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

EXHIBIT 10.3
 
FEDERATED NATIONAL HOLDING COMPANY
AMENDED AND RESTATED 2012 STOCK INCENTIVE PLAN
 
ARTICLE 1
GENERAL
 
1.1           Purpose
 
The Amended and Restated 2012 Stock Incentive Plan (the "Plan") is designed to
provide certain key persons, on whose initiative and efforts the successful
conduct of the business of Federated National Holding Company (the "Company")
depends, with incentives to: (a) enter into and remain in the service of the
Company, (b) acquire a proprietary interest in the success of the Company, (c)
maximize their performance, and (d) enhance the long-term performance of the
Company.
 
1.2           Administration
 
(a)           Administration by Board of Directors. The Plan shall be
administered by the Compensation Committee of the Company's Board of Directors
(the "Administrator"). The Administrator shall have the authority (i) to
exercise all of the powers granted to it under the Plan, (ii) to construe,
interpret and implement the Plan and any Award Agreements executed pursuant to
Section 2.1 in its sole discretion with all such determination being final,
binding and conclusive, (iii) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules governing its own operations,
(iv) to make all determinations necessary or advisable in administering the
Plan, and (v) to correct any defect, supply any omission and reconcile any
inconsistency in the Plan.
 
(b)           Administrator Action. Actions of the Administrator shall be taken
by the vote of a majority of its members. Any action may be taken by a written
instrument signed by a majority of the Administrator members, and action so
taken shall be fully as effective as if it had been taken by a vote at a
meeting. Except to the extent prohibited by applicable law or the applicable
rules of a stock exchange, the Administrator may allocate all or any portion of
its responsibilities and powers to any one or more of its members and may
delegate all or any part of its responsibilities to any person or persons
selected by it, and may revoke any such allocation or delegation at any time.
 
1.3           Persons Eligible for Awards
 
The persons eligible to receive awards under the Plan are those officers,
directors, and executive, managerial, administrative and professional employees
of the Company and its subsidiaries (collectively, "key persons") as the
Administrator in its sole discretion shall select, taking into account the
duties of the respective employees, their present and potential contributions to
the success of the Company and its subsidiaries, and such other factors as the
Administrator deems relevant in connection with accomplishing the purpose of the
Plan. The Administrator may from time to time, in its sole discretion, determine
that any key person shall be ineligible to receive awards under the Plan.
 
 
 

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

 
 
1.4           Types of Awards Under Plan
 
Awards may be made under the Plan in the form of (a) incentive stock options,
(b) non-qualified stock options, (c) stock appreciation rights, (d) dividend
equivalent rights, (e) restricted stock, (f) unrestricted stock, (g) restricted
stock units, and (h) performance shares, all as more fully set forth in Article
II. The term "award" means any of the foregoing. No incentive stock option may
be granted to a person who is not an employee of the Company or one of its
subsidiaries on the date of grant.
 
1.5           Shares Available for Awards
 
(a)           Aggregate Number Available; Certificate Legends. Subject to the
provisions of Section 1.5(b), the total number of shares of common stock of the
Company ("Common Stock") with respect to which awards may be granted pursuant to
the Plan is 1,000,000 shares. Shares issued pursuant to the Plan may be
authorized but unissued Common Stock, authorized and issued Common Stock held in
the Company's treasury or Common Stock acquired by the Company for the purposes
of the Plan. The Administrator may direct that any stock certificate evidencing
shares issued pursuant to the Plan shall bear a legend setting forth such
restrictions on transferability as may apply to such shares.
 
(b)           Adjustment Upon Changes in Common Stock. Upon certain changes in
Common Stock, the number of shares of Common Stock available for issuance with
respect to awards that may be granted under the Plan pursuant to Section 1.5(a),
shall be adjusted pursuant to Section 3.7(a).
 
(c)           Certain Shares to Become Available Again. The following shares of
Common Stock shall again become available for awards under the Plan: (i) any
shares that are subject to an award under the Plan and that remain unissued upon
the cancellation or termination of such award for any reason whatsoever; (ii)
any shares of restricted stock forfeited pursuant to Section 2.7(e), provided
that any dividends paid on such shares are also forfeited pursuant to such
Section 2.7(e); and (iii) any shares in respect of which a stock appreciation
right or performance share award is settled for cash.
 
1.6           Definitions of Certain Terms
 
(a)            The "Fair Market Value" of a share of Common Stock on any day
shall be the closing price on the Nasdaq Stock Market as reported for such day
in The Wall Street Journal or, if no such price is reported for such day, the
average of the high bid and low asked price of Common Stock as reported for such
day. If no quotation is made for the applicable day, the Fair Market Value of a
share of Common Stock on such day shall be determined in the manner set forth in
the preceding sentence using quotations for the next preceding day for which
there were quotations, provided that such quotations shall have been made within
the ten (10) business days preceding the applicable day. Notwithstanding the
foregoing, if deemed necessary or appropriate by the Administrator, the Fair
Market Value of a share of Common Stock on any day shall be determined by the
Administrator. In no event shall the Fair Market Value of any share of Common
Stock be less than its par value.
 
 
2

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

 
 
(b)           The term "incentive stock option" means an option that is intended
to qualify for special federal income tax treatment pursuant to Sections 421 and
422 of the Internal Revenue Code of 1986 as now constituted or subsequently
amended (the "Code"), or pursuant to a successor provision of the Code, and
which is so designated in the applicable Award Agreement. Any option that is not
specifically designated as an incentive stock option shall under no
circumstances be considered an incentive stock option. Any option that is not an
incentive stock option is referred to herein as a "non-qualified stock option."
 
(c)           The term "cause" in connection with a termination of employment by
reason of a dismissal for cause shall mean:
 
(i)           to the extent that there is an employment, severance or other
agreement governing the relationship between the grantee and the Company, a
Company subsidiary or a Company joint venture, which agreement contains a
definition of "cause," cause shall consist of those acts or omissions that would
constitute "cause" under such agreement; and otherwise,
 
(ii)           the grantee's termination of employment by the Company or a
subsidiary or an affiliate on account of any one or more of the following:
 
(1)           any failure by the grantee substantially to perform the grantee's
employment duties;
 
(2)           any excessive unauthorized absenteeism by the grantee;
 
(3)           any refusal by the grantee to obey the lawful orders of the
Company's Board of Directors or any other person or Administrator to whom the
grantee reports;
 
(4)           any act or omission by the grantee that is or may be injurious to
the Company, monetarily or otherwise;
 
(5)           any act by the grantee that is inconsistent with the best
interests of the Company;
 
(6)           the grantee's material violation of any of the Company's policies,
including, without limitation, those policies relating to discrimination or
sexual harassment;
 
(7)           the grantee's unauthorized (a) removal from the premises of the
Company or a subsidiary or an affiliate of any document (in any medium or form)
relating to the Company or a subsidiary or an affiliate or the customers or
clients of the Company or a subsidiary or an affiliate or (b) disclosure to any
person or entity of any of the Company's, or its subsidiaries or affiliates'
confidential or proprietary information;
 
(8)           the grantee's commission of any felony, or any other crime
involving moral turpitude; and
 
(9)           the grantee's commission of any act involving dishonesty or fraud.
 
 
3

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

 
 
 
Any rights the Company may have hereunder in respect of the events giving rise
to cause shall be in addition to the rights the Company may have under any other
agreement with a grantee or at law or in equity. Any determination of whether a
grantee's employment is (or is deemed to have been) terminated for cause shall
be made by the Administrator in its discretion, which determination shall be
final, binding and conclusive on all parties. If, subsequent to a grantee's
voluntary termination of employment or involuntary termination of employment
without cause, it is discovered that the grantee's employment could have been
terminated for cause, the Administrator may deem such grantee's employment to
have been terminated for cause. A grantee's termination of employment for cause
shall be effective as of the date of the occurrence of the event giving rise to
cause, regardless of when the determination of cause is made.
 
(d)           "Common Stock Offering" shall mean the sale of the Company's
Common Stock in a firmly underwritten public offering.
 
ARTICLE 2
AWARDS UNDER THE PLAN
 
2.1           Agreements Evidencing Awards
 
 
Each award granted under the Plan (except an award of unrestricted stock) shall
be evidenced by a written certificate ("Award Agreement") which shall contain
such provisions as the Administrator may, in its sole discretion, deem necessary
or desirable. By executing an Award Agreement pursuant to the Plan, a grantee
thereby agrees that the award shall be subject to all of the terms and
provisions of the Plan and the applicable Award Agreement.
 
2.2           Grant of Stock Options, Stock Appreciation Rights, Restricted
Stock Units and Dividend Equivalent Rights
 
(a)           Stock Option Grants. The Administrator may grant incentive stock
options and non-qualified stock options ("options") to purchase shares of Common
Stock from the Company, to such key persons, and in such amounts and subject to
such vesting and forfeiture provisions and other terms and conditions, as the
Administrator shall determine, in its sole discretion, subject to the provisions
of the Plan.
 
(b)           Stock Appreciation Right Grants; Types of Stock Appreciation
Rights. The Administrator may grant stock appreciation rights to such key
persons, and in such amounts and subject to such vesting and forfeiture
provisions and other terms and conditions, as the Administrator shall determine,
in its sole discretion, subject to the provisions of the Plan. The terms of a
stock appreciation right may provide that it shall be automatically exercised
for a cash payment upon the happening of a specified event that is outside the
control of the grantee, and that it shall not be otherwise exercisable. Stock
appreciation rights may be granted in connection with all or any part of, or
independently of, any option granted under the Plan. A stock appreciation right
granted in connection with an option may be granted at or after the time of
grant of such option.
 
 
4

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

 
 
(c)           Nature of Stock Appreciation Rights. The grantee of a stock
appreciation right shall have the right, subject to the terms of the Plan and
the applicable Award Agreement, to receive from the Company an amount equal to
(i) the excess of the Fair Market Value of a share of Common Stock on the date
of exercise of the stock appreciation right over the Fair Market Value of a
share of Common Stock on the date of grant (or over the option exercise price if
the stock appreciation right is granted in connection with an option),
multiplied by (ii) the number of shares with respect to which the stock
appreciation right is exercised. Payment upon exercise of a stock appreciation
right shall be in cash or in shares of Common Stock (valued at their Fair Market
Value on the date of exercise of the stock appreciation right) or both, all as
the Administrator shall determine in its sole discretion. Upon the exercise of a
stock appreciation right granted in connection with an option, the number of
shares subject to the option shall be reduced by the number of shares with
respect to which the stock appreciation right is exercised. Upon the exercise of
an option in connection with which a stock appreciation right has been granted,
the number of shares subject to the stock appreciation right shall be reduced by
the number of shares with respect to which the option is exercised.
 
(d)           Option Exercise Price. Each Award Agreement with respect to an
option shall set forth the amount (the "option exercise price") payable by the
grantee to the Company upon exercise of the option evidenced thereby. The option
exercise price per share shall be determined by the Administrator in its sole
discretion. Notwithstanding the foregoing, with respect to any options granted
within 30 days of a Common Stock Offering, the option exercise price will be the
average of the Fair Market Value of a share of Common Stock over the 30 day
period following the closing of the Common Stock Offering.
 
(e)           Exercise Period. Each Award Agreement with respect to an option or
stock appreciation right shall set forth the periods during which the award
evidenced thereby shall be exercisable, whether in whole or in part. Such
periods shall be determined by the Administrator in its sole discretion;
provided, however, that no option or a stock appreciation right shall be
exercisable more than 10 years after the date of grant.
 
(f)           Reload Options. The Administrator may, in its sole discretion,
include in any Award Agreement with respect to an option (the "original option")
a provision that an additional option (the "reload option") shall be granted to
any grantee who, pursuant to Section 2.3(c)(ii), delivers shares of Common Stock
in partial or full payment of the exercise price of the original option. The
reload option shall be for a number of shares of Common Stock equal to the
number thus delivered, shall have an exercise price equal to the Fair Market
Value of a share of Common Stock on the date of exercise of the original option,
and shall have an expiration date no later than the expiration date of the
original option. In the event that an Award Agreement provides for the grant of
a reload option, such Award Agreement shall also provide that the exercise price
of the original option be no less than the Fair Market Value of a share of
Common Stock on its date of grant, and that any shares that are delivered
pursuant to Section 2.3(c)(ii) in payment of such exercise price shall have been
held for at least six months.
 
 
5

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

 
 
(g)           Dividend Equivalent Rights. The Administrator may, in its sole
discretion, include in any Award Agreement with respect to an option, stock
appreciation right or performance shares, a dividend equivalent right entitling
the grantee to receive amounts equal to the ordinary dividends that would be
paid, during the time such award is outstanding and unexercised, on the shares
of Common Stock covered by such award if such shares were then outstanding. In
the event such a provision is included in a Award Agreement, the Administrator
shall determine whether such payments shall be made in cash or in shares of
Common Stock, whether they shall be conditioned upon the exercise of the award
to which they relate, the time or times at which they shall be made, and such
other vesting and forfeiture provisions and other terms and conditions as the
Administrator shall deem appropriate.
 
(h)           Restricted Stock Units. The Administrator may, in its sole
discretion, grant restricted stock units to such key persons, and in such
amounts and subject to such vesting and forfeiture provisions and other terms
and conditions, as the Administrator shall determine, in its sole discretion,
subject to the provisions of the Plan. A restricted stock unit granted under the
Plan shall confer upon the grantee a right to receive from the Company, upon the
occurrence of an event specified in the Award Agreement, such grantee's vested
restricted stock units multiplied by the Fair Market Value of a share of Common
Stock. Restricted stock units may be granted in connection with all or any part
of, or independently of, any award granted under the Plan. A restricted stock
unit granted in connection with another award may be granted at or after the
time of grant of such award.
 
(i)           Incentive Stock Option Limitation; Exercisability. To the extent
that the aggregate Fair Market Value (determined as of the time the option is
granted) of the stock with respect to which incentive stock options are first
exercisable by any employee during any calendar year shall exceed $100,000, or
such higher amount as may be permitted from time to time under Section 422 of
the Code, such options shall be treated as non-qualified stock options.
 
(j)           Incentive Stock Option Limitation: 10% Owners. Notwithstanding the
provisions of paragraphs (d) and (e) of this Section 2.2, an incentive stock
option may not be granted under the Plan to an individual who, at the time the
option is granted, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of his employer corporation or of its
parent or subsidiary corporations (as such ownership may be determined for
purposes of Section 422(b)(6) of the Code) unless (i) at the time such incentive
stock option is granted the option exercise price is at least 110% of the Fair
Market Value of the shares subject thereto and (ii) the incentive stock option
by its terms is not exercisable after the expiration of five years from the date
it is granted.
 
 
6

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

 
 
2.3           Exercise of Options, Stock Appreciation Rights and Restricted
Stock Units
 
Subject to the other provisions of this Article II, each option, stock
appreciation right and restricted stock unit granted under the Plan shall be
exercisable as follows:
 
(a)           Timing and Extent of Exercise. Options, stock appreciation rights
and restricted stock units shall be exercisable at such times and under such
conditions as set forth in the corresponding Award Agreement. Unless the
applicable Award Agreement otherwise provides, an option, stock appreciation
right or restricted stock unit may be exercised from time to time as to all or
part of the shares or units as to which such award is then exercisable. A stock
appreciation right granted in connection with an option may be exercised at any
time when, and to the same extent that, the related option may be exercised.
 
(b)           Notice of Exercise. An option, stock appreciation right or
restricted stock unit shall be exercised by the filing of a written notice with
the Company or the Company's designated exchange agent (the "exchange agent"),
on such form and in such manner as the Administrator shall in its sole
discretion prescribe.
 
(c)           Payment of Exercise Price. Any written notice of exercise of an
option shall be accompanied by payment for the shares being purchased. Such
payment shall be made: (i) by certified or official bank check (or the
equivalent thereof acceptable to the Company or its exchange agent) for the full
option exercise price; or (ii) with the consent of the Administrator, by
delivery of shares of Common Stock having a Fair Market Value (determined as of
the exercise date) equal to all or part of the option exercise price and a
certified or official bank check (or the equivalent thereof acceptable to the
Company or its exchange agent) for any remaining portion of the full option
exercise price; or (iii) at the discretion of the Administrator and to the
extent permitted by law, by such other provision, consistent with the terms of
the Plan, as the Administrator may from time to time prescribe (whether directly
or indirectly through the exchange agent).
 
(d)           Delivery of Certificates Upon Exercise. Subject to the provision
of Section 2.3(e), promptly after receiving payment of the full option exercise
price, or after receiving notice of the exercise of a stock appreciation right
for which payment will be made partly or entirely in shares, the Company or its
exchange agent shall, subject to the provisions of Section 3.2, deliver to the
grantee or to such other person as may then have the right to exercise the
award, a certificate or certificates for the shares of Common Stock for which
the award has been exercised. If the method of payment employed upon option
exercise so requires, and if applicable law permits, an optionee may direct the
Company or its exchange agent, as the case may be, to deliver the stock
certificate(s) to the optionee's stockbroker.
 
(e)           Investment Purpose and Legal Requirements. Notwithstanding the
foregoing, at the time of the exercise of any option, the Company may, if it
shall deem it necessary or advisable for any reason, require the holder of such
option (i) to represent in writing to the Company that it is the optionee's then
intention to acquire the shares with respect to which the option is to be
exercised for investment and not with a view to the distribution thereof, or
(ii) to postpone the date of exercise until such time as the Company has
available for delivery to the optionee a prospectus meeting the requirements of
all applicable securities laws; and no shares shall be issued or transferred
upon the exercise of any option unless and until all legal requirements
applicable to the issuance or transfer of such shares have been complied with to
the satisfaction of the Company. The Company shall have the right to condition
any issuance of shares to any optionee hereunder on such optionee's undertaking
in writing to comply with such restrictions on the subsequent transfer of such
shares as the Company shall deem necessary or advisable as a result of any
applicable law, regulation or official interpretation thereof, and certificates
representing such shares may contain a legend to reflect any such restrictions.
 
 
7

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

 
 
(f)           No Shareholder Rights. No grantee of an option, stock appreciation
right or restricted stock unit (or other person having the right to exercise
such award) shall have any of the rights of a Shareholder of the Company with
respect to shares subject to such award until the issuance of a stock
certificate to such person for such shares. Except as otherwise provided in
Section 1.5(b), no adjustment shall be made for dividends, distributions or
other rights (whether ordinary or extraordinary, and whether in cash, securities
or other property) for which the record date is prior to the date such stock
certificate is issued.
 
2.4           Compensation in Lieu of Exercise of an Option
 
Upon written application of the grantee of an option, the Administrator may in
its sole discretion determine to substitute, for the exercise of such option,
compensation to the grantee not in excess of the difference between the option
exercise price and the Fair Market Value of the shares covered by such written
application on the date of such application. Such compensation may be in cash,
in shares of Common Stock, or both, and the payment thereof may be subject to
conditions, all as the Administrator shall determine in its sole discretion. In
the event compensation is substituted pursuant to this Section 2.4 for the
exercise, in whole or in part, of an option, the number of shares subject to the
option shall be reduced by the number of shares for which such compensation is
substituted.
 
2.5           Termination of Employment; Death Subsequent to a Termination of
Employment
 
(a)           General Rule. Except to the extent otherwise provided in
paragraphs (b), (c), (d) or (e) of this Section 2.5 or Section 3.8(b)(iii), a
grantee whose employment terminates may exercise any outstanding option or stock
appreciation right on the following terms and conditions: (i) exercise may be
made only to the extent that the grantee was entitled to exercise the award on
the termination of employment date; and (ii) exercise must occur within three
months after termination of employment but in no event after the original
expiration date of the award.
 
(b)           Dismissal for Cause; Resignation. If a grantee is terminated for
cause or resigns without the Company's prior consent, all options and stock
appreciation rights not theretofore exercised shall terminate upon the grantee's
termination of employment.
 
(c)           Retirement. If a grantee retires, then any outstanding option,
stock appreciation right or restricted stock unit shall be exercisable pursuant
to its terms. For this purpose "retirement" shall mean a grantee's termination
of employment, under circumstances other than those described in paragraph (b)
above, on or after: (x) his 65th birthday, (y) the date on which he has attained
age 60 and completed at least five years of service with the Company (using any
method of calculation the Administrator deems appropriate) or (z) if approved by
the Administrator, on or after he has completed at least 20 years of service.
 
 
8

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

 
 
(d)           Disability. If a grantee’s employment terminates by reason of a
disability (as defined below), then any outstanding option, stock appreciation
right or restricted stock unit shall be exercisable pursuant to its terms. For
this purpose "disability" shall mean, except in connection any physical or
mental condition that would qualify a grantee for a disability benefit under the
long-term disability plan maintained by the Company or, if there is no such
plan, a physical or mental condition that prevents the grantee from performing
the essential functions of the grantee's position (with or without reasonable
accommodation) for a period of six consecutive months. The existence of a
disability shall be determined by the Administrator in its sole and absolute
discretion.
 
(e)           Death.
 
(i)           Termination of Employment as a Result of Grantee's Death. If a
grantee’s employment terminates as the result of his death, then any outstanding
option, stock appreciation right or restricted stock unit shall be exercisable
pursuant to its terms.
 
(ii)           Restrictions on Exercise Following Death. Any such exercise of an
award following a grantee's death shall be made only by the grantee's executor
or administrator or other duly appointed representative reasonably acceptable to
the Administrator, unless the grantee's will specifically disposes of such
award, in which case such exercise shall be made only by the recipient of such
specific disposition. If a grantee's personal representative or the recipient of
a specific disposition under the grantee's will shall be entitled to exercise
any award pursuant to the preceding sentence, such representative or recipient
shall be bound by all the terms and conditions of the Plan and the applicable
Award Agreement which would have applied to the grantee including, without
limitation, the provisions of Sections 3.2 and 3.5 hereof.
 
(f)           Special Rules for Incentive Stock Options. No option that remains
exercisable for more than three months following a grantee's termination of
employment for any reason other than death or disability, or for more than one
year following a grantee's termination of employment as the result of his
becoming disabled, may be treated as an incentive stock option.
 
(g)           Administrator Discretion. The Administrator, in the applicable
Award Agreement, may waive or modify the application of the foregoing provisions
of this Section 2.5.
 
2.6           Transferability of Options, Stock Appreciation Rights and
Restricted Stock Units
 
Except as otherwise provided in an applicable Award Agreement evidencing an
option, stock appreciation right or restricted stock unit, during the lifetime
of a grantee, each such award granted to a grantee shall be exercisable only by
the grantee and no such award shall be assignable or transferable otherwise than
by will or by the laws of descent and distribution. The Administrator may, in
any applicable Award Agreement evidencing an option (other than an incentive
stock option to the extent inconsistent with the requirements of Section 422 of
the Code applicable to incentive stock options), permit a grantee to transfer
all or some of the options to (A) the grantee's spouse, children or
grandchildren ("Immediate Family Members"), (B) a trust or trusts for the
exclusive benefit of such Immediate Family Members, or (C) other parties
approved by the Administrator in its sole and absolute discretion. Following any
such transfer, any transferred options shall continue to be subject to the same
terms and conditions as were applicable immediately prior to the transfer.
 
 
9

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

 
 
2.7           Grant of Restricted Stock
 
(a)           Restricted Stock Grants. The Administrator may grant restricted
shares of Common Stock to such key persons, in such amounts, and subject to such
vesting and forfeiture provisions and other terms and conditions as the
Administrator shall determine in its sole discretion, subject to the provisions
of the Plan. Restricted stock awards may be made independently of or in
connection with any other award under the Plan. A grantee of a restricted stock
award shall have no rights with respect to such award unless such grantee
accepts the award within such period as the Administrator shall specify by
accepting delivery of a restricted stock agreement in such form as the
Administrator shall determine and, in the event the restricted shares are newly
issued by the Company, makes payment to the Company its exchange agent by
certified or official bank check (or the equivalent thereof acceptable to the
Company) in an amount at least equal to the par value of the shares covered by
the award.
 
(b)           Issuance of Stock Certificate(s). Promptly after a grantee accepts
a restricted stock award, the Company or its exchange agent shall issue to the
grantee a stock certificate or stock certificates for the shares of Common Stock
covered by the award or shall establish an account evidencing ownership of the
stock in uncertificated form. Upon the issuance of such stock certificate(s), or
establishment of such account, the grantee shall have the rights of a
Shareholder with respect to the restricted stock, subject to: (i) the
nontransferability restrictions and forfeiture provision described in paragraphs
(d) and (e) of this Section 2.7; (ii) in the Administrator's discretion, to a
requirement that any dividends paid on such shares shall be held in escrow until
all restrictions on such shares have lapsed; and (iii) any other restrictions
and conditions contained in the applicable restricted stock agreement.
 
(c)           Custody of Stock Certificate(s). Unless the Administrator shall
otherwise determine, any stock certificates issued evidencing shares of
restricted stock shall remain in the possession of the Company until such shares
are free of any restrictions specified in the applicable restricted stock
agreement. The Administrator may direct that such stock certificate(s) bear a
legend setting forth the applicable restrictions on transferability.
 
(d)           Nontransferability. Shares of restricted stock may not be sold,
assigned, transferred, pledged or otherwise encumbered or disposed of except as
otherwise specifically provided in this Plan or the applicable restricted stock
agreement. The Administrator at the time of grant shall specify the date or
dates (which may depend upon or be related to the attainment of performance
goals and other conditions) on which the nontransferability of the restricted
stock shall lapse.
 
 
10

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

 
 
(e)           Consequence of Termination of Employment. Unless the Administrator
shall otherwise determine, a grantee's termination of employment for any reason
(including death) shall cause the immediate forfeiture of all shares of
restricted stock that have not yet vested as of the date of such termination of
employment. All dividends paid on such shares also shall be forfeited, whether
by termination of any escrow arrangement under which such dividends are held, by
the grantee's repayment of dividends he received directly, or otherwise.
 
2.8           Grant of Unrestricted Stock
 
The Administrator may grant (or sell at a purchase price at least equal to par
value) shares of Common Stock free of restrictions under the Plan, to such key
persons and in such amounts and subject to such forfeiture provisions as the
Administrator shall determine in its sole discretion. Shares may be thus granted
or sold in respect of past services or other valid consideration.
 
2.9           Grant of Performance Shares
 
(a)           Performance Share Grants. The Administrator may grant performance
share awards to such key persons, and in such amounts and subject to such
vesting and forfeiture provisions and other terms and conditions, as the
Administrator shall in its sole discretion determine, subject to the provisions
of the Plan. Such an award shall entitle the grantee to acquire shares of Common
Stock, or to be paid the value thereof in cash, as the Administrator shall
determine, if specified performance goals are met. Performance shares may be
awarded independently of, or in connection with, any other award under the Plan.
A grantee shall have no rights with respect to a performance share award unless
such grantee accepts the award by accepting delivery of a Award Agreement at
such time and in such form as the Administrator shall determine.
 
(b)           Shareholder Rights. The grantee of a performance share award will
have the rights of a Shareholder only as to shares for which a stock certificate
has been issued pursuant to the award and not with respect to any other shares
subject to the award.
 
(c)           Consequence of Termination of Employment. Except as may otherwise
be provided by the Administrator at any time prior to a grantee's termination of
employment, the rights of a grantee of a performance share award shall
automatically terminate upon the grantee's termination of employment by the
Company and its subsidiaries for any reason (including death).
 
(d)           Exercise Procedures; Automatic Exercise. At the discretion of the
Administrator, the applicable Award Agreement may set out the procedures to be
followed in exercising a performance share award or it may provide that such
exercise shall be made automatically after satisfaction of the applicable
performance goals.
 
 
11

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

 
 
(e)           Tandem Grants; Effect on Exercise. Except as otherwise specified
by the Administrator, (i) a performance share award granted in tandem with an
option may be exercised only while the option is exercisable, (ii) the exercise
of a performance share award granted in tandem with any other award shall reduce
the number of shares subject to such other award in the manner specified in the
applicable Award Agreement, and (iii) the exercise of any award granted in
tandem with a performance share award shall reduce the number of shares subject
to the latter in the manner specified in the applicable Award Agreement.
 
(f)           Nontransferability. Performance shares may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as otherwise
specifically provided in this Plan or the applicable Award Agreement. The
Administrator at the time of grant shall specify the date or dates (which may
depend upon or be related to the attainment of performance goals and other
conditions) on which the nontransferability of the performance shares shall
lapse.
 
ARTICLE 3
MISCELLANEOUS
 
3.1           Amendment of the Plan; Modification of Awards
 
(a)           Amendment of the Plan. The Board may from time to time suspend,
discontinue, revise or amend the Plan in any respect whatsoever, except that no
such amendment shall materially impair any rights or materially increase any
obligations under any award theretofore made under the Plan without the consent
of the grantee (or, upon the grantee's death, the person having the right to
exercise the award). For purposes of this Section 3.1, any action of the Board
or the Administrator that in any way alters or affects the tax treatment of any
award shall not be considered to materially impair any rights of any grantee.
 
(b)           Shareholder Approval Requirement. Shareholder approval shall be
required with respect to any amendment to the Plan that (i) increases the
aggregate number of shares that may be issued pursuant to incentive stock
options or changes the class of employees eligible to receive such options; or
(ii) materially increases the benefits under the Plan to persons whose
transactions in Common Stock are subject to section 16(b) of the 1934 Act or
increases the benefits under the Plan to someone who is, materially increases
the number of shares which may be issued to such persons, or materially modifies
the eligibility requirements affecting such persons.
 
(c)           Modification of Awards. The Administrator may cancel any award
under the Plan. The Administrator also may amend any outstanding Award
Agreement, including, without limitation, by amendment which would: (i)
accelerate the time or times at which the award becomes unrestricted or may be
exercised; (ii) waive or amend any goals, restrictions or conditions set forth
in the Award Agreement; or (iii) waive or amend the operation of Section 2.5
with respect to the termination of the award upon termination of employment.
However, any such cancellation or amendment (other than an amendment pursuant to
Sections 3.7 or 3.8(b)) that materially impairs the rights or materially
increases the obligations of a grantee under an outstanding award shall be made
only with the consent of the grantee (or, upon the grantee's death, the person
having the right to exercise the award).
 
 
12

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

 
 
3.2           Consent Requirement
 
(a)           No Plan Action Without Required Consent. If the Administrator
shall at any time determine that any Consent (as hereinafter defined) is
necessary or desirable as a condition of, or in connection with, the granting of
any award under the Plan, the issuance or purchase of shares or other rights
thereunder, or the taking of any other action thereunder (each such action being
hereinafter referred to as a "Plan Action"), then such Plan Action shall not be
taken, in whole or in part, unless and until such Consent shall have been
effected or obtained to the full satisfaction of the Administrator.
 
(b)           Consent Defined. The term "Consent" as used herein with respect to
any Plan Action means (i) any and all listings, registrations or qualifications
in respect thereof upon any securities exchange or under any federal, state or
local law, rule or regulation, (ii) any and all written agreements and
representations by the grantee with respect to the disposition of shares, or
with respect to any other matter, which the Administrator shall deem necessary
or desirable to comply with the terms of any such listing, registration or
qualification or to obtain an exemption from the requirement that any such
listing, qualification or registration be made and (iii) any and all consents,
clearances and approvals in respect of a Plan Action by any governmental or
other regulatory bodies.
 
3.3           Nonassignability
 
Except as provided in Sections 2.5(e), 2.6, 2.7(d) and 2.9(f): (a) no award or
right granted to any person under the Plan or under any Award Agreement shall be
assignable or transferable other than by will or by the laws of descent and
distribution; and (b) all rights granted under the Plan or any Award Agreement
shall be exercisable during the life of the grantee only by the grantee or the
grantee's legal representative.
 
3.4           Requirement of Notification of Election Under Section 83(b) of the
Code
 
If any grantee shall, in connection with the acquisition of shares of Common
Stock under the Plan, make the election permitted under section 83(b) of the
Code (i.e., an election to include in gross income in the year of transfer the
amounts specified in section 83(b)), such grantee shall notify the Company of
such election within 10 days of filing notice of the election with the Internal
Revenue Service, in addition to any filing and notification required pursuant to
regulations issued under the authority of Code section 83(b).
 
 
13

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

 
 
3.5           Requirement of Notification Upon Disqualifying Disposition Under
Section 421(b) of the Code
 
Each Award Agreement with respect to an incentive stock option shall require the
grantee to notify the Company of any disposition of shares of Common Stock
issued pursuant to the exercise of such option under the circumstances described
in section 421(b) of the Code (relating to certain disqualifying dispositions),
within 10 days of such disposition.
 
3.6           Withholding Taxes
 
(a)           With Respect to Cash Payments. Whenever cash is to be paid
pursuant to an award under the Plan, the Company shall be entitled to deduct
therefrom an amount sufficient in its opinion to satisfy all federal, state and
other governmental tax withholding requirements related to such payment.
 
(b)           With Respect to Delivery of Common Stock. Whenever shares of
Common Stock are to be delivered pursuant to an award under the Plan, the
Company shall be entitled to require as a condition of delivery that the grantee
remit to the Company an amount sufficient in the opinion of the Company to
satisfy all federal, state and other governmental tax withholding requirements
related thereto. With the approval of the Administrator, which the Administrator
shall have sole discretion whether or not to give, the grantee may satisfy the
foregoing condition by electing to have the Company withhold from delivery
shares having a value equal to the amount of tax to be withheld. Such shares
shall be valued at their Fair Market Value as of the date on which the amount of
tax to be withheld is determined. Fractional share amounts shall be settled in
cash. Such a withholding election may be made with respect to all or any portion
of the shares to be delivered pursuant to an award.
 
3.7           Adjustment Upon Changes in Common Stock
 
(a)           Shares Available for Grants. In the event of any change in the
number of shares of Common Stock outstanding by reason of any stock dividend or
split, reverse stock split, recapitalization, merger, consolidation, combination
or exchange of shares or similar corporate change, the maximum number of shares
of Common Stock with respect to which the Administrator may grant awards under
Article II hereof, as described in Section 1.5(a), and the individual annual
limit described in Section 1.5(d), shall be appropriately adjusted by the
Administrator. In the event of any change in the number of shares of Common
Stock outstanding by reason of any other event or transaction, the Administrator
may, but need not, make such adjustments in the number and class of shares of
Common Stock with respect to which awards: (i) may be granted under Article II
hereof and (ii) granted to any one employee of the Company or a subsidiary
during any one calendar year, in each case as the Administrator may deem
appropriate.
 
(b)           Outstanding Restricted Stock and Performance Shares. Unless the
Administrator in its sole and absolute discretion otherwise determines, any
securities or other property (including dividends paid in cash) received by a
grantee with respect to a share of restricted stock, the issue date with respect
to which occurs prior to such event, but which has not vested as of the date of
such event, as a result of any dividend, stock split, reverse stock split,
recapitalization, merger, consolidation, combination, exchange of shares or
otherwise will not vest until such share of restricted stock vests, and shall be
promptly deposited with the Company or other custodian designated pursuant to
Section 2.7(c) hereof.
 
 
14

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

 
 
The Administrator may, in its absolute discretion, adjust any grant of shares of
restricted stock, the issue date with respect to which has not occurred as of
the date of the occurrence of any of the following events, or any grant of
performance shares, to reflect any dividend, stock split, reverse stock split,
recapitalization, merger, consolidation, combination, exchange of shares or
similar corporate change as the Administrator may deem appropriate to prevent
the enlargement or dilution of rights of grantees.
 
(c)           Outstanding Options, Stock Appreciation Rights and Dividend
Equivalent Rights—Increase or Decrease in Issued Shares Without Consideration.
Subject to any required action by the Shareholders of the Company, in the event
of any increase or decrease in the number of issued shares of Common Stock
resulting from a subdivision or consolidation of shares of Common Stock or the
payment of a stock dividend (but only on the shares of Common Stock), or any
other increase or decrease in the number of such shares effected without receipt
of consideration by the Company, the Administrator shall proportionally adjust
the number of shares of Common Stock subject to each outstanding option and
stock appreciation right, and the exercise price-per-share of Common Stock of
each such option and stock appreciation right and the number of any related
dividend equivalent rights.
 
(d)           Outstanding Options, Stock Appreciation Rights, Restricted Stock
Units and Dividend Equivalent Rights—Certain Mergers. Subject to any required
action by the Shareholders of the Company, in the event that the Company shall
be the surviving corporation in any merger or consolidation (except a merger or
consolidation as a result of which the holders of shares of Common Stock receive
securities of another corporation), each option, stock appreciation right and
dividend equivalent right outstanding on the date of such merger or
consolidation shall pertain to and apply to the securities which a holder of the
number of shares of Common Stock subject to such option, stock appreciation
right, restricted stock unit or dividend equivalent right would have received in
such merger or consolidation.
 
(e)           Outstanding Options, Stock Appreciation Rights, Restricted Stock
Units and Dividend Equivalent Rights—Certain Other Transactions. In the event of
(i) a dissolution or liquidation of the Company, (ii) a sale of all or
substantially all of the Company's assets, (iii) a merger or consolidation
involving the Company in which the Company is not the surviving corporation or
(iv) a merger or consolidation involving the Company in which the Company is the
surviving corporation but the holders of shares of Common Stock receive
securities of another corporation and/or other property, including cash, the
Administrator shall, in its absolute discretion, have the power to:
 
(i)           cancel, effective immediately prior to the occurrence of such
event, each option, stock appreciation right and restricted stock unit
(including each dividend equivalent right related thereto) outstanding
immediately prior to such event (whether or not then exercisable), and, in full
consideration of such cancellation, pay to the grantee to whom such option or
stock appreciation right was granted an amount in cash, for each share of Common
Stock subject to such option or stock appreciation right, respectively, equal to
the excess of (x) the value, as determined by the Administrator in its absolute
discretion, of the property (including cash) received by the holder of a share
of Common Stock as a result of such event over (y) the exercise price of such
option or stock appreciation right; or
 
 
15

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

 
 
(ii)           provide for the exchange of each option, stock appreciation right
and restricted stock unit (including any related dividend equivalent right)
outstanding immediately prior to such event (whether or not then exercisable)
for an option on, stock appreciation right, restricted stock unit and dividend
equivalent right with respect to, as appropriate, some or all of the property
which a holder of the number of shares of Common Stock subject to such option,
stock appreciation right or restricted stock unit would have received and,
incident thereto, make an equitable adjustment as determined by the
Administrator in its absolute discretion in the exercise price of the option,
stock appreciation right or restricted stock unit, or the number of shares or
amount of property subject to the option, stock appreciation right, restricted
stock unit or dividend equivalent right or, if appropriate, provide for a cash
payment to the grantee to whom such option, stock appreciation right or
restricted stock unit was granted in partial consideration for the exchange of
the option, stock appreciation right or restricted stock unit.
 
(f)           Outstanding Options, Stock Appreciation Rights, Restricted Stock
Units and Dividend Equivalent Rights—Other Changes. In the event of any change
in the capitalization of the Company or a corporate change other than those
specifically referred to in Sections 3.7(c), (d) or (e) hereof, the
Administrator may, in its absolute discretion, make such adjustments in the
number and class of shares subject to options, stock appreciation rights,
restricted stock units and dividend equivalent rights outstanding on the date on
which such change occurs and in the per-share exercise price of each such
option, stock appreciation right and restricted stock unit as the Administrator
may consider appropriate to prevent dilution or enlargement of rights. In
addition, if and to the extent the Administrator determines it is appropriate,
the Administrator may elect to cancel each option, stock appreciation right and
restricted stock unit (including each dividend equivalent right related thereto)
outstanding immediately prior to such event (whether or not then exercisable),
and, in full consideration of such cancellation, pay to the grantee to whom such
option, stock appreciation right or restricted stock unit was granted an amount
in cash, for each share of Common Stock subject to such option, stock
appreciation right or restricted stock unit, respectively, equal to the excess
of (i) the Fair Market Value of Common Stock on the date of such cancellation
over (ii) the exercise price of such option, stock appreciation right or
restricted stock unit.
 
(g)           No Other Rights. Except as expressly provided in the Plan, no
grantee shall have any rights by reason of any subdivision or consolidation of
shares of stock of any class, the payment of any dividend, any increase or
decrease in the number of shares of stock of any class or any dissolution,
liquidation, merger or consolidation of the Company or any other corporation.
Except as expressly provided in the Plan, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number of shares of Common Stock subject to an award or the
exercise price of any option or stock appreciation right.
 
 
16

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

 
 
3.8           Change in Control
 
(a)           Change in Control Defined. For purposes of this Section 3.8,
"Change in Control" shall mean the occurrence of any of the following:
 
(i)           any person or "group" (within the meaning of Section 13(d)(3) of
the 1934 Act), other than entities which the Chairman of the Board directly or
indirectly controls (as defined in Rule 12b-2 under the 1934 Act), acquiring
"beneficial ownership" (as defined in Rule 13d-3 under the 1934 Act), directly
or indirectly, of fifty percent (50%) or more of the aggregate voting power of
the capital stock ordinarily entitled to elect directors of the Company;
 
(ii)           the sale of all or substantially all of the Company's assets in
one or more related transactions to a person other than such a sale to a
subsidiary of the Company which does not involve a change in the equity holdings
of the Company or to an entity which the Chairman directly or indirectly
controls; or
 
(iii)           any merger, consolidation, reorganization or similar event of
the Company or any of its subsidiaries, as a result of which the holders of the
voting stock of the Company immediately prior to such merger, consolidation,
reorganization or similar event do not directly or indirectly hold at least
fifty-one percent (51%) of the aggregate voting power of the capital stock of
the surviving entity.
 
(b)           Effect of a Change in Control. Unless the Administrator provides
otherwise in a Award Agreement, upon the occurrence of a Change in Control:
 
(i)           notwithstanding any other provision of this Plan, any award then
outstanding shall become fully vested and any award in the form of an option,
stock appreciation right or restricted stock unit shall be immediately
exercisable;
 
(ii)           to the extent permitted by law, the Administrator may, in its
sole discretion, amend any Award Agreement in such manner as it deems
appropriate;
 
(iii)           a grantee who incurs a termination of employment for any reason,
other than a dismissal for cause, concurrent with or within one year following
the Change in Control may exercise any outstanding option, stock appreciation
right or restricted stock unit, but only to the extent that the grantee was
entitled to exercise the award on his termination of employment date, until the
earlier of (A) the original expiration date of the award and (B) the later of
(x) the date provided for under the terms of Section 2.5 without reference to
this Section 3.8(b)(iii) and (y) the first anniversary of the grantee's
termination of employment.
 
(c)           Miscellaneous. Whenever deemed appropriate by the Administrator,
any action referred to in paragraph (b)(ii) of this Section 3.8 may be made
conditional upon the consummation of the applicable Change in Control
transaction.
 
 
17

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

 
 
3.9          Right of Discharge Reserved
 
Nothing in the Plan or in any Award Agreement shall confer upon any grantee the
right to continue his employment with the Company or affect any right that the
Company may have to terminate such employment.
 
3.10        Non-Uniform Determinations
 
The Administrator's determinations under the Plan need not be uniform and may be
made by it selectively among persons who receive, or who are eligible to
receive, awards under the Plan (whether or not such persons are similarly
situated). Without limiting the generality of the foregoing, the Administrator
shall be entitled, among other things, to make non-uniform and selective
determinations, and to enter into non-uniform and selective Award Agreements, as
to (a) the persons to receive awards under the Plan, and (b) the terms and
provisions of awards under the Plan.
 
3.11        Other Payments or Awards
 
Nothing contained in the Plan shall be deemed in any way to limit or restrict
the Company from making any award or payment to any person under any other plan,
arrangement or understanding, whether now existing or hereafter in effect.
 
3.12        Headings
 
Any section, subsection, paragraph or other subdivision headings contained
herein are for the purpose of convenience only and are not intended to expand,
limit or otherwise define the contents of such subdivisions.
 
3.13        Effective Date and Term of Plan
 
(a)           Adoption; Shareholder Approval. The Plan was adopted by the Board
and the Company intends to obtain approval of the Plan by the Company's
Shareholders within the time period required to allow grants of options
hereunder to qualify as incentive stock options.  Awards under the Plan prior to
such Shareholder approval shall be made subject to such approval.
 
(b)           Termination of Plan. Unless sooner terminated by the Board or
pursuant to Paragraph (a) above, the provisions of the Plan respecting the grant
of incentive stock options shall terminate on the tenth anniversary of the
adoption of the Plan by the Board, and no incentive stock option awards shall
thereafter be made under the Plan. All such awards made under the Plan prior to
its termination shall remain in effect until such awards have been satisfied or
terminated in accordance with the terms and provisions of the Plan and the
applicable Award Agreements.
 
 
18

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

 
 
3.14        Restriction on Issuance of Stock Pursuant to Awards
 
The Company shall not permit any shares of Common Stock to be issued pursuant to
Awards granted under the Plan unless such shares of Common Stock are fully paid
and non-assessable under applicable law.
 
3.15           Governing Law
 
Except to the extent preempted by any applicable federal law, the Plan will be
construed and administered in accordance with the laws of the State of Florida
without giving effect to principles of conflict of laws.
 
 
19

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