Document:

Exhibit
4.3

 

FIRST SUPPLEMENTAL INDENTURE

 

This First Supplemental Indenture, dated as of May 19, 2010 (this “Supplemental
Indenture”), among (i) Regal Cinemas Corporation (together with its
successors and assigns, the “Company”), (ii) R.C. Cobb II, LLC, a
Delaware limited liability company, and Regal Cinemas II, LLC, a Delaware
limited liability company (each a “New Subsidiary Guarantor” and
collectively, the “New Subsidiary Guarantors”), (iii) each other
now existing Guarantor under the Indenture referred to below and (iv) U.S.
Bank National Association, as Trustee under the Indenture referred to below.

 

W I T N E S S E T H:

 

WHEREAS, the Company, the Guarantors and the Trustee have heretofore
executed and delivered an Indenture, dated as of July 15, 2009 (as
amended, supplemented, waived or otherwise modified, the “Indenture”),
providing for the issuance of 8.625% Senior Notes due 2019 of the Company (the “Securities”);

 

WHEREAS, Section 4.10 of the Indenture provides that the Company
is required to cause each Subsidiary that Guarantees obligations under the
Credit Agreement or any other Indebtedness of the Company or any Guarantor to
execute and deliver to the Trustee a supplemental indenture pursuant to which
such Subsidiary will unconditionally Guarantee, on a joint and several basis,
the full and prompt payment of the principal of, premium, if any, and interest
on the Securities on a senior unsecured basis; and

 

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee,
the Company and the Guarantors are authorized to execute and deliver this
Supplemental Indenture to amend or supplement the Indenture, without the
consent of any Holder.

 

NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
New Subsidiary Guarantors, the Company, the other Guarantors and the Trustee
mutually covenant and agree for the equal and ratable benefit of the Holders of
the Securities as follows:

 

ARTICLE I

Definitions

 

SECTION 1.1.        Defined Terms.  As used in
this Supplemental Indenture, terms defined in the Indenture or in the preamble
or recital hereto are used herein as therein defined, except that the term “Holders”
in this Guarantee shall refer to the term “Holders” as defined in the
Indenture and the Trustee acting on behalf or for the benefit of such
Holders.  The words “herein,” “hereof” and “hereby” and other words of
similar import used in this Supplemental Indenture refer to this Supplemental
Indenture as a whole and not to any particular section hereof.

 

SECTION 1.2.        Definition of Credit Agreement. 
The definition of “Credit Agreement” in Section 1.01 of the Indenture
shall be deleted in its entirety and replaced with the following:

 

“Credit Agreement” means that certain Sixth Amended and
Restated Credit Agreement, dated as of May 19, 2010, among Regal Cinemas
Corporation, a 

 

1

 

Delaware corporation, the lenders and issuers party thereto from time
to time, Credit Suisse AG, Cayman Islands Branch, as administrative agent, and
Credit Suisse Securities (USA) LLC, as sole lead arranger and sole book runner,
and any related notes, collateral documents, letters of credit, guarantees and
other documents, and any appendices, exhibits or schedules to any of the
foregoing, as any or all of such agreements may be amended, restated, modified
or supplemented from time to time, together with any extensions, revisions,
increases, refinancings, renewals, refundings, restructurings or replacements thereof.

 

ARTICLE II

Agreement to be Bound; Guarantee

 

SECTION 2.1.        Agreement to be Bound.  Each
New Subsidiary Guarantor hereby becomes a party to the Indenture as a
Subsidiary Guarantor and as such will have all of the rights and be subject to
all of the obligations and agreements of a Subsidiary Guarantor under the
Indenture.  Each New Subsidiary Guarantor agrees to be bound by all of the
provisions of the Indenture applicable to a Subsidiary Guarantor and to perform
all of the obligations and agreements of a Subsidiary Guarantor under the
Indenture.

 

SECTION 2.2.        Guarantee.  Each New
Subsidiary Guarantor agrees, on a joint and several basis with all the existing
Guarantors, to fully, unconditionally and irrevocably Guarantee to each Holder
of the Securities and the Trustee the Guarantor Obligations pursuant to Article X
of the Indenture on a senior basis.

 

ARTICLE III

Miscellaneous

 

SECTION 3.1.        Notices.  All notices and
other communications to a New Subsidiary Guarantor shall be given as provided
in the Indenture to such New Subsidiary Guarantor, at its address set forth
below, with a copy to the Company as provided in the Indenture for notices to
the Company.

 

SECTION 3.2.        Parties.  Nothing expressed
or mentioned herein is intended or shall be construed to give any Person, firm
or corporation, other than the Holders and the Trustee, any legal or equitable
right, remedy or claim under or in respect of this Supplemental  indenture
or the Indenture or any provision herein or therein contained.

 

SECTION 3.3.        Governing Law.  This
Supplemental Indenture shall be governed by, and construed in accordance with,
the laws of the State of New York.

 

SECTION 3.4.        Ratification of Indenture;
Supplemental Indentures Part of Indenture.  Except as expressly
amended hereby, the Indenture is in all respects ratified and confirmed and all
the terms, conditions and provisions thereof shall remain in full force and
effect.  This Supplemental Indenture shall form a part of the Indenture
for all purposes, and every Holder of Securities heretofore or hereafter
authenticated and delivered shall be bound hereby.

 

SECTION 3.5.        Trustee not Responsible. 
The Trustee shall not be responsible in any manner whatsoever for or in respect
of the validity or sufficiency of this Supplemental Indenture 

 

2

 

or for or in respect of the recitals contained herein, all of which are
made solely by the Company and the Guarantors.

 

SECTION 3.6.        Counterparts.  The parties
hereto may sign one or more copies of this Supplemental Indenture in
counterparts, all of which together shall constitute one and the same
agreement.

 

SECTION 3.7.        Headings.  The headings of
the Articles and the Sections in this Guarantee are for convenience of
reference only and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.

 

[Remainder of Page Intentionally Blank]

 

3

 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  REGAL
  CINEMAS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Peter B. Brandow

  
	
   

  	
  Name:

  	
  Peter
  B. Brandow

  
	
   

  	
  Title:

  	
  Executive
  Vice President,

  
	
   

  	
   

  	
  General
  Counsel and Secretary

  
	
   

  	
   

  
	
   

  	
  NEW
  SUBSIDIARY GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  R.C.
  COBB II, LLC

  
	
   

  	
  REGAL
  CINEMAS II, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Peter B. Brandow

  
	
   

  	
  Name:

  	
  Peter
  B. Brandow

  
	
   

  	
  Title:

  	
  Vice
  President and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address
  for each of the New Subsidiary Guarantors:

  
	
   

  	
   

  
	
   

  	
  c/o
  Regal Entertainment Group

  
	
   

  	
  7132
  Regal Lane

  
	
   

  	
  Knoxville,
  Tennessee 37918

  
	
   

  	
  Attention
  of:

  	
  General
  Counsel

  
	
   

  	
  Facsimile:

  	
  (865)
  922-6085

  
	
   

  	
   

  	
   

  
	
   

  	
  with
  copies (which shall not constitute notice) to:

  
	
   

  	
   

  
	
   

  	
  Hogan
  Lovells US LLP

  
	
   

  	
  One
  Tabor Center, Suite 1500

  
	
   

  	
  1200
  Seventeenth Street

  
	
   

  	
  Denver,
  Colorado 80202

  
	
   

  	
  Attention
  of:

  	
  Richard
  J. Mattera, Esq.

  
	
   

  	
  Facsimile:

  	
  (303) 899-7333

  
				

 

 

	
   

  	
  OTHER
  SUBSIDIARY GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  A
  3 THEATRES OF SAN ANTONIO, LTD.,

  
	
   

  	
  by A3 Theatres of Texas, Inc., its General Partner

  
	
   

  	
   

  
	
   

  	
  A
  3 THEATRES OF TEXAS, INC.

  
	
   

  	
  CONSOLIDATED
  THEATRES MANAGEMENT, LLC

  
	
   

  	
  EASTGATE
  THEATRE, INC.

  
	
   

  	
  EDWARDS
  THEATRES, INC.

  
	
   

  	
  FREDERICK
  PLAZA CINEMAS, INC.

  
	
   

  	
  HOYTS
  CINEMAS CORPORATION

  
	
   

  	
  INTERSTATE
  THEATRES CORPORATION

  
	
   

  	
  R.C.
  COBB, INC.

  
	
   

  	
  RCI/FSSC,
  LLC

  
	
   

  	
  RCI/RMS,
  LLC

  
	
   

  	
  REGAL
  CINEMAS HOLDINGS, INC.

  
	
   

  	
  REGAL
  CINEMEDIA CORPORATION

  
	
   

  	
  REGAL
  GALLERY PLACE, LLC

  
	
   

  	
  REGAL
  INVESTMENT COMPANY

  
	
   

  	
  RICHMOND
  I CINEMA, LLC

  
	
   

  	
  UA
  SWANSEA, LLC

  
	
   

  	
  UNITED
  ARTISTS PROPERTIES I CORP.

  
	
   

  	
  UNITED
  ARTISTS REALTY COMPANY

  
	
   

  	
  UNITED
  ARTISTS THEATRE COMPANY

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Peter B. Brandow

  
	
   

  	
  Name:

  	
  Peter
  B. Brandow

  
	
   

  	
  Title:

  	
  Vice
  President and Secretary

  
	
   

  	
   

  
	
   

  	
  REGAL
  CINEMAS, INC.

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Peter B. Brandow

  
	
   

  	
  Name:

  	
  Peter
  B. Brandow

  
	
   

  	
  Title:

  	
  Vice
  President,

  
	
   

  	
   

  	
  General
  Counsel and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  PARENT
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  REGAL
  ENTERTAINMENT GROUP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Peter B. Brandow

  
	
   

  	
  Name:

  	
  Peter
  B. Brandow

  
	
   

  	
  Title:

  	
  Executive
  Vice President,

  
	
   

  	
   

  	
  General
  Counsel and Secretary

  

 

 

	
   

  	
  TRUSTEE:

  
	
   

  	
   

  
	
   

  	
  U.S.
  BANK NATIONAL ASSOCIATION, as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Brian J. Kabbes

  
	
   

  	
  Name:
  Brian J. Kabbes

  
	
   

  	
  Title:
  Vice President, Corporate Trust ServicesExhibit 10.1

 

INCYTE CORPORATION

 

2010 STOCK INCENTIVE PLAN

 

(Adopted
by the Board of Directors on March 19, 2010)

 

 

Table of Contents

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
   

  	
  ESTABLISHMENT AND
  PURPOSE

  	
  5

  
	
  SECTION 2.

  	
   

  	
  DEFINITIONS

  	
  5

  
	
  (a)

  	
   

  	
  “Affiliate”

  	
  5

  
	
  (b)

  	
   

  	
  “Award”

  	
  5

  
	
  (c)

  	
   

  	
  “Board
  of Directors”

  	
  5

  
	
  (d)

  	
   

  	
  “Change
  in Control”

  	
  5

  
	
  (e)

  	
   

  	
  “Code”

  	
  6

  
	
  (f)

  	
   

  	
  “Committee”

  	
  6

  
	
  (g)

  	
   

  	
  “Corporation”

  	
  6

  
	
  (h)

  	
   

  	
  “Consultant”

  	
  6

  
	
  (i)

  	
   

  	
  “Employee”

  	
  7

  
	
  (j)

  	
   

  	
  “Exchange
  Act”

  	
  7

  
	
  (k)

  	
   

  	
  “Exercise
  Price”

  	
  7

  
	
  (l)

  	
   

  	
  “Fair
  Market Value”

  	
  7

  
	
  (m)

  	
   

  	
  “ISO”

  	
  7

  
	
  (n)

  	
   

  	
  “Nonstatutory
  Option” or “NSO”

  	
  7

  
	
  (o)

  	
   

  	
  “Offeree”

  	
  7

  
	
  (p)

  	
   

  	
  “Option”

  	
  8

  
	
  (q)

  	
   

  	
  “Optionee”

  	
  8

  
	
  (r)

  	
   

  	
  “Outside
  Director”

  	
  8

  
	
  (s)

  	
   

  	
  “Parent”

  	
  8

  
	
  (t)

  	
   

  	
  “Participant”

  	
  8

  
	
  (u)

  	
   

  	
  “Performance
  Shares”

  	
  8

  
	
  (v)

  	
   

  	
  “Performance
  Share Agreement”

  	
  8

  
	
  (w)

  	
   

  	
  “Plan”

  	
  8

  
	
  (x)

  	
   

  	
  “Purchase
  Price”

  	
  8

  
	
  (y)

  	
   

  	
  “Qualifying
  Performance Criteria”

  	
  8

  
	
  (z)

  	
   

  	
  “Restricted
  Share”

  	
  8

  
	
  (aa)

  	
   

  	
  “Restricted
  Share Agreement”

  	
  8

  
	
  (bb)

  	
   

  	
  “Restricted
  Stock Unit”

  	
  8

  
	
  (cc)

  	
   

  	
  “Restricted
  Stock Unit Agreement”

  	
  8

  
	
  (dd)

  	
   

  	
  “SAR”

  	
  9

  
	
  (ee)

  	
   

  	
  “SAR
  Agreement”

  	
  9

  

 

i

 

	
  (ff)

  	
   

  	
  “Service”

  	
  9

  
	
  (gg)

  	
   

  	
  “Share”

  	
  9

  
	
  (hh)

  	
   

  	
  “Stock”

  	
  9

  
	
  (ii)

  	
   

  	
  “Stock
  Option Agreement”

  	
  9

  
	
  (jj)

  	
   

  	
  “Subsidiary”

  	
  9

  
	
  (kk)

  	
   

  	
  “Total
  and Permanent Disability”

  	
  9

  
	
  SECTION 3.

  	
   

  	
  ADMINISTRATION

  	
  9

  
	
  (a)

  	
   

  	
  Committee
  Composition

  	
  9

  
	
  (b)

  	
   

  	
  Committee
  for Non-Officer Grants

  	
  10

  
	
  (c)

  	
   

  	
  Committee Procedures

  	
  10

  
	
  (d)

  	
   

  	
  Committee
  Responsibilities

  	
  10

  
	
  SECTION 4.

  	
   

  	
  ELIGIBILITY

  	
  11

  
	
  (a)

  	
   

  	
  General
  Rule

  	
  11

  
	
  (b)

  	
   

  	
  Ten-Percent
  Stockholders

  	
  11

  
	
  (c)

  	
   

  	
  Attribution
  Rules

  	
  12

  
	
  (d)

  	
   

  	
  Outstanding
  Stock

  	
  12

  
	
  SECTION 5.

  	
   

  	
  STOCK SUBJECT TO PLAN

  	
  12

  
	
  (a)

  	
   

  	
  Basic
  Limitation

  	
  12

  
	
  (b)

  	
   

  	
  Award
  Limitation

  	
  12

  
	
  (c)

  	
   

  	
  Additional
  Shares

  	
  12

  
	
  SECTION 6.

  	
   

  	
  RESTRICTED SHARES

  	
  13

  
	
  (a)

  	
   

  	
  Restricted
  Share Agreement

  	
  13

  
	
  (b)

  	
   

  	
  Payment
  for Awards

  	
  13

  
	
  (c)

  	
   

  	
  Vesting

  	
  13

  
	
  (d)

  	
   

  	
  Voting
  and Dividend Rights

  	
  13

  
	
  (e)

  	
   

  	
  Restrictions
  on Transfer of Shares

  	
  13

  
	
  SECTION 7.

  	
   

  	
  TERMS AND CONDITIONS OF
  OPTIONS

  	
  13

  
	
  (a)

  	
   

  	
  Stock
  Option Agreement

  	
  13

  
	
  (b)

  	
   

  	
  Number
  of Shares

  	
  14

  
	
  (c)

  	
   

  	
  Exercise
  Price

  	
  14

  
	
  (d)

  	
   

  	
  Withholding
  Taxes

  	
  14

  
	
  (e)

  	
   

  	
  Exercisability
  and Term

  	
  14

  
	
  (f)

  	
   

  	
  Exercise
  of Options

  	
  14

  
	
  (g)

  	
   

  	
  Effect
  of Change in Control

  	
  14

  
	
  (h)

  	
   

  	
  No
  Rights as a Stockholder

  	
  14

  
	
  (i)

  	
   

  	
  Modification,
  Extension and Assumption of Options

  	
  15

  
	
  (j)

  	
   

  	
  Restrictions
  on Transfer of Shares

  	
  15

  

 

ii

 

	
  (k)

  	
   

  	
  Buyout
  Provisions

  	
  15

  
	
  SECTION 8.

  	
   

  	
  PAYMENT FOR SHARES

  	
  15

  
	
  (a)

  	
   

  	
  General
  Rule

  	
  15

  
	
  (b)

  	
   

  	
  Surrender
  of Stock

  	
  15

  
	
  (c)

  	
   

  	
  Services
  Rendered

  	
  15

  
	
  (d)

  	
   

  	
  Cashless
  Exercise

  	
  16

  
	
  (e)

  	
   

  	
  Exercise/Pledge

  	
  16

  
	
  (f)

  	
   

  	
  Promissory
  Note

  	
  16

  
	
  (g)

  	
   

  	
  Other
  Forms of Payment

  	
  16

  
	
  (h)

  	
   

  	
  Limitations
  under Applicable Law

  	
  16

  
	
  SECTION 9.

  	
   

  	
  STOCK APPRECIATION
  RIGHTS

  	
  16

  
	
  (a)

  	
   

  	
  SAR
  Agreement

  	
  16

  
	
  (b)

  	
   

  	
  Number
  of Shares

  	
  16

  
	
  (c)

  	
   

  	
  Exercise
  Price

  	
  16

  
	
  (d)

  	
   

  	
  Exercisability
  and Term

  	
  16

  
	
  (e)

  	
   

  	
  Effect
  of Change in Control

  	
  17

  
	
  (f)

  	
   

  	
  Exercise
  of SARs

  	
  17

  
	
  (g)

  	
   

  	
  Modification
  or Assumption of SARs

  	
  17

  
	
  (h)

  	
   

  	
  Buyout Provisions

  	
  17

  
	
  SECTION 10.

  	
   

  	
  RESTRICTED STOCK UNITS

  	
  17

  
	
  (a)

  	
   

  	
  Restricted
  Stock Unit Agreement

  	
  17

  
	
  (b)

  	
   

  	
  Payment
  for Awards

  	
  17

  
	
  (c)

  	
   

  	
  Vesting
  Conditions

  	
  17

  
	
  (d)

  	
   

  	
  Voting
  and Dividend Rights

  	
  18

  
	
  (e)

  	
   

  	
  Form and
  Time of Settlement of Restricted Stock Units

  	
  18

  
	
  (f)

  	
   

  	
  Death
  of Recipient

  	
  18

  
	
  (g)

  	
   

  	
  Creditors’
  Rights

  	
  18

  
	
  SECTION 11.

  	
   

  	
  PERFORMANCE SHARES

  	
  18

  
	
  (a)

  	
   

  	
  Performance
  Shares and Performance Share Agreement

  	
  18

  
	
  (b)

  	
   

  	
  Payment
  for Awards

  	
  19

  
	
  (c)

  	
   

  	
  Terms
  of Performance Share Awards

  	
  19

  
	
  (d)

  	
   

  	
  Voting
  and Dividend Rights

  	
  19

  
	
  (e)

  	
   

  	
  Form and
  Time of Settlement of Performance Shares

  	
  19

  
	
  (f)

  	
   

  	
  Death
  of Recipient

  	
  20

  
	
  (g)

  	
   

  	
  Creditors’
  Rights

  	
  20

  
	
  SECTION 12.

  	
   

  	
  AUTOMATIC GRANTS TO
  OUTSIDE DIRECTORS

  	
  20

  
	
  (a)

  	
   

  	
  Initial
  Grants

  	
  20

  

 

iii

 

	
  (b)

  	
   

  	
  Annual
  Grants

  	
  20

  
	
  (c)

  	
   

  	
  Vesting
  Conditions

  	
  20

  
	
  (d)

  	
   

  	
  Stock
  Option Agreement

  	
  21

  
	
  (e)

  	
   

  	
  Additional
  Grants

  	
  21

  
	
  SECTION 13.

  	
   

  	
  ADJUSTMENT OF SHARES;
  REORGANIZATIONS

  	
  21

  
	
  (a)

  	
   

  	
  Adjustments

  	
  21

  
	
  (b)

  	
   

  	
  Dissolution
  or Liquidation

  	
  21

  
	
  (c)

  	
   

  	
  Reorganizations

  	
  21

  
	
  (d)

  	
   

  	
  Reservation
  of Rights

  	
  23

  
	
  SECTION 14.

  	
   

  	
  DEFERRAL OF AWARDS

  	
  23

  
	
  (a)

  	
   

  	
  Committee
  Powers

  	
  23

  
	
  (b)

  	
   

  	
  General
  Rules

  	
  24

  
	
  (c)

  	
   

  	
  Code
  Section 409A

  	
  24

  
	
  SECTION 15.

  	
   

  	
  PAYMENT OF DIRECTOR’S
  FEES IN SECURITIES

  	
  24

  
	
  (a)

  	
   

  	
  Effective
  Date

  	
  24

  
	
  (b)

  	
   

  	
  Elections
  to Receive NSOs, Restricted Shares or Restricted Stock Units

  	
  24

  
	
  (c)

  	
   

  	
  Number and Terms of NSOs,
  Restricted Shares or Restricted Stock Units

  	
  24

  
	
  SECTION 16.

  	
   

  	
  AWARDS UNDER OTHER
  PLANS

  	
  25

  
	
  SECTION 17.

  	
   

  	
  LEGAL AND REGULATORY
  REQUIREMENTS

  	
  25

  
	
  SECTION 18.

  	
   

  	
  WITHHOLDING TAXES

  	
  25

  
	
  (a)

  	
   

  	
  General

  	
  25

  
	
  (b)

  	
   

  	
  Share
  Withholding

  	
  25

  
	
  SECTION 19.

  	
   

  	
  OTHER PROVISIONS
  APPLICABLE TO AWARDS

  	
  25

  
	
  (a)

  	
   

  	
  Transferability

  	
  25

  
	
  (b)

  	
   

  	
  Qualifying
  Performance Criteria

  	
  26

  
	
  SECTION 20.

  	
   

  	
  NO EMPLOYMENT RIGHTS

  	
  26

  
	
  SECTION 21.

  	
   

  	
  APPLICABLE LAW

  	
  27

  
	
  SECTION 22.

  	
   

  	
  DURATION AND AMENDMENTS

  	
  27

  
	
  (a)

  	
   

  	
  Term
  of the Plan

  	
  27

  
	
  (b)

  	
   

  	
  Right
  to Amend or Terminate the Plan

  	
  27

  
	
  (c)

  	
   

  	
  Effect of Termination

  	
  27

  

 

iv

 

INCYTE CORPORATION

 

2010 STOCK INCENTIVE PLAN

 

SECTION 1.   ESTABLISHMENT
AND PURPOSE.

 

The Plan was adopted by the
Board of Directors on March 19, 2010, and shall be effective on such date
subject to the approval of the Corporation’s stockholders.  The purpose of the Plan is to promote the
long-term success of the Corporation and the creation of stockholder value by (a) encouraging
Employees, Outside Directors and Consultants to focus on critical long-range objectives, (b) encouraging
the attraction and retention of Employees, Outside Directors and Consultants
with exceptional qualifications and (c) linking Employees, Outside
Directors and Consultants directly to stockholder interests through increased
stock ownership.  The Plan seeks to
achieve this purpose by providing for Awards in the form of Restricted Shares,
Restricted Stock Units, Performance Shares, Options (which may constitute ISOs
or NSOs) and SARs.

 

SECTION 2.   DEFINITIONS.

 

(a)          “Affiliate” shall mean any
entity other than a Subsidiary, if the Corporation and/or one or more
Subsidiaries own not less than 50% of such entity.

 

(b)          “Award” shall mean any
award of an Option, a SAR, Restricted Shares, Restricted Stock Units or
Performance Shares under the Plan.

 

(c)           “Board of
Directors” shall mean the Board of Directors of the
Corporation, as constituted from time to time.

 

(d)          “Change in
Control” shall mean the occurrence of any of the following
events:

 

(i)            A change in the
composition of the Board of Directors, as a result of which fewer than one-half
of the incumbent directors are directors who either:

 

(A)          Had been
directors of the Corporation 24 months prior to such change; or

 

(B)           Were elected,
or nominated for election, to the Board of Directors with the affirmative votes
of at least a majority of the directors who had been directors of the
Corporation 24 months prior to such change and who were still in office at the
time of the election or nomination; or

 

(ii)           Any “person”
(as defined below) by the acquisition or aggregation of securities is or
becomes the beneficial owner (as defined in Rule 13d-3 of the Exchange
Act), directly or indirectly, of securities of the Corporation representing 50%
or more of the combined voting power of the

 

5

 

Corporation’s
then outstanding securities ordinarily (and apart from rights accruing under
special circumstances) having the right to vote at elections of directors (the “Base
Capital Stock”); except that any change in the relative beneficial ownership of
the Corporation’s securities by any person resulting solely from a reduction in
the aggregate number of outstanding shares of Base Capital Stock, and any
decrease thereafter in such person’s ownership of securities, shall be
disregarded until such person increases in any manner, directly or indirectly,
such person’s beneficial ownership of any securities of the Corporation; or

 

(iii)          The
consummation of a merger or consolidation of the Corporation with or into
another entity or any other corporate reorganization, if persons who were not
stockholders of the Corporation immediately prior to such merger, consolidation
or other reorganization own immediately after such merger, consolidation or
other reorganization 50% or more of the voting power of the outstanding securities
of (A) the continuing or surviving entity and (B) any direct or
indirect parent corporation of such continuing or surviving entity; or

 

(iv)          The
consummation of the sale, transfer or other disposition of all or substantially
all of the assets of the Corporation.

 

For purposes of subsection (d)(ii) above, the
term “person” shall have the same meaning as when used in Sections 13(d) and
14(d) of the Exchange Act but shall exclude (1) a trustee or other
fiduciary holding securities under an employee benefit plan maintained by the
Corporation or a Parent or Subsidiary and (2) a corporation owned directly
or indirectly by the stockholders of the Corporation in substantially the same
proportions as their ownership of the Stock.

 

Any other provision of this Section 2(d) notwithstanding,
a transaction shall not constitute a Change in Control if its sole purpose is
to change the state of the Corporation’s incorporation or to create a holding
company that will be owned in substantially the same proportions by the persons
who held the Corporation’s securities immediately before such a transaction.

 

(e)           “Code” shall mean the
Internal Revenue Code of 1986, as amended.

 

(f)            “Committee” shall mean the
committee designated by the Board of Directors to administer the Plan, as
described in Section 3 hereof (or in the absence of such designation, the
Board of Directors itself).

 

(g)          “Corporation” shall mean
Incyte Corporation, a Delaware corporation.

 

(h)          “Consultant” shall mean a
consultant or advisor who provides bona fide services to the Corporation, a
Parent, a Subsidiary or an Affiliate as an independent contractor (not
including service as a member of the Board of Directors) or a member of the
board of directors of a Parent or a Subsidiary, in each case who is not an
Employee.

 

6

 

(i)           “Employee” shall mean any
individual who is a common-law employee of the Corporation, a Parent, a
Subsidiary or an Affiliate.

 

(j)            “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.

 

(k)          “Exercise
Price” shall mean (a) in the case of an Option, the amount for which one
Share may be purchased upon exercise of such Option, as specified in the
applicable Stock Option Agreement, and (b) in the case of a SAR, an
amount, as specified in the applicable SAR Agreement, which is subtracted from
the Fair Market Value of one Share in determining the amount payable upon
exercise of such SAR.

 

(l)           “Fair
Market Value” with respect to a Share, shall mean the market
price of one Share, determined by the Committee as follows:

 

(i)            If the Stock
was traded on The NASDAQ Stock Market, then the Fair Market Value shall be
equal to the last reported sale price reported for such date by The NASDAQ
Stock Market; or

 

(ii)           If the Stock
was not traded on The NASDAQ Stock Market but was traded on another United
States stock exchange on the date in question, then the Fair Market Value shall
be equal to the closing price reported for such date by the applicable
composite-transactions report; or

 

(iii)          If the Stock
was traded over-the-counter on the date in question, then the Fair Market Value
shall be equal to the last reported sale price reported for such date by the
OTC Bulletin Board or, if not so reported, shall be equal to the closing sale
price quoted for such date by Pink OTC Markets Inc. or similar organization or,
if no last reported or closing sale price is reported, shall be equal to the
mean between the last reported representative bid and asked prices quoted for
such date by the OTC Bulletin Board or, if the Stock is not quoted on the OTC
Bulletin Board, by Pink OTC Markets Inc. or similar organization; or

 

(iv)          If none of the
foregoing provisions is applicable, then the Fair Market Value shall be
determined by the Committee in good faith on such basis as it deems
appropriate.

 

In all cases, the determination of Fair Market Value by the Committee
shall be conclusive and binding on all persons.

 

(m)          “ISO” shall mean an
employee incentive stock option described in Section 422 of the Code.

 

(n)          “Nonstatutory
Option” or “NSO” shall mean an
employee stock option that is not an ISO.

 

(o)          “Offeree” shall mean an
individual to whom the Committee has offered the right to acquire Shares under
the Plan (other than upon exercise of an Option).

 

7

 

(p)          “Option” shall mean an
ISO or Nonstatutory Option granted under the Plan and entitling the holder to
purchase Shares.

 

(q)          “Optionee” shall mean an
individual or estate who holds an Option or SAR.

 

(r)           “Outside Director” shall mean a
member of the Board of Directors who is not an Employee or a Consultant.

 

(s)           “Parent” shall mean any
corporation or other entity (other than the Corporation) in an unbroken chain
of corporations or other entities ending with the Corporation, if each of the
corporations or other entities other than the Corporation owns stock possessing
50% or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain. A corporation or other entity that
attains the status of a Parent on a date after the adoption of the Plan shall
be a Parent commencing as of such date.

 

(t)           “Participant” shall mean an
individual or estate who holds an Award.

 

(u)          “Performance
Shares” shall mean a bookkeeping entry representing the Corporation’s
obligation to deliver Shares (or distribute cash) on a future date in
accordance with the provisions of a Performance Share Agreement.

 

(v)           “Performance
Share Agreement” shall mean the agreement between the Corporation
and the recipient of Performance Shares that contains the terms, conditions and
restrictions pertaining to such Performance Shares.

 

(w)          “Plan” shall mean
this 2010 Stock Incentive Plan of Incyte Corporation, as amended from time to
time.

 

(x)           “Purchase
Price” shall mean the consideration for which one Share may be acquired under
the Plan (other than upon exercise of an Option), as specified by the
Committee.

 

(y)           “Qualifying
Performance Criteria” shall have the meaning set forth in Section 19(b).

 

(z)           “Restricted
Share” shall mean a Share awarded under the Plan and subject to the terms,
conditions and restrictions set forth in a Restricted Share Agreement.

 

(aa)        “Restricted
Share Agreement” shall mean the agreement between the Corporation
and the recipient of a Restricted Share that contains the terms, conditions and
restrictions pertaining to such Restricted Shares.

 

(bb)        “Restricted
Stock Unit” shall mean a bookkeeping entry representing the
Corporation’s obligation to deliver one Share (or distribute cash) on a future
date in accordance with the provisions of a Restricted Stock Unit Agreement.

 

(cc)         “Restricted
Stock Unit Agreement” shall mean the agreement between the
Corporation and the recipient of a Restricted Stock Unit that contains the
terms, conditions and restrictions pertaining to such Restricted Stock Unit.

 

8

 

(dd)        “SAR” shall mean a
stock appreciation right granted under the Plan.

 

(ee)         “SAR
Agreement” shall mean the agreement between the Corporation
and an Optionee that contains the terms, conditions and restrictions pertaining
to his or her SAR.

 

(ff)           “Service” shall mean
service as an Employee, Consultant or Outside Director, subject to such further
limitations as may be set forth in the Plan or the applicable Stock Option
Agreement, SAR Agreement, Restricted Share Agreement, Restricted Stock Unit
Agreement or Performance Share Agreement. 
Service does not terminate when an Employee goes on a bona fide leave of
absence, that was approved by the Corporation in writing, if the terms of the
leave provide for continued Service crediting, or when continued Service
crediting is required by applicable law. 
However, for purposes of determining whether an Option is entitled to
ISO status, an Employee’s employment will be treated as terminating 90 days
after such Employee went on leave, unless such Employee’s right to return to
active work is guaranteed by law or by a contract.  Service terminates in any event when the
approved leave ends, unless such Employee immediately returns to active
work.  The Corporation shall be entitled
to determine in its sole discretion which leaves of absence count toward
Service, and when Service terminates for all purposes under the Plan.

 

(gg)        “Share” shall mean one
share of Stock, as adjusted in accordance with Section 13 (if applicable).

 

(hh)        “Stock” shall mean the
common stock of the Corporation, $.001 par value per share.

 

(ii)          “Stock
Option Agreement” shall mean the agreement between the Corporation
and an Optionee that contains the terms, conditions and restrictions pertaining
to such Option.

 

(jj)           “Subsidiary” shall mean any
corporation, if the Corporation or one or more other Subsidiaries own not less
than 50% of the total combined voting power of all classes of outstanding stock
of such corporation. A corporation that attains the status of a Subsidiary on a
date after the adoption of the Plan shall be considered a Subsidiary commencing
as of such date.

 

(kk)        “Total and
Permanent Disability” shall mean that the Optionee is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted, or can be expected to last for a continuous period
of not less than one year.

 

SECTION 3.   ADMINISTRATION.

 

(a)          Committee
Composition. The Plan shall be administered by the Board of
Directors or a Committee appointed by the Board of Directors.  The Committee shall consist of two or more
members of the Board of Directors.  In
addition, to the extent required by the Board of Directors, the composition of
the Committee shall satisfy (i) such requirements as the Securities and
Exchange Commission may establish for administrators acting under plans
intended to qualify for exemption under Rule 16b-3 (or its successor)
under the Exchange Act; and (ii) such

 

9

 

requirements as the Internal
Revenue Service may establish for outside directors acting under plans intended
to qualify for exemption under Section 162(m)(4)(C) of the Code.

 

(b)          Committee
for Non-Officer Grants.  The
Board of Directors may also appoint one or more separate committees of the
Board of Directors, each composed of one or more members of the Board of
Directors who need not satisfy the requirements of Section 3(a), who may
administer the Plan with respect to Employees who are not considered officers
or directors of the Corporation under Section 16 of the Exchange Act, may
grant Awards under the Plan to such Employees and may determine all terms of
such grants.  Within the limitations of
the preceding sentence, any reference in the Plan to the Committee shall
include such committee or committees appointed pursuant to the preceding
sentence.  To the extent permitted by
applicable laws, the Board of Directors may also authorize one or more officers
of the Corporation to designate Employees, other than persons subject to Section 16
of the Exchange Act, to receive Awards and to determine the number of such
Awards to be received by such Employees.

 

(c)           Committee
Procedures.  The Board
of Directors shall designate one of the members of the Committee as
chairman.  The Committee may hold
meetings at such times and places as it shall determine.  The acts of a majority of the Committee members
present at meetings at which a quorum exists, or acts reduced to or approved in
writing (including via email) by all Committee members, shall be valid acts of
the Committee.

 

(d)          Committee
Responsibilities.  Subject to
the provisions of the Plan, the Committee shall have full authority and
discretion to take the following actions:

 

(i)            To interpret
the Plan and to apply its provisions;

 

(ii)           To adopt, amend
or rescind rules, procedures and forms relating to the Plan;

 

(iii)          To adopt, amend
or terminate sub-plans established for the purpose of satisfying applicable
foreign laws, including qualifying for preferred tax treatment under applicable
foreign tax laws;

 

(iv)          To authorize
any person to execute, on behalf of the Corporation, any instrument required to
carry out the purposes of the Plan;

 

(v)           To determine
when Awards are to be granted under the Plan;

 

(vi)          To select the
Offerees and Optionees;

 

(vii)         To determine
the number of Shares to be made subject to each Award;

 

(viii)        To prescribe
the terms and conditions of each Award, including the Exercise Price, the
Purchase Price, the performance criteria, the performance period, and the
vesting or duration of the Award (including accelerating the vesting of Awards,
either at the time of the Award or thereafter, without the consent of the
Participant), to determine whether an

 

10

 

Option
is to be classified as an ISO or as a Nonstatutory Option, and to specify the
provisions of the agreement relating to such Award;

 

(ix)           To amend any
outstanding Award agreement, subject to applicable legal restrictions and to
the consent of the Participant if the Participant’s rights or obligations would
be materially impaired;

 

(x)            To prescribe
the consideration for the grant of each Award or other right under the Plan and
to determine the sufficiency of such consideration;

 

(xi)           To determine
the disposition of each Award or other right under the Plan in the event of a
Participant’s divorce or dissolution of marriage;

 

(xii)          To determine
whether Awards under the Plan will be granted in replacement of other grants
under an incentive or other compensation plan of an acquired business;

 

(xiii)         To correct any
defect, supply any omission, or reconcile any inconsistency in the Plan or any
Award agreement;

 

(xiv)        To establish or
verify the extent of satisfaction of any performance goals or other conditions
applicable to the grant, issuance, exercisability, vesting and/or ability to
retain any Award; and

 

(xv)         To take any
other actions deemed necessary or advisable for the administration of the Plan.

 

Subject to the requirements of applicable law, the Committee may
designate persons other than members of the Committee to carry out its
responsibilities and may prescribe such conditions and limitations as it may
deem appropriate, except that the Committee may not delegate its authority with
regard to the selection for participation of or the granting of Awards under
the Plan to persons subject to Section 16 of the Exchange Act.  All decisions, interpretations and other
actions of the Committee shall be final and binding on all Participants, and
all persons deriving their rights from a Participant.  No member of the Committee shall be liable
for any action that he or she has taken or has failed to take in good faith
with respect to the Plan or any Award.

 

SECTION 4.   ELIGIBILITY.

 

(a)          General
Rule. Only Employees shall be eligible for the grant of ISOs. Only
Employees, Consultants and Outside Directors shall be eligible for the grant of
Restricted Shares, Restricted Stock Units, Performance Shares, Nonstatutory
Options or SARs.

 

(b)          Ten-Percent
Stockholders. An Employee who owns more than 10% of the total
combined voting power of all classes of outstanding stock of the Corporation, a
Parent or Subsidiary shall not be eligible for the grant of an ISO unless such
grant satisfies the requirements of Section 422(c)(5) of the Code.

 

11

 

(c)           Attribution
Rules. For purposes of Section 4(b) above, in determining stock
ownership, an Employee shall be deemed to own the stock owned, directly or
indirectly, by or for such Employee’s brothers, sisters, spouse, ancestors and
lineal descendants. Stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust shall be deemed to be owned
proportionately by or for its stockholders, partners or beneficiaries.

 

(d)          Outstanding
Stock. For purposes of Section 4(b) above, “outstanding stock”
shall include all stock actually issued and outstanding immediately after the
grant but shall not include shares authorized for issuance under outstanding
options held by the Employee or by any other person.

 

SECTION 5.   STOCK SUBJECT
TO PLAN.

 

(a)          Basic
Limitation.  Shares
offered under the Plan shall be authorized but unissued Shares or treasury
Shares.  The aggregate number of Shares
authorized for issuance as Awards under the Plan shall not exceed 5,400,000
Shares, plus any Shares approved by the Corporation’s stockholders for issuance
under the Corporation’s 1991 Stock Plan and its 1993 Directors’ Stock Option
Plan (the “Prior Plans”) which are not subject to any outstanding award under
the Prior Plans and which are no longer available for issuance under the Prior
Plans by action of the Board of Directors. 
The limitation of this Section 5(a) shall be subject to
adjustment pursuant to Section 13. 
Notwithstanding the foregoing, the number of Shares that may be issued
under the Plan, other than (i) upon exercise of Options or SARs or (ii) pursuant
to any sale of Restricted Shares for a Purchase Price at least equal to 100
percent of the Fair Market Value shall not exceed 200,000 Shares, subject to
adjustment pursuant to Section 13. 
The number of Shares that are subject to other Awards outstanding at any
time under the Plan shall not exceed the number of Shares which then remain
available for issuance under the Plan. 
The Corporation, during the term of the Plan, shall at all times reserve
and keep available sufficient Shares to satisfy the requirements of the
Plan.  Shares tendered or withheld in
full or partial payment of the Exercise Price of an Award or to satisfy tax
withholding obligations in connection with an Award, and Shares issued under an
Award that are purchased by the Corporation on the open market, shall not be
available for future issuance under the Plan.

 

(b)          Award
Limitation.  Subject to
the provisions of Section 13, no Participant may receive Awards under the
Plan in any calendar year that relate to more than 800,000 Shares.

 

(c)           Additional
Shares.  If an Award expires or becomes
unexercisable without having been exercised in full, or, with respect to
Restricted Shares, Restricted Stock Units or Performance Shares, is forfeited
to or repurchased by the Corporation due to failure to vest, the unpurchased
Shares (or for Awards other than Options or SARs the forfeited or repurchased
Shares) which were subject thereto will become available for future grant or
sale under the Plan (unless the Plan has terminated).  With respect to SARs, when a stock settled
SAR is exercised, all of the Shares subject to the SAR shall be counted against
the number of Shares available for future grant or sale under the Plan,
regardless of the number of Shares actually issued pursuant to such exercise.  Shares that have actually been issued under
the Plan under any Award will not be returned to the Plan and will not become
available for future distribution under the Plan; provided, however,
that if Shares issued pursuant to Awards of Restricted Shares, Restricted Stock
Units or Performance Shares are repurchased by the Corporation or are forfeited
to the

 

12

 

Corporation, such Shares
will become available for future grant under the Plan.  To the extent an Award under the Plan is paid
out in cash rather than Shares, such cash payment will not result in reducing
the number of Shares available for issuance under the Plan.

 

SECTION 6.   RESTRICTED
SHARES.

 

(a)          Restricted
Share Agreement.  Each grant
of Restricted Shares under the Plan shall be evidenced by a Restricted Share
Agreement between the recipient and the Corporation. Such Restricted Shares
shall be subject to all applicable terms of the Plan and may be subject to any
other terms that are not inconsistent with the Plan.  The provisions of the various Restricted
Share Agreements entered into under the Plan need not be identical.

 

(b)          Payment
for Awards.  Restricted
Shares may be sold or awarded under the Plan for such consideration as the
Committee may determine, including cash, cash equivalents, full-recourse
promissory notes, past services and future services.

 

(c)           Vesting.  Each Award of Restricted Shares may or may
not be subject to vesting. Vesting shall occur, in full or in installments,
upon satisfaction of the conditions specified in the Restricted Share
Agreement.  A Restricted Share Agreement
may provide for accelerated vesting in the event of the Participant’s death,
Total and Permanent Disability or retirement or other events.  The Committee may determine, at the time of
granting Restricted Shares or thereafter, that all or part of such Restricted
Shares shall become vested upon a Change in Control.  Except as may be set forth in a Restricted
Share Agreement, vesting of the Restricted Shares shall cease on the termination
of the Participant’s Service.

 

(d)          Voting and
Dividend Rights.  The holders
of Restricted Shares awarded under the Plan shall have the same voting,
dividend and other rights as the Corporation’s other stockholders.  A Restricted Share Agreement, however, may
require that the holders of Restricted Shares invest any cash dividends
received in additional Restricted Shares. 
Such additional Restricted Shares shall be subject to the same
conditions and restrictions as the Award with respect to which the dividends
were paid.

 

(e)           Restrictions
on Transfer of Shares. 
Restricted Shares shall be subject to such rights of repurchase, rights
of first refusal or other restrictions as the Committee may determine. Such
restrictions shall be set forth in the applicable Restricted Share Agreement
and shall apply in addition to any general restrictions that may apply to all
holders of Shares.

 

SECTION 7.   TERMS AND
CONDITIONS OF OPTIONS.

 

(a)          Stock
Option Agreement.  Each grant
of an Option under the Plan shall be evidenced by a Stock Option Agreement
between the Optionee and the Corporation. 
Such Option shall be subject to all applicable terms and conditions of
the Plan and may be subject to any other terms and conditions which are not
inconsistent with the Plan and which the Committee deems appropriate for
inclusion in a Stock Option Agreement. 
The Stock Option Agreement shall specify whether the Option is an ISO or
an NSO.  The provisions of the various
Stock Option Agreements entered into under the Plan need not be identical.  Options may be granted in consideration of a
reduction in the Optionee’s other compensation.

 

13

 

(b)          Number of
Shares.  Each Stock Option Agreement
shall specify the number of Shares that are subject to the Option (subject to
adjustment in accordance with Section 13).

 

(c)           Exercise
Price.  Each Stock Option Agreement
shall specify the Exercise Price. The Exercise Price of an ISO shall not be
less than 100% of the Fair Market Value of a Share on the date of grant, except
as otherwise provided in Section 4(b), and the Exercise Price of an NSO
shall not be less 100% of the Fair Market Value of a Share on the date of
grant.  Subject to the foregoing in this Section 7(c),
the Exercise Price under any Option shall be determined by the Committee at its
sole discretion.  The Exercise Price
shall be payable in one of the forms described in Section 8.

 

(d)          Withholding
Taxes.  As a condition to the exercise
of an Option, the Optionee shall make such arrangements as the Corporation may
require for the satisfaction of any federal, state, local or foreign
withholding tax obligations that may arise in connection with such
exercise.  The Optionee shall also make
such arrangements as the Corporation may require for the satisfaction of any
federal, state, local or foreign withholding tax obligations that may arise in
connection with the disposition of Shares acquired by exercising an Option.

 

(e)           Exercisability
and Term.  Each Stock
Option Agreement shall specify the date when all or any installment of the
Option is to become exercisable.  The
Stock Option Agreement shall also specify the term of the Option; provided,
however, that the term of an ISO shall in no event exceed 10 years from
the date of grant (five years for Employees described in Section 4(b)). A
Stock Option Agreement may provide for accelerated exercisability in the event
of the Optionee’s death, Total and Permanent Disability or retirement or other
events and may provide for expiration prior to the end of its term in the event
of the termination of the Optionee’s Service. Options may be awarded in
combination with SARs, and such an Award may provide that the Options will not
be exercisable unless the related SARs are forfeited. Subject to the foregoing in
this Section 7(e), the Committee at its sole discretion shall determine
when all or any installment of an Option is to become exercisable and when an
Option is to expire.

 

(f)            Exercise
of Options.  Each Stock
Option Agreement shall set forth the extent to which the Optionee shall have
the right to exercise the Option following termination of the Optionee’s
Service with the Corporation and its Subsidiaries, and the right to exercise
the Option of any executors or administrators of the Optionee’s estate or any
person who has acquired such Option(s) directly from the Optionee by
bequest or inheritance.  Such provisions
shall be determined in the sole discretion of the Committee, need not be
uniform among all Options issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination of Service.

 

(g)          Effect of
Change in Control.  The
Committee may determine, at the time of granting an Option or thereafter, that
such Option shall become exercisable as to all or part of the Shares subject to
such Option upon a Change in Control.

 

(h)          No Rights
as a Stockholder.  An
Optionee, or a permitted transferee of an Optionee, shall have no rights as a
stockholder of the Corporation with respect to any Shares

 

14

 

covered by the Option until
the date of the issuance of the Shares underlying the Option upon a valid
exercise thereof.

 

(i)           Modification,
Extension and Assumption of Options.  Within the limitations of the Plan, the
Committee may modify, extend or assume outstanding Options or may accept the
cancellation of outstanding Options (whether granted by the Corporation or
another issuer) in return for the grant of new Options for the same or a
different number of Shares and at the same or a different Exercise Price;
provided, however, that the Committee may not modify outstanding Options to
lower the Exercise Price nor may the Committee assume or accept the
cancellation of outstanding Options in return for the grant of new Options with
a lower Exercise Price, unless such action has been approved by the Corporation’s
stockholders.  The foregoing
notwithstanding, no modification of an Option shall, without the consent of the
Optionee, materially impair such Optionee’s rights or increase his or her obligations
under such Option.

 

(j)            Restrictions
on Transfer of Shares.  Any
Shares issued upon exercise of an Option shall be subject to such special
forfeiture conditions, rights of repurchase, rights of first refusal and other
transfer restrictions as the Committee may determine.  Such restrictions shall be set forth in the
applicable Stock Option Agreement and shall apply in addition to any general
restrictions that may apply to all holders of Shares.

 

(k)          Buyout
Provisions.  Except with
respect to an Option whose Exercise Price exceeds the Fair Market Value of the
Shares subject to the Option, the Committee may at any time (a) offer to
buy out for a payment in cash or cash equivalents an Option previously granted
or (b) authorize an Optionee to elect to cash out an Option previously
granted, in either case at such time and based upon such terms and conditions
as the Committee shall establish.

 

SECTION 8.   PAYMENT FOR
SHARES.

 

(a)          General
Rule.  The entire Exercise Price or
Purchase Price of Shares issued under the Plan shall be payable in lawful money
of the United States of America at the time when such Shares are purchased,
except as provided in Section 8(b) through Section 8(g) below.

 

(b)          Surrender
of Stock.  To the
extent that a Stock Option Agreement so provides, payment may be made all or in
part by surrendering, or attesting to the ownership of, Shares which have
already been owned by the Optionee or his representative.  Such Shares shall be valued at their Fair
Market Value on the date when the new Shares are purchased under the Plan.  The Optionee shall not surrender, or attest
to the ownership of, Shares in payment of the Exercise Price if such action
would cause the Corporation to recognize compensation expense (or additional
compensation expense) with respect to the Option for financial reporting
purposes.

 

(c)           Services
Rendered.  At the
discretion of the Committee, Shares may be awarded under the Plan in
consideration of services rendered to the Corporation or a Subsidiary prior to
the award.  If Shares are awarded without
the payment of a Purchase Price in cash, the Committee shall make a
determination (at the time of the award) of the value of the services rendered
by the Offeree and the sufficiency of the consideration to meet the
requirements of Section 6(b).

 

15

 

(d)          Cashless
Exercise.  To the
extent that a Stock Option Agreement so provides, payment may be made all or in
part by delivery (on a form prescribed by the Committee) of an irrevocable
direction to a securities broker to sell Shares and to deliver all or part of
the sale proceeds to the Corporation in payment of the aggregate Exercise
Price.

 

(e)           Exercise/Pledge.  To the extent that a Stock Option Agreement
so provides, payment may be made all or in part by delivery (on a form
prescribed by the Committee) of an irrevocable direction to a securities broker
or lender to pledge Shares, as security for a loan, and to deliver all or part
of the loan proceeds to the Corporation in payment of the aggregate Exercise
Price.

 

(f)            Promissory
Note.  To the extent that a Stock
Option Agreement or Restricted Share Agreement so provides, payment may be made
all or in part by delivering (on a form prescribed by the Corporation) a
full-recourse promissory note.

 

(g)          Other
Forms of Payment.  To the
extent that a Stock Option Agreement or Restricted Share Agreement so provides,
payment may be made in any other form that is consistent with applicable laws,
regulations and rules.

 

(h)          Limitations
under Applicable Law. 
Notwithstanding anything herein or in a Stock Option Agreement or
Restricted Share Agreement to the contrary, payment may not be made in any form
that is unlawful, as determined by the Committee in its sole discretion.

 

SECTION 9.   STOCK APPRECIATION
RIGHTS.

 

(a)          SAR
Agreement.  Each grant
of a SAR under the Plan shall be evidenced by a SAR Agreement between the
Optionee and the Corporation.  Such SAR
shall be subject to all applicable terms of the Plan and may be subject to any
other terms that are not inconsistent with the Plan.  The provisions of the various SAR Agreements
entered into under the Plan need not be identical.  SARs may be granted in consideration of a
reduction in the Optionee’s other compensation.

 

(b)          Number of
Shares.  Each SAR Agreement shall
specify the number of Shares to which the SAR pertains and shall provide for
the adjustment of such number in accordance with Section 13.

 

(c)           Exercise
Price.  Each SAR Agreement shall
specify the Exercise Price, which shall not be less than 100% of the Fair
Market Value of a Share on the date of grant. 
A SAR Agreement may specify an Exercise Price that varies in accordance
with a predetermined formula while the SAR is outstanding.

 

(d)          Exercisability
and Term.  Each SAR
Agreement shall specify the date when all or any installment of the SAR is to
become exercisable.  The SAR Agreement
shall also specify the term of the SAR. 
A SAR Agreement may provide for accelerated exercisability in the event
of the Optionee’s death, Total and Permanent Disability or retirement or other
events.  Except as may be set forth in a
SAR Agreement, vesting of the SAR shall cease on the termination of the
Participant’s Service.  SARs may be
awarded in combination with Options, and such an Award may provide that the
SARs will not be exercisable unless the related Options are forfeited.  A

 

16

 

SAR may be included in an
ISO only at the time of grant but may be included in an NSO at the time of
grant or thereafter. A SAR granted under the Plan may provide that it will be
exercisable only in the event of a Change in Control.

 

(e)           Effect of
Change in Control.  The
Committee may determine, at the time of granting a SAR or thereafter, that such
SAR shall become fully exercisable as to all Shares subject to such SAR upon a
Change in Control.

 

(f)            Exercise
of SARs.  Upon exercise of a SAR, the
Optionee (or any person having the right to exercise the SAR after his or her
death) shall receive from the Corporation (a) Shares, (b) cash or (c) a
combination of Shares and cash, as the Committee shall determine.  The amount of cash and/or the Fair Market
Value of Shares received upon exercise of SARs shall, in the aggregate, be
equal to the amount by which the Fair Market Value (on the date of surrender)
of the Shares subject to the SARs exceeds the Exercise Price.

 

(g)          Modification
or Assumption of SARs. 
Within the limitations of the Plan, the Committee may modify, extend or
assume outstanding SARs or may accept the cancellation of outstanding SARs
(whether granted by the Corporation or by another issuer) in return for the
grant of new SARs for the same or a different number of Shares and at the same
or a different exercise price.  The
foregoing notwithstanding, no modification of a SAR shall, without the consent
of the holder, materially impair his or her rights or obligations under such
SAR.

 

(h)          Buyout
Provisions.  Except with respect to a SAR
whose Exercise Price exceeds the Fair Market Value of the Shares subject to the
SAR, the Committee may at any time (a) offer to buy out for a payment in
cash or cash equivalents a SAR previously granted, or (b) authorize an
Optionee to elect to cash out a SAR previously granted, in either case at such
time and based upon such terms and conditions as the Committee shall establish.

 

SECTION 10.                       RESTRICTED
STOCK UNITS.

 

(a)          Restricted
Stock Unit Agreement.  Each grant
of Restricted Stock Units under the Plan shall be evidenced by a Restricted
Stock Unit Agreement between the recipient and the Corporation.  Such Restricted Stock Units shall be subject
to all applicable terms of the Plan and may be subject to any other terms that
are not inconsistent with the Plan. The provisions of the various Restricted
Stock Unit Agreements entered into under the Plan need not be identical.
Restricted Stock Units may be granted in consideration of a reduction in the
recipient’s other compensation.

 

(b)          Payment
for Awards. To the extent that an Award is granted in the form
of Restricted Stock Units, no cash consideration shall be required of the Award
recipients.

 

(c)           Vesting
Conditions.  Each Award
of Restricted Stock Units may or may not be subject to vesting. Vesting shall
occur, in full or in installments, upon satisfaction of the conditions
specified in the Restricted Stock Unit Agreement.  A Restricted Stock Unit Agreement may provide
for accelerated vesting in the event of the Participant’s death, Total and
Permanent Disability or retirement or other events.  The Committee may determine, at the time of
granting Restricted Stock Units or thereafter, that all or part of such Restricted
Stock Units shall become vested in the event that a Change in Control occurs
with respect to the Corporation.

 

17

 

(d)          Voting and
Dividend Rights.  The holders
of Restricted Stock Units shall have no voting rights.  Prior to settlement or forfeiture, any
Restricted Stock Unit awarded under the Plan may, at the Committee’s
discretion, carry with it a right to dividend equivalents.  Such right entitles the holder to be credited
with an amount equal to all cash dividends paid on one Share while the
Restricted Stock Unit is outstanding. Dividend equivalents may be converted
into additional Restricted Stock Units. 
Settlement of dividend equivalents may be made in the form of cash, in
the form of Shares, or in a combination of both. Prior to distribution, any
dividend equivalents which are not paid shall be subject to the same conditions
and restrictions (including without limitation, any forfeiture conditions) as
the Restricted Stock Units to which they attach.

 

(e)           Form and
Time of Settlement of Restricted Stock Units.  Settlement of vested Restricted Stock Units
may be made in the form of (a) cash, (b) Shares or (c) any
combination of both, as determined by the Committee.  The actual number of Restricted Stock Units
eligible for settlement may be larger or smaller than the number included in
the original Award, based on predetermined performance factors.  Methods of converting Restricted Stock Units
into cash may include (without limitation) a method based on the average Fair
Market Value of Shares over a series of trading days.  A Restricted Stock Unit Agreement may provide
that vested Restricted Stock Units may be settled in a lump sum or in
installments.  A Restricted Stock Unit
Agreement may provide that the distribution may occur or commence when all
vesting conditions applicable to the Restricted Stock Units have been satisfied
or have lapsed, or it may be deferred to any later date.  The amount of a deferred distribution may be
increased by an interest factor or by dividend equivalents.  Until an Award of Restricted Stock Units is
settled, the number of such Restricted Stock Units shall be subject to
adjustment pursuant to Section 13.

 

(f)            Death of
Recipient. Any Restricted Stock Units that become payable
after the recipient’s death shall be distributed to the recipient’s beneficiary
or beneficiaries. Each recipient of Restricted Stock Units under the Plan shall
designate one or more beneficiaries for this purpose by filing the prescribed
form with the Corporation.  A beneficiary
designation may be changed by filing the prescribed form with the Corporation
at any time before the Award recipient’s death. 
If no beneficiary was designated or if no designated beneficiary
survives the Award recipient, then any Restricted Stock Units that become
payable after the recipient’s death shall be distributed to the recipient’s
estate.

 

(g)          Creditors’
Rights.  A holder of Restricted Stock
Units shall have no rights other than those of a general creditor of the
Corporation. Restricted Stock Units represent an unfunded and unsecured
obligation of the Corporation, subject to the terms and conditions of the
applicable Restricted Stock Unit Agreement.

 

SECTION 11.                       PERFORMANCE
SHARES.

 

(a)          Performance
Shares and Performance Share Agreement.  Each grant of Performance Shares under the
Plan shall be evidenced by a Performance Share Agreement between the recipient
and the Corporation.  Such Performance
Shares shall be subject to all applicable terms of the Plan and may be subject to
any other terms that are not inconsistent with the Plan. The provisions of the
various Performance Share Agreements entered into under the Plan need not be
identical. Performance Shares may be granted in consideration of a reduction in
the recipient’s other compensation.

 

18

 

(b)          Payment
for Awards. To the extent that an Award is granted in the form
of Performance Shares, no cash consideration shall be required of the Award
recipients.

 

(c)           Terms of
Performance Share Awards.  The
Committee may determine the terms of Performance Share Awards, all of which
shall be subject to Section 19(b) of the Plan.  Each Performance Share Agreement shall set
forth the number of Shares subject to such Performance Share Award, the
Qualifying Performance Criteria and the performance period.  Except as otherwise provided in the
Performance Share Agreement, the Performance Share Award shall terminate upon
the termination of the Participant’s Service. 
Prior to settlement and in accordance with Section 19(b) of
the Plan, the Committee shall determine the extent to which Performance Shares
have been earned.  Performance periods
may overlap and the holders may participate simultaneously with respect to
Performance Shares Awards that are subject to different performance periods and
different Qualifying Performance Criteria. 
The number of Shares may be fixed or may vary in accordance with such
Qualifying Performance Criteria as may be determined by the Committee.  A Performance Share Agreement may provide for
accelerated vesting in the event of the Participant’s death, Total and
Permanent Disability or retirement or other events.  The Committee may determine, at the time of
granting Performance Share Awards or thereafter, that all or part of the
Performance Shares shall become vested upon a Change in Control.

 

(d)          Voting and
Dividend Rights. The holders of Performance Shares shall have no
voting rights with respect to such Performance Shares.  Prior to settlement or forfeiture, any Performance
Share awarded under the Plan may, at the Committee’s discretion, carry with it
a right to dividend equivalents.  Such
right entitles the holder to be credited with an amount equal to all cash
dividends paid on one Share while the Performance Share is outstanding.  Dividend equivalents may be converted into
additional Performance Shares. 
Settlement of dividend equivalents may be made in the form of cash, in
the form of Shares, or in a combination of both.  Prior to distribution, any dividend equivalents
which are not paid shall be subject to the same conditions and restrictions
(including without limitation, any forfeiture conditions) as the Performance
Shares to which they attach.

 

(e)           Form and
Time of Settlement of Performance Shares.  Settlement of Performance Shares may be made
in the form of (a) cash, (b) Shares or (c) any combination of
both, as determined by the Committee and set forth in the Performance Share
Agreements.  The actual number of
Performance Shares eligible for settlement may be larger or smaller than the
number included in the original Award, based on the Qualifying Performance
Criteria.  Methods of converting
Performance Shares into cash may include (without limitation) a method based on
the average Fair Market Value of Shares over a series of trading days.  A Performance Share Agreement may provide
that Performance Shares may be settled in a lump sum or in installments.  A Performance Share Agreement may provide
that the distribution may occur or commence when all vesting conditions
applicable to the Performance Shares have been satisfied or have lapsed, or it
may be deferred to any later date.  The
amount of a deferred distribution may be increased by an interest factor or by
dividend equivalents.  Until an Award of
Performance Shares is settled, the number of such Performance Shares shall be
subject to adjustment pursuant to Section 13.

 

19

 

(f)            Death of
Recipient. Any Performance Share Award that becomes payable
after the recipient’s death shall be distributed to the recipient’s beneficiary
or beneficiaries. Each recipient of a Performance Share Award under the Plan
shall designate one or more beneficiaries for this purpose by filing the
prescribed form with the Corporation.  A
beneficiary designation may be changed by filing the prescribed form with the
Corporation at any time before the Award recipient’s death.  If no beneficiary was designated or if no
designated beneficiary survives the Award recipient, then any Performance Share
Award that becomes payable after the recipient’s death shall be distributed to
the recipient’s estate.

 

(g)          Creditors’
Rights.  A holder of Performance Shares
shall have no rights other than those of a general creditor of the Corporation.
Performance Shares represent an unfunded and unsecured obligation of the
Corporation, subject to the terms and conditions of the applicable Performance
Share Agreement.

 

SECTION 12.                       AUTOMATIC
GRANTS TO OUTSIDE DIRECTORS

 

(a)          Initial
Grants.  Each new Outside Director as of
the effective date of the Plan, shall receive Nonstatutory Options covering
35,000 Shares within one business day after his or her initial election to the
Board of Directors.  The number of Shares
included in an Option shall be subject to adjustment under Section 13.

 

(b)          Annual
Grants. On the first business day following the conclusion of each regular
annual meeting of the Corporation’s stockholders, each Outside Director who
will continue serving as a member of the Board of Directors thereafter shall receive
an Option covering 20,000 Shares, subject to adjustment under Section 13.  Each Outside Director who is not initially
elected at a regular annual meeting of the Corporation’s stockholders shall
receive an Option to purchase a pro rata portion of 20,000 Shares within ten
business days of such Director’s election based on the number of full months
remaining from the date of election until the next regular annual meeting of
the Corporation’s stockholders divided by twelve.  Any fractional shares resulting from such
calculation shall be rounded up to the nearest whole number.

 

(c)           Vesting
Conditions.  Each Option
granted under Subsection (a) of this Section 12 shall become
exercisable (i) as to one-fourth (1/4) of the total number of Shares
covered by such Option on the first anniversary of the date of grant and (ii) as
to one-forty-eighth (1/48) of the total number of Shares covered by such Option
on each of a series of thirty-six (36) monthly installments thereafter.  Except as set forth in the next succeeding
sentence and in the last sentence of this Subsection (c), each Option granted
under Subsection (b) of this Section 12 shall become exercisable in
full on the first anniversary of the date of grant; provided, however, that
each such Option shall become exercisable in full immediately prior to the next
regular annual meeting of the Corporation’s stockholders following such date of
grant in the event such meeting occurs prior to such first anniversary
date.  Except as set forth in the last
sentence of this Subsection (c), each Option granted under Subsection (b) to
Outside Directors who were not initially elected at a regular annual meeting of
the Corporation’s stockholders shall become exercisable in full immediately
prior to the next regular annual meeting of the Corporation’s stockholders
following the date of grant. 
Notwithstanding the foregoing, each Option granted under Subsection (b) above
that is outstanding shall become exercisable in full in the event that a Change
in Control occurs with respect to the Corporation.

 

20

 

(d)          Stock
Option Agreement.  All grants
to Outside Directors under this Section 12 shall be evidenced by a Stock
Option Agreement between the Optionee and the Corporation.  Such Option shall be subject to all
applicable terms and conditions of the Plan and may be subject to other terms
and condition that are not inconsistent with the Plan and that the Board of
Directors deems appropriate for inclusion in a Stock Option Agreement.

 

(e)           Additional
Grants.  Notwithstanding the foregoing
provisions of this Section 12, the Board of Directors may from time to
time increase the number of Shares subject to an initial or annual grant of
Options under Section 12(a) or (b) to any Outside Director to
the extent the Board of Directors determines necessary to induce an Outside
Director to become or remain an Outside Director or to reflect an increase in
the duties or responsibilities of the Outside Director, subject to all terms
and conditions of the Plan otherwise applicable to grants of Options.  Each such Option may become exercisable on
the same schedule as set forth in Section 12(c) or on a different
schedule, as the Board of Directors in each case shall determine.

 

SECTION 13.                       ADJUSTMENT OF
SHARES; REORGANIZATIONS.

 

(a)          Adjustments.  In the event of a subdivision of the
outstanding Stock, a declaration of a dividend payable in Shares, a declaration
of a dividend payable in a form other than Shares in an amount that has a
material effect on the Fair Market Value of Shares, a combination or
consolidation of the outstanding Stock (by reclassification or otherwise) into
a lesser number of Shares, a recapitalization, a spin-off or a similar
occurrence, the Committee shall make appropriate and equitable adjustments in:

 

(i)            The numerical
limitations set forth in Sections 5(a) and (b);

 

(ii)           The number of
Shares covered by all outstanding Awards; and

 

(iii)          The Exercise
Price under each outstanding Option and SAR.

 

(b)          Dissolution
or Liquidation.  To the extent
not previously exercised or settled, all outstanding Awards shall terminate
immediately prior to the dissolution or liquidation of the Corporation.

 

(c)           Reorganizations.  In the event the Corporation is party to a
merger or other reorganization, subject to any vesting acceleration provisions
in an Award agreement, outstanding Awards shall be treated in the manner
provided in the agreement of merger or reorganization (including as the same
may be amended).  Such agreement shall
not be required to treat all Awards or individual types of Awards similarly in
the merger or reorganization; provided, however, that such
agreement shall provide for one of the following with respect to all
outstanding Awards (as applicable):

 

(i)            The
continuation of the outstanding Award by the Corporation, if the Corporation is
a surviving corporation;

 

(ii)           The assumption
of the outstanding Award by the surviving corporation or its parent or
subsidiary;

 

21

 

(iii)          The substitution
by the surviving corporation or its parent or subsidiary of its own award for
the outstanding Award;

 

(iv)          Full
exercisability or vesting and accelerated expiration of the outstanding Award,
followed by the cancellation of such Award;

 

(v)           The cancellation
of an outstanding Option or SAR and a payment to the Optionee equal to the
excess of (i) the Fair Market Value of the Shares subject to such Option
or SAR (whether or not such Option or SARs is then exercisable or such Shares
are then vested) as of the closing date of such merger or reorganization over (ii) its
aggregate Exercise Price.  Such payment
may be made in the form of cash, cash equivalents, or securities of the
surviving corporation or its parent with a Fair Market Value equal to the
required amount. Such payment may be made in installments and may be deferred
until the date or dates when such Option or SAR would have become exercisable
or such Shares would have vested.  Such
payment may be subject to vesting based on the Optionee’s continuing Service,
provided that the vesting schedule shall not be less favorable to the Optionee
than the schedule under which such Option or SAR would have become exercisable
or such Shares would have vested (including any vesting acceleration
provisions).  If the Exercise Price of
the Shares subject to any Option or SAR exceeds the Fair Market Value of the
Shares subject thereto, then such Option or SAR may be cancelled without making
a payment to the Optionee with respect thereto. 
For purposes of this Subsection (v), the Fair Market Value of any
security shall be determined without regard to any vesting conditions that may
apply to such security;

 

(vi)          The
cancellation of an outstanding Restricted Stock Unit and a payment to the
Participant equal to the Fair Market Value of the Shares subject to such
Restricted Stock Unit (whether or not such Restricted Stock Unit is then
vested) as of the closing date of such merger or other reorganization.  Such payment may be made in the form of cash,
cash equivalents, or securities of the surviving corporation or its parent with
a Fair Market Value equal to the required amount.  Such payment may be made in installments and
may be deferred until the date or dates when such Restricted Stock Unit would
have vested.  Such payment may be subject
to vesting based on the Participant’s continuing Service, provided that the
vesting schedule shall not be less favorable to the Participant than the
schedule under which such Restricted Stock Unit would have vested (including
any vesting acceleration provisions). 
For purposes of this Subsection (vi), the Fair Market Value of any
security shall be determined without regard to any vesting conditions that may
apply to such security; or

 

(vii)         The
cancellation of an outstanding Performance Share Award and a payment to the
Participant equal to the Fair Market Value of the target

 

22

 

Shares
subject to such Performance Share Award (whether or not such Performance Share
Award is then vested) as of the closing date of such merger or
reorganization.  Such payment may be made
in the form of cash, cash equivalents, or securities of the surviving
corporation or its parent with a Fair Market Value equal to the required amount.  Such payment may be made in installments and
may be deferred until the date or dates when such Performance Share Award would
have settled.  Such payment may be
subject to the Participant’s continuing Service and the achievement of
performance criteria that are based on the performance criteria set forth in
the Performance Share Award, with such changes that may necessary to give
effect to the merger or other reorganization, provided that the performance
period shall not be less favorable to the Participant than the performance
period under such Performance Share Award (including any vesting acceleration
provisions).  For purposes of this
Subsection (vii), the Fair Market Value of any security shall be determined
without regard to any vesting conditions that may apply to such security.

 

(d)          Reservation
of Rights. Except as provided in Section 13, a
Participant shall have no rights by reason of the occurrence of (or relating
to) any merger or other reorganization, any transaction described in Section 13(a),
or any transaction that results in an increase or decrease in the number of
shares of stock of any class of the Corporation.  Any issue by the Corporation of shares of
stock of any class, or securities convertible into shares of stock of any
class, shall not affect, and no adjustment by reason thereof shall be made with
respect to, Awards. The grant of an Award pursuant to the Plan shall not affect
in any way the right or power of the Corporation to effect any merger or other
reorganization, any transaction described in Section 13(a), any dissolution
or liquidation of the Corporation or any transaction that results in an
increase or decrease in the number of shares of stock of any class of the
Corporation.

 

SECTION 14.                       DEFERRAL OF
AWARDS.

 

(a)          Committee
Powers. The Committee in its sole discretion may permit or require a
Participant to:

 

(i)            Have cash that
otherwise would be paid to such Participant as a result of the exercise of a
SAR or the settlement of Restricted Stock Units or Performance Shares credited
to a deferred compensation account established for such Participant by the
Committee as an entry on the Corporation’s books;

 

(ii)           Have Shares
that otherwise would be delivered to such Participant as a result of the
exercise of an Option or SAR converted into an equal number of Restricted Stock
Units; or

 

(iii)          Have Shares
that otherwise would be delivered to such Participant as a result of the
exercise of an Option or SAR or the settlement of Restricted Stock Units or
Performance Shares converted into amounts credited to a

 

23

 

deferred
compensation account established for such Participant by the Committee as an
entry on the Corporation’s books. Such amounts shall be determined by reference
to the Fair Market Value of such Shares as of the date when they otherwise
would have been delivered to such Participant.

 

(b)          General
Rules. A deferred compensation account established under this Section 14
may be credited with interest or other forms of investment return, as
determined by the Committee. A Participant for whom such an account is
established shall have no rights other than those of a general creditor of the
Corporation. Such an account shall represent an unfunded and unsecured
obligation of the Corporation and shall be subject to the terms and conditions
of the applicable agreement between such Participant and the Corporation. If
the deferral or conversion of Awards is permitted or required, the Committee in
its sole discretion may establish rules, procedures and forms pertaining to
such Awards, including (without limitation) the settlement of deferred
compensation accounts established under this Section 14.

 

(c)           Code Section 409A.
Notwithstanding the foregoing, any deferrals of Award payments in respect of an
Award held by a Participant who is subject to United States federal income tax
shall be subject to the applicable requirements of Section 409A of the
Code and the Treasury Regulations promulgated thereunder.  To the extent that the Committee determines
that any Award granted under the Plan is subject to Section 409A of the
Code, the Award agreement evidencing such Award shall incorporate the terms and
conditions required by Section 409A of the Code.   In the event that following the grant of an
Award the Committee determines that such Award may be subject to Section 409A
of the Code, the Committee may adopt such amendments to the applicable Award
agreement or adopt other policies and procedures (including amendments,
policies and procedures with retroactive effect), or take any other actions,
that the Committee determines are necessary or appropriate to (a) exempt
the Award from Section 409A of the Code and/or preserve the intended tax
treatment of the benefits provided with respect to the Award, or (b) comply
with the requirements of Section 409A of the Code and the Treasury
Regulations promulgated thereunder and thereby avoid the application of any
penalty taxes under such Section.

 

SECTION 15.                       PAYMENT OF
DIRECTOR’S FEES IN SECURITIES

 

(a)          Effective
Date. No provision of this Section 15 shall be effective unless and
until the Board has determined to implement such provision.

 

(b)          Elections
to Receive NSOs, Restricted Shares or Restricted Stock Units. An Outside
Director may elect to receive his or her annual retainer payment and/or meeting
fees from the Corporation in the form of cash, NSOs, Restricted Shares or
Restricted Stock Units, or a combination thereof, as determined by the
Board.  Such NSOs, Restricted Shares or
Restricted Stock Units shall be issued under the Plan.  An election under this Section 15 shall
be filed with the Corporation on the prescribed form.

 

(c)           Number
and Terms of NSOs, Restricted Shares or Restricted Stock Units. The number of
NSOs, Restricted Shares or Restricted Stock Units to be granted to Outside
Directors in lieu of annual retainers and meeting fees that would otherwise be
paid in cash shall be

 

24

 

calculated in a manner
determined by the Board.  The term of
such NSOs, Restricted Shares or Restricted Stock Units shall also be determined
by the Board.

 

SECTION 16.                       AWARDS UNDER
OTHER PLANS.

 

The Corporation may grant awards under other plans or programs.  Such awards may be settled in the form of
Shares issued under this Plan.  Such
Shares shall be treated for all purposes under the Plan like Shares issued in
settlement of Restricted Stock Units and shall, when issued, reduce the number
of Shares available under Section 5.

 

SECTION 17.                       LEGAL AND
REGULATORY REQUIREMENTS.

 

Shares shall not be issued under the Plan unless the issuance and
delivery of such Shares complies with (or is exempt from) all applicable
requirements of law, including (without limitation) the Securities Act of 1933,
as amended, the rules and regulations promulgated thereunder, state
securities laws and regulations and the regulations of any stock exchange on
which the Corporation’s securities may then be listed, and the Corporation has
obtained the approval or favorable ruling from any governmental agency which
the Corporation determines is necessary or advisable.  The Corporation shall not be liable to a
Participant or other persons as to: (a) the non-issuance or sale of Shares
as to which the Corporation has been unable to obtain from any regulatory body
having jurisdiction the authority deemed by the Corporation’s counsel to be
necessary to the lawful issuance and sale of any Shares under the Plan; and (b) any
tax consequences expected, but not realized, by any Participant or other person
due to the receipt, exercise or settlement of any Award granted under the Plan.

 

SECTION 18.                       WITHHOLDING
TAXES.

 

(a)          General.  To the extent required by applicable federal,
state, local or foreign law, a Participant or his or her successor shall make
arrangements satisfactory to the Corporation for the satisfaction of any
withholding tax obligations that arise in connection with the Plan.  The Corporation shall not be required to
issue any Shares or make any cash payment under the Plan until such obligations
are satisfied.

 

(b)          Share
Withholding.  The
Corporation may permit a Participant to satisfy all or part of his or her
withholding or income tax obligations by having the Corporation withhold all or
a portion of any Shares that otherwise would be issued to him or her or by
surrendering all or a portion of any Shares that he or she previously
acquired.  Such Shares shall be valued at
their Fair Market Value on the date when taxes otherwise would be withheld in
cash.  In no event may a Participant have
Shares withheld that would otherwise be issued to him or her in excess of the
number necessary to satisfy the legally required minimum tax withholding.

 

SECTION 19.                       OTHER PROVISIONS APPLICABLE
TO AWARDS.

 

(a)          Transferability.  Unless the agreement evidencing an Award (or
an amendment thereto authorized by the Committee) expressly provides otherwise,
no Award granted under this Plan, nor any interest in such Award, may be
assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in
any manner (prior to the vesting and lapse of any and all restrictions applicable
to Shares issued under such Award), other than by will or the laws of descent
and

 

25

 

distribution; provided,
however, that an ISO may be transferred or assigned only to the extent
consistent with Section 422 of the Code. 
Notwithstanding the foregoing, in no event may a Participant sell or
otherwise transfer for value any Award granted under the Plan or any interest
in such an Award, other than Shares issued to the Participant that are no
longer subject to vesting or other restrictions under the terms of the
applicable Award.  Any purported sale,
assignment, conveyance, gift, pledge, hypothecation or transfer in violation of
this Section 19(a) shall be void and unenforceable against the
Corporation.

 

(b)          Qualifying
Performance Criteria.  The number
of Shares or other benefits granted, issued, retainable and/or vested under an
Award may be made subject to the attainment of performance goals for a
specified period of time relating to one or more of the following performance
criteria, either individually, alternatively or in any combination, applied to
either the Corporation as a whole or to a business unit or Subsidiary, either
individually, alternatively or in any combination, and measured either annually
or cumulatively over a period of years, on an absolute basis or relative to a
pre-established target, to previous years’ or quarter’s results or to a
designated comparison group or index, in each case as specified by the
Committee in the Award: (a) cash flow (including operating cash flow), (b) earnings
per share, (c) (i) earnings before interest, (ii) earnings
before interest and taxes, (iii) earnings before interest, taxes and
depreciation, (iv) earnings before interest, taxes, depreciation and
amortization, or (iv) earnings before any combination of such expenses or
deductions, (d) return on equity, (e) total stockholder return, (f) share
price performance, (g) return on capital, (h) return on assets or net
assets, (i) revenue, (j) income or net income, (k) operating
income or net operating income, (l) operating profit or net operating
profit, (m) operating margin or profit margin (including as a percentage
of revenue), (n) return on operating revenue, (o) return on invested
capital, (p) market segment shares or (q) economic profit (“Qualifying Performance Criteria”).  The Committee may appropriately adjust any
evaluation of performance under a Qualifying Performance Criteria to exclude
any of the following events that occur during a performance period: (i) asset
write-downs, (ii) litigation or claim judgments or settlements, (iii) the
effect of changes in tax law, accounting principles or other such laws or
provisions affecting reported results, (iv) accruals for reorganization
and restructuring programs and (v) any extraordinary, nonrecurring items
to be disclosed in the Corporation’s financial statements (including footnotes)
for the applicable year and/or in management’s discussion and analysis of the
financial condition and results of operations appearing in the Corporation’s
annual report to stockholders for the applicable year.  If applicable, the Committee shall determine
the Qualifying Performance Criteria not later than the 90th day of the
performance period, and shall determine and certify, for each Participant (or
for all Participants), the extent to which the Qualifying Performance Criteria
have been met.  The Committee may not in
any event increase the amount of compensation payable under the Plan upon the attainment
of a Qualifying Performance Criteria to a Participant who is a “covered
employee” within the meaning of Section 162(m) of the Code.

 

SECTION 20.                       NO EMPLOYMENT
RIGHTS.

 

No provision of the Plan, nor any Award granted under the Plan, shall be
construed to give any person any right to become, to be treated as, or to
remain an Employee.  The Corporation and
its Subsidiaries reserve the right to terminate any person’s Service at any
time and for any reason, with or without notice.

 

26

 

SECTION 21.                       APPLICABLE LAW.

 

The Plan shall be construed and enforced in accordance with the law of
the State of Delaware, without reference to its principles of conflicts of law.

 

SECTION 22.                       DURATION AND
AMENDMENTS.

 

(a)          Term of
the Plan. The Plan, as set forth herein, shall terminate
automatically on March 18, 2020 and may be terminated on any earlier date
pursuant to Subsection (b) below.

 

(b)          Right to
Amend or Terminate the Plan. The Board of Directors may
amend or terminate the Plan at any time and from time to time. Rights and
obligations under any Award granted before amendment of the Plan shall not be
materially impaired by such amendment, except with consent of the Participant.
An amendment of the Plan shall be subject to the approval of the Corporation’s
stockholders only to the extent required by applicable laws, regulations or
rules.

 

(c)           Effect of
Termination. No Awards shall be granted under the Plan after
the termination thereof. The termination of the Plan shall not affect Awards
previously granted under the Plan.

 

27

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00174-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00174-of-00352.parquet"}]]