Tektronix, Inc.

Tektronix 2005 Stock Incentive Plan

      1.     Purpose. The purpose of this 2005 Stock Incentive Plan (the “Plan”) is to enable Tektronix, Inc. (the “Company”) to attract and retain the services of (i) selected employees, officers and directors of the Company or any parent or subsidiary of the Company and (ii) selected nonemployee agents, consultants, advisers and independent contractors of the Company or any parent or subsidiary of the Company. For purposes of this Plan, a person is considered to be employed by or in the service of the Company if the person is employed by or in the service of any entity (the “Employer”) that is either the Company or a parent or subsidiary of the Company.

      2.     Shares Subject to the Plan. Subject to adjustment as provided below and in Section 10, the shares to be offered under the Plan shall consist of Common Shares of the Company (“Common Stock”), and the total number of shares of Common Stock that may be issued under the Plan shall be 3,800,000. If an option, stock appreciation right or Performance-Based Award granted under the Plan, expires, terminates or is canceled, the unissued shares subject to that option, stock appreciation right or Performance-Based Award shall again be available under the Plan. If shares awarded or issued as restricted stock pursuant to Section 7 under the Plan are forfeited to or repurchased by the Company, the number of shares forfeited or repurchased shall again be available under the Plan.

      3.     Effective Date and Duration of Plan.

           3.1     Effective Date. The Plan shall become effective as of June 22, 2005. No awards shall be made under the Plan until the Plan is approved by shareholders of the Company in accordance with rules of the New York Stock Exchange.

           3.2     Duration. The Plan shall continue in effect until the date that is 10 years after the effective date of the Plan or such earlier date when all shares available for issuance under the Plan have been issued and all restrictions on the shares have lapsed. The Board of Directors may suspend or terminate the Plan at any time except with respect to options, stock appreciation rights or Performance-Based Awards and shares subject to restrictions then outstanding under the Plan. Termination shall not affect any outstanding options, stock appreciation rights or Performance-Based Awards or any right of the Company to repurchase shares or the forfeitability of shares issued under the Plan.

      4.     Independent Administration. The Plan shall be administered by a committee of the Board of Directors of the Company consisting entirely of directors who are deemed independent directors under rules of the New York Stock Exchange (the “Committee”), which Committee shall determine and designate the individuals to whom awards shall be made, the amount of the awards and the other terms and conditions of the awards. Subject to the provisions of the Plan, the Committee may adopt and amend rules and regulations relating to administration of the Plan, advance the lapse of any waiting period, accelerate any exercise date, waive or modify any restriction applicable to shares (except those restrictions imposed by law and the minimum restriction periods required under the Plan) and make all other determinations in the judgment of the Committee necessary or desirable for the administration of the Plan. The interpretation and construction of the provisions of the Plan and related agreements by the Committee shall be final and conclusive. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any related agreement in the manner and to the extent it deems expedient to carry the Plan into effect, and the Committee shall be the sole and final judge of such expediency. The Committee may authorize a director who is also the Chief Executive Officer of the Company to make option grants and restricted stock awards to employees who are not executive officers, subject to limitations imposed by the Committee.

      5.     Types of Awards, Eligibility, Limitations.

           5.1     Types of Awards, Eligibility. The Committee may, from time to time, take the following actions, separately or in combination, under the Plan: (i) grant Incentive Stock Options, as defined in

Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), as provided in Sections 6.1 and 6.2; (ii) grant options other than Incentive Stock Options (“Non-Statutory Stock Options”) as provided in Sections 6.1 and 6.3; (iii) make restricted stock grants and issue shares as provided in Section 7; (iv) award Performance-Based Awards as provided in Section 8; and (v) grant stock appreciation rights as provided in Section 9. Awards may be made to employees, including employees who are officers or directors, and to non-employee directors and to other individuals described in Section 1 selected by the Committee; provided, however, that only employees of the Company or any parent or subsidiary of the Company (as defined in subsections 424(e) and 424(f) of the Code) are eligible to receive Incentive Stock Options under the Plan. The Committee shall select the individuals to whom awards shall be made and shall specify the action taken with respect to each individual to whom an award is made.

           5.2     Per Employee Share Limitations. No employee may be granted options for more than an aggregate of 500,000 shares of Common Stock in the calendar year in which the employee is hired or 200,000 shares of Common Stock in any other calendar year.

           5.3     Aggregate Share Limitations for Certain Awards. Notwithstanding any provision in the Plan, not more than an aggregate of 2,850,000 shares (of the total shares reserved for the Plan pursuant to Section 2) may be issued under the Plan as (a) Performance-Based Awards or (b) restricted stock.

           5.4     Prohibition on Option Repricing. Except as provided in Section 10, without the prior approval of the Company’s shareholders, an option issued under the Plan may not be repriced by lowering the option exercise price or by cancellation of an outstanding option with a subsequent replacement or regrant of an option with a lower exercise price.

      6.     Option Grants.

           6.1     General Rules Relating to Options.

                6.1-1     Terms of Grant. The Committee may grant options under the Plan. With respect to each option grant, the Committee shall determine the number of shares subject to the option, the exercise price, the period of the option, the time or times at which the option may be exercised and whether the option is an Incentive Stock Option or a Non-Statutory Stock Option; provided, however, that except to the extent permitted by the last sentence of this Section 6.1-1, (a) any option granted under the Plan that vests based solely on the grantee’s continued employment with the Company shall not be exercisable until at least three years from the date of grant and (b) any option granted under the Plan that vests based solely on the performance of the Company under criteria determined by the Committee at the time of grant shall not be exercisable until at least one year from the date of grant, except that, as determined by the Committee in the Committee’s sole discretion, (i) an option can become exercisable in installments during the three year or one year period, as applicable, and (ii) the minimum vesting period shall not apply in the event of the participant’s death, disability, retirement or termination of employment or in connection with certain transactions that may involve a change of control of the Company. Notwithstanding the provisions of this Section 6.1-1, up to an aggregate of 450,000 shares of Common Stock reserved for the Plan may be issued to any participants under the Plan pursuant to restricted stock awards or as stock options or stock appreciation rights without minimum restriction or vesting periods.

                6.1-2     Exercise of Options. Except as provided in Section 6.1-4 or as determined by the Committee, no option granted under the Plan may be exercised unless at the time of exercise the optionee is employed by or in the service of the Company and shall have been so employed or provided such service continuously since the date the option was granted. Except as provided in Sections 6.1-4 and 10, options granted under the Plan may be exercised from time to time over the period stated in each option in amounts and at times prescribed by the Committee, provided that options may not be exercised for fractional shares. Unless otherwise determined by the Committee, if an optionee does not exercise an option in any one year for the full number of shares to which the optionee is entitled in that year, the optionee’s rights shall be cumulative and the optionee may purchase those shares in any subsequent year during the term of the option.

                6.1-3     Nontransferability. Each stock option granted under the Plan by its terms (i) shall be nonassignable and nontransferable by the optionee, either voluntarily or by operation of law, except (i) by will

or by the laws of descent and distribution of the state or country of the optionee’s domicile at the time of death or (ii) with respect to Nonstatutory Stock Options, pursuant to domestic relations orders or for estate planning purposes to the extent permitted by the Committee.

                6.1-4     Termination of Employment or Service.

                     6.1-4(a)     General Rule. Unless otherwise determined by the Committee, if an optionee’s employment or service with the Company terminates for any reason other than because of total disability as provided in Section 6.1-4(c), or death as provided in Sections 6.1-4(d), his or her option may be exercised at any time before the expiration date of the option or the expiration of three months after the date of termination, whichever is the shorter period, but only if and to the extent the optionee was entitled to exercise the option at the date of termination.

                     6.1-4(b)     Termination When Eligible for Retirement On or After Age 55. Unless otherwise determined by the Committee, in the event of the termination of an optionee’s employment when eligible for retirement on or after age 55 under the Cash Balance Plan (other than because of death as provided in Section 6.1-4(d) or because of disability as provided in Section 6.1-4(c), the option may be exercised at any time prior to the expiration date of the option or the expiration of one year after the date of such termination, whichever is the shortest period, but only if and to the extent the optionee was entitled to exercise the option on the date of termination. The Committee may, in its sole discretion, cancel any such options at any time prior to the exercise thereof unless the following conditions are met:

                          (i)     The optionee shall not render services for any organization or engage directly or indirectly in any business which, in the judgment of the Chief Executive Officer of the Company, is or becomes competitive with the Company, or which is or becomes otherwise prejudicial to or in conflict with the interests of the Company. The judgment of the Chief Executive Officer shall be based on the optionee’s positions and responsibilities while employed by the Company, the optionee’s post-employment responsibilities and position with the other organization or business, the extent of past, current and potential competition or conflict between the Company and the other organization or business, the effect on the Company’s customers, suppliers and competitors of the optionee’s assuming the post-employment position, and such other considerations as are deemed relevant given the applicable facts and circumstances. The optionee shall be free, however, to purchase as an investment or otherwise, stock or other securities of such organization or business so long as they are listed upon a recognized securities exchange or traded over-the-counter, and such investment does not represent a substantial investment to the optionee or a greater than 10 percent equity interest in the organization or business.

                          (ii)     The optionee shall not, without prior written authorization from the Company, disclose to anyone outside the Company, or use in other than the Company’s business, any confidential information or material, as defined in the Company’s employee confidentiality agreement, relating to the business of the Company, acquired by the optionee either during or after employment with the Company.

                          (iii)     The optionee, pursuant to the Company’s employee confidentiality agreement, shall disclose promptly and assign to the Company all right, title, and interest in any invention or idea, patentable or not, made or conceived by the optionee during employment by the Company, relating in any manner to the actual or anticipated business, research or development work of the Company and shall do anything reasonably necessary as requested by the Company to enable the Company to secure a patent where appropriate in the United States and in foreign countries.

                     6.1-4(c)     Termination Because of Disability. Unless otherwise determined by the Committee, if an optionee’s employment or service with the Company terminates because of disability as defined in the applicable option agreement, his or her option shall become exercisable in full and may be exercised at any time before the expiration date of the option or before the date one year after the date of termination, whichever is the shorter period.

                     6.1-4(d)     Termination Because of Death. Unless otherwise determined by the Committee, if an optionee dies while employed by or providing service to the Company, his or her option shall become exercisable in full and may be exercised at any time before the expiration date of the option or before

the date one year after the date of death, whichever is the shorter period, but only by the person or persons to whom the optionee’s rights under the option shall pass by the optionee’s will or by the laws of descent and distribution of the state or country of domicile at the time of death.

                     6.1-4(e)     Amendment of Exercise Period Applicable to Termination. The Committee may at any time extend the three months and one-year exercise periods any length of time not longer than the original expiration date of the option. Subject to Section 6.1-1, the Committee may at any time increase the portion of an option that is exercisable, subject to terms and conditions determined by the Committee.

                     6.1-4(f)     Failure to Exercise Option. To the extent that the option of any deceased optionee or any optionee whose employment or service terminates is not exercised within the applicable period, all further rights to purchase shares pursuant to the option shall cease and terminate.

                     6.1-4(g)     Leave of Absence. Absence on leave approved by the Employer or on account of illness or disability shall not be deemed a termination or interruption of employment or service. Unless otherwise determined by the Committee, vesting of options shall continue during a medical, family or military leave of absence, whether paid or unpaid, and vesting of options shall be suspended during any other unpaid leave of absence.

                6.1-5     Purchase of Shares.

                     6.1-5(a)     Notice of Exercise. Unless the Committee determines otherwise, shares may be acquired pursuant to an option granted under the Plan only upon the Company’s receipt of written notice from the optionee of the optionee’s binding commitment to purchase shares, specifying the number of shares the optionee desires to purchase under the option and the date on which the optionee agrees to complete the transaction, and, if required to comply with the Securities Act of 1933, containing a representation that it is the optionee’s intention to acquire the shares for investment and not with a view to distribution.

                     6.1-5(b)     Payment. Unless the Committee determines otherwise, on or before the date specified for completion of the purchase of shares pursuant to an option exercise, the optionee must pay the Company the full purchase price of those shares in cash or by check, or, with the consent of the Committee, in whole or in part, in Common Stock of the Company valued at fair market value, restricted stock or other contingent awards denominated in either stock or cash and other forms of consideration. Unless otherwise determined by the Committee, any Common Stock provided in payment of the purchase price must have been previously acquired and held by the optionee for at least six months. The fair market value of Common Stock provided in payment of the purchase price shall be the closing price of the Common Stock last reported before the time payment in Common Stock is made or, if earlier, committed to be made, if the Common Stock is publicly traded, or another value of the Common Stock as specified by the Committee. No shares shall be issued until full payment for the shares has been made, including all amounts owed for tax withholding.

                     6.1-5(c)     Tax Withholding. Each optionee who has exercised an option shall, immediately upon notification of the amount due, if any, pay to the Company in cash or by check amounts necessary to satisfy any applicable federal, state and local tax withholding requirements. If additional withholding is or becomes required (as a result of exercise of an option or as a result of disposition of shares acquired pursuant to exercise of an option) beyond any amount deposited before delivery of the certificates, the optionee shall pay such amount, in cash or by check, to the Company on demand. If the optionee fails to pay the amount demanded, the Company or the Employer may withhold that amount from other amounts payable to the optionee, including salary, subject to applicable law. With the consent of the Committee, an optionee may satisfy this obligation, in whole or in part, by instructing the Company to withhold from the shares to be issued upon exercise or by delivering to the Company other shares of Common Stock; provided, however, that the number of shares so withheld or delivered shall not exceed the minimum amount necessary to satisfy the required withholding obligation.

                     6.1-5(d)     Reduction of Reserved Shares. Upon the exercise of an option, the number of shares reserved for issuance under the Plan shall be reduced by the number of shares issued upon exercise of the option (without reduction to reflect any shares surrendered in payment for the exercise price or withheld to satisfy withholding requirements).

           6.2     Incentive Stock Options. Incentive Stock Options shall be subject to the following additional terms and conditions:

                6.2-1     Limitation on Amount of Grants. If the aggregate fair market value of stock (determined as of the date the option is granted) for which Incentive Stock Options granted under this Plan (and any other stock incentive plan of the Company or its parent or subsidiary corporations, as defined in subsections 424(e) and 424(f) of the Code) are exercisable for the first time by an employee during any calendar year exceeds $100,000, the portion of the option or options not exceeding $100,000, to the extent of whole shares, will be treated as an Incentive Stock Option and the remaining portion of the option or options will be treated as a Non-Statutory Stock Option. The preceding sentence will be applied by taking options into account in the order in which they were granted. If, under the $100,000 limitation, a portion of an option is treated as an Incentive Stock Option and the remaining portion of the option is treated as a Non-Statutory Stock Option, unless the optionee designates otherwise at the time of exercise, the optionee’s exercise of all or a portion of the option will be treated as the exercise of the Incentive Stock Option portion of the option to the full extent permitted under the $100,000 limitation. If an optionee exercises an option that is treated as in part an Incentive Stock Option and in part a Non-Statutory Stock Option, the Company will designate the portion of the stock acquired pursuant to the exercise of the Incentive Stock Option portion as Incentive Stock Option stock by issuing a separate certificate for that portion of the stock and identifying the certificate as Incentive Stock Option stock in its stock records.

                6.2-2     Limitations on Grants to 10 percent Shareholders. An Incentive Stock Option may be granted under the Plan to an employee possessing more than 10 percent of the total combined voting power of all classes of stock of the Company or any parent or subsidiary (as defined in subsections 424(e) and 424(f) of the Code) only if the option price is at least 110 percent of the fair market value, as described in Section 6.2-4, of the Common Stock subject to the option on the date it is granted and the option by its terms is not exercisable after the expiration of five years from the date it is granted.

                6.2-3     Duration of Options. Subject to Sections 6.1-2, 6.1-4 and 6.2-2, Incentive Stock Options granted under the Plan shall continue in effect for the period fixed by the Committee, except that by its terms no Incentive Stock Option shall be exercisable after the expiration of 10 years from the date it is granted.

                6.2-4     Option Price. The option price per share shall be determined by the Committee at the time of grant. Except as provided in Section 6.2-2, the option price shall not be less than 100 percent of the fair market value of the Common Stock covered by the Incentive Stock Option at the date the option is granted. The option price shall not be less than 100 percent of the fair market value of the Common Stock covered by the Non-Statutory Stock Option at the date the option is granted. The fair market value shall be the closing price of the Common Stock last reported before the time the option is granted, if the stock is publicly traded, or another value of the Common Stock as specified by the Committee.

                6.2-5     Limitation on Time of Grant. No Incentive Stock Option shall be granted on or after the tenth anniversary of the last action by the Committee adopting the Plan or approving an increase in the number of shares available for issuance under the Plan, which action was subsequently approved within 12 months by the shareholders.

                6.2-6     Early Dispositions. If within two years after an Incentive Stock Option is granted or within 12 months after an Incentive Stock Option is exercised, the optionee sells or otherwise disposes of Common Stock acquired on exercise of the Option, the optionee shall within 30 days of the sale or disposition notify the Company in writing of (i) the date of the sale or disposition, (ii) the amount realized on the sale or disposition and (iii) the nature of the disposition (e.g., sale, gift, etc.).

           6.3     Non-Statutory Stock Options. Non-Statutory Stock Options shall be subject to the following terms and conditions, in addition to those set forth in Section 6.1 above:

                6.3-1     Option Price. The option price for Non-Statutory Stock Options shall be determined by the Committee at the time of grant. All options shall be granted at an option price not less than 100 percent

of the fair market value of the Common Stock covered by the Non-Statutory Stock Option at the date the option is granted.

                6.3-2     Duration of Options. Non-Statutory Stock Options granted under the Plan shall continue in effect for the period fixed by the Committee, except that no Non-statutory Option shall be exercisable after the expiration of 10 years from the date it is granted.

      7.     Restricted Stock. Subject to the share limitation in Section 5.3, the Committee may make restricted stock grants and issue shares under the Plan for any consideration (including services) determined by the Committee. Shares issued under the Plan shall be subject to the terms, conditions and restrictions determined by the Committee. All Common Stock issued pursuant to this Section 7 shall be subject to an agreement, which shall be executed by the Company and the participant before the delivery of certificates representing the shares to the participant. The certificates representing the shares shall bear any legends required by the Committee. The Company may require any participant receiving restricted stock to pay to the Company in cash or by check upon demand amounts necessary to satisfy any applicable federal, state or local tax withholding requirements. If the participant fails to pay the amount demanded, the Company or the Employer may withhold that amount from other amounts payable to the purchaser, including salary, subject to applicable law. With the consent of the Committee, a participant may satisfy this obligation, in whole or in part, by instructing the Company to withhold from any shares to be issued or by delivering to the Company other shares of Common Stock; provided, however, that the number of shares so withheld or delivered shall not exceed the minimum amount necessary to satisfy the required withholding obligation. Upon the issuance of restricted stock, the number of shares reserved for issuance under the Plan shall be reduced by the number of shares issued, without reduction to reflect the number of shares withheld or delivered to satisfy withholding obligations. Except to the extent permitted by the last sentence of this Section 7, restricted stock shall be nontransferable and subject to repurchase at a price not exceeding fair market value at the time of repurchase by or forfeiture to the Company during a restriction period specified by the Committee at the time of grant, and (a) with respect to shares that become unrestricted based solely on the grantee’s continued employment with the Company, the minimum restriction period shall be the three years from the date of grant, and (b) with respect to shares that become unrestricted based solely on the performance of the Company under criteria determined by the Committee at the time of grant, the minimum restriction period shall be one year from the date of grant, except that, as determined by the Committee in the Committee’s sole discretion, (i) the restrictions can lapse as to shares in installments during the three year or one year period, as applicable, and (ii) the minimum restriction period shall not apply in the event of the participant’s death, disability, retirement or termination of employment or in connection with certain transactions that may involve a change of control of the Company. Notwithstanding the provisions of this Section 7, (i) up to an aggregate of 450,000 shares of Common Stock reserved for the Plan may be issued to any participants under the Plan pursuant to restricted stock awards or as stock options or stock appreciation rights without minimum restriction or vesting periods.

      8.     Performance-Based Awards. Subject to the share limitation in Section 5.3, the Committee may grant awards intended to qualify as qualified performance-based compensation under Section 162(m) of the Code and the regulations thereunder (“Performance-Based Awards”). Performance-Based Awards shall be denominated at the time of grant either in Common Stock (“Stock Performance Awards”) or in dollar amounts (“Dollar Performance Awards”). Payment under a Stock Performance Award or a Dollar Performance Award shall be made, at the discretion of the Committee, in Common Stock (“Performance Shares”), or in cash or in any combination thereof. Performance-Based Awards shall be subject to the following terms and conditions:

           8.1     Award Period. The Committee shall determine the period of time for which a Performance-Based Award is made (the “Award Period”).

           8.2     Performance Goals and Payment. The Committee shall establish in writing objectives (“Performance Goals”) that must be met by the Company or any subsidiary, division or other unit of the Company (“Business Unit”) during the Award Period as a condition to payment being made under the Performance-Based Award. The Performance Goals for each award shall be one or more targeted levels of

performance with respect to one or more of the following objective measures with respect to the Company or any Business Unit: earnings, earnings per share, stock price increase, total shareholder return (stock price increase plus dividends), return on equity, return on assets, return on capital, economic value added, revenues, operating income, inventories, inventory turns, cash flows, specific business or financial objectives in alignment with the Company’s business plan or any of the foregoing before the effect of acquisitions, divestitures, accounting changes, and restructuring and special charges (determined according to criteria established by the Committee). The Committee shall also establish the number of Performance Shares or the amount of cash payment to be made under a Performance-Based Award if the Performance Goals are met or exceeded, including the fixing of a maximum payment (subject to Section 8.4). The Committee may establish other restrictions to payment under a Performance-Based Award, such as a continued employment requirement, in addition to satisfaction of the Performance Goals. Some or all of the Performance Shares may be issued at the time of the award as restricted shares subject to forfeiture in whole or in part if Performance Goals or, if applicable, other restrictions are not satisfied.

           8.3     Computation of Payment. During or after an Award Period, the performance of the Company or Business Unit, as applicable, during the period shall be measured against the Performance Goals. If the Performance Goals are not met, no payment shall be made under a Performance-Based Award. If the Performance Goals are met or exceeded, the Committee shall approve the number of Performance Shares earned or the amount of cash payment to be made under the terms of the Performance-Based Award.

           8.4     Maximum Awards. No participant may receive in any fiscal year Stock Performance Awards under which the aggregate amount payable under the Awards exceeds the equivalent of 200,000 shares of Common Stock or Dollar Performance Awards under which the aggregate amount payable under the Awards exceeds $4,000,000.

           8.5     Tax Withholding. Each participant who has received Performance Shares shall, upon notification of the amount due, pay to the Company in cash or by check amounts necessary to satisfy any applicable federal, state and local tax withholding requirements. If the participant fails to pay the amount demanded, the Company or the Employer may withhold that amount from other amounts payable to the participant, including salary, subject to applicable law. With the consent of the Committee, a participant may satisfy this obligation, in whole or in part, by instructing the Company to withhold from any shares to be issued or by delivering to the Company other shares of Common Stock; provided, however, that the number of shares so delivered or withheld shall not exceed the minimum amount necessary to satisfy the required withholding obligation.

           8.6     Effect on Shares Available. The payment of a Performance-Based Award in cash shall not reduce the number of shares of Common Stock reserved for issuance under the Plan. The number of shares of Common Stock reserved for issuance under the Plan shall be reduced by the number of shares issued upon payment of an award, without reduction to reflect the number of shares delivered or withheld to satisfy withholding obligations.

      9.     Stock Appreciation Rights.

           9.1     Grant. Stock appreciation rights may be granted under the Plan by the Committee, subject to such rules, terms, and conditions as the Committee prescribes. With respect to each grant, the Committee shall determine the number of shares subject to the stock appreciation right, the period of the stock appreciation right, and the time or times at which the stock appreciation right may be exercised; provided, however, that except to the extent permitted below in this Section 9.1, (a) any stock appreciation right granted under the Plan that vests based solely on the grantee’s continued employment with the Company shall not be exercisable until at least three years from the date of grant and (b) any stock appreciation right granted under the Plan that vests based solely on the performance of the Company under criteria determined by the Committee at the time of grant shall not be exercisable until at least one year from the date of grant, except that, as determined by the Committee in the Committee’s sole discretion, (i) a stock appreciation right can become exercisable in installments during the three year or one year period, as applicable, and (ii) the minimum vesting period shall not apply in the event of the participant’s death, disability, retirement or termination of employment or in connection with certain transactions that may involve a change of control of

the Company. Notwithstanding the provisions of this Section 9.1, up to an aggregate of 450,000 additional shares of Common Stock reserved for the Plan may be issued to any participants under the Plan pursuant to restricted stock awards or as stock options or stock appreciation rights without minimum restriction or vesting periods. Stock appreciation rights shall continue in effect for the period fixed by the Committee, except that no stock appreciation right shall be exercisable after the expiration of 10 years from the date it is granted.

           9.2     Stock Appreciation Rights Granted in Connection with Options. If a stock appreciation right is granted in connection with an option, the stock appreciation right shall be exercisable only to the extent and on the same conditions that the related option could be exercised. Upon exercise of a stock appreciation right, any option or portion thereof to which the stock appreciation right relates terminates. If a stock appreciation right is granted in connection with an option, upon exercise of the option, the stock appreciation right or portion thereof to which the grant relates terminates.

           9.3     Exercise. Each stock appreciation right shall entitle the holder, upon exercise, to receive from the Company in exchange therefor an amount equal in value to the excess of the fair market value on the date of exercise of one share of Common Stock of the Company over its fair market value on the date of grant (or, in the case of a stock appreciation right granted in connection with an option, the option price per share under the option to which the stock appreciation right relates), multiplied by the number of shares covered by the stock appreciation right or the option, or portion thereof, that is surrendered. No stock appreciation right shall be exercisable at a time that the amount determined under this subparagraph is negative. Payment by the Company upon exercise of a stock appreciation right shall be made in Common Stock valued at fair market value. For this purpose, the fair market value of the Common Stock shall be the closing price of the Common Stock last reported before the time of exercise, or such other value of the Common Stock as specified by the Committee.

           9.4     Fractional Shares. No fractional shares shall be issued upon exercise of a stock appreciation right. The number of shares issuable on exercise of a stock appreciation right shall be rounded down to the next whole share unless, if permitted by Section 409A of the Code, the Committee determines that cash shall be paid in an amount equal to the value of the fraction.

           9.5     Nontransferability. Each stock appreciation right granted in connection with an Incentive Stock Option and, unless otherwise determined by the Committee, each other stock appreciation right granted under the Plan by its terms shall be nonassignable and nontransferable by the holder, either voluntarily or by operation of law, except by will or by the laws of descent and distribution of the state or country of the holder’s domicile at the time of death, and each stock appreciation right by its terms shall be exercisable during the holder’s lifetime only by the holder.

           9.6     Tax Withholding. Each holder who has exercised a stock appreciation right shall, immediately upon notification of the amount due, if any, pay to the Company in cash or by check amounts necessary to satisfy any applicable federal, state and local tax withholding requirements. If additional withholding is or becomes required (as a result of exercise of a stock appreciation right or as a result of disposition of shares acquired pursuant to exercise of a stock appreciation right) beyond any amount deposited before delivery of the certificates, the holder shall pay such amount, in cash or by check, to the Company on demand. If the holder fails to pay the amount demanded, the Company or the Employer may withhold that amount from other amounts payable to the holder, including salary, subject to applicable law. With the consent of the Committee, a holder may satisfy this obligation, in whole or in part, by instructing the Company to withhold from the shares to be issued upon exercise or by delivering to the Company other shares of Common Stock; provided, however, that the number of shares so withheld or delivered shall not exceed the minimum amount necessary to satisfy the required withholding obligation.

           9.7     Reduction of Reserved Shares. Upon the exercise of a stock appreciation right, the number of shares reserved for issuance under the Plan shall be reduced by the number of shares subject to the stock appreciation rights, without reduction to reflect the actual number of shares issued upon exercise of the stock appreciation rights or the number of any shares withheld to satisfy withholding requirements.

      10.     Changes in Capital Structure.

           10.1     Stock Splits, Stock Dividends. If the outstanding Common Stock of the Company is hereafter increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of any stock split, combination of shares, dividend payable in shares, recapitalization or reclassification, appropriate adjustment shall be made by the Committee in the number and kind of shares available for grants under the Plan and in all other share amounts set forth in the Plan. In addition, the Committee shall make appropriate adjustment in the number and kind of shares as to which outstanding options and stock appreciation rights, or portions thereof then unexercised, shall be exercisable, so that the optionee’s proportionate interest before and after the occurrence of the event is maintained. Notwithstanding the foregoing, the Committee shall have no obligation to effect any adjustment that would or might result in the issuance of fractional shares, and any fractional shares resulting from any adjustment may be disregarded or provided for in any manner determined by the Committee. Any such adjustments made by the Committee shall be conclusive.

           10.2     Mergers, Reorganizations, Etc. In the event of a merger, consolidation, plan of exchange, acquisition of property or stock, split-up, split-off, spin-off, reorganization or liquidation to which the Company is a party or any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company (each, a “Transaction”), the Committee shall, in its sole discretion and to the extent possible under the structure of the Transaction, select one of the following alternatives for treating outstanding options and stock appreciation rights under the Plan:

                10.2-1     Outstanding options and stock appreciation rights shall remain in effect in accordance with their terms.

                10.2-2     Outstanding options and stock appreciation rights shall be converted into options and stock appreciation rights to purchase stock in one or more of the corporations, including the Company, that are the surviving or acquiring corporations in the Transaction. The amount, type of securities subject thereto and exercise price of the converted options and stock appreciation rights shall be determined by the Committee, taking into account the relative values of the companies involved in the Transaction and the exchange rate, if any, used in determining shares of the surviving corporation(s) to be held by holders of shares of the Company following the Transaction. Unless otherwise determined by the Committee, the converted options and stock appreciation rights shall be vested only to the extent that the vesting requirements relating to options and stock appreciation rights granted hereunder have been satisfied.

                10.2-3     The Committee shall provide a period of 30 days or less before the completion of the Transaction during which outstanding options and stock appreciation rights may be exercised to the extent then exercisable, and upon the expiration of that period, all unexercised options and stock appreciation rights shall immediately terminate. The Committee may, in its sole discretion accelerate the exercisability of options and stock appreciation rights so that they are exercisable in full during that period.

           10.3     Dissolution of the Company. In the event of the dissolution of the Company, options and stock appreciation rights shall be treated in accordance with Section 10.2-3.

           10.4     Rights Issued by Another Corporation. The Committee may also grant options and stock bonuses, stock appreciation rights and Performance-Based Awards and issue restricted stock under the Plan with terms, conditions and provisions that vary from those specified in the Plan, provided that any such awards are granted in substitution for, or in connection with the assumption of, existing options, stock appreciation rights, stock bonuses, Performance-Based Awards and restricted stock granted, awarded or issued by another corporation and assumed or otherwise agreed to be provided for by the Company pursuant to or by reason of a Transaction.

      11.     Foreign Qualified Grants. Awards under the Plan may be granted to such employees of the Company and its subsidiaries who are residing in foreign jurisdictions as the Committee may determine from time to time. The Committee may adopt such supplements to the Plan as may be necessary to comply with the applicable laws of such foreign jurisdictions and to afford participants favorable treatment under such laws;

provided, however, that no award shall be granted under any such supplement with terms which are more beneficial to the participants than the terms permitted by the Plan.

      12.     Amendment of the Plan. The Committee may at any time modify or amend the Plan in any respect, except that, other than as provided in Section 10, shareholder approval shall be required for (a) any increase in the number of shares reserved for the Plan, (b) any increase in the number of shares referred to in Section 5.3 to a number that exceeds 75% of the total shares reserved for the Plan, (c) any amendment to Section 5.4, (d) any amendment to Section 6.3-1 and (e) any amendment to this Section 12. No change in an award already granted shall be made without the written consent of the holder of the award if the change would adversely affect the holder.

      13.     Approvals. The Company’s obligations under the Plan are subject to the approval of state and federal authorities or agencies with jurisdiction in the matter. The Company will use its best efforts to take steps required by state or federal law or applicable regulations, including rules and regulations of the Securities and Exchange Commission and any stock exchange on which the Company’s shares may then be listed, in connection with the grants under the Plan. The foregoing notwithstanding, the Company shall not be obligated to issue or deliver Common Stock under the Plan if such issuance or delivery would violate state or federal securities laws.

      14.     Employment and Service Rights. Nothing in the Plan or any award pursuant to the Plan shall (i) confer upon any employee any right to be continued in the employment of an Employer or interfere in any way with the Employer’s right to terminate the employee’s employment at will at any time, for any reason, with or without cause, or to decrease the employee’s compensation or benefits, or (ii) confer upon any person engaged by an Employer any right to be retained or employed by the Employer or to the continuation, extension, renewal or modification of any compensation, contract or arrangement with or by the Employer.

      15.     Rights as a Shareholder. The recipient of any award under the Plan shall have no rights as a shareholder with respect to any shares of Common Stock until the date the recipient becomes the holder of record of those shares. Except as otherwise expressly provided in the Plan, no adjustment shall be made for dividends or other rights for which the record date occurs before the date the recipient becomes the holder of record.

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