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Exhibit 10.11
 
MATTHEWS INTERNATIONAL CORPORATION
2007 EQUITY INCENTIVE PLAN,
AS AMENDED THROUGH SEPTEMBER 26, 2008

SECTION 1

Purpose; Definitions

1.1           Purpose.  The purposes of the 2007 Equity Incentive Plan, as
amended through September 26, 2008 (the "Plan") are to encourage eligible
employees of Matthews International Corporation (the "Corporation") and its
Subsidiaries to increase their efforts to make the Corporation and each
Subsidiary more successful, to provide an additional inducement for such
employees to remain with the Corporation or a Subsidiary, to reward such
employees by providing an opportunity to acquire shares of Common Stock on
favorable terms and to provide a means through which the Corporation may attract
able persons to enter the employ of the Corporation or one of its Subsidiaries.

1.2 Certain Definitions.  In addition to terms defined herein in the first place
where they are used, the following terms are defined as set forth below:

(a)           “Award” means a stock option, a stock appreciation right,
restricted stock, restricted stock units, performance units or other stock-based
award granted under the Plan.

(b)           “Base Price” shall have the meaning set forth in Section 5.3.

(c)           "Common Stock" shall mean the Class A Common Stock, par value
$1.00 per share, of the Corporation.

(d)           “Fair Market Value” with respect to a share of the Common Stock
shall mean the mean between the following prices, as applicable, for the date as
of which Fair Market Value is to be determined as quoted in The Wall Street
Journal (or in such other reliable publication as the Committee, in its sole
discretion, may  determine to rely upon):  (i) if the Common Stock is listed on
the New York Stock Exchange, the highest and lowest sales prices per share of
the Common Stock as quoted in the NYSE-Composite Transactions listing for such
date, (ii) if the Common Stock is not listed on such exchange, the highest and
lowest sales prices per share of Common Stock for such date on (or on any
composite index including) the principal United States of America securities
exchange registered under the 1934 Act on which the Common Stock is listed or
(iii) if the Common Stock is not listed on any such exchange, the highest and
lowest sales prices per share of the Common Stock for such date on the National
Association of Securities Dealers Automated Quotations System or any successor
system then in use ("NASDAQ").  If there are no such sale price quotations for
the date as of which Fair Market Value is to be determined but there are such
sale price quotations within a reasonable period both before and after such
date, then Fair Market Value shall be determined by taking a weighted average of
the means between the highest and lowest sales prices per share of the Common
Stock as so quoted on the nearest date before and the nearest date after the
date as of which Fair Market Value is to be determined.  The average should be
weighted inversely by the respective numbers of trading days between the selling
dates and the date as of which Fair Market Value is to be determined.  If there
are no such sale price quotations on or within a reasonable period both before
and after the date as of which Fair Market Value is to be determined, then Fair
Market Value of the Common Stock shall be the mean between the bona fide bid and
asked prices per share of Common Stock as so quoted for such date on NASDAQ, or
if none, the weighted average of the means between such bona fide bid and asked
prices on the nearest trading date before and the nearest trading date after the
date as of which Fair Market Value is to be determined, if both such dates are
within a reasonable period.  The average is to be determined in the manner
described above in this definition.  If the Fair Market Value of the Common
Stock cannot be determined on the basis previously set forth in this definition
on the date as of which Fair Market Value is to be determined, the Committee
shall in good faith and in conformance with the requirements of Section 409A of
the Code, to the extent applicable to an Award, determine the Fair Market Value
of the Common Stock on such date.  Fair Market Value shall be determined without
regard to any restriction other than a restriction which, by its terms, will
never lapse.

(e)           “Free-Standing SARs” shall have the meaning set forth in Section
5.2.

(f)           “Participant” means an eligible employee selected by the Committee
who has received an Award under the Plan and any transferee or transferees of
such employee to the extent the transfer is permitted under the Plan.

(g)           “Performance Goals” means the performance goals, if any,
established by the Committee in connection with the grant of restricted stock,
restricted stock units, performance units or other Awards.  In the case of
Qualified Performance-Based Awards, the “Performance Goals” means such
performance goals based on one or more of the following:

 
(i)
The following criteria for the Corporation on a consolidated basis, one or more
of its direct or indirect Subsidiaries, and/or one or more divisions of the
foregoing, either in absolute terms or relative to the performance of (x) the
Corporation, its Subsidiaries or divisions (for a different period), (y) one or
more other companies or (z) an index covering multiple companies:

1.
net income
2.
economic value added (earnings less a capital charge)
3.
EBITDA (earnings before interest, taxes, depreciation and amortization)
4.
sales
5.
costs
6.
gross margin
7.
operating margin
8.
pre-tax profit or income
9.
market share
10.
return on net assets
11.
return on assets
12.
return on capital
13.
return on invested capital
14.
cash flow
15.
free cash flow
16.
operating cash flow
17.
operating income
18.
earnings before interest and taxes
19.
working capital
20.
innovation as measured by a percentage of sales from new products

(ii)
The following criteria for the Corporation, either in absolute terms or relative
to the performance of the Corporation (for a different period), one or more
other companies or an index covering multiple companies:

1.
stock price
2.
return on shareholders’ equity
3.
earnings per share
4.
cash flow per share
5.
total shareholder return (stock price appreciation plus dividends)

(h)           “Qualified Performance-Based Award” means an Award intended to
qualify for the Section 162(m) Exemption, as provided in Section 12.

(i)           "Subsidiary" means any corporation, partnership, joint venture,
limited liability company or other entity in an unbroken chain of entities
beginning with the Corporation if each of the entities other than the last
entity in the unbroken chain owns an equity interest possessing at least fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other entities in the chain.

(j)           “Tandem SARs” shall have the meaning set forth in Section 5.2.

SECTION 2

Administration

2.1.                                                                                                                                Committee.  The
Plan shall be administered by a Committee (the "Committee") appointed by the
Board of Directors of the Corporation (the "Board") and consisting of not less
than two members of the Board, who, at the time of their appointment to the
Committee and at all times during their service as members of the Committee, are
(a) "Non-Employee Directors" as then defined under Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), or any successor
rule, (b) "outside directors" under Section 162(m)(4)(C) of the Internal Revenue
Code of 1986 as amended (the “Code”) or any successor provision, and (c)
independent directors under the applicable rules of any applicable stock
exchange or NASDAQ, if the Common Stock is subject to such rules.  The Committee
shall have plenary authority to interpret the Plan and prescribe such rules,
regulations and procedures in connection with the operations of the Plan as it
shall deem to be necessary and advisable for the administration of the Plan
consistent with the purposes of the Plan.  Without limitation of the foregoing,
the Committee shall have the authority, subject to the terms and conditions of
the Plan:

(a) to select the employees to whom Awards may be made;

(b) to determine whether and to what extent incentive stock options,
nonstatutory stock options, stock appreciation rights, restricted stock,
restricted stock units, performance units, other Awards of or based upon Common
Stock, or any combination thereof, are to be granted hereunder;

(c) to determine the number of shares of Common Stock to be covered by each
Award made hereunder;

(d) to determine the terms and conditions of each Award made hereunder, based on
such factors as the Committee shall determine;

(e) subject to Section 2.5, to modify, amend or adjust the terms and conditions
of any Award;

(f) to adopt, alter and repeal such administrative rules, guidelines and
practices governing the Plan as it shall from time to time deem advisable;

(g) to interpret the terms and provisions of the Plan and any Award under the
Plan (and any agreement under Section 2.5 relating thereto);

(h) subject to Section 2.5, to accelerate the vesting or lapse of restrictions
on any outstanding Award, other than a Qualified Performance-Based Award, based
in each case on such considerations as the Committee in its sole discretion
determines;

(i) to decide all other matters that must be determined in connection with an
Award;

(j) to determine whether, to what extent and under what circumstances cash,
shares of Common Stock and other property and other amounts payable with respect
to an Award under this Plan shall be deferred either automatically or at the
election of the employee;

(k) to establish any “blackout” period that the Committee in its sole discretion
deems necessary or advisable; and

(l)  
to otherwise administer the Plan.

In determining any Award to be made to any eligible employee, the Committee
shall consider the position and the responsibilities of the employee being
considered, the nature and value to the Corporation or a Subsidiary of his or
her services, his or her present and/or potential contribution to the success of
the Corporation or a Subsidiary and such other factors as the Committee may deem
relevant.  The Committee may, except to the extent prohibited by applicable law
or the listing standards of the stock exchange which is the principal market for
the Common Stock, 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 and powers to any officers of the Corporation or committee of
officers of the Corporation selected by it, except with respect to Awards
(including Qualified Performance-Based Awards) to any covered employees as
defined in Section 162(m)(3) of the Code (“Covered Employees”) or persons
subject to Section 16 of the Exchange Act.

           2.2.                      Committee Action.  The Committee shall keep
records of action taken at its meetings.  A majority of the Committee shall
constitute a quorum at any meeting and the acts of a majority of the members
present at any meeting at which a quorum is present, or acts approved in writing
by all members of the Committee, shall be the acts of the Committee.

2.3           Committee Discretion.  Any determination made by the Committee or
by an appropriately delegated officer pursuant to delegated authority under the
provisions of the Plan with respect to any Award shall be made in the sole
discretion of the Committee or such officer at the time of the Award or, unless
in contravention of any express term of the Plan, at any time thereafter. All
decisions made by the Committee or any appropriately delegated officer pursuant
to the provisions of the Plan shall be final and binding on all persons,
including the Corporation and the employees eligible under the Plan.

2.4           Cancellation; Suspension; Clawback.  Any or all outstanding Awards
to a Participant may, at any time between the date of grant and the third
anniversary of any exercise, payment or vesting of such Awards, in the
Committee’s sole discretion and subject to such terms and conditions established
by the Committee, be cancelled, suspended, or required to be repaid to the
Corporation if the Participant (whether during or after termination of
employment with the Corporation and its Subsidiaries) (i) engages in the
operation or management of a business (whether as owner, partner, officer,
director, employee or otherwise) which is in competition with the Corporation or
any of its Subsidiaries, (ii) induces or attempts to induce any customer,
supplier, licensee or other individual, corporation or other business
organization having a business relationship with the Corporation or any of its
Subsidiaries to cease doing business with the Corporation or any of its
Subsidiaries or in any way interferes with the relationship between any such
customer, supplier, licensee or other person and the Corporation or any of its
Subsidiaries, (iii) solicits any employee of the Corporation or any of its
Subsidiaries to leave the employment thereof or in any way interferes with the
relationship of such employee with the Corporation or any of its Subsidiaries,
or (iv) makes any statements or comments, orally or in writing, of a defamatory
or disparaging nature regarding the Corporation or any of its Subsidiaries
(including but not limited to regarding any of their respective businesses,
officers, directors, personnel, products or policies), provided, however, that
this sentence shall not apply following the occurrence of a Section 11 Event (as
defined in Section 11) unless the agreement under Section 2.5 specifically so
provides.  Whether a Participant has engaged in any such activities shall also
be determined, in its sole discretion, by the Committee, and any such
determination by the Committee shall be final and binding.

2.5           Agreements.  The terms and conditions of each Award shall be set
forth in a written (or electronic) agreement, which shall be delivered to the
Participant receiving such Award upon, or as promptly as is reasonably
practicable following, the making of such Award.  The effectiveness of an Award
shall be subject to the agreement being signed by the Corporation and the
Participant receiving the Award unless otherwise provided in the
agreement.  Unless otherwise provided in the agreement, each agreement or
amendment thereto shall be executed on behalf of the Corporation by the Chief
Executive Officer (if other than the President), the President or any Vice
President and by the Participant.  The agreement confirming a stock option shall
specify whether the stock option is an incentive stock option or a nonstatutory
stock option.  The provisions of such agreements need not be identical.  Without
the consent of the Participant, upon notice to the Participant thereof, the
Committee may amend any Award to the Participant and the corresponding agreement
in any respect not materially adverse to the Participant.  All other amendments
to the agreement shall be in writing (including electronic amendments) and
executed on behalf of the Corporation and by the Participant.  Any reference in
the Plan to the agreement under Section 2.5 shall include any amendment to such
agreement.

SECTION 3

Eligibility

Those employees of the Corporation or any Subsidiary (including, but not limited
to, Covered Employees) who share responsibility for the management, growth or
protection of the business of the Corporation or any Subsidiary shall be
eligible to receive Awards as described herein, provided however, that incentive
stock options may be granted only to employees of the Corporation and
Subsidiaries which are its subsidiaries within the meaning of Section 424(f) of
the Code.

SECTION 4

Shares Subject to the Plan

4.1           Number of Shares.  Subject to adjustment as provided in Section
4.5, the maximum aggregate number of shares of the Common Stock for which Awards
may be made under the Plan shall be 2,200,000 shares.  The maximum number of
shares of Common Stock that may be granted pursuant to options intended to be
incentive stock options shall be 1,000,000 shares.

4.2           Individual Limit.  The maximum number of shares of Common Stock as
to which Awards other than performance units under Section 8 or Awards under
Section 9 may be made under the Plan to any one Participant in any one calendar
year is 250,000 shares, subject to adjustment and substitution as set forth in
Section 4.5.  For the purposes of this limitation, any adjustment or
substitution made pursuant to Section 4.5 in a calendar year with respect to the
maximum number of shares set forth in the preceding sentence shall also be made
with respect to any shares subject to Awards previously granted under the Plan
to such Participant in the same calendar year.

4.3  
Share Counting.

(a)           For purposes of the limit set forth in the first sentence of
Section 4.1 (but not for purposes of Section 4.2), each share of Common Stock
which is subject to an Award other than a stock option or a stock appreciation
right shall be counted as two (2) shares rather than one (1) share, provided,
however, that in case of performance units, shares of Common Stock shall be
counted as two (2) shares rather than one (1) share for each actual share issued
only at the time, if any, of the actual issuance of shares pursuant to the
performance unit Award.

(b)           Except in the case of performance unit Awards (where shares of
Common Stock are counted only upon actual issuance of the shares pursuant to
Section 4.3(a)) to the extent that any Award is forfeited, or any option and the
Tandem SAR (if any) or any Free-Standing SAR terminates, expires or lapses
without being exercised, or any Award is settled for cash, the shares of Common
Stock subject to such Awards shall again be available for Awards under the Plan
under Section 4.1.  However, shares of Common Stock subject to such Awards shall
continue to be counted for purposes of Section 4.2 or Section 9, as applicable.

(c)           If the exercise price of any option and/or the tax withholding
obligations relating to any Awards are satisfied by delivering shares (either
actually or through attestation) or withholding shares relating to such Award,
the gross number of shares subject to the Award shall nonetheless be deemed to
have been granted for purposes of Sections 4.1 and 4.2 and any shares which are
delivered will not be added to the aggregate number of shares under Section 4.1
for which Awards may be made under the Plan.

(d)           If a Tandem SAR is granted, each share of Common Stock subject to
both the Tandem SAR and related stock option shall be counted as only one share
of Common Stock for purposes of Sections 4.1 and 4.2.

(e)           Each share of Common Stock subject to a stock option (with or
without a Tandem SAR) or a Free-Standing SAR shall be counted as one share of
Common Stock for purposes of Sections 4.1 and 4.2.

(f)           All shares of Common Stock covered by a stock appreciation right,
to the extent it is exercised and shares of Common Stock are actually issued
upon exercise of the right, shall be counted for purposes of Sections 4.1 and
4.2, regardless of the number of shares used to settle the stock appreciation
right upon exercise.

4.4           Common Stock.  To the extent that the Corporation has such shares
of Common Stock available to it and can issue such shares without violating any
law or regulation, the Corporation will reserve Common Stock for issuance with
respect to an Award payable in Common Stock.  The shares of Common Stock which
may be issued under the Plan may be either authorized but unissued shares or
shares previously issued and thereafter acquired by the Corporation or partly
each, as shall be determined from time to time by the Board.

4.5           Adjustment and Substitution of Shares.  In the event of a merger,
consolidation, acquisition of shares, stock rights offering, liquidation,
separation, spinoff, disaffiliation of a Subsidiary from the Corporation,
extra-ordinary dividend of cash or other property, or similar event affecting
the Corporation or any of its Subsidiaries (each, a “Corporate Transaction”),
the Committee or the Board shall make such substitutions or adjustments as it
deems appropriate and equitable to prevent the dilution or enlargement of the
rights of Participants to (A) the aggregate number and kind of shares of Common
Stock reserved for issuance and delivery under the Plan, (B) the various maximum
limitations set forth in Sections 4.1 and 4.2 upon certain types of Awards and
upon the Awards to individuals, (C) the number and kind of shares of Common
Stock subject to outstanding Awards; and (D) the exercise price of outstanding
Awards.  In the event of a stock dividend, stock split, reverse stock split,
reorganization, share combination, or recapitalization or similar event
affecting the capital structure of the Corporation (each, a “Share Change”), the
Committee or the Board shall make such substitutions or adjustments as it deems
appropriate and equitable to prevent the dilution or enlargement of the rights
of Participants to (A) the aggregate number and kind of shares of Common Stock
reserved for issuance and delivery under the Plan, (B) the various maximum
limitations set forth in Sections 4.1 and 4.2 upon certain types of Awards and
upon the Awards to individuals, (C) the number and kind of shares of Common
Stock subject to outstanding Awards; and (D) the exercise price of outstanding
Awards. In the case of Corporate Transactions, such adjustments may include,
without limitation, (1) the cancellation of outstanding Awards in exchange for
payments of cash, property or a combination thereof having an aggregate value
equal to the value of such Awards, as determined by the Committee or the Board
in its sole discretion (it being understood that in the case of a Corporate
Transaction with respect to which shareholders of Common Stock receive
consideration other than publicly-traded equity securities of the ultimate
surviving entity, any such determination by the Committee that the value of an
option or stock appreciation right shall for this purpose be deemed to equal the
excess, if any, of the value of the consideration being paid for each share
pursuant to such Corporate Transaction over the exercise price of such option or
stock appreciation right shall conclusively be deemed valid); (2) the
substitution of other property (including, without limitation, cash or other
securities of the Corporation and securities of entities other than the
Corporation) for the shares subject to outstanding Awards; and (3) in connection
with any disaffiliation of a Subsidiary, arranging for the assumption of Awards,
or replacement of Awards with new Awards based on other property or other
securities (including, without limitation, other securities of the Corporation
and securities of entities other than the Corporation), by the affected
Subsidiary, or by the entity that controls such Subsidiary following such
disaffiliation (as well as any corresponding adjustments to Awards that remain
based upon Corporation securities). The Committee shall adjust the Performance
Goals applicable to any Awards to reflect any unusual or non-recurring events
and other extraordinary items, impact of charges for restructurings,
discontinued operations, and the cumulative effects of accounting or tax
changes, each as defined by generally accepted accounting principles or as
identified in the Corporation’s financial statements, notes to the financial
statements, management’s discussion and analysis or other of the Corporation’s
SEC filings, provided that in the case of Performance Goals applicable to any
Qualified Performance-Based Awards, such adjustment does not violate Section
162(m) of the Code or cause such Awards not to qualify for the Section 162(m)
Exemption, as defined in Section 12.1.  No adjustment or substitution provided
in this Section 4.5 shall require the Corporation or any other entity to issue
or sell a fraction of a share or other security.  Except as provided in this
Section 4.5, a Participant shall not have any rights with respect to any
Corporate Transaction or Share Change.

4.6           Section 409A; Section 162(m); Incentive Stock
Options.  Notwithstanding the foregoing: (i) any adjustments made pursuant to
Section 4.5 to Awards that are considered “deferred compensation” within the
meaning of Section 409A of the Code shall be made in compliance with the
requirements of Section 409A of the Code; (ii) any adjustments made pursuant to
Section 4.5 to Awards that are not considered “deferred compensation” subject to
Section 409A of the Code shall be made in such a manner as to ensure that after
such adjustment, the Awards either (A) continue not to be subject to Section
409A of the Code or (B) comply with the requirements of Section 409A of the
Code; and (iii) in any event, neither the Committee nor the Board shall have the
authority to make any adjustments pursuant to Section 4.5 to the extent the
existence of such authority would cause an Award that is not intended to be
subject to Section 409A of the Code at the grant date of the Award to be subject
thereto.  If any such adjustment or substitution provided for in Section 4.5
requires the approval of shareholders in order to enable the Corporation to
grant incentive stock options or to comply with Section 162(m) of the Code, then
no such adjustment or substitution shall be made without the required
shareholder approval.  Notwithstanding the foregoing, in the case of incentive
stock options, if the effect of any such adjustment or substitution would be to
cause the option to fail to continue to qualify as an incentive stock option or
to cause a modification, extension or renewal of such option within the meaning
of Section 424 of the Code, the Committee may determine that such adjustment or
substitution not be made but rather shall use reasonable efforts to effect such
other adjustment of each then outstanding incentive stock option as the
Committee, in its sole discretion, shall deem equitable and which will not
result in any disqualification, modification, extension or renewal (within the
meaning of Section 424 of the Code) of such incentive stock option.

SECTION 5

Grant of Stock Options and Stock Appreciation Rights

5.1           Types of Options; Limit on Incentive Stock Options.  The Committee
shall have authority, in its sole discretion, to grant "incentive stock options"
pursuant to Section 422 of the Code, to grant "nonstatutory stock options"
(i.e., stock options which do not qualify under Sections 422 or 423 of the Code)
or to grant both types of stock options (but not in tandem).  Notwithstanding
any other provision contained in the Plan or in any agreement under Section 2.5,
but subject to the possible exercise of the Committee's discretion contemplated
in the last sentence of this Section 5.1, the aggregate Fair Market Value on the
date of grant of the shares with respect to which such incentive stock options
are exercisable for the first time by a Participant during any calendar year
under all plans of the corporation employing such Participant, any parent or
subsidiary corporation of such corporation and any predecessor corporation of
any such corporation shall not exceed $100,000.  If the date on which one or
more incentive stock options could first be exercised would be accelerated
pursuant to any provision of the Plan or any agreement under Section 2.5 and the
acceleration of such exercise date would result in a violation of the $100,000
restriction set forth in the preceding sentence, then, notwithstanding any such
provision, but subject to the provisions of the next succeeding sentence, the
exercise dates of such incentive stock options shall be accelerated only to the
extent, if any, that does not result in a violation of such restriction and, in
such event, the exercise dates of the incentive stock options with the lowest
option prices shall be accelerated to the earliest such dates.  The Committee
may, in its sole discretion, authorize the acceleration of the exercise date of
one or more incentive stock options even if such acceleration would violate the
$100,000 restriction set forth in the second sentence of this Section 5.1 and
even if one or more such incentive stock options are thereby converted in whole
or in part to nonstatutory stock options.

5.2           Types and Nature of Stock Appreciation Rights.  Stock appreciation
rights may be tandem stock appreciation rights which are granted in conjunction
with incentive stock options or nonstatutory stock options (“Tandem SARs”), or
stock appreciation rights which are not granted in conjunction with options
(“Free-Standing SARs”).  Upon the exercise of a stock appreciation right, the
Participant shall be entitled to receive an amount in cash, shares of Common
Stock, or both, in value equal to the product of (i) the excess of the Fair
Market Value of one share of Common Stock on the date of exercise of the stock
appreciation right over, in the case of a Tandem SAR, the exercise price of the
related option, or in the case of a Free-Standing SAR, the Base Price per share
(the “Spread”), multiplied by (ii) the number of shares of Common Stock in
respect of which the stock appreciation right has been
exercised.  Notwithstanding the foregoing, the Committee at the time it grants a
stock appreciation right may provide that the Spread covered by such stock
appreciation right may not exceed a lower specified amount.  The applicable
agreement under Section 2.5 governing the stock appreciation rights shall
specify whether such payment is to be made in cash or Common Stock or both, or
shall reserve to the Committee or the Participant the right to make that
determination prior to or upon the exercise of the stock appreciation
right.  Tandem SARs may be granted at the grant date of the related stock
options or, in the case of a related nonstatutory stock option, also at a later
date.  At the time a Tandem SAR is granted, the Committee may limit the exercise
period for such Tandem SAR, before and after which period no Tandem SAR shall
attach to the underlying stock option.  In no event shall the exercise period
for a Tandem SAR exceed the exercise period for the related stock option.  A
Tandem SAR shall be exercisable only at such time or times and to the extent
that the related option is exercisable in accordance with the provisions of this
Section 5.  A Tandem SAR shall terminate or be forfeited upon the exercise or
forfeiture of the related stock option, and the related stock option shall
terminate or be forfeited upon the exercise or forfeiture of the Tandem
SAR.  Any Tandem SAR granted with a related incentive stock option shall be
exercisable only when the Fair Market Value of a share of Common Stock exceeds
the exercise price for a share of Common Stock under the related incentive stock
option.

5.3           Exercise Price and Base Price.  The exercise price per share of
Common Stock subject to an option and any Tandem SAR, and the base price per
share for any Free-Standing SAR (the “Base Price”), shall be determined by the
Committee and set forth in the applicable agreement under Section 2.5, and shall
not be less than the Fair Market Value of a share of the Common Stock on the
applicable grant date, except that in the case of an incentive stock option
granted to a Participant who, immediately prior to such grant, owns stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Corporation or any Subsidiary which is a corporation (a
"Ten Percent Employee"), the exercise price shall not be less than one hundred
ten percent (110%) of the Fair Market Value on the date of grant.  For purposes
of this Section 5.3, an individual (i) shall be considered as owning not only
shares of stock owned individually but also all shares of stock that are at the
time owned, directly or indirectly, by or for the spouse, ancestors, lineal
descendants and brothers and sisters (whether by the whole or half blood) of
such individual and (ii) shall be considered as owning proportionately any
shares owned, directly or indirectly, by or for any corporation, partnership,
estate or trust in which such individual is a shareholder, partner or
beneficiary.  In no event may any option or stock appreciation right granted
under this Plan, other than pursuant to Section 4.5, be amended to decrease the
exercise price or Base Price thereof, be cancelled in conjunction with the grant
of any new option or stock appreciation right with a lower exercise price or
Base Price, be cancelled or repurchased for cash, property, or another Award at
a time when the exercise price or Base Price is greater than the Fair Market
Value of the underlying Common Stock, or otherwise be subject to any action that
would be treated, for accounting purposes, as a “repricing” of such option or
stock appreciation right, unless such amendment, cancellation, or action is
approved by the Corporation’s shareholders.

5.4           Term; Vesting and Exercisability.  The term of each option and
each stock appreciation right shall be fixed by the Committee, but shall not
exceed ten years from the date of grant (five years in the case of an incentive
stock option granted to a Ten Percent Employee).  Except as otherwise provided
herein, options and stock appreciation rights shall be exercisable at such time
or times and subject to such terms and conditions as shall be determined by the
Committee and may be exercisable commencing with the grant date.

5.5           Method of Exercise.  Subject to the provisions of this Section 5,
options and stock appreciation rights may be exercised, in whole or in part
(unless otherwise specified by the Committee in its sole discretion), at any
time during the applicable term by giving written notice of exercise to the
Corporation specifying the number of shares of Common Stock as to which the
option or stock appreciation rights is being exercised.  In the case of the
exercise of an option, such notice shall be accompanied by payment in full of
the exercise price in United States of America dollars by certified or bank
check or wire of immediately available funds. If approved by the Committee (at
the time of grant in the case of an incentive stock option or at any time in the
case of a nonstatutory stock option), payment, in full or in part, may also be
made as follows:

(a)           Payment may be made in the form of unrestricted shares of Common
Stock (by delivery of such shares or by attestation) of the same class as the
Common Stock subject to the option already owned by the Participant (based on
the Fair Market Value of the Common Stock on the date the option is exercised)
provided however, that any portion of the exercise price representing a fraction
of a share shall be paid in cash;

(b)           To the extent permitted by applicable law, payment may be made by
delivering a properly executed exercise notice to the Corporation, together with
a copy of irrevocable instructions to a broker to deliver promptly to the
Corporation the amount of sale or loan proceeds necessary to pay the exercise
price, and, if requested, the amount of any federal, state, local or foreign
withholding taxes. To facilitate the foregoing, the Corporation may, to the
extent permitted by applicable law, enter into agreements for coordinated
procedures with one or more brokerage firms.  In the event the broker sells any
shares on behalf of a Participant, the broker shall be acting solely as the
agent of the Participant, and the Corporation disclaims any responsibility for
the actions of the broker in making any such sales; and/or

(c)           With such other instrument as approved by the Committee, including
Corporation loans, to the extent permitted by applicable law.

5.6           Delivery; Rights of Shareholders.  No shares shall be delivered
pursuant to the exercise of an option until the exercise price for the option
has been fully paid and applicable taxes have been withheld.  Unless otherwise
specified by the Committee, the applicable Participant shall have all of the
rights of a shareholder of the Corporation holding Common Stock with respect to
the shares of Common Stock to be issued upon the exercise of the option or stock
appreciation right (including the right to vote the applicable shares and the
right to receive dividends), when the Participant (i) has given written notice
of exercise in accordance with the procedures established by the Committee, (ii)
if requested, has given the representation described in Section 10, and (iii) in
the case of an option, has paid in full the exercise price for such shares.

5.7           Nontransferability of Options and Stock
Appreciation Rights.  Unless the Committee shall otherwise determine in the case
of nonstatutory stock options and stock appreciation rights and limited to a
transfer without the payment of value or consideration to the Participant, (i)
no option or stock appreciation right shall be transferable by a Participant
other than by will, or if the Participant dies intestate, by the laws of descent
and distribution of the state of domicile of the Participant at the time of
death, and (ii) all stock options and stock appreciation rights shall be
exercisable during the lifetime of the Participant only by the Participant (or
the Participant’s guardian or legal representative).  Any Tandem SAR shall be
transferable only when the related stock option is transferable and with the
related stock option.

5.8           Termination of Employment.  Unless the Committee, in its sole
discretion, shall otherwise determine at the time of grant of the Award or,
other than in the case of incentive stock options, thereafter, but subject to
the provisions of Section 5.1 in the case of incentive stock options:

(a)           If the employment of a Participant who is not disabled within the
meaning of Section 422(c)(6) of the Code (a "Disabled Participant") is
voluntarily terminated with the consent of the Corporation or a Subsidiary or a
Participant retires under any retirement plan of the Corporation or a
Subsidiary, any then outstanding incentive stock option held by such Participant
shall be exercisable by the Participant (but only to the extent exercisable by
the Participant immediately prior to the termination of employment) at any time
prior to the expiration date of such incentive stock option or within three
months after the date of termination of employment, whichever is the shorter
period;

(b)           If the employment of a Participant who is not a Disabled
Participant is voluntarily terminated with the consent of the Corporation or a
Subsidiary or a Participant retires under any retirement plan of the Corporation
or a Subsidiary, any then outstanding nonstatutory stock option or stock
appreciation right held by such Participant shall be exercisable by the
Participant (but only to the extent exercisable by the Participant immediately
prior to the termination of employment) at any time prior to the expiration date
of such nonstatutory stock option or stock appreciation right or within one year
after the date of termination of employment, whichever is the shorter period;

(c)           If the employment of a Participant who is a Disabled Participant
is voluntarily terminated with the consent of the Corporation or a Subsidiary,
any then outstanding stock option or stock appreciation right held by such
Participant shall be exercisable in full (whether or not so exercisable by the
Participant immediately prior to the termination of employment) by the
Participant at any time prior to the expiration date of such stock option or
stock appreciation right or within one year after the date of termination of
employment, whichever is the shorter period;

(d)           Following the death of a Participant during employment, any
outstanding stock option or stock appreciation right held by the Participant at
the time of death shall be exercisable in full (whether or not so exercisable by
the Participant immediately prior to the death of the Participant) by the person
entitled to do so under the will of the Participant, or, if the Participant
shall fail to make testamentary disposition of the stock option or stock
appreciation right or shall die intestate, by the legal representative of the
Participant at any time prior to the expiration date of such stock option or
stock appreciation right or within one year after the date of death, whichever
is the shorter period;

(e)           Following the death of a Participant after termination of
employment during a period when a stock option or stock appreciation right is
exercisable, any outstanding stock option or stock appreciation right held by
the Participant at the time of death shall be exercisable by such person
entitled to do so under the will of the Participant or by such legal
representative (but only to the extent the stock option or stock appreciation
right was exercisable by the Participant immediately prior to the death of the
Participant) at any time prior to the expiration date of such stock option or
stock appreciation right or within one year after the date of death, whichever
is the shorter period; and

(f)           Unless the exercise period of a stock option or stock appreciation
right following termination of employment has been extended as provided in
Section 11.3, if the employment of a Participant terminates for any reason other
than voluntary termination with the consent of the Corporation or a Subsidiary,
retirement under any retirement plan of the Corporation or a Subsidiary or
death, all outstanding stock options and stock appreciation rights held by the
Participant at the time of such termination of employment shall automatically
terminate.

Whether termination of employment is a voluntary termination with the consent of
the Corporation or a Subsidiary and whether a Participant is a Disabled
Participant shall be determined in each case, in its sole discretion, by the
Committee (or, in the case of Participants who are not (i) Covered Employees as
of the end of the Corporation’s immediately preceding fiscal year or (ii) the
Chief Executive Officer of the Corporation, by such Chief Executive Officer, in
his sole discretion) and any such determination by the Committee or such Chief
Executive Officer shall be final and binding.  Without limitation of the
foregoing, a termination of employment by the Participant shall not be a
voluntary termination with the consent of the Corporation unless the Committee
or, if applicable, such Chief Executive Officer, in its or his sole discretion,
specifically consents to the termination of employment in writing.

5.9           Other Terms and Conditions.  Subject to the foregoing provisions
of this Section 5 and the other provisions of the Plan, any stock option or
stock appreciation right granted under the Plan may be exercised at such times
and in such amounts and be subject to such restrictions and other terms and
conditions, if any, as shall be determined, in its sole discretion, by the
Committee and set forth in the agreement under Section 2.5.

SECTION 6

Restricted Stock

6.1           Restricted Stock Awards; Certificates.  Shares of restricted stock
are actual shares of Common Stock issued to a Participant, and shall be
evidenced in such manner as the Committee may deem appropriate, including
book-entry registration or issuance of one or more stock certificates.  Any
certificate issued in respect of shares of restricted stock shall be registered
in the name of the applicable Participant and, unless held by or on behalf of
the Corporation in escrow or custody until the restrictions lapse or the shares
are forfeited, shall bear an appropriate conspicuous legend referring to the
terms, conditions, and restrictions applicable to such Award, substantially in
the following form:

“The transferability of this certificate and the shares of stock represented
hereby are subject to the terms and conditions (including forfeiture) of the
Matthews International Corporation 2007 Equity Incentive Plan and a
corresponding agreement. Copies of such Plan and agreement are on file at the
offices of Matthews International Corporation, Two NorthShore Center,
Pittsburgh, PA 15212-5851.”

The Committee may require that the certificates evidencing such shares be held
in escrow or custody by or on behalf of the Corporation until the restrictions
thereon shall have lapsed or the shares are forfeited and that, as a condition
of any Award of restricted stock, the applicable Participant deliver to the
Corporation a stock power, endorsed in blank, relating to the Common Stock
covered by such Award.

6.2           Terms and Conditions.  Shares of restricted stock shall be subject
to the restrictions set forth in Section 15.11 and the following terms and
conditions:

(a)           The Committee shall, prior to or at the time of grant, condition
the vesting of an Award of restricted stock upon (i) the continued service of
the applicable Participant, (ii) the attainment of Performance Goals, or (iii)
the attainment of Performance Goals and the continued service of the applicable
Participant.  The Committee shall establish at the time the restricted stock is
granted the performance periods during which any Performance Goals specified by
the Committee with respect to the restricted stock Award are to be measured.  In
the event that the Committee conditions the vesting of an Award of restricted
stock upon the attainment of Performance Goals or the attainment of Performance
Goals and the continued service of the applicable Participant, the Committee
may, prior to or at the time of grant, designate an Award of restricted stock as
a Qualified Performance-Based Award.  The conditions for vesting and the other
provisions of restricted stock Awards (including without limitation any
applicable Performance Goals) need not be the same with respect to each
recipient, and shall be established by the Committee in its sole
discretion.  Except in the case of a Qualified Performance-Based Award and
subject to the restrictions set forth in Section 15.11, the Committee at any
time after the date of grant, in its sole discretion, may modify or waive any of
the conditions applicable to an Award of restricted stock.

(b)           Subject to the provisions of the Plan (including Section 6.3) and
the applicable agreement under Section 2.5, during the period, if any, set by
the Committee, commencing with the date of such restricted stock Award for which
such vesting restrictions apply (the “Restriction Period”), and until the
expiration of the Restriction Period, the Participant shall not be permitted to
sell, assign, transfer, pledge or otherwise encumber shares of such restricted
stock.  A restricted stock Award may vest in part on a pro rata basis prior to
the expiration of any Restriction Period.

(c)           Except as provided in this Section 6 and in the applicable
agreement under Section 2.5, the applicable Participant shall have, with respect
to the shares of restricted stock, all of the rights of a shareholder of the
Corporation holding the Common Stock that is the subject of the restricted
stock, including, if applicable, the right to vote the shares and the right to
receive any cash dividends.  If so determined by the Committee and set forth in
the applicable agreement under Section 2.5 and subject to Section 15.4, cash
dividends on the Common Stock that is the subject of the restricted stock Award
may be (i) automatically deferred and reinvested in additional restricted stock,
and held subject to the same vesting and forfeiture conditions of the underlying
restricted stock, or (ii) held by the Corporation in cash (without any payment
of interest thereon) subject to the same vesting and forfeiture conditions of
the restricted stock with respect to which the dividends are payable.  Unless
otherwise determined by the Committee and set forth in the applicable agreement
under Section 2.5, any Common Stock or other securities payable with respect to
any restricted stock as a result of or pursuant to Section 4.5, shall be held
subject to the same vesting and forfeiture conditions of the underlying
restricted stock.

(d)           As soon as practicable after the applicable Restriction Period has
ended, the Committee shall determine and certify (in writing in the case of
Qualified Performance-Based Awards) whether and the extent to which the service
period and/or the Performance Goals were met for the applicable restricted
stock.  If the vesting condition or conditions applicable to the restricted
stock are not satisfied by the time the Restriction Period has expired, such
restricted stock shall be forfeited.  If and when the Restriction Period expires
without a prior forfeiture of the shares of restricted stock (i) if legended
certificates have been issued, unlegended certificates for such shares shall be
delivered to the Participant upon surrender of the legended certificates, (ii)
if legended certificates have not yet been issued, unlegended certificates (and
any related blank stock powers previously executed by the Participant) shall be
delivered to the Participant, and (iii) any cash dividends held by the
Corporation pursuant to Section 6.2(c) shall be delivered to the Participant.

6.3           Permitted Transfers.  Neither this Section 6 nor any other
provision of the Plan shall preclude a Participant from transferring or
assigning restricted stock, without the payment of value or consideration to the
Participant, to (i) the trustee of a trust that is revocable by such Participant
alone, both at the time of the transfer or assignment and at all times
thereafter prior to such Participant's death or (ii) the trustee of any other
trust to the extent approved in advance by the Committee, in its sole
discretion, in writing.  A transfer or assignment of restricted stock from such
trustee to any person other than such Participant shall be permitted only to the
extent approved in advance by the Committee, in its sole discretion, in writing,
and restricted stock held by such trustee shall be subject to all of the
conditions and restrictions set forth in the Plan and in the applicable
agreement under Section 2.5 as if such trustee were a party to such agreement.

SECTION 7

Restricted Stock Units

7.1           Restricted Stock Unit Awards.  Restricted stock units are Awards
denominated in shares of Common Stock that will be settled, subject to the terms
and conditions of the restricted stock units and at the sole discretion of the
Committee, in an amount in cash, shares of Common Stock, or both, based upon the
Fair Market Value of a specified number of shares of Common Stock.

7.2 Terms and Conditions.  Restricted stock units shall be subject to the
restrictions set forth in Section 15.11 and the following terms and conditions:

(a)           The Committee shall, prior to or at the time of grant, condition
the vesting of restricted stock units upon (i) the continued service of the
applicable Participant, (ii) the attainment of Performance Goals or (iii) the
attainment of Performance Goals and the continued service of the applicable
Participant. In the event that the Committee conditions the vesting of
restricted stock units upon the attainment of Performance Goals or the
attainment of Performance Goals and the continued service of the applicable
Participant, the Committee may, prior to or at the time of grant, designate the
restricted stock units as a Qualified Performance-Based Awards.  The Committee
shall determine the performance period(s) during which any Performance Goals are
to be achieved.  The conditions for grant or vesting and the other provisions of
restricted stock units (including without limitation any applicable Performance
Goals) need not be the same with respect to each recipient. An Award of
restricted stock units shall be settled as and when the restricted stock units
vest, as determined and certified (in writing in the case of Qualified
Performance-Based Awards) by the Committee, or at a later time specified by the
Committee or in accordance with an election of the Participant, if the Committee
so permits.  Except in the case of a Qualified Performance-Based Award and
subject to the restrictions set forth in Section 15.11, the Committee at any
time after the date of grant, in its sole discretion, may modify or waive any of
the conditions applicable to an Award of restricted stock units.

(b)           Subject to the provisions of the Plan and the applicable agreement
under Section 2.5, during the period, if any, set by the Committee, commencing
with the date of grant of such restricted stock units for which such vesting
restrictions apply (the “Units Restriction Period”), and until the expiration of
the Units Restriction Period, the Participant shall not be permitted to sell,
assign, transfer, pledge or otherwise encumber restricted stock units.  A
restricted stock unit may vest in part prior to the expiration of any Units
Restriction Period.

(c)           Participants granted restricted stock units shall not be entitled
to any dividends payable on the Common Stock unless the agreement under Section
2.5 for restricted stock units specifies to what extent and on what terms and
conditions the applicable Participant shall be entitled to receive current or
deferred payments of cash, Common Stock or other property corresponding to the
dividends payable on the Common Stock (subject to Section 15.4
below).  Restricted stock units shall not have any voting rights, and holders of
restricted stock units shall not be shareholders of the Corporation unless and
until shares of Common Stock are issued by the Corporation (in book-entry form
or otherwise).

SECTION 8

Performance Units

Performance units may be granted hereunder to eligible employees, for no cash
consideration or for such minimum consideration as may be required by applicable
law, either alone or in addition to other Awards granted under the Plan.  The
Committee shall establish at the time the performance unit is granted the
performance period(s) during which any Performance Goals specified by the
Committee with respect to the Award are to be measured, provided, however, that
performance units shall be subject to the restrictions set forth in Section
15.11.  The Performance Goals to be achieved during any performance period(s)
and the length of the performance period(s) shall be determined by the Committee
upon the grant of each performance unit.  The Committee may, in connection with
the grant of performance units, designate them as Qualified Performance-Based
Awards.  The conditions for grant or vesting and the other provisions of
performance units (including without limitation any applicable Performance
Goals) need not be the same with respect to each Participant.  Performance units
may be paid in cash, shares of Common Stock, other property or any combination
thereof, in the sole discretion of the Committee as set forth in the applicable
agreement under Section 2.5.  Performance units shall not have any voting
rights, and holders of performance units shall not be shareholders of the
Corporation unless and until shares of Common Stock are issued by the
Corporation (in book-entry form or otherwise).  The Performance Goals to be
achieved for each performance period, whether the Performance Goals have been
achieved, and the amount of the Award to be distributed shall be conclusively
determined and certified (in writing in the case of Qualified Performance-Based
Awards) by the Committee.  Performance units may be paid in a lump sum or in
installments following the close of the performance period(s).  The Participant
shall not be permitted to sell, assign, transfer, pledge or otherwise encumber
performance units.  The maximum value of the property, including cash, that may
be paid or distributed to any Participant pursuant to a grant of performance
units made in any one calendar year shall be five million United States of
America dollars ($5,000,000).  Except in the case of a Qualified
Performance-Based Award and subject to the restrictions set forth in Section
15.11, the Committee at any time after the grant of performance units, in its
sole discretion, may modify or waive any of the conditions applicable to an
Award of performance units.

SECTION 9

Other Stock-Based Awards

The Committee may award Common Stock and other Awards that are valued in whole
or in part by reference to, or are otherwise based upon, Common Stock, including
but not limited to, unrestricted stock or dividend equivalents.  Any such Award
shall be subject to the restrictions set forth in Section 15.11 and such other
terms and conditions as established by the Committee, and may include Qualified
Performance-Based Awards.  The maximum value of Common Stock and other property,
including cash, that may be paid or distributed to any Participant pursuant to
this Section 9 (and not pursuant to other sections of the Plan) in any one
calendar year shall be five million United States of America dollars
($5,000,000).

SECTION 10

Issuance of Shares

The Committee may require each person purchasing or receiving shares of Common
Stock pursuant to an Award to represent to and agree with the Corporation in
writing that such person is acquiring the shares without a view to the
distribution thereof.  The certificates for such shares may include any legend
which the Committee deems appropriate to reflect any restrictions on
transfer.  The obligation of the Corporation to issue shares of Common Stock
under the Plan shall be subject to (i) the effectiveness of a registration
statement under the Securities Act of 1933, as amended, with respect to such
shares, if deemed necessary or appropriate by counsel for the Corporation, (ii)
the condition that the shares shall have been listed (or authorized for listing
upon official notice of issuance) upon each stock exchange, if any, on which the
shares of Common Stock may then be listed, (iii) all other applicable laws,
regulations, rules and orders which may then be in effect and (iv) obtaining any
other consent, approval, or permit from any state or federal governmental agency
which the Committee shall, in its sole discretion, determine to be necessary or
advisable.

SECTION 11

Additional Rights in Certain Events

11.1                      Definitions.

For purposes of this Section 11, the following terms shall have the following
meaning:

(1)           The term "Person" shall be used as that term is used in Section
13(d) and 14(d) of the 1934 Act.

(2)           "Beneficial Ownership" shall be determined as provided in Rule
13d-3 under the 1934 Act as in effect on the effective date of the Plan.

(3)           "Voting Shares" shall mean all securities of a Corporation
entitling the holders thereof to vote in an annual election of Directors
(without consideration of the rights of any class of stock other than the Common
Stock to elect Directors by a separate class vote); and a specified percentage
of "Voting Power" of a Corporation shall mean such number of the Voting Shares
as shall enable the holders thereof to cast such percentage of all the votes
which could be cast in an annual election of directors (without consideration of
the rights of any class of stock other than the Common Stock to elect Directors
by a separate class vote).

(4)           "Section 11 Event" shall mean the date upon which any of the
following events occurs:

(a)           The Corporation acquires actual knowledge that any Person other
than the Corporation, a Subsidiary or any employee benefit plan(s) sponsored by
the Corporation has acquired the Beneficial Ownership, directly or indirectly,
of securities of the Corporation entitling such Person to 20% or more of the
Voting Power of the Corporation;

(b)           At any time less than 60% of the members of the Board of Directors
shall be individuals who were either (i) Directors on the effective date of the
Plan or (ii) individuals whose election, or nomination for election, was
approved by a vote (including a vote approving a merger or other agreement
providing the membership of such individuals on the Board of Directors) of at
least two-thirds of the Directors then still in office who were Directors on the
effective date of the Plan or who were so approved;

(c)           The shareholders of the Corporation shall approve an agreement or
plan providing for the Corporation to be merged, consolidated or otherwise
combined with, or for all or substantially all its assets or stock to be
acquired by, another corporation, as a consequence of which the former
shareholders of the Corporation will own, immediately after such merger,
consolidation, combination or acquisition, less than a majority of the Voting
Power of such surviving or acquiring corporation or the parent thereof; or

(d)           The shareholders of the Corporation shall approve any liquidation,
sale or transfer of all or substantially all of the assets of the Corporation
(other than to an entity or entities controlled by the Corporation and/or its
shareholders following such event);

provided, however, that if securities beneficially owned by a Participant are
included in determining the Beneficial Ownership of a Person referred to in
paragraph 4(a), then no Section 11 Event with respect to such Participant shall
be deemed to have occurred by reason of such event.

11.2                      Acceleration of the Exercise Date of Stock Options and
Stock Appreciation Rights.  Subject to the provisions of Section 5 in the case
of incentive stock options and Section 11.6, unless the agreement under Section
2.5 shall otherwise provide, notwithstanding any other provision contained in
the Plan, in case any Section 11 Event occurs all outstanding stock options and
stock appreciation rights shall become immediately and fully exercisable whether
or not otherwise exercisable by their terms.

11.3                      Extension of the Expiration Date of Stock Options and
Stock Appreciation Rights.  Subject to the provisions of Section 5 in the case
of incentive stock options and Section 11.6, unless the agreement under Section
2.5 shall otherwise provide, notwithstanding any other provision contained in
the Plan, all stock options and stock appreciation rights held by a Participant
whose employment with the Corporation or a Subsidiary terminates within one year
of any Section 11 Event for any reason other than voluntary termination with the
consent of the Corporation or a Subsidiary, retirement under any retirement plan
of the Corporation or a Subsidiary or death shall be exercisable for a period of
three months from the date of such termination of employment, but in no event
after the expiration date of the stock option or stock appreciation right.

11.4                      Lapse of Restrictions on Restricted Stock
Awards.  Unless the agreement under Section 2.5 shall otherwise provide,
notwithstanding any other provision contained in the Plan other than Section
11.6, if any Section 11 Event occurs prior to the scheduled lapse of all
restrictions applicable to restricted stock Awards under the Plan (including but
not limited to Qualified Performance-Based Awards), all such restrictions shall
lapse upon the occurrence of any such Section 11 Event regardless of the
scheduled lapse of such restrictions.

11.5                      Vesting of Restricted Stock Units and Performance
Units.  Unless the agreement under Section 2.5 shall otherwise provide,
notwithstanding any other provision contained in the Plan other than Section
11.6, if any Section 11 Event occurs, all restricted stock units and performance
units (including but not limited to Qualified Performance-Based Awards) shall be
considered to be earned and payable in full, any vesting conditions shall be
considered to have been satisfied, and such restricted stock units and
performance units shall be settled in cash as promptly as is practicable.

11.6                      Code Section 409A.  Notwithstanding the foregoing, if
any Award is subject to Section 409A of the Code, this Section 11 shall be
applicable only to the extent specifically provided in the agreement under
Section 2.5 applicable to the Award and permitted pursuant to Section 12.2.

11.7                      Tax Gross-Up Payments.  Unless the agreement under
Section 2.5 shall otherwise provide, if the independent auditors of the
Corporation most recently selected by the Board determine that (i) any grant,
payment or transfer to or for the benefit of a Participant (whether granted,
paid or payable or transferred or transferable pursuant to the Plan or
otherwise) (a “Payment”) would be deemed to be an “excess parachute payment” for
Federal income tax purposes because of Section 280G of the Code, or any
successor provision (“Section 280G”), and (ii) any Award, grant, payment or
transfer under the Plan to or for the benefit of a Participant within one year
of or following the occurrence of a Section 11 Event constitutes in whole or in
part a “parachute payment” under Section 280G (without regard to Section
280G(b)(4)) used in calculating such “excess parachute payment,” the Payment
will be grossed up through the payment by the Corporation to the Participant in
cash of the amount of any excise tax under Section 4999 of the Code, or any
successor provision (“Section 4999”), on the “excess parachute payment” and the
amount of any excise tax under Section 4999 and applicable income tax on the
total amount of such gross up payment so that the Participant will receive the
full amount of the Payment after the Participant has paid any excise tax under
Section 4999 of the Code on the “excess parachute payment” and any excise tax
under Section 4999 and applicable income tax on the amount of such gross up
payment.  On the later of the date an “excess parachute payment” is paid to or
for the benefit of the Participant or the date on which it can be first
determined that a Payment would be deemed to be an “excess parachute payment”
(but in any event no later than the end of the Participant’s taxable year next
following the taxable year in which the Participant remits the taxes subject to
the gross up payment), the Corporation shall pay or distribute to or for the
benefit of the Participant the gross up payment due to the Participant under
this Section 11.7.  Notwithstanding the foregoing, no amounts shall be payable
under this Section 11.7 unless they are either exempt from the application of,
or comply with, the requirements of Section 409A of the Code.

SECTION 12

Qualified Performance-Based Awards; Section 409A

12.1                      Qualified Performance-Based Awards.

(a)           The provisions of this Plan are intended to ensure that all
options and stock appreciation rights granted hereunder to any Participant who
is or may be a Covered Employee in the tax year in which such option or stock
appreciation right is expected to be deductible to the Corporation qualify for
the exemption from the limitation on deductions imposed by Section 162(m) of the
Code (the “Section 162(m) Exemption”), and all such Awards shall therefore be
considered Qualified Performance-Based Awards and this Plan shall be interpreted
and operated consistent with that intention.  When granting any Award other than
an option or stock appreciation right, the Committee may designate such Award as
a Qualified Performance-Based Award, based upon a determination that (i) the
recipient is or may be a Covered Employee with respect to such Award, and (ii)
the Committee wishes such Award to qualify for the Section 162(m) Exemption, and
the terms of any such Award (and of the grant thereof) shall be consistent with
such designation.  Within 90 days after the commencement of a performance period
or, if earlier, by the expiration of 25% of a performance period, the Committee
will designate one or more performance periods, determine the Participants for
the performance periods and establish the Performance Goals for the performance
periods.

(b)           Each Qualified Performance-Based Award (other than an option or
stock appreciation right) shall be earned, vested and/or payable (as applicable)
upon certification in writing by the Committee of the achievement of one or more
Performance Goals, together with the satisfaction of any other conditions, such
as continued employment, as previously established by the Committee with respect
to such Award.

(c)
Notwithstanding any provision in the Plan or in any agreement under Section 2.5,
to the extent that any such provision or action of the Committee would cause any
Qualified Performance-Based Award not to qualify for the Section 162(m)
Exemption, such provision or action shall be null and void as it relates to
Covered Employees, to the extent permitted by law and deemed advisable by the
Committee.

12.2                      Code Section 409A.  It is the intention of the
Corporation that no Award shall be “deferred compensation” subject to Section
409A of the Code, unless and to the extent that the Committee specifically
determines otherwise as provided in the immediately following sentence, and the
Plan and the terms and conditions of all Awards shall be interpreted
accordingly.  The terms and conditions governing any Awards that the Committee
determines will be subject to Section 409A of the Code, including any rules for
elective or mandatory deferral of the delivery of cash or shares of Common Stock
pursuant thereto and any rules regarding treatment of such Awards in the event
of a Section 11 Event, shall be set forth in the applicable agreement under
Section 2.5, and shall comply in all respects with Section 409A of the Code.

SECTION 13

Effect of the Plan on the Rights of Employees and Employer

Neither the adoption of the Plan nor any action of the Board or the Committee
pursuant to the Plan shall be deemed to give any employee any right to be
granted any Award under the Plan.  Nothing in the Plan, in any Award under the
Plan or in any agreement under Section 2.5 providing for any Award under the
Plan shall confer any right to any employee to continue in the employ of the
Corporation or any Subsidiary or interfere in any way with the rights of the
Corporation or any Subsidiary to terminate the employment of any employee at any
time or adjust the compensation of any employee at any time.

SECTION 14

Amendment or Termination

The right to amend the Plan at any time and from time to time and the right to
terminate the Plan are hereby specifically reserved to the Board; provided that
no such amendment of the Plan shall, without shareholder approval (a) increase
the maximum aggregate number of shares of Common Stock for which Awards may be
made under Section 4.1 of the Plan, (b) increase the maximum aggregate number of
shares of Common Stock as to which incentive stock options may be granted under
Section 4.1 of the Plan, (c) make any changes in the class of employees eligible
to receive Awards under the Plan, (d) change the maximum number of shares of
Common Stock as to which Awards may be made to any Participant under Section 4.2
of the Plan, or the maximum amount that may be paid or distributed to any
Participant pursuant to a grant of performance units or other stock-based Awards
made in any one calendar year under Section 8 or 9 of the Plan, respectively,
(e) change the exercise price or Base Price permitted under Section 5.3 of the
Plan or the restrictions regarding repricing under Section 5.3 of the Plan,(f)
be made if shareholder approval of the amendment is at the time required for
Awards under the Plan to qualify for the exemption from Section 16(b) of the
1934 Act provided by Rule 16b-3 or by the rules of the NASDAQ National Market
System or any stock exchange on which the Common Stock may then be listed or (g)
be made to the extent such approval is needed for Qualified Performance-Based
Awards to qualify for the Section 162(m) Exemption.  No amendment or termination
of the Plan shall, without the written consent of the holder of an Award under
the Plan, adversely affect the rights of such holder with respect thereto.

SECTION 15

General Provisions

15.1                      Additional Compensation Arrangements.  Nothing
contained in the Plan shall prevent the Corporation or any Subsidiary from
adopting other or additional compensation arrangements for its employees.

15.2                      Tax Withholding.  No later than the date as of which
an amount first becomes includible in the gross income of a Participant for
federal, state, local or foreign income or employment or other tax purposes with
respect to any Award under the Plan, such Participant shall pay to the
Corporation (or, if applicable, a Subsidiary), or make arrangements satisfactory
to the Corporation (or, if applicable, a Subsidiary) regarding the payment of,
any federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount.  Unless otherwise determined by the
Committee, withholding obligations may be settled with Common Stock, including
Common Stock that is part of the Award that gives rise to the withholding
requirement, having a Fair Market Value on the date of withholding equal to the
minimum amount (and not any greater amount unless otherwise determined by the
Committee) required to be withheld for tax purposes, all in accordance with such
procedures as the Committee establishes, and provided that any fractional share
amount must be paid in cash or withheld from compensation otherwise due to the
Participant.  The obligations of the Corporation under the Plan shall be
conditional on such payment or arrangements, and the Corporation and its
Subsidiaries shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment otherwise due to such Participant.  The Committee
may establish such procedures as it deems appropriate, including making
irrevocable elections, for the settlement of withholding obligations with Common
Stock.

15.3                      Limitation of Liability.  The grant of any Award shall
not:

(a)           give a Participant any rights except as expressly set forth in the
Plan or in the agreement under Section 2.5;

(b)           create any fiduciary or other obligation of the Corporation or any
Subsidiary to take any action or provide to the Participant any assistance or
dedicate or permit the use of any assets of the Corporation or any Subsidiary
that would permit the Participant to be able to attain any Performance Goals
associated with any Award;

(c)           create any trust, fiduciary or other duty or obligation of the
Corporation or any Subsidiary to engage in any particular business, continue to
engage in any particular business, engage in any particular business practices
or sell any particular product or products; or

(d)           create any obligation of the Corporation or any Subsidiary that
shall be greater than the obligation of the Corporation or that Subsidiary to
any of their general unsecured creditors.

15.4                      Limitation on Dividend Reinvestment and Dividend
Equivalents.  Reinvestment of dividends in additional restricted stock at the
time of any dividend payment, and the payment of shares with respect to
dividends to Participants holding Awards of restricted stock units, shall only
be permissible if authorized by the Committee and if sufficient shares of Common
Stock are available under Section 4 for such reinvestment or payment (taking
into account then outstanding Awards). In the event that sufficient shares of
Common Stock are not available for such reinvestment or payment, such
reinvestment or payment shall be made in the form of a grant of restricted stock
units equal in number to the shares of Common Stock that would have been
obtained by such payment or reinvestment, the terms of which restricted stock
units shall provide for settlement in cash and for dividend equivalent
reinvestment in further restricted stock units on the terms contemplated by this
Section 15.4.

15.5                      Governing Law and Interpretation.  To the extent not
preempted by federal Law, the Plan and all Awards made and actions taken
thereunder shall be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania, without reference to principles of conflict of
laws. The captions of this Plan are not part of the provisions hereof and shall
have no force or effect.

15.6                      Dispute Resolution.  Since Awards are granted in
Western Pennsylvania, records relating to the Plan and Awards are located in
Western Pennsylvania, and the Plan and Awards are administered in Western
Pennsylvania, the Corporation and the Participant to whom an Award is granted,
for themselves and their heirs, representatives, successors and assigns
(collectively, the “Parties”) irrevocably submit to the exclusive and sole
jurisdiction and venue of the state courts of Allegheny County, Pennsylvania and
the federal courts of the Western District of Pennsylvania with respect to any
and all disputes arising out of or relating to the Plan, the subject matter of
the Plan or any Awards under the Plan, including but not limited to any disputes
arising out of or relating to the interpretation and enforceability of any
Awards or the terms and conditions of the Plan.  To achieve certainty regarding
the appropriate forum in which to prosecute and defend actions arising out of or
relating to the Plan, and to ensure consistency in application and
interpretation of the governing law under Section 15.5 of the Plan, the Parties
agree that (a) sole and exclusive appropriate venue for any such action shall be
the Pennsylvania courts described in the immediately preceding sentence, and no
other, (b) all claims with respect to any such action shall be heard and
determined exclusively in such Pennsylvania courts, and no other, (c) such
Pennsylvania courts shall have sole and exclusive jurisdiction over the Parties
and over the subject matter of any dispute relating hereto and (d) the Parties
waive any and all objections and defenses to bringing any such action before
such Pennsylvania courts, including but not limited to those relating to lack of
personal jurisdiction, improper venue or forum non conveniens.

15.7                      Non-Transferability.  Except as otherwise specifically
provided in the Plan or by the Committee and limited to a transfer without the
payment of value or consideration to the Participant, Awards under the Plan are
not transferable except by will or by laws of descent and distribution of the
state of domicile of the Participant at the time of death.

15.8                      Deferrals.  The Committee shall be authorized to
establish procedures pursuant to which the payment of any Award may be deferred,
provided that any such deferral is consistent with all aspects of Section 409A
of the Code. Subject to the provisions of this Plan and any agreement under
Section 2.5, the recipient of an Award (including, without limitation, any
deferred Award) may, if so determined by the Committee, be entitled to receive,
currently or on a deferred basis, interest or dividends, or interest or dividend
equivalents, with respect to the number of shares covered by the Award, as
determined by the Committee, in its sole discretion, and the Committee may
provide that such amounts (if any) shall be deemed to have been reinvested in
additional shares or otherwise reinvested.

15.9                      Integration.  The Plan and any written agreements
executed by Participants and the Corporation under Section 2.5 contain all of
the understandings and representations between the parties and supersede any
prior understandings and agreements entered into between them regarding the
subject matter within.  There are no representations, agreements, arrangements
or understandings, oral or written, between the parties relating to the subject
matter of the Plan which are not fully expressed in the Plan and the written
agreements.

15.10                      Foreign Employees and Foreign Law
Considerations.  The Committee may grant Awards to eligible employees who are
foreign nationals, who are located outside the United States of America or who
are not compensated from a payroll maintained in the United States of America,
or who are otherwise subject to (or could cause the Corporation to be subject
to) legal or regulatory provisions of countries or jurisdictions outside the
United States of America, on such terms and conditions different from those
specified in the Plan as may, in the judgment of the Committee, be necessary or
desirable to foster and promote achievement of the purposes of the Plan, and, in
furtherance of such purposes, the Committee may make such modifications,
amendments, procedures, or subplans as may be necessary or advisable to comply
with such legal or regulatory provisions.

15.11                      Certain Restrictions on Certain Awards.  Subject to
the terms of the Plan and more restrictive terms, if any, of the applicable
agreement under Section 2.5, any Award of restricted stock, restricted stock
units, performance units, or other stock-based Awards under Section 9 shall be
subject to vesting during a restriction period of at least three (3) years
following the date of grant, provided, however, that:

(i)              A restriction period of only at least one (1) year following
the date of grant is permissible if vesting is conditional, in whole or in part,
upon the achievement of Performance Goals, except that there need not be any
minimum restriction period for a Performance Goal based upon stock price if
there is also a service-based restriction of at least one (1) year following the
date of grant;

(ii)              To the extent permitted by the Committee, in its sole
discretion, and specified in the applicable agreement under Section 2.5, an
Award with a restriction period of at least three (3) years may vest in part on
a pro rata basis prior to the expiration of any such restriction period;

(iii)                      To the extent permitted by the Committee, in its sole
discretion, and specified in the applicable agreement under Section 2.5, an
Award may vest prior to the expiration of any restriction period required under
this Section 15.11 in the event of a Participant’s death or retirement, the
Participant becoming a Disabled Participant, or an involuntary termination of
the Participant’s employment by the Corporation or a Subsidiary;

(iv)              In the event of the occurrence of a Section 11 Event, an Award
may vest prior to the expiration of any restriction period required under this
Section 15.11 pursuant to Section 11.4 or 11.5 or as otherwise permitted by the
Committee, in its sole discretion, and specified in the applicable agreement
under Section 2.5; and

(v)              The Committee may grant Awards of restricted stock, restricted
stock units, performance units and other stock-based Awards under Section 9
without regard to the foregoing requirements, and the Committee may accelerate
the vesting of and lapse any restrictions with respect to, any such Awards (in
addition to the potential acceleration under (ii)-(iv) of the foregoing), for up
to, collectively for all such Awards, ten percent (10%) of the shares of Common
Stock for which Awards may be made under Section 4.1 of the Plan, as adjusted
under the terms of the Plan.

SECTION 16

Effective Date and Duration of Plan

The effective date and date of adoption of the Plan shall be November 13, 2007,
the date of adoption of the Plan by the Board, and the effective date of the
amendments to the Plan by the Board on September 26, 2008 shall be September 26,
2008.  No Award under the Plan may be made subsequent to November 12, 2017.
 
 

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