Document:

Exhibit 10.43

 

FIRST
AMENDMENT

TO SENIOR SUBORDINATED UNSECURED CREDIT AND GUARANTY 

AGREEMENT

 

THIS FIRST AMENDMENT TO SENIOR
SUBORDINATED UNSECURED  CREDIT AND
GUARANTY AGREEMENT (this “Amendment”)
is dated as of November 4, 2010 and is entered into by and among AEROFLEX INCORPORATED, a Delaware corporation (the “Borrower”), certain Subsidiaries of the
Borrower, as Guarantors (each a “Guarantor” and
collectively, the “Guarantors”)
and each of the lenders party hereto (each a “Lender”
and collectively, the “Lenders), and
is made with reference to that certain SENIOR SUBORDINATED
UNSECURED CREDIT AND GUARANTY
AGREEMENT dated as of September 21, 2007 (the “Credit Agreement”) by and among the
Borrower, the Guarantors, the Lenders, and GOLDMAN
SACHS CREDIT PARTNERS L.P. (“GSCP”), as Administrative Agent (“Administrative Agent”).  Capitalized terms used but not defined herein
shall have the same meanings herein as set forth in the Credit Agreement after
giving effect to this Amendment.

 

RECITALS

 

WHEREAS, the Credit Parties have
requested that the Requisite Lenders agree to amend certain provisions of the
Credit Agreement as provided for herein; and

 

WHEREAS, subject to certain
conditions, the Requisite Lenders are willing to agree to such amendment
relating to the Credit Agreement.

 

NOW, THEREFORE, in consideration of the
premises and the agreements, provisions and covenants herein contained, the
parties hereto agree as follows:

 

SECTION I.     AMENDMENTS TO CREDIT AGREEMENT

 

1.1                               Amendments.

 

A.     Section 1.1 of the Credit
Agreement is hereby amended by adding the following definitions in proper
alphabetical sequence:

 

“Borrower Assignment Agreement” means an
Assignment and Assumption Agreement in the form of Exhibit E-1.

 

“Borrower Assignment Effective Date” has the meaning ascribed to
such term in Section 10.6(i)(ii).

 

“Offer Document” means the Offer to Purchase, substantially
in the form of Exhibit J hereto, as the same may be amended or modified
from time to time in accordance with the terms thereof.

 

 

1.2                               Amendments
to Section 10.6.

 

Section 10.6 of
the Credit Agreement is hereby amended by inserting a new Section 10.6(i) immediately
after the end of Section 10.6(h) as follows:

 

“(i)  Certain Permitted Loan Purchases.  Notwithstanding anything to the contrary
contained in this Section 10.6 or any other provision of this Agreement or
any other Credit Document, so long as no Default or Event of Default has
occurred and is continuing or would result therefrom, any Lender may sell,
assign or transfer all or a portion of its rights and obligations under this
Agreement with respect to its outstanding Loans to the Borrower for cash
pursuant to the terms of a Borrower Assignment Agreement, and the Borrower may
purchase all or a portion of any Lender’s rights and obligations under this
Agreement with respect to its outstanding Loans from any Lender for cash
pursuant to the terms of a Borrower Assignment Agreement, in each case, on the
following basis:

 

(i)  Such purchase or purchases shall be made
in one or more “modified Dutch auctions” pursuant to the Offer Document.

 

(ii)           Upon
its receipt of a duly executed and completed Borrower Assignment Agreement, and
of evidence reasonably satisfactory to the Administrative Agent that the
Borrower has made the payment to the assigning Lender of the amount required to
be paid pursuant to the applicable Borrower Assignment Agreement, the
Administrative Agent shall accept and record the information contained in such
Borrower Assignment Agreement in the Register and shall maintain a copy of such
Borrower Assignment Agreement.  The date
on which such payment is made to the assigning Lender shall be referred to
herein as the “Borrower Assignment Effective Date.”  Interest on such Loans accrued through the
Borrower Assignment Effective Date shall be paid to the Lender that has
assigned such Loans to the Borrower on such date and shall constitute payment
of interest thereon pursuant to Section 2.8 hereof.

 

(iii)          Following
the Borrower Assignment Effective Date, no interest shall accrue on the Loans
so assigned or sold and such Loans shall be cancelled or retired and no longer
outstanding (and may not be re-assigned or resold by the Borrower), for all
purposes under this Agreement and all other Credit Documents (notwithstanding
any provisions herein or therein to the contrary), including, but not limited
to (A) the making of, or the application of, any payments to the Lenders
under this Agreement or any other Credit Document, (B) the making of any
request, demand, authorization, direction, notice, consent or waiver under this
Agreement or any other Credit Document, (C) the providing of any rights to
the Borrower as a Lender under this Agreement or any other Credit Document, and
(D) the determination of Requisite Lenders, or for any similar or related
purpose, under this Agreement or any other Credit Document.

 

(iv)          The
Lenders hereby consent to the transactions described in this Section 10.6(i) and
waive the requirements of any provision of this Agreement and any other Credit
Document that would otherwise result in a breach of this 

 

2

 

Agreement,
a Default or an Event of Default as a direct result of any transaction
described in this Section 10.6(i).

 

(v)           The
provisions of this Section 10.6(i) shall not require the Borrower to
purchase or undertake any offer to purchase any Loans.

 

(vi)          The
parties hereto acknowledge that the payment by the Borrower for any Loans
purchased pursuant to the terms of this Section 10.6(i) shall be made
directly to each Lender who has executed a Borrower Assignment Agreement in
connection with any such assignment or transfer based on the information set
forth in the applicable Borrower Assignment Agreement and the Register.

 

1.3                               Exhibits.

 

The Credit Agreement is hereby amended by adding a new Exhibit E-1
and a new Exhibit J thereto, to read in their entirety as set forth in
Annex I hereto.

 

SECTION II.     CONDITIONS TO EFFECTIVENESS

 

This
Amendment shall become effective upon the satisfaction of all of the following
conditions precedent (such date, the “First Amendment Effective
Date”):

 

A.     Execution. Administrative Agent shall have received a counterpart signature page of
this Amendment duly executed by each of the Credit Parties and each of the
Requisite Lenders.

 

B.     Necessary Consents. Each Credit Party shall have obtained all
consents necessary and all material consents advisable in connection with the
transactions contemplated by this Amendment, including, without limitation, an
amendment to the Senior Secured Credit Facility in the form of Annex II hereto.

 

C.     Other Documents. 
Administrative Agent and Lenders shall have received such other
documents, information or agreements regarding Credit Parties as Administrative
Agent, Collateral Agent or any Lender may reasonably request.

 

D.     Absence of Default.  No
event has occurred and is continuing or will result from the consummation of
the transactions contemplated by this Amendment that would constitute an Event
of Default or a Default.

 

SECTION III.     REPRESENTATIONS AND WARRANTIES

 

In
order to induce Lenders to enter into this Amendment and to amend the Credit
Agreement in the manner provided herein, each Credit Party which is a party
hereto represents and warrants to each Lender that the following statements are
true and correct in all material respects:

 

A.     Corporate Power and Authority.  Each Credit Party, which is party hereto, has
all requisite power and authority to enter into this Amendment and to carry out
the transactions 

 

3

 

contemplated
by, and perform its obligations under, the Credit Agreement, as amended by this
Amendment (the “Amended Agreement”),
and the other Credit Documents.

 

B.     Authorization of Agreements.  The execution and delivery of this Amendment
and the performance of the Amended Agreement and the other Credit Documents
have been duly authorized by all necessary action on the part of each Credit
Party.

 

C.     No Conflict.  The
execution and delivery by each Credit Party of this Amendment and the
performance by each Credit Party of the Amended Agreement and the other Credit
Documents do not and will not (i) violate (A) any provision of (x) any
law, statute, rule or regulation, or (y) the certificate or articles
of incorporation or partnership agreement, other constitutive documents or
by-laws of Holdings, the Borrower or any Credit Party or (B) any
applicable order of any court or any rule, regulation or order of any
Governmental Authority, (ii) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a default under any
Contractual Obligation of the applicable Credit Party, where any such conflict,
violation, breach or default referred to in clause (i)(A)(x), (i)(B) or (ii) of
this Section III.C., individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect, (iii) be in conflict with,
result in a breach of, or constitute (along or with notice or lapse of time or
both) a default under the Senior Secured Credit Facility or the Indenture,
dated as of August 7, 2008, among the Borrower, each of the Credit Parties
party thereto, and The Bank of New York Mellon, as Trustee, (iv) except as
permitted under the Amended Agreement, result in or require the creation or
imposition of any Lien upon any of the properties or assets of any Credit
Party, or (v) require any approval of stockholders or partners or any
approval or consent of any Person under any Contractual Obligation of each
Credit Party, except for such approvals or consents which will be obtained on
or before the First Amendment Effective Date and except for any such approvals
or consents the failure of which to obtain could not reasonably be expected to
have a Material Adverse Effect.

 

D.     Governmental Consents.  No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority
is or will be required in connection with the execution and delivery by each
Credit Party of this Amendment and the performance by the Credit Parties of the
Amended Agreement and the other Credit Documents to which the Credit Parties
are party, except for such actions, consents and approvals the failure to
obtain or make which could not reasonably be expected to result in a Material
Adverse Effect or which have been obtained and are in full force and effect.

 

E.     Binding Obligation.  This
Amendment and the Amended Agreement have been duly executed and delivered by
each of the Credit Parties party thereto (including each Guarantor) and each
constitutes a legal, valid and binding obligation of such Credit Party to the
extent a party thereto, enforceable against such Credit Party in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting
creditors’ rights generally and except as enforceability may be limited by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

 

F.     Incorporation of Representations and Warranties from Credit Agreement. The
representations and warranties contained in Section 4 of the Amended
Agreement are and will be true and correct in all material respects on and as
of the First Amendment Effective Date to the 

 

4

 

same
extent as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case they were true and correct in all material respects on and as of such
earlier date.

 

G.     Absence of Default.  No
event has occurred and is continuing or will result from the consummation of
the transactions contemplated by this Amendment that would constitute an Event
of Default or a Default.

 

SECTION IV.     MISCELLANEOUS

 

A.     Reference to and Effect on the Credit Agreement and the Other Credit
Documents.

 

(i)     On and after the First Amendment Effective
Date, each reference in the Credit Agreement to “this Amendment”, “hereunder”, “hereof”,
“herein” or words of like import referring to the Credit Agreement, and each
reference in the other Credit Documents to the “Credit Agreement”, “thereunder”,
“thereof” or words of like import referring to the Credit Agreement shall mean
and be a reference to the Credit Agreement as amended by this Amendment.

 

(ii)     Except as specifically amended by this
Amendment, the Credit Agreement and the other Credit Documents shall remain in
full force and effect and are hereby ratified and confirmed.

 

(iii)     The execution, delivery and performance of
this Amendment shall not constitute a waiver of any provision of, or operate as
a waiver of any right, power or remedy of any Agent or Lender under, the Credit
Agreement or any of the other Credit Documents.

 

B.     Headings.  Section and Subsection headings in this
Amendment are included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose or be given any
substantive effect.

 

C.     Applicable Law.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES THEREOF.

 

D.     Counterparts.  This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are
physically attached to the same document. 
Delivery of an executed counterpart of a signature page to this
Amendment by facsimile or pdf or other similar electronic means shall be as
effective as delivery of a manually executed counterpart of this Amendment.

 

5

 

E.     Ratification by Guarantors.  Each Guarantor hereby acknowledges and agrees
that (i) its consent to this Amendment is not required, but each Guarantor
nevertheless hereby agrees and consents to this Amendment and to the documents
and agreements referred to herein, (ii) notwithstanding the effectiveness
of this Amendment, such Guarantor’s Guaranty shall remain in full force and
effect without modification thereto, (iii) nothing herein shall in any way
limit any of the terms or provisions of any Guarantor’s Guaranty or any other
Credit Document executed by any Guarantor (as the same may be amended, amended
and restated, supplemented or otherwise modified from time to time), all of
which are hereby ratified, confirmed and affirmed in all respects, (iv) no
other agreement, instrument, consent or document shall be required to give
effect to this Section, and (v) the Borrower, the Agents and any Lender
may from time to time enter into any further amendments, modifications,
terminations and/or waivers of any provisions of the Credit Documents without
notice to or consent from any Guarantor and without affecting the validity or
enforceability of any Guarantor’s Guaranty or giving rise to any reduction,
limitation, impairment, discharge or termination of any Guarantor’s Guaranty.

 

[Remainder
of this page intentionally left blank.]

 

6

 

IN WITNESS WHEREOF, the parties hereto have
caused this Amendment to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first written above.

 

 

	
  BORROWER:

  	
  AEROFLEX INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:
  SVP, CFO & Secretary

  

 

 

 

	
  GUARANTORS :

  	
  AEROFLEX
  COLORADO SPRINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:
  John Adamovich

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX HIGH SPEED TEST 

  SOLUTIONS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:
  John Adamovich

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX/INMET, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:
  John Adamovich

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX/KDI, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:
  John Adamovich

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  
	
   

  	
  AEROFLEX/METELICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:
  John Adamovich

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

8

 

	
   

  	
  AEROFLEX MICROELECTRONIC 

  SOLUTIONS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:
  John Adamovich

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX PLAINVIEW, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:
  John Adamovich

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX RAD, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:
  John Adamovich

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX/WEINSCHEL, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:
  John Adamovich

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX WICHITA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:
  John Adamovich

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX
  BLOOMINGDALE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:
  John Adamovich

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

 

	
   

  	
  AEROFLEX ACQUISITION
  ONE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:
  John Adamovich

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX ACQUISITION
  TWO, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:
  John Adamovich

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX ACQUISITION
  THREE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:
  John Adamovich

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AIF CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:
  John Adamovich

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  IFR FINANCE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:
  John Adamovich

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  IFR SYSTEMS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:
  John Adamovich

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

 

	
   

  	
  MCE ASIA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:
  John Adamovich

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  MICROMETRICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:
  John Adamovich

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  VI
  TECHNOLOGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:
  John Adamovich

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

 

	
   

  	
  TCW/CRESCENT
  MEZZANINE PARTNERS IV, 

  L.P.

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  TCW/Crescent Mezzanine Management IV, L.L.C., 

  its Investment Manager.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  TCW Asset Management Company, its Sub-

  Advisor

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Joseph A. Kaufman

  
	
   

  	
   

  	
  Name:
  Joseph A. Kaufman

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TCW/CRESCENT
  MEZZANINE PARTNERS IVB, 

  L.P.

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  TCW/Crescent Mezzanine Management IV, L.L.C., 

  its Investment Manager.

  
	
   

  	
   

  
	
   

  	
  By:
  TCW Asset Management Company, its Sub-

  Advisor

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Joseph A. Kaufman

  
	
   

  	
   

  	
  Name:
  Joseph A. Kaufman

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  

 

12

 

	
   

  	
  MAC
  CAPITAL, LTD.

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  TCW Advisors, Inc.

  
	
   

  	
   

  	
  as
  attorney-in-fact

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Gil Tollinchi

  
	
   

  	
   

  	
  Name:
  Gil Tollinchi

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Johnathan Insull

  
	
   

  	
   

  	
  Name:
  Johnathan Insull

  
	
   

  	
   

  	
  Title
  Senior Vice President

  

 

13

 

	
   

  	
  GS
  DIRECT, L.L.C.

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Laurie E. Schmidt

  
	
   

  	
   

  	
  Name:
  Laurie E. Schmidt

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

14

 

	
   

  	
  NEWSTONE CAPITAL PARTNERS, L.P.,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  Newstone Partners, L.P.

  
	
   

  	
  Its:
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  Newstone Capital Partners, LLC

  
	
   

  	
  Its:
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John C. Rocchio

  
	
   

  	
   

  	
  Name:
  John C. Rocchio

  
	
   

  	
   

  	
  Title:
  Managing Director

  

 

15EXHIBIT 10.4

 

TYCO ELECTRONICS LTD.

2007 STOCK AND INCENTIVE PLAN

(AMENDED AND RESTATED AS OF SEPTEMBER 29, 2010)

 

ARTICLE I

PURPOSE

 

1.1  Purpose.  The purposes of this Tyco
Electronics Ltd. 2007 Stock and Incentive Plan (Amended and Restated as of
September 29, 2010) (the “Plan”) are to promote the interests of Tyco
Electronics Ltd. (and any successor thereto) by (i) aiding in the
recruitment and retention of Directors and Employees, (ii) providing
incentives to such Directors and Employees by means of performance-related
incentives to achieve short-term and long-term performance goals,
(iii) providing Directors and Employees an opportunity to participate in
the growth and financial success of the Company, and (iv) promoting the
growth and success of the Company’s business by aligning the financial
interests of Directors and Employees with that of the other stockholders of the
Company. Toward these objectives, the Plan provides for the grant of Stock
Options, Stock Appreciation Rights, Annual Performance Bonuses, Long Term
Performance Awards and other Stock-Based Awards.

 

1.2  Effective
Dates; Shareholder Approval. 
The Plan was originally effective June 29, 2007, the date of the
dividend distribution of Tyco Electronics Ltd. shares to the Tyco
International Ltd. shareholders of record on the distribution date. The
Plan was approved by the Tyco Electronics Ltd. Board of Directors on
June 4, 2007 and adopted by Tyco International Ltd., as the Company’s
sole shareholder, on June 4, 2007. An amendment and restatement to the
Plan to ensure its compliance with Section 409A of the Code and to make
certain other clarifying changes was adopted by the Board of Directors of the
Company on January 13, 2009 and approved by the Company’s shareholders on
June 22, 2009. In order to provide for the issuance of additional shares
under the Plan, an amended and restated Plan was adopted by the Board of
Directors of the Company on November 17, 2009 and was approved by the
Company’s shareholders on March 10, 2010. 
The effective date of this amended and restated Plan is September 29,
2010.

 

ARTICLE II

DEFINITIONS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

1

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

provided,
however, that if and to the extent that any provision of this Plan or an Award
Certificate would cause a payment of deferred compensation that is subject to
Code Section 409A(a)(2) to be made upon the occurrence of a “Change
in Control,” or would change the timing and/or form of any payment of deferred
compensation that is subject to Code Section 409A(a)(2) upon a
specified date or event occurring after a “Change in Control” or upon a “Change
in Control Termination,” then such payment shall not be made, or such change in
timing or form of payment shall not occur, unless such “Change in Control” is
also a “change in ownership or effective control” of the Company within the
meaning of Code Section 409A(2)(A)(v) and applicable regulations and
rulings thereunder and such payment, or such associated date or event, occurs
no later than two years after the date of such “Change in Control.”

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Common Stock” means the common stock of
the Company, $.20 (U.S.) par value, and such other securities or property as
may become subject to Awards pursuant to an adjustment made under
Section 5.3 of the Plan.

 

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

 

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

 

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

 

“Director Shares” means the award of
fully-vested Shares to a Director under Section 4.6 as part of the
Director’s annual compensation, or under such circumstances as are deemed
appropriate by the Board.

 

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

 

3

 

“Dividend Equivalent” means an amount equal
to the cash dividend or the Fair Market Value of the stock dividend that would
be paid on each Share underlying an Award if the Share were duly issued and
outstanding on the date on which the dividend is payable. Dividend Equivalents
will not be awarded in connection with stock option or Stock Appreciation
Rights Awards.

 

“Effective Date” means September 29,
2010. The original effective date of the Tyco Electronics Ltd. Stock and
Incentive Plan was, June 29, 2007, the date of the dividend distribution
of Tyco Electronics Ltd. shares to the Tyco International Ltd.
shareholders of record on the distribution date.

 

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

 

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

 

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

 

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

 

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

 

“GAAP” means United States generally
accepted accounting principles.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

“Performance Measure” means, with respect
to any Annual Performance Bonus or Long Term Performance Award, the business
criteria selected by the Committee to measure the level of performance of the
Company during the Performance Cycle. The Committee may select as the
Performance Measure for a Performance Cycle any one or combination of the
following Company measures, as interpreted by the Committee, which measures (to
the extent applicable) will be determined in accordance with GAAP:

 

(a) Net operating profit after taxes;

 

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

 

(c) Return on invested capital;

 

(d) Return on assets or net assets;

 

(e) Total shareholder return;

 

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

 

(g) Earnings before income taxes;

 

(h) Earnings per Share;

 

(i) Net income;

 

(j) Free cash flow;

 

(k) Free cash flow per Share;

 

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

 

(m) Revenue growth.

 

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

 

“Plan” means the Tyco Electronics Ltd.
2007 Stock and Incentive Plan (Amended and Restated as of September 29,
2010), as it may be amended from time to time.

 

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

 

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

 

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

 

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

 

“Retirement” means Termination of
Employment on or after a Participant has attained age fifty-five (55) and
has completed at least five years of service with the Company and its
Subsidiaries.

 

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

 

“Share” means a share of Common Stock.

 

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

 

5

 

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

 

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

 

“Subsidiary” means a subsidiary company
(wherever incorporated) of the Company; provided, that in the case of any Award
that provides deferred compensation subject to Code Section 409A, “Subsidiary”
shall not include any subsidiary company as defined above unless such company
is within a controlled group of corporations with the Company as defined in
Code Sections 1563(a)(1), (2) and (3) where the phrase “at least
50%” is substituted in each place “at least 80%” appears or is with the Company
part of a group of trades or businesses under common control as defined in Code
Section 414(c) and Treas. Reg. § 1.414(c)-2 where the phrase “at
least 50%” is substituted in each place “at least 80%” appears, provided,
however, that when the relevant determination is to be based upon legitimate
business criteria (as described in Treas. Reg. § 1.409A-1(b)(5)(iii)(E) and
§ 1.409A-1(h)(3)), the phrase “at least 20%” shall be substituted in each
place “at least 50%” appears as described above with respect to both a
controlled group of corporations and trades or business under common control.

 

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

 

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

 

“Termination of Directorship” means the
date of cessation of a Director’s membership on the Board for any reason, with
or without Cause, as determined by the Company; provided, that if and to the
extent that any provision of this Plan or an Award Certificate would cause a
payment of deferred compensation that is subject to Code Section 409A(a)(2) to
be made upon the occurrence of a Termination of Directorship or would change
the timing and/or form of any payment of deferred compensation that is subject
to Code Section 409A(a)(2) upon a person’s Termination of
Directorship, then such payment shall not be made, or such change in timing
and/or form of payment shall not occur, unless such Termination of Directorship
would be deemed a “separation from service” within the meaning of Code
Section 409A(a)(2)(A)(i) and applicable regulations and rulings
thereunder, and shall not include any services provided in the capacity of an
employee or otherwise.

 

“Termination of Employment” means the date
of cessation of an Employee’s employment relationship with the Company or a
Subsidiary for any reason, with or without Cause, as determined by the Company;
provided, that if and to the extent that any provision of this Plan or an Award
Certificate would cause a payment of deferred compensation that is subject to
Code Section 409A(a)(2) to be made upon the occurrence of a
Termination of Employment or would change the timing and/or form of any payment
of deferred compensation that is subject to Code Section 409A(a)(2) upon
a person’s Termination of Employment, then such payment shall not be made or
such change in timing and/or form of payment shall not occur, unless such
Termination of Employment would be deemed a “separation from service” within
the meaning of Code Section 409A(a)(2)(A)(i) and applicable
regulations and rulings thereunder.

 

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

 

ARTICLE III

ADMINISTRATION

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

(g)           Except as
provided in Section 6.1, waive or amend any terms, conditions, restrictions
or limitations on an Award, except that the prohibition on the repricing of
Stock Options and Stock Appreciation Rights, as described in
Section 4.3(g), may not be waived and further provided that any such
waiver or amendment shall either comply with the requirements of
Section 409A or preserve any exemption from the application of Code
Section 409A;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

ARTICLE IV

AWARDS

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)            The Committee will determine
and set forth in the Award Certificate the date on which any Award of Stock
Options or Stock Appreciation Rights to a Participant may first be exercised.
Unless the applicable Award Certificate provides otherwise, a Stock Option or
Stock Appreciation Right will become exercisable in equal annual installments
over a period of four years beginning immediately after the date on which the
Stock Option or Stock Appreciation Right was granted. The right to exercise a
Stock Option or Stock Appreciation Right will lapse no later than 10 years
after the date of grant, except to the extent necessary to comply with applicable
laws outside of the United States or to preserve the tax advantages of the
Award outside the United States.

 

8

 

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

 

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

 

(iv)          Upon the Termination of
Employment of a Participant that does not meet the requirements of
paragraphs (ii) or (iii) above, or as otherwise provided in
Section 5.4 (Change in Control), any unvested Stock Options or Stock
Appreciation Rights will be forfeited unless the Award Certificate provides
otherwise. Any Stock Options or Stock Appreciation Rights that are vested as of
such Termination of Employment will lapse, and will not thereafter be
exercisable, upon the earlier of (A) their original expiration date or
(B) the date that is ninety (90) days after the date of such
Termination of Employment unless the Award Certificate provides otherwise.

 

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

 

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

 

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

 

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

 

(ii)           Tendering (actually or by
attestation) to the Company previously acquired Shares that have been held by
the Participant for at least six months, subject to paragraph (iv), and
that have a Fair Market Value on the day prior to the date of exercise equal to
the applicable portion of the Exercise Price 

 

9

 

being
so paid, provided that the Board has specifically approved the repurchase of
such Shares (unless such approval is not required by the terms of the bye-laws
of the Company) and the Committee has determined that, as of the date of
repurchase, the Company is, and after the repurchase will continue to be, able
to pay its liabilities as they become due; or

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(f)  Exercise of Stock
Appreciation Rights.  Upon
exercise of a Participant’s Stock Appreciation Rights, the Company will pay
cash or Shares or a combination of cash and Shares, in the discretion of the
Committee and as described in the Award Certificate. Cash payments will be
equal to the excess of the Fair Market Value of a Share on the date of exercise
over the Exercise Price, for each Share for which a Stock Appreciation Right
was exercised. If Shares are paid for the Stock Appreciation Right, the
Participant will receive a number of whole Shares equal to the quotient of the
cash payment amount divided by the Fair Market Value of a Share on the date of
exercise.

 

10

 

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

 

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

 

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

 

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

 

(c)           Performance
Measures; Targets; Award Criteria.

 

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

 

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

 

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

 

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

 

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

 

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

 

11

 

(g)  Retirement, Death,
Disability and Other Events. 
If a Participant would be entitled to an Annual Performance Bonus but
for the fact that the Participant’s employment with the Company terminated
prior to the end of the Performance Cycle as a result of the Participant’s
Retirement, death or Disability, or such other event as designated by the
Committee, the Participant may, in the Committee’s discretion, receive an
Annual Performance Bonus Award, pro rated for the portion of the Performance
Cycle that the Participant completed and which is payable at the same time
after the end of the Performance Cycle that payments to other Annual
Performance Bonus Award recipients are made.

 

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

 

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

 

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

 

(c)  Performance Measures;
Targets; Award Criteria.

 

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

 

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

 

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

 

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

 

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

 

In
applying Performance Measures, the Committee may, in its discretion, exclude
unusual or infrequently occurring items (including any event listed in
Section 5.3) and the cumulative effect of changes in the law, 

 

12

 

regulations
or accounting rules, and may determine no later than ninety (90) days
after the commencement of any applicable Performance Cycle to exclude other
items, each determined in accordance with GAAP (to the extent applicable) and
as identified in the financial statements, notes to the financial statements or
discussion and analysis of management.

 

(e)  Form of Payment.  Long Term Performance Awards in the form of
Performance Units may be paid in cash or full Shares, in the discretion of the
Committee, and as set forth in the Award Certificate. Performance-based
Restricted Units and Restricted Stock will be paid in full Shares. Payment with
respect to any fractional Share will be in cash in an amount based on the Fair
Market Value of the Share as of the date the Performance Unit becomes payable.
All such Long Term Performance Awards shall be paid no later than the
15th day of the third month following the end of the calendar year (or, if
later, following the end of the Company’s fiscal year) in which such Long Term
Performance Awards are no longer subject to a substantial risk of forfeiture
(as determined for purposes of Code Section 409A), except to the extent
that a Participant has elected to defer payment under the terms of a duly
authorized deferred compensation arrangement, in which case the terms of such
arrangement shall govern.

 

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

 

(g)  Retirement, Death,
Disability and Other Events. 
If a Participant would be entitled to a Long Term Performance Award but
for the fact that the Participant’s employment with the Company terminated
prior to the end of the Performance Cycle as a result of the Participant’s
Retirement, death or Disability, or such other event as designated by the
Committee, the Participant may, in the Committee’s discretion, receive a Long
Term Performance Award, pro rated for the portion of the Performance Cycle that
the Participant completed and payable at the same time after the end of the
Performance Cycle that payments to other Long Term Performance Award recipients
are made.

 

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

 

(a)  Vesting.  Unless the Award Certificate provides
otherwise, restrictions on Stock-Based Awards granted under this
Section 4.6 will lapse in equal annual installments over a period of four
years beginning immediately after the date of grant. If the restrictions on
Stock-Based Awards have not lapsed or been satisfied as of the Participant’s
Termination of Employment, the Shares will be forfeited by the Participant if
the termination is for any reason other than the Retirement, death or
Disability of the Participant or a Change in Control. Unless the Award
Certificate provides otherwise, (i) all restrictions on Stock-Based Awards
granted pursuant to this Section 4.6 will lapse upon the death or
Disability of the Participant, (ii) in the event of Retirement, the Award
will vest pro rata with respect to the portion of the four-year vesting term
(or such other vesting term as is set forth in the Award Certificate) that the
Participant has completed as of the Participant’s Termination of Employment and
provided that the Participant has satisfied all other applicable conditions
established by the Committee with respect to such pro rata vesting, and
(iii) in the event of a Change in Control, Stock-Based Awards will be
treated in accordance with Section 5.4. In no event may the vesting period
of a time-based full-value share award be less than three years (on either a
cliff or graded vesting basis), except that the Committee may award up to
10 percent of the shares authorized for issuance under Section 5.1
with a vesting period of less than three years under such circumstances as it
deems appropriate.

 

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

 

13

 

attempts
to sell, transfer, assign, pledge or otherwise encumber or dispose of the
Shares before the restrictions are satisfied or lapse.

 

(c)  Grant of Restricted Units.  The Committee may grant Restricted Units to
any Employee, which Units will be paid in cash or whole Shares or a combination
of cash and Shares, as determined in the discretion of the Committee. The
Committee will determine the terms and conditions applicable to the grant of
Restricted Units, which terms and conditions will be set forth in the Award
Certificate. For each Restricted Unit that vests, one Share will be paid or an
amount in cash equal to the Fair Market Value of a Share, as set forth in the
Award Certificate, will be delivered to the Participant on the applicable
delivery date.

 

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

 

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

 

4.7  Director
Awards.

 

(a)           The Committee
may grant Deferred Stock Units to each Director in such an amount as the Board,
in its discretion, may approve in advance. Each such Deferred Stock Unit will
vest as determined by the Committee and set forth in the Award Certificate and
will be paid in Shares within 30 days following the recipient’s
Termination of Directorship, subject to deferral under any applicable deferred
compensation plan approved by the Committee, in which case the terms of such
arrangement shall govern. Dividend Equivalents or additional Deferred Stock
Units will be credited to each Director’s account when dividends are paid on
Common Stock to the shareholders, and will be paid to the Director at the same
time that the Deferred Stock Units are paid to the Director.

 

(b)           The Committee
may grant Director Shares to each Director in such amounts as the Board, in its
discretion, may approve in advance.

 

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

 

4.8  Substitute
Awards.  The Committee may make
Awards under the Plan to Acquired Grantees through the assumption of, or in
substitution for, outstanding Stock-Based Awards previously granted to such
Acquired Grantees. Such assumed or substituted Awards will be subject to the
terms and conditions of the original awards made by the Acquired Company, with
such adjustments therein as the Committee considers appropriate to give effect
to the relevant provisions of any agreement for the acquisition of the Acquired
Company, provided that any such adjustment with respect to Nonqualified Stock
Options and Stock Appreciation Rights shall satisfy the requirements of Treas.
Reg. § 1.409A-1(b)(5)(v)(D) and otherwise ensure that such awards
continue to be exempt from Code Section 409A and provided that any
adjustment to Awards that are subject to Code Section 409A is in
compliance with Code Section 409A and the regulations and rulings
thereunder. Any grant of Incentive Stock Options pursuant to this
Section 4.8 will be made in accordance with Section 424 of the Code
and any final regulations published thereunder.

 

4.9  Limit on
Individual Grants.  Subject to
Sections 5.1 and 5.3, no Employee may be granted more than 6 million
Shares over any calendar year pursuant to Awards of Stock Options, Stock
Appreciation Rights and performance- based Restricted Stock and Restricted
Units, except that an incentive Award of no more than 10 million Shares
may be made pursuant to Stock Options, Stock Appreciation Rights and
performance-based Restricted Stock and Restricted Units to any 

 

14

 

person who has been hired
within the calendar year as a Key Employee. The maximum amount that may be paid
in cash or Shares pursuant to Annual Performance Bonuses or Long Term
Performance Awards paid in Performance Units to any one Employee is
$10 million (U.S.) for any Performance Cycle of 12 months. For any
longer Performance Cycle, this maximum will be adjusted proportionally.

 

4.10  Termination
for Cause; Clawback.  (a) Notwithstanding
anything to the contrary herein, if a Participant incurs a Termination of
Directorship or Termination of Employment for Cause, then all Stock Options,
Stock Appreciation Rights, Annual Performance Bonuses, Long Term Performance
Awards, Restricted Units, Restricted Stock and other Stock-Based Awards will
immediately be cancelled. The exercise of any Stock Option or Stock
Appreciation Right or the payment of any Award may be delayed, in the Committee’s
discretion, in the event that a potential termination for Cause is pending,
subject to ensuring an exemption from or compliance with Code Section 409A
and the underlying regulations and rulings. If a Participant incurs a
Termination of Employment for Cause, or the Company becomes aware (after the
Participant’s Termination of Employment) of conduct on the part of the
Participant that would be grounds for a Termination of Employment for Cause,
then the Participant will be required to deliver to the Company (i) Shares
(or, in the discretion of the Committee, cash) in an amount that is equal in
value to the amount of any profit the Participant realized upon the exercise of
an Option during the period beginning six (6) months prior to the
Participant’s Termination of Employment and ending on the two (2) year
anniversary of such Termination of Employment; and (ii) the number of
Shares (or, in the discretion of the Committee, the cash value of said shares)
the Participant received for Restricted Shares, Restricted Units or other
Stock-Based Awards that vested during the period described in (i) above.

 

(b) 
In addition, the Committee shall have the authority to establish any other
terms and conditions applicable to Awards (including the mandatory return of
all or any portion of the value previously realized by a Participant upon the vesting
or exercise of an Award) as are deemed necessary and/or appropriate to recover
amounts mistakenly paid to Participants (as a result of incorrect financial
data or otherwise), including provisions intended to comply with applicable rules adopted
or to be adopted by the Securities and Exchange Commission, New York Stock
Exchange or any other governmental agency or stock exchange having the
authority to establish rules affecting the payment of compensation under
this Plan.

 

ARTICLE V

SHARES SUBJECT TO THE PLAN; ADJUSTMENTS

 

5.1  Shares
Available.  The Shares
issuable under the Plan will be authorized but unissued Shares, and, to the
extent permissible under applicable law, Shares acquired by the Company, any
Subsidiary or any other person or entity designated by the Company. The
original number of shares issuable under the Plan on and after the original
effective date of the Plan (June 29, 2007) was five percent (5%) of the
Shares outstanding as of that date. The total number of Shares with respect to
which Awards may be issued under the Plan on and after the Effective Date may
equal, but not exceed, the total number of shares remaining from the original
number of shares issuable under the Plan, plus an additional fifteen million
(15,000,000) shares, subject to adjustment in accordance with Section 5.3;
provided that when Shares are issued pursuant to a grant of Restricted Stock,
Restricted Units, Deferred Stock Units, Performance Units or as payment of an
Annual Performance Bonus or other Stock-Based Award, the total number of Shares
remaining available for grant will be decreased by a margin of at least 1.8 per
Share issued. In addition, in the case of the settlement of any stock-settled
Stock Appreciation Right, the total number of Shares available for grant will
be decreased by the total number of Shares equal in value to the total value of
the Stock Appreciation Right on the day of settlement. No more than
10 million Shares of the total Shares issuable under the Plan may be
available for grant in the form of Incentive Stock Options.

 

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

 

(a)           Shares related
to Awards paid in cash;

 

(b)           Shares related
to Awards that expire, are forfeited or cancelled or terminate for any other
reason without issuance of Shares, and provided that each such forfeited,
cancelled or terminated Share that was originally issued pursuant to a grant of
Restricted Stock, Restricted Units, Deferred Stock Units, Performance Units or
as payment of an Annual Performance Bonus or other Stock- Based Award shall be
counted as 1.8 Share;

 

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

 

15

 

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

 

5.3  Adjustments.  In the event of a change in the outstanding
Shares by reason of a stock split, reverse stock split, dividend or other
distribution (whether in the form of cash, Shares, other securities or other
property), extraordinary cash dividend, recapitalization, merger,
consolidation, split-up, spin-off, reorganization, combination, repurchase or
exchange of Shares or other securities or similar corporate transaction or
event, the Committee shall make an appropriate adjustment to prevent dilution
or enlargement of the benefits or potential benefits intended to be made
available under the Plan. Any such adjustment with respect to Nonqualified
Stock Options and Stock Appreciation Rights shall satisfy the requirements of
Treas. Reg. § 1.409A-1(b)(5)(v)(D) and otherwise ensure that such
awards continue to be exempt from Code Section 409A, and any adjustment to
Awards that are subject to Code Section 409A shall comply with Code
Section 409A and the regulations and rulings thereunder. Any adjustment
made by the Committee under this Section 5.3 will be conclusive and
binding for all purposes under the Plan.

 

5.4  Change in
Control.

 

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

 

(b)           In addition to
the other actions described in Section 5.4(a), in the event of a Change in
Control the Committee may take any one or more of the following actions with
respect to any or all outstanding Awards, without the consent of the
Participant: (i) the Committee may determine that outstanding Stock
Options and Stock Appreciation Rights shall be fully exercisable, and
restrictions on Restricted Stock, Restricted Units, Deferred Stock Units and
other Stock-Based Awards shall lapse, as of the date of the Change in Control
or such other time (prior to a Participant’s Change in Control Termination) as
the Committee determines, (ii) the Committee may require that a
Participant surrender their outstanding Stock Options and Stock Appreciation
Rights in exchange for one or more payments by the Company, in cash or Common
Stock as determined by the Committee, in an amount equal to the amount by which
the then Fair Market Value of the shares of Common Stock subject to the
Participant’s unexercised Stock Options and Stock Appreciation Rights exceeds
the exercise price, if any, and on such terms as the Committee determines,
(iii) after giving Participants an opportunity to exercise their
outstanding Stock Options and Stock Appreciation Rights, the Committee may
terminate any or all unexercised Stock Options and Stock Appreciation Rights at
such time as the Committee deems appropriate, (iv) the Committee may
determine that Annual Performance Bonuses and/or Long Term Performance Awards
will be paid out at their target level, in cash or Common Stock as determined
by the Committee, or (v) the Committee may determine that Awards that
remain outstanding after the Change in Control shall be converted to similar
grants of, or assumed by, the surviving corporation (or a parent or subsidiary
of the surviving corporation or successor). Such acceleration, surrender,
termination, settlement or conversion shall take place as of the date of the
Change in Control or such other date as the Committee may specify. The
Committee may specify how an Award will be treated in the event of a Change in
Control either when the Award is granted or at any time thereafter, except as
otherwise provided herein.

 

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

 

16

 

ARTICLE VI

AMENDMENT AND TERMINATION

 

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

 

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

 

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

 

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

 

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

 

ARTICLE VII

GENERAL PROVISIONS

 

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

 

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

 

(b)           The Committee
may provide in the applicable Award Certificate that all or any part of a
Nonqualified Option or Shares of Restricted Stock may, subject to the prior
written consent of the Committee, be transferred to a family member. For
purposes of this subsection (b), “family member” includes any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law of the Participant, including
adoptive relationships, any person sharing the Participant’s household (other
than a tenant or employee), a trust in which these persons have more than
50 percent of the beneficial interest, a foundation in which these persons
(or the Participant) control the management of assets, and any other entity in
which these persons (or the Participant) own more than 50 percent of the
voting interests.

 

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

 

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

 

17

 

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

 

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

 

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

 

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

 

(b)  Other Awards Payable in
Shares.  The Participant shall
satisfy the Participant’s tax withholding obligations arising in connection
with the release of restrictions on Restricted Units, Restricted Stock and
other Stock- Based Awards by payment to the Company in cash or by certified
check, bank draft, wire transfer or postal or express money order, provided
that the format is approved by the Company or a designated third-party
administrator. However, subject to any requirements of applicable law, the
Company may also satisfy the Participant’s tax withholding obligations by other
methods, including selling or withholding Shares that would otherwise be
available for delivery, provided that the Board or the Committee has
specifically approved such payment method in advance.

 

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

 

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

 

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

 

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

 

18

 

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

 

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

 

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

 

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

 

7.10  Securities
Law Compliance.  Awards under
the Plan are intended to satisfy the requirements of Rule 16b-3 under the
Exchange Act. If any provision of this Plan or any grant of an Award would
otherwise frustrate or conflict with this intent, that provision will be
interpreted and deemed amended so as to avoid conflict. No Participant will be
entitled to a grant, exercise, transfer or payment of any Award if the grant,
exercise, transfer or payment would violate the provisions of the
Sarbanes-Oxley Act of 2002 or any other applicable law.

 

7.11 
Section 409A Compliance. 
To the extent the Committee determines that any Award granted under the
Plan is subject to Section 409A of the Code, the Award Certificate
evidencing such Award will incorporate the terms and conditions required by
Section 409A of the Code. To the extent applicable, the Plan and the Award
Certificate will be interpreted in accordance with Section 409A of the
Code and Department of Treasury regulations and other interpretive guidance
issued thereunder, including without limitation any such regulations or other
guidance that may be issued after the Effective Date. Notwithstanding any
provision of the Plan, in the event that the Committee determines that any
Award may be subject to Section 409A of the Code, the Committee may adopt
such amendments to the Plan and/or the applicable Award Certificate or adopt
policies and procedures or take any other action or actions, including an
action or amendment with retroactive effect, that the Committee determines is
necessary or appropriate to (i) exempt the Award from the application of
Section 409A of the Code or (ii) comply with the requirements of
Section 409A of the Code. Any Award that provides for a payment to any
Participant who is a “specified employee” of deferred compensation that is
subject to Code Section 409A(a)(2) and that becomes payable upon, or
that is accelerated upon, such Participant’s Termination of Employment, shall
also provide that no such payment shall be made on or before the date which is
six months following such Participant’s Termination of Employment (or, if
earlier, such Participant’s death). A specified employee for this purpose shall
be determined by the Committee or its delegate in accordance with the
provisions of Code Section 409A and the regulations and rulings
thereunder.

 

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

 

19

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