Document:

EX-4.6

 

Exhibit 4.6

OPENTV CORP.

2005 INCENTIVE PLAN

Form of Restricted Share Agreement

     RESTRICTED SHARE AGREEMENT dated as of                     , 2007 (the “Grant Date”), between OpenTV Corp.
(the “Company”) and                                          (“Grantee”).

Recitals

     A. Grantee is an employee of the Company or one of its
Subsidiaries.

     B. The Company has adopted the OpenTV Corp. 2005 Incentive Plan,
effective October 13, 2005 (the “Plan”), which is incorporated herein by
reference. This Agreement is entered into pursuant to Section 11.5 of the
Plan. Any capitalized terms used herein and not otherwise defined are used as
defined in the Plan.

     C. This Agreement is entered into in lieu of, and replaces and supersedes any other bonus
awards, arrangements, or agreements contemplated or previously entered into between the Company and
Grantee with respect to calendar year 2007.

     NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and Grantee hereby agree
to the following:

     1. Grant of Restricted Shares. The Company hereby awards to Grantee under the Plan, subject
to the terms and conditions hereinafter set forth,                                 shares (the “Restricted Shares”) of the
Company’s Class A Ordinary Shares, no par value. The Company will issue to Grantee share
certificates evidencing the Restricted Shares, which certificates will be registered in the name of
Grantee and will bear an appropriate legend referring to the terms, conditions, and restrictions
applicable to the Restricted Shares, substantially in the following form:

The transferability of this certificate and the Class A Ordinary Shares represented
hereby are subject to the terms, conditions and restrictions (including forfeiture)
contained in the Restricted Share Agreement, effective as of                           , 2007,
between OpenTV Corp. and the registered owner hereof. Copies of such Agreement are
on file in the offices of Open TV Corp., 275 Sacramento Street, San Francisco,
California 94111.

The certificates evidencing the Restricted Shares shall be held in custody by the Company or, if
specified by the Committee, by a third party custodian or trustee, until the restrictions on such
shares shall have lapsed, and, as a condition of this award of Restricted Shares, Grantee shall
deliver a stock power, duly endorsed in blank, relating to the Restricted Shares.

     2. Transfer Restrictions. The Restricted Shares may not be transferred or assigned in any
manner otherwise than by will or by the laws of descent or distribution or pursuant to a Domestic
relations order. Upon any attempt to effect any such transfer or assignment, the award provided for
herein shall immediately become null and void, and the Restricted
Shares shall be immediately forfeited to the Company. The terms of this Agreement shall be binding upon the
executors, administrators, heirs, successors and assigns of Grantee.

 

 

     3. Restrictions. Subject to the forfeiture provisions of Section 4 hereof, the restrictions
on the Restricted Shares shall lapse and such shares shall vest in Grantee upon the satisfaction of
the vesting conditions described below and as determined by the Committee based on “Net Income” of
the Company, as publicly reported in the financial statements of the Company included in the Annual
Reports on Form 10-K and Quarterly Reports on Form 10-Q filed by the Company from time to time with
the Securities and Exchange Commission; provided that, solely for purposes of determining the
satisfaction of the vesting conditions under this Agreement, extraordinary gains and losses
resulting from asset sales and acquisitions shall be excluded from the calculation of Net Income.
The vesting conditions shall be deemed satisfied if and only if the Company shall achieve
cumulative Net Income measured over any four consecutive fiscal quarters during the period
commencing April 1, 2007 and ending December 31, 2009 (“Cumulative Net Income”) as follows:

     (a) Restrictions lapse on 62.5% of the Restricted
Shares upon achievement of Cumulative Net Income equal
to or greater than zero;

     (b) Restrictions lapse on an additional 12.5% of
the Restricted Shares upon achievement of Cumulative Net Income of

           $4,000,000; and

     (c) Restrictions lapse on the final 25% of the
Restricted Shares upon achievement of Cumulative Net
Income of $6,000,000.

After the restrictions lapse, the Class A Ordinary Shares shall no longer be “Restricted Shares”
and shall be fully vested in and owned by the Grantee. Following the Company publicly reporting
its financial statements for the fiscal quarter ending December 31, 2009 and determining the
satisfaction, if any, of vesting conditions pursuant to this Section 3, any remaining Restricted
Shares as to which the restrictions thereon shall not have lapsed shall be immediately forfeited to
the Company.

     4. Termination of Employment; Forfeiture.

     (a) Upon termination of Grantee’s employment with the Company and its Subsidiaries as a result
of the retirement (as described herein), death or Disability of Grantee, any Restricted Shares,
after such termination, shall continue to be subject to the restrictions set forth herein, which
restrictions shall lapse and such shares shall vest in Grantee in accordance with the provisions of
Section 3 hereof as if Grantee had remained employed by the Company for six calendar months past
the date of termination. At the end of such six-month period, all Restricted Shares as to which
the restrictions thereon shall not have previously lapsed shall be immediately forfeited to the
Company. Retirement of Grantee shall mean (i) the termination of employment with the consent of
the Company or any Subsidiary on or after the last day of the month in which Grantee attains age 65
and has, as of such date of termination, been continuously employed by the Company for at least two years or (ii) otherwise as the Committee shall determine,
in its sole discretion.

 

 

     (b) Upon the involuntary termination of Grantee’s employment with the Company or any
Subsidiary within six months following a Change in Control (as defined in Section 7 hereof) for any
reason other than Cause, all restrictions shall lapse on the Restricted Shares.

     (c) Upon termination of Grantee’s employment with the Company and its Subsidiaries for any
reason other than as described in Sections 4(a) or (b) above, all Restricted Shares as to which the
restrictions thereon shall not have previously lapsed shall be immediately forfeited to the
Company.

     5. Distribution Following Termination of Restrictions. Upon the vesting and lapsing of the
restrictions as to any portion of the Restricted Shares, the Company will cause a new certificate
evidencing such number of Class A Ordinary Shares to be delivered to Grantee, or in the case of his
death to his legal representative, beneficiary or heir, free of the legend regarding
transferability; provided that the Company shall not be obligated to issue any fractional shares.

     6. Voting and Dividend Rights. During the period in which the restrictions provided herein
are applicable to the Restricted Shares, Grantee shall have the right to vote the Restricted Shares
and to receive any cash dividends paid with respect thereto unless and until forfeiture thereof.
Any dividend or distribution payable with respect to Restricted Shares that shall be paid or
distributed in shares of Class A Ordinary Shares shall be subject to the same restrictions provided
for herein, and the shares so paid or distributed shall be deemed Restricted Shares subject to all
terms and conditions herein. Any dividend or distribution (other than in cash or Class A Ordinary
Shares) payable or distributable on Restricted Shares, unless otherwise determined by the
Committee, shall be subject to the terms and conditions of this Agreement to the same extent and in
the same manner as the Restricted Shares are subject; provided that the Committee may make such
modifications and additions to the terms and conditions (including restrictions on transfer and the
conditions to the timing and degree of lapse of such restrictions) that shall become applicable to
such dividend or distribution as the Committee may provide in its absolute discretion.

     7. Change in Control. Upon a Change in Control, if the Company or the survivor or successor
entity in the transaction does not assume this Agreement with modification of the vesting
conditions in a manner that substantially reflects the same financial performance of the Company as
described above, all restrictions shall lapse on the Restricted Shares.

          A “Change in Control” shall be deemed to have occurred if:

     (a) any person (as defined in Sections 13(d) and 14(d) of the Exchange Act) (a “Person”) is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company (not including in the amount of the securities
beneficially owned by such person any such securities acquired directly from the Company or its
Subsidiaries) representing 50% or more of the combined voting power
of the Company’s then outstanding voting securities; provided, however, that for purposes of this
Agreement, the term “Person” shall not include (A) the Company or any of its Affiliates, (B) a
trustee or other fiduciary holding securities under an employee benefit plan of the Company or any
of its Affiliates, (C) an underwriter temporarily holding securities pursuant to an offering of
such securities, or (D) a corporation owned, directly or indirectly, by the shareholders of the
Company in substantially the same proportions as their ownership of shares of the Company; and
provided, further, however, that for purposes of this paragraph (i), there shall be excluded any
Person who becomes such a beneficial owner in connection with an Excluded Transaction (as defined
in paragraph (c) below);

 

 

     (b) the following individuals cease for any reason to constitute a majority of the number of
members of the Company’s Board (“Directors”) then serving: individuals who, on the date hereof,
constitute the Board and any new Director (other than a Director whose initial assumption of office
is in connection with an actual or threatened election contest including but not limited to a
consent solicitation, relating to the election of Directors of the Company) whose appointment or
election by the Board or nomination for election by the Company’s shareholders was approved or
recommended by a vote of at least two-thirds (2/3) of the Directors then still in office who either
were Directors on the date hereof or whose appointment, election or nomination for election was
previously so approved; or

     (c) there is consummated a merger or consolidation of the Company or any direct or indirect
subsidiary thereof with any other corporation, other than a merger or consolidation (an “Excluded
Transaction”) which would result in the holders of 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 corporation or any parent thereof) at least 50%
of the combined voting power of the voting securities of the entity surviving the merger or
consolidation (or the parent of such surviving entity) immediately after such merger or
consolidation, or

     (d) the shareholders of the Company approve a plan of complete liquidation of the Company, or
there is consummated the sale or other disposition of all or substantially all of the Company’s
assets.

     8. Corporate Structure Change. Except as otherwise provided in the Plan in the case of a
Change in Control of the Company, in the event of any merger, consolidation, reorganization,
recapitalization, reclassification or other capital or corporate structure change of the Company,
the securities or other consideration receivable for or in conversion of or exchange for Restricted
Shares shall be subject to the terms and conditions of this Agreement to the same extent and in the
same manner as the Restricted Shares are subject; provided that the Board of Directors may make
such modifications and additions to the terms and conditions (including restrictions on transfer
and the conditions to the timing and degree of lapse of such restrictions) that shall become
applicable to the securities or other consideration so receivable as the Board of Directors may
provide in its absolute discretion.

     9. Tax Withholding. The obligation of the Company to deliver any certificate to Grantee
pursuant to Section 5 hereof shall be subject to the receipt by the Company from Grantee of any
withholding taxes required as a result of the award of the Restricted
Shares or lapsing of restrictions thereon. Unless the Committee shall determine otherwise at any time
after the date hereof, Grantee may satisfy all or part of such withholding tax requirement by
electing to sell to the Company a designated number of unrestricted shares of Class A Ordinary
Shares held by Grantee at a price per share equal to the Fair Market Value of such shares, provided
that the aggregate value of the shares sold does not exceed the minimum required tax withholding
obligation.

 

 

     10. Securities Laws Requirements. The Company shall not be required to issue Restricted
Shares unless and until (i) such shares have been duly listed upon each stock exchange on which
Class A Ordinary Shares are then registered and (ii) the Company has complied with applicable
federal and state securities laws. The Company may require Grantee to furnish to the Company, prior
to the issuance of any Restricted Shares, an instrument, in such form as the Committee may from
time to time deem appropriate, in which Grantee represents that the Restricted Shares acquired by
him hereunder are being acquired for investment and not with a view to the sale or distribution
thereof.

     11. Incorporation of Plan Provisions. This Agreement and the award of Restricted Shares
hereunder are made pursuant to the Plan and are subject to all of the terms and provisions of the
Plan as if the same were fully set forth herein. In the event that any provision of this Agreement
conflicts with the Plan, the provisions of the Plan shall control. Grantee acknowledges receipt of
a copy of the Plan and agrees that all decisions under and interpretations of the Plan by the
Committee shall be final, binding and conclusive upon Grantee. Capitalized terms not otherwise
defined herein shall have the same meanings set forth in the Plan for such terms.

     12. No Rights to Employment. Nothing contained in this Agreement shall confer upon Grantee
any right to continued employment by the Company or any Subsidiary, or limit in any way the right
of the Company or any Subsidiary to terminate or modify the terms of Grantee’s employment at any
time. 

     13. Code Section 409A. If any provision of this Agreement would result in the imposition of
an excise tax under Section 409A of the Code and related regulations and Treasury pronouncements
(“Section 409A”), that provision will be reformed to avoid imposition of the excise tax and no
action taken to comply with Section 409A shall be deemed to impair a benefit under this Agreement
or require the consent of the Grantee.

 

 

     14. Miscellaneous.

     THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICT OF LAWS.

     This Agreement shall be binding upon and inure to the benefit of the Company and its
successors and assigns.

     If any term or provision of this Agreement should be invalid or unenforceable, such provision
shall be severed from this Agreement, and all other terms and provisions hereof shall remain in
full force and effect.

     This Agreement, including the relevant provisions of the Plan, constitutes the entire
agreement between the parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, both written and oral, with respect to the subject hereof. This
Agreement may not be amended, except by an instrument in writing signed by the Company and Grantee.

     This Agreement may be executed in one or more counterparts, each of which shall be an
original, but all of which together shall constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	OPENTV CORP.

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

               Grantee has had an opportunity to obtain the advice of counsel prior to executing this
Agreement and fully understands all provisions of the Agreement. Grantee further agrees to notify
the Company upon any change in the residence address indicated below.

	 	 	 	 	 
	Dated:

	 	  

NAME
OF GRANTEE
	 	 
	 
	 	 	 	 
	 

	 	Residence Address:EX-10.1

 

Exhibit 10.1

CA, INC.

2007 INCENTIVE PLAN

Effective as of June 12, 2007

 

 

CA, INC.

2007 INCENTIVE PLAN

ARTICLE I

ESTABLISHMENT AND PURPOSE 

     1.1 Purpose. The purpose of this CA, Inc. 2007 Incentive Plan (the “Plan”) is to
enable CA, Inc. (the “Company”) to achieve superior financial performance, as reflected in the
performance of its Common Stock and other key financial or operating indicators by (i) providing
incentives and rewards to certain Employees and Consultants who are in a position to contribute to
the success and long-term objectives of the Company, (ii) aiding in the recruitment and retention
of Employees and (iii) providing Employees and Consultants an opportunity to acquire or expand
equity interests in the Company, thus aligning the interests of such Employees and Consultants with
those of the Company’s shareholders. Towards these objectives, the Plan provides for the grant of
Annual Performance Bonuses, Stock Options, Restricted Stock and Other Equity-Based Awards.

     1.2 Effective Date; Shareholder Approval. The Plan is effective as of June 12, 2007,
subject to the approval by a vote at the Company’s 2007 Annual Meeting of Stockholders, or any
adjournment of such meeting, of the holders of at least a majority of the Shares of the Company,
present in person or by proxy and entitled to vote at such meeting. Any Awards granted under the
Plan prior to the approval of the Plan by the Company’s shareholders, as provided herein, shall be
contingent on such approval; if such approval is not obtained, the Plan shall have no effect, and
any Awards granted under the Plan shall be rescinded.

ARTICLE II

DEFINITIONS 

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

     2.1 “Annual Performance Bonus” means an Award described in Section 4.4 of the Plan.

     2.2 “Award” means any form of incentive or performance award granted under the Plan,
whether singly or in combination, to a Participant pursuant to such terms, conditions, restrictions
and/or limitations (if any) as the Committee may establish and as

 

 

set forth in the applicable Award
Agreement. Awards granted under the Plan may consist of:

	 	(a)	 	“Annual Performance Bonuses” awarded pursuant to Section 4.4;
	 
	 	(b)	 	“Long-Term Performance Bonuses” awarded pursuant to Section 4.5;
	 
	 	(c)	 	“Restricted Stock” awarded pursuant to Section 4.6;
	 
	 	(d)	 	“Stock Options” awarded pursuant to Section 4.7; and
	 
	 	(e)	 	“Other Equity-Based Awards” awarded pursuant to Section 4.8.

     2.3 “Award Agreement” means the document issued, either in writing or by electronic
means, by the Company to a Participant evidencing the grant of an Award.

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

     2.5 “Change in Control” means the happening of any of the following events:

     (a) an acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”))(a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 35% or more of either (i) the then outstanding shares of common
stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting
power of the then outstanding voting securities of the Company entitled to vote generally
in the election of directors (the “Outstanding Company Voting Securities”); excluding,
however, the following: (i) any acquisition directly from the Company, other than an
acquisition by virtue of the exercise of a conversion privilege unless the security being
so converted was itself directly acquired from the Company, (ii) any acquisition by the
Company, (iii) any acquisition by an employee benefit plan (or related trust) sponsored or
maintained by the Company or any entity controlled by the Company, or (iv) any acquisition
pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c)
of this Section 2.5; or

     (b) a change in the composition of the Board such that the individuals who, as of the
effective date of the Plan, constitute the Board (such Board shall be hereinafter referred
to as the “Incumbent Board”) cease for any reason to constitute a majority of the Board;
provided, however, for purposes of this Section 2.5, that any individual
who becomes a member of the Board subsequent to the effective date of the Plan, whose
election, or nomination for election by the Company’s shareholders, was approved by a vote
of a majority of those individuals who are members of the Board and who were also members of the Incumbent
Board (or deemed to be such pursuant to this proviso) shall be considered as though such
individual was a member of the Incumbent Board; but,

2

 

provided further, that
any such individual whose initial assumption of office occurs as a result of any actual or
threatened solicitation of proxies or consents by or on behalf of a Person other than the
Board shall not be so considered as a member of the Incumbent Board; or

     (c) consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company (“Corporate
Transaction”); excluding, however, such a Corporate Transaction pursuant to which (i) all
or substantially all of the individuals and entities who are beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Corporate Transaction will beneficially own, directly
or indirectly, more than 50% of, respectively, the outstanding shares of common stock and
the combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation resulting
from such Corporate Transaction (including, without limitation, a corporation which as the
result of such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Corporate Transaction, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may
be, (ii) no Person (other than the Company, any employee benefit plan (or related trust) of
the Company or such corporation resulting from such Corporate Transaction) will
beneficially own, directly or indirectly, 30% or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate Transaction or the
combined voting power of the outstanding voting securities of such corporation entitled to
vote generally in the election of directors, except to the extent that such ownership
existed prior to the Corporate Transaction, and (iii) individuals who were members of the
Incumbent Board will constitute at least a majority of the members of the board of
directors of the corporation resulting from such Corporate Transaction; or

     (d) the approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.

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

     2.7 “Committee” means the Compensation and Human Resource Committee of the Board
formed to act on performance-based compensation for Key Employees, or any successor committee or
subcommittee of the Board. However, if a member of the Compensation and Human Resource Committee
is not an “outside director” within the meaning of Section 162(m) of the Code or is not a
“non-employee director” within the meaning of Rule 16b-3 under the Exchange Act, the Compensation
and Human Resource Committee may from time to time delegate some or all of its functions under the
Plan to a committee or subcommittee composed of members that meet the relevant requirements. The term
“Committee” includes any such committee or subcommittee, to the extent of the Compensation and
Human Resource Committee’s delegation.

3

 

     2.8 “Common Stock” means the Common Stock, $.10 par value per share, of the Company.

     2.9 “Company” means CA, Inc.

     2.10 “Consultant” means any consultant or adviser if:

     (a) the consultant or advisor renders bona fide services to the Company;

     (b) the services rendered by the consultant or advisor are not in connection with the
offer or sale of securities in a capital-raising transaction and do not directly or
indirectly promote or maintain a market for the Company’s securities; and

     (c) the consultant or adviser is a natural person who has contracted directly with
the Company to render such services.

     2.11 “Disabled” or “Disability” means permanently and totally disabled within
the meaning of Section 22(e) of the Code.

     2.12 “Employee” means any individual who performs services as a common law employee
for the Company or a Related Company. “Employee” shall not include any seasonal or temporary
employees.

     2.13 “Exercise Price” means the price per Share, as fixed by the Committee, at which
Shares may be purchased under a Stock Option. In no event shall the Exercise Price with respect to
any Share subject to a Stock Option be set at a price that is less than the Fair Market Value of a
Share as of the date of grant.

     2.14 “Fair Market Value” of a Share means either (a) the closing sales price of a
Share as reported on the New York Stock Exchange on the applicable date, (b) if no sales of Shares
are reported for such date, for the next preceding day for which such sales were reported, or (c)
the fair market value of a Share determined in accordance with any other reasonable method approved
by the Committee in its discretion.

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

     2.16 “GAAP” means generally accepted accounting principles.

     2.17 “Incentive Stock Option” means a Stock Option granted under Section 4.7 of the
Plan that meets the requirements of Section 422 of the Code and
any regulations or rules promulgated thereunder and is designated in the Award Agreement to be an Incentive Stock
Option.

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

4

 

     2.19 “Long-Term Performance Bonus” means an Award described in Section 4.5 of the
Plan.

     2.20 “Nonqualified Stock Option” means any Stock Option granted under Section 4.7 of
the Plan that is not an Incentive Stock Option.

     2.21 “Participant” means an Employee or Consultant who has been granted an Award
under the Plan.

     2.22 “Performance Cycle” means a period measured by the Company’s fiscal year or
years over which the level of attainment of performance of one or more Performance Measures shall
be determined; provided, however, that the Committee, in its discretion, may determine to use a
period that is less than a full fiscal year.

     2.23 “Performance Measure” means, with respect to any Award granted in connection
with a Performance Cycle, the business criteria selected by the Committee to measure the level of
performance of the Company during such Performance Cycle. The Committee may select as the
Performance Measure for a Performance Cycle any one or combination of the following Company
measures (including any component thereof), as interpreted by the Committee, which (to the extent
applicable) shall be determined on a GAAP basis, either pre-tax or after-tax and may be determined
on a per share basis:

     (a) Net Operating Profit;

     (b) Return On Invested Capital;

     (c) Total Shareholder Return;

     (d) Relative Total Shareholder Return (as compared against a peer group of the
Company, which, unless otherwise specified by the Committee, shall be the companies
comprising the Standard & Poor’s Systems Software Index, excluding the Company);

     (e) Earnings;

     (f) Net Income, as adjusted;

     (g) Cash Flow;

     (h) Revenue;

     (i) Revenue Growth;

     (j) Share Performance;

     (k) Relative Share Performance;

     (l) Billings Growth; and/or

5

 

     (m) Customer Satisfaction.

     2.24 “Plan” means the CA, Inc. 2007 Incentive Plan, as set forth in this document and
as may be further amended from time to time.

     2.25 “Qualified Performance Award” means an Annual Performance Bonus, Long-Term
Performance Bonus, Restricted Stock Award or Other Equity-Based Award that is intended by the
Committee to meet the requirements for “qualified performance-based compensation” within the
meaning of Code section 162(m) and Treasury Regulation section 1.162-27(e).

     2.26 “Qualified Performance Award Determination Period” means the period within which
Committee determinations regarding Performance Measures, targets and payout formulas in connection
with Qualified Performance Awards must be made. The Qualified Performance Award Determination
Period is the period beginning on the first day of a Performance Cycle and ending no later than
ninety (90) days after commencement of the Performance Cycle; provided, however, that in the case
of a Performance Cycle that is less than 12 months in duration, the Qualified Performance Award
Determination Period shall end no later than the date on which 25% of the Performance Cycle has
elapsed.

     2.27 “Related Company” means a consolidated subsidiary of the Company for purposes of
reporting in the Company’s consolidated financial statements.

     2.28 “Reporting Person” means an Employee who is subject to the reporting
requirements of Section 16(a) of the Securities Exchange Act of 1934.

     2.29 “Restricted Stock” means Shares issued under a Long-Term Performance Bonus under
Section 4.5 or under a Restricted Stock Award pursuant to Section 4.6, which are subject to such
restrictions as the Committee, in its discretion, may impose.

     2.30 “Retirement” means retirement (i) at or after age 55 with ten years of service
or (ii) at or after age 65.

     2.31 “Rights Agreement” means the Stockholder Protection Rights Agreement dated as of
October 16, 2006 between the Company and Mellon Investor Services LLC (as rights agent).

     2.32 “Shares” means shares of Common Stock.

     2.33 “Stock Option” means a right granted under Section 4.7 of the Plan to purchase
from the Company a stated number of Shares at a specified price. Stock Options awarded under the Plan shall be in the form of either Incentive Stock Options or
Nonqualified Stock Options.

     2.34 “Termination of Consultancy” means the date of cessation of a Consultant’s
service relationship with the Company for any reason, with or without cause, as determined by the
Company.

6

 

     2.35 “Termination of Employment” means the date of cessation of an Employee’s
employment relationship with the Company and any Related Company for any reason, with or without
cause, as determined by the Company; provided, however, that, subject to the requirements of
applicable law, an Employee’s employment relationship for purposes of the Plan may be treated as
continuing intact while the Employee is on military leave, sick leave or other bona fide leave of
absence (such as temporary employment with the Government). Notwithstanding the foregoing, for
purposes of Incentive Stock Options granted under the Plan, an Employee’s employment relationship
shall be treated as continuing intact if the period of such leave does not exceed ninety (90) days,
or if longer, so long as the Employee’s right to reemployment with the Company or a Related Company
is guaranteed either by statute or by contract.

ARTICLE III

ADMINISTRATION 

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

     3.2 Authority of the Committee. The Committee shall have authority, in its sole and
absolute discretion and subject to the terms of the Plan, to (1) interpret the Plan; (2) prescribe
such rules and regulations as it deems necessary for the proper operation and administration of the
Plan, and amend or rescind any existing rules or regulations relating to the Plan; (3) select
Employees and Consultants to receive Awards under the Plan; (4) determine the form of an Award, the
number of Shares subject to an Award, all the terms, conditions, restrictions and/or limitations,
if any, of an Award including, without limitation, the timing or conditions of exercise or vesting,
and the terms of any Award Agreement; (5) determine whether Awards will be granted singly, in
combination or in tandem; (6) establish and administer Performance Measures in connection with
Awards, including Qualified Performance Awards granted under the Plan; (7) certify the level of
performance attainment for Performance Measures in connection with Qualified Performance Awards
granted under the Plan; (8) except as provided in Section 4.10, waive or amend any terms,
conditions, restrictions or limitations of an Award; (9) in accordance with Article V, make such
adjustments to the Plan (including but not limited to adjustment of the number of shares available
under the Plan or any Award) and/or to any Award granted under the Plan, as may be appropriate;
(10) accelerate the vesting, exercise or payment of an Award; (11) provide for the deferred payment
of Awards in Shares and the extent to which dividend equivalents shall be paid or credited with
respect to such Awards; (12) determine whether Nonqualified Stock Options may be transferable to
family members, a family trust or a family partnership; (13) establish such subplans as
the Committee may determine to be necessary in order to implement and administer the Plan in
foreign countries; and (14) take any and all other action it deems necessary or advisable for the
proper operation or administration of the Plan.

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

7

 

     3.4 Delegation of Authority. The Committee, in its discretion, may delegate its
authority and duties under the Plan to such other individual, individuals or committee as it may
deem advisable, under such conditions and subject to such limitations as the Committee may
establish. Notwithstanding the foregoing, only the Committee shall have authority to grant and
administer Awards to Key Employees and other Reporting Persons, to establish and certify
Performance Measures and to grant Awards to any Employee who is acting as a delegate of the
Committee in respect of the Plan.

     3.5 No Liability. No member of the Committee, nor any person acting as a delegate of
the Committee in respect of the Plan, shall be liable for any losses incurred by any person
resulting from any action, interpretation or construction made in good faith with respect to the
Plan or any Award granted thereunder.

ARTICLE IV

AWARDS

     4.1 Eligibility. Except as otherwise provided herein with respect to a specific form
of an Award, all Employees and Consultants shall be eligible to receive Awards granted under the
Plan.

     4.2 Participation. The Committee, at its sole discretion, shall select from time to
time Participants from those persons eligible under Section 4.1 above to receive Awards under the
Plan.

     4.3 Form of Awards. (a) Awards granted under the Plan shall be in the form of Annual
Performance Bonuses, Long-Term Performance Bonuses, Restricted Stock, Stock Options, and Other
Equity-Based Awards. Awards shall be in the form determined by the Committee, in its discretion,
and shall be evidenced by an Award Agreement. Awards may be granted singly, in combination or in
tandem with other Awards. The terms and conditions applicable to Annual Performance Bonuses shall
be as set forth in Section 4.4. The terms applicable to Long-Term Performance Bonuses shall be as
set forth in Section 4.5. The terms and conditions applicable to Restricted Stock shall be as set
forth in Section 4.6. The terms and conditions applicable to Stock Options shall be as set forth
in Section 4.7. The terms and conditions applicable to Other Equity-Based Awards shall be as set
forth in Section 4.8.

     (b) Qualified Performance Awards. The Committee shall designate whether an
Annual Performance Bonus, Long-Term Performance Bonus, Restricted Stock Award or Other
Equity-Based Award granted under the Plan is intended to constitute a Qualified Performance
Award. Qualified Performance Awards under the Plan may be granted either separately, at
the same time as other Awards designated as Qualified Performance Award, or at the same
time as Awards that are not designated as Qualified Performance Awards; provided, however,
that in no event may the payment of an Award that is not a Qualified Performance Award be
contingent upon the failure to attain a specific level of

8

 

performance on the Performance
Measure(s) applicable to a Qualified Performance Award for the same Performance Cycle. In
the event the Committee designates an Award as a Qualified Performance Award, any
determinations of the Committee pertaining to Performance Measures and other terms and
conditions of such Qualified Performance Award (other than a determination under Section
4.4(c)(ii), 4.5(c)(ii) or 4.6(b)(iii) to reduce the amount of an Award) shall be in writing
and made within the Qualified Performance Award Determination Period.

     4.4 Annual Performance Bonuses. The Committee may grant Annual Performance Bonuses
under the Plan only to such Employees as the Committee may from time to time select, in such
amounts and subject to such terms and conditions as the Committee, in its discretion, may
determine. An Annual Performance Bonus awarded under the Plan may, at the discretion of the
Committee, be designated as a Qualified Performance Award. An Annual Performance Bonus that the
Committee designates as a Qualified Performance Award shall be subject to the provisions of
paragraphs (a) through (d) below.

     (a) Performance Cycles. Annual Performance Bonuses designated as Qualified
Performance Awards shall be awarded in connection with a 12-month Performance Cycle, which
shall be the fiscal year of the Company; provided, however, that the Committee may, in its
discretion, establish a Performance Cycle of less than 12 months.

     (b) Bonus Participants. Within the Qualified Performance Award Determination
Period, the Committee shall determine the Employees who shall be eligible to receive an
Annual Performance Bonus designated as a Qualified Performance Award for such Performance
Cycle.

     (c) Performance Measures; Targets; Payout Formula.

     (i) For each Annual Performance Bonus designated as a Qualified Performance
Award, the Committee shall fix and establish, in writing, within the Qualified
Performance Award Determination Period (A) the Performance Measure(s) that shall
apply to such Annual Performance Bonus; (B) the target amount of such Annual
Performance Bonus that shall be payable to each such Employee; and (C) subject to
paragraph (g) below, the payout formula for computing the actual amount of such
Annual Performance Bonus that shall become payable with respect to each level of
attained performance. Towards this end, such payout formula shall, based on
objective criteria, set forth for the applicable Performance Measure(s) the minimum
level of performance that must be attained during the Performance Cycle before any
such Annual Performance Bonus shall become payable and the percentage (which
percentage may not exceed 200%) of the target amount of such Annual Performance Bonus
that shall be payable to each such Employee upon attainment of various levels of
performance that equal or exceed the minimum required level.

9

 

     (ii) Notwithstanding anything in this paragraph (c) to the contrary, the
Committee may, on a case by case basis and in its sole discretion, reduce, but not
increase, any Annual Performance Bonus designated as a Qualified Performance Award
that is payable to any Employee with respect to any given Performance Cycle,
provided, however, that no such reduction shall result in an increase
in the dollar amount of any such Annual Performance Bonus payable to any Key
Employee.

     (d) Payment of Bonuses; Certification. No Annual Performance Bonus designated
as a Qualified Performance Award shall be paid to a Key Employee under this Section 4.4
unless and until the Committee certifies in writing the level of attainment of the
applicable Performance Measure(s) for the applicable Performance Cycle.

     (e) Other Annual Performance Bonuses. Annual Performance Bonuses that are not
Qualified Performance Awards shall be based on a Performance Cycle (which may be less than
12 months) and such Performance Measures and payout formulas (which may be the same as or
different than those applicable to Annual Performance Bonuses that are designated as
Qualified Performance Awards) as the Committee, in its discretion, may establish for such
purposes.

     (f) Form of Payment. Annual Performance Bonuses shall be paid in cash.

     (g) Amount of Bonus. The maximum amount that may be paid as an Annual
Performance Bonus to any one Participant during any fiscal year of the Company shall not
exceed $10,000,000.

     4.5 Long-Term Performance Bonuses. The Committee may grant Long-Term Performance
Bonuses under the Plan only to such Employees as the Committee may from time to time select, in
such amounts and subject to such terms and conditions as the Committee, in its discretion, may
determine. A Long-Term Performance Bonus awarded under the Plan may, at the discretion of the
Committee, be designated as a Qualified Performance Award. A Long-Term Performance Bonus that the
Committee designates as a Qualified Performance Award shall be subject to the provisions of
paragraphs (a) through (d) below.

     (a) Performance Cycles. Long-Term Performance Bonuses designated as Qualified
Performance Awards shall be awarded in connection with a Performance Cycle, which shall be
at least one fiscal year of the Company. The Committee shall determine the length of a
Performance Cycle within the Qualified Performance Award Determination Period. In the
event that the Committee determines that a Performance Cycle shall be a period greater than
one fiscal year, a new Long-Term Performance Bonus Award may be granted and designated as a
Qualified Performance Award and a new Performance Cycle may commence prior to the
completion of the Performance Cycle associated with the prior Long-Term Performance Bonus
Award.

10

 

     (b) Bonus Participants. Within the Qualified Performance Award Determination
Period, the Committee shall determine the Employees who shall be eligible to receive a
Long-Term Performance Bonus designated as a Qualified Performance Award for such
Performance Cycle.

     (c) Performance Measures; Targets; Payout Formula.

     (i) For each Long-Term Performance Bonus designated as a Qualified Performance
Award, the Committee shall fix and establish, in writing, within the Qualified
Performance Award Determination Period (A) the Performance Measure(s) that shall
apply to such Performance Cycle; (B) the target amount of such Long-Term Performance
Bonus that shall be payable to each such Employee; and (C) subject to paragraph (g)
below, the payout formula for computing the actual amount of such Long-Term
Performance Bonus that shall become payable with respect to each level of attained
performance. Towards this end, such payout formula shall, based on objective
criteria, set forth for the applicable Performance Measure(s) the minimum level of
performance that must be attained during the Performance Cycle before any such
Long-Term Performance Bonus shall become payable and the percentage (which percentage
may not exceed 200%) of the target amount of such Long-Term Performance Bonus that
shall be payable to each such Employee upon attainment of various levels of
performance that equal or exceed the minimum required level.

     (ii) Notwithstanding anything in this paragraph (c) to the contrary, the
Committee may, on a case by case basis and in its sole discretion, reduce, but not
increase, any Long-Term Performance Bonus designated as a Qualified Performance Award
that is payable to any Employee with respect to any given Performance Cycle,
provided, however, that no such reduction shall result in an increase
in the dollar amount of any such Long-Term Performance Bonus payable to any Key
Employee.

     (d) Payment of Bonuses; Certification. No Long-Term Performance Bonus
designated as a Qualified Performance Award shall be paid to a Key Employee under this
Section 4.5 unless and until the Committee certifies in writing the level of attainment of the applicable Performance Measure(s) for the
applicable Performance Cycle.

     (e) Other Long-Term Performance Bonuses. Long-Term Performance Bonuses that
are not Qualified Performance Awards shall be based on such Performance Cycles, Performance
Measures and payout formulas (which may be the same as or different than those applicable
to Long Term Performance Bonuses that are designated as Qualified Performance Awards) as
the Committee, in its discretion, may establish for such purposes.

     (f) Form of Payment. Long-Term Performance Bonuses may be either paid in cash
or the value of the Award may be settled in Shares, Shares of

11

 

Restricted Stock, Stock
Options or other Awards or any combination of the foregoing in such proportions as the
Committee may, in its discretion, determine. To the extent that a Long-Term Performance
Bonus is paid in Shares of Restricted Stock, and/or Stock Options, the number of Shares of
Restricted Stock payable and/or the number of Stock Options granted shall be based on the
Fair Market Value of a Share on the date of grant, subject to such reasonable Restricted
Stock discount factors and/or Stock Option valuation methodology as the Committee may, in
its discretion, apply. Any Shares of Restricted Stock or Awards granted in connection with
a Long-Term Performance Bonus shall be subject to the provisions of Sections 4.6(e), (f) or
4.8, as applicable. Any Stock Options granted in payment of a Long-Term Performance Bonus
shall be subject to the provisions of Sections 4.7(a), (b), (c), (d), (f) and (g).

     (g) Amount of Bonus. Subject to Section 4.6(f), the maximum amount that may
be paid as a Long-Term Performance Bonus in the form of Restricted Stock to any one
Participant during any fiscal year of the Company shall not exceed $20,000,000.

     4.6 Restricted Stock. The Committee may grant Restricted Stock under the Plan to such
Employees as the Committee may from time to time select, in such amounts and subject to such terms,
conditions and restrictions as the Committee, in its discretion, may determine. A Restricted Stock
Award may, at the discretion of the Committee, be designated as a Qualified Performance Award. A
Restricted Stock Award that the Committee designates as a Qualified Performance Award shall be
subject to the provisions of paragraphs (a) through (c) below.

     (a) Performance Cycles. A Restricted Stock Award designated as a Qualified
Performance Award shall be awarded in connection with a Performance Cycle. Unless the
Committee determines that some other period shall apply, the Performance Cycle shall be the
fiscal year of the Company. In the event that the Committee determines that a Performance
Cycle shall be a period greater than a 12-month period, a new Restricted Stock Award may be
granted and designated as a Qualified Performance Award and a new Performance Cycle may
commence prior to the completion of the Performance Cycle associated with the prior
Restricted Stock Award.

     (b) Performance Measures; Targets and Payout Formulas.

     (i) Within the Qualified Performance Award Determination Period, the Committee
shall determine the Employees who shall be eligible to receive a Restricted Stock
Award designated as a Qualified Performance Award for such Performance Cycle and
shall establish, in writing, the Performance Measure(s) that shall apply for such
Performance Cycle.

     (ii) For each Restricted Stock Award designated as a Qualified Performance
Award, the Committee shall establish, in writing, within the Qualified Performance
Award Determination Period (A) a target amount of

12

 

Restricted Stock that shall be
payable to each such Employee and (B) subject to paragraph (f) below, a payout
formula for computing the actual amount of Restricted Stock that shall become payable
with respect to each level of attained performance. Towards this end, such payout
formula shall, based on objective criteria, set forth for the applicable Performance
Measure the minimum level of performance that must be attained during the Performance
Cycle before any such Restricted Stock shall become payable and the percentage (which
percentage may not exceed 200%) of the target amount of Restricted Stock that shall
be payable to each such Employee upon attainment of various levels of performance
that equal or exceed the minimum required level.

     (iii) The actual amount of Restricted Stock that shall be paid to each such
Employee for any given Performance Cycle under a Restricted Stock Award designated as
a Qualified Performance Award shall be determined based on such Employee’s target
Restricted Stock Award, the actual level of achievement of the Performance Measure(s)
and the payout formula determined by the Committee pursuant to this paragraph (b) for
such Performance Cycle. Notwithstanding the foregoing, the Committee may, on a case
by case basis and in its sole discretion, reduce, but not increase, the actual amount
of any Restricted Stock Award designated as a Qualified Performance Award that is
payable to any Employee with respect to any given Performance Cycle,
provided, however, that no such reduction shall result in an increase
in the amount of such Restricted Stock Award payable to any Key Employee.

     (c) Committee Certification. No Shares of Restricted Stock payable under a
Restricted Stock Award designated as a Qualified Performance Award shall be paid to a Key
Employee under this Section 4.6 unless and until the Committee certifies in writing the
level of attainment of the applicable Performance Measure(s) for the applicable Performance
Cycle.

     (d) Other Restricted Stock Awards. Restricted Stock Awards that are not
Qualified Performance Awards shall be subject to such provisions as the Committee may, in
its discretion, determine, and may be granted at any time; provided, however, that to the
extent that the Committee determines that a Restricted Stock Award that is not a Qualified Performance Award shall be
performance-based, such Restricted Stock Award shall be awarded in connection with a
Performance Cycle, applying such Performance Measures and payout formulas (which may be the
same as or different than those applicable to Restricted Stock Awards designated as
Qualified Performance Awards) as the Committee, in its discretion, may establish for such
purposes.

     (e)  Payment of Restricted Stock. As soon as practicable after Restricted
Stock has been awarded, a certificate or certificates for all such Shares of Restricted
Stock shall be registered in the name of the Participant and, at the discretion of the
Company, be either (i) delivered to the Participant or (ii) held for

13

 

the Participant by the
Company. The Participant shall thereupon have all the rights of a stockholder with respect
to such Shares, including the right to vote and receive dividends or other distributions
made or paid with respect to such Shares, except that such Shares shall be subject to the
vesting and forfeiture provisions of paragraph (e)(i) below. The Committee may, in its
discretion, impose such restrictions on Restricted Stock as it deems appropriate. Except
as the Committee may otherwise determine, and subject to the Committee’s authority under
Section 3.2, such Shares shall be subject to the following vesting provisions:

     (i) Vesting and Forfeiture. Shares of Restricted Stock that have not
yet vested shall be forfeited by a Participant upon the Participant’s Termination of
Employment for any reason other than death or Disability. Shares of Restricted Stock
shall vest in approximately equal annual installments over a three–year period after
the end of the applicable Performance Cycle (or date of grant, in the case of Awards
that are not Qualified Performance Awards).

     (ii) Acceleration of Vesting. Notwithstanding the foregoing, all Shares
of Restricted Stock shall immediately vest upon a Change in Control or upon the death
or Disability of the Participant.

     (iii) Legend. In order to enforce any restrictions that the Committee
may impose on Restricted Stock, the Committee shall cause a legend or legends setting
forth a specific reference to such restrictions to be placed on all certificates for
Shares of Restricted Stock. As restrictions are released, a new certificate, without
the legend, for the number of Shares with respect to which restrictions have been
released shall be issued and delivered to the Participant as soon as possible
thereafter.

     (f) Amount of Restricted Stock. The maximum aggregate number of Shares of
Restricted Stock that may be issued to any one Participant under Section 4.5 and this
Section 4.6 during any fiscal year of the Company shall not exceed 1,000,000 Shares,
subject to adjustment as provided in Section 5.3.

     4.7 Stock Options. Stock Options granted under the Plan may, at the discretion of the
Committee, be in the form of either Nonqualified Stock Options, Incentive Stock Options or a combination of the two, subject to the restrictions set forth in
paragraph (e) below. Where both a Nonqualified Stock Option and an Incentive Stock Option are
granted to a Participant at the same time, such Awards shall be deemed to have been granted in
separate grants, shall be clearly identified, and in no event will the exercise of one such Award
affect the right to exercise the other Award. Unless otherwise specified, a Stock Option shall be
a Non-Qualified Stock Option. Except as the Committee may otherwise determine, and subject to the
Committee’s authority under Section 3.2, Stock Options shall be subject to the following terms and
conditions:

     (a) Amount of Shares. The Committee may grant Stock Options to a Participant
in such amounts as the Committee may determine, subject to the

14

 

limitations set forth in
Section 5.1 of the Plan. The number of Shares subject to a Stock Option shall be set forth
in the applicable Award Agreement.

     (b) Exercise Price. Stock Options granted under the Plan shall be Fair Market
Value Stock Options. The Exercise Price of a Stock Option, as determined by the Committee
pursuant to this Section 4.7(b), shall be set forth in the applicable Award Agreement.

     (c) Option Term. Except as provided in Section 4.7(g), all Stock Options
granted under the Plan shall lapse no later than the tenth anniversary of the date of
grant.

     (d) Timing of Exercise. Except as may otherwise be provided in the Award
Agreement or as the Committee may otherwise determine, and subject to the Committee’s
authority under Section 3.2 to accelerate the vesting of an Award and to waive or amend any
terms, conditions, limitations or restrictions of an Award, each Stock Option granted under
the Plan shall be exercisable in whole or in part, subject to the following conditions,
limitations and restrictions:

     (i) 34% of the Shares subject to a Stock Option shall first become exercisable
on the one-year anniversary of the date of grant, 33% shall first become
exercisable on the two-year anniversary of the date of grant and the remainder
shall first become exercisable on the three-year anniversary of the date of grant;

     (ii) All Stock Options subject to the Award shall become immediately
exercisable upon a Change in Control;

     (iii) All Stock Options granted to a Participant shall become immediately
exercisable upon the death or Disability of the Participant and must be exercised,
if at all, within one year after such Participant’s death or Disability, but in no
event after the date such Stock Options would otherwise lapse. Stock Options of a
deceased Participant may be exercised only by the estate of the Participant or by
the person given authority to exercise such Stock Options by the Participant’s will
or by operation of law. In the event a Stock Option is exercised by the executor
or administrator of a deceased Participant, or by the person or persons to
whom the Stock Option has been transferred by the Participant’s will or the
applicable laws of descent and distribution, the Company shall be under no
obligation to deliver Shares thereunder unless and until the Company is satisfied
that the person or persons exercising the Stock Option is or are the duly appointed
executor(s) or administrator(s) of the deceased Participant or the person to whom
the Stock Option has been transferred by the Participant’s will or by the
applicable laws of descent and distribution;

15

 

     (iv) Upon an Employee’s Retirement, all Stock Options that have not become
exercisable as of the date of Retirement shall be forfeited and to the extent that
Stock Options have become exercisable as of such date, such Stock Options must be
exercised, if at all, within one year after Retirement, but in no event after the
date such Stock Options would otherwise lapse; and

     (v) Except as otherwise provided in Section 4.7(g) or Section 7.5, upon an
Employee’s Termination of Employment, or a Consultant’s Termination of Consultancy,
for any reason other than death, Disability or Retirement, all Stock Options that
have not become exercisable as of the date of termination shall be forfeited and to
the extent that Stock Options have become exercisable as of such date, such Stock
Options must be exercised, if at all, within 90 days after such Termination of
Employment or Termination of Consultancy.

     (e) Payment of Exercise Price. The Exercise Price shall be paid in full when
the Stock Option is exercised and stock certificates shall be registered and delivered only
upon receipt of such payment. Unless otherwise provided by the Committee, payment of the
Exercise Price may be made in cash or by certified check, bank draft, wire transfer, or
postal or express money order or any other form of consideration approved by the Committee.
In addition, at the discretion of the Committee, payment of all or a portion of the
Exercise Price may be made by

     (i) Delivering a properly executed exercise notice to the Company, or its
agent, together with irrevocable instructions to a broker to deliver promptly to
the Company the amount of sale proceeds with respect to the portion of the Shares
to be acquired upon exercise having a Fair Market Value on the date of exercise
equal to the sum of the applicable portion of the Exercise Price being so paid and
appropriate tax withholding;

     (ii) Tendering (actually or by attestation) to the Company previously acquired
Shares that have been held by the Participant for at least six months having a Fair
Market Value on the day prior to the date of exercise equal to the applicable portion of the Exercise Price being so paid;
or

     (iii) any combination of the foregoing.

     (f) Incentive Stock Options. Incentive Stock Options granted under the Plan
shall be subject to the following additional conditions, limitations and restrictions:

     (i) Eligibility. Incentive Stock Options may only be granted to
Employees of the Company or a Related Company that is a subsidiary or

16

 

parent
corporation, within the meaning of Code Section 424, of the Company (an “ISO
Related Company”). In no event may an Incentive Stock Option be granted to an
Employee who owns stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company or such Related Company or to a Consultant.

     (ii) Timing of Grant. No Incentive Stock Option shall be granted under
the Plan after the 10-year anniversary of the date the Plan is adopted by the Board.

     (iii) Amount of Award. The aggregate Fair Market Value on the date of
grant of the Shares with respect to which such Incentive Stock Options first become
exercisable during any calendar year under the terms of the Plan for any Participant
may not exceed $100,000 (or such other limit as may be specified in the Code). For
purposes of this $100,000 limit, the Participant’s Incentive Stock Options under this
Plan and all Plan’s maintained by the Company and an ISO Related Company shall be
aggregated. To the extent any Incentive Stock Option first becomes exercisable in a
calendar year and such limit would be exceeded, such Incentive Stock Option shall
thereafter be treated as a Nonqualified Stock Option for all purposes.

     (iv) Timing of Exercise. In the event that the Committee exercises its
discretion to permit an Incentive Stock Option to be exercised by a Participant more
than 90 days after the Participant’s Termination of Employment and such exercise
occurs more than three months after such Participant has ceased being an Employee (or
more than 12 months after the Participant is Disabled or dies), such Incentive Stock
Option shall thereafter be treated as a Nonqualified Stock Option for all purposes.

     (v) Transfer Restrictions. In no event shall the Committee permit an
Incentive Stock Option to be transferred by a Participant other than by will or the
laws of descent and distribution, and any Incentive Stock Option granted hereunder
shall be exercisable, during his or her lifetime, only by the Participant.

     (g) Extension of Stock Option Term for Blackouts.

At its discretion, the Committee may extend the term of any Stock Option beyond its
earlier termination pursuant to Section 4.7(c), (d)(iii), (iv) or (v) if the Company
had prohibited the participant from exercising the option prior to termination or
expiration in order to comply with applicable Federal, state, local or foreign law,
provided that such extension may not exceed 30 days from the date such prohibition is
lifted.

     4.8 Other Equity-Based Awards. The Committee may, from time to time, grant Awards
(other than Performance Bonuses, Restricted Stock or Stock Options) under

17

 

this Section 4.8 that
consist of, or are denominated in, payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Shares to any Employee or Consultant. These Awards may include,
among other things Shares, restricted stock options, restricted stock units, stock appreciation
rights (SARs) (which shall lapse no later than the tenth anniversary of the grant date, subject to
extension consistent with Section 4.7(g)), phantom or hypothetical Shares and Share units. The
Committee shall determine, in its discretion, the terms, conditions, restrictions and limitations,
if any, that shall apply to Awards granted pursuant to this Section 4.8, including whether dividend
equivalents shall be credited or paid with respect to any Award, which terms, conditions,
restrictions and/or limitations shall be set forth in the applicable Award Agreement; provided,
however, that in no event will the exercise price of an SAR with respect to any Share be less than
the Fair Market Value of a Share as of the date of grant.

     Other Equity Based Awards under the Plan may, in the discretion of the Committee, be
designated as Qualified Performance Awards. In the event the Committee designates an Other
Equity-Based Award as a Qualified Performance Award, the Committee shall condition the grant of
such Other Equity-Based Award on the attainment during a Performance Cycle of specified levels of
performance of one or more Performance Measures. The Performance Cycle, Performance Measure(s) and
payout schedules applicable to Other Equity-Based Awards that are designated as Qualified
Performance Awards shall be determined by the Committee at such time and in the manner as set out
in paragraphs (a) and (b) of Section 4.6. In such case, no Other Equity-Based Award designated as
a Qualified Performance Award shall be paid to a Key Employee under this Section 4.8 unless and
until the Committee certifies in writing the level of attainment of the applicable Performance
Measure(s) for the applicable Performance Cycle.

     4.9 Code Section 162(m). It is the intent of the Company that Qualified Performance
Awards granted to Key Employees under the Plan satisfy the applicable requirements of Code Section
162(m) and the regulations thereunder so that the Company’s tax deduction for Qualified Performance
Awards is not disallowed in whole or in part by operation of Code Section 162(m). If any provision
of this Plan pertaining to Qualified Performance Awards, or any Award to a Key Employee under the
Plan that the Committee designates as a Qualified Performance Award, would otherwise frustrate or
conflict with such intent, that provision or Award shall be interpreted and deemed amended so as to
avoid such conflict.

     4.10 No Repricing. Repricing of Options or SARs shall not be permitted without
stockholder approval. For this purpose, a “repricing” means any of the following (or any other
action that has the same effect as any of the following): (A) changing the terms of an Option or
SAR to lower its Exercise Price (other than pursuant to Section 5.3); (B) any other action that is
treated as a “repricing” under generally accepted accounting principles; and (C) repurchasing for
cash or canceling an Option or SAR at a time when its Exercise Price is greater than the Fair
Market Value of the underlying stock in exchange for another Award, unless the cancellation and
exchange occurs in connection with an event set forth in Section 5.3. Such cancellation and
exchange would be considered a “repricing” regardless of whether it is treated as a “repricing”
under

18

 

generally accepted accounting principles and regardless of whether it is voluntary on the
part of the Participant.

ARTICLE V

SHARES SUBJECT TO THE PLAN; ADJUSTMENTS

     5.1 Shares Available. The Shares issuable under the Plan shall be authorized but
unissued Shares or Shares held in the Company’s treasury. Subject to adjustment in accordance with
Section 5.3, the total number of Shares with respect to which Awards may be issued under the Plan
may equal but shall not exceed in the aggregate 30,000,000 Shares; provided, however, that from the
aggregate limit no more than 10,000,000 Shares may be granted in the form of Incentive Stock
Options and the maximum aggregate number of Shares with respect to which Awards may be granted to
any one Participant during any such fiscal year of the Company may not exceed 3,000,000 Shares. Any
Shares (a) delivered by the Company, (b) with respect to which Awards are made hereunder and (c)
with respect to which the Company becomes obligated to make Awards, in each case through the
assumption of, or in substitution for, outstanding awards previously granted by an acquired entity,
shall not count against the Shares available to be delivered pursuant to Awards under this Plan.

     5.2 Counting Rules. For purposes of determining the number of Shares remaining
available under the Plan, only Awards payable in Shares shall be counted. Any Shares related to
Awards, which terminate by expiration, forfeiture, cancellation or otherwise without issuance of
Shares, or are settled in cash in lieu of Shares, shall be available again for issuance under the
Plan. In the event Shares are tendered or withheld in payment of all or part of the Exercise Price
of a Stock Option, or in satisfaction of the withholding obligations of any Award, the Shares so
tendered or withheld shall become available for issuance under the Plan. An outstanding stock
appreciation right shall not be taken into account in determining the aggregate number of Shares
with respect to which Stock Options may thereafter be granted. With respect to stock appreciation
rights (SARs), when a SAR is exercised and settled in whole or in part in Shares, the Shares
subject to a SAR grant agreement shall be counted against the Shares available for
issuance as one (1) Share for every Share subject thereto, regardless of the number of Shares
used to settle the SAR upon exercise.

     5.3 Adjustments. In the event of any change in the number of issued Shares (or
issuance of shares of stock other than shares of Common Stock) by reason of any stock split,
reverse stock split, or stock dividend, recapitalization, reclassification, merger,
consolidation, split-up, spin-off, reorganization, combination, or exchange of Shares, the
exercisability of stock purchase rights received under the Rights Agreement, the issuance of
warrants or other rights to purchase Shares or other securities, or any other change in corporate
structure or in the event of any extraordinary distribution (whether in the form of cash, Shares,
other securities or other property), the Committee

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shall adjust the number or kind of Shares that
may be issued under the Plan, and the terms of any outstanding Award (including, without
limitation, the number of Shares subject to an outstanding Award, the type of property to which the
Award relates and the Exercise Price of a Stock Option, stock appreciation right or other Award) in
such manner as the Committee shall determine is appropriate in order to prevent the dilution or
enlargement of the benefits or potential benefits intended to be made available under the Plan, and
such adjustment shall be conclusive and binding for all purposes under the Plan. Notwithstanding
the foregoing, no adjustments shall be made with respect to Qualified Performance Awards granted to
a Key Employee to the extent such adjustment would cause the Award to fail to qualify as
performance-based compensation under Section 162(m) of the Code and no adjustment shall be required
if the Committee determines that such action could cause an Award to fail to satisfy the conditions
of an applicable exception from the requirements of Section 409A of the Code (“Section
409A”) or otherwise could subject a Participant to the additional tax imposed under Section
409A in respect of an outstanding Award.

     5.4 Consolidation, Merger or Sale of Assets. Upon the occurrence of (i) a merger,
consolidation, acquisition of property or stock, reorganization or otherwise involving the Company
in which the Company is not to be the surviving corporation, (ii) a merger, consolidation,
acquisition of property or stock, reorganization or otherwise involving the Company in which the
Company is the surviving corporation but holders of Shares receive securities of another
corporation, or (iii) a sale of all or substantially all of the Company’s assets (as an entirety)
or capital stock to another person, any Award granted hereunder shall be deemed to apply to the
securities, cash or other property (subject to adjustment by cash payment in lieu of fractional
interests) to which a holder of the number of Shares equal to the number of Shares the Participant
would have been entitled, and proper provisions shall be made to ensure that this clause is a
condition to any such transaction; provided, however, that the Committee (or, if
applicable, the board of directors of the entity assuming the Company’s obligations under the Plan)
shall, in its discretion, have the power to either:

     (a) provide, upon written notice to Participants, that all Awards that are currently
exercisable must be exercised within the time period specified in the notice and that all
Awards not exercised as of the expiration of such period shall be terminated without
consideration; provided, however, that the Committee (or successor board of
directors) may provide, in its discretion, that, for purposes of this subsection, all outstanding Awards are currently exercisable, whether or not
vested; or

     (b) cancel any or all Awards and, in consideration of such cancellation, pay to each
Participant an amount in cash with respect to each Share issuable under an Award equal to
the difference between the Fair Market Value of such Share on such date (or, if greater,
the value per Share of the consideration received by holders of Shares as a result of such
merger, consolidation, reorganization or sale) and the Exercise Price.

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     5.5 Fractional Shares. No fractional Shares shall be issued under the Plan. In the
event that a Participant acquires the right to receive a fractional Share under the Plan, such
Participant shall receive, in lieu of such fractional Share, cash equal to the Fair Market Value of
the fractional Share as of the date of settlement.

ARTICLE VI

AMENDMENT AND TERMINATION 

     6.1 Amendment. The Plan may be amended at any time and from time to time by the Board
without the approval of shareholders of the Company, except that no amendment which increases the
aggregate number of Shares which may be issued pursuant to the Plan, decreases the Exercise Price
at which Stock Options or stock appreciation rights may be granted or materially modifies the
eligibility requirements for participation in the Plan shall be effective unless and until the same
is approved by the shareholders of the Company. No amendment of the Plan shall materially
adversely affect any right of any Participant with respect to any Award theretofore granted without
such Participant’s written consent.

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

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

     (b) the 10-year anniversary of the date of the Company’s 2007 Annual Meeting of
Stockholders

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

ARTICLE VII

GENERAL PROVISIONS 

     7.1 Nontransferability of Awards. Except as otherwise provided in this Section 7.1,
no Awards under the Plan shall be subject in any manner to alienation, anticipation, sale,
assignment, pledge, encumbrance or transfer, other than by will or by the laws of descent or
distribution, by the Participant and no other persons shall otherwise acquire any rights therein.
During the lifetime of a Participant, Stock Options (except for Nonqualified Stock Options that are
transferable pursuant to subparagraphs (a) and (b)

21

 

below) shall be exercisable only by the
Participant and shall not be assignable or transferable except as provided above.

     (a) In the case of a Nonqualified Stock Option, except as the Committee may otherwise
determine, and subject to the Committee’s authority under Section 3.2 to waive or amend any
terms, conditions, limitations or restrictions of an Award, all or any part of such
Nonqualified Stock Option may, subject to the prior written consent of the Committee, be
transferred to one or more of a following classes of donees: family member, a trust for
the benefit of a family member, a limited partnership whose partners are solely family
members or any other legal entity set up for the benefit of family members. For purposes
of this Section 7.1, a family member means a Participant’s spouse, children, grandchildren,
parents, grandparents (natural, step, adopted, or in-laws), siblings, nieces, nephews and
grandnieces and grandnephews.

     (b) Except as the Committee may at any time determine, and subject to the Committee’s
authority under Section 3.2 to waive or amend any terms, conditions, limitations or
restrictions of an Award, any Nonqualified Stock Option transferred by a Participant
pursuant to paragraph (a) above may be exercised by the transferee only to the extent such
Nonqualified Stock Option would have been exercisable by the Participant had no transfer
occurred. Any such transferred Nonqualified Stock Option shall be subject to all of the
same terms and conditions as provided in the Plan and in the applicable Award Agreement.
The Participant or the Participant’s estate shall remain liable for any withholding tax
which may be imposed by any federal, state or local tax authority and the transfer of
Shares upon exercise of such Nonqualified Stock Option shall be conditioned on the payment
of such withholding tax. The Committee may, in its sole discretion, withhold its consent
to all or a part of any transfer of a Nonqualified Stock Option pursuant to this Section
7.1 unless and until the Participant makes arrangements satisfactory to the Committee for
the payment of any such withholding tax. The Participant must immediately notify the
Committee, in such form and manner as required by the Committee, of any proposed transfer
of a Nonqualified Stock Option pursuant to this Section and no such transfer shall be
effective until the Committee consents thereto in writing.

     (c) Anything in this Section 7.1 to the contrary notwithstanding, in no event may the
Committee permit an Incentive Stock Option to be transferred by any Participant other than
by will or the laws of descent and distribution.

     7.2 Withholding of Taxes.

          (a) Stock Options. As a condition to the delivery of any Shares pursuant to
the exercise of a Stock Option, the Committee may require that the Participant, at the time
of such exercise, pay to the Company by cash or by certified check, bank draft, wire
transfer or postal or express money order an amount sufficient to satisfy any applicable
tax withholding obligations. The Committee may, however, in its discretion, accept payment
of tax withholding

22

 

obligations through any of the Exercise Price payment methods described
in Section 4.7(e). In addition, the Committee may, in its discretion, permit payment of
tax withholding obligations to be made by instructing the Company to withhold Shares that
would otherwise be issued on exercise having a Fair Market Value on the date of exercise
equal to the applicable portion of the tax withholding obligations being so paid.
Notwithstanding the foregoing, in no event may any amount greater than the minimum
statutory withholding obligation or such other withholding obligation as required by
applicable law be satisfied by tendering or withholding Shares.

          (b) Restricted Stock. The Company shall satisfy tax withholding obligations
arising in connection with the release of restrictions on Shares of Restricted Stock or
Restricted Stock Units held by Participants subject to the tax laws of the United States,
United Kingdom or Israel (and such other country where withholding is required at the time
of the release of restrictions or as may be determined by the Company from time to time) by
withholding Shares that would otherwise be available for delivery upon such release having
a Fair Market Value on the date of release equal to the minimum statutory withholding
obligation or such other withholding obligation as required by applicable law.

          (c) Awards. To the extent not covered by 7.2(a) or (b) above, as a condition
to the delivery of any Shares, other property or cash pursuant to any Award or the lifting
or lapse of restrictions on any Award, or in connection with any other event that gives
rise to a federal or other governmental tax withholding obligation on the part of the
Company relating to an Award (including, without limitation, FICA tax), (a) the Company may
deduct or withhold (or cause to be deducted or withheld) from any payment or distribution
to the Participant, whether or not pursuant to the Plan, (b) the Company shall be entitled
to require that the Participant remit cash to the Company (through payroll deduction or
otherwise) or (c) the Company may enter into any other suitable arrangements to withhold,
in each case in an amount sufficient in the opinion of the Company to satisfy such
withholding obligation.

     7.3 Non-Uniform Determinations

     None of Committee’s determinations under the Plan and Award Agreements need to be uniform and
any such determinations may be made by it selectively among persons who receive, or are eligible to
receive, Awards under the Plan (whether or not such persons are similarly situated). Without
limiting the generality of the foregoing, the Committee shall be entitled, among other things, to
make non-uniform and selective determinations under Award Agreements, and to enter into non-uniform
and selective Award Agreements, as to (a) the persons to receive Awards, (b) the terms and
provisions of Awards, (c) whether a Participant’s employment has been terminated for purposes of
the Plan and (d) any adjustments to be made to Awards pursuant to Section 5.3 or otherwise

     7.4 Required Consents and Legend

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     (a) If the Committee shall at any time determine that any consent (as hereinafter defined) is
necessary or desirable as a condition of, or in connection with, the granting of any Award, the
delivery of Shares or the delivery of any cash, securities or other property under the Plan, or the
taking of any other action thereunder (each such action being hereinafter referred to as a “plan
action”), then such plan action shall not be taken, in whole or in part, unless and until such
consent shall have been effected or obtained to the full satisfaction of the Committee. The
Committee may direct that any Certificate evidencing Shares delivered pursuant to the Plan shall
bear a legend setting forth such restrictions on transferability as the Committee may determine to
be necessary or desirable, and may advise the transfer agent to place a stop order against any
legended shares. By accepting an Award, each Participant shall have expressly provided consent to
the items described in Section 7.4(b)(iv) hereof.

     (b) The term “consent” as used herein with respect to any plan action includes (i) any and all
listings, registrations or qualifications in respect thereof upon any securities exchange or under
any federal, state or local law, or law, rule or regulation of a jurisdiction outside the United
States, (ii) any and all written agreements and representations by the Participant with respect to
the disposition of shares, or with respect to any other matter, which the Committee may deem
necessary or desirable to comply with the terms of any such listing, registration or qualification
or to obtain an exemption from the requirement that any such listing, qualification or registration
be made, (iii) any and all other consents, clearances and approvals in respect of a plan action by
any governmental or other regulatory body or any stock exchange or self-regulatory agency, (iv) any
and all consents by the Participant to (A) the Company’s supplying to any third party recordkeeper
of the Plan such personal information as the Committee deems advisable to administer the Plan, (B)
the Company’s deducting amounts from the Participant’s wages, or another arrangement satisfactory
to the Committee, to reimburse the Company for advances made on the Participant’s behalf to satisfy
certain withholding and other tax obligations in connection with an Award and (C) the Company’s
imposing sales and transfer procedures and restrictions and hedging restrictions on Shares
delivered under the Plan and (v) any and all consents or authorizations required to comply with, or
required to be obtained under, applicable local law or otherwise required by the Committee. Nothing
herein shall require the Company to list, register or qualify the Shares on any securities exchange

     7.5 Special Forfeiture Provision. If the Committee, in its discretion,
determines and the applicable Award Agreement so provides, a Participant who, without prior written
approval of the Company, enters into any employment or consultation arrangement (including service
as an agent, partner, stockholder, consultant, officer or director) to any entity or person engaged
in any business in which the Company or its affiliates is engaged which, in the sole judgment of
the Company, is competitive with the Company or any subsidiary or affiliate, (i) shall forfeit all
rights under any outstanding Stock Option or stock appreciation right and shall return to the
Company the amount of any profit realized upon the exercise, within such period as the Committee
may determine, of any Stock Option or stock appreciation right and (ii) shall forfeit and return to
the Company all Shares of Restricted Stock and other Awards which are not then

24

 

vested or which
vested but remain subject to the restrictions imposed by this Section 7.3, as provided in the Award
Agreement.

     7.6 Code Section 83(b) Elections. Neither the Company, any Related Company, nor the
Committee shall have any responsibility in connection with a Participant’s election, or attempt to
elect, under Code section 83(b) to include the value of a Restricted Stock Award in the
Participant’s gross income for the year of payment. Any Participant who makes a Code section 83(b)
election with respect to any such Award shall promptly notify the Committee of such election and
provide the Committee with a copy thereof.

     7.7 No Implied Rights. The establishment and subsequent operation of the Plan,
including eligibility as a Participant, shall not be construed as conferring any legal or other
right upon any Employee for the continuation of his or her employment, or upon any Consultant for
the continuation of his or her consultancy, for any Performance Cycle or any other period. The
Company expressly reserves the right, which may be exercised at any time and without regard to
when, during a Performance Cycle or other accounting period, such exercise occurs, to discharge any
individual and/or treat him or her without regard to the effect which such treatment might have
upon him or her under any outstanding Award.

     7.8 No Obligation to Exercise Options. The granting of a Stock Option shall impose no
obligation upon the Participant to exercise such Stock Option.

     7.9 No Rights as Stockholders. A Participant granted an Award under the Plan shall
have no rights as a stockholder of the Company with respect to such Award unless and until such
time as certificates for the Shares underlying the Award are registered in such Participant’s name.
The right of any Participant to receive Shares by virtue of the terms of an Award or participation
in the Plan shall be no greater than the right of any unsecured general creditor of the Company.
With respect to any or all Awards, the Company may, in lieu of physical certificates, cause for
electronic shares to be held in the Participant’s name with a transfer agent or broker.

     7.10 Indemnification of Committee. The Company shall indemnify, to the full extent
permitted by law, each person made or threatened to be made a party to any civil
or criminal action or proceeding by reason of the fact that he, or his testator or intestate,
is or was a member of the Committee or a delegate of the Committee so acting.

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

     7.12 Nature of Payments. All Awards made pursuant to the Plan are in consideration of
services for the Company or the Related Companies. Any gain realized pursuant to Awards under the
Plan constitutes a special incentive payment to the Participant and shall not be taken into account
as compensation for purposes of any of the

25

 

employee benefit plans of the Company or any Related
Company except as may be determined by the Board or by the board of directors of the applicable
Related Company.

     7.13 Securities Exchange Act Compliance. Awards under the Plan are intended to
satisfy the requirements of Rule 16b-3 under the Securities Exchange Act of 1934. If any provision
or this Plan or of any grant of an Award would otherwise frustrate or conflict with such intent,
that provision shall be interpreted and deemed amended so as to avoid such conflict.

     7.14 Governing Law; Severability. The Plan and all determinations made and actions
taken thereunder shall be governed by the internal substantive laws, and not the choice of law
rules, of the State of New York and construed accordingly, to the extent not superseded by
applicable federal law. If any provision of the Plan shall be held unlawful or otherwise invalid
or unenforceable in whole or in part, the unlawfulness, invalidity or unenforceability shall not
affect any other provision of the Plan or part thereof, each of which shall remain in full force
and effect.

26

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