9

















 


(f)    Exercise of
Stock Appreciation Rights. Upon exercise of a Participant’s Stock
Appreciation Rights, the Company will pay cash or Shares or a combination of
cash and Shares, in the discretion of the Committee and as described in the
Award Certificate. Cash payments will be equal to the excess of the Fair Market
Value of a Share on the date of exercise (or, if the Committee shall so
determine, any date during a specified period before or after the date of
exercise) over the Exercise Price, for each Share for which a Stock
Appreciation Right was exercised. If Shares are paid for the Stock Appreciation
Right, the Participant will receive a number of whole Shares equal to the
quotient of the cash payment amount divided by the Fair Market Value of a Share
on the date of exercise. The Committee may make payments after exercise in
a lump sum or defer full payment by annual installments or otherwise.


 


(g)    No Repricing.
Except as otherwise provided in Section 5.3, in no event will
the Committee decrease the Exercise Price of a Stock Option or Stock
Appreciation Right after the date of grant or cancel outstanding Stock Options
or Stock Appreciation Rights and grant replacement Stock Options or Stock Appreciation
Rights with a lower Exercise Price than that of the replaced Stock Options or
Stock Appreciation Rights or other Awards without first obtaining the approval
of the holders of a majority of the Shares who are present in person or by
proxy at a meeting of the Company’s stockholders and entitled to vote.


 


4.4    Annual Performance Bonuses. The
Committee may grant Annual Performance Bonuses under the Plan in the form of
cash or Shares to the Reporting Persons that the Committee may from time
to time select, in the amounts and pursuant to the terms and conditions that
the Committee may determine and set forth in the Award Certificate,
subject to the provisions below:


 


(a)    Performance
Cycles. Annual Performance Bonuses will be awarded in connection with
a 12-month Performance Cycle, which will be the fiscal year of the Company.


 


(b)    Eligible
Participants. Within 90 days after the commencement of a Performance
Cycle, the Committee will determine the Reporting Persons who will be eligible
to receive an Annual Performance Bonus under the Plan.


 


(c)    Performance
Measures; Targets; Award Criteria.


 


(i)    Within 90 days after the commencement of a
Performance Cycle, the Committee will fix and establish in writing (A) the
Performance Measures that will apply to that Performance Cycle; (B) the
Target Amount payable to each Participant; and (C) subject to subsection (d) below,
the criteria for computing the amount that will be paid with respect to each
level of attained performance. The Committee will also set forth the minimum
level of performance, based on objective factors, that must be attained during
the Performance Cycle before any Annual Performance Bonus will be paid and the
percentage of the Target Amount that will become payable upon attainment of various
levels of performance that equal or exceed the minimum required level.


 


(ii)   The Committee may, in its discretion, select
Performance Measures that measure the performance of the Company or one or more
business units, divisions or Subsidiaries of the Company. The Committee may select
Performance Measures that are absolute or relative to the performance of one or
more comparable companies or an index of comparable companies.


 


(iii)  The Committee,
in its discretion, may, on a case-by-case basis, reduce, but not increase, the
amount payable to any Key Employee with respect to any given Performance Cycle,
provided, however, that no reduction will result in an increase in the amount
payable under any Annual Performance Bonus of another Key Employee.


 


(d)    Payment,
Certification. No Annual Performance Bonus will vest with respect to
any Reporting Person until the Committee certifies in writing the level of
performance attained for the Performance Cycle in relation to the applicable
Performance Measures. In applying Performance Measures, the Committee may, in
its discretion, exclude unusual or infrequently occurring items (including any
event listed in Section 5.3 and the cumulative effect of changes in the
law, regulations or accounting rules), and may determine no later than
ninety (90) days after the commencement of any applicable Performance Cycle to
exclude other items, each determined in accordance with GAAP (to the extent
applicable) and as identified in the financial


 


10

















 


statements, notes to the financial statements or
discussion and analysis of management.


 


(e)    Form of
Payment. Annual Performance Bonuses will be paid in cash or Shares. All
such Performance Bonuses shall be paid no later than the 15th day of the third
month following the end of the calendar year (or, if later, following the end
of the Company’s fiscal year) in which such Performance Bonuses are no longer
subject to a substantial risk of forfeiture (as determined for purposes of Section 409A
of the Code), except to the extent that a Participant has elected to defer
payment under the terms of a duly authorized deferred compensation arrangement.


 


(f)    Section 162(m)
of the Code. It is the intent of the Company that Annual Performance
Bonuses be “performance-based compensation” for purposes of Section 162(m)
of the Code, that this Section 4.4 be interpreted in a manner that
satisfies the applicable requirements of Section 162(m)(C) of the
Code and related regulations, and that the Plan be operated so that the Company
may take a full tax deduction for Annual Performance Bonuses. If any
provision of this Plan or any Annual Performance Bonus would otherwise
frustrate or conflict with this intent, the provision will be interpreted and
deemed amended so as to avoid this conflict.


 


(g)    Acceleration.
Each Participant who has been granted an Annual Performance Bonus
that is outstanding as of the date of a Change of Control will be deemed to
have achieved a level of performance, as of the date of Change in Control, that
would cause all (100%) of the Participant’s Target Amount to become payable.


 


4.5    Long Term Performance Awards. The
Committee may grant Long Term Performance Awards under the Plan in the form of
Performance Units, Restricted Units or Restricted Stock to any Reporting Person
who the Committee may from time to time select, in the amounts and
pursuant to the terms and conditions that the Committee may determine and
set forth in the Award Certificate, subject to the provisions below:


 


(a)    Performance
Cycles. Long Term Performance Awards will be awarded in connection
with a Performance Cycle, as determined by the Committee in its discretion,
provided, however, that a Performance Cycle may be no shorter than 12
months and no longer than 5 years.


 


(b)    Eligible
Participants. Within 90 days after the commencement of a Performance
Cycle, the Committee will determine the Reporting Persons who will be eligible
to receive a Long Term Performance Award for the Performance Cycle, provided
that the Committee may determine the eligibility of any Employee other
than a Key Employee after the expiration of this 90-day period.


 


(c)    Performance
Measures; Targets; Award Criteria.


 


(i)    Within 90 days after the commencement of a
Performance Cycle, the Committee will fix and establish in writing (A) the
Performance Measures that will apply to that Performance Cycle; (B) with
respect to Performance Units, the Target Amount payable to each Participant; (C) with
respect to Restricted Units and Restricted Stock, the Target Vesting Percentage
for each Participant; and (D) subject to subsection (d) below,
the criteria for computing the amount that will be paid or will vest with
respect to each level of attained performance. The Committee will also set
forth the minimum level of performance, based on objective factors, that must
be attained during the Performance Cycle before any Long Term Performance Award
will be paid or vest, and the percentage of Performance Units that will become
payable and the percentage of performance-based Restricted Units or Shares of
Restricted Stock that will vest upon attainment of various levels of
performance that equal or exceed the minimum required level.


 


(ii)   The Committee may, in its discretion, select
Performance Measures that measure the performance of the Company or one or more
business units, divisions or Subsidiaries of the Company. The Committee may select
Performance Measures that are absolute or relative to the performance of one or
more comparable companies or an index of comparable companies.


 


(iii)  The Committee,
in its discretion, may, on a case-by-case basis, reduce, but not increase, the
amount of Long Term Performance Awards payable to any Key Employee with respect
to any given Performance Cycle, provided, however, that no reduction will
result in an increase in the dollar amount or number of Shares payable under
any Long Term Performance Award of another Key Employee.


 


11

















 


(d)    Payment,
Certification. No Long Term Performance Award will vest with respect
to any Reporting Person until the Committee certifies in writing the level of
performance attained for the Performance Cycle in relation to the applicable
Performance Measures. Long Term Performance Awards awarded to Participants who
are not Key Employees will be based on the Performance Measures  and payment formulas that the Committee, in
its discretion, may establish for these purposes. These Performance
Measures and formulas may be the same as or different than the Performance
Measures and formulas that apply to Key Employees.


 


In applying Performance
Measures, the Committee may, in its discretion, exclude unusual or infrequently
occurring items (including any event listed in Section 5.3 and the cumulative
effect of changes in the law, regulations or accounting rules, and may determine
no later than ninety (90) days after the commencement of any applicable
Performance Cycle to exclude other items, each determined in accordance with
GAAP (to the extent applicable) and as identified in the financial statements,
notes to the financial statements or discussion and analysis of management.


 


(e)    Form of
Payment. Long Term Performance Awards in the form of
Performance Units may be paid in cash or full Shares, in the discretion of
the Committee, and as set forth in the Award Certificate. Performance-based
Restricted Units and Restricted Stock will be paid in full Shares. Payment with
respect to any fractional Share will be in cash in an amount based on the Fair
Market Value of the Share as of the date the Performance Unit becomes payable.


 


(f)    Section 162(m)
of the Code. It is the intent of the Company that Long Term
Performance Awards be “performance-based compensation” for purposes of Section 162(m)
of the Code, that this Section 4.5 be interpreted in a manner that
satisfies the applicable requirements of Section 162(m)(C) of the
Code and related regulations, and that the Plan be operated so that the Company
may take a full tax deduction for Long Term Performance Awards. If any
provision of this Plan or any Long Term Performance Award would otherwise
frustrate or conflict with this intent, the provision will be interpreted and
deemed amended so as to avoid this conflict.


 


(g)    Retirement. If
a Participant would be entitled to a Long Term Performance Award but for the
fact that the Participant’s employment with the Company terminated prior to the
end of the Performance Cycle, the Participant may, in the Committee’s
discretion, receive a Long Term Performance Award, pro rated for the portion of
the Performance Cycle that the Participant completed and payable at the same
time after the end of the Performance Cycle that payments to other Long Term
Performance Award recipients are made, if the sum of the Participant’s age and
years of service with the Company was 60 or higher at the time of Termination
of Employment or if the Participant retired under a Normal Retirement.


 


(h)    Acceleration.
Each Participant who has been granted a Long Term Performance Award
that is outstanding as of the date of a Change of Control will be deemed to
have achieved a level of performance, as of the date of Change in Control, that
would cause all (100%) of the Participant’s Target Amount to become payable and
all restrictions on the Participant’s performance-based Restricted Units and
Shares of Restricted Stock to lapse.


 


4.6    Other Stock-Based Awards. The
Committee may, from time to time, grant Awards (other than Stock Options, Stock
Appreciation Rights, Annual Performance Bonuses or Long Term Performance
Awards) to any Employee who the Committee may from time to time select,
which Awards consist of, or are denominated in, payable in, valued in whole or
in part by reference to, or otherwise related to, Shares. These Awards may include,
among other forms, Restricted Stock, Restricted Units, or Deferred Stock Units.
The Committee will determine, in its discretion, the terms and conditions that
will apply to Awards granted pursuant to this Section 4.6, which terms and
conditions will be set forth in the applicable Award Certificate.


 


(a)    Vesting. Unless
the Award Certificate provides otherwise, restrictions on Stock-Based Awards
granted under this Section 4.6 will lapse in equal annual installments
over a period of four years beginning immediately after the date of grant. If
the restrictions on Stock-Based Awards have not lapsed or been satisfied as of
the Participant’s Termination of Employment, the Shares will be forfeited by
the Participant if the termination is for any reason other than the Normal
Retirement, death or Disability of the Participant or a Change in Control,
except that the Award will vest pro rata with respect to the portion of the
four-year vesting term (or such other vesting term as is set forth in the Award
Certificate) that the Participant has completed if the Participant has attained
age 55, the sum of the Participant’s age and years of service with the Company
is 60 or higher and the Participant has


 


12

















 


satisfied all other applicable conditions
established by the Committee with respect to such pro rata vesting. Unless the
Award Certificate provides otherwise, all restrictions on Stock-Based Awards
granted pursuant to this Section 4.6 will lapse upon the Normal Retirement,
death or Disability of the Participant or a Change in Control.


 


(b)    Grant of
Restricted Stock. The Committee may grant Restricted Stock to
any Employee, which Shares will be registered in the name of the Participant
and held for the Participant by the Company. The Participant will have all
rights of a stockholder with respect to the Shares, including the right to vote
and to receive dividends or other distributions, except that the Shares may be
subject to a vesting schedule and will be forfeited if the Participant
attempts to sell, transfer, assign, pledge or otherwise encumber or dispose of
the Shares before the restrictions are satisfied or lapse.


 


(c)    Grant of
Restricted Units. The Committee may grant Restricted Units to
any Employee, which Units will be paid in cash or whole Shares or a combination
of cash and Shares, in the discretion of the Committee, when the restrictions
on the Units lapse and any other conditions set forth in the Award Certificate
have been satisfied. For each Restricted Unit that vests, one Share will be
paid or an amount in cash equal to the Fair Market Value of a Share as of the
date on which the Restricted Unit vests.


 


(d)    Grant of
Deferred Stock Units. The Committee may grant Deferred Stock
Units to any Employee, which Units will be paid in whole Shares upon the
Employee’s Termination of Employment if the restrictions on the Units have
lapsed. One Share will be paid for each Deferred Stock Unit that becomes
payable.


 


(e)    Dividends
and Dividend Equivalents. At the discretion of the Committee,
dividends issued on Shares may be paid immediately or withheld and
deferred in the Participant’s account. In the event of a payment of dividends
on Common Stock, the Committee may credit Restricted Units with Dividend
Equivalents in accordance with terms and conditions established in the
discretion of the Committee. Dividend Equivalents will be subject to such
vesting terms as is determined by the Committee and may be distributed
immediately or withheld and deferred in the Participant’s account as determined
by the Committee and set forth in the applicable Award Agreement. Deferred
Stock Units may, in the discretion of the Committee and as set forth in the
Award Certificate, be credited with Dividend Equivalents or additional Deferred
Stock Units. The number of any Deferred Stock Units credited to a Participant’s
account upon the payment of a dividend will be equal to the quotient produced
by dividing the cash value of the dividend by the Fair Market Value of one
Share as of the date the dividend is paid. The Committee will determine any
terms and conditions on deferral of a dividend or Dividend Equivalent,
including the rate of interest to be credited on deferral and whether interest
will be compounded.


 


4.7    Director Awards.


 


(a)   As of the first day of each fiscal year of
the Company, the Committee will grant Deferred Stock Units to each Director in
such an amount as the Board, in its discretion, may approve in advance,
provided that the aggregate Fair Market Value of the Shares underlying the
Deferred Stock Units granted to any Director in a year may not exceed
$200,000 (U.S.) determined as of the date of grant. Each such Deferred Stock
Unit will vest as determined by the Committee and set forth in the Award
Certificate and will be paid in Shares within 30 days following the recipient’s
Termination of Directorship. Dividend Equivalents or additional Deferred Stock
Units will be credited to each Director’s account when dividends are paid on
Common Stock to the shareholders, and will be paid to the Director at the same
time that the Deferred Stock Units are paid to the Director.


 


(b)   The Committee may, in its discretion, grant
Stock Options, Stock Appreciation Rights and other Stock-Based Awards to
Directors, provided that in no event may a Director in any fiscal year be
granted more than 10,000 Shares pursuant to such Awards, excluding Deferred
Stock Units.


 


4.8    Substitute Awards. The Committee may make
Awards under the Plan to Acquired Grantees through the assumption of, or in
substitution for, outstanding stock-based awards previously granted to such
Acquired Grantees. Such assumed or substituted Awards will be subject to the
terms and conditions of the original awards made by the Acquired Company, with
such adjustments therein as the Committee considers appropriate to give effect
to the relevant provisions of any agreement for the acquisition of the Acquired
Company. Any grant of Incentive Stock Options pursuant to this Section 4.8
will be made in accordance with Section 424 of the Code and any final
regulations published thereunder.


 


4.9    Limit on Individual Grants. Subject
to Sections 5.1 and 5.3, no Employee may be granted more than 6 million


 


13

















 


Shares
over any calendar year pursuant to Awards of Stock Options, Stock Appreciation
Rights and performance-based Restricted Stock and Restricted Units, except that
an incentive Award of no more than 10 million Shares may be made pursuant
to Stock Options, Stock Appreciation Rights and performance-based Restricted
Stock and Restricted Units to any person who has been hired within the calendar
year as a Key Employee. The maximum amount that may be paid in cash or
Shares pursuant to Annual Performance Bonuses or Long Term Performance Awards
paid in Performance Units to any one Employee is $5 million (U.S.) for any
Performance Cycle of 12 months. For any longer Performance Cycle, this maximum
will be adjusted proportionally.


 


4.10    Termination for Cause. Notwithstanding
anything to the contrary herein, if a Participant incurs a Termination of
Directorship or Termination of Employment for Cause, then all Stock Options,
Stock Appreciation Rights, Annual Performance Bonuses, Long Term Performance
Awards, Restricted Units, Restricted Stock and other Stock-Based Awards will
immediately be cancelled. The exercise of any Stock Option or Stock
Appreciation Right or the payment of any Award may be delayed, in the
Committee’s discretion, in the event that a potential termination for Cause is
pending.


 


ARTICLE V


SHARES
SUBJECT TO THE PLAN; ADJUSTMENTS


 


5.1    Shares Available. The Shares
issuable under the Plan will be authorized but unissued Shares, and, to the
extent permissible under applicable law, Shares acquired by the Company, any
Subsidiary or any other person or entity designated by the Company. The total
number of Shares with respect to which Awards may be issued under the Plan
may equal, but may not exceed, 160 million Shares, and subject to
adjustment in accordance with Section 5.3; provided that when Shares are
issued pursuant to a grant of Restricted Stock, Restricted Units, Deferred
Stock Units,  Performance Units or as
payment of an Annual Performance Bonus or other Stock-Based Award, the total
number of Shares remaining available for grant will be decreased by a margin of
at least 1.8 per Share issued. No more than 10 million Shares of the total
Shares issuable under the Plan may be available for grant in the form of
Incentive Stock Options.


 


5.2    Counting Rules. The following Shares
related to Awards under this Plan may again be available for issuance
under the Plan, in addition to the Shares described in Section 5.1:


 


(a)   Shares related to Awards paid in cash;


 


(b)   Shares related to Awards that expire, are
forfeited or cancelled or terminate for any other reason without issuance of
Shares;


 


(c)   Shares that are tendered or withheld in
payment of all or part of the Exercise Price of a Stock Option awarded
under this Plan, or in satisfaction of withholding tax obligations arising
under this Plan;


 


(d)   Any Shares issued in connection with Awards
that are assumed, converted or substituted as a result of the acquisition of an
Acquired Company by the Company or a combination of the Company with another
company; and


 


(e)   Any Shares of Restricted Stock that are
returned to the Company upon a Participant’s Termination of Employment.


 


5.3    Adjustments. In the event of a
change in the outstanding Shares by reason of a 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 or similar
corporate transaction or event, the Committee shall make an appropriate
adjustment to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan . Any adjustment made by
the Committee under this Section 5.3 will be conclusive and binding for
all purposes under the Plan.


 


5.4    Change in Control.


 


(a)    Acceleration.
All outstanding Stock Options and Stock Appreciation Rights will
become exercisable as of the effective date of a Change in Control if the
Awards are not otherwise vested, and all conditions will be waived with respect
to outstanding Restricted Stock and Restricted Units (other than Long Term
Performance Awards) and Deferred Stock Units. Each Participant who has been
granted an Annual Performance Bonus or Long


 


14

















 


Term Performance Award that is outstanding as of the
date of Change in Control will be deemed to have achieved a level of
performance, as of the Change in Control, that would cause all (100%) of the
Participant’s Target Amounts to become payable and all restrictions on the
Participant’s Restricted Units and Shares of Restricted Stock to lapse.


 


(b)    Adjustment,
Conversion and Payment. In addition to the foregoing, no later than 90
days after the date of Change in Control, the Committee (as constituted prior
to the date of Change in Control) shall provide, in its discretion, for any of
the following actions to apply to each Award that is outstanding as of the date
of Change in Control: (i) an adjustment to such Award as the Committee
deems appropriate to reflect such Change in Control; (ii) the acquisition
of such Award, or substitution of a new right therefor, by the acquiring or
surviving corporation after such Change in Control, or (iii) the purchase
of such Award, at the Participant’s request, for an amount of cash equal to the
amount that could have been attained upon the exercise or redemption of such
Award immediately prior to the Change in Control had such Award been exercisable
or payable at such time. Any payment made pursuant to this Section 5.4(b) shall
include the value of any Dividend Equivalents credited with respect to such
Award and accrued interest on such Dividend Equivalents. The Committee may specify
how an Award will be treated in the event of a Change in Control either when
the Award is granted or at any time thereafter.


 


5.5    Fractional Shares. No fractional
Shares will be issued under the Plan. Except as otherwise provided in Section 4.5(e),
if a Participant acquires the right to receive a fractional Share under the
Plan, the Participant will receive, in lieu of the fractional Share, a full
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
stockholders of the Company, except that no material revision to the terms of
the Plan will be effective until the amendment is approved by the stockholders
of the Company. A revision is “material” for this purpose if, among other
changes, it materially increases the number of Shares that may be issued
under the Plan (other than an increase pursuant to Section 5.3 of the
Plan), expands the types of Awards available under the Plan, materially expands
the class of persons eligible to receive Awards under the Plan, materially
extends the term of the Plan, materially decreases the Exercise Price at which
Stock Options or Stock Appreciation Rights may be granted, reduces the
Exercise Price of outstanding Stock Options or Stock Appreciation Rights, or
results in the replacement of outstanding Stock Options and Stock Appreciation
Rights with new Awards that have an Exercise Price that is lower than the
Exercise Price of the replaced Stock Options and Stock Appreciation Rights. The
Board may, in its discretion, increase the maximum dollar amount of Deferred
Stock Units that may be granted to a Director in any fiscal year and the
maximum number of Shares that may be granted to a Director in any fiscal year
pursuant to Stock Options, Stock Appreciation Rights and other Stock-Based
Awards. No amendment of the Plan made without the Participant’s written consent
may adversely affect any right of a Participant with respect to an
outstanding Award.


 


6.2    Termination. The Plan will
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 day before the 10th anniversary of the adoption
of the Plan by the Company’s shareholder as described in Section 1.2.


 


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


 


ARTICLE VII


GENERAL
PROVISIONS


 


7.1    Nontransferability of Awards. No
Award under the Plan will be subject in any manner to alienation, anticipation,
sale, assignment, pledge, encumbrance or transfer, and no other persons will
otherwise acquire any rights


 


15

















 


therein,
except as provided below.


 


(a)    Any Award may be transferred by will or
by the laws of descent or distribution.


 


(b)    The Committee may provide in the
applicable Award Certificate that all or any part of a Nonqualified Option
or Shares of Restricted Stock may, subject to the prior written consent of the
Committee, be transferred to a family member. For purposes of this subsection (b),
“family member” includes any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of
the Participant, including adoptive relationships, any person sharing the
Participant’s household (other than a tenant or employee), a trust in which
these persons have more than fifty percent of the beneficial interest, a
foundation in which these persons (or the Participant) control the management
of assets, and any other entity in which these persons (or the Participant) own
more than fifty percent of the voting interests.


 


Any transferred Award will
be subject to all of the same terms and conditions as provided in the Plan and
the applicable Award Certificate. The Participant or the Participant’s estate will
remain liable for any withholding tax that may be imposed by any federal,
state or local tax authority. The Committee may, in its discretion, disallow
all or a part of any transfer of an Award pursuant to this subsection (b) unless
and until the Participant makes arrangements satisfactory to the Committee for
the payment of any withholding tax. The Participant must immediately notify the
Committee, in the form and manner required by the Committee, of any
proposed transfer of an Award pursuant to this subsection (b). No transfer
will be effective until the Committee consents to the transfer in writing.


 


(c)    Except as otherwise provided in the
applicable Award Certificate, any Nonqualified Stock Option transferred by a
Participant pursuant to this subsection (c) may be exercised by
the transferee only to the extent that the Award would have been exercisable by
the Participant had no transfer occurred. The transfer of Shares upon exercise
of the Award will be conditioned on the payment of any withholding tax.


 


(d)    Restricted Stock may be freely
transferred after the restrictions lapse or are satisfied and the Shares are
delivered, provided, however, that Restricted Stock awarded to an affiliate of
the Company may be transferred only pursuant to Rule 144 under the
Securities Act, or pursuant to an effective registration for resale under the
Securities Act. For purposes of this subsection (d), “affiliate” will have
the meaning assigned to that term under Rule 144.


 


(e)    In no event may a Participant transfer
an Incentive Stock Option other than by will or the laws of descent and
distribution.


 


7.2    Withholding of Taxes. The
Committee, in its discretion, may satisfy a Participant’s tax withholding
obligations by any of the following methods or any method as it determines to
be in accordance with the laws of the jurisdiction in which the Participant
resides, has domicile or performs services.


 


(a)    Stock
Options and Stock Appreciation Rights. As a condition to the
delivery of Shares pursuant to the exercise of a Stock Option or Stock
Appreciation Right, the Committee may require that the Participant, at the
time of exercise, pay to the Company by cash, 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 also, in its
discretion, accept payment of tax withholding obligations through any of the
Exercise Price payment methods described in Section 4.3(d).


 


(b)    Other Awards
Payable in Shares. The Participant shall satisfy the Participant’s
tax withholding obligations arising in connection with the release of
restrictions on Restricted Units, Restricted Stock and other Stock-Based Awards
by payment to the Company in cash or by certified check, bank draft, wire
transfer or postal or express money order, provided that the format is approved
by the Company or a designated third-party administrator. However, subject to
any requirements of applicable law, the Company may also satisfy the
Participant’s tax withholding obligations by other methods, including selling
or withholding Shares that would otherwise be available for delivery, provided
that the Board or the Committee has specifically approved such payment method
in advance.


 


16

















 


(c)    Cash Awards.
The Company may satisfy a Participant’s tax withholding
obligation arising in connection with the payment of any Award in cash by
withholding cash from such payment.


 


7.3    Special Forfeiture Provision. The
Committee may, in its discretion, provide in an Award Certificate that the
Participant may not, within two years of the Participant’s Termination of
Employment with the Company, enter into any employment or consultation
arrangement (including service as an agent, partner, stockholder, consultant,
officer or director) with any entity or person engaged in any business in which
the Company or any Subsidiary is engaged without prior written approval of the
Committee if, in the sole judgment of the Committee, the business is
competitive with the Company or any Subsidiary or business unit or such
employment or consultation arrangement would present a risk that the
Participant would likely disclose Company proprietary information (as
determined by the Committee). If the Committee makes a determination that this
prohibition has been violated, the Participant (i) will forfeit all rights
under any outstanding Stock Option or Stock Appreciation Right that was granted
subject to the Award Certificate and will return to the Company the amount of
any profit realized upon an exercise of all Awards during the period, as the
Committee determines and sets forth in the Award Certificate, beginning no
earlier than six months prior to the Participant’s Termination of Employment,
and (ii) will forfeit and return to the Company any Annual Performance
Bonuses, Performance Units, Shares of Restricted Stock, Restricted Units
(including any credited Dividend Equivalents), Deferred Stock Units, and other
Stock-Based Awards that are outstanding on the date of the Participant’s
Termination of Employment, subject to the Award Certificate, and have not
vested or that became vested and remain subject to this Section 7.3 during
a period, as the Committee determines and sets forth in the Award Certificate,
beginning no earlier than six months prior to the Participant’s Termination of
Employment.


 


7.4    No Implied Rights. The
establishment and operation of the Plan, including the eligibility of a
Participant to participate in the Plan, will not be construed as conferring any
legal or other right upon any Director for any continuation of directorship or
any Employee for the continuation of employment through the end of any
Performance Cycle or other period. The Company expressly reserves the right,
which may be exercised at any time and in the Company’s sole discretion,
to discharge any individual or treat him or her without regard to the effect
that discharge might have upon him or her as a Participant in the Plan.


 


7.5    No Obligation to Exercise Awards. The
grant of a Stock Option or Stock Appreciation Right will impose no obligation
upon the Participant to exercise the Award.


 


7.6    No Rights as Stockholders. A
Participant who is granted an Award under the Plan will have no rights as a
stockholder of the Company with respect to the Award unless and until
certificates for the Shares underlying the Award are registered in the
Participant’s name and (other than in the case of Restricted Stock) delivered
to the Participant. The right of any Participant to receive an Award by virtue
of participation in the Plan will be no greater than the right of any unsecured
general creditor of the Company.


 


7.7    Indemnification of Committee. The
Company will indemnify, to the fullest 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 the person, or the executor or
administrator of the person’s estate, is or was a member of the Committee or a
delegate of the Committee.


 


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


 


7.9    Nature of Payments. All Awards
made pursuant to the Plan are in consideration of services for the Company or a
Subsidiary. Any gain realized pursuant to Awards under the Plan constitutes a
special incentive payment to the Participant and will not be taken into account
as compensation for purposes of any other employee benefit plan of the Company
or a Subsidiary, except as the Committee otherwise provides. The adoption of
the Plan will have no effect on Awards made or to be made under any other
benefit plan covering an employee of the Company or a Subsidiary or any
predecessor or successor of the Company or a Subsidiary.


 


7.10    Securities Law Compliance. Awards
under the Plan are intended to satisfy the requirements of Rule 16b-3
under the Exchange Act. If any provision of this Plan or any grant of an Award
would otherwise frustrate or conflict with this intent, that provision will be
interpreted and deemed amended so as to avoid conflict. No Participant will be
entitled to a grant, exercise, transfer or payment of any Award if the grant,
exercise, transfer or payment would violate the provisions of the
Sarbanes-Oxley Act of 2002 or any other applicable law.


 


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7.11    Section 409A Compliance. To
the extent the Committee determines that any Award granted under the Plan is
subject to Section 409A of the Code, the Award Certificate evidencing such
Award will incorporate the terms and conditions required by Section 409A
of the Code. To the extent applicable, the Plan and the Award Certificate will
be interpreted in accordance with Section 409A of the Code and Department
of Treasury regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or other guidance that may be
issued after the Effective Date. Notwithstanding any provision of the Plan, in
the event that following the Effective Date the Committee determines that any
Award may be subject to Section 409A of the Code, the Committee may adopt
such amendments to the Plan and/or the applicable Award Certificate or adopt
policies and procedures or take any other action or actions, including an
action or amendment with retroactive effect, that the Committee determines is
necessary or appropriate to (i) exempt the Award from the application of Section 409A
of the Code or (ii) comply with the requirements of Section 409A of
the Code.


 


7.12    Governing Law, Severability. The
Plan and all determinations made and actions taken under the Plan will be
governed by the law of Bermuda and construed accordingly. If any provision of
the Plan is held unlawful or otherwise invalid or unenforceable in whole or in
part, the unlawfulness, invalidity or unenforceability will not affect any
other parts of the Plan, which parts will remain in full force and effect.


 


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