exv10w12



 




Exhibit 10.12





 


 


 


 


 




 




 



CAPITALSOURCE INC.




THIRD AMENDED AND RESTATED EQUITY INCENTIVE PLAN






 




 












 




TABLE OF CONTENTS




	 	 	 	 	 	 
	 	 	Page	
	 	 	 	
	
    
     1. PURPOSE

    	 	 	1	 
	
    
     2. DEFINITIONS

    	 	 	1	 
	
    
     3. ADMINISTRATION OF THE PLAN

    	 	 	4	 
	 	
    
      3.1. Board

    	 	 	4	 
	 	
    
      3.2. Committee

    	 	 	4	 
	 	
    
      3.3. Terms of Awards

    	 	 	4	 
	 	
    
      3.4. Deferral Arrangement

    	 	 	5	 
	 	
    
      3.5. No Liability

    	 	 	5	 
	
    
     4. STOCK SUBJECT TO THE PLAN

    	 	 	5	 
	
    
     5. EFFECTIVE DATE, DURATION AND AMENDMENTS

    	 	 	6	 
	 	
    
      5.1. Effective Date

    	 	 	6	 
	 	
    
      5.2. Term

    	 	 	6	 
	 	
    
      5.3. Amendment and Termination of the Plan

    	 	 	6	 
	
    
     6. AWARD ELIGIBILITY AND LIMITATIONS

    	 	 	6	 
	 	
    
      6.1. Service Providers; Outside Directors;
    Other Persons

    	 	 	6	 
	 	
    
      6.2. Successive Awards

    	 	 	6	 
	 	
    
      6.3. Limitation on Shares of Stock Subject to
    Awards and Cash Awards

    	 	 	6	 
	 	
    
      6.4. Limitations on Incentive Stock Options

    	 	 	6	 
	 	
    
      6.5. Stand-Alone, Additional, Tandem, and
    Substitute Awards

    	 	 	7	 
	
    
     7. AWARD AGREEMENT

    	 	 	7	 
	
    
     8. TERMS AND CONDITIONS OF OPTIONS

    	 	 	7	 
	 	
    
      8.1. Option Price

    	 	 	7	 
	 	
    
      8.2. Vesting

    	 	 	7	 
	 	
    
      8.3. Term

    	 	 	7	 
	 	
    
      8.4. Termination of Service

    	 	 	8	 
	 	
    
      8.5. Limitations on Exercise of Option

    	 	 	8	 
	 	
    
      8.6. Method of Exercise

    	 	 	8	 
	 	
    
      8.7. Rights of Holders of Options

    	 	 	8	 
	 	
    
      8.8. Delivery of Stock Certificates

    	 	 	8	 
	 	
    
      8.9. No Option Repricing

    	 	 	8	 
	
    
     9. TRANSFERABILITY OF OPTIONS

    	 	 	8	 
	 	
    
      9.1. Transferability of Options

    	 	 	8	 
	 	
    
      9.2. Family Transfers

    	 	 	8	 
	
    
    10. STOCK APPRECIATION RIGHTS

    	 	 	9	 
	 	
    
     10.1. Right to Payment

    	 	 	9	 
	 	
    
     10.2. Other Terms

    	 	 	9	 
	
    
    11. RESTRICTED STOCK AND STOCK UNITS

    	 	 	9	 
	 	
    
     11.1. Grant of Restricted Stock or Stock Units

    	 	 	9	 
	 	
    
     11.2. Restrictions

    	 	 	9	 
	 	
    
     11.3. Restricted Stock Certificates

    	 	 	10	 
	 	
    
     11.4. Rights of Holders of Restricted Stock

    	 	 	10	 




A-i







 




	 	 	 	 	 	 	 
	 	 	Page	
	 	 	 	
	 	
    
     11.5. Rights of Holders of Stock Units

    	 	 	10	 
	 	 	
    
     11.5.1. No Voting and Dividend Rights

    	 	 	10	 
	 	 	
    
     11.5.2. Creditor’s Rights

    	 	 	10	 
	 	
    
     11.6. Termination of Service

    	 	 	10	 
	 	
    
     11.7. Purchase of Restricted Stock

    	 	 	11	 
	 	
    
     11.8. Delivery of Stock

    	 	 	11	 
	
    
    12. UNRESTRICTED STOCK AWARDS

    	 	 	11	 
	
    
    13. FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK

    	 	 	11	 
	 	
    
     13.1. General Rule.

    	 	 	11	 
	 	
    
     13.2. Surrender of Stock.

    	 	 	11	 
	 	
    
     13.3. Cashless Exercise.

    	 	 	11	 
	 	
    
     13.4. Other Forms of Payment

    	 	 	11	 
	
    
    14. DIVIDEND EQUIVALENT RIGHTS

    	 	 	12	 
	 	
    
     14.1. Dividend Equivalent Rights

    	 	 	12	 
	 	
    
     14.2. Termination of Service

    	 	 	12	 
	
    
    15. PERFORMANCE AND ANNUAL INCENTIVE AWARDS

    	 	 	12	 
	 	
    
     15.1. Performance Conditions

    	 	 	12	 
	 	
    
     15.2. Performance or Annual Incentive Awards Granted
    to Designated Covered Employees

    	 	 	12	 
	 	 	
    
     15.2.1. Performance Goals Generally

    	 	 	12	 
	 	 	
    
     15.2.2. Business Criteria

    	 	 	13	 
	 	 	
    
     15.2.3. Timing For Establishing Performance Goals

    	 	 	13	 
	 	 	
    
     15.2.4. Performance or Annual Incentive Award Pool

    	 	 	13	 
	 	 	
    
     15.2.5. Settlement of Performance or Annual Incentive
    Awards; Other Terms

    	 	 	13	 
	 	
    
     15.3. Written Determinations

    	 	 	13	 
	 	
    
     15.4. Status of Section 15.2 Awards Under Code
    Section 162(m)

    	 	 	13	 
	
    
    16. PARACHUTE LIMITATIONS

    	 	 	14	 
	
    
    17. REQUIREMENTS OF LAW

    	 	 	14	 
	 	
    
     17.1. General

    	 	 	14	 
	 	
    
     17.2. Rule 16b-3

    	 	 	15	 
	
    
    18. EFFECT OF CHANGES IN CAPITALIZATION

    	 	 	15	 
	 	
    
     18.1. Changes in Stock

    	 	 	15	 
	 	
    
     18.2. Changes in Capitalization; Merger; Liquidation

    	 	 	15	 
	 	
    
     18.3. Adjustments

    	 	 	16	 
	 	
    
     18.4. No Limitations on Company

    	 	 	16	 
	
    
    19. GENERAL PROVISIONS

    	 	 	16	 
	 	
    
     19.1. Disclaimer of Rights

    	 	 	16	 
	 	
    
     19.2. Nonexclusivity of the Plan

    	 	 	16	 
	 	
    
     19.3. Withholding Taxes

    	 	 	17	 
	 	
    
     19.4. Captions

    	 	 	17	 
	 	
    
     19.5. Other Provisions

    	 	 	17	 
	 	
    
     19.6. Number And Gender

    	 	 	17	 
	 	
    
     19.7. Severability

    	 	 	17	 
	 	
    
     19.8. Governing Law

    	 	 	17	 
	 	
    
     19.9. Code Section 409A

    	 	 	17	 




A-ii






 





CAPITALSOURCE INC.




THIRD AMENDED AND RESTATED EQUITY INCENTIVE PLAN



     
CapitalSource Inc., a Delaware corporation (the
“Company”), sets forth herein the terms of its Third
Amended and Restated Equity Incentive Plan (the
“Plan”) as
of January 25, 2006, as follows:






		
	1.	
    PURPOSE



     
This Plan is intended to (a) provide incentive to eligible
persons to stimulate their efforts toward the continued success
of the Company and to operate and manage their businesses in a
manner that will provide for the long-term growth and
profitability of the Company; and (b) provide a means of
obtaining, rewarding and retaining key personnel. To this end,
the Plan provides for the grant of stock options, stock
appreciation rights, restricted stock, stock units, unrestricted
stock, dividend equivalent rights and cash awards. Any of these
awards may, but need not, be made as performance incentives to
reward attainment of annual or long-term performance goals in
accordance with the terms hereof. Stock options granted under
the Plan may be non-qualified stock options or incentive stock
options, as provided herein.






		
	2.	
    DEFINITIONS



     
For purposes of interpreting the Plan and related documents
(including Award Agreements), the following definitions shall
apply:



     
2.1     “Affiliate”
means, with respect to the Company, any company or other
trade or business that controls, is controlled by or is under
common control with the Company within the meaning of
Rule 405 of Regulation C under the Securities Act,
including, without limitation, any Subsidiary.



     
2.2     “Annual Incentive
Award” means an Award made subject to attainment of
performance goals (as described in Section 15) over
a performance period of up to and including one year (the fiscal
year, unless otherwise specified by the Committee).



     
2.3     “Award” means
a grant of an Option, Stock Appreciation Right, Restricted
Stock, Unrestricted Stock, Stock Unit, Dividend Equivalent
Rights, or cash award under the Plan.



     
2.4     “Award Agreement”
means the written agreement between the Company and a
Grantee that evidences and sets out the terms and conditions of
an Award.



     
2.5     “Benefit
Arrangement” shall have the meaning set forth in
Section 16 hereof.



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



     
2.7     “Cause,”
unless otherwise provided by the Board or the Committee in
the Award Agreement, has the same meaning as provided in the
employment agreement between the Service Provider and the
Company or any Affiliate of the Company, on the date of
Termination of Employment, or if no such definition or
employment agreement exists, “Cause” means conduct
amounting to (i) fraud or dishonesty against the Company or
any Affiliate of the Company, (ii) Service Provider’s
willful misconduct, repeated refusal to follow the reasonable
directions of a member of the Board or knowing violation of law
in the course of performance of the duties of Service
Provider’s employment with the Company any Affiliate of the
Company, (iii) repeated absences from work without a
reasonable excuse, (iv) intoxication with alcohol or drugs
while on the Company’s or any Affiliate of the
Company’s premises, (v) a conviction or plea of guilty
or nolo contendere to a felony or a crime involving dishonesty,
or (vi) a material breach or violation of the terms of any
employment or other agreement to which Service Provider and the
Company, or, if applicable, any Affiliate of the Company are
parties.



     
2.8     “Code” means
the Internal Revenue Code of 1986, as now in effect or as
hereafter amended.



     
2.9     “Committee”
means the Compensation Committee of the Board.



     
2.10     “Company”
means CapitalSource Inc.



1







 





     
2.11     “Corporate
Transaction” means (i) the dissolution or
liquidation of the Company or a merger, consolidation, or
reorganization of the Company with one or more other entities in
which the Company is not the surviving entity, (ii) a sale
of substantially all of the assets of the Company to another
person or entity, or (iii) any transaction (including
without limitation a merger or reorganization in which the
Company is the surviving entity) which results in any person or
entity (other than persons who are shareholders or Affiliates
immediately prior to the transaction) owning 50% or more of the
combined voting power of all classes of stock of the Company.



     
2.12     “Covered
Employee” means a Grantee who is a Covered Employee
within the meaning of Section 162(m)(3) of the Code.



     
2.13     “Disability”
has the same meaning as provided in the long-term disability
plan or policy maintained or, if applicable, most recently
maintained, by the Company or, if applicable, any Affiliate of
the Company for the Service Provider. If no long-term disability
plan or policy was ever maintained on behalf of the Service
Provider, Disability shall mean that condition described in Code
Section 22(e)(3), as amended from time to time. In the
event of a dispute, the determination of Disability shall be
made by the Board and shall be supported by advice of a
physician competent in the area to which such Disability relates.



     
2.14     “Dividend
Equivalent” means a right granted to a Grantee under
Section 14 hereof, to receive cash,
Stock, other Awards or other property equal in value to dividends paid with respect to a specified number of shares of Stock, or other periodic payments.



     
2.15     “Effective Date”

means January 25, 2006.



     
2.16     “Exchange Act”
means the Securities Exchange Act of 1934, as now in effect
or as hereafter amended.



     
2.17     “Fair Market
Value” means the value of a share of Stock, determined
as follows: if on the Grant Date or other determination date the
Stock is listed on an established national or regional stock
exchange, is admitted to quotation on The Nasdaq Stock Market,
Inc. or is publicly traded on an established securities market,
the Fair Market Value of a share of Stock shall be the closing
price of the Stock on such exchange or in such market (if there
is more than one such exchange or market the Board shall
determine the appropriate exchange or market) on the Grant Date
or such other determination date (or if there is no such
reported closing price, the Fair Market Value shall be the mean
between the highest bid and lowest asked prices or between the
high and low sale prices on such trading day) or, if no sale of
Stock is reported for such trading day, on the next preceding
day on which any sale shall have been reported. If the Stock is
not listed on such an exchange, quoted on such system or traded
on such a market, Fair Market Value shall be the value of the
Stock as determined by the Board in good faith. Notwithstanding
the foregoing, for Options with a Grant Date of the date of the
assumption of the Plan by the Company from CapitalSource
Holdings LLC, Fair Market Value on such Grant Date shall be the
price per share at which the Company agrees to sell Stock in the
Company’s initial public offering as set forth in the
underwriting agreement among the Company, the selling
stockholders named therein and the representatives of the
several underwriters named in a schedule thereto.



     
2.18     “Family Member”
means a person who is a spouse, former spouse, child,
stepchild, grandchild, parent, stepparent, grandparent, niece,
nephew, mother-in-law,
father-in-law,
son-in-law,
daughter-in-law,
brother, sister,
brother-in-law, or
sister-in-law,
including adoptive relationships, of the Grantee, any person
sharing the Grantee’s household (other than a tenant or
employee), a trust in which any one or more of these persons
have more than fifty percent of the beneficial interest, a
foundation in which any one or more of these persons (or the
Grantee) control the management of assets, and any other entity
in which one or more of these persons (or the Grantee) own more
than fifty percent of the voting interests.



     
2.19     “Grant Date”
means, as determined by the Board or the Committee, the
latest to occur of (i) the date as of which the Board or
such Committee approves an Award, (ii) the date on which
the recipient of an



2







 




Award first becomes eligible to receive an Award under
Section 6 hereof, or (iii) such other date as
may be specified by the Board or such Committee.



     
2.20     “Grantee”
means a person who receives or holds an Award under the Plan.



     
2.21     “Incentive Stock
Option” means an “incentive stock option”
within the meaning of Section 422 of the Code, or the
corresponding provision of any subsequently enacted tax statute,
as amended from time to time.



     
2.22     “Non-qualified Stock
Option” means an Option that is not an Incentive Stock
Option.



     
2.23     “Option”
means an option to purchase one or more shares of Stock
pursuant to the Plan.



     
2.24     “Option Price”
means the purchase price for each share of Stock subject to
an Option.



     
2.25     “Other Agreement”
shall have the meaning set forth in Section 16
hereof.



     
2.26     “Outside
Director” means a member of the Board who is not an
officer or employee of the Company.



     
2.27     “Performance
Award” means an Award made subject to the attainment of
performance goals (as described in Section 15) over
a performance period of more than one year.



     
2.28     “Plan” means
this CapitalSource Inc. Third Amended and Restated Equity
Incentive Plan.



     
2.29     “Purchase Price”
means the purchase price for each share of Stock pursuant to
a grant of Restricted Stock.



     
2.30     “Reporting
Person” means a person who is required to file reports
under Section 16(a) of the Exchange Act.



     
2.31     “Restricted
Stock” means shares of Stock, awarded to a Grantee
pursuant to Section 11 hereof.



     
2.32     “SAR Exercise
Price” means the per share exercise price of an SAR
granted to a Grantee under Section 10 hereof.



     
2.33     “Securities Act”
means the Securities Act of 1933, as now in effect or as
hereafter amended.



     
2.34     “Service”
means service as an employee, officer, Outside Director or
other Service Provider of the Company or an Affiliate. Unless
otherwise stated in the applicable Award Agreement, a
Grantee’s change in position or duties shall not result in
interrupted or terminated Service, so long as such Grantee
continues to be an employee, officer, Outside Director or other
Service Provider of the Company or an Affiliate. Subject to the
preceding sentence, whether a termination of Service shall have
occurred for purposes of the Plan shall be determined by the
Board, which determination shall be final, binding and
conclusive.



     
2.35     “Service
Provider” means an employee, officer or Outside
Director of the Company or an Affiliate, or a consultant or
adviser currently providing services to the Company or an
Affiliate.



     
2.36     “Stock” means
the common stock, par value $.01 per share, of the Company.



     
2.37     “Stock Appreciation
Right” or “SAR” means a right granted
to a Grantee under Section 10 hereof.



     
2.38     “Stock Unit”
means a bookkeeping entry representing the equivalent of a
share of Stock, awarded to a Grantee pursuant to
Section 11 hereof.



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



     
2.40     “Termination
Date” means the date upon which an Option shall
terminate or expire, as set forth in Section 8.3
hereof.



     
2.41     “Ten Percent
Stockholder” means an employee who owns more than ten
percent (10%) of the total combined voting power of all classes
of outstanding stock of the Company, its parent or any of its



3







 




Subsidiaries. In determining stock ownership, the attribution
rules of Section 424(d) of the Code shall be applied.



     
2.42     “Unrestricted
Stock” means an Award pursuant to Section 12
hereof.






		
	3.	
    ADMINISTRATION OF THE PLAN



     
3.1.     Board



     
The Board shall have such powers and authorities related to the
administration of the Plan as are consistent with the
Company’s amended and restated certificate of incorporation
and amended and restated by-laws and applicable law. The Board
shall have full power and authority to take all actions and to
make all determinations required or provided for under the Plan,
any Award or any Award Agreement, and shall have full power and
authority to take all such other actions and make all such other
determinations not inconsistent with the specific terms and
provisions of the Plan that the Board deems to be necessary or
appropriate to the administration of the Plan, any Award or any
Award Agreement. All such actions and determinations shall be by
the affirmative vote of a majority of the members of the Board
present at a meeting or by unanimous consent of the Board
executed in writing in accordance with the Company’s
amended and restated certificate of incorporation and amended
and restated by-laws and applicable law. The interpretation and
construction by the Board of any provision of the Plan, any
Award or any Award Agreement shall be final and conclusive.



     
3.2.     Committee.



     
The Board from time to time may delegate to the Committee such
powers and authorities related to the administration and
implementation of the Plan, as set forth in Section 3.1
above and other applicable provisions, as the Board shall
determine, consistent with the amended and restated certificate
of incorporation and amended and restated by-laws of the Company
and applicable law. The Board may also appoint one or more
separate committees of the Board, each composed of one or more
directors of the Company who need not be Outside Directors, who
may administer the Plan with respect to employees or other
Service Providers who are not officers or directors of the
Company, may grant Awards under the Plan to such employees or
other Service Providers, and may determine all terms of such
Awards. In addition, the Committee may delegate to one or more
executive officers of the Company the authority to grant Awards
to employees or other Service Providers who are not officers or
directors of the Company. Such delegation shall specify the
maximum number of shares of Stock that may be granted by such
officer(s), as well as the time period during which the
delegation shall remain in effect. In the event that the Plan,
any Award or any Award Agreement entered into hereunder provides
for any action to be taken by or determination to be made by the
Board, such action may be taken or such determination may be
made by the Committee if the power and authority to do so has
been delegated to the Committee by the Board as provided for in
this Section. Unless otherwise expressly determined by the
Board, any such action or determination by the Committee shall
be final, binding and conclusive. To the extent permitted by
law, the Committee may delegate its authority under the Plan to
a member of the Board.



     
3.3.     Terms of Awards.



     
Subject to the other terms and conditions of the Plan, the Board
shall have full and final authority to:






		
	 	     
    (i) designate Grantees,
	 
	 	     
    (ii) determine the type or types of Awards to be made to a
    Grantee,
	 
	 	     
    (iii) determine the number of shares of Stock to be subject
    to an Award,
	 
	 	     
    (iv) establish the terms and conditions of each Award
    (including, but not limited to, the exercise price of any
    Option, the nature and duration of any restriction or condition
    (or provision for lapse thereof) relating to the vesting,
    exercise, transfer, or forfeiture of an Award or the shares of
    Stock subject thereto, and any terms or conditions that may be
    necessary to qualify Options as Incentive Stock Options),
	 
	 	     
    (v) prescribe the form of each Award Agreement evidencing
    an Award, and



4







 






		
	 	     
    (vi) amend, modify, or supplement the terms of any
    outstanding Award, subject to Section 8.9. Such
    authority specifically includes the authority, in order to
    effectuate the purposes of the Plan but without amending the
    Plan, to modify Awards to eligible individuals who are foreign
    nationals or are individuals who are employed outside the United
    States to recognize differences in local law, tax policy, or
    custom.



     
The Board shall have the right, in its discretion, to make
Awards in substitution or exchange for any other award under
another plan of the Company, any Affiliate, or any business
entity to be acquired by the Company or an Affiliate. The
Committee may retain the right in an Award Agreement to cause a
forfeiture of the gain realized by a Grantee on account of
actions taken by the Grantee in violation or breach of or in
conflict with any non-competition agreement, any agreement
prohibiting solicitation of employees or clients of the Company
or any Affiliate thereof or any confidentiality obligation with
respect to the Company or any Affiliate thereof or otherwise in
competition with the Company or any Affiliate thereof, to the
extent specified in such Award Agreement applicable to the
Grantee. Furthermore, the Company may annul an Award if the
Grantee is an employee of the Company or an Affiliate thereof
and is terminated for Cause as defined in the applicable Award
Agreement or the Plan, as applicable. The grant of any Award
shall be contingent upon the Grantee executing the appropriate
Award Agreement.



     
3.4.     Deferral Arrangement.



     
The Board may permit or require the deferral of any award
payment into a deferred compensation arrangement, subject to
such rules and procedures as it may establish, which may include
provisions for the payment or crediting of interest or dividend
equivalents, including converting such credits into deferred
Stock equivalents and restricting deferrals to comply with
hardship distribution rules affecting 401(k) plans. Any such
deferrals shall be made in a manner that complies with Code
Section 409A.



     
3.5.     No Liability.



     
No member of the Board or of the Committee shall be liable for
any action or determination made in good faith with respect to
the Plan or any Award or Award Agreement.






		
	4.	
    STOCK SUBJECT TO THE PLAN



     
Subject to adjustment as provided in Section 18
hereof, the number of shares of Stock available for issuance
under the Plan shall be thirty three million (33,000,000).
Any shares of Stock that are subject to Awards of Options shall
be counted against this limit as one (1) share for every
one (1) share issued. With respect to Stock Appreciation
Rights, when a stock-settled Stock Appreciation Right grant is
exercised, the shares subject to such award will be counted
against the maximum share limitations as one (1) share for
every share subject thereto, regardless of the number of shares
actually issued to settle the Stock Appreciation Right upon
exercise. Any shares that are subject to Awards other than
Options or Stock Appreciation Rights shall be counted against
this limit as one and one-half
(11/2)
shares for every one (1) share granted. Stock issued or to
be issued under the Plan shall be authorized but unissued shares
or treasury shares. If any shares covered by an Award are not
purchased or are forfeited, if an Award is settled in cash or if
an Award otherwise terminates without delivery of any Stock
subject thereto, then the number of shares of Stock counted
against the aggregate number of shares available under the Plan
with respect to such Award shall, to the extent of any such
forfeiture, cash payment or termination, again be available for
making Awards under the Plan. Any shares of Stock that again
become available for grant pursuant to this Article 4 shall
be added back as one (1) share if such shares were subject
to Options or Stock Appreciation Rights granted under the Plan,
and as one and one-half
(11/2
) shares if such shares were subject to Awards other than
Options or Stock Appreciation Rights granted under the Plan.
Shares issued pursuant to Awards granted in substitution for
awards held by employees of a business entity acquired by the
Company or an Affiliate shall not count against the shares
available for issuance under the Plan.



5







 






		
	5.	
    EFFECTIVE DATE, DURATION AND AMENDMENTS



     
5.1.     Effective Date.



     
The amendment and restatement of the Plan shall be effective as
of the Effective Date, subject to approval of the Plan by the
Company’s stockholders within one year of the Effective
Date. Upon approval of the Plan by the stockholders of the
Company as set forth above, all Awards made under the Plan on or
after the Effective Date shall be fully effective as if the
stockholders of the Company had approved the Plan on the
Effective Date. If the stockholders fail to approve the
amendment and restatement of the Plan within one year after the
Effective Date, any Awards made hereunder after the Effective
Date shall be null and void and of no effect.



     
5.2.     Term.



     
The Plan shall terminate automatically on August 6, 2016 and may be terminated on any earlier date as
provided in Section 5.3.



     
5.3.     Amendment and Termination
of the Plan



     
The Board may, at any time and from time to time, amend,
suspend, or terminate the Plan as to any shares of Stock as to
which Awards have not been made. An amendment shall be
contingent on approval of the Company’s stockholders to the
extent stated by the Board or required by applicable law. In
addition, an amendment will be contingent on approval of the
Company’s stockholders if the amendment would
(i) materially increase the benefits accruing to
participants under the Plan, (ii) materially increase the
aggregate number of shares of Stock that may be issued under the
Plan, or (iii) materially modify the requirements as to
eligibility for participation in the Plan. No Awards shall be
made after termination of the Plan. No amendment, suspension, or
termination of the Plan shall, without the consent of the
Grantee, impair rights or obligations under any Award
theretofore awarded under the Plan.






		
	6.	
    AWARD ELIGIBILITY AND LIMITATIONS



     
6.1.     Service Providers; Outside
Directors; Other Persons



     
Subject to this Section 6, Awards may be made under
the Plan to: (i) any Service Provider to the Company or of
any Affiliate, including any such Service Provider who is an
officer or director of the Company, or of any Affiliate, as the
Board shall determine and designate from time to time and
(ii) any other individual whose participation in the Plan
is determined to be in the best interests of the Company by the
Board.



     
6.2.     Successive Awards.



     
An eligible person may receive more than one Award, subject to
such restrictions as are provided herein.



     
6.3.     Limitation on Shares of
Stock Subject to Awards and Cash Awards.



     
(i) the maximum number of shares of Stock subject to
Options or SARs that can be issued under the Plan to any person
eligible for an Award under Section 6 hereof is ten
million (10,000,000) in any three consecutive calendar
years;



     
(ii) the maximum number of shares that can be issued under
the Plan, other than pursuant to an Option, SAR or time-vested
Restricted Stock grant, to any person eligible for an Award
under Section 6 hereof is one million (1,000,000) in
any three consecutive calendar years; and



     
(iii) the maximum amount that may be earned as an Annual
Incentive Award or other cash Award in any fiscal year by any
one Grantee shall be $5,000,000 and the maximum amount that may
be earned as a Performance Award or other cash Award in respect
of a performance period by any one Grantee shall be $5,000,000.



     
The preceding limitations in this Section 6.3 are
subject to adjustment as provided in Section 18
hereof.



     
6.4.     Limitations on Incentive
Stock Options.



6







 



     
An Option shall constitute an Incentive Stock Option only
(i) if the Grantee of such Option is an employee of the
Company or any Subsidiary of the Company; (ii) to the
extent specifically provided in the related Award Agreement; and
(iii) to the extent that the aggregate Fair Market Value
(determined at the time the Option is granted) of the shares of
Stock with respect to which all Incentive Stock Options held by
such Grantee become exercisable for the first time during any
calendar year (under the Plan and all other plans of the
Grantee’s employer and its Affiliates) does not exceed
$100,000. This limitation shall be applied by taking Options
into account in the order in which they were granted.



     
6.5.     Stand-Alone, Additional,
Tandem, and Substitute Awards



     
Awards granted under the Plan may, in the discretion of the
Board, be granted either alone or in addition to, in tandem
with, or in substitution or exchange for, any other Award or any
award granted under another plan of the Company, any Affiliate,
or any business entity to be acquired by the Company or an
Affiliate, or any other right of a Grantee to receive payment
from the Company or any Affiliate. Such additional, tandem, and
substitute or exchange Awards may be granted at any time. If an
Award is granted in substitution or exchange for another Award,
the Board shall require the surrender of such other Award in
consideration for the grant of the new Award. In addition,
Awards may be granted in lieu of cash compensation, including in
lieu of cash amounts payable under other plans of the Company or
any Affiliate. Notwithstanding Sections 8.1 and 10.1, the
Option Price of an Option or the grant price of an SAR that is a
Substitute Award may be less than 100% of the Fair Market Value
of a share of Common Stock on the original date of grant;
provided, that, the Option Price or grant price is determined in
accordance with the principles of Code Section 424 and the
regulations thereunder.






		
	7.	
    AWARD AGREEMENT



     
Each Award granted pursuant to the Plan shall be evidenced by an
Award Agreement, in such form or forms as the Board shall from
time to time determine. Award Agreements granted from time to
time or at the same time need not contain similar provisions but
shall be consistent with the terms of the Plan. Each Award
Agreement evidencing an Award of Options shall specify whether
such Options are intended to be Non-qualified Stock Options or
Incentive Stock Options, and in the absence of such
specification such options shall be deemed Non-qualified Stock
Options.






		
	8.	
    TERMS AND CONDITIONS OF OPTIONS



     
8.1.     Option Price



     
The Option Price of each Option shall be fixed by the Board and
stated in the Award Agreement evidencing such Option. The Option
Price of each Option shall be at least the Fair Market Value on
the Grant Date of a share of Stock; provided,
however, that in the event that a Grantee is a Ten
Percent Stockholder, the Option Price of an Option granted to
such Grantee that is intended to be an Incentive Stock Option
shall be not less than 110 percent of the Fair Market Value
of a share of Stock on the Grant Date. In no case shall the
Option Price of any Option be less than the par value of a share
of Stock.



     
8.2.     Vesting.



     
Subject to Sections 8.3 and 18 hereof, each Option
granted under the Plan shall become exercisable at such times
and under such conditions as shall be determined by the Board
and stated in the Award Agreement. For purposes of this
Section 8.2, fractional numbers of shares of Stock
subject to an Option shall be rounded down to the next nearest
whole number.



     
8.3.     Term.



     
Each Option granted under the Plan shall terminate, and all
rights to purchase shares of Stock thereunder shall cease, upon
the expiration of ten years from the date such Option is
granted, or under such circumstances and on such date prior
thereto as is set forth in the Plan or as may be fixed by the
Board and stated in the Award Agreement relating to such Option
(the “Termination Date”); provided, however, that in
the event that the Grantee is a Ten Percent Stockholder, an
Option granted to such Grantee that is intended to be an
Incentive Stock Option shall not be exercisable after the
expiration of five years from its Grant Date.



7







 



     
8.4.     Termination of Service.



     
Each Award Agreement shall set forth the extent to which the
Grantee shall have the right to exercise the Option following
termination of the Grantee’s Service. Such provisions shall
be determined in the sole discretion of the Board, need not be
uniform among all Options issued pursuant to the Plan, and may
reflect distinctions based on the reasons for termination of
Service. An Option that is intended to be an Incentive Stock
Option shall no longer be exercisable as an Incentive Stock
Option ninety (90) days after the termination of the
Grantee’s Service.



     
8.5.     Limitations on Exercise of
Option.



     
Notwithstanding any other provision of the Plan, in no event may
any Option be exercised, in whole or in part, ten years
following the Grant Date, or after the occurrence of an event
referred to in Section 18 hereof which results in
termination of the Option.



     
8.6.     Method of Exercise.



     
An Option that is exercisable may be exercised by the
Grantee’s delivery to the Company of written notice of
exercise on any business day, at the Company’s principal
office, on the form specified by the Company. Such notice shall
specify the number of shares of Stock with respect to which the
Option is being exercised and shall be accompanied by payment in
full of the Option Price of the shares for which the Option is
being exercised.



     
8.7.     Rights of Holders of
Options



     
Unless otherwise stated in the applicable Award Agreement, an
individual holding or exercising an Option shall have none of
the rights of a stockholder (for example, the right to receive
cash or dividend payments or distributions attributable to the
subject shares of Stock or to direct the voting of the subject
shares of Stock ) until the shares of Stock covered thereby are
fully paid and issued to him. Except as provided in
Section 18 hereof, no adjustment shall be made for
dividends, distributions or other rights for which the record
date is prior to the date of such issuance.



     
8.8.     Delivery of Stock
Certificates.



     
Promptly after the exercise of an Option by a Grantee and the
payment in full of the Option Price, such Grantee shall be
entitled to the issuance of a stock certificate or certificates
evidencing his or her ownership of the shares of Stock subject
to the Option. Notwithstanding any other provision of this Plan
to the contrary, the Company may elect to satisfy any
requirement under this Plan for the delivery of stock
certificates through the use of book-entry.



     
8.9.     No Option Repricing.



     
Notwithstanding any other provision in the Plan to the contrary,
the Option Price of an Option may not be amended or modified
after the Grant Date, and an Option may not be surrendered in
consideration of or exchanged for cash, other Awards or a new
option having an Option Price below that of the Option which was
surrendered or exchanged without approval of the Company’s
stockholders.






		
	9.	
    TRANSFERABILITY OF OPTIONS



     
9.1.     Transferability of
Options



     
Except as provided in Section 9.2, during the
lifetime of a Grantee, only the Grantee (or, in the event of
legal incapacity or incompetency, the Grantee’s guardian or
legal representative) may exercise an Option. Except as provided
in Section 9.2, no Option shall be assignable or
transferable by the Grantee to whom it is granted, other than by
will or the laws of descent and distribution.



     
9.2.     Family Transfers.



     
If authorized in the applicable Award Agreement, a Grantee may
transfer, not for value, all or part of an Option which is not
an Incentive Stock Option to any Family Member. For the purpose
of this Section 9.2, a



8







 




“not for value” transfer is a transfer which is
(i) a gift, (ii) a transfer under a domestic relations
order in settlement of marital property rights; or (iii) a
transfer to an entity in which more than fifty percent of the
voting interests are owned by Family Members (or the Grantee) in
exchange for an interest in that entity. Following a transfer
under this Section 9.2, any such Option shall
continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer. Subsequent transfers
of transferred Options are prohibited except to Family Members
of the original Grantee in accordance with this
Section 9.2 or by will or the laws of descent and
distribution. The events of termination of Service of
Section 8.4 hereof shall continue to be applied with
respect to the original Grantee, following which the Option
shall be exercisable by the transferee only to the extent, and
for the periods specified, in Section 8.4.






		
	10.	
    STOCK APPRECIATION RIGHTS



     
The Board is authorized to grant Stock Appreciation Rights
(“SARs”) to Grantees on the following terms and
conditions:



     
10.1.     Right to Payment.



     
A SAR shall confer on the Grantee to whom it is granted a right
to receive, upon exercise thereof, the excess of (A) the
Fair Market Value of one share of Stock on the date of exercise
over (B) the grant price of the SAR, as determined by the
Board. The Award Agreement for an SAR shall specify the grant
price of the SAR, which shall be at least the Fair Market Value
of a share of Stock on the Grant Date.



     
10.2.     Other Terms.



     
The Board shall determine at the date of grant or thereafter,
the time or times at which and the circumstances under which a
SAR may be exercised in whole or in part (including based on
achievement of performance goals and/or future service
requirements), the time or times at which SARs shall cease to be
or become exercisable following termination of Service or upon
other conditions, the method of exercise, method of settlement,
form of consideration payable in settlement which may be cash or
Stock, method by or forms in which Stock will be delivered or
deemed to be delivered to Grantees, whether or not a SAR shall
be in tandem or in combination with any other Award, and any
other terms and conditions of any SAR, provided, however, that
each SAR granted under the Plan shall terminate, and all rights
to acquire shares of Stock thereunder shall cease, upon the
expiration of ten years from the date such SAR is granted.



     
10.3.     No SAR Repricing.



     
Notwithstanding any other provision in the Plan to the contrary,
the grant price of an SAR may not be amended or modified after
the Grant Date, and an SAR may not be surrendered in
consideration of or exchanged for cash, other Awards or a new
SAR having an grant price below that of the SAR which was
surrendered or exchanged without approval of the Company’s
stockholders.






		
	11.	
    RESTRICTED STOCK AND STOCK UNITS



     
11.1.     Grant of Restricted Stock
or Stock Units.



     
The Board may from time to time grant Restricted Stock or Stock
Units to persons eligible to receive Awards under
Section 6 hereof, subject to such restrictions,
conditions and other terms, if any, as the Board may determine.



     
11.2.     Restrictions.



     
At the time a grant of Restricted Stock or Stock Units is made,
the Board may, in its sole discretion, establish a period of
time (a “restricted period”) applicable to such
Restricted Stock or Stock Units. Each Award of Restricted Stock
or Stock Units may be subject to a different restricted period.
The Board may, in its sole discretion, at the time a grant of
Restricted Stock or Stock Units is made, prescribe restrictions
in addition to or other than the expiration of the restricted
period, including the satisfaction of corporate or individual
performance objectives, which may be applicable to all or any
portion of the Restricted Stock or Stock Units in accordance
with Section 15.1 and 15.2. Notwithstanding
the foregoing and other than in the



9







 




case of employees newly-hired by the Company, Restricted Stock
that vests solely by the passage of time shall not vest in full
in less than three (3) years from the Grant Date.
Restricted Stock for which vesting may be accelerated may be
accelerated by achieving performance targets shall not vest in
full in less than one (1) year from the Grant Date. Neither
Restricted Stock nor Stock Units may be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of during
the restricted period or prior to the satisfaction of any other
restrictions prescribed by the Board with respect to such
Restricted Stock or Stock Units.



     
11.3.     Restricted Stock
Certificates.



     
The Company shall issue, in the name of each Grantee to whom
Restricted Stock has been granted, stock certificates
representing the total number of shares of Restricted Stock
granted to the Grantee, as soon as reasonably practicable after
the Grant Date. The Board may provide in an Award Agreement that
either (i) the Secretary of the Company, or his delegate,
shall hold such certificates for the Grantee’s benefit
until such time as the Restricted Stock is forfeited to the
Company or the restrictions lapse, or (ii) such
certificates shall be delivered to the Grantee, provided,
however, that all such certificates, regardless of whether held
by the Secretary, his delegate or delivered to the Grantee,
shall bear a legend or legends that comply with the applicable
securities laws and regulations and makes appropriate reference
to the restrictions imposed under the Plan and the Award
Agreement.



     
11.4.     Rights of Holders of
Restricted Stock.



     
Unless the Board otherwise provides in an Award Agreement,
holders of Restricted Stock shall have the right to vote such
Stock and the right to receive any dividends declared or paid
with respect to such Stock. The Board may provide that any
dividends paid on Restricted Stock must be reinvested in shares
of Stock, which may or may not be subject to the same vesting
conditions and restrictions applicable to such Restricted Stock.
All distributions, if any, received by a Grantee with respect to
Restricted Stock as a result of any stock split, stock dividend,
combination of shares, or other similar transaction shall be
subject to the restrictions applicable to the original Grant.
Holders of Restricted Stock may not make an election under Code
Section 83(b) with regard to the grant of Restricted Stock,
and any holder who attempts to make such an election shall
forfeit the Restricted Stock.



     
11.5.     Rights of Holders of Stock
Units.



          
11.5.1.     No Voting and Dividend
Rights.






		
	 	     
    Unless the Board otherwise provides in an Award Agreement,
    holders of Stock Units shall have no rights as stockholders of
    the Company. The Board may provide in an Award Agreement
    evidencing a grant of Stock Units that the holder of such Stock
    Units shall be entitled to receive, upon the Company’s
    payment of a cash dividend on its outstanding Stock, a cash
    payment for each Stock Unit held equal to the per-share dividend
    paid on the Stock. Such Award Agreement may also provide that
    such cash payment will be deemed reinvested in additional Stock
    Units at a price per unit equal to the Fair Market Value of a
    share of Stock on the date that such dividend is paid.



          
11.5.2.     Creditor’s
Rights.






		
	 	     
    A holder of Stock Units shall have no rights other than those of
    a general creditor of the Company. Stock Units represent an
    unfunded and unsecured obligation of the Company, subject to the
    terms and conditions of the applicable Award Agreement.



     
11.6.     Termination of Service.



     
Unless the Board otherwise provides in an Award Agreement or in
writing after the Award Agreement is issued, upon the
termination of a Grantee’s Service, any Restricted Stock or
Stock Units held by such Grantee that have not vested, or with
respect to which all applicable restrictions and conditions have
not lapsed, shall immediately be deemed forfeited. Upon
forfeiture of Restricted Stock or Stock Units, the Grantee shall
have no further rights with respect to such Award, including but
not limited to any right to vote Restricted Stock or any right
to receive dividends with respect to shares of Restricted Stock
or Stock Units.



10







 



     
11.7.     Purchase of Restricted
Stock.



     
The Grantee shall be required, to the extent required by
applicable law, to purchase the Restricted Stock from the
Company at a Purchase Price equal to the greater of (i) the
aggregate par value of the shares of Stock represented by such
Restricted Stock or (ii) the Purchase Price, if any,
specified in the Award Agreement relating to such Restricted
Stock. The Purchase Price shall be payable in a form described
in Section 13 or, in the discretion of the Board, in
consideration for past Services rendered to the Company or an
Affiliate.



     
11.8.     Delivery of Stock.



     
Upon the expiration or termination of any restricted period and
the satisfaction of any other conditions prescribed by the
Board, the restrictions applicable to shares of Restricted Stock
or Stock Units settled in Stock shall lapse, and, unless
otherwise provided in the Award Agreement, a stock certificate
for such shares shall be delivered, free of all such
restrictions, to the Grantee or the Grantee’s beneficiary
or estate, as the case may be. Stock Units may also be settled
in cash upon the determination of the Board or as specified in
the applicable Award Agreement.






		
	12.	
    UNRESTRICTED STOCK AWARDS



     
The Board may, in its sole discretion, grant (or sell at par
value or such other higher purchase price determined by the
Board) an Unrestricted Stock Award to any Grantee pursuant to
which such Grantee may receive shares of Stock free of any
restrictions (“Unrestricted Stock”) under the Plan.
Unrestricted Stock Awards may be granted or sold as described in
the preceding sentence in respect of past services and other
valid consideration, or in lieu of, or in addition to, any cash
compensation due to such Grantee.






		
	13.	
    FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK



     
13.1.     General Rule.



     
Payment of the Option Price for the shares purchased pursuant to
the exercise of an Option or the Purchase Price for Restricted
Stock shall be made in cash or in cash equivalents acceptable to
the Company.



     
13.2.     Surrender of Stock.



     
To the extent the Award Agreement so provides, payment of the
Option Price for shares purchased pursuant to the exercise of an
Option or the Purchase Price for Restricted Stock may be made
all or in part through the tender to the Company of shares of
Stock, which shall be valued, for purposes of determining the
extent to which the Option Price or Purchase Price has been paid
thereby, at their Fair Market Value on the date of exercise. In
addition, and also only to the extent the Award Agreement so
provides, payment of the Option Price may be made by requesting
that the Company withhold shares of Stock that would otherwise
be deliverable pursuant to the exercise of the Option, which
shares shall be valued at their Fair Market Value on the date of
exercise.



     
13.3.     Cashless Exercise.



     
With respect to an Option only (and not with respect to
Restricted Stock), to the extent the Award Agreement so provides
and subject to compliance with applicable law, payment of the
Option Price for shares purchased pursuant to the exercise of an
Option may be made all or in part by delivery (on a form
acceptable to the Board) of an irrevocable direction to a
licensed securities broker acceptable to the Company to sell
shares of Stock and to deliver all or part of the sales proceeds
to the Company in payment of the Option Price and any
withholding taxes described in Section 19.3.



     
13.4.     Other Forms of Payment.



     
To the extent the Award Agreement so provides, payment of the
Option Price for shares purchased pursuant to exercise of an
Option or the Purchase Price for Restricted Stock may be made in
any other form that is consistent with applicable laws,
regulations and rules.



11







 






		
	14.	
    DIVIDEND EQUIVALENT RIGHTS



     
14.1.     Dividend Equivalent
Rights.



     
A Dividend Equivalent Right is an Award entitling the recipient
to receive credits based on cash distributions that would have
been paid on the shares of Stock specified in the Dividend
Equivalent Right (or other award to which it relates) if such
shares had been issued to and held by the recipient. A Dividend
Equivalent Right may be granted hereunder to any Grantee as a
component of another Award or as a freestanding award. The terms
and conditions of Dividend Equivalent Rights shall be specified
in the grant. Dividend Equivalents credited to the holder of a
Dividend Equivalent Right may be paid currently or may be deemed
to be reinvested in additional shares of Stock, which may
thereafter accrue additional equivalents. Any such reinvestment
shall be at Fair Market Value on the date of reinvestment.
Dividend Equivalent Rights may be settled in cash or Stock or a
combination thereof, in a single installment or installments,
all determined in the sole discretion of the Board. Subject to
Code Section 409A, a Dividend Equivalent Right granted as a
component of another Award may provide that such Dividend
Equivalent Right shall be settled upon exercise, settlement, or
payment of, or lapse of restrictions on, such other award, and
that such Dividend Equivalent Right shall expire or be forfeited
or annulled under the same conditions as such other award. A
Dividend Equivalent Right granted as a component of another
Award may also contain terms and conditions different from such
other award.



     
14.2.     Termination of Service.



     
Except as may otherwise be provided by the Board either in the
Award Agreement or in writing after the Award Agreement is
issued, a Grantee’s rights in all Dividend Equivalent
Rights or interest equivalents shall automatically terminate
upon the Grantee’s termination of Service for any reason.






		
	15.	
    PERFORMANCE AND ANNUAL INCENTIVE AWARDS



     
15.1.     Performance Conditions



     
The right of a Grantee to exercise or receive a grant or
settlement of any Award, and the timing thereof, may be subject
to such performance conditions as may be specified by the Board.
The Board may use such business criteria and other measures of
performance as it may deem appropriate in establishing any
performance conditions, and may exercise its discretion to
reduce the amounts payable under any Award subject to
performance conditions, except as limited under
Sections 15.2 hereof in the case of a Performance
Award or Annual Incentive Award intended to qualify under Code
Section 162(m). If and to the extent required under Code
Section 162(m), any power or authority relating to a
Performance Award or Annual Incentive Award intended to qualify
under Code Section 162(m), shall be exercised by the
Committee and not the Board.



     
15.2.     Performance or Annual
Incentive Awards Granted to Designated Covered Employees



     
If and to the extent that the Committee determines that a
Performance or Annual Incentive Award to be granted to a Grantee
who is designated by the Committee as likely to be a Covered
Employee should qualify as “performance-based
compensation” for purposes of Code Section 162(m), the
grant, exercise and/or settlement of such Performance or Annual
Incentive Award shall be contingent upon achievement of
pre-established performance goals and other terms set forth in
this Section 15.2.



          
15.2.1.     Performance Goals
Generally.






		
	 	     
    The performance goals for such Performance or Annual Incentive
    Awards shall consist of one or more business criteria and a
    targeted level or levels of performance with respect to each of
    such criteria, as specified by the Committee consistent with
    this Section 15.2. Performance goals shall be
    objective and shall otherwise meet the requirements of Code
    Section 162(m) and regulations thereunder including the
    requirement that the level or levels of performance targeted by
    the Committee result in the achievement of performance goals
    being “substantially uncertain.” The Committee may
    determine that such Performance or Annual Incentive Awards shall
    be granted, exercised and/or settled upon achievement of any one
    performance goal or that two or more of the performance goals
    must be



12







 


		
	 	
    achieved as a condition to grant, exercise and/or settlement of
    such Performance or Annual Incentive Awards. Performance goals
    may differ for Performance or Annual Incentive Awards granted to
    any one Grantee or to different Grantees.




          
15.2.2.     Business Criteria.






		
	 	     
    One or more of the following business criteria for the Company,
    on a consolidated basis, and/or specified subsidiaries or
    business units of the Company (except with respect to the total
    stockholder return and earnings per share criteria), shall be
    used exclusively by the Committee in establishing performance
    goals for such Performance or Annual Incentive Awards:
    (1) total stockholder return; (2) such total
    stockholder return as compared to total return (on a comparable
    basis) of a publicly available index such as, but not limited
    to, the Standard & Poor’s 500 Stock Index;
    (3) net income; (4) pretax earnings; (5) earnings
    before interest expense and taxes (EBIT), (6) earnings
    before interest expense, taxes, depreciation and amortization
    (EBITDA); (7) pretax operating earnings after interest
    expense and before bonuses, service fees, and extraordinary or
    special items; (8) operating margin; (9) earnings per
    share; (10) return on equity; (11) return on assets,
    (12) return on capital; (13) return on investment;
    (14) operating earnings; (15) working capital;
    (16) ratio of debt to stockholders’ equity,
    (17) revenue; (18) book value and (19) funds from
    operations (FFO).
	 
	 	     
    15.2.3.     Timing For Establishing
    Performance Goals.
	 
	 	     
    Performance goals shall be established not later than
    90 days after the beginning of any performance period
    applicable to such Performance or Annual Incentive Awards, or at
    such other date as may be required or permitted for
    “performance-based compensation” under Code
    Section 162(m).
	 
	 	     
    15.2.4.     Performance or Annual
    Incentive Award Pool.
	 
	 	     
    The Committee may establish a Performance or Annual Incentive
    Award pool, which shall be an unfunded pool, for purposes of
    measuring Company performance in connection with Performance or
    Annual Incentive Awards.
	 
	 	     
    15.2.5.     Settlement of
    Performance or Annual Incentive Awards; Other Terms.
	 
	 	     
    Settlement of such Performance or Annual Incentive Awards shall
    be in cash, Stock, other Awards or other property, in the
    discretion of the Committee. The Committee may, in its
    discretion, reduce the amount of a settlement otherwise to be
    made in connection with such Performance or Annual Incentive
    Awards. The Committee shall specify the circumstances in which
    such Performance or Annual Incentive Awards shall be paid or
    forfeited in the event of termination of Service by the Grantee
    prior to the end of a performance period or settlement of
    Performance Awards.



     
15.3.     Written Determinations.



     
All determinations by the Committee as to the establishment of
performance goals, the amount of any Performance Award pool or
potential individual Performance Awards and as to the
achievement of performance goals relating to Performance Awards,
and the amount of any Annual Incentive Award pool or potential
individual Annual Incentive Awards and the amount of final
Annual Incentive Awards, shall be made in writing in the case of
any Award intended to qualify under Code Section 162(m). To
the extent required to comply with Code Section 162(m), the
Committee may delegate any responsibility relating to such
Performance Awards or Annual Incentive Awards.



     
15.4.     Status of
Section 15.2 Awards Under Code Section 162(m)



     
It is the intent of the Company that Performance Awards and
Annual Incentive Awards under Section 15.2 hereof
granted to persons who are designated by the Committee as likely
to be Covered Employees within the meaning of Code
Section 162(m) and regulations thereunder shall, if so
designated by the Committee, constitute “qualified
performance-based compensation” within the meaning of Code
Section 162(m) and regulations thereunder. Accordingly, the
terms of Section 15.2, including the definitions of
Covered Employee and other terms used therein, shall be
interpreted in a manner consistent with Code Section 162(m)
and regulations thereunder. The foregoing notwithstanding,
because the Committee cannot



13







 




determine with certainty whether a given Grantee will be a
Covered Employee with respect to a fiscal year that has not yet
been completed, the term Covered Employee as used herein shall
mean only a person designated by the Committee, at the time of
grant of Performance Awards or an Annual Incentive Award, as
likely to be a Covered Employee with respect to that fiscal
year. If any provision of the Plan or any agreement relating to
such Performance Awards or Annual Incentive Awards does not
comply or is inconsistent with the requirements of Code
Section 162(m) or regulations thereunder, such provision
shall be construed or deemed amended to the extent necessary to
conform to such requirements.






		
	16.	
    PARACHUTE LIMITATIONS



     
Notwithstanding any other provision of this Plan or of any other
agreement, contract, or understanding heretofore or hereafter
entered into by a Grantee with the Company or any Affiliate,
except an agreement, contract, or understanding between the
Grantee and the Company or any Affiliate that modifies or
excludes application of this paragraph (an “Other
Agreement”), and notwithstanding any formal or informal
plan or other arrangement for the direct or indirect provision
of compensation to the Grantee (including groups or classes of
Grantees or beneficiaries of which the Grantee is a member),
whether or not such compensation is deferred, is in cash, or is
in the form of a benefit to or for the Grantee (a “Benefit
Arrangement”), if the Grantee is a “disqualified
individual,” as defined in Section 280G(c) of the
Code, any Option, Restricted Stock or Stock Unit held by that
Grantee and any right to receive any payment or other benefit
under this Plan shall not become exercisable or vested
(i) to the extent that such right to exercise, vesting,
payment, or benefit, taking into account all other rights,
payments, or benefits to or for the Grantee under this Plan, all
Other Agreements, and all Benefit Arrangements, would cause any
payment or benefit to the Grantee under this Plan to be
considered a “parachute payment” within the meaning of
Section 280G(b)(2) of the Code as then in effect (a
“Parachute Payment”) and (ii) if, as a result of
receiving a Parachute Payment, the aggregate after-tax amounts
received by the Grantee from the Company under this Plan, all
Other Agreements, and all Benefit Arrangements would be less
than the maximum after-tax amount that could be received by the
Grantee without causing any such payment or benefit to be
considered a Parachute Payment. In the event that the receipt of
any such right to exercise, vesting, payment, or benefit under
this Plan, in conjunction with all other rights, payments, or
benefits to or for the Grantee under any Other Agreement or any
Benefit Arrangement would cause the Grantee to be considered to
have received a Parachute Payment under this Plan that would
have the effect of decreasing the after-tax amount received by
the Grantee as described in clause (ii) of the preceding
sentence, then the Grantee shall have the right, in the
Grantee’s sole discretion, to designate those rights,
payments, or benefits under this Plan, any Other Agreements, and
any Benefit Arrangements that should be reduced or eliminated so
as to avoid having the payment or benefit to the Grantee under
this Plan be deemed to be a Parachute Payment.






		
	17.	
    REQUIREMENTS OF LAW



     
17.1.     General.



     
The Company shall not be required to sell or issue any shares of
Stock under any Award if the sale or issuance of such shares
would constitute a violation by the Grantee, any other
individual exercising an Option, or the Company of any provision
of any law or regulation of any governmental authority,
including without limitation any federal or state securities
laws or regulations. If at any time the Company shall determine,
in its discretion, that the listing, registration or
qualification of any shares subject to an Award upon any
securities exchange or under any governmental regulatory body is
necessary or desirable as a condition of, or in connection with,
the issuance or purchase of shares hereunder, no shares of Stock
may be issued or sold to the Grantee or any other individual
exercising an Option pursuant to such Award unless such listing,
registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to
the Company, and any delay caused thereby shall in no way affect
the date of termination of the Award. Specifically, in
connection with the Securities Act, upon the exercise of any
Option or the delivery of any shares of Stock underlying an
Award, unless a registration statement under such Act is in
effect with respect to the shares of Stock covered by such
Award, the Company shall not be required to sell or issue such
shares unless the Board has received evidence satisfactory to it
that the Grantee or any



14







 




other individual exercising an Option may acquire such shares
pursuant to an exemption from registration under the Securities
Act. Any determination in this connection by the Board shall be
final, binding, and conclusive. The Company may, but shall in no
event be obligated to, register any securities covered hereby
pursuant to the Securities Act. The Company shall not be
obligated to take any affirmative action in order to cause the
exercise of an Option or the issuance of shares of Stock
pursuant to the Plan to comply with any law or regulation of any
governmental authority. As to any jurisdiction that expressly
imposes the requirement that an Option shall not be exercisable
until the shares of Stock covered by such Option are registered
or are exempt from registration, the exercise of such Option
(under circumstances in which the laws of such jurisdiction
apply) shall be deemed conditioned upon the effectiveness of
such registration or the availability of such an exemption.



     
17.2.     Rule 16b-3.



     
During any time when the Company has a class of equity security
registered under Section 12 of the Exchange Act, it is the
intent of the Company that Awards pursuant to the Plan and the
exercise of Options granted hereunder will qualify for the
exemption provided by
Rule 16b-3 under
the Exchange Act. To the extent that any provision of the Plan
or action by the Board does not comply with the requirements of
Rule 16b-3, it
shall be deemed inoperative to the extent permitted by law and
deemed advisable by the Board, and shall not affect the validity
of the Plan. In the event that
Rule 16b-3 is
revised or replaced, the Board may exercise its discretion to
modify this Plan in any respect necessary to satisfy the
requirements of, or to take advantage of any features of, the
revised exemption or its replacement.






		
	18.	
    EFFECT OF CHANGES IN CAPITALIZATION



     
18.1.     Changes in Stock.



     
If the number of outstanding shares of Stock is increased or
decreased or the shares of Stock are changed into or exchanged
for a different number or kind of shares or other securities of
the Company on account of any recapitalization,
reclassification, stock split, reverse split, combination of
shares, exchange of shares, stock dividend or other distribution
payable in capital stock, or other increase or decrease in such
shares effected without receipt of consideration by the Company
occurring after the Effective Date, the number and kinds of
shares for which grants of Awards may be made under the Plan
shall be adjusted proportionately and accordingly by the
Company. In addition, the number and kind of shares for which
Awards are outstanding shall be adjusted proportionately and
accordingly so that the proportionate interest of the Grantee
immediately following such event shall, to the extent
practicable, be the same as immediately before such event. Any
such adjustment in outstanding Options or SARs shall not change
the aggregate Option Price or SAR Exercise Price payable with
respect to shares that are subject to the unexercised portion of
an outstanding Option or SAR, as applicable, but shall include a
corresponding proportionate adjustment in the Option Price or
SAR Exercise Price per share. The conversion of any convertible
securities of the Company shall not be treated as an increase in
shares effected without receipt of consideration.
Notwithstanding the foregoing, in the event of any distribution
to the Company’s stockholders of securities of any other
entity or other assets (other than dividends payable in cash or
stock of the Company) without receipt of consideration by the
Company, the Company may, in such manner as the Company deems
appropriate, adjust (i) the number and kind of shares
subject to outstanding Awards and/or (ii) the exercise
price of outstanding Options and SARs to reflect such
distribution.



     
18.2.     Changes in Capitalization;
Merger; Liquidation.



     
(a) In the event of a merger, consolidation, reorganization
or other Corporate Transaction of the Company, the Board may
make such adjustments with respect to Awards and take such other
action as it deems necessary or appropriate to reflect such
merger, consolidation, reorganization or other Corporate
Transaction, including, without limitation, the substitution of
new awards, the termination or the adjustment of outstanding
awards, the acceleration of Awards or the removal of
restrictions on outstanding Awards, all as may be provided in
the applicable Award Agreement or, if not expressly addressed
therein, as the Board subsequently may determine in the event of
any such transaction.



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(b) In addition to or instead of any adjustments authorized
in Section 18.1(a) above, in the event of a
merger, consolidation, reorganization or other Corporate
Transaction of the Company, the Board may elect, in its sole
discretion, to cancel or repurchase any outstanding Awards
issued under the Plan and pay or deliver, or cause to be paid or
delivered, to the holder thereof an amount in cash or securities
having a value (as determined by the Board acting in good
faith), in the case of an Award consisting of Restricted Stock
or Stock Units, equal to the formula or fixed price per share
paid to holders of the Stock in connection with such transaction
and, in the case of Options, equal to the product of the number
of shares of Stock subject to the Option (the “Option
Stock”) multiplied by the amount, if any, by which
(I) the formula or fixed price per share of Stock paid to
holders of Stock pursuant to such transaction exceeds
(II) the Option Price applicable to such Option.
Notwithstanding the foregoing, Stock Units shall be cancelled on
a Corporate Transaction only to the extent such Corporate
Transaction constitutes a “change in control event”
within the meaning of Code Section 409A.



     
18.3.     Adjustments.



     
Adjustments under this Section 18 related to shares
of Stock or securities of the Company shall be made by the
Board, whose determination in that respect shall be final,
binding and conclusive. No fractional shares or other securities
shall be issued pursuant to any such adjustment, and any
fractions resulting from any such adjustment shall be eliminated
in each case by rounding downward to the nearest whole share.
The Board may provide in the Award Agreements at the time of
grant, or any time thereafter with the consent of the Grantee,
for different provisions to apply to an Award in place of those
described in Section 18.



     
18.4.     No Limitations on
Company.



     
The existence of this Plan and the Awards granted pursuant to
this Plan shall not affect in any way the right or power of the
Company to make or authorize any adjustment, reclassification,
reorganization or other change in its capital or business
structure, any merger or consolidation of the Company, any issue
of debt or equity securities having preferences or priorities as
to the Stock or the rights thereof, the dissolution or
liquidation of the Company, any sale or transfer of all or any
part of its business or assets, or any other act or proceeding.






		
	19.	
    GENERAL PROVISIONS



     
19.1.     Disclaimer of Rights



     
No provision in the Plan or in any Award or Award Agreement
shall be construed to confer upon any individual the right to
remain in the employ or service of the Company or any Affiliate,
or to interfere in any way with any contractual or other right
or authority of the Company either to increase or decrease the
compensation or other payments to any individual at any time, or
to terminate any employment or other relationship between any
individual and the Company. In addition, notwithstanding
anything contained in the Plan to the contrary, unless otherwise
stated in the applicable Award Agreement, no Award granted under
the Plan shall be affected by any change of duties or position
of the Grantee, so long as such Grantee continues to be a
director, officer, consultant or employee of the Company or an
Affiliate. The obligation of the Company to pay any benefits
pursuant to this Plan shall be interpreted as a contractual
obligation to pay only those amounts described herein, in the
manner and under the conditions prescribed herein. The Plan
shall in no way be interpreted to require the Company to
transfer any amounts to a third party trustee or otherwise hold
any amounts in trust or escrow for payment to any Grantee or
beneficiary under the terms of the Plan.



     
19.2.     Nonexclusivity of the
Plan



     
Neither the adoption of the Plan nor the submission of the Plan
to the stockholders of the Company for approval shall be
construed as creating any limitations upon the right and
authority of the Board to adopt such other incentive
compensation arrangements (which arrangements may be applicable
either generally to a class or classes of individuals or
specifically to a particular individual or particular
individuals) as the Board in its discretion determines
desirable, including, without limitation, the granting of stock
options otherwise than under the Plan.



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19.3.     Withholding Taxes



     
The Company or an Affiliate, as the case may be, shall have the
right to deduct or withhold from payments of any kind otherwise
due to a Grantee (including by withholding shares of Stock
otherwise deliverable under an Award) any Federal, state, or
local taxes of any kind required by law to be withheld with
respect to the vesting of or other lapse of restrictions
applicable to an Award or upon the issuance of any shares of
Stock upon the exercise of an Option or pursuant to an Award. At
the time of such vesting, lapse, or exercise, the Grantee shall
pay to the Company or the Affiliate, as the case may be, any
amount that the Company or the Affiliate may reasonably
determine to be necessary to satisfy such withholding
obligation. Subject to the prior approval of the Company or the
Affiliate, which may be withheld by the Company or the
Affiliate, as the case may be, in its sole discretion, the
Grantee may elect to satisfy such obligations, in whole or in
part, (i) by causing the Company or the Affiliate to
withhold shares of Stock otherwise issuable to the Grantee or
(ii) by delivering to the Company or the Affiliate shares
of Stock already owned by the Grantee. The shares of Stock so
delivered or withheld shall have an aggregate Fair Market Value
equal to such withholding obligations. The Fair Market Value of
the shares of Stock used to satisfy such withholding obligation
shall be determined by the Company or the Affiliate as of the
date that the amount of tax to be withheld is to be determined.
A Grantee who has made an election pursuant to this
Section 19.3 may satisfy his or her withholding
obligation only with shares of Stock that are not subject to any
repurchase, forfeiture, unfulfilled vesting, or other similar
requirements.



     
19.4.     Captions



     
The use of captions in this Plan or any Award Agreement is for
the convenience of reference only and shall not affect the
meaning of any provision of the Plan or such Award Agreement.



     
19.5.     Other Provisions



     
Each Award granted under the Plan may contain such other terms
and conditions not inconsistent with the Plan as may be
determined by the Board, in its sole discretion.



     
19.6.     Number And Gender



     
With respect to words used in this Plan, the singular form shall
include the plural form, the masculine gender shall include the
feminine gender, etc., as the context requires.



     
19.7.      Severability



     
If any provision of the Plan or any Award Agreement shall be
determined to be illegal or unenforceable by any court of law in
any jurisdiction, the remaining provisions hereof and thereof
shall be severable and enforceable in accordance with their
terms, and all provisions shall remain enforceable in any other
jurisdiction.



     
19.8.     Governing Law



     
The validity and construction of this Plan and the instruments
evidencing the Award hereunder shall be governed by the laws of
the State of Delaware, other than any conflicts or choice of law
rule or principle that might otherwise refer construction or
interpretation of this Plan and the instruments evidencing the
Awards granted hereunder to the substantive laws of any other
jurisdiction.



     
19.9.     Code Section 409A



     
The Board or the Committee, as applicable, intends to comply
with Section 409A of the Code, or an exemption to
Section 409A, with regard to Awards hereunder that
constitute nonqualified deferred compensation within the meaning
of Section 409A. To the extent that the Board or the
Committee, as applicable, determines that a Grantee would
otherwise be subject to the additional 20% tax imposed on
certain nonqualified deferred compensation plans pursuant to
Section 409A as a result of any provision of any Award
granted under this Plan, such provision shall be deemed amended
to the minimum extent necessary to avoid application of such
additional tax. The nature of any such amendment shall be
determined by the Board or the Committee, as applicable.



17