EXHIBIT 10.1

PHI, INC.

LONG-TERM INCENTIVE PLAN

1. Purpose. The purpose of the PHI, Inc. Long-Term Incentive Plan (the “Plan”)
is to increase stockholder value and to advance the interests PHI, Inc. (“PHI”)
and its subsidiaries (collectively with PHI, the “Company”) by furnishing
equity-based economic incentives (the “Incentives”) designed to attract, retain,
reward, and motivate key employees, officers, and directors of the Company and
consultants and advisors to the Company and to strengthen the mutuality of
interests between service providers and PHI’s shareholders. Incentives consist
of opportunities to purchase or receive shares of PHI non-voting common stock,
$0.10 par value per share (the “Non-Voting Stock”) or cash valued in relation to
Non-Voting Stock, on terms determined under the Plan. As used in the Plan, the
term “subsidiary” means any corporation, limited liability company or other
entity, of which PHI owns (directly or indirectly) within the meaning of section
424(f) of the Internal Revenue Code of 1986, as amended (the “Code”), 50% or
more of the total combined voting power of all classes of stock, membership
interests or other equity interests issued thereby.

2. Administration.

2.1 Composition. The Plan shall generally be administered by the Compensation
Committee or a subcommittee thereof (the “Committee”) of the Board of Directors
of PHI (the “Board”). The Committee shall consist of not fewer than two members
of the Board, each of whom shall (a) qualify as a “non-employee director” under
Rule 16b-3 under the Securities Exchange Act of 1934 (the “1934 Act”) or any
successor rule and (b) qualify as an “outside director” under Section 162(m) of
the Code (“Section 162(m)”).

2.2 Authority. The Committee shall have plenary authority to award Incentives
under the Plan, to determine the terms and conditions of the Incentives and to
enter into agreements with or provide notices to participants as to the terms of
the Incentives (the “Incentive Agreements”). The Committee shall have the
general authority to interpret the Plan, modify or waive the terms and
conditions of previously granted Incentives (including accelerating
exercisability or vesting and waiving performance criteria), establish any rules
or regulations relating to the Plan that it determines to be appropriate, and to
make any other determination that it believes necessary or advisable for the
proper administration of the Plan. Committee decisions in matters relating to
the Plan shall be final and conclusive on the Company, participants, and all
other interested parties. The Committee may delegate its authority hereunder to
the extent provided in Section 3.

3. Eligible Participants.

3.1 Eligibility. Key employees, officers, and directors of the Company and
persons providing services as consultants or advisors to the Company shall
become eligible to receive Incentives under the Plan when designated by the
Committee.

3.2 Delegation of Authority. With respect to participants not subject to either
Section 16 of the 1934 Act or Section 162(m) of the Code, the Committee may
delegate to appropriate officers of the Company its authority to designate
participants, to determine the size

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and type of Incentives to be received by those participants, and to set and
modify the terms of such Incentives; provided, however, that the resolution so
authorizing any such officer shall specify the total number of Incentives such
officer may so award and such actions shall be treated for all purposes as if
taken by the Committee, and provided further that the per share exercise price
of any options granted by an officer, rather than by the Committee, shall be
equal to the Fair Market Value (as defined in Section 13.10) of a share of
Non-Voting Stock on the later of the date the officer approves such grant or the
date the participant’s employment with or service to the Company commences.

4. Types of Incentives. Incentives may be granted under the Plan to eligible
participants in the forms of (a) incentive stock options, (b) non-qualified
stock options, (c) stock appreciation rights (“SARs”), (d) restricted stock,
(e) restricted stock units (“RSUs”), and (f) Other Stock-Based Awards (as
defined in Section 10).

5. Shares Subject to the Plan.

5.1 Number of Shares. Subject to adjustment as provided in Section 13.5, the
maximum number of shares of Non-Voting Stock that may be delivered to
participants and their permitted transferees under the Plan shall be 750,000
shares.

5.2 Share Counting. To the extent any shares of Non-Voting Stock covered by a
stock option or SAR are not delivered to a participant or permitted transferee
because the Incentive is forfeited or canceled, or shares of Non-Voting Stock
are not delivered because an Incentive is paid or settled in cash, such shares
shall not be deemed to have been delivered for purposes of determining the
maximum number of shares of Non-Voting Stock available for delivery under this
Plan. In the event that shares of Non-Voting Stock are issued as an Incentive
and thereafter are forfeited or reacquired by the Company pursuant to rights
reserved upon issuance thereof, such forfeited and reacquired Shares may again
be issued under the Plan. With respect to SARs, if the SAR is payable in shares
of Non-Voting Stock, all shares to which the SARs relate are counted against the
Plan limits, rather than the net number of shares delivered upon exercise of the
SAR.

5.3 Limitations on Awards. Subject to adjustment as provided in Section 13.5,
the following additional limitations are imposed under the Plan:

(a) The maximum number of shares of Non-Voting Stock that may be issued upon
exercise of stock options intended to qualify as incentive stock options under
Section 422 of the Code shall be 25,000 shares.

(b) The maximum number of shares of Non-Voting Stock that may be covered by
Incentives granted under the Plan to any one individual during any one
fiscal-year period shall be 100,000.

(c) The maximum value of an Other Stock-Based Award that is valued in dollars
(whether or not paid in Non-Voting Stock) scheduled to be paid out to any one
participant in any fiscal year shall be $900,000.

 

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5.4 Type of Non-Voting Stock. Non-Voting Stock issued under the Plan may be
authorized and unissued shares or issued shares held as treasury shares.

6. Stock Options. A stock option is a right to purchase shares of Non-Voting
Stock from PHI. Stock options granted under the Plan may be incentive stock
options (as such term is defined in Section 422 of the Code) or non-qualified
stock options. Any option that is designated as a non-qualified stock option
shall not be treated as an incentive stock option. Each stock option granted by
the Committee under this Plan shall be subject to the following terms and
conditions:

6.1 Price. The exercise price per share shall be determined by the Committee,
subject to adjustment under Section 13.5; provided that in no event shall the
exercise price be less than the Fair Market Value (as defined in Section 13.10)
of a share of Non-Voting Stock on the date of grant, except in the case of a
stock option granted in assumption of or substitution for an outstanding award
of a company acquired by the Company or with which the Company combines. In the
event that an option grant is approved by the Committee, but is to take effect
on a later date, such as when employment or service commences, such later date
shall be the date of grant.

6.2 Number. The number of shares of Non-Voting Stock subject to the option shall
be determined by the Committee, subject to Section 5 and subject to adjustment
as provided in Section 13.5.

6.3 Duration and Time for Exercise. The term of each stock option shall be
determined by the Committee, but shall not exceed a maximum term of ten years.
Each stock option shall become exercisable at such time or times during its term
as shall be determined by the Committee. Notwithstanding the foregoing, the
Committee may accelerate the exercisability of any stock option at any time, in
addition to the automatic acceleration of stock options under Section 12.

6.4 Repurchase. Upon approval of the Committee, the Company may repurchase a
previously granted stock option from a participant by mutual agreement before
such option has been exercised by payment to the participant of the amount per
share by which: (a) the Fair Market Value of the Non-Voting Stock subject to the
option on the business day immediately preceding the date of purchase exceeds
(b) the exercise price, or by payment of such other mutually agreed upon amount;
provided, however, that no such repurchase shall be permitted if prohibited by
Section 6.6.

6.5 Manner of Exercise. A stock option may be exercised, in whole or in part, by
giving written notice to the Company, specifying the number of shares of
Non-Voting Stock to be purchased. The exercise notice shall be accompanied by
the full purchase price for such shares. The option price shall be payable in
United States dollars and may be paid (a) in cash; (b) by check; (c) by delivery
of or attestation of ownership of shares of Non-Voting Stock, which shares shall
be valued for this purpose at the Fair Market Value on the business day
immediately preceding the date such option is exercised; (d) by delivery of
irrevocable written instructions to a broker approved by the Company (with a
copy to the Company) to immediately sell a portion of the shares, issuable under
the option and to deliver promptly to the Company the amount of

 

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sale proceeds (or loan proceeds if the broker lends funds to the participant for
delivery to the Company) to pay the exercise price; (e) if approved by the
Committee, through a net exercise procedure whereby the optionee surrenders the
option in exchange for that number of shares of Non-Voting Stock with an
aggregate Fair Market Value equal to the difference between the aggregate
exercise price of the options being surrendered and the aggregate Fair Market
Value of the shares of Non-Voting Stock subject to the option; or (f) in such
other manner as may be authorized from time to time by the Committee.

6.6 Repricing. Except for adjustments pursuant to Section 13.5 or actions
permitted to be taken by the Committee under Section 12 in the event of a Change
of Control, unless approved by the stockholders of the Company, (a) the exercise
or base price for any outstanding option or SAR granted under this Plan may not
be decreased after the date of grant; and (b) an outstanding option or SAR that
has been granted under this Plan may not, as of any date that such option or SAR
has a per share exercise price that is greater than the then current Fair Market
Value of a share of Non-Voting Stock, be surrendered to the Company as
consideration for the grant of a new option or SAR with a lower exercise price,
shares of restricted stock, restricted stock units, an Other Stock-Based Award,
a cash payment, or Non-Voting Stock.

6.7 Incentive Stock Options. Notwithstanding anything in the Plan to the
contrary, the following additional provisions shall apply to the grant of stock
options that are intended to qualify as incentive stock options (as such term is
defined in Section 422 of the Code):

(a) Any incentive stock option agreement authorized under the Plan shall contain
such other provisions as the Committee shall deem advisable, but shall in all
events be consistent with and contain or be deemed to contain all provisions
required in order to qualify the options as incentive stock options.

(b) All incentive stock options must be granted within ten years from the date
on which this Plan is adopted by the Board of Directors.

(c) No incentive stock options shall be granted to any non-employee or to any
participant who, at the time such option is granted, would own (within the
meaning of Section 422 of the Code) stock possessing more than 10% of the total
combined voting power of all classes of stock of the employer corporation or of
its parent or subsidiary corporation.

(d) The aggregate Fair Market Value (determined with respect to each incentive
stock option as of the time such incentive stock option is granted) of the
Non-Voting Stock with respect to which incentive stock options are exercisable
for the first time by a participant during any calendar year (under the Plan or
any other plan of PHI or any of its subsidiaries) shall not exceed $100,000. To
the extent that such limitation is exceeded, the excess options shall be treated
as non-qualified stock options for federal income tax purposes.

 

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7. Stock Appreciation Rights.

7.1 Grant of Stock Appreciation Rights. A stock appreciation right, or SAR, is a
right to receive, without payment to the Company, a number of shares of
Non-Voting Stock, cash, or any combination thereof, the number or amount of
which is determined pursuant to the formula set forth in Section 7.5. Each SAR
granted by the Committee under the Plan shall be subject to the terms and
conditions of the Plan and the applicable Incentive Agreement.

7.2 Number. Each SAR granted to any participant shall relate to such number of
shares of Non-Voting Stock as shall be determined by the Committee, subject to
adjustment as provided in Section 13.5.

7.3 Duration and Time for Exercise. The term of each SAR shall be determined by
the Committee, but shall not exceed a maximum term of ten years. Each SAR shall
become exercisable at such time or times during its term as shall be determined
by the Committee. Notwithstanding the foregoing, the Committee may accelerate
the exercisability of any SAR at any time in its discretion in addition to the
automatic acceleration of SARs under Section 12.

7.4 Exercise. A SAR may be exercised, in whole or in part, by giving written
notice to the Company, specifying the number of SARs that the holder wishes to
exercise. The date that the Company receives such written notice shall be
referred to herein as the “Exercise Date.” The Company shall, within 30 days of
an Exercise Date, deliver to the exercising holder certificates for, or other
evidence of ownership of, the shares of Non-Voting Stock to which the holder is
entitled pursuant to Section 7.5 or cash or both, as provided in the Incentive
Agreement.

7.5 Payment.

(a) The number of shares of Non-Voting Stock which shall be issuable upon the
exercise of a SAR payable in Non-Voting Stock shall be determined by dividing:

(i) the number of shares of Non-Voting Stock as to which the SAR is exercised,
multiplied by the amount of the appreciation in each such share (for this
purpose, the “appreciation” shall be the amount by which the Fair Market Value
(as defined in Section 13.10) of a share of Non-Voting Stock subject to the SAR
on the trading day prior to the Exercise Date exceeds the “Base Price,” which is
an amount, not less than the Fair Market Value of a share of Non-Voting Stock on
the date of grant, which shall be determined by the Committee at the time of
grant, subject to adjustment under Section 13.5); by

(ii) the Fair Market Value of a share of Non-Voting Stock on the Exercise Date.

(b) No fractional shares of Non-Voting Stock shall be issued upon the exercise
of a SAR; instead, the holder of a SAR shall be entitled to purchase the portion
necessary to make a whole share at its Fair Market Value on the Exercise Date.

(c) If so provided in the Incentive Agreement, a SAR may be exercised for cash
equal to the Fair Market Value of the shares of Non-Voting Stock that would be
issuable under this Section 7.5, if the exercise had been for Non-Voting Stock.

8. Restricted Stock.

 

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8.1 Grant of Restricted Stock. The Committee may award shares of restricted
stock to such eligible participants as determined pursuant to the terms of
Section 3. An award of restricted stock shall be subject to such restrictions on
transfer and forfeitability provisions and such other terms and conditions,
including the attainment of specified performance goals, as the Committee may
determine, subject to the provisions of the Plan. To the extent restricted stock
is intended to qualify as “performance-based compensation” under Section 162(m),
it must be granted subject to the attainment of performance goals as described
in Section 11 below and meet the additional requirements imposed by
Section 162(m).

8.2 The Restricted Period. At the time an award of restricted stock is made, the
Committee shall establish a period of time during which the transfer of the
shares of restricted stock shall be restricted and after which the shares of
restricted stock shall be vested (the “Restricted Period”). Each award of
restricted stock may have a different Restricted Period.

8.3 Escrow. The participant receiving restricted stock shall enter into an
Incentive Agreement with the Company setting forth the conditions of the grant.
Any certificates representing shares of restricted stock shall be registered in
the name of the participant and deposited with the Company, together with a
stock power endorsed in blank by the participant. Each such certificate shall
bear a legend in substantially the following form:

The transferability of this certificate and the shares of non-voting common
stock represented by it are subject to the terms and conditions (including
conditions of forfeiture) contained in the PHI, Inc. Long-Term Incentive Plan
(the “Plan”), and an agreement entered into between the registered owner and
PHI, Inc. thereunder. Copies of the Plan and the agreement are on file at the
principal office of PHI, Inc.

Alternatively, in the discretion of the Company, ownership of the shares of
restricted stock and the appropriate restrictions shall be reflected in the
records of the Company’s transfer agent and no physical certificates shall be
issued prior to vesting.

8.4 Dividends on Restricted Stock. Any and all cash and stock dividends paid
with respect to the shares of restricted stock shall be subject to any
restrictions on transfer, forfeitability provisions or reinvestment requirements
as the Committee may, in its discretion, prescribe in the Incentive Agreement.

8.5 Forfeiture. In the event of the forfeiture of any shares of restricted stock
under the terms provided in the Incentive Agreement (including any additional
shares of restricted stock that may result from the reinvestment of cash and
stock dividends, if so provided in the Incentive Agreement), such forfeited
shares shall be surrendered and any certificates cancelled. The participants
shall have the same rights and privileges, and be subject to the same forfeiture
provisions, with respect to any additional shares received pursuant to
Section 13.5 due to a recapitalization or other change in capitalization.

8.6 Expiration of Restricted Period. Upon the expiration or termination of the
Restricted Period and the satisfaction of any other conditions prescribed by the
Committee, the restrictions applicable to the restricted stock shall lapse and,
unless otherwise instructed by the

 

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participant, a stock certificate for the number of shares of restricted stock
with respect to which the restrictions have lapsed shall be delivered, free of
all such restrictions and legends, except any that may be imposed by law, to the
participant or the participant’s estate, as the case may be.

8.7 Rights as a Stockholder. Subject to the terms and conditions of the Plan and
subject to any restrictions on the receipt of dividends that may be imposed in
the Incentive Agreement, each participant receiving restricted stock shall have
all the rights of a holder of Non-Voting Stock with respect to such shares
during the Restricted Period.

9. Restricted Stock Units.

9.1 Grant of Restricted Stock Units. A restricted stock unit, or RSU, represents
the right to receive from the Company on the respective scheduled vesting or
payment date for such RSU, one share of Non-Voting Stock. An award of RSUs may
be subject to the attainment of specified performance goals or targets,
forfeitability provisions and such other terms and conditions as the Committee
may determine, subject to the provisions of the Plan. To the extent an award of
RSUs is intended to qualify as performance-based compensation under
Section 162(m), it must be granted subject to the attainment of performance
goals as described in Section 11 and meet the additional requirements imposed by
Section 162(m).

9.2 Vesting Period. At the time an award of RSUs is made, the Committee shall
establish a period of time during which the restricted stock units shall vest
(the “Vesting Period”). Each award of RSUs may have a different Vesting Period.

9.3 Dividend Equivalent Accounts. Subject to the terms and conditions of this
Plan and the applicable Incentive Agreement, as well as any procedures
established by the Committee, the Committee may determine to pay dividend
equivalent rights with respect to RSUs, in which case, unless determined by the
Committee to be paid currently, the Company shall establish an account for the
participant and reflect in that account any securities, cash or other property
comprising any dividend or property distribution with respect to the share of
Non-Voting Stock underlying each RSU. The participant shall have rights to the
amounts or other property credited to such account, subject to any restrictions
contained in this Plan and the applicable Incentive Agreement.

9.4 Rights as a Stockholder. Subject to the restrictions imposed under the terms
and conditions of this Plan and subject to any other restrictions that may be
imposed in the Incentive Agreement, each participant receiving restricted stock
units shall have no rights as a stockholder with respect to such restricted
stock units until such time as shares of Non-Voting Stock are issued to the
participant.

10. Other Stock-Based Awards.

10.1 Grant of Other Stock-Based Awards. Subject to the limitations described in
Section 10.2 hereof, the Committee may grant to eligible participants “Other
Stock-Based Awards,” which shall consist of awards (other than options, SARs,
restricted stock, or RSUs described in Sections 6 through 9 hereof) paid out in
shares of Non-Voting Stock or the value of which is based in whole or in part on
the value of shares of Non-Voting Stock. Other Stock-Based Awards may be awards
of shares of Non-Voting Stock, awards of phantom stock, or may

 

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be denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, shares of, or appreciation in the value of,
Non-Voting Stock (including, without limitation, securities convertible or
exchangeable into or exercisable for shares of Non-Voting Stock), as deemed by
the Committee consistent with the purposes of this Plan. The Committee shall
determine the terms and conditions of any Other Stock-Based Award (including
which rights of a stockholder, if any, the recipient shall have with respect to
Non-Voting Stock associated with any such award) and may provide that such award
is payable in whole or in part in cash. An Other Stock-Based Award may be
subject to the attainment of such specified performance goals or targets as the
Committee may determine, subject to the provisions of this Plan. To the extent
that an Other Stock-Based Award is intended to qualify as “performance-based
compensation” under Section 162(m), it must be granted subject to the attainment
of performance goals as described in Section 11 below and meet the additional
requirements imposed by Section 162(m).

10.2 Limitations. An acceleration of the expiration of an applicable vesting
period shall occur (i) as provided under Section 13.3 in the event of
termination of employment under the circumstances provided in the Incentive
Agreement and (ii) as described in Section 12 in the event of a Change of
Control of the Company.

11. Performance Goals for Section 162(m) Awards. To the extent that shares of
restricted stock, RSUs, or Other Stock-Based Awards granted under the Plan are
intended to qualify as “performance-based compensation” under Section 162(m),
the vesting, grant, or payment of such awards shall be conditioned on the
achievement of one or more performance goals and must satisfy the other
requirements of Section 162(m). The performance goals pursuant to which such
awards shall vest, be granted, or be paid out shall be any or a combination of
the following performance measures applied to the Company, PHI, a division,
segment, department, business unit, or a subsidiary: earnings per share;
earnings or earnings before interest, taxes, depreciation, and amortization
(“EBITDA”); EBITDA divided by revenues; earnings before interest, taxes,
depreciation, and amortization and rentals (“EBITDAR”); EBITDAR divided by
revenues; an economic value-added measure; stock price; shareholder return;
return on shareholder equity; return on assets; return on capital employed;
return on total capital; return on assets or net assets; revenue; reduction of
expenses; free cash flow; operating cash flow; income, pre-tax income, or net
income; operating income or net operating income; gross profit; operating profit
or net operating profit; operating margin or profit margin; return on operating
revenue; return on invested capital; market segment share; safety performance;
achievement of business or operational goals such as market share, customer
growth, customer satisfaction, new product or services revenue, or business
development; or strategic business criteria, consisting of one or more
objectives based on meeting specified revenue, market share, market penetration,
or geographic business expansion goals, objectively-identified project
milestones, cost targets, and goals relating to acquisitions or divestitures.
For any performance period, such performance objectives may be measured on an
absolute basis or relative to a group of peer companies selected by the
Committee, relative to internal goals or relative to levels attained in prior
years. The performance goals may be subject to such adjustments as are specified
in advance by the Committee in accordance with Section 162(m).

12. Change of Control.

 

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12.1 Definitions. As used in this Section 12, the following words or terms shall
have the meanings indicated:

(a) Approval Date shall mean the date of the Board’s approval of this Plan.

(b) Beneficial Owner (and variants thereof), with respect to a security shall
mean a Person who, directly or indirectly (through any contract, understanding,
relationship, or otherwise), has or shares (i) the power to vote, or direct the
voting of, the security, and/or (ii) the power to dispose of, or to direct the
disposition of, the security.

(c) Business Combination shall mean the consummation of a reorganization,
merger, or consolidation (including a merger or consolidation of the Company or
any direct or indirect subsidiary of the Company), or sale or other disposition
of all or substantially all of the assets of PHI.

(d) Change of Control Value shall equal the amount determined by whichever of
the following items is applicable:

(i) the per share price to be paid to holders of Non-Voting Stock in any such
merger, consolidation, or other reorganization;

(ii) the price per share offered to holders of Non-Voting Stock in any tender
offer or exchange offer whereby a Change of Control takes place;

(iii) in all other events, the Fair Market Value per share of Non-Voting Stock
into which such options or SARs being converted are exercisable or right to
receive Non-Voting Stock is to be settled, as determined by the Committee as of
the date determined by the Committee to be the date of conversion of such
options; or

(iv) in the event that the consideration offered to holders of Non-Voting Stock
in any transaction described in this Section 12 consists of anything other than
cash, the Committee shall determine the fair cash equivalent of the portion of
the consideration offered that is other than cash.

(e) Incumbent Board shall mean the individuals who, as of the Approval Date,
constitute the Board.

(f) Person shall mean a natural person or company, and shall also mean the group
or syndicate created when two or more Persons act as a syndicate or other group
(including, without limitation, a partnership or limited partnership) for the
purpose of acquiring, holding, or disposing of a security, except that Person
shall not include an underwriter temporarily holding a security pursuant to an
offering of the security.

(g) Post-Transaction Corporation.

 

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(i) Unless a Change of Control includes a Business Combination, Post-Transaction
Corporation shall mean PHI after the Change of Control.

(ii) If a Change of Control includes a Business Combination, Post-Transaction
Corporation shall mean the corporation resulting from such Business Combination,
including a corporation which as a result of such transaction owns PHI or all or
substantially all of PHI’s assets either directly or through one or more
subsidiaries.

12.2 Change of Control Defined. Unless otherwise provided in an Incentive
Agreement, Change of Control shall mean:

(a) the acquisition by any Person of Beneficial Ownership of more than 50
percent of the outstanding shares of PHI voting common stock, $0.10 par value
per share (the “Voting Stock”); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a Change of
Control:

(i) any acquisition of Voting Stock directly from PHI,

(ii) any acquisition of Voting Stock by PHI,

(iii) any acquisition of Voting Stock by any employee benefit plan, including
without limitation an employee stock ownership plan (or related trust) sponsored
or maintained by PHI or any corporation controlled by PHI, or

(iv) any acquisition of Voting Stock by any corporation or entity pursuant to a
transaction that does not constitute a Change of Control under Section 12.2(b);
or

(b) a Business Combination, in each case, unless, following such Business
Combination, all or substantially all of the Persons who were the Beneficial
Owners of PHI’s outstanding common stock (“Common Stock,” including but not
limited to Non-Voting Stock and Voting Stock) and PHI’s voting securities
entitled to vote generally in the election of directors immediately prior to
such Business Combination have direct or indirect Beneficial Ownership,
respectively, of more than 50 percent of the then-outstanding shares of Common
Stock, and more than 50 percent of the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of
directors, of the Post-Transaction Corporation; or

(c) approval by the shareholders of PHI of a plan of complete liquidation or
dissolution of PHI.

12.3 Effect of a Change of Control.

(a) Unless otherwise provided in the applicable Incentive Agreement, immediately
prior to the consummation of any Change of Control, all outstanding Incentives
granted pursuant to the Plan shall automatically become fully vested and
exercisable, all restrictions or limitations on any Incentives shall lapse and
all performance criteria and other conditions relating to the payment of
Incentives shall be deemed to be achieved or waived by PHI without the necessity
of action by any Person.

 

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(b) As used in this Section 12.3, “immediately prior” to the Change of Control
shall mean sufficiently in advance of the Change of Control to permit the
grantee to take all steps reasonably necessary (i) to exercise any option or SAR
fully, and (ii) to deal with the shares purchased or acquired under any
Incentive so that all such shares may be treated in the same manner in
connection with the Change of Control as the shares of Non-Voting Stock of other
shareholders.

12.4 Committee Discretion to Set Terms of Exercise or Exchange. No later than 30
days after the approval by the Board of a Change of Control of the types
described in subsections (b) or (c) of Section 12.2 and no later than 30 days
after a Change of Control of the type described in subsection (a) of
Section 12.2, the Committee (as the Committee was composed immediately prior to
such Change of Control and notwithstanding any removal or attempted removal of
some or all of the members thereof as directors or Committee members), acting in
its sole discretion without the consent or approval of any participant, may act
to effect one or more of the alternatives listed below and such act by the
Committee may not be revoked or rescinded by persons not members of the
Committee immediately prior to the Change of Control:

(a) accelerate the vesting of any Incentives which did not automatically
accelerate under the terms of this Plan and/or the applicable Incentive
Agreement;

(b) require that all outstanding options and SARs be exercised on or before a
specified date (before or after such Change of Control) fixed by the Committee,
after which specified date all unexercised options and SARs shall terminate,

(c) make such equitable adjustments to Incentives then-outstanding as the
Committee deems appropriate to reflect such Change of Control (provided,
however, that the Committee may determine in its sole discretion that no
adjustment is necessary),

(d) provide for mandatory conversion of some or all of the outstanding options,
SARs, or rights to received Non-Voting Stock granted under the Plan held by some
or all participants as of a date, before or after such Change of Control,
specified by the Committee, in which event such options, SARs and rights shall
be deemed automatically cancelled and the Company shall pay, or cause to be
paid, to each such participant an amount of cash per share equal to the excess,
if any, of the Change of Control Value of the shares subject to such option,
SAR, or right, as defined and calculated above, over the exercise price(s) of
such options, SARs, or rights, if any, or, in lieu of such cash payment, the
issuance of Non-Voting Stock or securities of an acquiring entity having a Fair
Market Value equal to such excess, or

(e) provide that thereafter, upon any exercise of an option or SAR or the
settlement of any other right to receive Non-Voting Stock, the participant shall
be entitled to purchase under such option or SAR, or receive in settlement of
such right, in lieu of the number of shares of Non-Voting Stock then covered by
such option, SAR, or right, the number and class

 

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of shares of stock or other securities or property (including, without
limitation, cash) to which the participant would have been entitled pursuant to
the terms of the agreement providing for the reorganization, merger,
consolidation, or asset sale, if, immediately prior to such Change of Control,
the participant had been the holder of record of the number of shares of
Non-Voting Stock then covered by such options, SARs, and rights.

13. General.

13.1 Duration. No Incentives may be granted under the Plan after May 4, 2022;
provided, however, that subject to Section 13.9, the Plan shall remain in effect
after such date with respect to Incentives granted prior to that date, until all
such Incentives have either been satisfied by the issuance of shares of
Non-Voting Stock or otherwise been terminated under the terms of the Plan and
all restrictions imposed on shares of Non-Voting Stock in connection with their
issuance under the Plan have lapsed.

13.2 Transferability. No Incentives granted hereunder may be transferred,
pledged, assigned or otherwise encumbered by a participant except: (a) by will;
(b) by the laws of descent and distribution; (c) if permitted by the Committee
and so provided in the Incentive Agreement or an amendment thereto, pursuant to
a domestic relations order, as defined in the Code; or (d) as to options only,
if permitted by the Committee and so provided in the Incentive Agreement or an
amendment thereto, (i) to Immediate Family Members, (ii) to a partnership in
which the participant and/or Immediate Family Members, or entities in which the
participant and/or Immediate Family Members are the sole owners, members or
beneficiaries, as appropriate, are the sole partners, (iii) to a limited
liability company in which the participant and/or Immediate Family Members, or
entities in which the participant and/or Immediate Family Members are the sole
owners, members or beneficiaries, as appropriate, are the sole members, or
(iv) to a trust for the sole benefit of the participant and/or Immediate Family
Members. “Immediate Family Members” shall be defined as the spouse and natural
or adopted children or grandchildren of the participant and their spouses. To
the extent that an incentive stock option is permitted to be transferred during
the lifetime of the participant, it shall be treated thereafter as a
nonqualified stock option. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of Incentives, or levy of attachment or
similar process upon Incentives not specifically permitted herein, shall be null
and void and without effect.

13.3 Effect of Termination of Employment or Death. In the event that a
participant ceases to be an employee of the Company or to provide services to
the Company for any reason, including death, disability, early retirement or
normal retirement, any Incentives may be exercised, shall vest or shall expire
at such times as may be determined by the Committee and provided in the
Incentive Agreement.

13.4 Additional Conditions. Anything in this Plan to the contrary
notwithstanding: (a) the Company may, if it shall determine it necessary or
desirable for any reason, at the time of award of any Incentive or the issuance
of any shares of Non-Voting Stock pursuant to any Incentive, require the
recipient of the Incentive, as a condition to the receipt thereof or to the
receipt of shares of Non-Voting Stock issued pursuant thereto, to deliver to the
Company a written representation of present intention to acquire the Incentive
or the shares of Non-Voting Stock issued pursuant thereto for his own account
for investment and not for

 

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distribution; and (b) if at any time the Company further determines, in its sole
discretion, that the listing, registration or qualification (or any updating of
any such document) of any Incentive or the shares of Non-Voting Stock issuable
pursuant thereto is necessary on any securities exchange or under any federal or
state securities or blue sky law, or that the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of, or in
connection with the award of any Incentive, the issuance of shares of Non-Voting
Stock pursuant thereto, or the removal of any restrictions imposed on such
shares, such Incentive shall not be awarded or such shares of Non-Voting Stock
shall not be issued or such restrictions shall not be removed, as the case may
be, in whole or in part, unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Company.

13.5 Adjustment. In the event of any recapitalization, reclassification, stock
dividend, stock split, combination of shares or other similar change in the
Non-Voting Stock, the number of shares of Non-Voting Stock then subject to the
Plan, including shares subject to outstanding Incentives, and any and all other
limitations provided in the Plan limiting the number of shares of Non-Voting
Stock that may be issued hereunder, shall be adjusted in proportion to the
change in outstanding shares of Non-Voting Stock. In the event of any such
adjustments, the price of any option, the Base Price of any SAR and the
performance objectives of any Incentive shall also be adjusted to provide
participants with the same relative rights before and after such adjustment. No
substitution or adjustment shall require the Company to issue a fractional share
under the Plan and the substitution or adjustment shall be limited by deleting
any fractional share.

13.6 Withholding.

(a) The Company shall have the right to withhold from any payments made or stock
issued under the Plan or to collect as a condition of payment, issuance or
vesting, any taxes required by law to be withheld. At any time that a
participant is required to pay to the Company an amount required to be withheld
under applicable income tax laws in connection with an Incentive, the
participant may, with the prior approval of the Committee, subject to
Section 13.6(b) below, satisfy this obligation in whole or in part by electing
(the “Election”) to deliver currently owned shares of Non-Voting Stock or to
have the Company withhold shares of Non-Voting Stock, in each case having a
value equal to the minimum statutory amount required to be withheld under
federal, state and local law. The value of the shares to be delivered or
withheld shall be based on the Fair Market Value of the Non-Voting Stock on the
date that the amount of tax to be withheld shall be determined (“Tax Date”).

(b) Each Election must be made prior to the Tax Date. If a participant makes an
election under Section 83(b) of the Code with respect to shares of restricted
stock, an Election to have shares withheld to satisfy withholding taxes is not
permitted to be made.

13.7 No Continued Employment. No participant under the Plan shall have any
right, because of his or her participation, to continue in the employ of the
Company for any period of time or to any right to continue his or her present or
any other rate of compensation.

 

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13.8 Deferral Permitted. Payment of an Incentive may be deferred at the option
of the participant if permitted in the Incentive Agreement. Any deferral
arrangements shall comply with Section 409A of the Code.

13.9 Amendments to or Termination of the Plan. The Board may amend or
discontinue this Plan at any time; provided, however, that no such amendment
may:

(a) amend Section 6.6 to permit repricing of options or SARs without the
approval of stockholders;

(b) materially impair, without the consent of the recipient, an Incentive
previously granted, except that the Company retains all of its rights under
Section 12; or

(c) materially revise the Plan without the approval of the stockholders. A
material revision of the Plan includes (i) except for adjustments permitted
herein, a material increase to the maximum number of shares of Non-Voting Stock
that may be issued through the Plan, (ii) a material increase to the benefits
accruing to participants under the Plan, (iii) a material expansion of the
classes of persons eligible to participate in the Plan, (iv) an expansion of the
types of awards available for grant under the Plan, (v) a material extension of
the term of the Plan and (vi) a material change that reduces the price at which
shares of Non-Voting Stock may be offered through the Plan.

13.10 Definition of Fair Market Value. Whenever “Fair Market Value” of
Non-Voting Stock shall be determined for purposes of this Plan, except as
provided below in connection with a cashless exercise through a broker, it shall
be determined as follows: (i) if the Non-Voting Stock is listed on an
established stock exchange or any automated quotation system that provides sale
quotations, the closing sale price for a share of the Non-Voting Stock on such
exchange or quotation system on the date as of which fair market value is to be
determined, (ii) if the Non-Voting Stock is not listed on any exchange or
quotation system, but bid and asked prices are quoted and published, the mean
between the quoted bid and asked prices on the date as of which fair market
value is to be determined, and if bid and asked prices are not available on such
day, on the next preceding day on which such prices were available; and (iii) if
the Non-Voting Stock is not regularly quoted, the fair market value of a share
of Non-Voting Stock on the date as of which fair market value is to be
determined, as established by the Committee in good faith. In the context of a
cashless exercise through a broker, the “Fair Market Value” shall be the price
at which the Non-Voting Stock subject to the stock option is actually sold in
the market to pay the option exercise price.

 

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