Exhibit 10.1


SCHOLASTIC CORPORATION 2011 STOCK INCENTIVE
PLAN


ARTICLE I

PURPOSE


          The purpose
of this Scholastic Corporation 2011 Stock Incentive Plan is to enhance the
profitability and value of the Company for the benefit of its stockholders by enabling
the Company to offer employees of, and Consultants to, the Company and its
Affiliates stock-based incentives in the Company, thereby creating a means to
raise the level of stock ownership by employees and Consultants in order to
attract, retain and reward such individuals and strengthen the mutuality of
interests between such individuals and the Company’s stockholders.


ARTICLE II

DEFINITIONS


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


2.1 “ACQUISITION EVENT” has the meaning set forth in Section 4.2(d).


2.2 “AFFILIATE” means each of the following: (i) any Subsidiary; (ii)
any Parent; (iii) any corporation, trade or business (including, without
limitation, a partnership or limited liability company) which is directly or
indirectly controlled 50% or more (whether by ownership of stock, assets or an
equivalent ownership interest or voting interest) by the Company or one of its
Affiliates; (iv) any corporation, trade or business (including, without
limitation, a partnership or limited liability company) which directly or
indirectly controls 50% or more (whether by ownership of stock, assets or an
equivalent ownership interest or voting interest) of the Company or a Parent;
and (v) any other entity in which the Company or any of its Affiliates has a
material equity interest and which is designated as an “Affiliate” by
resolution of the Committee.


2.3 “AWARD” means any award under this Plan of any (i) Stock Option;
(ii) Restricted Stock Unit; or (iii) other awards providing benefits similar to
a Stock Option or Restricted Stock Unit and which are designed to meet the
requirements of a Foreign Jurisdiction.


2.4 “AWARD AGREEMENT” means, with respect to each Award, a written or
electronic agreement or communication between the Company and the Participant
setting forth the terms and conditions of the Award, including, without
limitation, a Stock Option Agreement and Restricted Stock Unit Agreement. An
Award Agreement may, but need not, require as a condition of its effectiveness
that such Award Agreement be executed by the Participant, including by
electronic signature or other electronic indication of acceptance.


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


2.6 “CAUSE” means, with respect to the Termination of Employment of an
employee or Termination of Consultancy of a Consultant, (i) in the case where
there is no employment agreement or consultancy agreement between the Company
or an Affiliate and the Participant in effect at the time of the relevant grant
or where there is an employment agreement or consultancy agreement in effect at
such time, but such agreement does not define “cause” (or words of like
import), termination due to a Participant’s dishonesty, fraud, insubordination,
willful misconduct, refusal to perform services (for any reason other than
illness or incapacity) or materially unsatisfactory performance of his or her
duties for the Company or an Affiliate, as determined by the Committee in its
sole discretion; or (ii) in the case where there is an employment agreement or
consultancy agreement between the Company or an Affiliate and the Participant
in effect at the time of grant that defines “cause” (or words of like import),
termination that is 


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or would be deemed to be “for cause” (or words of like import) as
defined under such employment agreement or consultancy agreement at the time of
grant, as determined by the Committee in its sole discretion.


2.7 “CODE” means the Internal Revenue Code of 1986, as amended. Any
reference to any section of the Code shall also be deemed to include a
reference to any successor provision and the Treasury regulations and other
guidance promulgated thereunder.


2.8 “COMMITTEE” means a committee or subcommittee of the Board
appointed from time to time by the Board, which committee or subcommittee shall
consist of two or more non-employee directors, each of whom is intended to be,
to the extent required by Rule 16b-3, a “non-employee director” as defined in
Rule 16b-3 and, to the extent required by Section 162(m) of the Code, an
“outside director” as defined under Section 162(m) of the Code, and to satisfy
any other independence requirement under the rules of the NASDAQ Stock Market,
Inc. (“NASDAQ”); provided, however, that if and to the extent that no Committee
exists which has the authority to administer this Plan, the functions of the
Committee shall be exercised by the Board and all references herein to the
Committee shall be deemed to be references to the Board.


2.9 “COMMON STOCK” means the Common Stock, $.01 par value per share, of
the Company.


2.10 “COMPANY” means Scholastic Corporation, a Delaware corporation,
and its successors by operation of law.


2.11 “CONSULTANT” means any non-employee advisor or consultant to the
Company or its Affiliates.


2.12 “DISABILITY” means (i) in the case where there is no employment
agreement or consultancy agreement between the Company or an Affiliate and the
Participant in effect at the time of the relevant grant, or where there is an
employment agreement or consultancy agreement in effect at such time, but such
agreement does not define “disability”, “total and permanent disability”, as
defined in Section 22(e)(3) of the Code, as determined by the Committee in its
sole discretion; (ii) in the case where there is an employment agreement or
consultancy agreement between the Company or an Affiliate and the Participant
at the time of the relevant grant that defines “disability”, “disability” as
defined under such employment agreement or consultancy agreement, as determined
by the Committee in its sole discretion; or (iii) in the case of an Award that
constitutes nonqualified deferred compensation subject to Section 409A of the
Code (“Section 409A Award”), “disability” as defined in Section 409A(2)(C) of
the Code.


2.13 “EFFECTIVE DATE” means the effective date of this Plan as defined
in Article XII.


2.14 “ELIGIBLE EMPLOYEE” means each employee of the Company or an
Affiliate.


2.15 “EXCHANGE ACT” means the Securities Exchange Act of 1934, as
amended. Any references to any section of the Exchange Act shall also be a
reference to any successor provision.


2.16 “FAIR MARKET VALUE” means, unless otherwise required by any
applicable provision of the Code, as of any date, the mean between the high and
low sales prices of a share of Common Stock on the applicable date: (i) as
reported on the principal national securities exchange on which it is then
traded (including, without limitation, the NASDAQ Stock Market LLC) or (ii) if
not traded on any such national securities exchange, the mean of the closing
bid and asked prices of a share of Common Stock as reported by an automated
quotation system sponsored by the National Association of Securities Dealers,
Inc. If the Common Stock is not readily tradable on a national securities
exchange, or any automated quotation system sponsored by the National
Association of Securities Dealers, Inc., its Fair Market Value shall be 


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set in good faith by the Committee, taking into account all factors
that the Committee deems relevant, and shall be determined by the reasonable
application of a reasonable valuation method within the meaning of Section 409A
of the Code. 


2.17 “FAMILY MEMBER” means,
solely to the extent provided for in Securities Act Form S-8, 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, including adoptive
relationships, any person sharing the employee’s household (other than a tenant
or employee), a trust in which these persons have more than 50% of the
beneficial interest, a foundation in which these persons (or the employee)
control the management of assets, and any other entity in which these persons
(or the employee) own more than 50% of the voting interests or as otherwise
defined in Securities Act Form S-8.


2.18 “FOREIGN JURISDICTION” means any jurisdiction outside of the
United States including, without limitation, countries, states, provinces and
localities.


2.19 “PARENT” means any parent corporation of the Company within the
meaning of Section 424(e) of the Code.


2.20 “PARTICIPANT” means any Eligible Employee or Consultant to whom an
Award has been made under this Plan.


2.21 “PERFORMANCE GOALS” has the meaning set forth in Section 8.1.


2.22 “PLAN” means this Scholastic Corporation 2011 Stock Incentive
Plan, as amended from time to time.


2.23 “RESTRICTED STOCK UNIT” means an Award having a unit of
measurement equivalent to one share of Common Stock but with none of the
attendant rights of a holder of a share of Common Stock until a share of Common
Stock is ultimately distributed in settlement of the Award (other than the
right to receive dividend equivalent amounts in accordance with Section 7.2
hereof). 


2.24 “RETIREMENT” means a Termination of Employment on or after age 55
and at least 10 years of continuous service with the Company or its Affiliates
in accordance with the Company’s standard retirement policies as in effect from
time to time or such other definitions of Retirement as the Committee may
determine from time to time in its discretion. 


2.25 “RULE 16B-3” means Rule 16b-3 under Section 16(b) of the Exchange
Act as then in effect or any successor provisions.


2.26 “SECTION 162(M) OF THE CODE” means Section 162(m) of the Code.


2.27 “SECURITIES ACT” means the Securities Act of 1933, as amended. Any
reference to any section of the Securities Act shall also be a reference to any
successor provision.


2.28 “STOCK OPTION” means any option to purchase shares of Common Stock
granted to an Eligible Employee or Consultant under Article VI. 


2.29 “SUBSIDIARY” means any subsidiary corporation of the Company
within the meaning of Section 424(f) of the Code.


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2.30 “TERMINATION OF CONSULTANCY” means (i) the expiration of the
contract (or in the case of more than one contract, all contracts) under which
services are performed by the Consultant for the Company or an Affiliate; or
(ii) when an entity which is retaining a Participant as a Consultant ceases to
be an Affiliate unless the Participant otherwise is, or thereupon becomes, a
Consultant to the Company or another Affiliate at the time the entity ceases to
be an Affiliate. In the event that a Consultant becomes an Eligible Employee or
a non-employee director upon the termination of his or her consultancy, the
Committee, in its sole and absolute discretion, may determine that no
Termination of Consultancy shall be deemed to occur until such time as such
individual is no longer a Consultant, an Eligible Employee or a non-employee
director. Notwithstanding the foregoing, the Committee may otherwise define
Termination of Consultancy in the Award Agreement or, if no rights of a
Participant are reduced, may otherwise define Termination of Consultancy
thereafter. In the case of a Section 409A Award, “Termination of Consultancy”
shall be interpreted to mean “separation from service” as defined in Section
409A of the Code.


2.31 “TERMINATION OF EMPLOYMENT” means: (i) a termination of employment
(for reasons other than a military or personal leave of absence granted by the
Company) of a Participant from the Company and its Affiliates; or (ii) when an
entity which is employing a Participant ceases to be an Affiliate, unless the
Participant otherwise is, or thereupon becomes, employed by the Company or
another Affiliate at the time the entity ceases to be an Affiliate. In the
event that an Eligible Employee becomes a Consultant or non-employee director
upon the termination of his or her employment, the Committee, in its sole and
absolute discretion, may determine that no Termination of Employment shall be
deemed to occur until such time as such individual is no longer an Eligible
Employee, a Consultant or a non-employee director. Notwithstanding the
foregoing, the Committee may otherwise define Termination of Employment in the
Award Agreement or, if no rights of a Participant are reduced, may otherwise
define Termination of Employment thereafter. In the case of a Section 409A
Award, “Termination of Employment” shall be interpreted to mean “separation
from service” as defined in Section 409A. 


2.32 “TRANSFER” means (i) when used as a noun, any direct or indirect
transfer, sale, assignment, pledge, hypothecation, encumbrance or other
disposition (including the issuance of equity in a Person), whether for value
or no value and whether voluntary or involuntary (including by operation of
law), and (ii) when used as a verb, to directly or indirectly transfer, sell,
assign, pledge, hypothecate, encumber, or otherwise dispose of (including the
issuance of equity in a Person), whether for value or no value and whether
voluntary or involuntary (including by operation of law).


ARTICLE III

ADMINISTRATION


3.1 THE COMMITTEE. The Plan shall be
administered and interpreted by the Committee. If for any reason the appointed
Committee does not meet the “non-employee director” or “outside director”
requirements of Rule 16b-3 or Section 162(m) of the Code, such noncompliance
with the requirements of Rule 16b-3 or Section 162(m) of the Code shall not
affect the validity of Awards, grants, interpretations or other actions of the
Committee.


3.2 GRANTS OF AWARDS.
The Committee shall have full authority and discretion to grant to Eligible
Employees and Consultants, pursuant to the terms of this Plan, (i) Stock
Options, (ii) Restricted Stock Units, or (iii) other awards providing benefits
similar to Stock Options or Restricted Stock Units which are designed to meet
the requirements of Foreign Jurisdictions. All Awards shall be granted by,
confirmed by, and subject to the terms of, a written or electronic Award
Agreement. In particular, the Committee shall have the discretionary authority:


          (a) to
select the Eligible Employees and Consultants to whom Awards may from time to
time be granted hereunder;


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          (b) to
determine whether and to what extent Awards, including any combination of two
or more Awards, are to be granted hereunder to one or more Eligible Employees
or Consultants;


          (c) to
determine, in accordance with the terms of this Plan, the number of shares of
Common Stock to be covered by each Award granted hereunder;


          (d) to
determine the terms and conditions, not inconsistent with the terms of this
Plan, of any Award granted hereunder (including, but not limited to, the
exercise or purchase price (if any), any restriction or limitation upon
exercise, Performance Goals, any vesting schedule or acceleration thereof, and
any forfeiture restrictions, or waiver thereof, regarding any Award and the
shares of Common Stock relating thereto, based on such factors, if any, as the
Committee shall determine, from time to time in any particular case, in its
sole discretion);


          (e) to
establish or verify the extent of satisfaction of any Performance Goals or
other conditions applicable to an Award;


          (f) to determine
whether and under what circumstances or method an Award may be settled;


          (g) to
determine whether an Award is intended to satisfy Section 162(m) of the Code;


          (h) to
determine whether to require an Eligible Employee or Consultant, as a condition
of the granting of any Award, not to sell or otherwise dispose of shares of
Common Stock acquired pursuant to the exercise of a Stock Option or other Award
for a period of time as determined by the Committee, in its sole discretion,
following the date of the acquisition of such Stock Option or Award;


          (i) to
modify, extend or renew an Award, subject to Articles X and XIV herein,
provided, however, that if an Award is modified, extended or renewed and
thereby deemed to be the issuance of a new Award under the Code or the
applicable accounting rules, the exercise price of an Award may continue to be
the original exercise price even if less than the Fair Market Value of the
Common Stock at the time of such modification, extension or renewal; 


          (j) to
offer to buy out an Option previously granted, based on such terms and
conditions as the Committee shall establish and communicate to the Participant
at the time such offer is made; 


          (k) to
delegate the day-to-day administration of the Plan to one or more officers of
the Company or one or more agents, and such administrators may have the
authority to execute and distribute agreements or other documents evidencing or
relating to Awards granted under the Plan, to maintain Plan administration
records, to interpret the terms of Awards and to take such other actions as the
Committee may specify. Any action taken by any such administrator within the
scope of its delegation shall be deemed for all purposes to have been taken by
the Committee, and references in this Plan to the Committee shall include any
such administrator; provided that the actions and interpretations of any such
administrator shall be subject to review and approval, disapproval or
modification by the Committee; and


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          (l) to make
all other determinations or take such actions deemed necessary, appropriate, or
advisable for the administration of the Plan.


3.3 GUIDELINES. Subject to Articles X and XIV hereof, the Committee
shall have the discretionary authority to adopt, alter, repeal and interpret
and construe such administrative rules, guidelines and practices governing this
Plan and perform all acts, including the delegation of its administrative
responsibilities, as it shall, from time to time, deem advisable; to construe
and interpret the terms and provisions of this Plan and any Award issued under
this Plan (and any agreements relating thereto); and to otherwise supervise the
administration of this Plan. The Committee may correct any defect, supply any omission
or reconcile any inconsistency in this Plan or in any Award Agreement relating
thereto in the manner and to the extent it shall deem necessary to effectuate
the purpose and intent of this Plan. The Committee may adopt special guidelines
and provisions for persons who are residing in, or subject to the taxes of,
Foreign Jurisdictions to comply with applicable tax, securities, employment and
other laws, and may impose any limitations and restrictions that it deems
necessary to comply with such laws of such Foreign Jurisdictions. To the extent
applicable, this Plan is intended to comply with Section 162(m) and Section
409A of the Code and the applicable requirements of Rule 16b-3 and shall be
limited, construed and interpreted in a manner so as to comply therewith.


3.4 DECISIONS FINAL. Any decision, interpretation or other action made
or taken in good faith by or at the direction of the Company, the Board or the
Committee (or any of its members) arising out of or in connection with this
Plan shall be within the absolute discretion of all and each of them, as the
case may be, and shall be final, binding and conclusive on the Company and all
employees and Participants and their respective heirs, executors,
administrators, successors and assigns and any persons claiming rights under
this Plan or an Award. A Participant or other person claiming rights under this
Plan may contest a decision or action by the Committee with respect to an Award
or such other person only on the ground that such decision or action was
arbitrary or capricious or was unlawful, and any review of such decision or
action by the Board or otherwise shall be limited to determining whether the
Committee’s decision or action was arbitrary, capricious or unlawful.


3.5 RELIANCE ON COUNSEL. The Company, the Board or the Committee may
consult with legal counsel, who may be counsel for the Company or other
counsel, with respect to its obligations or duties hereunder, or with respect
to any action or proceeding or any question of law, and shall not be liable
with respect to any action taken or omitted by it in good faith pursuant to the
advice of such counsel.


3.6 PROCEDURES. If the Committee is appointed, the Board shall
designate one of the members of the Committee as chairman and the Committee
shall hold meetings, subject to the By-Laws of the Company, at such times and
places as it shall deem advisable. A majority of the Committee members shall
constitute a quorum if the Committee consists of an odd number of members. If
the Committee consists of an even number of members, 50% of the Committee
members shall constitute a quorum. All determinations of the Committee shall be
made by a majority of those members present at a meeting at which there is a
quorum. Any decision or determination reduced to writing and signed by all the
Committee members, in accordance with the By-Laws of the Company, shall be
fully as effective as if it had been made by a vote at a meeting duly called
and held. The Committee shall keep minutes of its meetings and shall make such
rules and regulations for the conduct of its business as it shall deem
advisable.


3.7 DESIGNATION OF CONSULTANTS/LIABILITY.


          (a) The
Committee may designate employees of the Company and Affiliates and
professional advisors to assist the Committee in the administration of this
Plan and may grant authority to officers to execute Award Agreements or other
communications (including by electronic signature or electronic acceptance) or
other documents on behalf of the Committee.


6





          (b) The Committee
may employ such legal counsel, consultants and agents as it may deem desirable
for the administration of this Plan and may rely upon any opinion received from
any such counsel or consultant and any computation received from any such
consultant or agent. Expenses incurred by the Committee in the engagement of
any such counsel, consultant or agent shall be paid by the Company. The
Committee, its members and any employee of the Company or Affiliate designated
pursuant to Paragraph (a) above shall not be liable for any action or
determination made in good faith with respect to this Plan. To the maximum
extent permitted by applicable law, no officer of the Company or Affiliate or
member or former member of the Committee shall be liable for any action or determination
made in good faith with respect to this Plan or any Award granted under it. To
the maximum extent permitted by applicable law or the Certificate of
Incorporation or By-Laws of the Company (or if applicable, of an Affiliate),
each officer and member or former member of the Committee shall be indemnified
and held harmless by the Company (or if applicable, an Affiliate) against any
cost or expense (including reasonable fees of counsel reasonably acceptable to
the Company) or liability (including any sum paid in settlement of a claim with
the approval of the Company), and shall be advanced amounts necessary to pay
the foregoing at the earliest time and to the fullest extent permitted, arising
out of any act or omission to act in connection with this Plan, except to the
extent arising out of such officer’s, member’s or former member’s own fraud or
bad faith. Such indemnification shall be in addition to any rights of
indemnification the officers, directors or members or former officers,
directors or members may have under applicable law or under the Certificate of
Incorporation or By-Laws of the Company or any Affiliate. Notwithstanding
anything else herein, this indemnification will not apply to the actions or
determinations made by an individual with regard to Awards granted to him or
her under this Plan.


ARTICLE IV

SHARE AND OTHER LIMITATIONS


4.1 SHARES.


          (a) GENERAL
LIMITATION. The aggregate number of shares of Common Stock which may be issued
or used for reference purposes under this Plan or with respect to which Awards
may be granted shall not exceed 2,100,000 shares of Common Stock (subject to
any increase or decrease pursuant to Section 4.2) with respect to all types of
Awards. The shares of Common Stock available under this Plan may be either
authorized and unissued Common Stock or Common Stock held in or acquired for
the treasury of the Company. If any Stock Option granted under this Plan
expires, terminates, or is canceled for any reason without having been
exercised in full or, with respect to Stock Options, the Company repurchases
any Stock Option, the number of shares of Common Stock underlying such
unexercised or repurchased Stock Option shall again be available for the
purposes of Awards under this Plan. If Common Stock has been delivered or
exchanged by a Participant as full or partial payment to the Company of an
exercise price or the price of the purchase of an Award, the number of shares
of Common Stock exchanged as payment in connection with the exercise or
purchase shall again be available for purposes of determining the number of
shares of Common Stock available for Awards. If Common Stock has been delivered
by a Participant for payment of withholding taxes, or if the number of shares
of Common Stock otherwise deliverable has been reduced for payment of
withholding taxes, the number of shares of Common Stock delivered by such
Participant or reduced for payment of withholding taxes shall again be
available for purposes of determining the number of shares of Common Stock
available for Awards. 


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          (b)
INDIVIDUAL PARTICIPANT LIMITATIONS. The maximum number of shares of Common
Stock subject to any Stock Option or Restricted Stock Unit or other Award
intended to comply with Section 162(m) of the Code which may be granted under
this Plan during any fiscal year of the Company to any Eligible Employee or
Consultant shall be 500,000 shares per each type of Award (subject to any
increase or decrease pursuant to Section 4.2).


4.2 CHANGES.


          (a) The
existence of this Plan and the Awards granted hereunder shall not affect in any
way the right or power of the Board or the stockholders of the Company to make
or authorize any adjustment, recapitalization, reorganization or other change
in the Company’s capital structure or its business, any merger or consolidation
of the Company or any Affiliate, any issue of bonds, debentures, preferred or
prior preference stock ahead of or affecting Common Stock, the dissolution or
liquidation of the Company or any Affiliate, any sale or transfer of all or
part of the assets or business of the Company or any Affiliate or any other
corporate act or proceeding.


          (b) Subject
to the provisions of Section 4.2(d), in the event of any change in the capital
structure of the Company by reason of any stock split, reverse stock split,
stock dividend, combination or reclassification of shares, recapitalization, or
other change in the capital structure of the Company, non-cash distribution
with respect to its outstanding Common Stock or capital stock other than Common
Stock, merger, consolidation, spin-off, reorganization, partial or complete
liquidation, issuance of rights or warrants to purchase any Common Stock or
securities convertible into Common Stock, or any other corporate transaction or
event having an effect similar to any of the foregoing and effected, then the
aggregate number and kind of shares which thereafter may be issued under this
Plan, the number and kind of shares or other property (including cash) to be
issued upon exercise of an outstanding Stock Option or other Award granted
under this Plan and the purchase price thereof shall be appropriately adjusted
consistent with such change in such manner as, and to the extent that, the
Committee may deem equitable to prevent substantial dilution or enlargement (as
determined by the Committee) of the rights granted to, or available for,
Participants under this Plan, and any such adjustment determined by the
Committee in good faith shall be final, binding and conclusive on the Company
and all Participants and employees and their respective heirs, executors,
administrators, successors and assigns.


          (c)
Fractional shares of Common Stock resulting from any adjustment in Stock
Options or other Awards pursuant to Section 4.2(b) shall be aggregated until,
and eliminated at, the time of exercise by rounding-down for fractions less
than one-half and rounding-up for fractions equal to or greater than one-half.
No cash settlements shall be made with respect to fractional shares eliminated
by rounding. Notice of any adjustment shall be given by electronic or other
communication by the Committee to each Participant whose Award has been
adjusted and such adjustment (whether or not such notice is given) shall be
effective and binding for all purposes of this Plan.


          (d) In the
event of a merger or consolidation in which the Company is not the surviving
entity or in the event of any transaction that results in the acquisition of
substantially all of the Company’s outstanding Common Stock by a single person
or entity or by a group of persons and/or entities acting in concert, or in the
event of the sale or transfer of all or substantially all of the Company’s
assets (all of the foregoing being referred to as “Acquisition 


8





Events”), then the Committee may, in its sole discretion, terminate,
effective as of the date of the Acquisition Event, all outstanding Stock
Options and other Awards with respect to which a Participant has a right to
exercise, by delivering electronic or other notice of termination to each
Participant at least 10 days prior to the date of consummation of the
Acquisition Event, in which case during the period from the date on which such
notice of termination is delivered to the consummation of the Acquisition
Event, each such Participant shall have the right to exercise in full all of
such Awards held by the Participant that are then outstanding (without regard
to any limitations on exercisability otherwise contained in such Stock Option
or Award Agreements), but any such exercise shall be contingent upon and
subject to the occurrence of the Acquisition Event, and, provided that, if the
Acquisition Event does not take place within the period specified by the
Committee after giving such notice for any reason whatsoever, the notice and
exercise pursuant thereto shall be null and void. 


          (e) In the
event of an Acquisition Event, the Committee may, in its sole discretion,
provide that all Restricted Stock Units shall fully vest on the date of
consummation of the Acquisition Event and, if the Restricted Stock Units are
subject to the attainment of Performance Goals, the Committee may, in its
discretion, determine that such awards shall be considered to be earned in full
“at target” as if the applicable Performance Goals established by the Committee
have been achieved as of such date. If the Committee determines to vest
Restricted Stock Units as provided in the preceding sentence and the
Acquisition Event constitutes a “change in control” event as described in
Section 409A of the Code, the Restricted Stock Units shall be settled and paid
on the date of consummation of the Acquisition Event. If the Acquisition Event does
not constitute a “change in control” event as described in Section 409A of the
Code, Restricted Stock Units that do not constitute Section 409A Awards shall
be settled and paid on the date of consummation of the Acquisition Event
and Restricted Stock Units that do constitute Section 409A Awards shall be settled and paid on the
date provided for in the Award Agreement or, if sooner, the earliest date on
which the Restricted
Stock Units may be paid without violating Section 409A of the Code. Any
such acceleration of vesting shall be contingent upon and subject to the
occurrence of the Acquisition Event, and, provided that, if the Acquisition
Event does not take place within the period specified by the Committee after
giving such notice for any reason whatsoever, the acceleration of vesting
pursuant thereto shall be null and void. 


          (f) If an
Acquisition Event occurs but the Committee does not terminate the outstanding
Stock Options or accelerate the vesting of outstanding Restricted Stock Units
or other Awards pursuant to Section 4.2(d) or (e), then the provisions of
Section 4.2(b) shall apply. 


4.3 MINIMUM PURCHASE PRICE. Notwithstanding any provision of this Plan
to the contrary, if authorized but previously unissued shares of Common Stock
are issued under this Plan, such shares shall not be issued for a consideration
which is less than as permitted under applicable law.


ARTICLE V

ELIGIBILITY


5.1 GENERAL ELIGIBILITY. All Eligible Employees and Consultants and
prospective employees of and Consultants to the Company and its Affiliates are
eligible to be granted Stock Options and Restricted Stock Units under this Plan
or other Awards under this Plan providing benefits similar to each of the
foregoing and which are designed to meet the requirements of Foreign
Jurisdictions. Eligibility for the grant of an Award and actual participation
in this Plan shall be determined by the Committee in its sole discretion. The
vesting and exercise of Awards granted to a prospective employee or Consultant
are conditioned upon such individual actually becoming an Eligible Employee or
Consultant.


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ARTICLE VI

STOCK OPTIONS


6.1 STOCK OPTIONS. Stock Options granted hereunder shall not be
incentive stock options intended to satisfy the requirements of Section 422 of
the Code.


6.2 GRANTS. The Committee shall have the authority to grant to any
Eligible Employee or Consultant one or more Stock Options. 


6.3 TERMS OF STOCK OPTIONS. Stock Options granted under this Plan shall
be subject to the following terms and conditions, and shall be in such form and
contain such additional terms and conditions, not inconsistent with the terms
of this Plan, as the Committee shall deem desirable:


          (a)
EXERCISE PRICE. The exercise price per share of Common Stock shall be
determined by the Committee, but shall not be less than 100% of the Fair Market
Value of a share of Common Stock at the time of grant.


          (b) STOCK
OPTION TERM. The term of each Stock Option shall be fixed by the Committee;
provided, however, that no Stock Option shall be exercisable more than 10 years
after the date such Stock Option is granted.


          (c)
EXERCISABILITY. Stock Options shall be exercisable at such time or times and
subject to such terms and conditions as shall be determined by the Committee at
grant. If the Committee provides, in its discretion, that any Stock Option is
exercisable subject to certain limitations (including, without limitation, that
such Stock Option is exercisable only in installments or within certain time
periods), the Committee may waive such limitations on exercisability at any
time at or after grant in whole or in part (including, without limitation,
waiver of the installment exercise provisions or acceleration of the time at
which such Stock Option may be exercised), based on such factors, if any, as
the Committee shall determine, in its sole discretion. Stock Options may not be
exercised during any period prohibited by the Company’s stock trading policies
or applicable securities laws.


          (d) METHOD
OF EXERCISE. Subject to whatever installment exercise, waiting period, and
other provisions and limitations apply under Paragraph (c) above, Stock Options
may be exercised in whole or in part at any time and from time to time during
the Stock Option term by giving notice of exercise to the Company, pursuant to
such electronic or other procedures as may be specified by the Company or its Plan
administrator from time to time, specifying the number of shares to be
purchased. Such notice shall be accompanied by payment in full of the purchase
price as follows: 


	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 in cash or by check, bank draft or money order payable to the order
 of the Company pursuant to procedures specified by the Company or its Plan
 administrator from time to time;

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 if the Common Stock is traded on a national securities exchange, or
 quoted on a national quotation system sponsored by the National Association of
 Securities Dealers, Inc., through a “cashless exercise” procedure whereby the
 Participant delivers irrevocable instructions to a broker approved by the
 Company to sell a sufficient number of shares of Common Stock acquired upon
 exercise of the Stock Options and remit 

 


10









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 promptly to the Company an amount equal to the purchase price and any
 applicable withholding taxes; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)

 	
 on such other terms and conditions as may be acceptable to the
 Company or its Plan administrator from time to time (including, without
 limitation, the relinquishment of Stock Options or by payment in full or in
 part in the form of Common Stock owned by the Participant by either actual
 delivery or attestation (and for which the Participant has good title free
 and clear of any liens and encumbrances) based on the Fair Market Value of
 the Common Stock on the exercise date as determined by the Company or its
 Plan administrator). No shares of Common Stock shall be issued until payment
 therefor, as provided herein, has been made or provided for. 

 


          (e) FORM,
MODIFICATION, EXTENSION AND RENEWAL OF STOCK OPTIONS. Subject to the terms and
conditions and within the limitations of this Plan, Stock Options shall be
evidenced by such form of written or electronic Award Agreement or grant as is
approved by the Committee from time to time, and the Committee may modify,
extend or renew outstanding Stock Options granted under this Plan (provided
that the rights of a Participant are not reduced without his or her consent).
Notwithstanding the foregoing, the Company shall not reduce the exercise price
of a Stock Option and shall not exchange a Stock Option for a new Award with a
lower (or no exercise price) without approval of the stockholders of the
Company in accordance with the Company’s Certificate of Incorporation and the
laws of the State of Delaware.


          (f) OTHER
TERMS AND CONDITIONS. Any Stock Option may contain such other provisions, which
shall not be inconsistent with any of the foregoing terms of this Plan, as the
Committee shall deem appropriate.


ARTICLE VII

RESTRICTED STOCK UNITS


7.1 AWARDS OF RESTRICTED STOCK UNITS. Awards of Restricted Stock Units
may be issued to Eligible Employees or Consultants either alone or in addition
to other Awards granted under this Plan. The Committee shall determine the
Eligible Employees or Consultants to whom, and the time or times at which,
grants of Restricted Stock Units will be made, the number of units to be
awarded, the time or times within which such Awards may be subject to
forfeiture, the vesting schedule and rights to acceleration thereof, and all
other terms and conditions of the Awards. An Award Agreement may condition the
grant or vesting of Restricted Stock Units upon the attainment of Performance
Goals, including pre-established Performance Goals intended to meet the
requirements of qualified performance-based compensation under Section 162(m)
of the Code, or such other factors as the Committee may determine, in its sole
discretion.


7.2 RESTRICTED STOCK UNIT AWARDS. Restricted Stock Units represent an
unfunded and unsecured obligation of the Company and do not confer any rights
of a stockholder until Common Stock is issued thereunder. Settlement of
Restricted Stock Units may be settled in shares of Common Stock or otherwise as
determined by the Committee or as set forth in the Award Agreement. Dividend
equivalent rights shall be payable in cash with respect to Restricted Stock
Units only to the extent provided by the Committee or as set forth in the Award
Agreement. Until a Restricted Stock Unit is settled, the number of shares
represented by the unit shall be subject to adjustment pursuant to Section 4.2.



11





ARTICLE VIII

PERFORMANCE GOALS


8.1 PERFORMANCE GOALS, FORMULAE OR STANDARDS. The Committee may
condition the grant or vesting of Awards under the Plan upon the attainment of
specified performance goals (“Performance Goals”), including pre-established
Performance Goals intended to meet the requirements of qualified
performance-based compensation under Section 162(m) of the Code (“Qualified
Performance-Based Compensation”), or such other factors as the Committee may
determine, in its sole discretion. If the grant of shares pursuant to an Award
or the lapse of restrictions of an Award is intended to constitute Qualified
Performance-Based Compensation, the Committee shall establish the Performance
Goals and the applicable vesting percentage of the Award applicable to each
Participant or class of Participants in writing prior to the beginning of the
applicable fiscal year or at such later date as otherwise determined by the
Committee and while the outcome of the Performance Goals are substantially
uncertain. Such Performance Goals may incorporate provisions for disregarding
(or adjusting for) changes in accounting methods, corporate transactions
(including, without limitation, dispositions and acquisitions) and other
similar type events or circumstances to the extent permitted by Section 162(m).
With regard to an Award that is intended to constitute Qualified Performance-Based
Compensation, to the extent any such provision would create impermissible
discretion under Section 162(m) of the Code or otherwise violate Section 162(m)
of the Code, such provision shall be of no force or effect. The applicable
Performance Goals shall be based on one or more of the Performance Criteria set
forth in Exhibit A hereto. Qualified Performance-Based Compensation does not
include any amount or portion of any amount that will be paid based upon a
level of performance that is substantially certain to be met at the time the
criteria is established. 


8.2 DEATH, DISABILITY, CHANGE IN CONTROL. Restricted Stock Units or
other Awards under the Plan intended to be Qualified Performance-Based
Compensation under Section 162(m)(4)(C) of the Code may not be payable prior to
attainment of the relevant Performance Goals; provided, however, that the
Committee may provide, either in connection with the grant of an Award or by
amendment thereafter, that achievement of such performance goals will be waived
upon the death or disability (within the meaning of Code Section 162(m)) of the
Participant, or in connection with a change in ownership or control of the
Company (within the meaning of Code Section 162(m)). 


ARTICLE IX

NON-TRANSFERABILITY AND TERMINATION OF

EMPLOYMENT/CONSULTANCY


9.1 NON-TRANSFERABILITY. Except as otherwise provided herein, no Stock
Option, Restricted Stock Unit or other Award shall be Transferable by the
Participant otherwise than by will or by the laws of descent and distribution.
Except as otherwise provided herein, all Stock Options shall be exercisable,
during the Participant’s lifetime, only by the Participant. No Award shall,
except as otherwise specifically provided by law or herein, be Transferable in
any manner, and any attempt to Transfer any such Award shall be void, and no
such Award shall in any manner be liable for or subject to the debts,
contracts, liabilities, engagements or torts of any person who shall be
entitled to such Award, nor shall it be subject to attachment or legal process
for or against such person. Notwithstanding any provision herein to the
contrary, the Committee may determine at the time of grant or thereafter that a
Stock Option that is otherwise not Transferable pursuant to this Section 9.1 is
Transferable to, and exercisable by, a Family Member in whole or in part and in
such circumstances, and under such conditions, as specified by the Committee. A
Stock Option that is Transferred to a Family Member pursuant to the preceding
sentence (i) may not be subsequently Transferred during the employee’s lifetime
other than to the employee or another Family Member, and (ii) remains subject
to the terms of this Plan and the Award Agreement.


12





9.2 TERMINATION OF EMPLOYMENT OR TERMINATION OF CONSULTANCY. The
following rules apply with regard to the Termination of Employment or
Termination of Consultancy of a Participant: 


          (a) RULES
APPLICABLE TO STOCK OPTIONS. Except as otherwise determined by the Committee or
as provided in the applicable provisions of the Award Agreement or, if no
rights of the Participant are reduced, as thereafter determined by the
Committee:


	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 TERMINATION BY REASON OF DEATH OR DISABILITY. If a Participant’s
 Termination of Employment or Termination of Consultancy is by reason of death
 or Disability, all Stock Options held by such Participant shall become fully
 exercisable on the date of such Termination of Employment or Termination of
 Consultancy and may be exercised by the Participant (or, in the case of
 death, by the legal representative of the Participant’s estate) at any time
 within a period of one year from the date of such Termination of Employment
 or Termination of Consultancy, but in no event beyond the expiration of the
 stated terms of such Stock Options.

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 TERMINATION BY REASON OF RETIREMENT. In the event of a Participant’s
 Termination of Employment by reason of Retirement, for a period of three
 years from the date of such Termination of Employment, all unvested Stock
 Options held by such Participant shall continue to vest and all exercisable
 Stock Options may be exercised by the Participant, but in no event beyond the
 expiration of the stated terms of such Stock Options. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)

 	
 INVOLUNTARY TERMINATION WITHOUT CAUSE. If a Participant’s Termination
 of Employment or Termination of Consultancy is by involuntary termination
 without Cause, all Stock Options held by such Participant may be exercised,
 to the extent exercisable at Termination of Employment or Termination of
 Consultancy, by the Participant at any time within a period of 90 days from
 the date of such Termination of Employment or Termination of Consultancy, but
 in no event beyond the expiration of the stated term of such Stock Options. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (iv)

 	
 TERMINATION FOR CAUSE OR FOR ANY REASON OTHER THAN DEATH, DISABILITY,
 RETIREMENT OR INVOLUNTARY TERMINATION WITHOUT CAUSE. If a Participant’s
 Termination of Employment or Termination of Consultancy is for Cause, all
 Stock Options held by such Participant shall thereupon terminate and expire
 as of the date of such Termination of Employment or Termination of
 Consultancy. If a Participant’s Termination of Employment or Termination of
 Consultancy is for any reason other than Cause, death, Disability,
 Retirement, or other than an involuntary Termination of Employment or Termination
 of Consultancy without Cause, including, without limitation, a voluntary
 Termination of Employment or Termination of Consultancy, all Stock Options
 held by such Participant may be exercised, to the extent exercisable at
 Termination of Employment 

 


13









	
  

 	
  

 	
  

 
	
  

 	
  

 	
 or Termination of Consultancy, by the Participant at any time within
 a period of 90 days from the date of such Termination of Employment or
 Termination of Consultancy, but in no event beyond the expiration of the
 stated term of such Stock Options.

 


          (b) RULES
APPLICABLE TO RESTRICTED STOCK UNITS. Except as otherwise provided in the
applicable provisions of the Award Agreement and this Plan and except as
provided in Article VIII hereof with respect to Restricted Stock Units intended
to constitute Qualified Performance-Based Compensation:


	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 upon a Termination of Employment or Termination of Consultancy by a
 Participant as a result of a Participant’s death, Disability or Retirement,
 all outstanding unvested Restricted Stock Units shall immediately vest and a
 share of Common Stock with respect to each Restricted Stock Unit shall be
 distributed within 30 days of such termination.

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 If a Restricted Stock Unit constitutes a Section 409A Award, no
 distribution shall be made upon a Participant’s Termination of Employment or
 a Termination of Consultancy unless such termination constitutes a
 “separation from service” within the meaning of Section 409A of the Code.

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)

 	
 Except as provided in this Article IX, Restricted Stock Units that
 are not vested as of the date of a Participant’s Termination of Employment or
 Termination of Consultancy for any reason shall terminate and be forfeited in
 their entirety on the date of such termination.

 


ARTICLE X

TERMINATION OR AMENDMENT OF PLAN


10.1 TERMINATION OR AMENDMENT. Notwithstanding any other provision of
this Plan, the Board or the Committee may at any time, and from time to time,
amend, in whole or in part, any or all of the provisions of this Plan
(including any amendment deemed necessary to ensure that the Company may comply
with any regulatory requirement referred to in Article XII), or suspend or
terminate it entirely, retroactively or otherwise; provided, however, that,
unless otherwise required by law or specifically provided herein, the rights of
a Participant with respect to Awards granted prior to such amendment,
suspension or termination may not be impaired without the consent of such
Participant and, provided further, without the approval of the stockholders of
the Company in accordance with the Company’s Certificate of Incorporation and
the laws of the State of Delaware, to the extent required by the applicable
provisions of Rule 16b-3 or Section 162(m) of the Code, no amendment may be
made which would (i) increase the aggregate number of shares of Common Stock
that may be issued under this Plan; (ii) increase the maximum individual
Participant limitations for a fiscal year under Section 4.1(b); (iii) change
the classification of employees or Consultants eligible to receive Awards under
this Plan; (iv) decrease the minimum option price of any Stock Option; (v)
extend the maximum option period under Section 6.3; (vi) materially alter the
Performance Criteria for Awards as set forth in Exhibit A; or (vii) require
stockholder approval in order for this Plan to continue to comply with the
applicable provisions of Section 162(m) of the Code. 


10.2 The Committee may amend the terms of any Award theretofore
granted, prospectively or retroactively, but, subject to Article IV above or as
otherwise specifically provided herein, no such 


14





amendment or other action by the Committee shall impair the rights of
any Participant without the Participant’s consent.


ARTICLE XI

UNFUNDED PLAN


11.1 UNFUNDED STATUS OF PLAN. This Plan is intended to constitute an
“unfunded” plan for incentive and deferred compensation. With respect to any
payments as to which a Participant has a fixed and vested interest but which
are not yet made to a Participant by the Company, nothing contained herein
shall give any such Participant any rights that are greater than those of a
general unsecured creditor of the Company.


ARTICLE XII

GENERAL PROVISIONS


12.1 LEGEND. The Committee may require each person receiving shares
pursuant to an Award under this Plan to represent to and agree with the Company
electronically or otherwise that the Participant is acquiring the shares
without a view to distribution thereof. In addition to any legend required by
this Plan, the certificates for any shares issued under the Plan shall include
any legend which the Committee deems appropriate to reflect any restrictions on
Transfer if the shares of Common Stock available under the Plan are no longer
registered under a Securities Act Form S-8 or any successor form. All
certificates for shares of Common Stock delivered under this Plan shall be
subject to such stock transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Common
Stock is then listed or any national securities association system upon whose
system the Common Stock is then quoted, any applicable Federal or state
securities law, and any applicable corporate law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions. The Company reserves the right to issue book
entry shares in lieu of share certificates.


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


12.3 NO RIGHT TO EMPLOYMENT/CONSULTANCY. Neither this Plan nor the
grant of any Award hereunder shall give any Participant or other employee or
Consultant any right with respect to continuance of employment or Consultancy
by the Company or any Affiliate, nor shall they be a limitation in any way on
the right of the Company or any Affiliate by which an employee is employed or a
Consultant is retained to terminate his or her employment or Consultancy at any
time.


12.4 WITHHOLDING OF TAXES. The Company shall have the right to deduct
from any payment to be made to a Participant, or to otherwise require, prior to
the issuance or delivery of any shares of Common Stock or the payment of any
cash hereunder, payment by the Participant of any minimum Federal, state or
local taxes required by law to be withheld. Any such withholding obligation
with regard to any Participant may be satisfied, subject to the consent of the
Committee or as provided in the Award Agreement, by reducing the number of
shares of Common Stock otherwise deliverable by the Company or by delivering
shares of Common Stock already owned by the Participant. Any fraction of a
share of Common Stock required to satisfy such tax obligations shall be
disregarded and the amount due shall be paid instead in cash by the
Participant.


15





12.5 LISTING AND OTHER CONDITIONS.


          (a) Unless
otherwise determined by the Committee, as long as the Common Stock is listed on
a national securities exchange or system sponsored by a national securities
association, the issue of any shares of Common Stock pursuant to an Award shall
be conditioned upon such shares being listed on such exchange or system. The
Company shall have no obligation to issue such shares unless and until such
shares are so listed, and the right to exercise any Stock Option with respect
to such shares shall be suspended until such listing has been effected.


          (b) If at
any time counsel to the Company shall be of the opinion that any sale or
delivery of shares of Common Stock pursuant to an Award is or may in the
circumstances be unlawful or result in the imposition of excise taxes on the
Company under the statutes, rules or regulations of any applicable
jurisdiction, the Company shall have no obligation to make such sale or
delivery, or to make any application or to effect or to maintain any
qualification or registration under the Securities Act or otherwise with
respect to shares of Common Stock or Awards, and the right to exercise any
Stock Option shall be suspended until, in the opinion of said counsel, such
sale or delivery shall be lawful or will not result in the imposition of excise
taxes on the Company.


          (c) Upon
termination of any period of suspension under this Section 12.5, any Award
affected by such suspension which shall not then have expired or terminated shall
be reinstated as to all shares available before such suspension and as to
shares which would otherwise have become available during the period of such
suspension, but no such suspension shall extend the term of any Stock Option.


          (d) A Participant
shall be required to supply the Company electronically or otherwise with any
certificates, representations and information that the Company requests and
otherwise cooperate with the Company in obtaining any listing, registration,
qualification, exemption, consent or approval the Company deems necessary or
appropriate.


12.6 GOVERNING LAW. This Plan shall be governed and construed in
accordance with the laws of the State of Delaware (regardless of the law that
might otherwise govern under applicable Delaware principles of conflict of
laws).


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


12.8 OTHER BENEFITS. No Award payment under this Plan shall be deemed
compensation for purposes of computing benefits under any retirement plan of
the Company or its Affiliates nor affect any benefits under any other benefit
plan now or subsequently in effect under which the availability or amount of
benefits is related to the level of compensation.


12.9 COSTS. The Company shall bear all expenses incurred in
administering this Plan, including expenses of issuing Common Stock pursuant to
any Awards hereunder.


12.10 NO RIGHT TO SAME BENEFITS. The provisions of Awards need not be
the same with respect to each Participant, and such Awards to individual
Participants need not be the same in subsequent years.


16





12.11 DEATH/DISABILITY. The Committee may in its discretion require the
transferee of a Participant to supply it with written notice of the Participant’s
death or Disability and to supply it with a copy of the will (in the case of
the Participant’s death) or such other evidence as the Committee deems
necessary to establish the validity of the Transfer of an Award. The Committee
may also require the agreement of the transferee to be bound by all of the
terms and conditions of this Plan.


12.12 SECTION 16(b) OF THE EXCHANGE ACT. All elections and transactions
under this Plan by persons subject to Section 16 of the Exchange Act involving
shares of Common Stock are intended to comply with any applicable exemptive
condition under Rule 16b-3 and the Committee shall interpret and administer
these guidelines in a manner consistent therewith. The Committee may establish
and adopt electronic or other administrative guidelines, designed to facilitate
compliance with Section 16(b) of the Exchange Act, as it may deem necessary or
proper for the administration and operation of this Plan and the transaction of
business hereunder. If an officer (as defined in Rule 16b) is designated by the
Committee to receive an Award, any such Award shall be deemed approved by the
Committee and shall be deemed an exempt purchase under Rule 16b. Any provisions
in this Plan or an Award Agreement inconsistent with Rule 16b shall be inoperative
and shall not affect the validity of this Section 12.12. Notwithstanding
anything herein to the contrary, if the grant of any Award or the payment of a
share of Common Stock with respect to an Award or any election with regard
thereto results or would result in a violation of Section 16(b) of the Exchange
Act, any such grant, payment or election shall be deemed to be amended to
comply therewith, and to the extent such grant, payment or election cannot be
amended to comply therewith, such grant, payment or election shall be
immediately cancelled and the Participant shall not have any rights thereto.


12.13 SECTION 409A. With respect to any Section 409A Award, this Plan
and each Award Agreement are intended to be interpreted in a manner that
conforms to or exempts such Award from the requirements of Section 409A of the
Code. To the extent required by Section 409A of the Code, upon a Termination of
Employment or Termination of Consultancy (other than as a result of death) of a
“specified employee” (within the meaning of Section 409A), Section 409A Awards
shall be delayed until six months after such Termination of Employment or
Termination of Consultancy if such termination constitutes a “separation from
service” (within the meaning of Section 409A(a)(2)(A)(i) of the Code) and such
distributions shall be made at the beginning of the seventh month following the
date of the Specified Employee’s Termination of Employment or Termination of
Consultancy.


12.14 SUCCESSORS AND ASSIGNS. This Plan shall be binding on all successors
and permitted assigns of a Participant, including, without limitation, the
estate of such Participant and the executor, administrator or trustee of such
estate.


12.15 SEVERABILITY OF PROVISIONS. If any provision of this Plan shall
be held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof, and this Plan shall be construed and
enforced as if such provision had not been included.


12.16 HEADINGS AND CAPTIONS. The headings and captions herein are
provided for reference and convenience only, shall not be considered part of
this Plan, and shall not be employed in the construction of this Plan.


ARTICLE XIII

EFFECTIVE DATE OF PLAN


13.1 This Plan was adopted by the Board on July 20, 2011 and shall become
effective on September 21, 2011, the date it was approved by the stockholders
of the Company in accordance with the requirements of the Company’s Certificate
of Incorporation and the laws of the State of Delaware.


17





ARTICLE XIV

TERM OF PLAN


14.1 No Award shall be granted pursuant to this Plan on or after
September 21, 2021 (the tenth anniversary of the date this Plan was approved by
the stockholders of the Company), but Awards granted prior to such tenth
anniversary may extend beyond that date.


18





EXHIBIT A TO THE 2011 STOCK INCENTIVE PLAN


PERFORMANCE CRITERIA


          Any
Performance Goals established for purposes of conditioning the grant of an
Award based on performance or the vesting of performance-based Awards, and
which are intended to comply with Section 162(m) of the Code, shall be based on
one or more of the following performance criteria either individually,
alternatively, or in any combination applied either to the Company, an
Affiliate or any business unit thereof, individually, alternatively, or in any
combination, and measured either annually or cumulatively over a period of
years, or on an absolute basis or relative to previous year’s results or to a
designated comparison group, in either case as specified by the Committee in
the Award (“Performance Criteria”): (i) the attainment of certain target levels
of, or a specified percentage increase in, revenues, income before income taxes
and extraordinary items, income or net income, earnings before income tax,
earnings before interest, taxes, depreciation and amortization, or a
combination of any or all of the foregoing; (ii) the attainment of certain
target levels of, or a percentage increase in, after-tax or pre-tax profits
including, without limitation, that attributable to continuing and/or other
operations; (iii) the attainment of certain target levels of, or a specified
increase in, operational cash flow; (iv) the achievement of a certain level of,
reduction of, or other specified objectives with regard to limiting the level
of increase in, all or a portion of the Company’s bank debt or other long-term
or short-term public or private debt or other similar financial obligations of
the Company, which may be calculated net of such cash balances and/or other
offsets and adjustments as may be established by the Committee; (v) the
attainment of a specified percentage increase in earnings per share or earnings
per share from continuing operations; (vi) the attainment of certain target
levels of, or a specified increase in, return on capital employed or return on
invested capital or operating revenue; (vii) the attainment of certain target
levels of, or a percentage increase in, after-tax or pre-tax return on
stockholders’ equity; (viii) the attainment of certain target levels of, or a
specified increase in, economic value added targets based on a cash flow return
on investment formula; (ix) the attainment of certain target levels in the fair
market value of the shares of the Company’s Common Stock; (x) market segment
share; (xi) product release schedules; (xii) new product innovation; (xiii)
product or other cost reductions; (xiv) brand recognition or acceptance; (xv)
product ship targets; (xvi) customer satisfaction; (xvii) total shareholder
return; (xviii) return on assets or net assets; (xix) assets, operating margin
or profit margin; and (xx) the growth in the value of an investment in the
Company’s Common Stock assuming the reinvestment of dividends. For purposes of
item (i) above, “extraordinary items” shall mean all items of gain, loss or
expense for the fiscal year determined to be extraordinary or unusual in nature
or infrequent in occurrence or related to a corporate transaction (including,
without limitation, a disposition or acquisition) or related to a change in
accounting principle, all as determined in accordance with standards
established by the Financial Accounting Standards Board Codification Topic
225-20-45. 


          To the
extent permitted under Code Section 162(m), but only to the extent permitted
under Code Section 162(m) (including, without limitation, compliance with any
requirements for stockholder approval), the Committee may: (i) designate
additional 





business criteria on which the Performance Criteria may be based, or
(ii) adjust, modify or amend the aforementioned business criteria.