Document:

Exhibit
10.2

 

TYCO
ELECTRONICS LTD.

2007
STOCK AND INCENTIVE PLAN

(EFFECTIVE
AS OF                , 2007)

 

ARTICLE
I

 

PURPOSE

 

       1.1    Purpose.    The purposes of this Tyco Electronics Ltd.
2007 Stock and Incentive Plan (the “Plan”) are to promote the interests of TycoElectronics
Ltd. (and any successor thereto) by (i) aiding in the recruitment and retention
of Directors and Employees, (ii) providing incentives to such Directors and
Employees by means of performance-related incentives to achieve short-term and
long-term performance goals, (iii) providing Directors and Employees an
opportunity to participate in the growth and financial success of the Company,
and (iv) promoting the growth and success of the Company’s business by aligning
the financial interests of Directors and Employees with that of the other
stockholders of the Company. Toward these objectives, the Plan provides for the
grant of Stock Options, Stock Appreciation Rights, Annual Performance Bonuses,
Long Term Performance Awards and other Stock-Based Awards.

 

       1.2    Effective Date; Shareholder Approval.    The Plan is effective as of the date of the
dividend distribution of Tyco Electronics Ltd. shares to the Tyco International
Ltd. shareholders of record on the distribution date.  The Plan was initially adopted by Tyco
International Ltd., as the the Company’s sole shareholder on December 8, 2006.  This amended and restated Plan was approved
by the Tyco Electronics Ltd. Board of Directors on June 4, 2007 and adopted by
Tyco International Ltd., as the Company’s sole shareholder, on June 4, 2007.

 

ARTICLE
II

DEFINITIONS

 

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

 

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

 

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

 

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

 

       “ Award
” means any form of incentive or performance award granted under the
Plan, whether singly or in combination, to a Participant by the Committee
pursuant to any terms and conditions that the Committee may establish and set
forth in the applicable Award Certificate. Awards granted under the Plan may
consist of:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

1

 

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

 

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

 

       “ Cause
” means misconduct that is willfully or wantonly harmful to the
Company or any of its Subsidiaries, monetarily or otherwise, including, without
limitation, conduct that violates the Company’s Code of ethical Conduct..

 

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

 

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

 

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

 

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

 

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

 

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

 

“ Change in Control Termination ” means a
Participant’s involuntary termination of employment that occurs during the 12
month period immediately following a Change in Control.  For this purpose, a Participant’s involuntary
termination of employment includes only the following:

 

2

 

(a)                            termination of the Participant’s
employment by the Company for any reason other than for Cause, Disability or
death;

 

(b)                           termination of the Participant’s
employment by the Participant after one of the following events, provided that
the Participant’s termination of employment occurs within one hundred and
eighty (180) days after the occurrence of any such event:

i.      the Company (1) assigns or causes to be
assigned to the Participant duties inconsistent in any material respect with
his or her position as in effect immediately prior to the Change in Control;
(2) makes or causes to be made any material adverse change in the Participant’s
position, authority, duties or responsibilities; or (3) takes or causes to be
taken any other action which, in the reasonable judgment of the Participant,
would cause him or her to violate his or her ethical or professional
obligations (after written notice of such judgment has been provided by the
Participant to the Company and the Company has been given a 15-day period
within which to cure such action), or which results in a significant diminution
in such position, authority, duties or responsibilities; or

ii.   the Company, without the Participant’s
consent, (1) requires the Participant to relocate to a principal place of
employment more than fifty (50) miles from his or her existing place of
employment; or (2) reduces the Participant’s base salary, annual bonus, or
retirement, welfare, stock incentive, perquisite (if any) and other benefits
taken as a whole.

 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

       “ Dividend
Equivalent ” means an amount equal to the cash dividend or the Fair
Market Value of the stock

 

3

 

dividend that would be
paid on each Share underlying an Award if the Share were duly issued and
outstanding on the date on which the dividend is payable.

 

       “ Effective
Date ” means                     , 2007, the the date of the
dividend distribution of Tyco Electronics Ltd. shares to the Tyco International
Ltd. shareholders of record on the distribution date.

 

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

 

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

 

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

 

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

 

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

 

       “ GAAP
” means United States generally accepted accounting principles.

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

       “ Performance
Measure ” means, with respect to any Annual Performance Bonus or
Long Term Performance Award, the business criteria selected by the Committee to
measure the level of performance of the Company during the Performance Cycle.
The Committee may select as the Performance Measure for a Performance Cycle

 

4

 

any one or combination of
the following Company measures, as interpreted by the Committee, which measures
(to the extent applicable) will be determined in accordance with GAAP:

 

        (a) 
Net operating profit after taxes;

 

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

 

        (c) 
Return on invested capital;

 

        (d) 
Return on assets or net assets;

 

        (e) 
Total shareholder return;

 

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

 

        (g) 
Earnings before income taxes;

 

        (h) 
Earnings per Share;

 

         (i) 
Net income;

 

         (j) 
Free cash flow;

 

        (k) 
Free cash flow per Share;

 

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

 

       (m) 
Revenue growth.

 

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

 

       “ Plan
” means the Tyco Electronics Ltd. 2007 Stock and Incentive Plan, as
it may be amended from time to time.

 

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

 

 

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

 

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

 

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

 

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

 

       “ Share
” means a share of Common Stock.

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

 

 

 

 

ARTICLE
III

ADMINISTRATION

 

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

 

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

 

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

 

        (b) 
Prescribe the rules and regulations that it deems necessary for the
proper operation and administration of the Plan, and amend or rescind any
existing rules or regulations relating to the Plan;

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE
IV

AWARDS

 

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

 

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

 

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

 

7

 

subject to the provisions
below:

 

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

 

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

 

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

 

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

 

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

 

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

 

8

 

 

       (iv) 
Upon the Termination of Employment of a Participant that does not meet
the requirements of paragraphs (ii) or (iii) above, any unvested Stock Options
or Stock Appreciation Rights will be forfeited unless the Award Certificate
provides otherwise. Any Stock Options or Stock Appreciation Rights that are
vested as of such Termination of Employment will lapse, and will not thereafter
be exercisable, upon the earlier of (A) their original expiration date or (B)
the date that is ninety (90) days after the date of such Termination of
Employment unless the Award Certificate provides otherwise.

 

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

 

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

 

 

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

 

       (i)   
Delivering a properly executed exercise notice to the Company or its
agent, together with irrevocable instructions to a broker to deliver to the
Company, within the typical settlement cycle for the sale of equity securities
on the relevant trading market (or otherwise in accordance with the provisions
of Regulation T issued by the Federal Reserve Board), the amount of sale
proceeds with respect to the portion of the Shares to be acquired having a Fair
Market Value on the date of exercise equal to the sum of the applicable portion
of the Exercise Price being so paid;

 

       (ii)   
Tendering (actually or by attestation) to the Company previously
acquired Shares that have been held by the Participant for at least six months,
subject to paragraph (iv), and that have a Fair Market Value on the day prior
to the date of exercise equal to the applicable portion of the Exercise Price
being so paid, provided that the Board has specifically approved the repurchase
of such Shares (unless such approval is not required by the terms of the
bye-laws of the Company) and the Committee has determined that, as of the date
of repurchase, the Company is, and after the repurchase will continue to be,
able to pay its liabilities as they become due; or

 

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

 

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

 

       (e)    Incentive Stock Options.    Incentive Stock Options granted under the
Plan will be subject to the following

 

9

 

additional conditions,
limitations and restrictions:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

       (c)    Performance Measures; Targets; Award
Criteria.

 

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

 

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

 

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

 

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

 

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

 

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

 

 

 

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

 

11

 

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

 

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

 

       (c)    Performance Measures; Targets; Award
Criteria.

 

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

 

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

 

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

 

             (iv)  
With respect to Employees who are not Key Employees, the Committee may establish,
in its discretion,  performance criteria
other than the Performance Measures  that
will be applicable for the Performance Cycle.

 

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

 

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

 

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

 

12

 

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

 

       (g)    Retirement.    If a Participant would be entitled to a Long
Term Performance Award but for the fact that the Participant’s employment with
the Company terminated prior to the end of the Performance Cycle, the
Participant may, in the Committee’s discretion, receive a Long Term Performance
Award, pro rated for the portion of the Performance Cycle that the Participant
completed and payable at the same time after the end of the Performance Cycle
that payments to other Long Term Performance Award recipients are made, if the Participant
has attained age 55 and the sum of the Participant’s age and years of service
with the Company was 60 or higher at the time of Termination of Employment or
if the Participant retired under a Normal Retirement.

 

 

 

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

 

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

 

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

 

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

 

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

 

       (e)    Dividends and Dividend Equivalents.    At the discretion of the Committee,
dividends issued on Shares may be paid immediately or withheld and deferred in
the Participant’s account. In the event of a payment of

 

13

 

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

 

       4.7    Director Awards.

 

       (a)  
As of the first day of each fiscal year of the Company (or upon a
Director’s commencement of service as a non-employee Director of the Company),
the Committee will grant Deferred Stock Units to each Director in such an
amount as the Board, in its discretion, may approve in advance. Each such
Deferred Stock Unit will vest as determined by the Committee and set forth in
the Award Certificate and will be paid in Shares within 30 days following the
recipient’s Termination of Directorship. Dividend Equivalents or additional
Deferred Stock Units will be credited to each Director’s account when dividends
are paid on Common Stock to the shareholders, and will be paid to the Director
at the same time that the Deferred Stock Units are paid to the Director

 

       (b)  
The Committee may, in its discretion, grant Stock Options, Stock
Appreciation Rights and other Stock-Based Awards to Directors.

 

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

 

       4.9    Limit on Individual Grants.    Subject to Sections 5.1 and 5.3, no Employee
may be granted more than 6 million Shares over any calendar year pursuant to
Awards of Stock Options, Stock Appreciation Rights and performance-based
Restricted Stock and Restricted Units, except that an incentive Award of no
more than 10 million Shares may be made pursuant to Stock Options, Stock
Appreciation Rights and performance-based Restricted Stock and Restricted Units
to any person who has been hired within the calendar year as a Key Employee.
The maximum amount that may be paid in cash or Shares pursuant to Annual Performance
Bonuses or Long Term Performance Awards paid in Performance Units to any one
Employee is $10 million (U.S.) for any Performance Cycle of 12 months. For any
longer Performance Cycle, this maximum will be adjusted proportionally.

 

       4.10    Termination for Cause.    Notwithstanding anything to the contrary
herein, if a Participant incurs a Termination of Directorship or Termination of
Employment for Cause, then all Stock Options, Stock Appreciation Rights, Annual
Performance Bonuses, Long Term Performance Awards, Restricted Units, Restricted
Stock and other Stock-Based Awards will immediately be cancelled. The exercise
of any Stock Option or Stock Appreciation Right or the payment of any Award may
be delayed, in the Committee’s discretion, in the event that a potential
termination for Cause is pending.  If a
Participant incurs a Termination of Employment for Cause, or the Company
becomes aware (after the Participant’s Termination of Employment) of conduct on
the part of the Participant that would be grounds for a Termination of
Employment for Cause, then the Participant will be required to deliver to the
Company (i) Shares (or, in the discretion of the Committee, cash) in an amount
that is equal in value to the amount of any profit the Participant realized
upon the exercise of an Option during the period beginning six (6) months prior
to the Participant’s Termination of Employment for Cause and ending on the two
(2) year anniversary of such Termination of Employment; and (ii) the number of
Shares (or, in the discretion of the Committee, the cash value of said shares)
the Participant received for Restricted Shares or Restricted Units that vested
during the period described in (i) above.

 

 

14

 

ARTICLE
V

SHARES
SUBJECT TO THE PLAN; ADJUSTMENTS

 

       5.1    Shares Available.    The Shares issuable under the Plan will be
authorized but unissued Shares, and, to the extent permissible under applicable
law, Shares acquired by the Company, any Subsidiary or any other person or
entity designated by the Company. The total number of Shares with respect to
which Awards may be issued under the Plan may equal, but may not exceed, five
percent (5%) of the Shares outstanding as of the Effective Date, and subject to
adjustment in accordance with Section 5.3; provided that when Shares are issued
pursuant to a grant of Restricted Stock, Restricted Units, Deferred Stock Units,
 Performance Units or as payment of an
Annual Performance Bonus or other Stock-Based Award, the total number of Shares
remaining available for grant will be decreased by a margin of at least 1.8 per
Share issued. No more than 10 million Shares of the total Shares issuable under
the Plan may be available for grant in the form of Incentive Stock Options.

 

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

 

       (a)  
Shares related to Awards paid in cash;

 

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

 

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

 

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

 

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

 

       5.3    Adjustments.    In the event of a change in the outstanding
Shares by reason of a stock split, reverse stock split, dividend or other
distribution (whether in the form of cash, Shares, other securities or other
property), extraordinary cash dividend, recapitalization, merger,
consolidation, split-up, spin-off, reorganization, combination, repurchase or
exchange of Shares or other securities or similar corporate transaction or
event, the Committee shall make an appropriate adjustment to prevent dilution
or enlargement of the benefits or potential benefits intended to be made
available under the Plan .  Any
adjustment made by the Committee under this Section 5.3 will be conclusive and
binding for all purposes under the Plan.

 

       5.4    Change in Control.

 

           (a)
   Unless otherwise provided under the terms of
an applicable Award Certificate, (i) all outstanding Stock Options and Stock
Appreciation Rights will become exercisable as of the effective date of a Participant’s
Change in Control Termination if the Awards are not otherwise vested, and all
conditions will be waived with respect to outstanding Restricted Stock , Restricted
Units and other Stock-Based Awards (other than Long Term Performance Awards)
and Deferred Stock Units, and (ii) each Participant who has been granted an
Annual Performance Bonus or Long Term Performance Award that is outstanding as
of the date of such Participant’s Change in Control Termination will be deemed
to have achieved a level of performance, as of the Change in Control
Termination, that would cause all (100%) of the Participant’s Target Amounts to
become payable and all restrictions on the Participant’s Restricted Units and
Shares of Restricted Stock to lapse.  Unless
the Committee determines otherwise in its discretion (either when the award is
granted or any time thereafter), in the event that Awards outstanding as of the
date of a Change in Control that are payable in shares of Company Common Stock will
not be substituted with comparable awards payable or redeemable in shares of
publicly-traded stock after the Change in Control, each such outstanding Award
(i) will become fully vested (at target, where applicable) immediately prior to
the Change in Control and (ii) each such Award that is a Stock Option will be
settled in cash, without the Participant’s consent, for an amount equal to the
amount that could have been attained upon the exercise of such Award
immediately prior to the Change in Control had such Award been exercisable or
payable at such time.

 

          (b) 
In addition to the such other actions described in Secion 5.4(a), in the
event of a Change in Control the Committee may take any one or more of the
following actions with respect to any or all outstanding Awards,

 

15

 

without the consent of
the Participant: (i) the Committee may determine that outstanding Stock Options
and Stock Appreciation Rights shall be fully exercisable, and restrictions on
Restricted Stock, Restricted Units, Deferred Stock Units and other Stock-Based
Awards shall lapse, as of the date of the Change in Control or such other time
(prior to a Participant’s Change in Control Termination) as the Committee
determines, (ii) the Committee may require that a Participant surrender their
outstanding Stock Options and Stock Appreciation Rights in exchange for one or
more payments by the Company, in cash or Common Stock as determined by the
Committee, in an amount equal to the amount by which the then Fair Market Value
of the shares of Common Stock subject to the Participant’s unexercised Stock
Options and Stock Appreciation Rights exceeds the exercise price, if any, and
on such terms as the Committee determines, (iii) after giving Participants an
opportunity to exercise their outstanding Stock Options and Stock Appreciation
Rights, the Committee may terminate any or all unexercised Stock Options and
Stock Appreciation Rights at such time as the Committee deems appropriate, (iv)
the Committee may determine that Annual Performance Bonuses and/or Long Term
Performance Awards will be paid out at their target level, in cash or Common
Stock as determined by the Committee  ,
or (v) the Committee may determine that Awards that remain outstanding after
the Change in Control shall be converted to similar grants of, or assumed by,
the surviving corporation (or a parent or subsidiary of the surviving
corporation or successor).  Such
acceleration, surrender, termination, settlement or conversion shall take place
as of the date of the Change in Control or such other date as the Committee may
specify.  The Committee may specify how an
Award will be treated in the event of a Change in Control either when the Award
is granted or at any time thereafter.

 

 

 

 

 

 

 

 

       5.5    Fractional Shares.    No fractional Shares will be issued under
the Plan.  Except as otherwise provided
in Section 4.5(e), if a Participant acquires the right to receive a fractional
Share under the Plan, the Participant will receive, in lieu of the fractional
Share, a full Share as of the date of settlement, unless otherwise provided by
the Committee.

 

ARTICLE
VI

AMENDMENT
AND TERMINATION

 

       6.1    Amendment.    The Plan may be amended at any time and from
time to time by the Board without the approval of stockholders of the Company,
except that no material revision to the terms of the Plan will be effective
until the amendment is approved by the stockholders of the Company. A revision
is “material” for this purpose if, among other changes, it materially increases
the number of Shares that may be issued under the Plan (other than an increase
pursuant to Section 5.3 of the Plan), expands the types of Awards available
under the Plan, materially expands the class of persons eligible to receive
Awards under the Plan, materially extends the term of the Plan, materially
decreases the Exercise Price at which Stock Options or Stock Appreciation
Rights may be granted, reduces the Exercise Price of outstanding Stock Options
or Stock Appreciation Rights, or results in the replacement of outstanding
Stock Options and Stock Appreciation Rights with new Awards that have an Exercise
Price that is lower than the Exercise Price of the replaced Stock Options and
Stock Appreciation Rights.  No amendment
of the Plan made without the Participant’s written consent may adversely affect
any right of a Participant with respect to an outstanding Award.

 

       6.2    Termination.    The Plan will terminate upon the earlier of
the following dates or events to occur:

 

       (a)   
the adoption of a resolution of the Board terminating the Plan; or

 

       (b)   
the day before the 10th anniversary of the adoption of the Plan by the
Company’s shareholder as described in Section 1.2.

 

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

 

16

 

ARTICLE
VII

GENERAL
PROVISIONS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

       (a)    Stock Options and Stock Appreciation Rights.
   As a condition to the
delivery of Shares pursuant to the exercise of a Stock Option or Stock
Appreciation Right, the Committee may require that the Participant, at the time
of exercise, pay to the Company by cash, certified check, bank draft, wire
transfer or postal or express money order an amount sufficient to satisfy any
applicable tax withholding obligations. The Committee may also, in its
discretion, accept payment of tax withholding obligations through any of the
Exercise Price payment methods described in Section 4.3(d).

 

       (b)    Other Awards Payable in Shares.    The Participant shall satisfy the
Participant’s tax withholding obligations arising in connection with the
release of restrictions on Restricted Units, Restricted Stock and other
Stock-Based Awards by payment to the Company in cash or by certified check,
bank draft, wire transfer or postal or express money order, provided that the
format is approved by the Company or a designated third-party

 

17

 

administrator. However,
subject to any requirements of applicable law, the Company may also satisfy the
Participant’s tax withholding obligations by other methods, including selling
or withholding Shares that would otherwise be available for delivery, provided
that the Board or the Committee has specifically approved such payment method
in advance.

 

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

 

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

 

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

 

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

 

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

 

       7.7    Indemnification of Committee.    The Company will indemnify, to the fullest
extent permitted by law, each person made or threatened to be made a party to
any civil or criminal action or proceeding by reason of the fact that the
person, or the executor or administrator of the person’s estate, is or was a
member of the Committee or a delegate of the Committee.

 

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

 

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

 

       7.10    Securities Law Compliance.    Awards under the Plan are intended to
satisfy the requirements of Rule 16b-3

 

18

 

under the Exchange Act.
If any provision of this Plan or any grant of an Award would otherwise
frustrate or conflict with this intent, that provision will be interpreted and
deemed amended so as to avoid conflict. No Participant will be entitled to a
grant, exercise, transfer or payment of any Award if the grant, exercise,
transfer or payment would violate the provisions of the Sarbanes-Oxley Act of
2002 or any other applicable law.

 

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

 

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

 

19Exhibit
10.3

 

EMPLOYMENT CONTRACT

(effective starting October 1, 1999)

 

between

 

TYCO
Electronics Logistics AG, AMPerestrasse 3, 9328 Steinach,

 

and

 

Dr. Jürgen
W. Gromer, Im Tiefenweg 44, D-64625 Bensheim-Auerbach

 

1.     Function and management of
Tyco Electronics Logistics AG

 

1.1           Tyco
Electronics Logistics AG (hereinafter referred to as the “Company”) was
established in Steinach on August 20, 1999, following the acquisition of
the AMP Group by the Tyco Group.

 

The Company is in the
service of the worldwide Tyco Group in the areas of electronic data processing,
logistics, distribution, finance, transportation and the procurement of goods
and services of all kinds. The scope of the Company’s business activity has
increased substantially in the interim period. With the conclusion of
manufacturing and distribution agreements with Tyco companies all over the
world, the concentration of important patent rights within the Company and the
parallel expansion of the activities of the Tyco Electronics Division, an appropriate
strengthening of the management structure of the Company is necessary for
responsible and efficient management.

 

In addition, the top
management of Tyco Electronics wants to be able to exert direct influence
through deployment in and management of the Company’s most important bodies.

 

1.2           The
Company’s management was significantly strengthened and expanded, first
effective October 1, 1999, and then effective April 1, 2000.
Management work was structured and organized by means of the appointment of a management
team chairman in the person of the management board delegate and the naming of
a managing board member.

 

1.3           The
Company’s management board was also expanded and strengthened significantly
from a personnel standpoint. The now three-person management board is headed by
a president. The management board delegate combines the functions of the
corporate bodies of management board and management team. The previously sole
management board member specifically assumes the formal preparation of management
board matters and management of local functions in the capacity of “managing”
management board member.

 

1.4           In a
revision of the bylaws dated October 19, 1995, the management board
intends to reorganize the functions and competencies of the corporate bodies,
as well as their work method, in the near future, including a reorganization
from a formal standpoint. It is necessary to note in this regard that, without
exception, the management board members and management team members also have
to perform functions in other companies domestically and abroad. The frequent
absence from Steinach which is necessarily associated therewith requires a
limitation of the number of meetings held locally and the logical use of all
technical and electronic aides (particularly intranet and Internet).

 

2.     Position and function of J.
W. Gromer

 

2.1           Dr. J.
W. Gromer has been the general manager of Tyco Electronics (Schweiz) AG
(formerly AMP [Schweiz] AG), Steinach, since December 17, 1991. He
subsequently assumed the management functions for Tyco Electronics (Schweiz)
HFI AG and Tyco Electronics (Schweiz) Productions AG as well. Dr. J. W.
Gromer continues to perform these functions.

 

 

2.2           Starting
October 1, 1999, Dr. J. W. Gromer took over senior management of the
Company, and chairmanship of the expanded management team of Tyco Electronics
Logistics AG was delegated to him effective April 1, 2000. Dr. J. W.
Gromer was also elected to the management board and designated as the
management board president.

 

Finally, he assumed the function
of management board delegate.

 

2.3           The
duties of Dr. J. W. Gromer as management board president, management board
delegate and management team chairman arise from the bylaws and additional
resolutions of the Company’s management board, as well as statutory law and the
articles of incorporation.

 

2.4           Dr. J.
W. Gromer is required to perform the duties assigned to him in accordance with
the applicable statutes and in accordance with the Company’s articles of
incorporation and bylaws.

 

2.5           Dr. J.
W. Gromer is granted individual signatory authority.

 

3.     Contract term

 

3.1           The
employment relationship began on October 1, 1999. It was entered into for
an indefinite term and may be terminated by either party upon compliance with a
notice period of six months effective at the end of the relevant calendar
month.

 

3.2           Both
parties shall have the right of early termination for good cause.

 

3.3           Termination
must be in written form. The time of the other party’s receipt of notice of
termination shall govern for purposes of compliance with the termination notice
period.

 

4.     Compensation

 

4.1           In
exchange for his activities, first as general manager and then as management
board president, management board member, management board delegate and
chairman of the Company’s management team, Dr. J. W. Gromer shall receive
annual remuneration which shall be set by the parties by amicable agreement at
the beginning of the fiscal year. If no agreement is reached, the previous
remuneration amount shall continue to apply.

 

4.2           Dr. J.
W. Gromer shall have a right to reimbursement of expenses. The provisions of
the Company’s General Employment Terms shall be applicable.

 

5.     Social security charges

 

        The Company’s General Employment Terms shall
be applicable with respect to social security charges. In particular, it shall
be necessary to take into account the fact that Dr. J. W. Gromer is
domiciled in Germany and satisfies the Social Security charged obligations
there.

 

6.     Vacation, overtime

 

        Dr. J. W. Gromer shall have a right to
four weeks vacation each fiscal year. The needs of the Company shall be taken
into consideration in scheduling of vacation. Vacation which is not taken in
the course of a calendar year should be taken by no later than the following
calendar year; otherwise the claim shall be forfeited.

 

7.     Obligations specific to Tyco
Electronics

 

        Dr. J. W. Gromer shall be obligated to
respect the usual additional rules at Tyco Electronics (non-competition
agreement, confidentiality agreement, intellectual property agreement). He
shall sign separate documents in this regard.

 

2

 

8.     Security clauses

 

8.1           The
assignment of claims arising from this contract shall be barred.

 

8.2           Dr. J.
W. Gromer shall be obligated at the time of his departure from the Company to
surrender to the Company all records, minutes, customer lists and other
documents which he has obtained in connection with his activities on behalf of
the Company.

 

9.     General

 

9.1           Any
modification or amendment to this contract must be in written form in order to
be valid.

 

9.2           If a
provision of this contract is or should become invalid, the validity of the
remaining provisions shall not be affected thereby. The invalid provisions
shall be replaced by a provision which, weighing the parties’ interests, the
two parties would have concluded had they been aware of the invalidity.

 

9.3           This
contract shall be governed by Swiss law.

 

9.4           The
place performance in place of venue for all disputes shall be the Company’s
domicile in Steinach.

 

 

	
  Steinach,
  6/19/2000

  	
  Tyco
  Electronics Logistics AG

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  Urban Slongo

  	
   

  	
  /s/
  Jürg Frischknecht

  	
   

  
	
   

  	
  Dr.
  Urban Slongo

  	
  Jürg
  Frischknecht

  
	
   

  	
  Management
  board member

  	
  Management
  board member

  
	
  Gensheim-Auerbach,
  6/7/2000

  	
   

  	
   

  
	
   

  	
  /s/
  Jürgen W. Gromer

  	
   

  	
   

  
	
   

  	
  Dr.
  Jürgen W. Gromer

  	
   

  
						

 

3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}]]