NONRECURRING ITEM, AS DETERMINED BY
THE COMMITTEE, OCCURRING AFTER THE ESTABLISHMENT OF THE PERFORMANCE GOALS
APPLICABLE TO THE PERFORMANCE AWARD.
EACH SUCH ADJUSTMENT, IF ANY, SHALL BE
MADE SOLELY FOR THE PURPOSE OF PROVIDING A CONSISTENT BASIS FROM PERIOD TO
PERIOD FOR THE CALCULATION OF PERFORMANCE MEASURES IN ORDER TO PREVENT THE
DILUTION OR ENLARGEMENT OF THE PARTICIPANT'S RIGHTS WITH RESPECT TO A
PERFORMANCE AWARD.
PERFORMANCE MEASURES MAY BE ONE OR MORE OF THE FOLLOWING, AS
DETERMINED BY THE COMMITTEE:
(I)
REVENUE;
(II)
SALES;
(III)
EXPENSES;
(IV)
OPERATING INCOME;
(V)
GROSS MARGIN;
(VI)
OPERATING MARGIN;
(VII)
EARNINGS BEFORE ANY ONE OR MORE OF: STOCK-BASED COMPENSATION
EXPENSE, INTEREST, TAXES, DEPRECIATION AND AMORTIZATION;
(VIII)
PRE-TAX PROFIT;
(IX)
NET OPERATING INCOME;
(X)
NET INCOME;
(XI)
ECONOMIC VALUE ADDED;
(XII)
FREE CASH FLOW;
(XIII)
OPERATING CASH FLOW;
(XIV)
STOCK PRICE;
(XV)
EARNINGS PER SHARE;
(XVI)
RETURN ON STOCKHOLDER EQUITY;
(XVII)
RETURN ON CAPITAL;
(XVIII)
RETURN ON ASSETS;
19
(XIX)
RETURN ON INVESTMENT;
(XX)
EMPLOYEE SATISFACTION;
(XXI)
EMPLOYEE RETENTION;
(XXII)
BALANCE OF CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES;
(XXIII)
MARKET SHARE;
(XXIV)
CUSTOMER SATISFACTION;
(XXV)
PRODUCT DEVELOPMENT;
(XXVI)
RESEARCH AND DEVELOPMENT EXPENSES;
(XXVII)
COMPLETION OF AN IDENTIFIED SPECIAL PROJECT; AND
(XXVIII)
COMPLETION OF A JOINT VENTURE OR OTHER CORPORATE TRANSACTION.
(B)
PERFORMANCE TARGETS.
PERFORMANCE TARGETS MAY INCLUDE A MINIMUM,
MAXIMUM, TARGET LEVEL AND INTERMEDIATE LEVELS OF PERFORMANCE, WITH THE FINAL
VALUE OF A PERFORMANCE AWARD DETERMINED UNDER THE APPLICABLE PERFORMANCE AWARD
FORMULA BY THE LEVEL ATTAINED DURING THE APPLICABLE PERFORMANCE PERIOD.
A
PERFORMANCE TARGET MAY BE STATED AS AN ABSOLUTE VALUE OR AS A VALUE DETERMINED
RELATIVE TO AN INDEX, BUDGET OR OTHER STANDARD SELECTED BY THE COMMITTEE.
10.5
SETTLEMENT OF PERFORMANCE AWARDS.
(A)
DETERMINATION OF FINAL VALUE.
AS SOON AS PRACTICABLE FOLLOWING
THE COMPLETION OF THE PERFORMANCE PERIOD APPLICABLE TO A PERFORMANCE AWARD, THE
COMMITTEE SHALL CERTIFY IN WRITING THE EXTENT TO WHICH THE APPLICABLE
PERFORMANCE GOALS HAVE BEEN ATTAINED AND THE RESULTING FINAL VALUE OF THE AWARD
EARNED BY THE PARTICIPANT AND TO BE PAID UPON ITS SETTLEMENT IN ACCORDANCE WITH
THE APPLICABLE PERFORMANCE AWARD FORMULA.
(B)
DISCRETIONARY ADJUSTMENT OF AWARD FORMULA.
IN ITS DISCRETION, THE
COMMITTEE MAY, EITHER AT THE TIME IT GRANTS A PERFORMANCE AWARD OR AT ANY TIME
THEREAFTER, PROVIDE FOR THE POSITIVE OR NEGATIVE ADJUSTMENT OF THE PERFORMANCE
AWARD FORMULA APPLICABLE TO A PERFORMANCE AWARD GRANTED TO ANY PARTICIPANT WHO
IS NOT A COVERED EMPLOYEE TO REFLECT SUCH PARTICIPANT'S INDIVIDUAL PERFORMANCE
IN HIS OR HER POSITION WITH THE COMPANY OR SUCH OTHER FACTORS AS THE COMMITTEE
MAY DETERMINE.
IF PERMITTED UNDER A COVERED EMPLOYEE'S AWARD AGREEMENT, THE
COMMITTEE SHALL HAVE THE DISCRETION, ON THE BASIS OF SUCH CRITERIA AS MAY BE
ESTABLISHED BY THE COMMITTEE, TO REDUCE SOME OR ALL OF THE VALUE OF THE
PERFORMANCE AWARD THAT WOULD OTHERWISE BE PAID TO THE COVERED EMPLOYEE UPON ITS
SETTLEMENT NOTWITHSTANDING THE ATTAINMENT OF ANY PERFORMANCE GOAL AND THE
RESULTING VALUE OF THE PERFORMANCE AWARD DETERMINED IN ACCORDANCE WITH THE
PERFORMANCE AWARD FORMULA.
NO SUCH REDUCTION MAY RESULT IN