Document:

exv10w2

 

EXHIBIT 10.2

FOURTH AMENDMENT TO

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

     THIS FOURTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(this “Amendment”) is made and given as of the 30th day of September, 2004 by
and among LIFE TIME FITNESS, Inc., a Minnesota corporation (“Borrower”),
Antares Capital Corporation, a Delaware corporation (“Antares”), in its
capacity as Agent for the Lenders party to the Credit Agreement described below
and as a Lender, JP Morgan Chase Bank, as trustee of the Antares Funding Trust
created under the Trust Agreement dated as of November 30, 1999 (“Chase”), as a
Lender, Mariner CDO 2002, Ltd. (“Mariner”) as a Lender, Merrill Lynch Capital,
a division of Merrill Lynch Business Financial Services Inc. a Delaware
corporation, (“Merrill”), as a Lender and as Syndication Agent, and M&I
Marshall & Ilsley Bank, a Wisconsin state bank (“M&I Bank”), as a Lender.

W I T N E S S E T H:

     WHEREAS, Borrower, Antares, Chase, Mariner, Merrill and M&I Bank are all
of the parties to a certain Second Amended and Restated Credit Agreement dated
as of July 19, 2001, as amended (the “Credit Agreement”); and

     WHEREAS, Borrower has requested that Agent and the Lenders amend the
Credit Agreement in certain respects and waive the application of certain
provisions of the Credit Agreement as more fully set forth herein and Agent and
the Lenders are agreeable to such request;

     NOW, THEREFORE, the parties hereto agree as follows:

     1. Definitions. Capitalized terms used in this Amendment, unless
otherwise defined herein, shall have the meaning ascribed to such terms in the
Credit Agreement.

     2. Amendments. Subject to the conditions set forth below, on the Fourth
Amendment Effective Date the Credit Agreement shall be amended as follows:

      (A) Section 6.1 shall be amended and restated in its entirety as
follows:

        6.1 Capital Expenditures. The Borrower and its Subsidiaries
shall not make or commit to make Capital Expenditures during the
twelve-month period ending December 31, 2004 in excess of
$20,000,000, excluding any amount of such Capital Expenditures
which are financed.

      (B) The following new definitions shall be added in their proper
alphabetical places:

        “Fourth Amendment” means that certain Fourth Amendment to
Second Amended and Restated Credit Agreement dated as of September
30, 2004 by and among Borrower, Agent and the Lenders.

        “Fourth Amendment Effective Date” means the date upon which
the Fourth Amendment is executed by each of Borrower, Antares,
Chase, Mariner, Merrill and M&I Bank.

 

 

     3. General.

     (a) Counterparts. This Amendment may be executed by one or more of the
parties hereto on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Amendment signed by all the parties
shall be lodged with each of the Borrower, Antares, Chase, Mariner, Merrill and
M&I Bank .

     (b) Headings. Section captions and headings used in this Amendment are
for convenience only and are not part of and shall not affect the construction
of this Amendment.

     (c) Governing Law. This Amendment and the rights and obligations of the
parties hereto shall be governed by, and construed and interpreted in
accordance with, the law of the State of Illinois without regard to its
conflict of laws doctrine. Whenever possible, each provision of this Amendment
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Amendment shall be prohibited by
or invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Amendment.

     (d) Successors and Assigns. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

[Balance of page intentionally left blank; signature page follows.]

2

 

     IN WITNESS WHEREOF, the parties have caused this Fourth Amendment to be
executed by their respective authorized agents as of the date first written
above.

	 	 	 	 	 
	 	 	LIFE TIME FITNESS, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	Name:	 	 
	

	 	Title:	 	 
	 
	 	 	 	 
	 	 	ANTARES CAPITAL CORPORATION
as Agent and Lender
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	Name:	 	 
	

	 	Title:	 	 
	 
	 	 	 	 
	 	 	JP MORGAN CHASE BANK, not individually but
solely as trustee of the Antares Funding
Trust created under the Trust Agreement
dated as of November 30, 1999
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	Name:	 	 
	

	 	Title:	 	 
	 
	 	 	 	 
	 	 	MARINER CDO 2002, LTD.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	Name:	 	 
	

	 	Title:	 	 

3

 

	 	 	 	 	 
	 	 	MERRILL LYNCH CAPITAL, a Division of
Merrill Lynch Business Financial Services Inc.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	Name:	 	 
	

	 	Title:	 	 
	 
	 	 	 	 
	 	 	M&I MARSHALL & ILSLEY BANK
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	Name:	 	 
	

	 	Title:	 	 

4exv10w1

 

Exhibit 10.1

ENGENIO INFORMATION TECHNOLOGIES, INC. (FORMERLY LSI

LOGIC STORAGE SYSTEMS, INC.)

AMENDED AND RESTATED 2004 EQUITY INCENTIVE PLAN

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page

	ENGENIO INFORMATION TECHNOLOGIES, INC. (FORMERLY LSI LOGIC STORAGE SYSTEMS, INC.)	 	 	 	 
	SECTION 1 BACKGROUND AND PURPOSE	 	 	1	 
	 	1.1	 	 	Background and Effective Date
	 	 	1	 
	 	1.2	 	 	Purpose of the Plan
	 	 	1	 
	SECTION 2 DEFINITIONS	 	 	1	 
	 	2.1	 	 	“1934 Act”
	 	 	1	 
	 	2.2	 	 	“Affiliate”
	 	 	1	 
	 	2.3	 	 	“Affiliated SAR”
	 	 	1	 
	 	2.4	 	 	“Award”
	 	 	1	 
	 	2.5	 	 	“Award Agreement”
	 	 	2	 
	 	2.6	 	 	“Board” or “Board of Directors”
	 	 	2	 
	 	2.7	 	 	“Cash Flow”
	 	 	2	 
	 	2.8	 	 	“Code”
	 	 	2	 
	 	2.9	 	 	“Committee”
	 	 	2	 
	 	2.10	 	 	“Company”
	 	 	2	 
	 	2.11	 	 	“Director”
	 	 	2	 
	 	2.12	 	 	“Disability”
	 	 	2	 
	 	2.13	 	 	“Earnings Per Share”
	 	 	2	 
	 	2.14	 	 	“Employee”
	 	 	2	 
	 	2.15	 	 	“Exchange Program”
	 	 	2	 
	 	2.16	 	 	“Exercise Price”
	 	 	2	 
	 	2.17	 	 	“Fair Market Value”
	 	 	3	 
	 	2.18	 	 	“Fiscal Year”
	 	 	3	 
	 	2.19	 	 	“Freestanding SAR”
	 	 	3	 
	 	2.20	 	 	“Grant Date”
	 	 	3	 
	 	2.21	 	 	“Incentive Stock Option”
	 	 	3	 
	 	2.22	 	 	“Nonemployee Director”
	 	 	3	 
	 	2.23	 	 	“Nonqualified Stock Option”
	 	 	3	 
	 	2.24	 	 	“Option”
	 	 	3	 
	 	2.25	 	 	“Parent”
	 	 	3	 
	 	2.26	 	 	“Participant”
	 	 	3	 
	 	2.27	 	 	“Performance Goals”
	 	 	3	 
	 	2.28	 	 	“Performance Unit”
	 	 	4	 
	 	2.29	 	 	“Period of Restriction”
	 	 	4	 
	 	2.30	 	 	“Plan”
	 	 	4	 
	 	2.31	 	 	“Profit After Tax”
	 	 	4	 
	 	2.32	 	 	“Profit Before Tax”
	 	 	4	 
	 	2.33	 	 	“Restricted Stock”
	 	 	4	 
	 	2.34	 	 	“Restricted Stock Unit”
	 	 	4	 
	 	2.35	 	 	“Retirement”
	 	 	4	 
	 	2.36	 	 	“Return on Capital”
	 	 	4	 

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TABLE OF CONTENTS
(continued)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page

	 	2.37	 	 	“Return on Equity”
	 	 	4	 
	 	2.38	 	 	“Return on Sales”
	 	 	4	 
	 	2.39	 	 	“Revenue”
	 	 	5	 
	 	2.40	 	 	“Rule 16b-3”
	 	 	5	 
	 	2.41	 	 	“Section 16 Person”
	 	 	5	 
	 	2.42	 	 	“Shares”
	 	 	5	 
	 	2.43	 	 	“Stock Appreciation Right” or “SAR”
	 	 	5	 
	 	2.44	 	 	“Subsidiary”
	 	 	5	 
	 	2.45	 	 	“Tandem SAR”
	 	 	5	 
	 	2.46	 	 	“Termination of Service”
	 	 	5	 
	 	2.47	 	 	“Total Shareholder Return”
	 	 	5	 
	SECTION 3 ADMINISTRATION	 	 	5	 
	 	3.1	 	 	The Committee
	 	 	5	 
	 	3.2	 	 	Authority of the Committee
	 	 	6	 
	 	3.3	 	 	Delegation by the Committee
	 	 	6	 
	 	3.4	 	 	Decisions Binding
	 	 	6	 
	SECTION 4 SHARES SUBJECT TO THE PLAN	 	 	6	 
	 	4.1	 	 	Number of Shares
	 	 	6	 
	 	4.2	 	 	Lapsed Awards
	 	 	6	 
	 	4.3	 	 	Adjustments in Awards and Authorized Shares
	 	 	6	 
	SECTION 5 STOCK OPTIONS	 	 	7	 
	 	5.1	 	 	Grant of Options
	 	 	7	 
	 	5.2	 	 	Award Agreement
	 	 	7	 
	 	5.3	 	 	Exercise Price
	 	 	7	 
	 	5.4	 	 	Expiration of Options
	 	 	7	 
	 	5.5	 	 	Exercisability of Options
	 	 	8	 
	 	5.6	 	 	Payment
	 	 	8	 
	 	5.7	 	 	Restrictions on Share Transferability
	 	 	8	 
	 	5.8	 	 	Certain Additional Provisions for Incentive Stock Options
	 	 	8	 
	SECTION 6 RESTRICTED STOCK	 	 	9	 
	 	6.1	 	 	Grant of Restricted Stock
	 	 	9	 
	 	6.2	 	 	Restricted Stock Agreement
	 	 	9	 
	 	6.3	 	 	Transferability
	 	 	9	 
	 	6.4	 	 	Other Restrictions
	 	 	10	 
	 	6.5	 	 	Removal of Restrictions
	 	 	10	 
	 	6.6	 	 	Voting Rights
	 	 	10	 
	 	6.7	 	 	Dividends and Other Distributions
	 	 	10	 
	 	6.8	 	 	Return of Restricted Stock to Company
	 	 	10	 
	SECTION 7 STOCK APPRECIATION RIGHTS	 	 	11	 
	 	7.1	 	 	Grant of SARs
	 	 	11	 

-ii-

 

TABLE OF CONTENTS
(continued)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page

	 	7.2	 	 	SAR Agreement
	 	 	11	 
	 	7.3	 	 	Expiration of SARs
	 	 	11	 
	 	7.4	 	 	Payment of SAR Amount
	 	 	11	 
	SECTION 8 PERFORMANCE UNITS AND RESTRICTED STOCK UNITS	 	 	11	 
	 	8.1	 	 	Grant of Performance Units/Restricted Stock Units
	 	 	11	 
	 	8.2	 	 	Value of Performance Units/Restricted Stock Units
	 	 	12	 
	 	8.3	 	 	Performance Goals/Vesting Criteria and Other Terms
	 	 	12	 
	 	8.4	 	 	Earning or Vesting of Performance Units and Restricted Stock Units
	 	 	13	 
	 	8.5	 	 	Form and Timing of Payment of Performance Units/Restricted Stock Units
	 	 	13	 
	 	8.6	 	 	Cancellation of Performance Units; Restricted Stock Units
	 	 	13	 
	SECTION 9 NONEMPLOYEE DIRECTOR OPTIONS	 	 	13	 
	 	9.1	 	 	Granting of Options
	 	 	13	 
	 	9.2	 	 	Terms of Options
	 	 	13	 
	SECTION 10 NONEMPLOYEE DIRECTOR AWARDS OF RESTRICTED STOCK	 	 	14	 
	 	10.1	 	 	Granting of Restricted Stock
	 	 	15	 
	 	10.2	 	 	Terms of Restricted Stock
	 	 	15	 
	SECTION 11 MISCELLANEOUS	 	 	15	 
	 	11.1	 	 	Deferrals
	 	 	15	 
	 	11.2	 	 	No Effect on Employment or Service
	 	 	15	 
	 	11.3	 	 	Participation
	 	 	16	 
	 	11.4	 	 	Indemnification
	 	 	16	 
	 	11.5	 	 	Successors
	 	 	16	 
	 	11.6	 	 	Limited Transferability of Awards
	 	 	16	 
	 	11.7	 	 	Beneficiary Designations
	 	 	16	 
	 	11.8	 	 	No Rights as Stockholder
	 	 	17	 
	SECTION 12 AMENDMENT, TERMINATION, AND DURATION	 	 	17	 
	 	12.1	 	 	Amendment, Suspension, or Termination
	 	 	17	 
	 	12.2	 	 	Duration of the Plan
	 	 	17	 
	SECTION 13 TAX WITHHOLDING AND MINIMUM SHARE PURCHASE PRICE	 	 	17	 
	 	13.1	 	 	Withholding Requirements
	 	 	17	 
	 	13.2	 	 	Withholding Arrangements
	 	 	17	 
	 	13.3	 	 	Minimum Share Purchase Price
	 	 	18	 
	SECTION 14 LEGAL CONSTRUCTION	 	 	18	 
	 	14.1	 	 	Gender and Number
	 	 	18	 
	 	14.2	 	 	Severability
	 	 	18	 
	 	14.3	 	 	Requirements of Law
	 	 	18	 
	 	14.4	 	 	Securities Law Compliance
	 	 	18	 
	 	14.5	 	 	Governing Law
	 	 	18	 

-iii-

 

TABLE OF CONTENTS
(continued)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page

	 	14.6	 	 	Captions
	 	 	18	 

-iv-

 

ENGENIO INFORMATION TECHNOLOGIES, INC.

(FORMERLY LSI LOGIC STORAGE SYSTEMS, INC.)

AMENDED AND RESTATED 2004 EQUITY INCENTIVE PLAN

SECTION 1

BACKGROUND AND PURPOSE

     1.1 Background and Effective Date. The Plan permits the grant of
Nonqualified Stock Options, Incentive Stock Options, and Restricted Stock,
SARs, Performance Units, and Restricted Stock Units. The Plan is effective as
of February 12, 2004, subject to ratification by an affirmative vote of the
holders of a majority of the Shares.

     1.2 Purpose of the Plan. The Plan is intended to attract, motivate, and
retain (a) employees of the Company and its Affiliates and (b) directors of the
Company who are employees of neither the Company nor of any Affiliate. The
Plan also is designed to encourage stock ownership by Participants, thereby
aligning their interests with those of the Company’s shareholders and to permit
the payment of compensation that qualifies as performance-based compensation
under section 162(m) of the Code.

SECTION 2

DEFINITIONS

     The following words and phrases shall have the following meanings unless a
different meaning is plainly required by the context:

     2.1 “1934 Act” means the Securities Exchange Act of 1934, as amended.
Reference to a specific section of the 1934 Act or regulation thereunder shall
include such section or regulation, any valid regulation promulgated under such
section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation.

     2.2 “Affiliate” means any corporation or any other entity (including, but
not limited to, partnerships and joint ventures) controlling, controlled by, or
under common control with the Company.

     2.3 “Affiliated SAR” means a SAR that is granted in connection with a
related Option, and which automatically will be deemed to be exercised at the
same time that the related Option is exercised.

     2.4 “Award” means, individually or collectively, a grant under the Plan of
Nonqualified Stock Options, Incentive Stock Options, Restricted Stock, SARs,
Performance Units, and/or Restricted Stock Units.

-1-

 

     2.5 “Award Agreement” means the written agreement setting forth the terms
and provisions applicable to each Award granted under the Plan.

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

     2.7 “Cash Flow” means the Company’s or a business unit’s sum of Profit
After Tax plus depreciation and amortization less capital expenditures plus
changes in working capital comprised of accounts receivable, inventories, other
current assets, trade accounts payable, accrued expenses, product warranty,
advance payments from customers and long-term accrued expenses, determined in
accordance with generally acceptable accounting principles.

     2.8 “Code” means the Internal Revenue Code of 1986, as amended. Reference
to a specific section of the Code or regulation thereunder shall include such
section or regulation, any valid regulation promulgated under such section, and
any comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.

     2.9 “Committee” means the committee appointed by the Board (pursuant to
Section 3.1) to administer the Plan.

     2.10 “Company” means Engenio Information Technologies, Inc. (formerly LSI
Logic Storage Systems, Inc.), a Delaware corporation, or any successor thereto.

     2.11 “Director” means any individual who is a member of the Board of
Directors of the Company.

     2.12 “Disability” means a permanent and total disability determined in accordance with
uniform and nondiscriminatory standards adopted by the Committee from time to
time.

     2.13 “Earnings Per Share” means the Company’s or a business unit’s Profit
After Tax, divided by a weighted average number of all classes of common shares
outstanding and dilutive common equivalent shares deemed outstanding,
determined in accordance with generally accepted accounting principles.

     2.14 “Employee” means any employee of the Company or of an Affiliate,
whether such employee is so employed at the time the Plan is adopted or becomes
so employed subsequent to the adoption of the Plan.

     2.15 “Exchange Program” means a program established by the Committee under
which outstanding Awards are amended or surrendered or cancelled in exchange
for (a) Awards with a different Exercise Price, (b) a different type of Award,
(c) cash, or (d) a combination of (a), (b) and/or (c).

     2.16 “Exercise Price” means the price at which a Share may be purchased by
a Participant pursuant to the exercise of an Option.

-2-

 

     2.17 “Fair Market Value” means, as of the relevant date, the value per
Share determined as follows: (a) if the Shares are listed on any established
stock exchange or a national market system, including without limitation the
New York Stock Exchange or the Nasdaq National Market, its Fair Market Value
shall be the closing price per Share (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the last market trading day
prior to the time of determination, as reported by such source as the Board or
Committee deems reliable; (b) if the Shares are regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share shall be the mean between the high bid and low asked
prices for a Share on the last market trading day prior to the time of
determination, as reported by such source the Board or Administrator deems
reliable; or (c) in the absence of an established market for the Shares, the
Fair Market Value shall be determined in good faith by the Board or Committee.

     2.18 “Fiscal Year” means the fiscal year of the Company.

     2.19 “Freestanding SAR”
means a SAR that is granted independently of any Option.

     2.20 “Grant Date” means, with respect to an Award, the date that the Award
was granted.

     2.21 “Incentive Stock Option” means an Option to purchase Shares that is
designated as an Incentive Stock Option and is intended to meet the
requirements of Section 422 of the Code.

     2.22 “Nonemployee Director” means a Director who is an employee of neither
the Company nor of any Affiliate.

     2.23 “Nonqualified Stock Option” means an option to purchase Shares that
is not intended to be an Incentive Stock Option.

     2.24 “Option” means an Incentive Stock Option or a Nonqualified Stock
Option.

     2.25 “Parent” means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if each of the
corporations (other than the Company) in the unbroken chain then owns stock
possessing fifty percent (50%) or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.

     2.26 “Participant” means an Employee or Nonemployee Director who has an
outstanding Award.

     2.27 “Performance Goals” means the goal(s) (or combined goal(s))
determined by the Committee (in its discretion) to be applicable to a
Participant with respect to an Award. As determined by the Committee, the
Performance Goals applicable to an Award may provide for a targeted level or
levels of achievement using one or more of the following measures: (a) Cash
Flow, (b) earnings per share, (c) Profit After Tax, and (d) Profit Before Tax,
(e) Return on Capital, (f) Return on Equity, (g) Return on Sales, (h) Revenue
and/or (i) Total Shareholder Return. The Performance Goals may differ from
Participant to Participant and from Award to Award. Prior to the Determination
Date, the
Committee shall determine whether any significant element(s) shall be

-3-

 

included in or excluded from the calculation of any Performance Goal with
respect to any Participants.

     2.28 “Performance Unit” means a Performance Unit Award granted to a
Participant pursuant to Section 8.

     2.29 “Period of Restriction” means the period during which the transfer of
Shares of Restricted Stock are subject to restrictions, and as a consequence,
the Shares are subject to a substantial risk of forfeiture. As provided in
Section 6, such restrictions may be based on the passage of time, the
achievement of Performance Goals or other performance objectives, or the
occurrence of other events or conditions, as determined by the Committee, in
its discretion; provided, however, that with respect to Awards granted pursuant
to Section 10, the restrictions shall be based on the passage of time in
accordance with Section 10.2.3.

     2.30 “Plan” means the Amended and Restated Engenio Information
Technologies, Inc. (formerly LSI Logic Storage Systems, Inc.) 2004 Equity
Incentive Plan, as set forth in this instrument and as hereafter amended from
time to time.

     2.31 “Profit After Tax” means the Company’s or a business unit’s income
after taxes, determined in accordance with generally accepted accounting
principles.

     2.32 “Profit Before Tax” means the Company’s or a business unit’s income
before taxes, determined in accordance with generally accepted accounting
principles.

     2.33 “Restricted Stock” means an Award granted to a Participant pursuant
to Section 6.

     2.34 “Restricted Stock Unit” means a Restricted Stock Unit Award granted
to a Participant pursuant to Section 8.

     2.35 “Retirement” means a Termination of Service occurring on or after the
earlier of (a) age sixty-five (65), or (b) age fifty-five (55) and the
completion of ten (10) years of service with the Company or an Affiliate.

     2.36 “Return on Capital” means the Company’s or a business unit’s Profit
After Tax divided by the Company’s or business unit’s, as applicable, average
invested capital, determined in accordance with generally accepted accounting
principles.

     2.37 “Return on Equity” means the percentage equal to the Company’s Profit
After Tax divided by average stockholder’s equity, determined in accordance
with generally accepted accounting principles.

     2.38 “Return on Sales” means the percentage equal to the Company’s or a
business unit’s Profit After Tax, divided by the Company’s or the business
unit’s, as applicable, Revenue, determined in accordance with generally
accepted accounting principles.

-4-

 

     2.39 “Revenue” means the Company’s or business unit’s net sales,
determined in accordance with generally accepted accounting principles.

     2.40 “Rule 16b-3” means Rule 16b-3 promulgated under the 1934 Act, and any
future regulation amending, supplementing or superseding such regulation.

     2.41 “Section 16 Person” means a person who, with respect to the Shares,
is subject to Section 16 of the 1934 Act.

     2.42 “Shares” means the shares of Class A common stock of the Company.

     2.43 “Stock Appreciation Right” or “SAR” means an Award, granted alone or
in connection with a related Option, that pursuant to Section 7 is designated
as a SAR.

     2.44 “Subsidiary” means any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

     2.45 “Tandem SAR” means an SAR that is granted in connection with a
related Option, the exercise of which shall require forfeiture of the right to
purchase an equal number of Shares under the related Option (and when a Share
is purchased under the Option, the SAR shall be canceled to the same extent).

     2.46 “Termination of Service” means (a) in the case of an Employee, a
cessation of the employee-employer relationship between the Employee and the
Company or an Affiliate for any reason, including, but not by way of
limitation, a termination by resignation, discharge, death, Disability,
Retirement, or the disaffiliation of an Affiliate, but excluding any such
termination where there is a simultaneous reemployment by the Company or an
Affiliate; and (b) in the case of a Nonemployee Director, a cessation of the
Director’s service on the Board for any reason, including, but not by way of
limitation, a termination by resignation, death, Disability, Retirement or
non-reelection to the Board.

     2.47 “Total Shareholder Return” means the total return (change in share
price plus reinvestment of any dividends) of a Share.

SECTION 3

ADMINISTRATION

     3.1 The Committee. The Plan shall be administered by the Committee. The
Committee shall consist of not less than two (2) Directors who shall be
appointed from time to time by, and shall serve at the pleasure of, the Board
of Directors. The Committee shall be comprised solely of Directors who both
are (a) “non-employee directors” under Rule 16b-3, and (b) “outside directors”
under Section 162(m) of the Code.

-5-

 

     3.2 Authority of the Committee. It shall be the duty of the Committee to
administer the Plan in accordance with the Plan’s provisions. The Committee
shall have all powers and discretion necessary or appropriate to administer the
Plan and to control its operation, including, but not limited to, the power to
(a) determine which Employees (including Employees who are also Directors)
shall be granted Awards, (b) prescribe the terms and conditions of the Awards,
(c) interpret the Plan and the Awards, (d) adopt such procedures and subplans
as are necessary or appropriate to permit participation in the Plan by
Employees and Nonemployee Directors who are foreign nationals or employed
outside of the United States, (e) adopt rules for the administration,
interpretation and application of the Plan as are consistent therewith, (f)
interpret, amend or revoke any such rules, and (g) effect, at any time and from
time to time, an Exchange Program.

     3.3 Delegation by the Committee. The Committee, in its sole discretion and on such terms and conditions
as it may provide, may delegate all or any part of its authority and powers
under the Plan to one or more Directors or officers of the Company; provided,
however, that the Committee may not delegate its authority and powers (a) with
respect to Section 16 Persons, or (b) in any way which would jeopardize the
Plan’s qualification under Section 162(m) of the Code or Rule 16b-3.

     3.4 Decisions Binding. All determinations and decisions made by the
Committee, the Board, and any delegate of the Committee pursuant to the
provisions of the Plan shall be final, conclusive, and binding on all persons,
and shall be given the maximum deference permitted by law.

SECTION 4

SHARES SUBJECT TO THE PLAN

     4.1 Number of Shares. Subject to adjustment as provided in Section 4.3,
the total number of Shares available for grant under the Plan shall not exceed
7,500,000 Shares granted under the Plan may be either authorized but unissued
Shares or treasury Shares.

     4.2 Lapsed Awards. If an Award is cancelled, terminates, expires, or
lapses for any reason (with the exception of the termination of a Tandem SAR
upon exercise of the related Option, or the termination of a related Option
upon exercise of the corresponding Tandem SAR), any Shares subject to such
Award again shall be available to be the subject of an Award, except as
determined by the Committee.

     4.3 Adjustments in Awards and Authorized Shares. In the event that any
dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, or other
change in the corporate structure of the Company affecting the Shares such that
an adjustment is determined by the Committee (in its sole discretion) to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust the number and
class of Shares that may be delivered under the Plan, the number, class, and
price of Shares subject to outstanding Awards, and

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the numerical limits of
Sections 5.1, 6.1, 7.1, 8.1.1, 9.1 and 10.1. Notwithstanding the preceding,
the number of Shares subject to any Award always shall be a whole number.

SECTION 5

STOCK OPTIONS

     5.1 Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Employees at any time and from time to time as
determined by the Committee in its sole discretion. The Committee, in its sole
discretion, shall determine the number of Shares subject to each Option,
provided that during any Fiscal Year, no Participant shall be granted Options
covering more than 1,500,000 Shares. The Committee may grant Incentive Stock
Options, Nonqualified Stock Options, or a combination thereof.

     5.2 Award Agreement. Each Option shall be evidenced by an Award Agreement
that shall specify the Exercise Price, the expiration date of the Option, the
number of Shares to which the Option pertains, any conditions to exercise of
the Option, and such other terms and conditions as the Committee, in its
discretion, shall determine. The Award Agreement shall also specify whether
the Option is intended to be an Incentive Stock Option or a Nonqualified Stock
Option.

     5.3 Exercise Price. Subject to the provisions of this Section 5.3, the
Exercise Price for each Option shall be determined by the Committee in its sole
discretion.

          5.3.1 Nonqualified Stock Options. In the case of a Nonqualified Stock
Option, the Exercise Price shall be not less than one hundred percent (100%) of
the Fair Market Value of a Share on the Grant Date.

          5.3.2 Incentive Stock Options. In the case of an Incentive Stock Option,
the Exercise Price shall be not less than one hundred percent (100%) of the
Fair Market Value of a Share on the Grant Date; provided, however, that if on
the Grant Date, the Employee (together with persons whose stock ownership is
attributed to the Employee pursuant to Section 424(d) of the Code) owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or any of its Subsidiaries or any Parent of the Company,
the Exercise Price shall be not less than one hundred and ten percent (110%) of
the Fair Market Value of a Share on the Grant Date.

          5.3.3 Substitute Options. Notwithstanding the provisions of Sections
5.3.1 and 5.3.2, in the event that the Company or an Affiliate consummates a
transaction described in Section 424(a) of the Code (e.g., the acquisition of
property or stock from an unrelated corporation), persons who become Employees
or Nonemployee Directors on account of such transaction may be granted Options
in substitution for options granted by their former employer. If such
substitute Options are granted, the Committee, in its sole discretion and
consistent with Section 424(a) of the
Code, may determine that such substitute Options shall have an exercise
price less than one hundred percent (100%) of the Fair Market Value of the
Shares on the Grant Date.

     5.4 Expiration of Options.

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          5.4.1 Expiration Dates. Each Option shall terminate no later than the
first to occur of the following events:

               (a) The date for termination of the Option set forth in the written Award
Agreement; or

               (b) The expiration of ten years (10) from the Grant Date.

          5.4.2 Death of Participant. Notwithstanding Section 5.4.1, if a
Participant dies prior to the expiration of his or her Options, the Committee,
in its discretion, may provide that his or her Options shall be exercisable for
up to one (1) year after the date of death.

          5.4.3 Committee Discretion. Subject to the limits of Sections 5.4.1 and
5.4.2, the Committee, in its sole discretion, (a) shall provide in each Award
Agreement when each Option expires and becomes unexercisable, and (b) may,
after an Option is granted, extend the maximum term of the Option (subject to
Section 5.8.4 regarding Incentive Stock Options).

     5.5 Exercisability of Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall determine in its sole discretion. After an Option is
granted, the Committee, in its sole discretion, may accelerate the
exercisability of the Option.

     5.6 Payment. Options shall be exercised by the Participant’s delivery of
a notice of exercise to the Corporate Secretary of the Company (or its
designee), setting forth the number of Shares with respect to which the Option
is to be exercised, accompanied by full payment for the Shares. The notice
shall be given in the form and manner specified by the Company from time to
time.

          Upon the exercise of any Option, the Exercise Price shall be payable to
the Company in full in cash or its equivalent. The Committee, in its sole
discretion, also may permit exercise (a) by tendering previously acquired
Shares having an aggregate Fair Market Value at the time of exercise equal to
the total Exercise Price, or (b) by any other means which the Committee, in its
sole discretion, determines to both provide legal consideration for the Shares,
and to be consistent with the purposes of the Plan. As soon as practicable
after receipt of a written notification of exercise and full payment for the
Shares purchased, the Company shall deliver to the Participant (or the
Participant’s designated broker), Share certificates (which may be in book
entry form) representing such Shares.

     5.7 Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option as it
may deem advisable, including, but not limited to, restrictions related to
applicable federal securities laws, the requirements of any national securities
exchange or system upon which Shares are then listed or traded, or any blue sky
or state securities laws.

     5.8 Certain Additional Provisions for Incentive Stock Options.

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          5.8.1 Exercisability. The aggregate Fair Market Value (determined on the
Grant Date(s)) of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by any Employee during any calendar year (under
all plans of the Company and its Subsidiaries and any Parent of the Company)
shall not exceed $100,000.

          5.8.2 Termination of Service. No vested Incentive Stock Option may be
exercised more than three (3) months after the Participant’s Termination of
Service for any reason other than Disability or death, unless (a) the
Participant dies during such three-month period, and (b) the Award Agreement or
the Committee permits later exercise. No Incentive Stock Option may be
exercised more than one (1) year after the Participant’s Termination of Service
on account of Disability, unless (a) the Participant dies during such one-year
period, and (b) the Award Agreement or the Committee permit later exercise.

          5.8.3 Company and Subsidiaries Only. Incentive Stock Options may be
granted only to persons who are Employees of the Company or a Subsidiary on the
Grant Date.

          5.8.4 Expiration. No Incentive Stock Option may be exercised after the
expiration of ten (10) years from the Grant Date; provided, however, that if
the Option is granted to an Employee who, together with persons whose stock
ownership is attributed to the Employee pursuant to Section 424(d) of the Code,
owns stock possessing more than 10% of the total combined voting power of all
classes of the stock of the Company or any of its Subsidiaries or any Parent of
the Company, the Option may not be exercised after the expiration of five (5)
years from the Grant Date.

SECTION 6

RESTRICTED STOCK

     6.1 Grant of Restricted Stock. Subject to the terms and provisions of
the Plan, the Committee, at any time and from time to time, may grant shares of
Restricted Stock to Employees in such amounts as the Committee, in its sole
discretion, shall determine. The Committee, in its sole discretion, shall
determine the number of
Shares to be granted to each Participant as Restricted Stock, provided
that during any Fiscal Year, no Participant shall receive more than 500,000
Shares of Restricted Stock.

     6.2 Restricted Stock Agreement. Each Award of Restricted Stock shall be
evidenced by an Award Agreement that shall specify the Period of Restriction,
the number of Shares granted, and such other terms and conditions as the
Committee, in its sole discretion, shall determine. Unless the Committee
determines otherwise, shares of Restricted Stock shall be held by the Company
as escrow agent until the restrictions on such Shares have lapsed.

     6.3 Transferability. Except as provided in this Section 6, shares of
Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until the end of the applicable Period of
Restriction.

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     6.4 Other Restrictions. The Committee, in its sole discretion, may impose
such other restrictions on shares of Restricted Stock as it may deem advisable
or appropriate, in accordance with this Section 6.4.

          6.4.1 General Restrictions. The Committee may set restrictions based upon
the achievement of specific Performance Goals or other performance objectives
(Company-wide, divisional, or individual), the passage of time, applicable
federal or state securities laws, or any other basis determined by the
Committee in its discretion.

          6.4.2 Section 162(m) Performance Goals. For purposes of qualifying grants
of Restricted Stock as “performance-based compensation” under Section 162(m) of
the Code, the Committee, in its discretion, may establish the conditions to be
satisfied based upon the achievement of Performance Goals. The Performance
Goals shall be set by the Committee on or before the latest date permissible to
enable the Restricted Stock to qualify as “performance-based compensation”
under Section 162(m) of the Code. In granting Restricted Stock that is
intended to qualify under Section 162(m) of the Code, the Committee shall
follow any procedures determined by it from time to time to be necessary or
appropriate to ensure qualification of the Restricted Stock under Section
162(m) of the Code (e.g., in determining the Performance Goals).

          6.4.3 Legend on Certificates. The Committee, in its discretion, may
legend the certificates representing Restricted Stock to give appropriate
notice of such restrictions.

     6.5 Removal of Restrictions. Except as otherwise provided in this Section 6, Shares of Restricted
Stock covered by each Restricted Stock grant made under the Plan shall be
released from escrow as soon as practicable after the last day of the Period of
Restriction. The Committee, in its discretion, may accelerate the time at
which any restrictions shall lapse or be removed. After the restrictions have
lapsed, the Participant shall be entitled to have any legend or legends under
Section 6.4.3 removed from his or her Share certificate, and the Shares shall
be freely transferable by the Participant.

     6.6 Voting Rights. During the Period of Restriction, Participants holding
Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares, unless the Committee determines otherwise.

     6.7 Dividends and Other Distributions. During the Period of Restriction,
Participants holding Shares of Restricted Stock shall be entitled to receive
all dividends and other distributions paid with respect to such Shares unless
otherwise provided in the Award Agreement. If any such dividends or
distributions are paid in Shares, the Shares shall be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted
Stock with respect to which they were paid.

     6.8 Return of Restricted Stock to Company. On the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed shall
revert to the Company and again shall become available for grant under the
Plan.

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SECTION 7

STOCK APPRECIATION RIGHTS

     7.1 Grant of SARs. Subject to the terms and conditions of the Plan, a SAR
may be granted to Employees at any time and from time to time as shall be
determined by the Committee, in its sole discretion. The Committee may grant
Affiliated SARs, Freestanding SARs, Tandem SARs, or any combination thereof.

          7.1.1 Number of Shares. The Committee shall have complete discretion to
determine the number of SARs granted to any Participant, provided that during
any Fiscal Year, no Participant shall be granted SARs covering more than
500,000 Shares.

          7.1.2 Exercise Price and Other Terms. The Committee, subject to the
provisions of the Plan, shall have complete discretion to determine the terms
and conditions of SARs granted under the Plan. However, the exercise price of
an SAR shall be not less than one hundred percent (100%) of the Fair Market
Value of a Share on the Grant Date.

     7.2 SAR Agreement. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the exercise price, the term of the SAR, the
conditions of exercise, and such other terms and conditions as the Committee,
in its sole discretion, shall determine.

     7.3 Expiration of SARs. A SAR granted under the Plan shall expire upon
the date determined by the Committee, in its sole discretion, and set forth in
the Award Agreement. Notwithstanding the foregoing, the rules with respect to
Options set forth in Section 5.4 also shall apply to SARs.

     7.4 Payment of SAR Amount. Upon exercise of a SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying:

               (a) The difference between the Fair Market Value of a Share on the date of
exercise over the exercise price; times

               (b) The number of Shares with respect to which the SAR is exercised. At
the discretion of the Committee, the payment upon SAR exercise may be in cash,
in Shares of equivalent value, or in some combination thereof.

SECTION 8

PERFORMANCE UNITS AND RESTRICTED STOCK UNITS

     8.1 Grant of Performance Units/Restricted Stock Units. Performance Units
and Restricted Stock Units may be granted to Employees at any time and from
time to time, as shall be determined by the Committee, in its sole discretion.
The Committee shall have complete discretion in determining the number of
Performance Units and Restricted Stock Units granted to each Participant
provided that during any Fiscal Year, (a) no Participant shall receive
Performance Units having an

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initial value greater than $1,000,000, and (b) no
Participant shall receive more than 500,000 Restricted Stock Units.

     8.2 Value of Performance Units/Restricted Stock Units. Each Performance
Unit shall have an initial value that is established by the Committee on or
before the Grant Date. Each Restricted Stock Unit shall have an initial value
equal to the Fair Market Value of a Share on the Grant Date.

     8.3 Performance Goals/Vesting Criteria and Other Terms. The Committee shall set, in its discretion, Performance Goals, other
performance objectives and/or a requirement of continued employment over a
period of time which, depending on the extent to which such objectives or
requirements are met, will determine the number or value of Performance Units
or Restricted Stock Units that will vest or be earned by the Participants. The
time period during which the Performance Goals, other performance objectives or
continued employment must be met shall be called the “Vesting Period.” Each
Award of Performance Units and Restricted Stock Units shall be evidenced by an
Award Agreement that shall specify the Vesting Period, and such other terms and
conditions as the Committee, in its sole discretion, shall determine.

               8.3.1 General Performance Goals or Other Requirements. The Committee may
set vesting requirements on the basis of achievement of Performance Goals or
other performance objectives based upon the achievement of Company-wide,
divisional, or individual goals, the passage of time, applicable federal or
state securities laws, or any other basis determined by the Committee in its
discretion.

               8.3.2 Section 162(m) Performance Goals. For purposes of qualifying grants
of Performance Units and/or Restricted Stock Units as “performance-based
compensation” under Section 162(m) of the Code, the Committee, in its
discretion, may establish the conditions to be satisfied applicable to
Performance Units and/or Restricted Stock Units based upon the achievement of
Performance Goals. The Performance Goals shall be set by the Committee on or
before the latest date permissible to enable the Performance Units and/or
Restricted Stock Units to qualify as “performance-based compensation” under
Section 162(m) of the Code. In granting Performance Units and/or Restricted
Stock Units which are intended to qualify under Section 162(m) of the Code, the
Committee shall follow any procedures determined by it from time to time to be
necessary or appropriate to ensure qualification of the Performance Units
and/or Restricted Stock Units under Section 162(m) of the Code (e.g., in
determining the Performance Goals).

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     8.4 Earning or Vesting of Performance Units and Restricted Stock Units.
After the applicable Vesting Period has ended, the holder of Performance Units
or Restricted Stock Units, as the case may be, shall be entitled to receive a
payout with respect to earned/vested Performance Units or Restricted Stock
Units in accordance with the terms of the Award Agreement in the form of cash,
Shares or a combination thereof pursuant to Section 8.5 below. After the grant
of a Performance Unit or Restricted Stock Unit, the Committee, in its sole
discretion, may reduce or waive any Performance Goals or other performance
objectives for such Performance Unit or Restricted Stock Unit.

     8.5 Form and Timing of Payment of Performance Units/Restricted Stock
Units. Payment of earned/vested Performance Units or Restricted Stock Units,
as the case may be, shall be made as soon as practicable after the expiration
of the applicable Vesting Period. The Committee, in its sole discretion, may
pay earned/vested Performance Units or Restricted Stock Units, as the case may
be, in the form of cash, in Shares (which have an aggregate Fair Market Value
equal to the value of the earned/vested Performance Units or Restricted Stock
Units, as the case may be, at the close of the applicable Vesting Period) or in
a combination thereof.

     8.6 Cancellation of Performance Units; Restricted Stock Units. On the
date set forth in the Award Agreement, all unearned or unvested Performance
Units and Restricted Stock Units shall be forfeited to the Company, and again
shall be available for grant under the Plan.

SECTION 9

NONEMPLOYEE DIRECTOR OPTIONS

     The provisions of this Section 9 are applicable only to Options granted to
Nonemployee Directors.

     9.1 Granting of Options.

          9.1.1 Initial Grants. Each Nonemployee Director who first becomes a
Nonemployee Director on or after the effective date of this Plan, automatically
shall receive, as of the date that the individual first is appointed or elected
as a Nonemployee Director, an Option to purchase 25,000 Shares.

          9.1.2 Ongoing Grants. Each Nonemployee Director who both (a) is a
Nonemployee Director on the last business day of a Fiscal Year, and (b) has
served as a Nonemployee Director for the entire Fiscal Year which includes such
last business day, automatically shall receive, as of such last business day
only, an Option to purchase 15,000 Shares.

     9.2 Terms of Options.

          9.2.1 Option Agreement. Each Option granted pursuant to this Section 9
shall be evidenced by a written Award Agreement between the Participant and the
Company.

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          9.2.2 Exercise Price. The Exercise Price for the Shares subject to each
Option granted pursuant to this Section 9 shall be 100% of the Fair Market
Value of such Shares on the Grant Date.

          9.2.3 Exercisability.

               (a) Each Option granted pursuant to Section 9.1.1 shall become exercisable
as to 100% of the Shares on the first anniversary of the Grant Date.

               (b) Each Option granted pursuant to Section 9.1.2 shall become exercisable
as to 100% of the Shares on the first anniversary of the Grant Date.
Notwithstanding the preceding, once a Participant ceases to be a Director, his
or her Options which are not then exercisable shall never become exercisable
and shall be immediately forfeited, except to the limited extent provided in
Section 9.2.5. Shares subject to forfeited Options shall revert to the Company
and again shall become available for grant under the Plan.

          9.2.4 Expiration of Options. Each Option granted pursuant to this Section
9 shall terminate upon the first to occur of the following events:

               (a) The expiration of ten (10) years from the Grant Date; or

               (b) The expiration of seven (7) months from the date of the Participant’s
Termination of Service for any reason other than the Participant’s death,
Disability or Retirement; or

               (c) The expiration of one (1) year from the date of the Participant’s
Termination of Service by reason of Disability or Retirement.

          9.2.5 Death of Participant. Notwithstanding the provisions of Section
9.2.4, if a Participant dies prior to the expiration of his or her Options in
accordance with Section 9.2.4, then (a) one hundred percent (100%) of the
Shares covered by his or her Options shall immediately become one hundred
percent (100%) exercisable, and (b) his or her Options shall terminate one (1)
year after the date of his or her death.

          9.2.6 Not Incentive Stock Options. Options granted pursuant to this
Section 9 shall not be designated as Incentive Stock Options.

          9.2.7 Other Terms. All provisions of the Plan not inconsistent with this
Section 9 shall apply to Options granted to Nonemployee Directors.

SECTION 10

NONEMPLOYEE DIRECTOR AWARDS OF RESTRICTED STOCK

     The provisions of this Section 10 are applicable only to Restricted Stock
granted to Nonemployee Directors.

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     10.1 Granting of Restricted Stock. Each Nonemployee Director who first
becomes a Nonemployee Director on or after the effective date of this Plan,
automatically shall receive, as of the date that the individual first is
appointed or elected as a Nonemployee Director, 2,500 Shares of Restricted
Stock.

     10.2 Terms of Restricted Stock.

          10.2.1 Award Agreement. Each Award of Restricted Stock granted pursuant
to this Section 10 shall be evidenced by a written Award Agreement between the
Participant and the Company.

          10.2.2 Escrow. Shares of Restricted Stock granted pursuant to this
Section 10 shall be held by the Company as escrow agent until the end of the
Period of Restriction applicable to such Shares.

          10.2.3 End of Period of Restriction. The Period of Restriction for each
Award of Restricted Stock granted pursuant to Section 10.1 shall end as to 100%
of the Shares on the first anniversary of the Grant Date and all such Shares
shall be fully vested on such date. Notwithstanding the preceding, once a
Participant ceases to be a Director, his or her Shares of Restricted Stock as
to which the Period of Restriction has not ended shall be immediately
forfeited, except to the limited extent provided in Section 10.2.5.

          10.2.4 Death of Participant. If a Participant dies prior to the end of
the Period of Restriction on his or her Award of Restricted Stock in accordance
with Section 10.2.3, then the Period of Restriction applicable to such Award
shall immediately end and one hundred percent (100%) of the Shares covered by
his or her Award of Restricted Stock shall immediately become one hundred
percent (100%) vested.

          10.2.5 Other Terms. All provisions of the Plan not inconsistent with this
Section 10 shall apply to Awards of Restricted Stock granted to Nonemployee
Directors.

SECTION 11

MISCELLANEOUS

     11.1 Deferrals. The Committee, in its sole discretion, may permit a
Participant to defer receipt of the payment of cash or the delivery of Shares
that would otherwise be due to such Participant under an Award. Any such
deferral elections shall be subject to such rules and procedures as shall be
determined by the Committee in its sole discretion.

     11.2 No Effect on Employment or Service. Nothing in the Plan shall interfere with or limit in any way the right
of the Company to terminate any Participant’s employment or service at any
time, with or without cause. For purposes of the Plan, transfer of employment
of a Participant between the Company and any one of its Affiliates (or between
Affiliates) shall not be deemed a Termination of Service. Employment with the
Company and its Affiliates is on an at-will basis only.

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     11.3 Participation. No Employee shall have the right to be selected to
receive an Award under this Plan, or, having been so selected, to be selected
to receive a future Award.

     11.4 Indemnification. Each person who is or shall have been a member of
the Committee, or of the Board, shall be indemnified and held harmless by the
Company against and from (a) any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan or any Award Agreement, and (b) from any and all
amounts paid by him or her in settlement thereof, with the Company’s approval,
or paid by him or her in satisfaction of any judgment in any such claim,
action, suit, or proceeding against him or her, provided he or she shall give
the Company an opportunity, at its own expense, to handle and defend the same
before he or she undertakes to handle and defend it on his or her own behalf.
The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the
Company’s Certificate of Incorporation or Bylaws, by contract, as a matter of
law, or otherwise, or under any power that the Company may have to indemnify
them or hold them harmless.

     11.5 Successors. All obligations of the Company under the Plan, with
respect to Awards granted hereunder, shall be binding on any successor to the
Company, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or substantially
all of the business or assets of the Company.

     11.6 Limited Transferability of Awards. No Award granted under the Plan
may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will, by the laws of descent and distribution. All
rights with respect to an Award granted to a Participant shall be available
during his or her lifetime only to the Participant. Notwithstanding the
foregoing, after the Plan becomes effective, the Committee (in its sole
discretion) may determine that a Participant may, in a manner specified by the
Committee, (a) transfer a Nonqualified Stock Option to a Participant’s spouse,
former spouse or dependent pursuant to a court-approved domestic relations
order which relates to the provision of child support, alimony payments or
marital property rights, and (b) transfer a Nonqualified Stock Option by bona
fide gift and not for any consideration, to (i) a member or members of the
Participant’s immediate
family, (ii) a trust established for the exclusive benefit of the
Participant and/or member(s) of the Participant’s immediate family, (iii) a
partnership, limited liability company of other entity whose only partners or
members are the Participant and/or member(s) of the Participant’s immediate
family, or (iv) a foundation in which the Participant an/or member(s) of the
Participant’s immediate family control the management of the foundation’s
assets. The transferability provisions provided in the preceding sentence
shall be effective only if expressly determined by the Committee after the
effective date of the Plan.

     11.7 Beneficiary Designations. Notwithstanding any contrary provisions of
Section 11.6, after the Plan becomes effective, the Committee (in its sole
discretion) may determine that a Participant under the Plan may name a
beneficiary or beneficiaries to whom any vested but unpaid Award shall be paid
in the event of the Participant’s death. Each such designation shall revoke
all prior designations by the Participant and shall be effective only if given
in a form and manner

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acceptable to the Committee. In the absence of any such
designation, any vested benefits remaining unpaid at the Participant’s death
shall be paid to the Participant’s estate and, subject to the terms of the Plan
and of the applicable Award Agreement, any unexercised vested Award may be
exercised by the administrator or executor of the Participant’s estate. The
provisions of this Section 11.7 shall be effective only if expressly determined
by the Committee after the effective date of the Plan.

     11.8 No Rights as Stockholder. Except to the limited extent provided in
Sections 6.6 and 6.7 with respect to holders of Restricted Stock, no
Participant (nor any beneficiary) shall have any of the rights or privileges of
a stockholder of the Company with respect to any Shares issuable pursuant to an
Award (or exercise thereof), unless and until certificates representing such
Shares shall have been issued, recorded on the records of the Company or its
transfer agents or registrars, and delivered to the Participant (or
beneficiary).

SECTION 12

AMENDMENT, TERMINATION, AND DURATION

     12.1 Amendment, Suspension, or Termination. The Board or the Committee,
in its sole discretion, may amend, suspend or terminate the Plan, or any part
thereof, at any time and for any reason. The amendment, suspension, or
termination of the Plan shall not, without the consent of the Participant,
alter or impair any rights or obligations under any Award theretofore granted
to such Participant. No Award may be granted during any period of suspension
or after termination of the Plan.

     12.2 Duration of the Plan. The Plan shall be effective as of February 12,
2004, and subject to Section 12.1 (regarding the Board’s right to amend or
terminate the Plan), shall remain in effect thereafter. However,
without further stockholder approval, no Incentive Stock Option may be
granted under the Plan after February 12, 2014.

SECTION 13

TAX WITHHOLDING AND MINIMUM SHARE PURCHASE PRICE

     13.1 Withholding Requirements. Prior to the delivery of any Shares or
cash pursuant to an Award (or exercise thereof), the Company shall have the
power and the right to deduct or withhold, or require a Participant to remit to
the Company, an amount sufficient to satisfy federal, state, and local taxes
(including the Participant’s FICA obligation) required to be withheld with
respect to such Award (or exercise thereof).

     13.2 Withholding Arrangements. The Committee, in its sole discretion and
pursuant to such procedures as it may specify from time to time, may permit a
Participant to satisfy such tax withholding obligation, in whole or in part by
(a) electing to have the Company withhold otherwise deliverable Shares, or (b)
delivering to the Company already-owned Shares having a Fair Market Value equal
to the minimum amount required to be withheld.

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     13.3 Minimum Share Purchase Price. Notwithstanding anything to the
contrary herein, with respect to any Shares issued pursuant to an Award
hereunder, the purchase price by a Participant for each Share issued shall in
no event be less than the par value per Share; provided, however, the Committee
may provide in an Award Agreement that any such purchase price shall be paid by
the Company to a Participant pursuant to a bonus equal to the aggregate
purchase price for such Shares, subject to required tax withholding.

SECTION 14

LEGAL CONSTRUCTION

     14.1 Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural
shall include the singular and the singular shall include the plural.

     14.2 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.

     14.3 Requirements of Law. The granting of Awards and the issuance of Shares under the Plan shall
be subject to all applicable laws, rules, and regulations, and to such
approvals by any governmental agencies or national securities exchanges as may
be required.

     14.4 Securities Law Compliance. With respect to Section 16 Persons,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3. To the extent any provision of the Plan, Award
Agreement or action by the Committee fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed advisable by the
Committee.

     14.5 Governing Law. The Plan and all Award Agreements shall be construed
in accordance with and governed by the laws of the State of California, other
than its conflicts of laws provisions.

     14.6 Captions. Captions are provided herein for convenience only, and
shall not serve as a basis for interpretation or construction of the Plan.

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EXECUTION

     IN WITNESS WHEREOF, the Company, by its duly authorized officer, has
executed this restated Plan on the date indicated below.

	 	 	 	 	 
	 	ENGENIO INFORMATION TECHNOLOGIES, INC.

 	 
	Dated: September 13, 2004 	By  	/s/ David E. Sanders
 	 
	 	 	Title:  Vice President General Counsel 	 
	 	 	 	 
	 

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