exv10w2



 







Exhibit 10.2




HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED




Amended and Restated

2002 Stock Option and Incentive Plan




     1. Purpose. The purpose of the 2002 Stock Option and Incentive Plan (this “Plan”) is to
attract and retain officers, key employees, and Non-Officer Directors for Harman International
Industries, Incorporated, a Delaware corporation (the “Company”) and its Subsidiaries and to
provide to such persons incentives and rewards for superior performance. If this Plan is approved
by the Company’s stockholders, it will replace the Company’s 1992 Incentive Plan.



     2. Definitions. As used in this Plan,



          “Applicable Exchange Rules” shall have the meaning set forth in Section 17(a) of this Plan.




          “Appreciation Right” means a Tandem Appreciation Right or Free-Standing Appreciation Right
granted pursuant to Section 5 of this Plan.




          “Base Price” means the price to be used as the basis for determining the Spread upon the
exercise of a Free-Standing Appreciation Right.




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




          “Code” means the Internal Revenue Code of 1986, as amended from time to time.




          “Committee” means the committee of the Board referred to in Section 16 of this Plan.




          “Common Stock” means the shares of Common Stock, par value $0.01 per share, of the Company or
any security into which such shares of Common Stock may be changed by reason of any transaction or
event of the type referred to in Section 10 of this Plan.




          “Company” has the meaning set forth in Section 1 of this Plan.




          “Covered Employee” means an Eligible Participant who is, or is determined by the Committee to
be likely to become, a “covered employee” within the meaning of Section 162(m) of the Code (or any
successor provision).




          “Date of Grant” means the date specified by the Committee on which a grant of Option Rights,
Appreciation Rights or Performance Units or a grant or sale of Restricted Shares or Restricted
Share Units shall become effective.




          “Director” means a member of the Board.




          “Eligible Participant” means a person who is selected by the Committee to receive benefits
under this Plan and (a) who is at the time an officer, director or key employee of the




 









 







Company or
any one or more of its Subsidiaries, or (b) who has agreed to commence serving in any of such
capacities within 90 days of the Date of Grant; provided, however, that a Non-Officer Director
shall only be eligible to receive awards under Section 8 of this Plan.




          “Evidence of Award” means an agreement, certificate, resolution or other type or form of
writing or other evidence approved by the Committee which sets forth the terms and conditions of
the Option Rights, Appreciation Rights, Performance Units, Restricted Shares or Restricted Share
Units. An Evidence of Award may be in an electronic medium, may be limited to a notation on the
books and records of the Company and, with the approval of the Committee, need not be signed by a
representative of the Company or an Eligible Participant.




          “Free-Standing Appreciation Right” means an Appreciation Right granted pursuant to Section 5
of this Plan that is not granted in tandem with an Option Right.




          “Incentive Stock Options” means Option Rights that are intended to qualify as “incentive stock
options” under Section 422 of the Code or any successor provision.




          “Less-Than-80% Subsidiary” means a Subsidiary with respect to which the Company, directly or
indirectly, owns or controls less than 80% of the total combined Voting Power represented by all
classes of stock issued by such Subsidiary.




          “Management Objectives” means the measurable performance objective or objectives established
pursuant to this Plan for Eligible Participants who have received grants of Performance Units or,
when so determined by the Board, Option Rights, Appreciation Rights, Restricted Shares, Restricted
Share Units, dividend credits or other awards pursuant to this Plan. Management Objectives may be
described in terms of Company-wide objectives or objectives that are related to the performance of
the individual Eligible Participant or of the Subsidiary, division, department, region or function
within the Company or Subsidiary in which the Eligible Participant is employed. The Management
Objectives may be made relative to the performance of other corporations. The Management Objectives
applicable to any award to a Covered Employee that is intended to comply with Section 162(m) of the
Code shall be based on specified levels of or growth in one or more of the following criteria:




          (a) cash flow/net assets ratio;




          (b) return on total capital or assets;




          (c) Return on Consolidated Equity;




          (d) earnings or earnings per share;




          (e) revenue;




          (f) cash flow; and/or




          (g) stock price or total return to stockholders.




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          If the Committee determines that a change in the business, operations, corporate structure or
capital structure of the Company, or the manner in which it conducts its business, or other events
or circumstances render the Management Objectives unsuitable, the Committee may in its discretion
modify such Management Objectives or the related minimum acceptable level of achievement, in whole
or in part, as the Committee deems appropriate and equitable, except in the case of a Covered
Employee where such action would result in the loss of the otherwise available exemption of the
award under Section 162(m) of the Code. In such case, the Committee shall not make any modification
of the Management Objectives or minimum acceptable level of achievement.




          “Market Value per Share” means, as of any particular date, (a) the closing sale price per
share of Common Stock, regular way, as reported on the New York Stock Exchange Composite Tape or,
if the shares of Common Stock are no longer traded on the New York Stock Exchange, on the principal
exchange on which the shares of Common Stock are then traded, or, if the Common Stock is not then
traded on an exchange, the last sale price as reported on the Nasdaq National Market System or
other division of the Nasdaq on which the shares of Common Stock are then quoted, on the relevant
date (or, if no trades are reported on that date, on the next preceding date on which a sale
occurred), or (b) if clause (a) does not apply, the fair market value of the shares of Common Stock
as determined in good faith by the Committee.




          “Non-Officer Director” means a Director who is not an officer or employee of the Company or
any Subsidiary.




          “Optionee” means the optionee named in an Evidence of Award evidencing an outstanding Option
Right.




          “Option Price” means the purchase price payable on exercise of an Option Right.




          “Option Right” means the right to purchase shares of Common Stock upon exercise of an option
granted pursuant to Section 4 of this Plan.




          “Performance Period” means, in respect of a Performance Unit, a period of time established
pursuant to Section 7 of this Plan within which the Management Objectives relating to such
Performance Unit must be achieved.




          “Performance Unit” means a bookkeeping entry that records a unit equivalent to $100.00 awarded
pursuant to Section 7 of this Plan.




          “Plan” has the meaning set forth in Section 1 of this Plan.




          “Restricted Shares” means shares of Common Stock granted or sold pursuant to Section 6(a) of
this Plan as to which neither the substantial risk of forfeiture nor the prohibition on transfers
referred to in such Section 6(a) has expired.




          “Restricted Share Unit” means an award made pursuant to Section 6(b) of this Plan of the right
to receive Common Stock or cash at the end of a specified period.




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          “Restriction Period” means the period of time during which Restricted Share Units are subject
to deferral limitations, as provided in Section 6(b) of this Plan.




          “Return on Consolidated Equity” means a fraction (expressed as a percentage), the numerator of
which is the net income of the Company as set forth in the Company’s audited consolidated financial
statements and the denominator of which is the Company’s average stockholders’ equity for the
fiscal year, as determined by adding the average stockholders’ equity for each quarter of the
fiscal year, divided by four.




          “Spread” means the excess of the Market Value per Share on the date when an Appreciation Right
is exercised over (i) the Option Price provided for in the related Option Right (for Options Rights
or Tandem Appreciation Rights) or (ii) the Base Price (for Free-Standing Appreciation Rights).




          “Subsidiary” means a corporation, partnership, joint venture, unincorporated association or
other entity in which the Company has a direct or indirect ownership or other equity interest;
provided, however, for purposes of determining whether any person may be an Eligible Participant
for purposes of any grant of Incentive Stock Options, “Subsidiary” means any corporation in which
the Company owns or controls, directly or indirectly, more than 50% of the total combined Voting
Power represented by all classes of stock issued by such corporation.




          “Tandem Appreciation Right” means an Appreciation Right granted pursuant to Section 5 of this
Plan that is granted in tandem with an Option Right.




          “Voting Power” means with respect to any Subsidiary, the total votes relating to the
then-outstanding securities entitled to vote generally in the election of its board of directors
(or other managing body).




     3. Shares Available Under this Plan.



          (a) Subject to adjustment as provided in Section 10 of this Plan, the number of shares of
Common Stock that may be issued or transferred (i) upon the exercise of Option Rights or
Appreciation Rights, (ii) as Restricted Shares and released from substantial risks of forfeiture
thereof, (iii) as Restricted Share Units, (iv) in payment of Performance Units that have been
earned, (v) as awards to Non-Officer Directors or (vi) in payment of dividend equivalents paid with
respect to awards made under this Plan, shall not exceed in the aggregate 6,000,000 shares of
Common Stock. Such shares of Common Stock may be shares of original issuance or treasury shares or
a combination of the foregoing.




          (b) Shares of Common Stock relating to awards that expire, are forfeited, surrendered or
relinquished, whether upon exercise or otherwise, shall not be available for reissuance under this
Plan.




          (c) Notwithstanding anything in this Section 3, or elsewhere in this Plan, to the contrary and
subject to adjustment as provided in Section 10 of this Plan, (i) the aggregate number of shares of
Common Stock actually issued or transferred by the Company upon the exercise of Incentive Stock
Options shall not exceed 6,000,000 shares of Common Stock; (ii) no Eligible Participant shall be
granted Option Rights and Appreciation Rights, in the aggregate, for

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more than 600,000 shares of Common Stock during any calendar year; (iii) non-option awards
denominated in shares of Common Stock (including, without limitation, awards of Restricted Shares
and Restricted Share Units) shall not exceed 600,000 shares of Common Stock, in the aggregate; and
(iv) no Eligible Participant shall be granted during any calendar year non-option awards
denominated in shares of Common Stock (including, without limitation, awards of Restricted Shares
and Restricted Share Units) representing more than 50,000 shares of Common Stock, in the aggregate.




          (d) Notwithstanding any other provision of this Plan to the contrary, in no event shall any
Eligible Participant in any calendar year receive an award of Performance Units having an aggregate
maximum value as of their respective Dates of Grant in excess of $2,000,000.




     4. Option Rights. The Committee may authorize the grant of options to purchase shares of
Common Stock to Eligible Participants. Each such grant may utilize any or all of the
authorizations, and shall be subject to all of the requirements contained in the following
provisions:



          (a) Each grant shall specify the number of shares of Common Stock to which it pertains subject
to the limitations set forth in Section 3 of this Plan.




          (b) Each grant shall specify an Option Price of not less than the Market Value per Share on
the Date of Grant.




          (c) Each grant shall specify whether the Option Price shall be payable (i) in cash or by check
acceptable to the Company, (ii) by the actual or constructive transfer to the Company of shares of
unrestricted Common Stock owned by the Optionee for a period of time acceptable to the Committee,
having a value at the time of exercise equal to the total Option Price, (iii) any other legal
consideration that the Committee may deem appropriate, including without limitation any form of
consideration authorized under Section 4(d) of this Plan, on such basis as the Committee may
determine in accordance with this Plan, and, unless otherwise determined by the Committee pursuant
to Section 4(d) of this Plan, or (iv) by a combination of such methods of payment.




          (d) The Committee may determine, at or after the Date of Grant, that payment of the Option
Price of any Option Right (other than an Incentive Stock Option) may also be made in whole or in
part in the form of Restricted Shares or other shares of Common Stock that are forfeitable or
subject to restrictions on transfer (based on the Market Value per Share on the date of exercise),
other Option Rights (based on the Spread on the date of exercise) or Performance Units. Unless
otherwise determined by the Committee at or after the Date of Grant, whenever any Option Price is
paid in whole or in part by means of any of the forms of consideration specified in this Section
4(d), the shares of Common Stock received upon the exercise of the Option Rights shall be subject
to such risks of forfeiture or restrictions on transfer as may correspond to any that apply to the
consideration surrendered, but only to the extent, determined with respect to the consideration
surrendered, of (i) the same number of shares of Common Stock received by the Optionee as applied
to the forfeitable or Restricted Shares

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surrendered by the Optionee, (ii) the Spread of any unexercisable portion of Option Rights, or
(iii) the stated value of Performance Units.




          (e) Unless otherwise determined by the Committee, each grant of Option Rights shall specify
the period or periods of continuous service by the Optionee with the Company or any Subsidiary that
is necessary before the Option Rights or installments thereof will become exercisable and may
provide for the earlier exercise of such Option Rights upon the occurrence of a change of control
of the Company or other similar transaction or event specified in an Evidence of Award.




          (f) Subject to the limitations set forth in Section 3 of this Plan, successive grants of
Option Rights may be made to the same Eligible Participant whether or not any Option Rights
previously granted to such Eligible Participant remain unexercised.




          (g) Any grant of Option Rights may specify Management Objectives that must be achieved as a
condition to the exercise of such rights.




          (h) Option Rights granted under this Plan may be (i) options, including, without limitation,
Incentive Stock Options, that are intended to qualify under particular provisions of the Code, (ii)
options that are not intended so to qualify, or (iii) combinations of the foregoing.




          (i) The Committee may, at or after the Date of Grant of any Option Rights (other than
Incentive Stock Options), provide for the payment of dividend equivalents to the Optionee on either
a current or, deferred or contingent basis or may provide that such equivalents shall be credited
against the Option Price.




          (j) The exercise of an Option Right shall result in the cancellation on a share-for-share
basis of any Tandem Appreciation Right authorized under Section 5 of this Plan.




          (k) No Option Right shall be exercisable more than 10 years from the Date of Grant.




          (l) Each grant of Option Rights shall be evidenced by an Evidence of Award, which shall
contain such terms and provisions, not inconsistent with this Plan, as the Committee may approve.




     5. Appreciation Rights.



          (a) The Committee may authorize the granting (i) to any Optionee, of Tandem Appreciation
Rights in respect of Option Rights granted hereunder, and (ii) to any Eligible Participant, of
Free-Standing Appreciation Rights. A Tandem Appreciation Right shall be a right of the Optionee,
exercisable by his or her surrender of the related Option Right, to receive from the Company an
amount determined by the Committee, which shall be expressed as a percentage of the Spread (not
exceeding 100%) at the time of exercise. Tandem Appreciation Rights may be granted at any time
prior to the exercise or termination of the related Option Rights; provided, however, that a Tandem
Appreciation Right awarded in relation to an Incentive Stock Option must be granted concurrently
with such Incentive Stock Option. A Free-Standing Appreciation

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Right shall be a right of the Eligible Participant to receive from the Company an amount
determined by the Committee, which shall be expressed as a percentage of the Spread (not exceeding
100%) at the time of exercise.




          (b) Each grant of Appreciation Rights may utilize any or all of the authorizations, and shall
be subject to all of the requirements, contained in the following provisions:




               (i) Any grant of Appreciation Rights may specify that the amount payable on exercise of an
Appreciation Right may be paid by the Company in cash, in shares of Common Stock or in any
combination thereof and may either grant to the Eligible Participant or retain in the Committee the
right to elect among those alternatives; provided, however, that if the right to elect among those
alternatives is granted to the Optionee, the Committee shall have the sole discretion to approve or
disapprove the Optionee’s election to receive cash in full or partial settlement of an Appreciation
Right, which consent or approval may be given at any time after the election to which it relates.



               (ii) Any grant of Appreciation Rights may specify that the amount payable on exercise of an
Appreciation Right (valuing shares of Common Stock for this purpose at their Market Value per Share
on the date of exercise) may not exceed a maximum amount specified by the Committee on the Date of
Grant.



               (iii) Any grant of Appreciation Rights may specify waiting periods before exercise and
permissible exercise dates or periods.



               (iv) Any grant of Appreciation Rights may provide that an Appreciation Right may be exercised
upon the occurrence of, or only exercised in the event of, a change of control of the Company or
other similar transaction or event specified in an Evidence of Award.



               (v) Any grant of Appreciation Rights may specify Management Objectives that must be achieved
as a condition of the exercise of such Appreciation Rights.



               (vi) Any grant of Appreciation Rights may provide for the payment to the Eligible Participant
of dividend equivalents thereon in cash or shares of Common Stock on a current, deferred or
contingent basis.



               (vii) Each grant of Appreciation Rights shall be evidenced by an Evidence of Award that shall
describe such Appreciation Rights, identify the related Option Rights (in the case of Tandem
Appreciation Rights), and which shall contain such terms and provisions, not inconsistent with this
Plan, as the Committee may approve.



          (c) Any grant of Tandem Appreciation Rights shall provide that such Rights may be exercised
only at a time when the related Option Right is also exercisable and at a time when the Spread is
positive, and by surrender of the related Option Right for cancellation.




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          (d) Any grant of Free-Standing Appreciation Rights may utilize any or all of the following
additional authorizations, and shall be subject to the following additional requirements:




               (i) Each grant shall specify in respect of each Free-Standing Appreciation Right a Base Price,
which shall be equal to or greater than the Market Value per Share on the Date of Grant.



               (ii) Subject to the limitations set forth in Section 3 of this Plan, successive grants of
Free-Standing Appreciation Rights may be made to the same Eligible Participant regardless of
whether any Free-Standing Appreciation Rights previously granted to the Eligible Participant remain
unexercised.



               (iii) No Free-Standing Appreciation Right granted under this Plan may be exercised more than
10 years from the Date of Grant.



     6. Restricted Shares and Restricted Share Units.



          (a) Restricted Shares. The Committee may authorize the grant or sale of Restricted
Shares to Eligible Participants. Each such grant or sale may utilize any or all of the
authorizations, and shall be subject to all of the requirements, contained in the following
provisions:




               (i) Each such grant or sale of Restricted Shares shall constitute an immediate transfer of the
ownership of shares of Common Stock to the Eligible Participant in consideration of the performance
of services, entitling such Eligible Participant to voting, dividend and other ownership rights,
but subject to the substantial risk of forfeiture and restrictions on transfer referred to
hereinafter.



               (ii) Each such grant or sale of Restricted Shares may be made without additional consideration
or in consideration of a payment by such Eligible Participant that is less than Market Value per
Share on the Date of Grant.



               (iii) Each such grant or sale of Restricted Shares shall provide that the Restricted Shares
covered by such grant or sale shall be subject to a “substantial risk of forfeiture” within the
meaning of Section 83 of the Code for a period to be determined by the Committee on the Date of
Grant, provided that such period shall be at least three years. Notwithstanding the foregoing
restriction, any grant or sale of Restricted Shares may provide for the earlier lapse of
substantial risk of forfeiture in the event of a change in control of the Company or other similar
transaction or event specified in an Evidence of Award.



               (iv) Each such grant or sale of Restricted Shares shall provide that during the period for
which a substantial risk of forfeiture is to continue, the transferability of the Restricted Shares
shall be prohibited or restricted in the manner and to the extent prescribed by the Company on the
Date of Grant (which restrictions may include, without limitation, rights of repurchase or first
refusal in favor of the Company or provisions subjecting the Restricted Shares to a continuing
substantial risk of forfeiture in the hands of any transferee).



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               (v) Any grant or sale of Restricted Shares may specify Management Objectives that, if
achieved, will result in termination or early termination of the restrictions applicable to such
shares. Each grant or sale may specify in respect of such Management Objectives a minimum
acceptable level of achievement and may set forth a formula for determining the number of
Restricted Shares on which restrictions will terminate if performance is at or above the minimum
level, but falls short of full achievement of the specified Management Objectives.



               (vi) Any grant or sale of Restricted Shares may provide that any or all dividends or other
distributions paid thereon during the period of such restrictions be automatically deferred and
reinvested in additional Restricted Shares, which shall be subject to the same restrictions as the
underlying award.



               (vii) Each grant or sale of Restricted Shares shall be evidenced by an Evidence of Award that
shall contain such terms and provisions, not inconsistent with this Plan, as the Committee may
approve. Unless otherwise directed by the Committee, all certificates representing Restricted
Shares shall be held in custody by the Company until all restrictions thereon have lapsed, together
with a stock power or powers executed by the Eligible Participant in whose name such certificates
are registered, endorsed in blank and covering such shares.



          (b) Restricted Share Units. The Committee may also authorize the grant or sale of
Restricted Share Units to Eligible Participants. Each such grant or sale may utilize any or all of
the authorizations, and will be subject to all of the requirements, contained in the following
provisions:




               (i) Each such grant or sale will constitute the agreement by the Company to deliver Common
Stock or cash to the Eligible Participant in the future in consideration of the performance of
services, but subject to the fulfillment of such conditions during the Restriction Period as the
Board may specify.



               (ii) Each such grant or sale may be made without additional consideration or in consideration
of a payment by such Eligible Participant that is less than the Market Value per Share at the Date
of Grant.



               (iii) Each such grant or sale will be subject to a Restriction Period as determined by the
Committee at the Date of Grant, and may provide for the earlier lapse or other modification of such
Restriction Period upon (a) the Eligible Participant achieving Management Objectives specified in
such grant, (b) a change in control of the Company or other similar transaction or event or (c) the
retirement, death or disability of the Eligible Participant, as specified in an Evidence of Award;
provided, however, that each such grant or sale shall be subject to a “substantial risk of
forfeiture” in the same manner as set forth in Section 6(a)(iii) of this Plan.



               (iv) During the Restriction Period, the Eligible Participant will have no right to transfer
any rights under his or her Restricted Share Units and will have no rights of ownership in the
Restricted Share Units and will have no right to vote them, but the Board may, at or after the Date
of Grant, authorize the payment of dividend equivalents on such Restricted



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Share Units on either a current or deferred or contingent basis, either in cash or in Common
Stock.




               (v) Each grant or sale of Restricted Share Units will be evidenced by an Evidence of Award and
will contain such terms and provisions, consistent with this Plan, as the Board may approve.



     7. Performance Units. The Committee may authorize the grant of Performance Units to Eligible
Participants. Each such grant may utilize any or all of the authorizations, and shall be subject to
all of the requirements, contained in the following provisions:



          (a) Each grant of Performance Units shall specify the number of Performance Units to which it
pertains, which number may be subject to adjustment to reflect changes in compensation or other
factors, provided, however, that no such adjustment shall be made in the case of a Covered Employee
where such action would result in the loss of the otherwise available exemption of the award under
Section 162(m) of the Code.




          (b) The Performance Period with respect to each Performance Unit shall be such period of time
(not less than three years), commencing with the Date of Grant as shall be determined by the
Committee at the time of grant. The Performance Period may be subject to earlier lapse or other
modification in the event of a change in control of the Company or other similar transaction or
event specified in the Evidence of Award.




          (c) Any grant of Performance Units shall specify Management Objectives that must be achieved
as a condition to the payment or early payment of the award, and each grant may specify in respect
of such specified Management Objectives a minimum acceptable level of achievement and shall set
forth a formula for determining the number of Performance Units that will be earned if performance
is at or above the minimum level, but falls short of full achievement of the specified Management
Objectives. The grant of Performance Units shall specify that, before Performance Units shall be
earned and paid, the Committee must certify that the Management Objectives have been satisfied.




          (d) Each grant of Performance Units shall specify the time and manner of payment of
Performance Units that have been earned. Any grant may specify that the amount payable with respect
thereto may be paid by the Company in cash, in shares of Common Stock or in any combination thereof
and may either grant to the Eligible Participant or retain in the Committee the right to elect
among those alternatives.




          (e) Any grant of Performance Units may specify that the amount payable or the number of shares
of Common Stock issued with respect thereto or any combination thereof may not exceed a maximum
amount or number, as applicable, specified by the Committee on the Date of Grant.




          (f) Each grant of Performance Units shall be evidenced by an Evidence of Award containing such
terms and provisions, not inconsistent with this Plan, as the Committee may approve.




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     8. Automatic Grants of Nonqualified Stock Options to Non-Officer Directors. Non-Officer
Directors may only receive grants or awards under this Plan pursuant to the terms of this Section
8. If this Plan is approved by the requisite vote of the stockholders of the Company, Option Rights
shall be automatically granted to Non-Officer Directors as follows:



          (a) Each person who first becomes a Non-Officer Director after the effective date of this Plan
will be granted an Option Right to purchase 6,000 shares of Common Stock on the date such person
first becomes a Non-Officer Director.




          (b) Beginning with the 2006 annual meeting of the Company’s stockholders, each person serving
as a Non-Officer Director shall be granted an Option Right to purchase 5,000 shares of Common Stock
immediately after each annual meeting of the Company’s stockholders.




          (c) Each grant of Option Rights under this Section 8 shall be subject to the following
additional requirements:




               (i) The Option Price per share for which each such Option Right is exercisable shall be not
less than 100% of the Market Value per Share on the Date of Grant.



               (ii) Each such Option Right shall become exercisable to the extent of one-fifth of the number
of shares of Common Stock covered thereby one year after the Date of Grant and to the extent of an
additional one-fifth of such shares of Common Stock after each of the next four successive years
thereafter so long as the holder of the Option Right has served continuously as a Director. Such
Option Rights shall become exercisable in full immediately in the event of a change in control of
the Company or other similar transaction or event specified in the Evidence of Award. Each such
Option Right granted under this Plan shall expire 10 years from the Date of Grant and shall be
subject to earlier termination as hereinafter provided.



               (iii) In the event of the termination of service on the Board by the holder of any such Option
Rights, other than by reason of disability or death as set forth in subparagraph (iv) hereof, the
then outstanding Option Rights of such holder may be exercised only to the extent that they were
exercisable on the date of such termination and shall expire 90 days after such termination, or on
their stated expiration date, whichever occurs first.



               (iv) In the event of the death or disability of the holder of any such Option Rights, each of
the then outstanding Option Rights of such holder shall be exercisable in full and may be exercised
at any time within one year after such death or disability, but in no event after the expiration
date of the term of such Option Rights.



               (v) If a Non-Officer Director subsequently becomes an officer or employee of the Company or a
Subsidiary while remaining a Director, any Option Rights then held under this Plan by such
individual shall not be affected thereby.



               (vi) Option Rights may be exercised by a Non-Officer Director upon payment to the Company in
full of the Option Price in accordance with Section 4(c) of this Plan.



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               (vii) Successive grants of Option Rights may be made to a Non-Officer Director whether or not
Option Rights previously granted to such Non-Officer Director remain outstanding.



               (viii) Each grant of Option Rights under this Section 8 shall be evidenced by an Evidence of
Award containing the foregoing terms and conditions and such other terms and conditions, not
inconsistent with this Plan, as the Committee may approve.



     9. Transferability.



          (a) Except as otherwise determined by the Committee, no Option Right, Appreciation Right,
Restricted Share Unit or other derivative security granted under this Plan shall be transferable by
an Eligible Participant other than by will or the laws of descent and distribution. Except as
otherwise determined by the Committee, Option Rights and Appreciation Rights shall be exercisable
during the Optionee’s lifetime only by him or her or by his or her guardian or legal
representative.




          (b) The Committee may specify on the Date of Grant that part or all of the shares of Common
Stock that are (i) to be issued or transferred by the Company upon the exercise of Option Rights or
Appreciation Rights, upon payment under any grant of Performance Units, or upon the lapse of the
Restriction Period referred to in Section 6(b) or (ii) no longer subject to the substantial risk of
forfeiture and restrictions on transfer referred to in Section 6(a) of this Plan, shall be subject
to further restrictions on transfer.




     10. Adjustments. The Committee may make or provide for such adjustments in the numbers of
shares of Common Stock covered by any outstanding Restricted Stock Unit, Option Rights or
Appreciation Rights, in the Option Price and Base Price provided in outstanding Appreciation
Rights, and in the kind of shares of Common Stock covered thereby, as the Committee, in its sole
discretion, exercised in good faith, may determine is equitably required to prevent dilution or
enlargement of the rights of Eligible Participants or Optionees that otherwise would result from
(a) any stock dividend, stock split, combination of shares of Common Stock, recapitalization or
other change in the capital structure of the Company, (b) any merger, consolidation, spin-off,
split-off, spin-out, split-up, reorganization, partial or complete liquidation or other
distribution of assets, issuance of rights or warrants to purchase securities, or (c) any other
corporate transaction or event having an effect similar to any of the foregoing. Moreover, in the
event of any such transaction or event, the Committee, in its discretion, may provide in
substitution for any or all outstanding awards under this Plan such alternative consideration as
it, in good faith, may determine to be equitable in the circumstances and may require in connection
therewith the surrender of all awards so replaced. The Committee may also make or provide for such
adjustments in the numbers and kind of shares of Common Stock specified in Section 3 of this Plan,
and numbers of Option Rights issuable pursuant to Section 8 of this Plan, as the Committee in its
sole discretion, exercised in good faith, may determine is appropriate to reflect any transaction
or event described in this Section 10, provided, however, that any such adjustment to the number
specified in Section 3(c)(i) of this Plan shall be made only if and to the extent that such
adjustment would not cause any option intended to qualify as an Incentive Stock Option to fail so
to qualify.



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     11. Governing Law. This Plan and all awards granted and actions taken thereunder shall be
governed by and construed in accordance with the internal substantive laws of the State of
Delaware.



     12. Fractional Shares. The Company shall not be required to issue any fractional shares of
Common Stock pursuant to this Plan. The Committee may provide for the elimination of fractions or
for the settlement of fractions in cash.



     13. Withholding Taxes. To the extent that the Company is required to withhold federal, state,
local or foreign taxes in connection with any payment made or benefit realized by an Eligible
Participant or other person under this Plan, and the amounts available to the Company for such
withholding are insufficient, it shall be a condition to the receipt of such payment or the
realization of such benefit that the Eligible Participant or such other person make arrangements
satisfactory to the Company for payment of the balance of such taxes required to be withheld, which
arrangements (in the discretion of the Committee) may include relinquishment of a portion of such
benefit. Eligible Participants shall also make such arrangements as the Company may require for the
payment of any withholding tax obligations that may arise in connection with the disposition of
shares of Common Stock acquired upon the exercise of Option Rights. In no event, however, shall the
Company accept shares of Common Stock for payment of taxes in excess of required tax withholding
rates, except that, in the discretion of the Committee, an Eligible Participant may surrender
shares of Common Stock that have been owned by such Eligible Participant for a period of time
acceptable to the Committee to satisfy any tax obligations resulting from any such transaction.



     14. Participation by Employees of a Less-Than-80% Subsidiary. As a condition to the
effectiveness of any grant or award to be made hereunder to an Eligible Participant who is an
employee of a Less-Than-80% Subsidiary, regardless whether such Eligible Participant is also
employed by the Company or another Subsidiary, the Committee may require the Less-Than-80%
Subsidiary to agree to transfer to the Eligible Participant (as, if and when provided for under
this Plan and any applicable agreement entered into between the Eligible Participant and the
Less-Than-80% Subsidiary pursuant to this Plan) the shares of Common Stock that would otherwise be
delivered by the Company upon receipt by the Less-Than-80% Subsidiary of any consideration then
otherwise payable by the Eligible Participant to the Company. Any such award may be evidenced by an
Evidence of Award between the Eligible Participant and the Less-Than-80% Subsidiary, in lieu of the
Company, on terms not inconsistent with this Plan and approved by the Committee and the
Less-Than-80% Subsidiary. All shares of Common Stock so delivered by or to a Less-Than-80%
Subsidiary will be treated as if they had been delivered by or to the Company for purposes of
Section 3 of this Plan, and all references to the Company in this Plan shall be deemed to refer to
the Less-Than-80% Subsidiary except with respect to the definitions of the Board and the Committee
and in other cases where the context otherwise requires.



     15. International Employees. In order to facilitate the making of any grant or combination of
grants under this Plan, the Committee may provide for such special terms for awards to Eligible
Participants who are foreign nationals or who are employed by the Company or any Subsidiary outside
of the United States of America, as the Committee may consider necessary or appropriate to
accommodate differences in local law, tax policy or custom.



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Moreover, the Committee may approve such supplements to, or amendments, restatements or
alternative versions of, this Plan as it may consider necessary or appropriate for such purposes
without thereby affecting the terms of this Plan as in effect for any other purpose; provided,
however, that no such supplements, amendments, restatements or alternative versions shall include
any provisions that are inconsistent with the terms of this Plan, as then in effect, unless this
Plan could have been amended to eliminate such inconsistency without further approval by the
stockholders of the Company.




     16. Administration of this Plan. This Plan shall be administered by one or more committees of
the Board, as determined by the Board. Each committee shall be deemed a “Committee” hereunder and
shall have the authority delegated to it by the Board from time to time. The interpretation and
construction by the Committee of any provision of this Plan or of any Evidence of Award and any
determination by the Committee pursuant to any provision of this Plan or of any Evidence of Award
shall be final and conclusive. No member of the Committee shall be liable for any such action or
determination made in good faith.



     17. Amendments, Etc.



          (a) The Committee may at any time and from time to time amend this Plan in whole or in part;
provided, however, that any amendment that must be approved by the stockholders of the Company in
order to comply with applicable law or the rules of the New York Stock Exchange or, if the shares
of Common Stock are not traded on the New York Stock Exchange, the principal securities exchange
upon which the shares of Common Stock are then traded or quoted (the “Applicable Exchange Rules”),
shall not be effective unless and until such approval has been obtained. Presentation of this Plan
or any amendment hereof for stockholder approval shall not be construed to limit the Company’s
authority to offer similar or dissimilar benefits under other plans without stockholder approval to
the extent permitted under applicable law or Applicable Exchange Rules. Without limiting the
foregoing, the Committee may amend this Plan to eliminate provisions which are no longer necessary
as a result of changes in tax or securities law or regulations or in financial accounting
principles, or in the interpretation thereof.




          (b) The Evidence of Award evidencing any outstanding award may, with the concurrence of the
affected Eligible Participant, be amended by the Committee, provided that the terms and conditions
of each Evidence of Award and amendment are not inconsistent with this Plan and that no amendment
shall adversely affect the rights of an Eligible Participant with respect to any outstanding award
without the Eligible Participant’s consent.




          (c) The Committee shall not, without the further approval of the stockholders of the Company,
authorize the amendment of any outstanding Option Right to reduce the Option Price or authorize the
amendment of any outstanding Appreciation Right to reduce the Base Price. Furthermore, no Option
Right or Appreciation Right shall be cancelled by agreement between the Company and Eligible
Participant, in the case of Option Rights, and replaced with an award having a lower Option Price
without the further approval of the stockholders of the Company.




          (d) The Committee may, in its sole discretion, accelerate the time at which any Option Right
or Appreciation Right may be exercised, the time during which any Restricted

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Shares are subject to a substantial risk of forfeiture or other restrictions on transfer, the
time at which the Restriction Period for a Restricted Share Unit lapses or the time at which any
Performance Units will be deemed to have been fully earned or may waive any other limitation or
requirement under any such award. The Committee may not, however, accelerate the time at which any
substantial risk of forfeiture or prohibition or restriction on transfer relating to any grant or
sale of Restricted Shares or Restricted Share Units will lapse, without further approval of the
stockholders of the Company, except that such grant or sale may provide for the earlier termination
of such period in the manner provided in Section 6(a)(iii), 6(a)(v) or 6(b)(iii) of this Plan.




          (e) The Committee may permit Eligible Participants to elect to defer the issuance of shares of
Common Stock or the settlement of awards in cash under this Plan pursuant to such rules, procedures
or programs as it may establish for purposes of this Plan. The Committee may provide that such
deferred issuances and settlements include the payment or crediting of dividend equivalents or
interest on the deferral amounts.




          (f) The Committee may condition the grant of any award or combination of awards authorized
under this Plan on the surrender or deferral by the Eligible Participant of his or her right to
receive a cash bonus or other compensation otherwise payable by the Company or a Subsidiary to the
Eligible Participant.




          (g) In the event an Eligible Participant shall have (i) been convicted of a criminal violation
involving fraud, embezzlement or theft in connection with his or her duties or in the course of his
or her employment with the Company or any Subsidiary, (ii) committed intentional wrongful damage to
property of the Company or any Subsidiary, or (iii) committed intentional wrongful disclosure of
secret processes or confidential information of the Company or any Subsidiary, and the Committee,
in good faith, shall determine that any such act shall have been demonstrably and materially
harmful to the Company, then notwithstanding any other provision in this Plan to the contrary, the
Committee may terminate any Option Rights or other awards under this Plan granted such Eligible
Participant. Any termination of Option Rights or other awards under this Section 17(g) shall be
effective at such time as the Committee may determine in its sole discretion, but in any event no
earlier than the date the Committee makes the determination contemplated by this Section 17(g).




          (h) This Plan shall not confer upon any Eligible Participant any right with respect to
continuance of employment or other service with the Company or any Subsidiary, nor shall it
interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate
such Eligible Participant’s employment or other service at any time.




          (i) To the extent that any provision of this Plan would prevent any Option Right that was
intended to qualify as an Incentive Stock Option from qualifying as such, that provision shall be
null and void with respect to such Option Right. Such provision, however, shall remain in effect
for other Option Rights and there shall be no further effect on any provision of this Plan.




     18. Effective Date. This Plan shall be effective immediately; provided, however, that the
effectiveness of this Plan is conditioned on its approval by the stockholders of the Company



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in accordance with applicable law within 12 months after the date this Plan is adopted by the
Board. All awards under this Plan shall be null and void if this Plan is not approved by the
stockholders within such 12-month period.




     19. Term. No awards shall be granted under this Plan after November 8, 2012. Any awards
previously granted under this Plan and outstanding subsequent to November 8, 2012 shall continue to
be governed by the provisions of this Plan.




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