Document:

Settlement Agreement and General Release

 Exhibit 10.41 
  
 SETTLEMENT AGREEMENT AND GENERAL RELEASE 
  
 This Settlement Agreement and General Release (hereinafter “Agreement”) is entered into as of this 26th day of
September, 2003 (“Effective Date”), by and between Richard Freeman (hereinafter “Employee”) and ChipPAC, Inc. (hereinafter the “Company”). 
  
 WHEREAS, Employee and Company have agreed that Employee’s active duties at the Company will be discontinued no later
than November 30, 2003; and 
  
 WHEREAS, Employee and Company have
agreed that Employee’s employment with the Company will terminate on November 30, 2003; and 
  
 WHEREAS, Company desires to provide certain benefits to Employee in connection with the termination of Employee’s employment on the terms specified
in the Employment Agreement entered into between Employee and the Company on October 4, 2000 and detailed herein; and 
  
 WHEREAS, Company and Employee acknowledge that the benefits specified herein are greater than Employee would otherwise be entitled to upon termination of
his employment; and 
  
 WHEREAS, Company and Employee desire to
settle fully and finally all differences between them and to mutually release each other; 
  
 NOW, THEREFORE, in consideration of the mutual covenants and promises set forth herein, Employee and Company agree as follows: 
  

1.    Employee’s last day of employment with Company will be November 30, 2003. From September 26, 2003 through a date to be
determined by the CEO (“the Transition Date”), but no later than November 30, 2003, Employee will assist with the transition of his duties to others. From the Transition Date through November 30, 2003, Employee will be relieved of his
regular duties at the Company, but will be available to provide support to the Company as needed upon reasonable notice at the direction of the CEO. Employee shall resign his title of Senior Vice President and Chief Operating Officer at the
Transition Date. The Company’s internal records shall reflect that Employee’s employment terminated as a result of voluntary resignation on November 30, 2003 (the “Termination Date”). 
  
 2.    From and after the Transition Date, as
consideration for this Agreement, and in lieu of any other severance or other payment, ChipPAC will continue to pay Employee’s base salary (at current levels and less any withholdings required by 

 law) for an additional period of eight months. If during this eight month period, Employee accepts other employment,
Employee shall immediately so notify the Company’s Vice President, Human Resources, and any further payments to be made under this paragraph shall be reduced by the amount of any compensation so received by Employee during this eight month
period. Employee agrees that during this eight month period, Employee will not engage in employment with, or provide consulting services for, any competitor of the Company, and will not hire or solicit any Company employee; if Employee breaches this
provision, any remaining salary payments will immediately cease and Company may seek damages and an injunction against Employee. 
  
 3.    Employee will be eligible to receive a STI bonus payment for 2003 prorated for the days of the performance period for which
Employee would have otherwise been eligible, up to the Transition Date, and provided the company has achieved its targets such that a bonus is paid out to other eligible participants for that performance period, but will not be eligible for bonus
payments thereafter. Any payment will be subject to the terms of the plan and goals achieved, as measured by the CEO and approved by the Board of Directors. Any award will be paid at the same time other employees receive their payments. 

 
 4.    Employee’s existing stock options will
continue to vest through the Termination Date, in accordance with the terms of the relevant stock option agreements and plan provisions. Employee shall have the right to exercise vested stock options in accordance with the relevant stock option
agreements and plan provisions. The exercise period specified in the stock option agreements upon termination of employment will run from the Termination Date, excluding any trading blackout periods. Employee agrees that he is subject to the
Company’s trading blackout periods because of the position he has held as an Executive Officer of the Company, as defined under Section 16 of the Securities Exchange Act of 1934. Employee agrees that pursuant to the Company’s trading
blackout policy, unless with permission from the General Counsel in an open window period, he will not sell the Company’s stock, or exercise and sell stock options of the Company, earlier than two business days following the Company’s Q4
2003 earnings release. Employee acknowledges that the Company may set the trading blackout period within its sole discretion. The Company agrees to notify Employee in writing of any alteration to this trading blackout period or any other trading
blackout period or open window period potentially affecting the exercise period of Employee’s stock options. The Company agrees to provide such notification prior to the effective start date of the trading blackout period. Employee agrees to
notify the Company’s General Counsel within twenty-four (24) hours of any trade made within six (6) months of his resignation from the position of Senior Vice President and Chief Operating Officer by, or on behalf of, Employee, his immediate
family or anyone under his control, in order to allow the Company to fulfill the relevant reporting requirements on Employee’s behalf. 
  
 5.    Employee’s vacation accrual shall cease on the Transition Date and any vacation accrued as of this date but remaining
unused or unpaid will be paid to Employee by this date. Employee’s medical and dental coverage shall terminate on November 30, 2003. Thereafter, Employee is responsible for maintaining medical and 

 dental coverage under COBRA or otherwise. Life insurance, accidental death, disability and dependent life insurance
coverages shall end on the Transition Date. Employee may convert the life insurance coverage to single policy coverage within thirty (30) days thereafter. Any other benefits due Employee upon termination of employment under any other plan, program
or arrangement that Company makes generally available to its employees shall be determined by the terms of such plan or program. 
  
 6.    Employee, on behalf of himself, his representatives, heirs, successors, and assigns does hereby completely release and forever
discharge Company and all other affiliated or related companies or divisions, its and their present and former officers, directors, shareholders, agents, employees, attorneys, successors, and assigns (hereinafter collectively “Company”)
from all claims, rights, demands, actions, obligations, liabilities and causes of action of any kind or nature whatsoever, known or unknown, which Employee may now have or has ever had against Company, based upon any act or omission by Company prior
to the date of execution of this Agreement by Employee, including, but not limited to: (1) any and all claims for damages, declaratory or injunctive relief or attorneys’ fees, arising from or in any way related to his employment at Company, or
the termination thereof, including all claims for compensation, bonus (including any ChipPAC incentive bonus or stock program), benefits or severance; (2) any charges or claims arising under any federal, state or local law, statute or regulation,
including without limitation rights or claims of age or other discrimination Employee may have under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection
Act, the California Fair Employment and Housing Act, the California Labor Code, or Claims for disability, including claims under the Americans with Disabilities Act, or retaliation in violation of any applicable law, rule, regulation or order; (3)
any claims of breach of contract (express or implied, in fact or in law), breach of the covenant of good faith and fair dealing, estoppel, breach of duty, fraud, deceit, negligent or intentional misrepresentation, negligent or intentional
interference with contract or prospective economic advantage, violation of public policy, defamation, intentional or negligent infliction of emotional distress or other tortious conduct of any kind; (4) all claims filed or caused to be filed in any
court of law or before any state or federal administrative agency before execution of this Agreement; and (5) all claims to attorneys’ fees, however incurred, including, without limitation, fees incurred in connection with any released claims
and review of this Agreement; provided, however, that this paragraph does not waive (a) any indemnification rights Employee may have whether as an employee or an officer, pursuant to Labor Code Section 2802, Company Certificate of
Incorporation or By-Laws, Indemnification Agreement or Company policy; (b) any vested rights or any workers’ compensation claims (the settlement of which would require approval by the California Workers’ Compensation Appeals Board); or (c)
any claims arising from acts or omissions occurring after the date of execution of this Agreement. 
  
 7.    Employee acknowledges that by entering into this Agreement he is specifically releasing any claims for age discrimination.

  
 8.    It is understood and agreed that the
preceding Paragraph is a full and 

 final Release covering all known as well as all unknown or unanticipated injuries, debts, claims or damages including,
without limitation, those arising from or in any way related to Employee’s employment by Company or the termination thereof. Therefore, Employee waives any and all rights or benefits which he may now have, or in the future may have, under the
terms of Section 1542 of the California Civil Code which provides as follows: 
  
 A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement
with the debtor. 
  
 9.    Employee hereby
agrees and promises that he will not initiate or cause to be initiated against Company any claim, charge, complaint, demand, suit, action, cause of action, investigation, audit, compliance review or proceeding of any kind, or participate in same,
individually or as a representative or member of a class, under any contract (express or implied), law, statute or regulation, federal, state or local, pertaining in any manner whatsoever to the claims, rights, demands, actions, obligations,
liabilities, and causes of action herein released, including, without limitation, those relating to his employment by Company or the termination thereof. 
  
 10.    Employee acknowledges that he has complied with and will continue to comply with his obligations to Company under applicable
laws and contract provisions. Employee agrees that he will hold in strictest confidence, and not use or disclose to any person, firm or corporation without prior express written authorization of the President and CEO of Company, any information,
matter or thing of a proprietary or confidential nature, whether or not it is in written, permanent or intangible form (collectively, the Proprietary Information) pertaining to any business of Company. Employee specifically agrees that he will not
utilize any information developed during or in connection with his employment at Company in the filing or prosecution of any patent application or patent in the name of any person or entity other than Company. Such Proprietary Information includes,
but is not limited to, trade secrets, confidential knowledge, data or other proprietary information relating to Company’s products, processes, know-how, designs, formulas, development or experimental work, computer programs, databases, other
original works or authorship, financial or other business information, customer lists, other customer information, or employee information. These obligations with respect to Proprietary Information extend to such information belonging to third
parties who may have disclosed such information to Employee as a result of his status as an employee of Company. Employee agrees that he will continue to comply with the Employee Confidential Information and Inventions Agreement or the Proprietary
Information and Inventions Agreement signed by him. Employee agrees to return to Company by the Termination Date all Company property, credit cards, documents or other materials or equipment that have been furnished to him by Company, including any
and all records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches or other documents or property, or reproductions of any aforementioned items belonging to Company. 

 11.    Employee agrees not to defame, disparage or criticize Company or its
shareholders, directors, officers, employees or business or employment practices at any time, or interfere with the same. In addition, Employee agrees not to engage in any conduct that Employee knows or reasonably should know will damage the
reputation of Company or cause third parties to view Company in a less favorable light. 
  
 12.    It is understood and agreed that the furnishing of the consideration for this Agreement shall not be deemed or construed as an admission of liability or responsibility by Company for any
purpose. Employee and Company agree that this Agreement is being entered into solely for the purpose of avoiding further expense and inconvenience from defending against any claims, rights, demands, actions, obligations, liabilities and causes of
action. Company expressly denies liability for any and all claims. 
  
 13.    Employee understands and agrees that this Agreement and each and every provision hereof shall be treated by him as confidential and shall not be disclosed directly or indirectly by Employee to any other person,
firm, organization or other entity, for any reason, at any time without the prior written consent of Company, unless and until its disclosure is required by law. It shall not constitute a breach of this Agreement for Employee to disclose the terms
hereof to his immediate family and to his attorney and his financial advisor and/or accountant; provided, however, that Employee shall be obliged to use his best efforts to assure that such persons do not disclose this Agreement or any provision
thereof. 
  
 14.    In the event that Employee
breaches any term of this Agreement, Company shall have the right to recover consideration paid or provided hereunder. 
  
 15.    Should any provision of this Agreement be held invalid or illegal, such illegality shall not invalidate the entire Agreement.
Rather, this Agreement shall be construed as if it did not contain the illegal part, and the rights and obligations of the parties shall be construed and enforced accordingly. 
  
 16.    No failure to exercise and no delay in exercising any right, remedy or power under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy or power under this Agreement preclude any other or further exercise thereof, or the exercise of any right, remedy or power provided for herein or by
law or in equity. 
  
 17.    This Agreement
shall not be amended or modified in any manner except upon written agreement by the parties. 
  
 18.    With respect to any matters under this Agreement that are governed by state law, the parties agree that this Agreement shall be construed and governed 

 by the laws of the State of California. The language of all parts of this Agreement shall in all cases be construed as a
whole, according to its fair meaning, and not strictly for or against any Party. 
  
 19.    Any contractual claims that Employee may have against Company, or which Company may have against Employee, in any way related to the subject matter, interpretation, application or alleged
breach of this Agreement (“Arbitrable Claims”) shall be resolved by arbitration in Santa Clara County, California. Arbitration shall be final and binding upon the parties and shall be the exclusive remedy for all Arbitrable Claims.
Arbitration of Arbitrable Claims shall be in accordance with the national Rules for the Resolution of Employment Disputes of the American Arbitration Association, as amended, and as augmented by this Agreement. Either party shall have the right to
demand that the Arbitrator bifurcate the issues of the validity and enforceability of this Agreement for decision prior to consideration of any other issues raised. Either party may bring an action in court to compel arbitration under this Release
and to enforce the arbitration award. Notwithstanding the foregoing, Company may enforce in court, without prior resort to arbitration any provision of the Release regarding confidential information, inventions, or covenants not to compete or not to
sue. THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JURY WITH REGARD TO ARBITRABLE CLAIMS. 
  
 20.    This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. 
  
 I HAVE CAREFULLY READ
AND UNDERSTAND THIS SETTLEMENT AGREEMENT AND GENERAL RELEASE AND REALIZE THAT IT DEALS WITH MY LEGAL RIGHTS, INCLUDING MY LEGAL RIGHTS TO PURSUE A CLAIM OF AGE DISCRIMINATION. I HAVE HAD AN ADEQUATE OPPORTUNITY TO CONSIDER THIS AGREEMENT. I AM FULLY
AWARE OF AND UNDERSTAND ITS CONTENTS AND ITS LEGAL EFFECT, THAT THE PRECEDING PARAGRAPHS RECITE THE SOLE CONSIDERATION FOR THIS AGREEMENT, AND THAT ALL AGREEMENTS AND UNDERSTANDINGS BETWEEN ME AND COMPANY ARE INCLUDED HEREIN. 
  
 I HAVE BEEN ENCOURAGED TO CONSULT AN ATTORNEY OF MY OWN CHOICE IN THE
NEGOTIATION OF THIS AGREEMENT AND BEFORE EXECUTING THIS AGREEMENT AND HAVE BEEN GIVEN ADEQUATE OPPORTUNITY TO REVIEW IT AND TO CONSULT WITH WHOMEVER I WISH REGARDING ITS PROVISIONS. 
  
 I RECEIVED THIS SETTLEMENT AGREEMENT AND GENERAL RELEASE ON SEPTEMBER 26, 2003 AND UNDERSTAND THAT I HAVE BEEN GIVEN UNTIL
THE CLOSE OF BUSINESS ON OCTOBER 31, 2003 TO DECIDE WHETHER TO SIGN THIS AGREEMENT. I UNDERSTAND THAT I WILL HAVE AN ADDITIONAL SEVEN DAYS FROM THE DATE OF SIGNING THIS AGREEMENT 

 DURING WHICH TO REVOKE IT, BY HAND DELIVERING OR FAXING WRITTEN NOTICE OF REVOCATION TO THE COMPANY’S GENERAL
COUNSEL. IF I DO NOT REVOKE IT, THE AGREEMENT WILL BECOME FINAL AND BINDING. IF I SIGN THIS AGREEMENT BEFORE OCTOBER 31, 2003, I SHALL WAIVE THE RIGHT TO THE REVIEW PERIOD BUT WILL STILL HAVE THE SEVEN DAYS REVOCATION PERIOD. IF I REVOKE THIS
AGREEMENT, IT WILL BE VOID, I WILL NOT BE ENTITLED TO RECEIVE ANY BENEFITS HEREUNDER, AND I WILL HAVE TO RETURN TO THE COMPANY ANY BENEFITS ALREADY PAID HEREUNDER. 
  
 I UNDERSTAND THAT THE TERMS OF THIS AGREEMENT WILL NOT BECOME ENFORCEABLE UNTIL THIS REVOCATION PERIOD HAS EXPIRED, AND I
WILL NOT RECEIVE THE BENEFITS SET FORTH ABOVE UNTIL AT LEAST EIGHT DAYS FOLLOWING THE DATE OF EXECUTION OF THE AGREEMENT AND RELEASE. BENEFITS MAY BE MAILED TO ME. 
  
 I AGREE THAT THE PAYMENTS AND BENEFITS DESCRIBED IN THIS DOCUMENT ARE GREATER THAN THOSE I WOULD RECEIVE ON THE TERMINATION
OF MY EMPLOYMENT BUT FOR THE TERMS OF THIS SETTLEMENT AGREEMENT AND GENERAL RELEASE. 
  
 I HAVE EXECUTED THIS AGREEMENT AND RELEASE VOLUNTARILY AND OF MY OWN FREE WILL, WITHOUT COERCION AND WITH FULL KNOWLEDGE OF WHAT IT MEANS TO DO SO, AND BASED ON MY OWN JUDGMENT AND NOT IN RELIANCE UPON ANY ORAL OR
WRITTEN REPRESENTATIONS OR PROMISES MADE BY COMPANY, OTHER THAN THOSE CONTAINED OR REFERENCED HEREIN. 
  

	Dated: October 31, 2003	 	 	 	 Employee

			
	 	 	 	 	 /s/    RICHARD
FREEMAN

	 	 	 	 	 Richard Freeman
  

			
	Dated: September 26, 2003	 	 	 	 ChipPAC, Inc.

				
	 	 	 	 	 By:
	 	 /s/    CONNIE FREDERICKSON-BRAY

	 	 	 	 	Print Name: Connie Frederickson-Bray
	 	 	 	 	Title: Vice President Human Resources<PAGE>

                                                                   Exhibit 10(a)

                          R.R. DONNELLEY & SONS COMPANY

                            2000 STOCK INCENTIVE PLAN

 (as adopted by the Board of Directors on January 27, 2000; as amended September
                                    25, 2003)

                                   I. GENERAL

1. Plan. To provide incentives to management through rewards based upon the
ownership or performance of the common stock of R.R. Donnelley & Sons Company
(the "Company"), the Committee hereinafter designated, may grant cash or bonus
awards, stock options, stock appreciation rights ("SARs"), or combinations
thereof, to eligible participants, on the terms and subject to the conditions
stated in the Plan. In addition, to provide incentives to members of the Board
of Directors ("Board") who are not employees of the Company ("non-employee
directors"), such non-employee directors are hereby granted options on the terms
and subject to the conditions set forth in the Plan. For purposes of the Plan,
references to employment by the Company also means employment by a
majority-owned subsidiary of the Company and employment by any other entity
designated by the Board or the Committee in which the Company has a direct or
indirect equity interest.

2. Eligibility. Officers and other key management employees of the Company, its
subsidiaries, and any other entity designated by the Board or the Committee in
which the Company has a direct or indirect equity interest, shall be eligible,
upon selection by the Committee, to receive cash or bonus awards, stock options
or SARs, either singly or in combination, as the Committee, in its discretion,
shall determine ("participants"). Non-employee directors shall receive stock
options on the terms and subject to the conditions stated in the Plan.

3. Limitation on Shares to be Issued. Subject to adjustment as provided in
Section 5 of this Article I, 8,000,000 shares of common stock, par value $1.25
per share ("common stock"), shall be available under the Plan, reduced by the
aggregate number of shares of common stock which become subject to outstanding
bonus awards, stock options and SARs which are not granted in tandem with or by
reference to a stock option ("free-standing SARs"). Shares subject to a grant or
award under the Plan or under any other stock incentive plan of the Company
approved by stockholders on or prior to December 31, 1999 which are not issued
or delivered by reason of the expiration, termination, cancellation or
forfeiture of all or a portion of the grant or award, or by reason of
withholding of shares to pay all or a portion of the exercise price or to
satisfy tax withholding obligations, or by reason of the delivery of shares
prior to June 30, 2003 to

<PAGE>

pay all or a portion of the exercise price or to satisfy tax withholding
obligations, shall again be available for future grants and awards; provided,
however, that for purposes of this sentence, stock options and SARs granted in
tandem with or by reference to a stock option granted prior to the grant of such
SARs ("tandem SARs") shall be treated as one grant. To the extent that the
Company repurchased shares in the open market or otherwise prior to June 30,
2003, a number of shares having a repurchase price equal to the aggregate
proceeds received by the Company from the exercise of stock options granted by
the Company under the Plan or any other stock incentive plan of the Company
approved by stockholders on or prior to December 31, 1999 shall again be
available for future grants and awards. For the purpose of complying with
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
and the rules and regulations thereunder, the maximum number of shares of common
stock with respect to which options or SARs or a combination thereof may be
granted during any one-year period to any person shall be 1,000,000, subject to
adjustment as provided in Section 5 of this Article I; provided, however, that
for purposes of this sentence, stock options and tandem SARs shall be treated as
one grant. The maximum number of shares of common stock with respect to which
bonus awards, including performance awards or fixed awards in the form of
restricted stock or other form may be granted hereunder is 3,000,000 in the
aggregate, subject to adjustment as provided in Section 5 of this Article I.

   Shares of common stock to be issued shall be treasury stock of the Company.

4. Administration of the Plan. The Plan shall be administered by a Committee
designated by the Board of Directors (the "Committee"). Each member of the
Committee may be (i) an "outside director" within the meaning of Section 162(m)
of the Code and (ii) a "Non-Employee Director" within the meaning of Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
Committee shall, subject to the terms of the Plan, select eligible participants
for grants and awards; determine the form of each grant and award, either as
cash, a bonus award, stock options or SARs or a combination thereof; and
determine the number of shares or units subject to the grant or award, the fair
market value of the common stock or units when necessary, the time and
conditions of vesting, exercise or settlement, whether dividends or dividend
equivalents accrue under any award, and all other terms and conditions of each
grant and award, including, without limitation, the form of instrument
evidencing the grant or award. The Committee may establish rules and regulations
for the administration of the Plan, interpret the Plan, and impose, incidental
to a grant or award, conditions with respect to competitive employment or other
activities not inconsistent with the Plan. All such rules, regulations,
interpretations and conditions shall be conclusive and binding on all parties.
Each grant and award shall be evidenced by a written instrument and no grant or
award shall be valid until an agreement is executed by the Company and such
grant or award shall be effective as of the effective date set forth in the
agreement.

     The Committee may delegate some or all of its power and authority hereunder
to the Chief Executive Officer or other executive officer of the Company as the
Committee deems appropriate; provided, however, that the Committee may not
delegate its power and authority with regard to (i) the selection for
participation in the Plan of (A) a participant who is a "covered employee"
within the meaning of Section 162(m) of the

                                       2

<PAGE>

Code or who, in the Committee's judgment, is likely to be a covered employee at
any time during the period a grant or award hereunder to such participant would
be outstanding or (B) an officer or other person subject to Section 16 of the
Exchange Act or (ii) decisions concerning the timing, pricing or amount of a
grant or award to a participant, officer or other person described in clause (i)
above. A majority of the Committee shall constitute a quorum. The acts of the
Committee shall be either (i) acts of a majority of the members of the Committee
present at any meeting at which a quorum is present or (ii) acts approved in
writing by all of the members of the Committee without a meeting.

5. Adjustments. In the event of any stock split, stock dividend,
recapitalization, reorganization, merger, consolidation, combination, exchange
of shares, liquidation, spin-off or other similar change in capitalization or
event, or any distribution to holders of common stock other than a regular cash
dividend, the number and class of securities available under the Plan, the
number and class of securities subject to each outstanding bonus award, the
number and class of securities subject to each outstanding stock option and the
purchase price per security and the terms of each outstanding SAR shall be
appropriately adjusted by the Committee, such adjustments to be made in the case
of outstanding stock options and SARs without an increase in the aggregate
purchase price or base price. If any such adjustment would result in a
fractional security being (i) available under the Plan, such fractional security
shall be disregarded, or (ii) subject to an outstanding grant or award under the
Plan, the Company shall pay the holder thereof, in connection with the first
vesting, exercise or settlement of such grant or award, in whole or in part,
occurring after such adjustment, an amount in cash determined by multiplying (i)
the fraction of such security (rounded to the nearest hundredth) by (ii) the
excess, if any, of (A) the fair market value on the vesting, exercise or
settlement date over (B) the exercise or base price, if any, of such grant or
award; provided, however, that if the fair market value of such fractional
security immediately after such adjustment is less than the fair market value of
one share of common stock immediately prior to such adjustment, such fractional
security shall be disregarded and no payment shall be made.

6. Effective Date and Term of Plan. The Plan shall be submitted to the
stockholders of the Company for approval at the 2000 annual meeting of
stockholders and, if approved, shall become effective on the date of such
stockholder approval. The Plan shall terminate on the date on which shares are
no longer available for grants or awards under the Plan, unless terminated prior
thereto by action of the Board, except that Section III 1.(b), Automatic Options
for Non-Employee Directors shall terminate on December 31, 2009. No further
grants or awards shall be made under the Plan after termination, but termination
shall not affect the rights of any participant under any grants or awards made
prior to termination.

7. Amendments. The Plan may be amended or terminated by the Board in any respect
except that no amendment may be made without stockholder approval if stockholder
approval is required by applicable law, rule or regulation, including Section
162(m) of the Code, or such amendment would increase (subject to Section 5 of
this Article I) the number of shares available under the Plan. No amendment may
impair the rights of a holder of an outstanding grant or award without the
consent of such holder.

                                       3

<PAGE>

                                II. BONUS AWARDS

1. Form of Award. Bonus awards, whether performance awards or fixed awards, may
be made to eligible participants in the form of (i) cash, whether in an absolute
amount or as a percentage of compensation, (ii) stock units, each of which is
substantially the equivalent of a share of common stock but for the power to
vote and, subject to the Committee's discretion, the entitlement to an amount
equal to dividends or other distributions otherwise payable on a like number of
shares of common stock, (iii) shares of common stock issued to the participant
but forfeitable and with restrictions on transfer in any form as hereinafter
provided or (iv) any combination of the foregoing.

2. Performance Awards. (a) Awards may be made in terms of a stated potential
maximum dollar amount, percentage of compensation or number of units or shares,
with such actual amount, percentage or number to be determined by reference to
the level of achievement of corporate, sector, business unit, division,
individual or other specific performance goals over a performance period of not
less than one nor more than ten years, as determined by the Committee.

     (b) In no event shall any participant receive a payment with respect to any
performance award if the minimum threshold performance goals requirement
applicable to the payment is not achieved during the performance period.

     (c) If the Committee desires that compensation payable pursuant to any
performance award be "qualified performance-based compensation" within the
meaning of Section 162(m) of the Code, then with respect to such performance
award, for any calendar year no participant shall receive stock units or shares
of common stock in excess of 100,000 stock units or shares of common stock or a
cash award in excess of the then fair market value of 100,000 shares of common
stock, subject to adjustment as provided in Section 5 of Article I.

     (d) The Committee retains sole discretion to reduce the amount of or
eliminate any payment otherwise payable to a participant with respect to any
performance award. The Committee may exercise such discretion by establishing
conditions for payments with respect to performance awards in addition to the
performance goals, including the achievement of financial, strategic or
individual goals, which may be objective or subjective, as it deems appropriate.

     (e) For purposes of the Plan, "performance goals" means the objectives
established by the Committee which shall be satisfied or met during the
applicable performance period as a condition to a participant's receipt of all
or a part of a performance-based award under the Plan. The performance goals
shall be tied to one or more of the following business criteria, determined with
respect to the Company or the applicable sector, business unit or division: net
sales, cost of sales, gross profit, earnings from operations, earnings before
interest, taxes, depreciation and amortization ("EBITDA"), earnings before
income taxes, earnings before interest and taxes, cash flow measures, return on
equity, return on assets, return on net assets employed, net income per common
share (basic or diluted), EVA (Economic Value Added, which represents the

                                       4

<PAGE>

cash operating earnings of the Company after deducting a charge for capital
employed) or any other similar criteria established by the Committee for the
applicable performance period. In the discretion of the Committee, the Committee
may amend or adjust the performance goals or other terms or conditions of an
outstanding award in recognition of unusual or nonrecurring events. If the
Committee desires that compensation payable pursuant to any award subject to
performance goals be "qualified performance-based compensation" within the
meaning of Section 162(m) of the Code, the performance goals (i) shall be
established by the Committee no later than 90 days after the beginning of the
applicable performance period (or such other time designated by the Internal
Revenue Service) and (ii) shall satisfy all other applicable requirements
imposed under Treasury Regulations promulgated under Section 162(m) of the Code,
including the requirement that such performance goals be stated in terms of an
objective formula or standard.

3. Fixed Awards. Awards may be made which are not contingent on the achievement
of specific objectives, but are contingent on the participant's continuing in
the Company's employ for a period specified in the award.

4. Rights with Respect to Restricted Shares. If shares of restricted common
stock are subject to an award, the participant shall have the right, unless and
until such award is forfeited or unless otherwise determined by the Committee at
the time of grant, to vote the shares and to receive dividends thereon from the
date of grant and the right to participate in any capital adjustment applicable
to all holders of common stock; provided, however, that a distribution with
respect to shares of common stock, other than a regular quarterly cash dividend,
shall be deposited with the Company and shall be subject to the same
restrictions as the shares of common stock with respect to which such
distribution was made.

     During the restriction period, a certificate or certificates representing
restricted shares shall be registered in the holder's name or the name of a
nominee of the Company and may bear a legend, in addition to any legend which
may be required under applicable laws, rules or regulations, indicating that the
ownership of the shares of common stock represented by such certificate is
subject to the restrictions, terms and conditions of the Plan and the agreement
relating to the restricted shares. All such certificates shall be deposited with
the Company, together with stock powers or other instruments of assignment
(including a power of attorney), each endorsed in blank with a guarantee of
signature if deemed necessary or appropriate, which would permit transfer to the
Company of all or a portion of the shares of common stock subject to the award
in the event such award is forfeited in whole or in part. Upon termination of
any applicable restriction period, including, if applicable, the satisfaction or
achievement of applicable objectives, and subject to the Company's right to
require payment of any taxes, the requisite number of shares of common stock
shall be delivered to the holder of such award.

5. Rights with Respect to Stock Units. If stock units are credited to a
participant pursuant to an award, then, subject to the Committee's discretion,
amounts equal to dividends and other distributions otherwise payable on a like
number of shares of common stock after the crediting of the units (unless the
record date for such dividends or other distributions

                                       5

<PAGE>

precedes the date of grant of such award) shall be credited to an account for
the participant and held until the award is forfeited or paid out and interest
shall be credited on the account at a rate determined by the Committee.

6. Vesting and Resultant Events. The Committee may, in its discretion, provide
for early vesting of an award in the event of the participant's death, permanent
and total disability or retirement. At the time of vesting, (i) the award (and
any dividend equivalents, other distributions and interest which have been
credited), if in units, shall be paid to the participant either in shares of
common stock equal to the number of units, in cash equal to the fair market
value of such shares, or in such combination thereof as the Committee shall
determine, (ii) the award, if a cash bonus award, shall be paid to the
participant either in cash, or in shares of common stock with a then fair market
value equal to the amount of such award, or in such combination thereof as the
Committee shall determine and (iii) shares of restricted common stock issued
pursuant to an award shall be released from the restrictions.

                               III. STOCK OPTIONS

1. Grants. (a) Options for Eligible Participants. Options to purchase shares of
common stock of the Company may be granted to such eligible participants as may
be selected by the Committee. These options may, but need not, constitute
"incentive stock options" under Section 422 of the Code. To the extent that the
aggregate fair market value (determined as of the date of grant) of shares of
common stock with respect to which options designated as incentive stock options
are exercisable for the first time by an optionee during any calendar year
(under the Plan or any other plan of the Company, or any parent or subsidiary)
exceeds the amount (currently $100,000) established by the Code, such options
shall not constitute incentive stock options.

     (b) Automatic Options for Non-Employee Directors. The Company shall grant
an option to purchase shares of common stock of the Company on the date of the
2000 annual meeting of stockholders and, thereafter, annually on the date of the
Company's annual meeting of stockholders to each individual who immediately
following such meeting on such date is a non-employee director. The number of
shares of common stock subject to an option granted to a non-employee director
pursuant to this Section 1(b) (a "Director Option") shall equal the number
determined by (i) multiplying (A) the then current annual cash retainer fee
payable to a non-employee director by (B) 2.5, and (ii) dividing that product by
100% of the fair market value of a share of common stock on the date of grant of
such option. A Director Option shall become exercisable in whole or in part on
the earlier to occur of (i) the date which is the first anniversary of the date
the Director Option is granted (the date of grant being hereafter referred to as
the "Option Date") or (ii) the day immediately preceding the date of the first
annual meeting of stockholders of the Company next following the Option Date.
Subject to Section 4 of this Article III, a Director Option shall expire on the
first business day preceding the date of the tenth anniversary of the date of
grant.

                                       6

<PAGE>

     (c) Elective Options for Non-Employee Directors. Each non-employee director
may from time to time elect, in accordance with procedures to be specified by
the Committee, to receive in lieu of all or part of (i) the annual cash retainer
fee for services as a director of the Company, any fees for attendance at
meetings of the Board or any committee of the Board and any fees for serving as
a member or chairman of any committee of the Board that would otherwise be
payable to such non-employee director ("Fees") or (ii) the annual phantom stock
award granted to such non-employee director pursuant to the Retirement Benefits
and Phantom Stock Grants for Directors Policy ("Retirement Benefit"), an option
to purchase shares of Common Stock, which option shall have a value (as
determined in accordance with the Black-Scholes stock option valuation method)
as of the date of grant of such option equal to the amount of such Fees or
Retirement Benefit. An option granted to a non-employee director pursuant to
this Section 1(c) shall be a Director Option and shall become exercisable in
full on the date which is the first anniversary of the date the Director Option
is granted.

2. Number of Shares and Purchase Price. The number of shares of common stock
subject to an option and the purchase price per share of common stock
purchasable upon exercise of the option shall be determined by the Committee;
provided, however, that the purchase price per share of common stock shall not
be less than 100% of the fair market value of a share of common stock on the
date of grant of the option, including a Director Option; provided further, that
if an incentive stock option shall be granted to any person who, on the date of
grant of such option, owns capital stock possessing more than ten percent of the
total combined voting power of all classes of capital stock of the Company (or
of any parent or subsidiary) (a "Ten Percent Holder"), the purchase price per
share of common stock shall be the price (currently 110% of fair market value)
required by the Code in order to constitute an incentive stock option.

3. Exercise of Options. The period during which options granted hereunder (other
than Director Options) may be exercised shall be determined by the Committee;
provided, however, that no stock option shall be exercised later than ten years
after its date of grant; provided further, that if an incentive stock option
shall be granted to a Ten Percent Holder, such option shall not be exercisable
more than five years after its date of grant. The Committee may, in its
discretion, establish performance measures which shall be satisfied or met as a
condition to the grant of an option or to the exercisability of all or a portion
of an option. The Committee shall determine whether an option shall become
exercisable in cumulative or non-cumulative installments and in part or in full
at any time. An exercisable option, or portion thereof, may be exercised only
with respect to whole shares of common stock.

     An option may be exercised (i) by giving written notice to the Company
specifying the number of whole shares of common stock to be purchased and
accompanied by payment therefor in full (or arrangement made for such payment to
the Company's satisfaction) either (A) in cash, (B) in previously owned whole
shares of common stock (which the optionee has held for at least six months
prior to delivery of such shares or which the optionee purchased on the open
market and for which the optionee has good title free and clear of all liens and
encumbrances) having a fair market value, determined as of the date of exercise,
equal to the aggregate purchase price

                                       7

<PAGE>

payable by reason of such exercise, (C) in cash by a broker-dealer acceptable to
the Company to whom the optionee has submitted an irrevocable notice of exercise
or (D) a combination of (A) and (B), (ii) if applicable, by surrendering to the
Company any SARs which are canceled by reason of the exercise of the option and
(iii) by executing such documents as the Company may reasonably request. The
Committee shall have sole discretion to disapprove of an election pursuant to
any of clauses (B)-(D). Any fraction of a share of common stock which would be
required to pay such purchase price shall be disregarded and the remaining
amount due shall be paid in cash by the optionee. No shares of common stock
shall be delivered until the full purchase price therefor has been paid.

4. Termination of Employment or Service. Subject to the requirements of the
Code, all of the terms relating to the exercise, cancellation or other
disposition of an option upon a termination of employment with the Company or
service on the Board, as the case may be, of the holder of such option, whether
by reason of disability, retirement, death or any other reason, shall be
determined by the Committee; provided, however, that the expiration date of an
option may never be extended beyond the original expiration date of such option.

                          IV. STOCK APPRECIATION RIGHTS

1. Grants. Free-standing SARs entitling the grantee to receive cash or shares of
common stock having a fair market value equal to the appreciation in market
value of a stated number of shares of common stock from the date of grant to the
date of exercise of such SARs, or in the case of tandem SARs, from the date of
grant of the related stock option to the date of exercise of such tandem SARs,
may be granted to such participants as may be selected by the Committee. The
holder of a tandem SAR may elect to exercise either the option or the SAR, but
not both. Tandem SARs shall be automatically canceled upon exercise of the
related stock option.

2. Number of SARs and Base Price. The number of SARs subject to a grant shall be
determined by the Committee. Any tandem SAR related to an incentive stock option
shall be granted at the same time that such incentive stock option is granted.
The base price of a tandem SAR shall be the purchase price per share of common
stock of the related option. The base price of a free-standing SAR shall be
determined by the Committee; provided, however, that such base price shall not
be less than 100% of the fair market value of a share of common stock on the
date of grant of such SAR.

3. Exercise of SARs. The agreement relating to a grant of SARs may specify
whether such grant shall be settled in shares of common stock (including
restricted shares of common stock) or cash or a combination thereof. Upon
exercise of an SAR, the grantee shall be paid the excess of the then fair market
value of the number of shares of common stock to which the SAR relates over the
base price of the SAR. Such excess shall be paid in cash or in shares of common
stock having a fair market value equal to such excess or in such combination
thereof as the Committee shall determine. The period during which SARs granted
hereunder may be exercised shall be determined by the Committee;

                                       8

<PAGE>

provided, however, no SAR shall be exercised later than ten years after the date
of its grant; and provided, further, that no tandem SAR shall be exercised if
the related option has expired or has been canceled or forfeited or has
otherwise terminated. The Committee may, in its discretion, establish
performance measures which shall be satisfied or met as a condition to the grant
of an SAR or to the exercisability of all or a portion of an SAR. The Committee
shall determine whether an SAR may be exercised in cumulative or non-cumulative
installments and in part or in full at any time. An exercisable SAR, or portion
thereof, may be exercised, in the case of a tandem SAR, only with respect to
whole shares of common stock and, in the case of a free-standing SAR, only with
respect to a whole number of SARs. If an SAR is exercised for restricted shares
of common stock, the restricted shares shall be issued in accordance with
Section 4 of Article II and the holder of such restricted shares shall have such
rights of a stockholder of the Company as determined pursuant to such Section.
Prior to the exercise of an SAR for shares of common stock, including restricted
shares, the holder of such SAR shall have no rights as a stockholder of the
Company with respect to the shares of common stock subject to such SAR.

     A tandem SAR may be exercised (i) by giving written notice to the Company
specifying the number of whole SARs which are being exercised, (ii) by
surrendering to the Company any options which are canceled by reason of the
exercise of such SAR and (iii) by executing such documents as the Company may
reasonably request. A free-standing SAR may be exercised (i) by giving written
notice to the Company specifying the whole number of SARs which are being
exercised and (ii) by executing such documents as the Company may reasonably
request.

4. Termination of Employment. Subject to the requirements of the Code, all of
the terms relating to the exercise, cancellation or other disposition of an SAR
upon a termination of employment with the Company of the holder of such SAR,
whether by reason of disability, retirement, death or any other reason, shall be
determined by the Committee; provided, however, that the expiration date of an
SAR may never be extended beyond the original expiration date of such SAR.

                                    V. OTHER

1. Non-Transferability of Options and Stock Appreciation Rights. No option or
SAR shall be transferable other than (i) by will, the laws of descent and
distribution or pursuant to beneficiary designation procedures approved by the
Company or (ii) as otherwise set forth in the agreement relating to such option
or SAR. Each option or SAR may be exercised during the participant's lifetime
only by the participant or the participant's guardian, legal representative or
similar person or the permitted transferee of the participant. Except as
permitted by the second preceding sentence, no option or SAR may be sold,
transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed
of (whether by operation of law or otherwise) or be subject to execution,
attachment or similar process. Upon any attempt to so sell, transfer, assign,
pledge, hypothecate, encumber or otherwise dispose of any option or SAR, such
award and all rights thereunder shall immediately become null and void.

                                       9

<PAGE>

2. Tax Withholding. The Company shall have the right to require, prior to the
issuance or delivery of any shares of common stock or the payment of any cash
pursuant to a grant or award hereunder, payment by the holder thereof of any
Federal, state, local or other taxes which may be required to be withheld or
paid in connection therewith. An agreement may provide that (i) the Company
shall withhold whole shares of common stock which would otherwise be delivered
to a holder, having an aggregate fair market value determined as of the date the
obligation to withhold or pay taxes arises in connection therewith (the "Tax
Date"), or withhold an amount of cash which would otherwise be payable to a
holder, in the amount necessary to satisfy any such obligation or (ii) the
holder may satisfy any such obligation by any of the following means: (A) a cash
payment to the Company, (B) delivery to the Company of previously owned whole
shares of common stock (which the holder has held for at least six months prior
to the delivery of such shares or which the holder purchased on the open market
and for which the holder has good title, free and clear of all liens and
encumbrances) having an aggregate fair market value determined as of the Tax
Date, equal to the amount necessary to satisfy any such obligation, (C)
authorizing the Company to withhold whole shares of common stock which would
otherwise be delivered having an aggregate fair market value determined as of
the Tax Date or withhold an amount of cash which would otherwise be payable to a
holder, equal to the amount necessary to satisfy any such liability, (D) in the
case of the exercise of an option, a cash payment by a broker-dealer acceptable
to the Company to whom the optionee has submitted an irrevocable notice of
exercise or (E) any combination of (A), (B) and (C); provided, however, that the
Committee shall have sole discretion to disapprove of an election pursuant to
any of clauses (B)-(E). An agreement relating to a grant or award hereunder may
not provide for shares of common stock to be withheld having an aggregate fair
market value in excess of the minimum amount of taxes required to be withheld.
Any fraction of a share of common stock which would be required to satisfy such
an obligation shall be disregarded and the remaining amount due shall be paid in
cash by the holder.

3. Acceleration Upon Change in Control. If while (i) any performance award or
fixed award granted under Article II is outstanding or (ii) any stock option
granted under Article III of the Plan or SAR granted under Article IV of the
Plan is outstanding --

          (a) any "person," as such term is defined in Section 3(a)(9) of the
     Exchange Act, as modified and used in Section 13(d) and 14(d) thereof (but
     not including (i) the Company or any of its subsidiaries, (ii) a trustee or
     other fiduciary holding securities under an employee benefit plan of the
     Company or any of its subsidiaries, (iii) an underwriter temporarily
     holding securities pursuant to an offering of such securities, or (iv) a
     corporation owned, directly or indirectly, by the stockholders of the
     Company in substantially the same proportions as their ownership of stock
     of the Company) (hereinafter a "Person") is or becomes the beneficial
     owner, as defined in Rule 13d-3 of the Exchange Act, directly or
     indirectly, of securities of the Company (not including in the securities
     beneficially owned by such Person any securities acquired directly from the
     Company or its affiliates, excluding an acquisition resulting from the
     exercise of a conversion or exchange privilege in respect of outstanding
     convertible or

                                       10

<PAGE>

     exchangeable securities) representing 50% or more of the combined voting
     power of the Company's then outstanding securities; or

          (b) during any period of two (2) consecutive years beginning January
     1, 2000, individuals who at the beginning of such period constitute the
     Board and any new director (other than a director designated by a Person
     who has entered into any agreement with the Company to effect a transaction
     described in Clause (a), (c) or (d) of this Section) whose election by the
     Board or nomination for election by the Company's stockholders was approved
     by a vote of at least two-thirds (2/3) of the directors then still in
     office who either were directors at the beginning of the period or whose
     election or nomination for election was previously so approved, cease for
     any reason to constitute a majority thereof; or

          (c) the stockholders of the Company approve a merger or consolidation
     of the Company with any other corporation, other than (i) a merger or
     consolidation which would result in the voting securities of the Company
     outstanding immediately prior thereto continuing to represent (either by
     remaining outstanding or by being converted into voting securities of the
     surviving or acquiring entity), in combination with the ownership of any
     trustee or other fiduciary holding securities under an employee benefit
     plan of the Company, at least 50% of the combined voting power of the
     voting securities of the Company or such surviving or acquiring entity
     outstanding immediately after such merger or consolidation, or (ii) a
     merger or consolidation effected to implement a recapitalization of the
     Company (or similar transaction) in which no Person acquires more than 50%
     of the combined voting power of the Company's then outstanding securities;
     or

          (d) the stockholders of the Company approve a plan of complete
     liquidation of the Company or an agreement for the sale or disposition by
     the Company of all or substantially all the Company's assets,

(any of such events being hereinafter referred to as a "Change in Control"),
then from and after the date on which public announcement of the acquisition of
such percentage shall have been made, or the date on which the change in the
composition of the Board set forth above shall have occurred, or the date of any
such stockholder approval of a merger, consolidation, plan of complete
liquidation or an agreement for the sale of the Company's assets as described
above occurs (the applicable date being hereinafter referred to as the
"Acceleration Date"), (i) with respect to such performance awards, the highest
level of achievement specified in the award shall be deemed met and the award
shall be immediately and fully vested, (ii) with respect to such fixed awards,
the period of continued employment specified in the award upon which the award
is contingent shall be deemed completed and the award shall be immediately and
fully vested and (iii) with respect to such options and SARs, all such options
and SARs, whether or not then exercisable in whole or in part, shall be fully
and immediately exercisable.

4. Restrictions on Shares. Each grant and award made hereunder shall be subject
to the requirement that if at any time the Company determines that the listing,
registration or

                                       11

<PAGE>

qualification of the shares of common stock subject thereto upon any securities
exchange or under any law, or the consent or approval of any governmental body,
or the taking of any other action is necessary or desirable as a condition of,
or in connection with, the delivery of shares thereunder, such shares shall not
be delivered unless such listing, registration, qualification, consent, approval
or other action shall have been effected or obtained, free of any conditions not
acceptable to the Company. The Company may require that certificates evidencing
shares of common stock delivered pursuant to any grant or award made hereunder
bear a legend indicating that the sale, transfer or other disposition thereof by
the holder is prohibited except in compliance with the Securities Act of 1933,
as amended, and the rules and regulations thereunder.

5. No Right of Participation or Employment. No person (other than non-employee
directors to the extent provided in Article III) shall have any right to
participate in the Plan. Neither the Plan nor any grant or award made hereunder
shall confer upon any person any right to continued employment by the Company,
any subsidiary or any affiliate of the Company or affect in any manner the right
of the Company, any subsidiary or any affiliate of the Company to terminate the
employment of any person at any time without liability hereunder.

6. Rights as Stockholder. No person shall have any right as a stockholder of the
Company with respect to any shares of common stock or other equity security of
the Company which is subject to a grant or award hereunder unless and until such
person becomes a stockholder of record with respect to such shares of common
stock or equity security.

7. Governing Law. The Plan, each grant and award hereunder and the related
agreement, and all determinations made and actions taken pursuant thereto, to
the extent not otherwise governed by the Code or the laws of the United States,
shall be governed by the laws of the State of Delaware and construed in
accordance therewith without giving effect to principles of conflicts of laws.

8. Foreign Participants. Notwithstanding any provision of the Plan to the
contrary the Committee may, with a view to both promoting achievement of the
purposes of the plan and complying with provisions of laws in countries outside
the United States in which the Company or its subsidiaries operate or have
employees, determine which persons outside the United States shall be eligible
to participate in the Plan on such terms and conditions different from those
specified in the Plan as may in the judgement of the Committee be necessary or
advisable and, to that end, the Committee may establish sub-plans, modified
option exercise procedures and other terms and procedures.

9. Approval of Plan. The Plan and all grants and awards made hereunder shall be
null and void if the adoption of the Plan is not approved by the affirmative
vote of a majority of the shares of common stock present in person or
represented by proxy at the 2000 annual meeting of stockholders.

                                       12

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