Document:

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                                                                    Exhibit 4(c)

           [FORM OF FACE OF SERIES A MTN FIXED RATE REGISTERED NOTE]

                              U.S. Fixed Rate Note

REGISTERED                                                            REGISTERED
No. USFXR                                                           [      ] /1/
CUSIP: _____ /2/                                                    [      ] /3/

         Unless this certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the issuer
or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company and
any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.

IF APPLICABLE, THE "AMOUNT OF OID", THE "ORIGINAL ISSUE DATE", THE "YIELD TO
MATURITY", AS WELL AS THE METHOD USED TO DETERMINE THE YIELD TO MATURITY WHERE
THERE IS A SHORT ACCRUAL PERIOD AND THE AMOUNT OF OID ALLOCABLE TO SUCH SHORT
ACCRUAL PERIOD WILL BE SET FORTH BELOW. THE CALCULATION OF THE AMOUNT OF OID
UPON (A) OPTIONAL REDEMPTION OR (B) DECLARATION OF ACCELERATION IS DISCUSSED ON
THE REVERSE HEREOF.

-------------------------
/1/ Insert Principal Amount.

/2/ Applies only if this Note is a Registered Global Security.

/3/ Insert Optional Payment Amount if the Note has a dual currency feature.

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                      GENERAL ELECTRIC CAPITAL CORPORATION
                       GLOBAL MEDIUM-TERM NOTE, SERIES A
                                  (Fixed Rate)

<TABLE>
<S>                                <C>                                   <C>
ORIGINAL ISSUE DATE:               INITIAL REDEMPTION DATE:              APPLICABILITY OF MODIFIED PAYMENT
                                                                         UPON ACCELERATION OR REDEMPTION:
MATURITY DATE:                     INITIAL REDEMPTION PERCENTAGE:
                                                                         If yes, state Issue Price:
INTEREST RATE:                     OPTION ELECTION DATES: /4/
                                                                         APPLICABILITY OF ANNUAL REDEMPTION
INTEREST PAYMENT DATE(S):          DESIGNATED EXCHANGE DATE: /4/         PERCENTAGE INCREASE:

SPECIFIED (FACE AMOUNT) /4,5/      AMOUNT OF OID:                        If yes, state each redemption date
CURRENCY:                                                                and redemption price:
                                   INTEREST PAYMENT PERIOD:
INDEXED CURRENCY: /5/                                                    INITIAL ACCRUAL PERIOD OID
                                   APPLICABILITY OF ANNUAL REDEMPTION    (computed under the Approximate
CURRENCY BASE RATE: /5/            PERCENTAGE REDUCTION:                 method):

OPTIONAL REPAYMENT DATES:          If yes, state Annual Percentage       DETERMINATION AGENT: /5/
                                   Reduction:
INTEREST ACCRUAL DATE:                                                   YIELD TO MATURITY:
                                   OPTION VALUE CALCULATION AGENT: /4/
OPTIONAL PAYMENT CURRENCY: /4/                                           DAY COUNT CONVENTION
                                                                         |_|30/360         |_|Actual/365
OTHER PROVISIONS:                                                        |_|Actual/360     |_|Actual/Actual
</TABLE>

         General Electric Capital Corporation, a Delaware corporation (together
with its successors and assigns, the "Company"), for value received, hereby
promises to pay to Cede & Co., or registered assignees, the principal sum (or
Face Amount, if the Note has a dual-currency or index feature) of on the
Maturity Date specified above (except to the extent redeemed or repaid prior to
the Maturity Date) and to pay interest thereon at the Interest Rate per annum
specified above from the Original Issue Date specified above until the principal
hereof is paid or duly made available for payment (except as provided below), in
arrears monthly, quarterly, semiannually, or annually as specified above as the
Interest Payment Period on each Interest Payment Date (as specified above),
commencing with the first Interest Payment Date next succeeding the Original
Issue Date specified above, and on the Maturity Date (or any redemption or
repayment date); provided, however, that if the Original Issue Date occurs
between a Record Date, as defined below, and the next succeeding Interest
Payment Date, interest payments will commence on the second Interest Payment
Date succeeding the Original Issue Date to the registered holder of this Note on
the Record Date with respect to such second Interest Payment Date.

------------------------------
/4/ If Note has dual-currency feature.

/5/ If Note has index feature.

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         [With respect to any dual-currency Notes, the Company may elect on each
Option Election Date specified above (each such date herein being called an
"Option Election Date") to pay the amounts due on this Note on the succeeding
Interest Payment Date or Maturity Date, as the case may be, in the Optional
Payment Currency specified above (the "Optional Payment Currency") instead of in
the Face Amount Currency. The amounts due in the Optional Payment Currency on
any Interest Payment Date or at the Maturity Date, as the case may be, shall be
determined by the Company using the Designated Exchange Rate specified above
(the "Designated Exchange Rate"). If such election is made, the Company shall
notify the Paying Agent, as defined below, of the election on the Option
Election Date and notice of such election shall be mailed to the registered
holder of this Note by first class mail, postage prepaid, at the address of such
holder as that address appears upon the books of the Company within two Business
Days (this and certain other capitalized terms used herein are defined on the
reverse of this Note) of the Option Election Date and shall state (i) the
Interest Payment Date and (ii) the exchange rate to be used to convert amounts
from the Face Amount Currency to the Optional Payment Currency, which rate shall
be the Designated Exchange Rate. Any such notice by the Company to the
registered holder of this Note, once given, may not be withdrawn. If the Company
elects on any Option Election Date to pay the amounts due on each succeeding
Interest Payment Date or at the Maturity Date, as the case may be, in the
Optional Payment Currency, then it shall pay all such amounts (including
principal) due with respect to this Note in the Optional Payment Currency on
each succeeding Interest Payment Date or at the Maturity Date, as the case may
be. If the Company does not elect on an Option Election Date to pay the amount
due on the succeeding Interest Payment Date or at the Maturity Date, as the case
may be, in the Optional Payment Currency, then such payment shall be made in the
Face Amount Currency and no notice of such payment need be given.]6

         Payment of the principal of this Note, any premium and the interest due
at the Maturity Date (or any redemption or repayment date) will be made in
immediately available funds upon surrender of this Note at the office or agency
of such paying agent as the Company may determine maintained for that purpose in
the Borough of Manhattan, The City of New York (a "Paying Agent"), or at the
office or agency of such other Paying Agent as the Company may determine.

         Interest on this Note will accrue initially from the Original Issue
Date and thereafter will accrue from the most recent Interest Payment Date to
which interest has been paid or duly provided for and thereafter will accrue
until the principal hereof has been paid or duly made available for payment
(except as provided below). The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date, will, subject to certain exceptions
described herein, be paid to the person in whose name this Note (or one or more
predecessor Note) is registered at the close of business on the date 15 days
prior to an Interest Payment Date (whether or not a Business Day) (each such
date a "Record Date"); provided, however, that interest payable on the Maturity
Date (or any redemption or repayment date) will be payable to the person to whom
the principal hereof shall be payable.

         If the Specified Currency indicated on the face hereof is other than
U.S. dollars, any payment on this Note on an Interest Payment Date or the
Maturity Date (or any redemption or repayment date) will be made in U.S. dollars
based on the noon U.S. dollar buying rate in the City of New York for cable
transfers of such Specified Currency, on the second Business Day (this and
certain other capitalized terms used herein are defined on the reverse of this
Note) preceding the applicable payment date, as certified by the Federal Reserve
Bank of New York for customs purposes, unless the holder hereof elects by
written request (which request shall also include appropriate wire transfer
instructions) to the Paying Agent at its corporate trust office in The City of
New York received on or prior to the Record Date relating to an Interest Payment
Date or at least 10 days prior to the Maturity Date (or any redemption or
repayment date), as the case may be, to receive such payment in such Specified
Currency except as provided on the reverse hereof; provided, that the amount of
such Specified Currency to be received by a holder of this Note who so elects to
receive such Specified Currency will be based on a firm bid quotation in New
York City received by the Exchange Rate Agent, as defined on the reverse hereof,
at approximately 11:00 A.M., New York City time, on the second Business Day
preceding the applicable payment date from a recognized foreign exchange dealer
(which may be the Exchange Rate Agent) for the purchase by the quoting dealer of
U.S. dollars in exchange for such Specified Currency for settlement on such
payment date in the aggregate amount of such Specified Currency payable to all
holders of Notes having the same terms as this Note (including Original
-----------------------------
/6/ Use if Note has dual-currency feature.

                                       3

<PAGE>

Issue Date) that have so elected to receive such Specified Currency and at which
the applicable dealer commits to execute a contract; provided, further, that if
such bid quotation is not available, such payments shall be made in U.S.
Dollars. All currency exchange costs will be borne by the holder of this Note
who so elects to receive such Specified Currency by deductions from such
payments. The holder hereof may elect to receive payment in such Specified
Currency for all such payments and need not file a separate election for each
such payment, and such election shall remain in effect until revoked by written
notice to the Paying Agent at its corporate trust office in The City of New York
received on a date prior to the Record Date for the relevant Interest Payment
Date or at least 10 days prior to the Maturity Date (or any redemption or
repayment date), as the case may be; provided, however, that such election is
irrevocable as to the next succeeding payment to which it relates; if such
election is made as to full payment on this Note, such election may thereafter
be revoked so long as the Paying Agent is notified of
the revocation within the time period set forth above.

         If the Specified Currency indicated on the face hereof is U.S. dollars,
payment of the principal of and premium, if any, and interest on this Note will
be made in such coin or currency of the United States as at the time of payment
is legal tender for payment of public and private debts; provided, however, that
payments of interest, other than interest due at maturity (or any redemption or
repayment date) will be made by United States dollar check mailed to the address
of the person entitled thereto as such address shall appear in the Note
register. A holder of U.S.$5,000,000 or more in aggregate principal amount of
Notes having the same Interest Payment Date will be entitled to receive payments
of interest, other than interest due at maturity or any date of redemption or
repayment, by wire transfer of immediately available funds to an account
maintained by the holder of this Note if appropriate wire transfer instructions
in writing have been received by the Paying Agent not less than 10 days prior to
the applicable Interest Payment Date.

         Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         Unless the certificate of authentication hereon has been executed by
the Trustee, as defined on the reverse hereof, by manual signature, this Note
shall not be entitled to any benefit under the Indenture, as defined on the
reverse hereof, or be valid or obligatory for any purpose.

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         IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed under its corporate seal.

DATED:                                      GENERAL ELECTRIC CAPITAL
                                             CORPORATION

[SEAL]                                      By:________________________________
                                               Title:

Attest:

By:________________________________
   Title:

CERTIFICATE OF AUTHENTICATION

         This is one of the Securities of the Tranche designated therein
described in the within-mentioned Indenture.

JPMORGAN CHASE BANK (FORMERLY KNOWN AS THE CHASE MANHATTAN BANK), as Trustee

By:________________________________
   Authorized Officer

                                       5

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                           [FORM OF REVERSE OF NOTE]

         This Note is one of a duly authorized issue of Global Medium-Term
Notes, Series A, having maturities from nine months to 60 years from the date of
issue (the "Notes") of the Company. The Notes are issuable under a Third Amended
and Restated Indenture, dated as of February 27, 1997 between the Company and
JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as
supplemented by the First Supplemental Indenture dated as of May 3, 1999 and the
Second Supplemental Indenture dated as of July 2, 2001, (such indenture as
amended and as supplemented to the date hereof being referred to herein as the
"Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities of the Company, the Trustee and the holders of
the Notes and the terms upon which the Notes are, and are to be, authenticated
and delivered. JPMorgan Chase Bank has been appointed Exchange Rate Agent (the
"Exchange Rate Agent", which terms include any successor or exchange rate agent
with respect to the Notes, and JPMorgan Chase Bank at its corporate trust office
in The City of New York has been appointed the registrar and as a Paying Agent
with respect to the Notes. The terms of individual Notes may vary with respect
to interest rates, interest rate formulas, issue dates, maturity dates, or
otherwise, all as provided in the Indenture. To the extent not inconsistent
herewith, the terms of the Indenture are hereby incorporated by reference
herein.

         This Note will not be subject to any sinking fund and will not be
redeemable or subject to repayment at the option of the holder prior to
maturity, except as provided below.

         This Note may be redeemed at the option of the Company on any date on
and after the Initial Redemption Date, if any, specified above (the "Redemption
Date"). If no Initial Redemption Date is set forth above, this Note may not be
redeemed at the option of the Company prior to the Maturity Date. On and after
the Initial Redemption Date, if any, this Note may be redeemed at any time in
whole or from time to time in part in increments of $1,000 (provided that any
remaining principal hereof shall be at least $1,000) at the option of the
Company at the applicable Initial Redemption Percentage together with interest
thereon payable to the Redemption Date, on notice given to the holder of this
Note not more than 60 nor less than 30 days prior to the Redemption Date. In the
event of redemption of this Note in part only, a new Note for the unredeemed
portion hereof shall be issued in the name of the holder of this Note upon the
surrender hereof. The Initial Redemption Percentage may be increased or
decreased, as the case may be, as indicated on the face hereof under
"Applicability of Annual Redemption Percentage Increase" or "Applicability of
Annual Redemption Reductions". [If this Note is subject to "Modified Payment
upon Acceleration or Redemption" the redemption price of this Note shall be
limited to the Amortized Amount.]

         Unless otherwise indicated on the face of this Note, this Note shall
not be subject to repayment at the option of the holder prior to the Maturity
Date. If so indicated on the face of this Note, this Note may be subject to
repayment at the option of the holder on the Optional Repayment Date or Dates
specified on the face hereof on the terms set forth herein. On any Optional
Repayment Date, this Note will be repayable in whole or in part in increments of
1,000 units of the Specified Currency indicated on the face hereof (provided
that any remaining principal amount hereof shall not be less than the minimum
authorized denomination hereof) at the option of the holder hereof at a price
equal to 100% of the principal amount to be repaid, together with interest
hereon payable to the date of repayment. For this Note to be repaid in whole or
in part at the option of the holder hereof, the Company must receive at the
corporate trust office of the Paying Agent in the Borough of Manhattan, The City
of New York, at least 30 days but not more than 60 days prior to the repayment,
(i) this Note with the form entitled "Option to Elect Repayment" on the reverse
hereof duly completed or (ii) a telegram, facsimile transmission or a letter
from a member of a national securities exchange or a member of the National
Association of Securities Dealers, Inc. (the "NASD") or a commercial bank or
trust company in the United States which must set forth the name of the holder
of the Note, the principal amount of this Note, the principal amount of this
Note to be repaid, the certificate number or a description of the tenor and
terms of this Note, a statement that the option to elect repayment is being
exercised thereby and a guarantee that this Note to be repaid, together with the
duly completed form entitled "Option to Elect Repayment" on the reverse hereof,
will be received by the Paying Agent not later than the fifth Business Day after
the date of such telegram, facsimile transmission or letter; provided, however,
that such telegram, facsimile transmission or letter from a member of a national
securities exchange or a member of the NASD, or a commercial bank or trust
company in the United States shall only be effective if in such case, this Note
and form duly completed are received by the Company by such fifth Business Day.
Exercise of such repayment option by the holder hereof shall be irrevocable. In
the event of repayment of this Note in part only, a new Note or Notes for the

                                       6

<PAGE>
amount of the unpaid portion hereof shall be issued in the name of the holder
hereof upon cancellation hereof, but only in an authorized denomination.

         Interest payments on this Note will include interest accrued to but
excluding the Interest Payment Dates or the Maturity Date (or earlier redemption
or repayment date), as the case may be. Unless otherwise indicated on the face
of this Note, interest payments for this Note will be computed and paid on the
basis of a 360-day year of twelve 30-day months.

         In the case where the Interest Payment Date or the Maturity Date (or
any redemption or repayment date) does not fall on a Business Day, payment of
interest, premium, if any, or principal otherwise payable on such date need not
be made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the Interest Payment Date or on the
Maturity Date (or any redemption or repayment date), and no interest shall
accrue for the period from and after the Interest Payment Date or the Maturity
Date (or any redemption or repayment date) to such next succeeding Business Day.

         This Note is unsecured and ranks pari passu with all other unsecured
and unsubordinated indebtedness of the Company.

         This Note, and any Note or Notes issued upon transfer or exchange
hereof, is issuable only in fully registered form, without coupons, in
denominations of 100,000 units of the Specified Currency indicated on the face
hereof or any integral multiple of 1,000 units of such Specified Currency in
excess thereof, unless otherwise indicated on the face thereof.

         JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank) has
been appointed registrar for the Notes (the "Registrar", which term includes any
successor registrar appointed by the Company), and the Registrar will maintain
at its office in The City of New York a register for the registration and
transfer of Notes. This Note may be transferred at the aforesaid office of the
Registrar by surrendering this Note for cancellation, accompanied by a written
instrument of transfer in form approved by the Registrar and duly executed by
the registered holder hereof in person or by the holder's attorney duly
authorized in writing, and thereupon the Registrar shall issue in the name of
the transferee or transferees, in exchange herefor, a new Note or Notes having
identical terms and provisions for an equal aggregate principal amount in
authorized denominations, subject to the terms and conditions set forth herein;
provided, however, that the Registrar will not be required to register the
transfer of or exchange any Note that has been called for redemption in whole or
in part, or as to which the holder thereof has elected to cause such Note to be
repaid in whole or in part, except the unredeemed or unpaid portion of Notes
being redeemed or repaid in part, or to register the transfer of or exchange
Notes to the extent and during the period so provided in the Indenture with
respect to the redemption of Notes. Notes are exchangeable at said office for
other Notes of other authorized denominations of equal aggregate principal
amount having identical terms and provisions. All such exchanges and transfers
of Notes will be free of charge, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge in connection
therewith. All Notes surrendered for exchange shall be accompanied by a written
instrument of transfer in form approved by the Registrar and executed by the
registered holder in person or by the holder's attorney duly authorized in
writing. The date of registration of any Note delivered upon any exchange or
transfer of Notes shall be such that no gain or loss of interest results from
such exchange or transfer.

         In case any Note shall at any time become mutilated, destroyed, lost or
stolen, or is apparently destroyed, lost or stolen, and such Note or evidence of
the loss, theft or destruction thereof (together with the indemnity hereinafter
referred to and such other documents or proof as may be required in the
premises) shall be delivered to the Registrar, a new Note of like tenor will be
issued by the Company in exchange for the Note so mutilated or defaced, or in
lieu of the Note so destroyed or lost or stolen, but, in the case of any
destroyed or lost or stolen Note only upon receipt of evidence satisfactory to
the Registrar and the Company that such Note was destroyed or lost or stolen
and, if required, upon receipt also of indemnity satisfactory to each of them.
All expenses and reasonable charges associated with procuring such indemnity and
with the preparation, authentication and delivery of a new Note shall be borne
by the owner of the Note mutilated, defaced, destroyed, lost or stolen.

         The Indenture provides that if an Event of Default (as defined in the
Indenture) with respect to any series of debt securities issued under the
Indenture, including the series of Global Medium-Term Notes, Series A, of which
this Note

                                       7

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forms a part, shall have occurred and be continuing, either the
Trustee or the holders of not less than 25% in principal amount of the debt
securities of such series then outstanding under the Indenture, by notice in
writing to the Company (and to the Trustee if given by securityholders of such
series), may declare the principal of all debt securities of such series and
interest accrued thereon to be due and payable immediately, but upon certain
conditions such declarations may be annulled and past defaults may be waived
(except a continuing default in payment of principal (or premium, if any) or
interest on such debt securities) by the holders of a majority in principal
amount of the debt securities of such series then outstanding.

         If the face hereof indicates that this Note is subject to "Modified
Payment upon Acceleration or Redemption", then (i) if the principal hereof is
declared to be due and payable as described in the preceding paragraph, the
amount of principal due and payable with respect to this Note shall be limited
to the sum of the Issue Price specified on the face hereof plus the Amortized
Amount, (ii) for the purpose of any vote of security holders taken pursuant to
the Indenture prior to the acceleration of payment of this Note, the principal
amount hereof shall equal the amount that would be due and payable hereon,
calculated as set forth in clause (i) above, if this Note were declared to be
due and payable on the date of any such vote and (iii) for the purpose of any
vote of securityholders taken pursuant to the Indenture following the
acceleration of payment of this Note, the principal amount hereof shall equal
the amount of principal due and payable with respect to this Note, calculated as
set forth in clause (i) above.

         The Indenture permits the Company, when authorized by resolution of the
Board of Directors, and the Trustee, with the consent of the holders of not less
than 66-2/3% in aggregate principal amount of the notes of each series (each
series voting as a class) affected by such supplemental indenture at the time
outstanding, including the series of Global Medium-Term Series A, of which this
Note forms a part, to enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the holders of the notes
of each such series or the coupons appertaining to such notes; provided,
however, that no such supplemental indenture shall (i) extend the fixed maturity
of any note, or reduce the rate or extend the time of payment of interest, if
any, thereon, or reduce the principal amount or premium, if any, thereof, or
make the principal thereof or premium, if any, or interest, if any, thereon
payable in any coin or currency other than that provided in any note, or reduce
the amount of the principal of an Original Issue Discount note that would be due
and payable upon an acceleration of the maturity thereof or adversely affect the
right of repayment, if any, at the option of the holder without the consent of
the holder of each note so affected, or (ii) reduce the aforesaid percentage of
notes of any series, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holder of each note so
affected. A supplemental indenture which changes or eliminates any covenant or
other provision of the Indenture which has expressly been included solely for
the benefit of one or more particular series of notes, or which modifies the
rights of the holders of notes of such series or of coupons appertaining to such
notes with respect to such covenant or other provision, shall be deemed not to
affect the rights under the Indenture of the holders of notes of any other
series or of coupons appertaining to such notes.

         Except as set forth below, if the principal of, or premium, if any, or
interest, if any, on this Note is payable in a Specified Currency other than
U.S. dollars and such Specified Currency is not available to the Company for
making payments thereof due to the imposition of exchange controls or other
circumstances beyond the control of the Company or is no longer used by the
government of the country issuing, or authority sponsoring, such Specified
Currency or for the settlement of transactions by public institutions within the
international banking community, then the Company will be entitled to satisfy
its obligations to the holder of this Note by making such payments in U.S.
dollars on the basis of the most recently available market exchange rate for
such Specified Currency, as determined by the Exchange Rate Agent on the date of
such payment, or if such rate is not available on such date, as of the most
recent practicable date. If a Specified Currency is unavailable solely because
the country of issue has replaced its currency with Euro or other currency of
the European Union pursuant to the Treaty establishing the European Communities,
the amounts payable will, beginning with the date the replacement becomes
effective, be made in Euro or such other currency. The amounts payable on any
date will be converted into Euro or such other currency on the basis of the most
recently available market exchange rate for such currency, as determined by the
Exchange Rate Agent on the date of such payment, or if such rate is not
available on such date, as of the most recent practicable date.

         If any payment is required to be made in Euro and Euro are unavailable
due to the imposition of exchange controls or other circumstances beyond the
Company's control or are no longer used in the European Monetary System, then
all payments will be made in U.S. dollars until Euro are again available or so
used. The amount of each payment in

                                       8

<PAGE>

U.S. dollars will be computed on the basis of the equivalent of Euro in U.S.
dollars, determined on the basis of the most recently available market exchange
rate for Euro as determined by the Exchange Rate Agent on the date of such
payment, or if such rate is not available on such date, as of the most recent
practicable date. Any payment made under such circumstances in U.S. dollars or
Euro, as the case may be, where the required payment is in a Specified Currency
other than U.S. dollars or Euro, as the case may be, will not constitute an
Event of Default.

         So long as this Note shall be outstanding, the Company will cause to be
maintained an office or agency for the payment of the principal of and premium,
if any, and interest on this Note as herein provided in the Borough of
Manhattan,

         The City of New York, and an office or agency in said Borough of
Manhattan for the registration, transfer and exchange as aforesaid of the Notes.
The Company may designate other agencies for the payment of said principal,
premium, if any, and interest at such place or places (subject to applicable
laws and regulations) as the Company may decide. So long as there shall be any
such agency, the Company shall keep the Trustee advised of the names and
locations of such agencies, if any are so designated.

         With respect to moneys paid by the Company and held by the Trustee or
any Paying Agent for the payment of the principal of or interest or premium, if
any, on any Notes that remain unclaimed at the end of two years after such
principal, interest or premium shall have become due and payable (whether at
maturity or upon call for redemption or otherwise), such moneys shall be so
repaid to the Company. Upon such repayment all liability of the Trustee or such
Paying Agent with respect to such moneys shall thereupon cease, without,
however, limiting in any way any obligation that the Company may have to pay the
principal of or interest or premium, if any, on this Note as the same shall
become due.

         No provision of this Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of, premium, if any, and interest on this Note at the time, place, and
rate, and in the coin or currency, herein and in the Indenture prescribed unless
otherwise agreed between the Company and the registered holder of this Note.

         The Company or any agent of the Company, the Registrar or the Trustee
may treat the holder in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the Company,
the Registrar, the Trustee nor any such agent shall be affected by notice to the
contrary.

         No recourse shall be had for the payment of the principal of, or
premium, if any, or the interest on, this Note, for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture or any
indenture supplemental thereto, against any incorporator, shareholder, officer
or director, as such, past, present or future, of the Company or of any
successor corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issuer
hereof, expressly waived and released.

         This Note shall for all purposes be governed by, and construed in
accordance with, the laws of the State of New York.

         As used herein:

         (a) the term "Amortized Amount" is equal to the original issue discount
amortized from the Original Issue Date to the date of redemption or declaration,
as the case may be, which amortization shall be calculated using the "constant
yield method" (computed in accordance with the rules under the Internal Revenue
Code of 1986, as amended, and the regulations thereunder, in effect on the date
of redemption or declaration, as the case may be);

         (b) the term "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which commercial banks are
authorized or required by law, regulation or executive order to close in The
City of New York; provided, however, that, with respect to Notes denominated in
a foreign currency, such day is also not a day on which commercial banks are
authorized or required by law, regulation or executive order to close in the
Principal Financial Center of the country issuing the Specified Currency (or, if
the Specified Currency is Euro, such day

                                       9

<PAGE>

is also a day on which the Trans-European Automated Real-Time Gross Settlement
Express Transfer (TARGET) System is open);

         (c) the term "Principal Financial Center" means (i) the capital city of
the country issuing the currency in which the Notes are denominated that with
respect to the following currencies, the "Principal Financial Center" will be as
indicated below:

             Currency                      Principal Financial Center

             United States dollars         The City of New York

             Australian dollars            Sydney and, if Australian dollars is
                                           the currency in which the Notes are
                                           denominated, Melbourne

             Canadian dollars              Toronto

             South African rand            Johannesburg

             Swiss francs                  Zurich

         (d) the term "United States" means the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction.

         (e) all other terms used in this Note which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.

                                       10

<PAGE>

ABBREVIATIONS

         The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

             TEN COM-as tenants in common
             TEN ENT-as tenants in the entireties
             JT TEN-as joint tenants with right of ownership and not as tenants
                    in common
             UNIF GIFT MIN ACT-    Custodian
                                 --------------------------------------------
                      (Cust)                             (Minor)

             Under Uniform Gifts to Minors Act ------------------------------
                                                (State)

       Additional abbreviations may also be used though not in the above list.

                 -------------------

       FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
       transfer(s) unto

[PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE]

[PLEASE PRINT OR TYPE NAME AND ADDRESS INCLUDING ZIP CODE, OF ASSIGNEE]

the within Note and all rights thereunder, hereby irrevocably constituting and
appointing such person attorney to transfer such Note on the books of the
Company, with full power of substitution in the premises.

Dated:

NOTICE:           The signature to this assignment must correspond with the name
                  as written upon the face of the within Note in every
                  particular without alteration or enlargement or any change
                  whatsoever.

                                       11

<PAGE>

                           OPTION TO ELECT REPAYMENT

The undersigned hereby irrevocably request(s) the Issuer to repay the within
Note (or portion thereof specified below) pursuant to its terms at a price equal
to the principal amount thereof, together with interest to the Optional
Repayment Date, to the undersigned, at (Please print or typewrite name and
address of the undersigned)

If less than the entire principal amount of the within Note is to be repaid,
specify the portion thereof (which shall be increments of 1,000 units of the
Specified Currency indicated on the face hereof) which the holder elects to have
repaid: ___________; and specify the denomination or denominations (which shall
not be less than the minimum authorized denomination) of the Notes to be issued
to the holder for the portion of the within Note not being repaid (in the
absence of any such specification, one such Note will be issued for the portion
not being repaid):

Date:

       NOTICE:    The signature on this Option to Elect Repayment must
                  correspond with the name as written upon the face of the
                  within instrument in every particular without alteration or
                  enlargement.

                                       12exv4w1

 

EXHIBIT 4.1

AMENDED AND RESTATED

BIORELIANCE

1997 INCENTIVE PLAN, AS AMENDED

 

 

AMENDED AND RESTATED

BIORELIANCE

1997 INCENTIVE PLAN, AS AMENDED

     1.     Purpose. The purpose of this Plan is to strengthen BioReliance
Corporation, a Delaware corporation (the “Company”), by providing an incentive
to its employees, officers, consultants and directors and thereby encouraging
them to devote their abilities and industry to the success of the Company’s
business enterprise. It is intended that this purpose be achieved by extending
to employees, officers, consultants and directors of the Company and its
Subsidiaries a long-term incentive for high levels of performance and unusual
efforts through the grant of Incentive Stock Options, Nonqualified Stock
Options, Stock Appreciation Rights, Dividend Equivalent Rights, Performance
Awards and/or Restricted Stock (as each term is herein defined). After the
Effective Date of this Plan, no further awards shall be made under any of the
Former Plans. Each award outstanding under a Former Plan as of the Effective
Date of this Plan shall remain outstanding and continue to be subject to the
terms of the Former Plan and the award agreement under which such award was
granted. Each Share that is available for the granting of new awards under
either of the Former Plans as of the Effective Date of this Plan and each Share
that is the subject of an award under either of the Former Plans but is not
issued prior to the time that such award expires or otherwise terminates shall,
after the Effective Date of this Plan, not be available for the granting of
awards under either of the Former Plans, but shall instead be available for the
granting of Options under this Plan.

     2.     Definitions. For purposes of the Plan:

           2.1      “Adjusted Fair Market Value” means, in the event of a Change in
Control, the greater of (i) the highest price per Share paid to holders of the
Shares in any transaction (or series of transactions) constituting or resulting
in a Change in Control or (ii) the highest Fair Market Value of a Share during
the sixty (60) day period ending on the date of a Change in Control.

           2.2      “Affiliate” means any entity, directly or indirectly, controlled by,
controlling or under common control with the Company or any corporation or
other entity acquiring, directly or indirectly, all or substantially all the
assets and business of the Company, whether by operation of law or otherwise.

           2.3      “Agreement” means the written agreement between the Company and an
Optionee or Grantee evidencing the grant of an Option or Award and setting
forth the terms and conditions thereof.

           2.4      “Automatic Option” means an Option granted pursuant to Section 6.

           2.5      “Award” means a grant of Restricted Stock, a Stock Appreciation Right,
a Performance Award, a Dividend Equivalent Right or any or all of them.

           2.6      “Beneficial Ownership” means ownership within the meaning of Rule
13d-3 promulgated under the Exchange Act.

           2.7      “Beneficiary” means an individual, trust or estate who or which, by a
written designation of the Optionee or Grantee filed with the Company by
operation of law, succeeds to the rights and obligations of the Optionee or
Grantee under the Plan and an Agreement upon the Optionee’s or Grantee’s death.

-1-

 

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

           2.9      “Business Day” means any day on which the New York Stock Exchange is
open for trading.

           2.10      “Cause” shall mean:

                        (a) for purposes of Section 6.4, (i) a willful act which constitutes gross
misconduct or fraud and which is materially injurious to the Company or (ii)
conviction of, or plea of “guilty” or “no contest” to, a felony; and

                        (b) in all other cases, either (1) the definition set forth in the
employment agreement between the Optionee or Grantee and the Company, or in
absence thereof, (2) (i) intentional failure to perform reasonably assigned
duties, (ii) dishonesty or willful misconduct in the performance of duties,
(iii) involvement in a transaction in connection with the performance of duties
to the Company or any of its Subsidiaries which transaction is adverse to the
interests of the Company or any of its Subsidiaries and which is engaged in for
personal profit or (iv) willful violation of any law, rule or regulation in
connection with the performance of duties (other than traffic violations or
similar offenses). No act or failure to act shall be considered willful unless
done or omitted to be done in bad faith and without reasonable belief that the
action or omission was in the best interest of the Company.

           2.11      “Change in Capitalization” means any increase or reduction in the
number of Shares, or any change (including, without limitation, a change in
value) in the Shares or exchange of Shares for a different number or kind of
shares or other securities of the Company or another corporation, by reason of
a reclassification, recapitalization, merger, consolidation, reorganization,
spin-off, split-up, issuance of warrants or rights or debentures, stock
dividend, stock split or reverse stock split, property dividend, combination or
exchange of shares, change in corporate structure or substantially similar
event.

           2.12      A “Change in Control” shall mean the occurrence during the term of
the Plan of any of the following events; provided, however, that the Committee,
in its sole discretion, may specify a more restrictive definition of Change in
Control in any Agreement and, in such event, the definition of Change in
Control set forth in the Agreement shall apply to the Award granted under such
Agreement:

                        (a) An acquisition in one or more transactions (other than directly from
the Company or pursuant to options granted under this Plan or otherwise by the
Company) of any voting securities of the Company (the “Voting Securities”) by
any Person (other than any member of the Knafel Family) immediately after which
such Person has Beneficial Ownership of (i) thirty percent (30%) or more of the
combined voting power of the Company’s then outstanding Voting Securities and
(ii) a number of Voting Securities having combined voting power greater than
the combined voting power of the Voting Securities then Beneficially Owned by
members of the Knafel Family; provided, however, in determining whether a
Change in Control has occurred, Voting Securities which are acquired in a
“Non-Control Acquisition” (as defined below) shall not constitute an
acquisition which would cause a Change in Control. A “Non-Control Acquisition”
shall mean an acquisition by (A) an employee benefit plan (or a trust forming a
part thereof) maintained by (i) the Company or (ii) any Subsidiary, (B) the
Company or any Subsidiary, or (C) any Person in connection with a “Non-Control
Transaction” (as defined below);

                        (b) The individuals who, as of April 24, 1997, are members of the Board
(the “Incumbent Board”), cease for any reason to constitute at least two-thirds
of the Board; provided, however, that if the election, or nomination for
election by the Company’s stockholders, of any new director was approved by a
vote of at least two-thirds of the Incumbent Board, such new director shall,
for purposes of the Plan, be considered as a member of the Incumbent Board;
provided, further, however,

-2-

 

that no individual shall be considered a member of the Incumbent Board if
such individual initially assumed office as a result of an actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board (a “Proxy Contest”) including by reason of any agreement intended to
avoid or settle a or Proxy Contest; or

                 (c) Consummation of:

		
	 	(i) A merger, consolidation or reorganization involving
the Company, unless

		
	 	     (A) the stockholders of the Company immediately
before such merger, consolidation or reorganization
own, directly or indirectly, immediately following such
merger, consolidation or reorganization, more than
fifty percent (50%) of the combined voting power of the
outstanding voting securities of the corporation
resulting from such merger or consolidation or
reorganization (the “Surviving Corporation”) in
substantially the same proportion as their ownership of
the Voting Securities immediately before such merger,
consolidation or reorganization;

		
	 	     (B) the individuals who were members of the
Incumbent Board immediately prior to the execution of
the agreement providing for such merger, consolidation
or reorganization constitute at least two-thirds of the
members of the governing board of directors of the
Surviving Corporation;

		
	 	     (C) no Person (other than the Company or any
Subsidiary, any employee benefit plan (or any trust
forming a part thereof) maintained by the Company, the
Surviving Corporation or any Subsidiary, or any Person
who, immediately prior to such merger, consolidation or
reorganization had Beneficial Ownership of twenty
percent (20%) or more of the then outstanding Voting
Securities) has Beneficial Ownership of twenty percent
(20%) or more of the combined voting power of the
Surviving Corporation’s then outstanding voting
securities; and

		
	 	     (D) a transaction described in clauses (A) through
(C) shall herein be referred to as a “Non-Control
Transaction”;

		
	 	(ii) A complete liquidation or dissolution of the
Company; or

		
	 	(iii) An agreement for the sale or other disposition of
all or substantially all of the assets of the Company to any
Person (other than a transfer to a Subsidiary).

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any Person (the “Subject Person”) acquired Beneficial Ownership
of more than the permitted amount of the outstanding Voting Securities as a
result of the acquisition of Voting Securities by the Company which, by
reducing the number of Voting Securities outstanding, increases the
proportional number of shares beneficially owned by the Subject Person;
provided, however, that if a Change in Control would occur (but for the
operation of this sentence) as a result of the acquisition of Voting Securities
by the Company,

-3-

 

and after such share acquisition by the Company, the Subject Person becomes the
Beneficial Owner of any additional Voting Securities which increases the
percentage of the then outstanding Voting Securities beneficially owned by the
Subject Person, then a Change in Control shall occur.

If an Eligible Individual’s employment is terminated by the Company without
Cause prior to the date of a Change in Control but the Eligible Individual
reasonably demonstrates that the termination (A) was at the request of a third
party who has indicated an intention or taken steps reasonably calculated to
effect a Change in Control or (B) otherwise arose in connection with, or in
anticipation of, a Change in Control which has been threatened or proposed,
such termination shall be deemed to have occurred after a Change in Control for
purposes of this Plan provided a Change in Control shall actually have
occurred.

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

           2.14      “Committee” means a committee, as described in Section 3.1, appointed
by the Board from time to time to administer the Plan and to perform the
functions set forth herein.

           2.15      “Company” means BioReliance Corporation, a Delaware corporation.

           2.16      “Date of Grant” means the date designated by the Committee as the
date as of which it grants an Option or Award, which shall not be earlier than
the date on which the Committee approves the granting of such Option or Award.

           2.17      “Director” means a director of the Company.

           2.18      “Disability” means:

                        (a) in the case of an Optionee or Grantee whose employment with the
Company or a Subsidiary is subject to the terms of an employment agreement
between such Optionee or Grantee and the Company or Subsidiary, which
employment agreement includes a definition of “Disability”, the term
“Disability” as used in this Plan or any Agreement shall have the meaning set
forth in such employment agreement during the period that such employment
agreement remains in effect; and

                        (b) in all other cases, the term “Disability” as used in this Plan or any
Agreement shall mean a physical or mental infirmity which impairs the
Optionee’s or Grantee’s ability to perform substantially his or her duties for
a period of one hundred eighty (180) consecutive days.

           2.19      “Disability Date” means the date which is six months after the date
on which an Optionee or Grantee is first absent from active employment with the
Company by reason of a Disability.

           2.20      “Discretionary Option” means an Option granted pursuant to Section 5.

           2.21      “Dividend Equivalent Right” means a right to receive all or some
portion of the cash dividends that are or would be payable with respect to
Shares.

           2.22      “Division” means any of the operating units or divisions of the
Company designated as a Division by the Committee.

           2.23      “Eligible Individual” means any of the following individuals who is
designated by the Committee as eligible to receive Options subject to the
conditions set forth herein: (a) any director (including any Non-Employee
Director), officer or employee of the company or a Subsidiary, (b) any
individual to whom the Company or a Subsidiary has extended a formal, written
offer of

-4-

 

employment, or (c) any consultant or advisor who performs actual services
for the Company or a Subsidiary.

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

           2.25      “Fair Market Value” on any date means the closing price at the close
of the primary trading session of the Shares on such date on the principal
national securities exchange on which such Shares are listed or admitted to
trading, or, if such Shares are not so listed or admitted to trading, the
closing price at the close of the primary trading session on such date as
quoted on the Nasdaq Stock Market or such other market in which such prices are
regularly quoted, or, if there has been no such closing price with respect to
Shares on such date, the Fair Market Value shall be the value established by
the Committee in good faith and, in the case of an Incentive Stock Option, in
accordance with Section 422 of the Code.

           2.26      “Former Plans” means the Microbiological Associates, Inc. 1988
Incentive Stock Option Plan, the Microbiological Associates, Inc. 1995
Non-Qualified Stock Option Plan, and the Magenta Corporation 1994 Incentive
Stock Option Plan.

           2.27      “Grantee” means a person to whom an Award has been granted under the
Plan.

           2.28      “Incentive Stock Option” means an Option satisfying the requirements
of Section 422 of the Code and designated by the Committee as an Incentive
Stock Option.

           2.29      “Knafel Family” means (i) Sidney R. Knafel and/or members of his
“immediate family” (as defined in Rule 16a-1 promulgated under the Exchange
Act), (ii) a trust solely for the benefit of any of the individuals referred to
in clause (i) above; (iii) the guardian, conservator, estate or other legal
representative of any of the individuals referred to in clause (i) above; and
(iv) any corporation, partnership, limited liability company or other entity
all of the outstanding equity securities of which are owned, directly or
indirectly, by the individuals or entities referred to in clause (i), (ii) or
(iii) above.

           2.30      “Non-Employee Director” means a director of the Company who is a
“Non-employee director” within the meaning of Rule 16b-3 promulgated under the
Exchange Act.

           2.31      “Nonqualified Stock Option” means an Option which is not an Incentive
Stock Option.

           2.32      “Normal Retirement Date” means the date on which an Optionee or
Grantee terminates active employment with the Company on or after attainment of
age 65, but does not include termination by the Company for Cause.

           2.33      “Option” means a Nonqualified Stock Option, an Incentive Stock
Option, a Discretionary Option, an Automatic Option, or any or all of them.

           2.34      “Optionee” means a person to whom an Option has been granted under
the Plan.

           2.35      “Outside Director” means a director of the Company who is an “Outside
Director” within the meaning of Section 162(m) of the Code and the regulations
promulgated thereunder.

           2.36      “Parent” means any corporation which is a parent corporation (within
the meaning of Section 424(e) of the Code) with respect to the Company.

-5-

 

           2.37      “Performance Awards” means Performance Units, Performance Shares or
either or both of them.

           2.38      “Performance Cycle” means the time period specified by the Committee
at the time Performance Awards are granted during which the performance of the
Company, a Subsidiary or a Division will be measured.

           2.39      “Performance Objectives” has the meaning set forth in Section 11.

           2.40      “Performance Shares” means Shares issued or transferred to an
Eligible Individual under Section 11.

           2.41      “Performance Units” means Performance Units granted to an Eligible
Individual under Section 11.

           2.42      “Person” means “person” as such term is used for purposes of Section
13(d) or 14(d) of the Exchange Act, including, without limitation, any
individual, firm, corporation, partnership, limited liability company, joint
venture, association, trust or other entity, or any group of Persons.

           2.43      “Plan” means the BioReliance Corporation 1997 Incentive Plan, as
amended and restated from time to time.

           2.44      “Restricted Stock” means Shares issued or transferred to an Eligible
Individual pursuant to Section 10.

           2.45      “Scientific Advisory Board” means the Scientific Advisory Board of
the Company.

           2.46      “Shares” means the common stock, par value $.01 per share, of the
Company.

           2.47      “Stock Appreciation Right” means a right to receive all or some
portion of the increase in the value of the Shares as provided in Section 8
hereof.

           2.48      “Subsidiary” means any corporation or other Person of which a
majority of its voting power or its equity securities or equity interest is
owned directly or indirectly by the Company.

           2.49      “Successor Corporation” means a corporation, or a parent or
subsidiary thereof within the meaning of Section 424(a) of the Code, which
issues or assumes a stock option in a transaction to which Section 424(a) of
the Code applies.

           2.50      “Ten-Percent Stockholder” means an Eligible Individual, who, at the
time an Incentive Stock Option is to be granted to him or her, owns (within the
meaning of Section 422(b)(6) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company, or of a Parent or a Subsidiary.

           2.51      “Termination of Employment” means the later of (i) a severance of the
employer-employee relationship with the Company or (ii) the resignation,
removal or termination of an officer of the Company.

           2.52      For the purpose of UK Approved Options, the following terms and
modifications shall apply, namely:

-6-

 

	 	 	 
	Agreement	 	
shall include an option certificate issued pursuant to

Section 5.1 of the Plan.
	 
	Beneficiary	 	
shall include the Optionee’s legal personal representatives

or executors (but so that, in the event of the insolvency

of an Optionee, all his UK Approved Options shall lapse).
	 
	Change in Capitalization	 	
means a spin-off or other change which does not cause a

variation of share capital of the Company, shall not result

in an adjustment to the number, price or other terms of UK

Approved Options, nor shall any such adjustments be made

without the prior approval of the UK Inland Revenue.
	 
	Dividend Equivalent Right	 	
means a UK Approved Option shall not carry a Dividend

Equivalent Right.
	 
	Eligible Employee	 	
means an employee (including a Full-Time director) of the

Company or a Subsidiary who is resident or ordinarily

resident in the United Kingdom at the Date of Grant of his

Option, but excluding any Excluded Person.
	 
	Excluded Person	 	
means any person who has (or within the preceding 12 months

has had) a material interest in the Company (if then a

close company within the meaning of Schedule 9 to the Taxes

Act) or a company which is a close company and either

controls the Company or is a member of a consortium which

owns the Company.
	 
	Full-Time	 	
means an employee required under the terms of his or her

employment to work for his or her employing company or

companies for at least 25 hours per week (excluding meal

breaks).
	 
	Option	 	
shall include a UK Approved Option unless otherwise stated

in the Plan.
	 
	Performance Award	 	
The grant of a UK Approved Option shall not include a

Performance Award.
	 
	Stock Appreciation Right	 	
The grant of a UK Approved Option shall not include a Stock

Appreciation Right.
	 
	Taxes Act	 	
Income and Corporation Taxes Act 1988 of the United Kingdom.
	 
	UK Approved Option	 	
means a non-transferable right to acquire Shares granted to

an Eligible Employee pursuant to Section 5 of the Plan and

for the time being subsisting.

     3.     Administration.

           3.1 The Plan shall be administered by the Committee, which shall hold
meetings at such times as may be necessary for the proper administration of the
Plan. The Committee shall keep

-7-

 

minutes of its meetings. A quorum shall consist of not fewer than two members
of the Committee and a majority of a quorum may authorize any action. Any
decision or determination reduced to writing and signed by a majority of all of
the members of the Committee shall be as fully effective as if made by a
majority vote at a meeting duly called and held. The Committee shall consist
of at least two (2) directors of the Company and may consist of the entire
Board; provided, however, that (A) if the Committee consists of less than the
entire Board, then, with respect to any Option or Award to an Eligible
Individual who is subject to Section 16 of the Exchange Act, the Committee
shall consist of at least two (2) directors each of whom shall be a
Non-employee Director and (B) to the extent necessary for any Option or Award
intended to qualify as performance-based compensation under Section 162(m) of
the Code to so qualify, each member of the Committee, whether or not it
consists of the entire Board, shall be an Outside Director. For purposes of
the preceding sentence, if one or more members of the Committee is not a
Nonemployee Director and an Outside Director but recuses himself or herself or
abstains from voting with respect to a particular action taken by the
Committee, then the Committee, with respect to that action, shall be deemed to
consist only of the members of the Committee who have not recused themselves or
abstained from voting. Subject to applicable law, the Committee may delegate
its authority under the Plan to any other person or persons. No member of the
Committee shall be liable for any action, failure to act, determination or
interpretation made in good faith with respect to this Plan or any transaction
hereunder, except for liability arising from his or her own willful
misfeasance, gross negligence or reckless disregard of his or her duties. The
Company hereby agrees to indemnify each member of the Committee for all costs
and expenses and, to the extent permitted by applicable law, any liability
incurred in connection with defending against, responding to, negotiating for
the settlement of or otherwise dealing with any claim, cause of action or
dispute of any kind arising in connection with any actions in administering
this Plan or in authorizing or denying authorization to any transaction
hereunder.

     3.2 Subject to the express terms and conditions set forth herein, the
Committee shall have the power from time to time to:

     
     (a)  determine those Eligible Individuals to whom Discretionary Options may
be granted under the Plan and the number of such Discretionary Options to be
granted and to prescribe the terms and conditions (which need not be identical)
of each such Discretionary Option, including the purchase price per Share
subject to each Discretionary Option, and make any amendment or modification to
any applicable Agreement consistent with the terms of the Plan;

     
     (b)  select those Eligible Individuals to whom Awards shall be granted
under the Plan and to determine the number of Stock Appreciation Rights,
Performance Awards, Shares of Restricted Stock and/or Dividend Equivalent
Rights to be granted pursuant to each Award, the terms and conditions (which
need not be identical) of each Award, including the restrictions or Performance
Objectives relating to Awards and the maximum value of any Award, and make any
amendment or modification to any Agreement consistent with the terms of the
Plan;

     
     (c)  accelerate a Discretionary Option or Award and to waive restrictive
conditions for a Discretionary Option or Award (including, without limitation,
any forfeiture conditions), in such circumstances as the Committee deems
appropriate, subject to any express limitations of the Plan, including, without
limitation, Section 16(b); provided, however, that nothing in this Section
3.2(c) shall be construed to limit the Committee’s authority under other
provisions of the Plan. In the case of any acceleration of a Discretionary
Option or Award after the attainment of the applicable Performance
Objective(s), the amount payable shall be discounted to its present value using
an interest rate equal to Moody’s Average Corporate Bond Yield for the month
preceding the month in which such acceleration occurs. This paragraph shall
not apply in respect of a UK Approved Option;

-8-

 

     
     (d)  construe and interpret the Plan and the Options and Awards granted
hereunder and to establish, amend and revoke rules and regulations for the
administration of the Plan, including, without limitation, correcting any
defect or supplying any omission, or reconciling any inconsistency in the Plan
or in any Agreement, in the manner and to the extent it shall deem necessary or
advisable so that the Plan complies with applicable law including Rule 16b-3
under the Exchange Act and the Code to the extent applicable, and otherwise to
make the Plan fully effective. All decisions and determinations by the
Committee in the exercise of this power shall be final, binding and conclusive
upon the Company, its Subsidiaries, the Optionees and Grantees, and all other
persons having any interest therein;

     
     (e)  determine the duration and purposes for leaves of absence which may be
granted to an Optionee or Grantee on an individual basis without constituting a
termination of employment or service for purposes of the Plan;

     
     (f)  exercise its sole discretion with respect to the powers and rights
granted to it as set forth in the Plan; and

     
     (g)  generally exercise such powers and to perform such acts as are deemed
necessary or advisable to promote the best interests of the Company with
respect to the Plan.

     4.     Stock Subject to the Plan.

     
     4.1 The maximum number of Shares that may be made the subject of Options
and Awards granted under the Plan is 1,212,277 Shares; provided, however, that
in the aggregate, not more than one-third of the number of allotted Shares may
be made the subject of Restricted Stock Awards under Section 10 of the Plan;
and provided, further, that the aggregate Fair Market Value of the Shares with
respect to which Incentive Stock Options granted under the Plan become
exercisable for the first time by an Optionee during any calendar year shall
not exceed $100,000. Upon a Change in Capitalization, the maximum number of
Shares referred to in the preceding sentence shall be adjusted in number and
kind pursuant to Section 13. The maximum number of Shares that may be the
subject of Options and Awards granted to an Eligible Individual in any one
calendar year period may not exceed 200,000 Shares. The maximum dollar amount
of cash or the Fair Market Value of Shares that any Eligible Individual may
receive in any calendar year in respect to Performance Units denominated in
dollars may not exceed $1,500,000. The Company shall reserve for the purposes
of the Plan, out of its authorized but unissued Shares or out of Shares held in
the Company’s treasury, or partly out of each, such number of Shares as shall
be determined by the Board.

     
     4.2 Upon the granting of an Option or an Award, the number of Shares
available under Section 4.1 for the granting of further Options and Awards
shall be reduced as follows:

          
     (a)  In connection with the granting of an Option or an Award (other than
the granting of a Performance Unit denominated in dollars), the number of
Shares shall be reduced by the number of Shares in respect of which the Option
or Award is granted or denominated provided, however, that if any Option is
exercised by tendering Shares, either actually or by attestation, to the
Company as full or partial payment of the purchase price, the maximum number of
Shares available under Section 4.1 shall be increased by the number of Shares
so tendered.

          
     (b)  In connection with the granting of a Performance Unit denominated in
dollars, the number of Shares shall be reduced by an amount equal to the
quotient of (i) the dollar amount in which the Performance Unit is denominated,
divided by (ii) the Fair Market Value of a Share on the date the Performance
Unit is granted.

-9-

 

     
     4.3 Whenever any outstanding Option or Award or portion thereof expires,
is canceled or is otherwise terminated for any reason without having been
exercised or payment having been made in respect of the entire Option or Award
(including any outstanding Options under any of the Former Plans), the Shares
allocable to the expired, canceled or otherwise terminated portion of the
Option or Award may again be the subject of Options or Awards granted
hereunder.

     
     4.4 In no event may more than 1,212,277 Shares be issued upon the
exercise of Incentive Stock Options granted under the Plan.

     5.     Option Grants for Eligible Individuals.

     
     5.1 Authority of Committee.

           
     (a)  Subject to the provisions of the Plan, the Committee shall have full
and final authority to select those Eligible Individuals who will receive
Discretionary Options, and the terms and conditions of the grant to such
Eligible Individuals shall be set forth in an Agreement. The terms and
conditions of UK Approved Options shall be set forth in a certificate executed
as a deed by the Company and UK Approved Options may only be granted to
Eligible Employees.

           
     (b)  Notwithstanding any provision of this Section 5, any Discretionary
Option granted under this Section 5 to an Eligible Individual who is a
Non-Employee Director shall be governed by the duration and termination
provisions set forth in Sections 6.4(a) — (e) of the Plan or such other
duration and termination provisions as determined by the Committee and set
forth in an Agreement.

     5.2 Purchase Price.

           
     (a)  The purchase price (which may be greater than, less than or equal to
the Fair Market Value on the Date of Grant) or the manner in which the purchase
price is to be determined for Shares under each Discretionary Option shall be
determined by the Committee and set forth in the Agreement; provided, however,
that the purchase price per Share under each Incentive Stock Option shall not
be less than 100% of the Fair Market Value of a Share on the Date of Grant
(110% in the case of an Incentive Stock Option granted to a Ten-Percent
Stockholder).

          
     (b)  The purchase price of a Share under a UK Approved Option shall be not
less than:

               
     (i)  its market value as determined by the Committee in accordance with the
provisions of Part VIII of the Taxation of Chargeable Gains Act 1992 of the
United Kingdom and approved prior to the grant of the related UK Approved
Option by the Shares Valuation Division of the UK Inland Revenue; or

     
     
     

     (ii)  its nominal amount or (when applicable) such price as from time to
time adjusted pursuant to the Plan.

     
     
     (c)  No UK Approved Option shall be granted under this Plan to an Eligible
Employee if the aggregate purchase price of the Shares comprised therein, when
added to the aggregate of the amounts for which shares of the Company may be
acquired under any subsisting UK Approved Options granted to him under the Plan
or any other scheme (not being a savings-related share option scheme) approved
under Schedule 9 to the Taxes Act and established by the Company or a
Subsidiary, would exceed, or further exceed, pounds sterling 30,000 or such
other limit as may apply from time to time under paragraph 28 of Schedule 9 to
the Taxes Act (the “Limit”). For the purposes of determining

-10-

 

whether an Option is subject to the Limit, Options which fell to be
treated under the provisions of Section 115 of the Finance Act 1996 of the
United Kingdom as unapproved options shall be treated as having been granted
under a scheme other than one which is approved under Schedule 9 to the Taxes
Act.

     
     5.3 Maximum Duration. Discretionary Options granted hereunder shall be
for such term as the Committee shall determine, provided that an Incentive
Stock Option shall not be exercisable after the expiration of ten (10) years
from the date it is granted (five (5) years in the case of an Incentive Stock
Option granted to a Ten-Percent Stockholder) and a Nonqualified Stock Option
shall not be exercisable after the expiration of ten (10) years from the Date
of Grant. The Committee may, subsequent to the granting of any Discretionary
Option (other than a UK Approved Option), extend the term thereof, but in no
event shall the term as so extended exceed the maximum term provided for in the
preceding sentence.

     
     5.4 Exercisability. Subject to Sections 5.5 and 7.3, each Discretionary
Option shall become exercisable in such installments (which need not be equal)
and at such times as may be designated by the Committee and set forth in the
Agreement. To the extent not exercised, installments shall accumulate and be
exercisable, in whole or in part, at any time after becoming exercisable, but
not later than the date the Discretionary Option expires. No UK Approved
Option shall become exercisable in any circumstances by an Optionee who is at
the time of such intended exercise an Excluded Person.

     
     5.5 Termination. Except as provided in Sections 5.1(b) and 12, and unless
otherwise provided by the Committee, in its sole discretion, in the applicable
Agreement, the following provisions shall apply to Discretionary Options upon a
Termination of Employment:

     
     
     
     (a)  Subject to Section 5.3 and except as provided in Section 5.5(d),
unless otherwise determined by the Committee at the time of grant (and set
forth in the applicable Agreement) or at a later date, except in the case of
Disability, retirement on or after the Optionee’s Normal Retirement Date and
death as provided in Sections 5.5(b) and 5.5(c) below, if an Optionee of a
Discretionary Option has a Termination of Employment with the Company or a
Subsidiary, any unexercised Discretionary Option held by such Optionee shall
expire ninety (90) days after the Optionee has a Termination of Employment
for any reason other than a termination for Cause, and such Discretionary
Option may only be exercised by the Optionee or his or her Beneficiary to the
extent that the Discretionary Option or a portion thereof was exercisable on
the date of Termination of Employment; provided, however, that no
Discretionary Option may be exercised after the expiration date specified for
the particular Discretionary Option in the Discretionary Option grant. If
the Optionee’s Termination of Employment arises as a result of a termination
for Cause, then, unless the Committee determines otherwise at the time of the
Termination of Employment, any unexercised Options held by such Optionee
shall terminate and expire concurrently with the Optionee’s Termination of
Employment.

     
     
     
     (b)  Subject to Section 5.3, unless otherwise determined by the Committee
at the time of grant (and set forth in the applicable Agreement) or at a
later date, if an Optionee becomes disabled within the meaning of Section
2.17 hereof or retires on or after the Optionee’s Normal Retirement Date, any
unexercised Discretionary Option held by such disabled or retired Optionee
shall expire one (1) year after the Disability Date or date of Termination of
Employment by reason of retirement, as the case may be, and such Option may
only be exercised by the Optionee or his or her Beneficiary to the extent
that the Discretionary Option or a portion thereof was exercisable on the
Disability Date or the date of Termination of Employment by reason of
retirement, as the case may

-11-

 

be; provided, however, no Discretionary Option may be exercised after
the expiration date specified for the particular Discretionary Option in the
Discretionary Option grant.

     
     
     
     (c)  Subject to Section 5.3, unless otherwise determined by the Committee
at the time of grant (and set forth in the applicable Agreement) or at a later
date, if an Optionee dies while still employed by the Company, the Options
which the Optionee was entitled to exercise on the date of the Optionee’s death
may be exercised at any time after the Optionee’s death by the Optionee’s
Beneficiary; provided, however, that no Option may be exercised after the
earlier of: (i) one (1) year after the Optionee’s death or (ii) the expiration
date specified for the particular Option in the Option Agreement. If an
Optionee dies after his or her Termination of Employment, then the Options
which the Optionee was entitled to exercise on the date of the Optionee’s death
may be exercised by his or her Beneficiary within the period specified in
Sections 5.5(a) or 5.5(b), as the case may be.

     
     
     
     (d)  Subject to Section 5.3, upon an Optionee’s Termination of Employment
following a Change in Control, each Option held by the Optionee that was
exercisable as of the date of such Termination of Employment shall remain
exercisable for a period ending not before the earlier of (A) the first
anniversary of the Termination of Employment or (B) the expiration of the
stated term of the Option.

     
     5.6 Modification. No modification of a Discretionary Option shall
adversely alter or impair any rights or obligations under the Discretionary
Option without the Optionee’s consent.

     6.     Automatic Option Grants for Non-Employee Directors, Committee
Chairpersons and Scientific Advisory Board Members.

     
     6.1 Grant. Automatic Options shall be granted (i) to each Non-Employee
Director who becomes a member of the Board after April 24, 1997 upon election
or appointment, (ii) to each Non-Employee Director who is a member of the
Board, (iii) to each Non-Employee Director who is the chairperson of a
committee of the Board, (iv) to each member of the Scientific Advisory Board
who becomes a member of the Scientific Advisory Board after April 24, 1997 upon
election or appointment and (v) to each member of the Scientific Advisory
Board, as follows:

     
     
     
     (a)  Initial Grant. Each Non-Employee Director who becomes a Director
after April 24, 1997 shall, upon becoming a Director, be granted an Automatic
Option in respect of 2,000 Shares and each member of the Scientific Advisory
Board who becomes a member of the Scientific Advisory Board after April 24,
1997 shall, upon becoming a member of the Scientific Advisory Board, be granted
an Automatic Option in respect of 1,000 Shares.

     
     
     
     (b)  Annual Grants to Non-Employee Directors and Members of the Scientific
Advisory Board. Each Non-Employee Director shall be granted an Automatic
Option in respect of 5,000 Shares annually on the first Business Day on or
after January 1 of each calendar year that the Plan is in effect provided that
the Non-Employee Director is a Director on such date and each member of the
Scientific Advisory Board shall be granted an Automatic Option in respect of
500 Shares annually on the first Business Day on or after January 1 of each
calendar year that the Plan is in effect provided that the member of the
Scientific Advisory Board is a member on such date; provided, however, that a
Director or member of the Scientific Advisory Board shall not be entitled to
receive an annual grant pursuant to this Section 6.1(b) for the calendar year
in which such Director or member of the Scientific Advisory Board is first
elected or appointed to the Board or to the Scientific Advisory Board, as the
case may be.

-12-

 

     
     
     

     (c)  Annual Grants to Committee Chairpersons. Each Non-Employee Director
who, in accordance with the Bylaws of the Company, serves as a chairperson of
any committee of the Board as of the first Business Day on or after January 1
of each calendar year that the Plan is in effect shall, on such date, be
granted an Automatic Option in respect of 500 Shares.

     
     
     
     (d)  Terms and Conditions. All Automatic Options granted pursuant to this
Section 6 shall be evidenced by an Agreement containing such other terms and
conditions not inconsistent with the provisions of this Plan as determined by
the Board; provided, however, that such terms shall not vary the price, amount
or timing of the Automatic Options provided under this Section 6, including
provisions dealing with vesting, forfeiture and termination of such Automatic
Options.

     6.2 Purchase Price. The purchase price for Shares under each Automatic
Option shall be equal to 100% of the Fair Market Value of such Shares on the
Date of Grant.

     6.3 Vesting. Subject to Sections 6.4 and 7.3, each Automatic Option
granted after May 21, 1998 shall vest in one-third increments on each of the
first three anniversaries of the Grant Date; provided, however, that the
Optionee continues to serve as a Director or member of the Scientific Advisory
Board (as the case may be) as of such date. If an Optionee ceases to serve as
a Director or member of the Scientific Advisory Board (as the case may be) for
any reason, the Optionee shall have no rights with respect to any Automatic
Option (or portion thereof) which has not then vested pursuant to the preceding
sentence and the Optionee shall automatically forfeit any Automatic Option (or
portion thereof) which remains unvested.

     6.4 Duration. Each Automatic Option (and, with respect to Non-Employee
Directors, each Discretionary Option) shall terminate on the date which is the
tenth anniversary of the Date of Grant, unless terminated earlier as follows:

     
     
     (a)  If an Optionee’s service as a Director or member of the Scientific
Advisory Board terminates for any reason other than Disability, death or Cause,
the Optionee may for a period of three (3) months after such termination
exercise his or her Option to the extent, and only to the extent, that such
Option or portion thereof was vested and exercisable as of the date the
Optionee’s service as a Director or member of the Scientific Advisory Board
terminated, after which time the Option shall automatically terminate in full.

          
     (b)  If an Optionee’s service as a Director or member of the Scientific
Advisory Board terminates by reason of the Optionee’s resignation or removal
due to Disability, the Optionee may, for a period of one (1) year after such
termination, exercise his or her Option to the extent, and only to the extent,
that such Option or portion thereof was vested and exercisable, as of the date
the Optionee’s service as Director or member of the Scientific Advisory Board
terminated, after which time the Option shall automatically terminate in full.

     
     
     (c)  If an Optionee’s service as a Director or member of the Scientific
Advisory Board terminates for Cause, the Option granted to the Optionee
hereunder shall immediately terminate in full and no rights thereunder may be
exercised.

     
     
     (d)  If an Optionee dies while a Director or member of the Scientific
Advisory Board or within three (3) months after termination of service as a
Director or member of the Scientific Advisory Board as described in clause (a)
of this Section 6.4 or within twelve (12) months after termination of service
as a Director or member of the Scientific Advisory Board as described in clause
(b) of this Section 6.4, the Option granted to the Optionee may be exercised at
any time within twelve (12) months after the Optionee’s death by the person or
persons to whom such rights under the

-13-

 

Option shall pass by will, or by the laws of descent or distribution,
after which time the Option shall terminate in full; provided, however, that an
Option may be exercised to the extent, and only to the extent, that the Option
or portion thereof was exercisable on the date of death or earlier termination
of the Optionee’s services as a Director or member of the Scientific Advisory
Board.

     
     
     (e)  In the event an Optionee’s service as a Director or member of the
Scientific Advisory Board of the Company is terminated by the Company following
a Change in Control, each Option held by the Optionee that was exercisable as
of the date of termination of the Optionee’s service shall remain exercisable
for a period ending not before the earlier of (i) the first anniversary of the
termination of the Optionee’s service as a Director or member of the Scientific
Advisory Board or (ii) the expiration of the stated term of the Option.

     7.     Terms
and Conditions Applicable to All Options.

     
     7.1 Method of Exercise.

     
     
     (a)  The exercise of an Option shall be made only by a written notice
delivered in person or by mail to the Secretary of the Company at the Company’s
principal executive office, specifying the number of Shares to be purchased and
accompanied by payment therefor and otherwise in accordance with the Agreement
pursuant to which the Option was granted; provided however, that Options may
not be exercised by an Optionee for six (6) months following a hardship
distribution to the Optionee, to the extent such exercise is prohibited under
Treasury Regulation §1.401(k)-1(d)(2)(iv)(B)(4). The purchase price for any
Shares purchased pursuant to the exercise of an Option shall be paid, as
determined by the Committee in its sole discretion, in either of the following
forms (or any combination thereof) (a) cash or (b) the transfer to the Company
of Shares that have been held by the Optionee for at least six (6) months (or
such lesser period as may be permitted by the Committee) prior to the exercise
of the Option and that have a Fair Market Value equal in amount to the purchase
price, such transfer to be upon such terms and conditions as determined by the
Committee. In addition, both Discretionary Options and Automatic Options may
be exercised through a registered broker-dealer pursuant to such cashless
exercise procedures (other than Share withholding) which are, from time to
time, deemed acceptable by the Committee. Any Shares transferred to the
Company (or withheld upon exercise) as payment of the purchase price under an
Option shall be valued at their Fair Market Value on the day preceding the date
of exercise of such Option. The Optionee shall deliver the Agreement
evidencing the Option to the Secretary of the Company who shall endorse thereon
a notation of such exercise and return such Agreement to the Optionee. No
fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an
Option and the number of Shares that may be purchased upon exercise shall be
rounded to the nearest number of whole Shares. Notwithstanding anything to the
contrary contained herein, payment on exercise of UK Approved Options shall be
made only in cash.

     
     
     (b)  If the Fair Market Value of the Shares with respect to which the
Option is being exercised exceeds the exercise price of such Option, an
Optionee may, instead of exercising an Option as provided in Section 7.1(a),
request that the Committee authorize payment to the Optionee of the difference
between the Fair Market Value of part or all of the Shares which are the
subject of the Option and the exercise price of the Option, such difference to
be determined as of the date the Committee receives the request from the
Optionee. The Committee, in its sole discretion, may grant or deny such a
request from an Optionee with respect to part or all of the Shares as to which
the Option is then exercisable and, to the extent granted, shall direct the
Company to make the payment to the Optionee either in cash or in Shares or in
any combination thereof; provided, however, that payment in Shares shall be
made based upon the Fair Market Value of Shares as of the date the Committee
received the request from the Optionee. An Option shall be deemed to have been
exercised and shall be canceled

-14-

 

to the extent that the Committee grants a request pursuant to this Section
7.1(b). The provisions of this paragraph shall not apply to holders of UK
Approved Options.

     
     

     7.2 Rights of Optionees. No Optionee shall be deemed for any purpose to
be the owner of any Shares subject to any Option unless and until (a) the
Option shall have been exercised pursuant to the terms thereof, (b) the Company
shall have issued and delivered Shares to the Optionee, and (c) the Optionee’s
name shall have been entered as a stockholder of record on the books of the
Company. Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such Shares, subject to such terms and
conditions as may be set forth in the applicable Agreement. The preceding
sentence shall not apply to any Optionee holding a UK Approved Option. If
under the terms of a resolution passed or an announcement made by the Company
prior to the date of exercise of a UK Approved Option, a dividend is to be or
is proposed to be paid to holders of Shares by reference to a record date after
such date of exercise, any Shares to be issued upon such exercise of a UK
Approved Option will not rank for such dividend. Subject as aforesaid, the
Shares so to be issued shall be identical and rank pari passu in all respects
with the fully paid Shares then in issue.

     
     
     7.3 Effect of Change in Control. In the event of a Change in Control, all
Options outstanding on the date of such Change in Control shall become
immediately and fully exercisable. In addition, to the extent set forth in an
Agreement evidencing the grant of a Discretionary Option, an Optionee will be
permitted to surrender to the Company for cancellation within sixty (60) days
after such Change in Control any Discretionary Option or portion of a
Discretionary Option to the extent not yet exercised and the Optionee will be
entitled to receive a cash payment in an amount equal to the excess, if any, of
(x) (A) in the case of a Nonqualified Stock Option, the greater of (1) the Fair
Market Value, on the date preceding the date of surrender, of the Shares
subject to the Discretionary Option or portion thereof surrendered or (2) the
Adjusted Fair Market Value of the Shares subject to the Discretionary Option or
portion thereof surrendered or (B) in the case of an Incentive Stock Option,
the Fair Market Value, on the date preceding the date of surrender, of the
Shares subject to the Discretionary Option or portion thereof surrendered, over
(y) the aggregate purchase price for such Shares under the Discretionary Option
or portion thereof surrendered.

     8.     Stock
Appreciation Rights. The Committee may in its sole discretion,
either alone or in connection with the grant of a Discretionary Option, grant
Stock Appreciation Rights in accordance with the Plan, the terms and
conditions of which shall be set forth in an Agreement. If granted in
connection with an Option, a Stock Appreciation Right shall cover the same
Shares covered by the Option (or such lesser number of Shares as the
Committee may determine) and shall, except as provided in this Section 8, be
subject to the same terms and conditions as the related Option.

     
     
     8.1 Time of Grant. A Stock Appreciation Right may be granted (i) at any
time if unrelated to an Option, or (ii) if related to an Option, either at the
time of grant, or at any time thereafter during the term of the Option.

          

     8.2 Stock Appreciation Right Related
to an Option.

     
     
     

     (a)  Exercise. Subject to Section 8.8, a Stock Appreciation Right granted
in connection with an Option shall be exercisable at such time or times and
only to the extent that the related Options are exercisable (including, without
limitation, exercisability upon Termination of Employment), and will not be
transferable except to the extent the related Option may be transferable. A
Stock Appreciation Right granted in connection with an Incentive Stock Option
shall be exercisable only if the Fair Market Value of a Share on the date of
exercise exceeds the purchase price specified in the related Incentive Stock
Option Agreement.

-15-

 

     
     
     

     (b)  Treatment of Related Options and Stock Appreciation Rights Upon
Exercise. Upon the exercise of a Stock Appreciation Right granted in
connection with an Option, the Option shall be canceled to the extent of the
number of Shares as to which the Stock Appreciation Right is exercised, and
upon the exercise of an Option granted in connection with a Stock Appreciation
Right, the Stock Appreciation Right shall be canceled to the extent of the
number of Shares as to which the Option is exercised or surrendered.

     8.3 Stock
Appreciation Right Unrelated to an Option.

     
     
     

     (a)  Terms. Stock Appreciation Rights unrelated to Options shall contain
such terms and conditions as to exercisability (subject to Sections 8.3(b) and
8.8), vesting and duration as the Committee shall determine, but in no event
shall they have a term of greater than ten (10) years.

     
     
     

     (b)  Termination. Except as provided in Section 8.8 and subject to Section
8.3(a), and unless otherwise provided by the Committee, in its sole discretion,
in the applicable Agreement, upon a Grantee’s Termination of Employment or, in
the case of a Non-Employee Director, termination of service as a director, a
Stock Appreciation Right shall be exercisable by the Grantee to the same extent
that a Discretionary Option would be exercisable by an Optionee upon the
Optionee’s Termination of Employment under the provisions of Sections 5.5(a)
through (d) (or, as applicable for Non-Employee Directors, Section 6.4);
provided, however, no Stock Appreciation Right may be exercised after the
expiration date specified for the particular Stock Appreciation Right in the
applicable Agreement.

     8.4 Amount
Payable. Upon exercise of a Stock Appreciation Right, the
Grantee shall be entitled to receive an amount determined by multiplying (x)
the excess of the Fair Market Value of a Share on the date preceding the date
of exercise of such Stock Appreciation Right over (A) in the case of a Stock
Appreciation Right related to an Option, the per Share purchase price under the
related option or (B) in the case of a Stock Appreciation Right unrelated to an
Option, the Fair Market Value of a Share on the date the Stock Appreciation
Right was granted, by (y) the number of Shares as to which the Stock
Appreciation Right is being exercised. Notwithstanding the foregoing, the
Committee may limit in any manner the amount payable with respect to any Stock
Appreciation Right by including such a limit in the Agreement evidencing the
Stock Appreciation Right at the time it is granted.

     8.5 Method of
Exercise. Stock Appreciation Rights shall be exercised by a
Grantee only by a written notice delivered in person or by mail to the
Secretary of the Company at the Company’s principal executive office,
specifying the number of Shares with respect to which the Stock Appreciation
Right is being exercised. If requested by the Committee, the Grantee shall
deliver the Agreement evidencing the Stock Appreciation Right being exercised
and the Agreement evidencing any related Option to the Secretary of the Company
who shall endorse thereon a notation of such exercise and return such Agreement
to the Grantee.

     8.6 Form of
Payment. Payment of the amount determined under Section 8.4
may be made in the sole discretion of the Committee solely in whole Shares in a
number determined at their Fair Market Value on the date preceding the date of
exercise of the Stock Appreciation Right, or solely in cash, or in a
combination of cash and Shares. If the Committee decides to make full payment
in Shares and the amount payable results in a fractional Share, payment for the
fractional Share will be made in cash.

     8.7
Modification. No modification of an Award shall adversely alter or
impair any rights or obligations under the Agreement without the Grantee’s
consent.

-16-

 

     8.8 Effect of
Change in Control.
 In the event of a Change in Control, all
Stock Appreciation Rights shall become immediately and fully exercisable. In
addition, to the extent set forth in an Agreement evidencing the grant of a
Stock Appreciation Right (but not with respect to any Stock Appreciation Right
granted in connection with an Incentive Stock Option), a Grantee will be
permitted to surrender to the Company for cancellation within sixty (60) days
after such Change in Control any Stock Appreciation Right or portion of a Stock
Appreciation Right to the extent not yet exercised and the Grantee will be
entitled to receive a payment from the Company in cash or Shares, in either
case, with a value equal to the excess, if any, of (A) the Adjusted Fair Market
Value, on the date preceding the date of exercise, of the Shares over (B) the
aggregate Fair Market Value, on the date the Stock Appreciation was granted, of
the Shares subject to the Stock Appreciation Right or portion thereof
exercised.

     9.     Dividend
Equivalent Rights. Dividend Equivalent Rights may be granted
to Eligible Individuals in tandem with an Option or Award. The terms and
conditions (including, without limitation, terms and conditions relating to a
Change in Control) applicable to each Dividend Equivalent Right shall be
specified in the Agreement under which the Dividend Equivalent Right is
granted. Amounts payable in respect of Dividend Equivalent Rights may be
payable currently or deferred until the lapsing of restrictions on such
Dividend Equivalent Rights or until the vesting, exercise, payment, settlement
or other lapse of restrictions on the Option or Award to which the Dividend
Equivalent Rights relate. In the event that the amount payable in respect of
Dividend Equivalent Rights are to be deferred, the Committee shall determine
whether such amounts are to be held in cash or reinvested in Shares or deemed
(notionally) to be reinvested in Shares. If amounts payable in respect of
Dividend Equivalent Rights are to be held in cash, there may be credited at the
end of each year (or portion thereof) interest on the amount of the account at
the beginning of the year at a rate per annum as the Committee, in its sole
discretion, may determine. Dividend Equivalent Rights may be settled in cash
or Shares or a combination thereof, in a single installment or multiple
installments. With respect to Dividend Equivalent Rights granted in tandem with
an Option, the Agreement may provide that the Optionee may elect to have
amounts payable in respect of such Dividend Equivalent Rights applied against
the exercise price of such Option. To the extent necessary for any Dividend
Equivalent Right intended to qualify as performance-based compensation under
Section 162(m) of the Code to so qualify, the terms and conditions of the
Dividend Equivalent Right shall be such that payment of the Dividend Equivalent
Right is contingent upon the attainment of specified Performance Objectives
within the Performance Cycle, as provided for in Section 11, and such Dividend
Equivalent Right shall be treated as a Performance Award for purposes of
Sections 11 and 16(b).

     10.     Restricted
Stock.

     
     

     10.1 Grant. The Committee may grant Awards to Eligible Individuals of
Restricted Stock, which shall be evidenced by an Agreement between the Company
and the Grantee. Each Agreement shall contain such restrictions, terms and
conditions as the Committee may, in its sole discretion, determine and (without
limiting the generality of the foregoing) such Agreements may require that an
appropriate legend be placed on Share certificates. Awards of Restricted Stock
shall be subject to the terms and provisions set forth below in this Section
10.

     

     

     10.2 Rights of Grantee. Shares of Restricted Stock granted pursuant to an
Award hereunder shall be issued in the name of the Grantee as soon as
reasonably practicable after the Date of Grant provided that the Grantee has
executed an Agreement evidencing the Award, the appropriate blank stock powers
and, in the sole discretion of the Committee, an escrow agreement and any other
documents which the Committee may require as a condition to the issuance of
such Shares. If a Grantee shall fail to execute the Agreement evidencing a
Restricted Stock Award, the appropriate blank stock powers and, in the sole
discretion of the Committee, an escrow agreement and any other documents which
the

-17-

 

Committee may require within the time period prescribed by the Committee
at the time the Award is granted, the Award shall be null and void. At the
sole discretion of the Committee, Shares issued in connection with a Restricted
Stock Award shall be deposited together with the stock powers with an escrow
agent (which may be the Company) designated by the Committee. Unless the
Committee determines otherwise and as set forth in the Agreement, upon delivery
of the Shares to the escrow agent, the Grantee shall have all of the rights of
a stockholder with respect to such Shares, including the right to vote the
Shares and to receive all dividends or other distributions paid or made with
respect to the Shares.

     
     
     10.3 Non-transferability. Until all restrictions upon the Shares of
Restricted Stock awarded to a Grantee shall have lapsed in the manner set forth
in Section 10.4, such Shares shall not be sold, transferred or otherwise
disposed of and shall not be pledged or otherwise hypothecated, nor shall they
be delivered to the Grantee.

     
     
     10.4 Lapse of Restrictions.

     
     
     
     

     (a)  Generally. Subject to Section 10.4(b), restrictions upon Shares of
Restricted Stock awarded hereunder shall lapse at such time or times and on
such terms and conditions as the Committee may determine. The Agreement
evidencing the Award shall set forth any such restrictions.

     
     
     
     

     (b)  Effect of Change in
Control. Unless the Committee shall determine
otherwise at the time of the grant of an Award of Restricted Stock, the
restrictions upon Shares of Restricted Stock shall lapse upon a Change in
Control. The Agreement evidencing the Award shall set forth any such
provisions.

     10.5 Terms of Restricted Stock.

     
     
     
     
     (a)  Forfeiture of Restricted
Stock. Subject to Sections 10.4(b) and
10.5(b), all Restricted Stock shall be forfeited and returned to the Company
and all rights of the Grantee with respect to such Restricted Stock shall
terminate unless the Grantee continues in the service of the Company as an
employee or director until the expiration of the forfeiture period for such
Restricted Stock and satisfies any and all other conditions set forth in the
Agreement. The Committee, in its sole discretion, shall determine the
forfeiture period (which may, but need not, lapse in installments) and any
other terms and conditions applicable with respect to any Restricted Stock
Award.

     
     
     
     
     (b)  Waiver of Forfeiture
Period. Notwithstanding anything contained in
this Section 10 to the contrary, the Committee may, in its sole discretion,
waive the forfeiture period and any other conditions set forth in any Agreement
under appropriate circumstances (including, without limitation, the death,
Disability or retirement of the Grantee or a material change in circumstances
arising after the Date of Grant) and subject to such terms and conditions
(including, without limitation, forfeiture of a proportionate number of the
Restricted Stock) as the Committee shall deem appropriate, provided that the
Grantee shall at that time have completed at least one (1) year of employment
or service after the Date of Grant.

     10.6 Modification
or Substitution. Subject to the terms of the Plan,
including, without limitation, Section 16(b), the Committee may modify
outstanding Awards of Restricted Stock or accept the surrender of outstanding
Shares of Restricted Stock (to the extent the restrictions on such Shares have
not yet lapsed) and grant new Awards in substitution for them. Notwithstanding
the foregoing, no modification of an Award shall adversely alter or impair any
rights or obligations under the Agreement without the Grantee’s consent.

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             10.7    Treatment
of Dividends. At the time an Award of Shares of Restricted
Stock is granted, the Committee may, in its sole discretion, determine that the
payment to the Grantee of dividends, or a specified portion thereof, declared
or paid on such Shares by the Company shall be (a) deferred until the lapsing
of the restrictions imposed upon such Shares and (b) held by the Company for
the account of the Grantee until such time. In the event that dividends are to
be deferred, the Committee shall determine whether such dividends are to be
reinvested in Shares (which shall be held as additional Shares of Restricted
Stock) or held in cash. If deferred dividends are to be held in cash, there
may be credited at the end of each year (or portion thereof) interest on the
amount of the account at the beginning of the year at a rate per annum as the
Committee, in its sole discretion, may determine. Payment of deferred
dividends in respect of Shares of Restricted Stock (whether held in cash or as
additional Shares of Restricted Stock), together with interest accrued thereon,
if any, shall be made upon the lapsing of restrictions imposed on the Shares in
respect of which the deferred dividends were paid, and any dividends deferred
(together with any interest accrued thereon) in respect of any Shares of
Restricted Stock shall be forfeited upon the forfeiture of such Shares.

             10.8    Delivery
of Shares. Upon the lapse of the restrictions on Shares of
Restricted Stock, the Committee shall cause a stock certificate to be delivered
to the Grantee with respect to such Shares, free of all restrictions hereunder.

     11.      Performance
Awards.

             11.1    (a)    Performance
Objectives. Performance Objectives for Performance
Awards may be expressed in terms of (i) earnings per Share, (ii) Share price,
(iii) pre-tax profits, (iv) net earnings, (v) return on equity or assets, (vi)
revenues, (vii) EBITDA, (viii) market share or market penetration or (ix) any
combination of the foregoing, and may be determined before or after accounting
changes, special charges, foreign currency effects, acquisitions, divestitures
or other extraordinary events. Performance Objectives may be in respect of the
performance of the Company and its Subsidiaries (which may be on a consolidated
basis), a Subsidiary or a Division. Performance Objectives may be absolute or
relative and may be expressed in terms of a progression within a specified
range. The Performance Objectives with respect to a Performance Cycle shall be
established in writing by the Committee by the earlier of (i) the date on which
a quarter of the Performance Cycle has elapsed or (ii) the date which is ninety
(90) days after the commencement of the Performance Cycle, and in any event,
while the performance relating to the Performance Objectives remains
substantially uncertain.

                         (b)    Determination
of Performance. Prior to the vesting, payment,
settlement or lapsing of any restrictions with respect to any Performance Award
made to a Grantee who is subject to Section 162(m) of the Code, the Committee
shall certify in writing that the applicable Performance Objectives have been
satisfied.

             11.2    Performance
Units. The Committee, in its sole discretion, may grant
Awards of Performance Units to Eligible Individuals (with the exception of
Non-Employee Directors), the terms and conditions of which shall be set forth
in an Agreement between the Company and the Grantee. Performance Units shall
be denominated in Shares or dollars and, contingent upon the attainment of
specified Performance Objectives within the Performance Cycle, represent the
right to receive payment as provided in Section 11.2(b) depending on the level
of Performance Objective attainment. Each Agreement shall specify the number
of Performance Units to which it relates, the Performance Objectives which must
be satisfied in order for the Performance Units to vest and the Performance
Cycle within which such Performance Objectives must be satisfied.

-19-

 

                         (a)    Vesting
and Forfeiture. Subject to Sections 11.1(b) and 11.4, a
Grantee shall become vested with respect to the Performance Units to the extent
that the Performance Objectives set forth in the Agreement are satisfied for
the Performance Cycle.

                         (b)    Payment
of Awards. Payment to Grantees in respect of vested
Performance Units shall be made as soon as practicable after the last day of
the Performance Cycle to which such Award relates unless the Agreement
evidencing the Award provides for the deferral of payment, in which event the
terms and conditions of the deferral shall be set forth in the Agreement.
Subject to Section 11.4, such payments may be made entirely in Shares valued at
their Fair Market Value as of the last day of the applicable Performance Cycle
or such other date specified by the Committee, entirely in cash, or in such
combination of Shares and cash as the Committee in its sole discretion shall
determine at any time prior to such payment.

             11.3    Performance
Shares. The Committee, in its sole discretion, may grant
Awards of Performance Shares to Eligible Individuals (with the exception of
Non-Employee Directors), the terms and conditions of which shall be set forth
in an Agreement between the Company and the Grantee. Each Agreement may
require that an appropriate legend be placed on Share certificates. Awards of
Performance Shares shall be subject to the following terms and provisions:

                         (a)    Rights
of Grantee. The Committee shall provide at the time an Award
of Performance Shares is made the time or times at which the actual Shares
represented by such Award shall be issued in the name of the Grantee; provided,
however, that no Performance Shares shall be issued until the Grantee has
executed an Agreement evidencing the Award, the appropriate blank stock powers
and, in the sole discretion of the Committee, an escrow agreement and any other
documents which the Committee may require as a condition to the issuance of
such Performance Shares. If a Grantee shall fail to execute the Agreement
evidencing an Award of Performance Shares, the appropriate blank stock powers
and, in the sole discretion of the Committee, an escrow agreement and any other
documents which the Committee may require within the time period prescribed by
the Committee at the time the Award is granted, the Award shall be null and
void. At the sole discretion of the Committee, Shares issued in connection
with an Award of Performance Shares shall be deposited together with the stock
powers with an escrow agent (which may be the Company) designated by the
Committee. Except as restricted by the terms of the Agreement, upon delivery
of the Shares to the escrow agent, the Grantee shall have, in the sole
discretion of the Committee, all of the rights of a stockholder with respect to
such Shares, including the right to vote the Shares and to receive all
dividends or other distributions paid or made with respect to the Shares.

                         (b)    Non-transferability. Until any restrictions upon the Performance
Shares awarded to a Grantee shall have lapsed in the manner set forth in
Sections 11.3(c) or 11.4, such Performance Shares shall not be sold,
transferred or otherwise disposed of and shall not be pledged or otherwise
hypothecated, nor shall they be delivered to the Grantee. The Committee may
also impose such other restrictions and conditions on the Performance Shares,
if any, as it deems appropriate.

                         (c)    Lapse
of Restrictions. Subject to Sections 11.1(b) and 11.4,
restrictions upon Performance Shares awarded hereunder shall lapse and such
Performance Shares shall become vested at such time or times and on such terms,
conditions and satisfaction of Performance Objectives as the Committee may, in
its sole discretion, determine at the time an Award is granted.

                         (d)    Treatment
of Dividends. At the time the Award of Performance Shares
is granted, the Committee may, in its sole discretion, determine that the
payment to the Grantee of dividends, or a specified portion thereof, declared
or paid on actual Shares represented by such Award which have been issued by
the Company to the Grantee shall be (i) deferred until the lapsing of the

-20-

 

restrictions imposed upon such Performance Shares and (ii) held by the
Company for the account of the Grantee until such time. In the event that
dividends are to be deferred, the Committee shall determine whether such
dividends are to be reinvested in Shares (which shall be held as additional
Performance Shares) or held in cash. If deferred dividends are to be held in
cash, there may be credited at the end of each year (or portion thereof)
interest on the amount of the account at the beginning of the year at a rate
per annum as the Committee, in its sole discretion, may determine. Payment of
deferred dividends in respect of Performance Shares (whether held in cash or in
additional Performance Shares), together with interest accrued thereon, if any,
shall be made upon the lapsing of restrictions imposed on the Performance
Shares in respect of which the deferred dividends were paid, and any dividends
deferred (together with any interest accrued thereon) in respect of any
Performance Shares shall be forfeited upon the forfeiture of such Performance
Shares.

                         (e)    Delivery of Shares. Upon the lapse of the restrictions on Performance
Shares awarded the Committee shall cause a stock certificate to be delivered to
the Grantee, free of all restrictions hereunder.

             11.4    Effect
of Change in Control. In the event of a Change in Control:

                         (a)    With respect to Performance Units, unless otherwise determined by the
Committee, the Grantee shall (i) become vested in all Performance Units and
(ii) be entitled to receive in respect of all Performance Units which become
vested as a result of a Change in Control a cash payment within ten (10)
Business Days after such Change in Control in an amount as determined by the
Committee at the time of the Award of such Performance Unit and as set forth in
the Agreement.

                         (b)    With respect to Performance Shares, unless otherwise determined by the
Committee, restrictions shall lapse immediately on all Performance Shares.

                         (c)    The Agreements evidencing Performance Shares and Performance Units
shall provide for the treatment of such Awards (or portions thereof) which do
not become vested as the result of a Change in Control, including, without
limitation, provisions for the adjustment of applicable Performance Objectives.

             11.5    Termination. Except as provided in Section 12, and unless otherwise
provided by the Committee, in its sole discretion, in the applicable Agreement,
the following provisions shall apply to Performance Awards upon a Termination
of Employment:

                         (a)    Termination
of Employment. Except as provided in Sections 11.5(b)
and (d), in the case of a Grantee’s Termination of Employment, prior to the end
of a Performance Cycle, the Grantee will not be entitled to any Performance
Awards, and any Performance Shares shall be forfeited.

                         (b)    Disability,
Retirement or Death. Unless otherwise provided by the
Committee, in its sole discretion, in the Agreement, if a Grantee’s Disability
Date or Termination of Employment by reason of retirement on or after the
Grantee’s Normal Retirement Date or death occurs following at least twelve
months of participation in any Performance Cycle, but prior to the end of a
Performance Cycle, the Grantee or such Grantee’s Beneficiary, as the case may
be, shall be entitled to receive a pro-rata share of his or her Performance
Award as determined under Subsection (c).

-21-

 

                         (c)    Pro-Rata
Payment.

                                             (i)    Performance
Units. With respect to Performance Units, the amount of
any payment made to a Grantee (or Beneficiary) under circumstances described in
Section 11.5(b) will be the amount determined by multiplying the amount of the
Performance Units payable in Shares or dollars which would have been earned,
determined at the end of the Performance Cycle, had such employment not been
terminated, by a fraction, the numerator of which is the number of whole months
such Grantee was employed during the Performance Cycle, and the denominator of
which is the total number of months of the Performance Cycle. Any such payment
shall be made as soon as practicable after the end of the respective
Performance Cycle, and shall relate to attainment of Performance Objectives
over the entire Performance Cycle.

                                             (ii)    Performance
Shares. With respect to Performance Shares, the amount
of Performance Shares held by a Grantee (or Beneficiary) with respect to which
restrictions shall lapse under circumstances described in Section 11.5(b) will
be the amount determined by multiplying the amount of the Performance Shares
with respect to which restrictions would have lapsed, determined at the end of
the Performance Cycle, had such employment not been terminated, by a fraction,
the numerator of which is the number of whole months such Grantee was employed
during the Performance Cycle, and the denominator of which is the total number
of months of the Performance Cycle. The Committee shall determine the amount
of Performance Shares with respect to which restrictions shall lapse under this
Section 11.5(c)(ii) as soon as practicable after the end of the respective
Performance Cycle, and such determination shall relate to attainment of
Performance Objectives over the entire Performance Cycle. At that time, all
Performance Shares relating to that Performance Cycle with respect to which
restrictions shall not lapse shall be forfeited.

                         (d)    Other
Events. Notwithstanding anything to the contrary in this
Section 11, the Committee may, in its sole discretion, determine to pay all or
any portion of a Performance Award to a Grantee who has terminated employment
prior to the end of a Performance Cycle under certain circumstances (including,
without limitation, a material change in circumstances arising after the Date
of Grant) and subject to such terms and conditions that the Grantee shall have
completed, at his or her Termination of Employment at least one year of
employment after the Date of Grant.

             11.6    Modification
or Substitution. Subject to the terms of the Plan,
including, without limitation, Section 16(b), the Committee may modify
outstanding Performance Awards or accept the surrender of outstanding
Performance Awards and grant new Performance Awards in substitution for them.
Notwithstanding the foregoing, no modification of a Performance Award shall
adversely alter or impair any rights or obligations under the Agreement without
the Grantee’s consent.

     12.    Employment
Agreement Governs Termination of Employment. An
employment agreement, if applicable, between an Optionee or Grantee and the
Company shall govern with respect to the terms and conditions applicable to
such Option or Award upon a termination or change in the status of the
employment of the Optionee or Grantee, to the extent that such employment
agreement provides for terms and conditions that differ from the terms and
conditions provided for in the applicable Agreement or the Plan; provided,
however, that to the extent necessary for an Option or Award intended to
qualify as performance-based compensation under Section 162(m) of the Code to
so qualify, the terms of the applicable Agreement or the Plan shall govern
the Option or Award; and, provided further, that the Committee shall have
reviewed and, in its sole discretion, approved the employment agreement.

-22-

 

     13.    Adjustment
Upon Changes in Capitalization.

                         (a)    In the event of a Change in Capitalization, the Committee shall
conclusively determine the appropriate adjustments, if any, to (i) the maximum
number and class of Shares or other stock or securities with respect to which
Options or Awards may be granted under the Plan, (ii) the maximum number and
class of Shares or other stock or securities with respect to which Options or
Awards may be granted to any Eligible Individual during any calendar year,
(iii) the number and class of Shares or other stock or securities which are
subject to outstanding Options or Awards granted under the Plan and the
purchase price therefor, if applicable, (iv) the number and class of Shares or
other securities in respect of which Automatic Options are to be granted under
Section 6 and (v) the Performance Objectives.

                         (b)    Any such adjustment in the Shares or other stock or securities subject
to outstanding Incentive Stock Options (including any adjustments in the
purchase price) shall be made in such manner as not to constitute a
modification as defined by Section 424(h)(3) of the Code and only to the extent
otherwise permitted by Sections 422 and 424 of the Code.

                         (c)    If, by reason of a Change in Capitalization, a Grantee of an Award
shall be entitled to, or an Optionee shall be entitled to exercise an Option
with respect to, new, additional or different shares of stock or securities,
such new, additional or different shares shall thereupon be subject to all of
the conditions, restrictions and performance criteria which were applicable to
the Shares subject to the Award or Option, as the case may be, prior to such
Change in Capitalization.

     14.    Effect
of Certain Transactions. Subject to Sections 7.3, 8.8, 10.4(b)
and 11.4 or as otherwise provided in an Agreement, in the event of (i) the
liquidation or dissolution of the Company or (ii) a merger or consolidation of
the Company (a “Transaction”), the Plan and the Options and Awards issued
hereunder shall continue in effect in accordance with their respective terms,
except that following a Transaction each Optionee and Grantee shall be entitled
to receive in respect of each Share subject to any outstanding Options or
Awards, as the case may be, upon exercise of any Option or payment or transfer
in respect of any Award, the same number and kind of stock, securities, cash,
property or other consideration that each holder of a Share was entitled to
receive in the Transaction in respect of a Share; provided, however, that such
stock, securities, cash, property, or other consideration shall remain subject
to all of the conditions, restrictions and performance criteria which were
applicable to the Options and Awards prior to such Transaction.

     15.    Limitation
on Transfer. Subject to any limitations on transferability
specifically provided for elsewhere in the Plan, the rights and interest of an
Optionee or Grantee in any Option or Award may not be assigned or transferred
other than by will or the laws of descent and distribution or, in the
Committee’s sole discretion, pursuant to a domestic relations order (within the
meaning of Exchange Act Rule 16a-12). During the lifetime of an Optionee or
Grantee, and except as the preceding sentence provides, only the Optionee or
Grantee personally may exercise rights under the Plan. Except as otherwise
specifically provided in the Plan, the Beneficiary of an Optionee or Grantee
may exercise the rights of the Optionee or Grantee only to the extent they were
exercisable under the Plan at the date of the death of the Optionee or Grantee
and are otherwise currently exercisable.

     16.    Interpretation. Following the required registration of any equity
security of the Company pursuant to Section 12 of the Exchange Act:

                         (a)    The Plan is intended to comply with Rule 16b-3 promulgated under the
Exchange Act and the Committee shall interpret and administer the provisions of
the Plan or any

-23-

 

 Agreement in a manner consistent therewith. Any provisions inconsistent
with such Rule shall be inoperative and shall not affect the validity of the
Plan.

                         (b)    Unless otherwise expressly stated in the relevant Agreement, each
Option, Stock Appreciation Right and Performance Award granted under the Plan
is intended to be performance-based compensation within the meaning of Section
162(m)(4)(C) of the Code (except that, in the event of a Change in Control,
payment of Performance Awards to a Grantee who remains a “covered employee”
with respect to such payment within the meaning of Section 162(m)(3) of the
Code may not qualify as performance-based compensation). The Committee shall
not be entitled to exercise any discretion otherwise authorized hereunder with
respect to such Options or Awards if the ability to exercise such discretion or
the exercise of such discretion itself would cause the compensation
attributable to such Options or Awards to fail to qualify as performance-based
compensation. Notwithstanding anything to the contrary in the Plan, the
provisions of the Plan may at any time be bifurcated by the Board or the
Committee in any manner so that certain provisions of the Plan or any
Performance Award intended (or required in order) to satisfy the applicable
requirements of Section 162(m) of the Code are only applicable to persons whose
compensation is subject to Section 162(m).

                         (c)    UK Approved Options are intended to comply with Schedule 9 to the
Taxes Act, and in particular, but without limitation, with paragraphs 10 to 14
thereof, and the Plan shall, except were inconsistent with the subject or
context, be interpreted accordingly.

     17.    Effective Date, Termination and Amendment of the Plan. The effective
date of this Plan shall be the date the Plan is adopted by the Board, subject
only to the approval by the affirmative vote of the holders of a majority of
the securities of the Company present, or represented, and entitled to vote at
a meeting of stockholders duly held in accordance with the applicable laws of
the State of Delaware within twelve (12) months of the adoption of the Plan by
the Board.

     The Plan shall terminate on the day preceding the tenth anniversary of the
date of its adoption by the Board and no Option or Award may be granted
thereafter. The Board may sooner terminate the Plan and the Board may at any
time and from time to time amend, modify or suspend the Plan; provided,
however, that: (a) no such amendment, modification, suspension or termination
shall impair or adversely alter any Options or Awards theretofore granted under
the Plan, except with the consent of the Optionee or Grantee, nor shall any
amendment, modification, suspension or termination deprive any Optionee or
Grantee of any Shares which he or she may have acquired through or as a result
of the Plan; and (b) to the extent necessary under applicable law, no amendment
shall be effective unless approved by the stockholders of the Company in
accordance with applicable law.

     No alteration shall be made to provisions of the Plan relating to UK
Approved Options without the prior written approval of the UK Inland Revenue.

     18.    Non-Exclusivity of the Plan. The adoption of the Plan by the Board
shall not be construed as amending, modifying or rescinding any previously
approved incentive arrangement or as creating any limitations on the power of
the Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock options otherwise than
under the Plan, and such arrangements may be either applicable generally or
only in specific cases.

     19.    Limitation of Liability. As illustrative of the limitations of
liability of the Company, but not intended to be exhaustive thereof, nothing
in the Plan shall be construed to:

		
	 	        (a)    give any person any right to be granted an Option or Award
other than at the sole discretion of the Committee;

-24-

 

		
	 	        (b)    give any person any rights whatsoever with respect to
Shares except as specifically provided in the Plan;
	 
	 	        (c)    limit in any way the right of the Company to terminate the
employment of any person at any time; or
	 
	 	        (d)    be evidence of any agreement or understanding, expressed
or implied, that the Company will employ any person at any
particular rate of compensation or for any particular period of
time.

     20.    Regulations and Other Approvals; Governing Law.

                         20.1    Except as to matters of federal law, the Plan and the rights of all
persons claiming hereunder shall be construed and determined in accordance with
the laws of the State of Delaware without giving effect to conflicts of laws
principles thereof.

                         20.2    The obligation of the Company to sell or deliver Shares with respect
to Options and Awards granted under the Plan shall be subject to all applicable
laws, rules and regulations, including all applicable federal and state
securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Committee.

                         20.3    The Board may make such changes as may be necessary or appropriate to
comply with the rules and regulations of any government authority, or to obtain
for Eligible Individuals granted Incentive Stock Options the tax benefits under
the applicable provisions of the Code and regulations promulgated thereunder.

     The Board may make such changes as may be necessary or appropriate to
obtain or maintain the approval of the provisions of the Plan relating to UK
Approved Options by the UK Inland Revenue.

                         20.4    Each Option and Award is subject to the requirement that, if at any
time the Committee determines, in its sole discretion, that the listing,
registration or qualification of Shares issuable pursuant to the Plan is
required by any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the grant of an Option or
Award or the issuance of Shares, no Options or Awards shall be granted or
payment made or Shares issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been effected or obtained
free of any conditions as acceptable to the Committee.

                         20.5    Notwithstanding anything contained in the Plan or any Agreement to
the contrary, in the event that the disposition of Shares acquired pursuant to
the Plan is not covered by a then current registration statement under the
Securities Act of 1933, as amended (the “Securities Act”), and is not otherwise
exempt from such registration, such Shares shall be restricted against transfer
to the extent required by the Securities Act and Rule 144 or other regulations
thereunder. The Committee may require any individual receiving Shares pursuant
to an Option or Award granted under the Plan, as a condition precedent to
receipt of such Shares, to represent and warrant to the Company in writing that
the Shares acquired by such individual are acquired without a view to any
distribution thereof and will not be sold or transferred other than pursuant to
an effective registration thereof under said Act or pursuant to an exemption
applicable under the Securities Act or the rules and regulations promulgated
thereunder. The certificates evidencing any of such Shares shall be
appropriately amended to reflect their status as restricted securities as
aforesaid.

-25-

 

     21.    Miscellaneous.

                         21.1    Multiple Agreements. The terms of each Option or Award may differ
from other Options or Awards granted under the Plan at the same time, or at
some other time. The Committee may also grant more than one Option or Award to
a given Eligible Individual during the term of the Plan, either in addition to,
or in substitution for, one or more Options or Awards previously granted to
that Eligible Individual.

                         21.2    Withholding of Taxes.

                         (a)    At such times as an Optionee or Grantee recognizes taxable income in
connection with the receipt of Shares or cash hereunder (a “Taxable Event”),
the Optionee or Grantee shall pay to the Company an amount equal to the
federal, state and local income taxes and other amounts as may be required by
law to be withheld by the Company in connection with the Taxable Event (the
“Withholding Taxes”) prior to the issuance, or release from escrow, of such
Shares or the payment of such cash. The Company shall have the right to deduct
from any payment of cash to an Optionee or Grantee an amount equal to the
Withholding Taxes in satisfaction of the obligation to pay Withholding Taxes.
In satisfaction of the obligation to pay Withholding Taxes to the Company, the
Optionee or Grantee may make a written election (the “Tax Election”), which may
be accepted or rejected in the sole discretion of the Committee, to have
withheld a portion of the Shares then issuable to him or her having an
aggregate Fair Market Value equal to the Withholding Taxes.

                         (b)    If an Optionee makes a disposition, within the meaning of Section
424(c) of the Code and regulations promulgated thereunder, of any Share or
Shares issued to such Optionee pursuant to the exercise of an Incentive Stock
Option within the two-year period commencing on the day after the date of the
grant or within the one-year period commencing on the day after the date of
transfer of such Share or Shares to the Optionee pursuant to such exercise, the
Optionee shall, within ten (10) Business Days of such disposition, notify the
Company thereof, by delivery of written notice to the Company at its principal
executive office.

                         21.3    Power of Attorney given by UK Employees. The following provisions
shall apply only to Options and Awards granted to UK-resident or ordinarily
resident Employees.

                         (a)    It shall be a condition of all Options (which term shall for the
purposes of paragraphs 21.3 (a) through (d) exclude UK Approved Options which
retain approval from the UK Inland Revenue under Schedule 9 to the Taxes Act)
and Awards granted to UK Employees and a condition precedent to the vesting,
exercisability, or release for consideration, of all such Options and Awards
that, if the vesting, exercise, or release for consideration gives rise to a
liability of the Company or any Subsidiary (the “Relevant Body”) under Section
203F of the Taxes Act or otherwise pursuant to the United Kingdom’s Pay As You
Earn (“PAYE”) system (or any other similar withholding tax system in any other
applicable jurisdiction), the Relevant Body shall (to the extent permitted by
English law) be entitled to withhold from such Grantee’s or Optionee’s salary
or other payments due to him, and/or the Grantee or Optionee shall be required
to pay to the Relevant Body, as a condition of such vesting, exercise or
release, the amount which the Relevant Body is required to pay to the UK Inland
Revenue (or other relevant taxing authority).

                         (b)    Any payment by the Grantee or Optionee shall be made within such
period as the Relevant Body shall notify to him. The Company may refuse to
permit (a) the vesting or exercise of any Option or Award or (b) the release of
any Option or Award for consideration if any such payment is not satisfied by
the Grantee or Optionee within such period as shall have been notified to him.

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                         (c)    Alternatively, if the Committee so decides in its absolute discretion,
the PAYE or other taxation liability falling upon any Relevant Body may be
satisfied by (a) the Company not releasing to the Grantee or Optionee concerned
such number of Shares (which expression shall for this purpose include other
shares or securities to be issued upon such vesting or exercise) or (b)
deducting from any consideration for the release of an Option or Award such
monetary amount as shall in either case equal in value the amount required to
be paid to the Inland Revenue (or other relevant taxing authority), together
(where relevant) with any commission or similar costs associated with or to be
incurred upon the disposal of any such Shares to fund such tax liability.

                         (d)    Each holder of an Option or an Award under the Plan hereby appoints
any Director of the Company or a Subsidiary as his attorney for the purpose of
signing, in the name and on behalf of such holder, any documents required to
implement the foregoing (including, without prejudice to the generality of the
foregoing, the right to sell Shares not so released as aforesaid).

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