Exhibit 10.26

UNUM GROUP

STOCK INCENTIVE PLAN OF 2007

    SECTION 1.         Purpose; Definitions

The purpose of this Plan is to give the Company a competitive advantage in
attracting, retaining and motivating officers, employees, directors and/or
consultants and to provide the Company and its Subsidiaries and Affiliates with
a long-term incentive plan providing incentives directly linked to stockholder
value. Certain terms used herein have definitions given to them in the first
place in which they are used. In addition, for purposes of this Plan, the
following terms are defined as set forth below:

(a)         “Affiliate” means a corporation or other entity controlled by,
controlling or under common control with, the Company.

(b)         “Applicable Exchange” means the New York Stock Exchange or such
other securities exchange as may at the applicable time be the principal market
for the Common Stock.

(c)         “Award” means an Option, Stock Appreciation Right, Restricted Stock,
Restricted Stock Unit, Performance Units or Other Stock-Based Award granted
pursuant to the terms of this Plan.

(d)         “Award Agreement” means a written document or agreement setting
forth the terms and conditions of a specific Award.

(e)         “Board” means the Board of Directors of the Company.

(f)         “Cause” means, unless otherwise provided in an Award Agreement,
(i) “Cause” as defined in any Individual Agreement to which the applicable
Participant is a party, or (ii) if there is no such Individual Agreement or if
it does not define Cause: (A) conviction of the Participant for committing a
felony under federal law or the law of the state in which such action occurred,
(B) dishonesty in the course of fulfilling the Participant’s employment duties,
(C) failure on the part of the Participant to perform substantially such
Participant’s employment duties in any material respect, (D) a material
violation of the Company’s ethics and compliance program, or (E) before a Change
in Control, such other events as shall be determined by the Committee and set
forth in a Participant’s Award Agreement. Notwithstanding the general rule of
Section 2(c), following a Change in Control, any determination by the Committee
as to whether “Cause” exists shall be subject to de novo review.

(g)         “Change in Control” has the meaning set forth in Section 10(b).

(h)         “Code” means the Internal Revenue Code of 1986, as amended from time
to time, and any successor thereto, the Treasury Regulations thereunder and
other relevant interpretive guidance issued by the Internal Revenue Service or
the Treasury Department. Reference to any specific section of the Code shall be
deemed to include such regulations and guidance, as well as any successor
provision of the Code.

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(i)         “Commission” means the Securities and Exchange Commission or any
successor agency.

(j)         “Committee” has the meaning set forth in Section 2(a).

(k)         “Common Stock” means common stock, par value $.10 per share, of the
Company.

(l)         “Company” means Unum Group, a Delaware corporation.

(m)         “Disability” means (i) “Disability” as defined in any Individual
Agreement to which the Participant is a party, (ii) if there is no such
Individual Agreement or it does not define “Disability,” disability of a
Participant means the Participant is (A) unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, or (B) by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less
than three months under an accident and health plan covering employees of the
Company. The Committee may require such medical or other evidence as it deems
necessary to judge the nature and duration of the Participant’s condition.
Notwithstanding the above, with respect to an Incentive Stock Option, Disability
shall mean Permanent and Total Disability as defined in Section 22(e)(3) of the
Code.

(n)         “Disaffiliation” means a Subsidiary’s or Affiliate’s ceasing to be a
Subsidiary or Affiliate for any reason (including, without limitation, as a
result of a public offering, or a spinoff or sale by the Company, of the stock
of the Subsidiary or Affiliate) or a sale of a division of the Company and its
Affiliates.

(o)         “Eligible Individuals” means directors, officers, employees and
consultants of the Company or any of its Subsidiaries or Affiliates, and
prospective employees and consultants who have accepted offers of employment or
consultancy from the Company or its Subsidiaries or Affiliates.

(p)         “Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.

(q)         “Fair Market Value” means the closing price of a share of Common
Stock on the Applicable Exchange on the date of measurement, or if Shares were
not traded on the Applicable Exchange on such measurement date, then on the next
preceding date on which Shares were traded, all as reported by such source as
the Committee may select. If the Common Stock is not listed on a national
securities exchange, Fair Market Value shall be determined by the Committee in
its good faith discretion using a reasonable valuation method which shall
include consideration of the following factors, as applicable: (i) the value of
the Company’s tangible and intangible assets; (ii) the present value of the
Company’s future cash-flows; (iii) the market value of stock or equity interests
in similar corporations and other entities engaged in substantially similar
trades or businesses, the value of which can be readily determined objectively
(such as through trading prices on an established securities market or an amount
paid in an arm’s-length

 

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private transaction); (iv) control premiums or discounts for lack of
marketability; (v) recent arm’s length transactions involving the sale or
transfer of such stock or equity interests; and (vi) other relevant factors.

(r)         “Free-Standing SAR” has the meaning set forth in Section 5(b).

(s)         “Full-Value Award” means any Award other than an Option or Stock
Appreciation Right.

(t)         “Grant Date” means (i) the date on which the Committee by resolution
selects an Eligible Individual to receive a grant of an Award and determines the
number of Shares to be subject to such Award, or (ii) such later date as the
Committee shall provide in such resolution.

(u)         “Incentive Stock Option” means any Option that is designated in the
applicable Award Agreement as an “incentive stock option” within the meaning of
Section 422 of the Code, and that in fact so qualifies.

(v)         “Individual Agreement” means an employment, consulting or similar
agreement between a Participant and the Company or one of its Subsidiaries or
Affiliates.

(w)         “Nonqualified Option” means any Option that is not an Incentive
Stock Option.

(x)         “Option” means an Award granted under Section 5.

(y)         “Other Stock-Based Award” means Awards of Common Stock and other
Awards that are valued in whole or in part by reference to, or are otherwise
based upon, Common Stock, including (without limitation), unrestricted stock,
dividend equivalents, and convertible debentures.

(z)         “Participant” means an Eligible Individual to whom an Award is or
has been granted.

(aa)         “Performance Goals” means the performance goals established by the
Committee in connection with the grant of Restricted Stock, Restricted Stock
Units, Performance Units or Other Stock-Based Awards. In the case of Qualified
Performance-Based Awards, (i) such goals shall be based on the attainment of
specified levels of one or more of the following measures: overall or selected
premium or sales growth, expense efficiency ratios (ratio of expenses to premium
income), market share, customer service measures or indices, underwriting
efficiency and/or quality, persistency factors, return on net assets, economic
value added, shareholder value added, embedded value added, combined ratio,
expense ratio, loss ratio, premiums, risk based capital, revenues, revenue
growth, earnings (including earnings before taxes, earnings before interest and
taxes or earnings before interest, taxes, depreciation and amortization),
earnings per share, operating income (including non-pension operating income),
pre- or after-tax income, net income, cash flow (before or after dividends),
cash flow per share (before or after dividends), gross margin, return on equity,
return on capital (including return on total capital or return on invested
capital), cash flow return on investment, return on assets or operating assets,
economic value added (or an equivalent metric), stock price appreciation, total
stockholder return (measured in terms of stock price appreciation and dividend
growth), cost control, gross profit,

 

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operating profit, cash generation, unit volume, stock price, market share,
sales, asset quality, cost saving levels, marketing-spending efficiency, core
non-interest income, or change in working capital with respect to the Company or
any one or more subsidiaries, divisions, business units or business segments of
the Company either in absolute terms or relative to the performance of one or
more other companies or an index covering multiple companies and (ii) such
Performance Goals shall be set by the Committee within the time period
prescribed by Section 162(m) of the Code and the regulations promulgated
thereunder.

(bb)         “Performance Period” means that period established by the Committee
at the time any Performance Unit is granted or at any time thereafter during
which any Performance Goals specified by the Committee with respect to such
Award are to be measured.

(cc)         “Performance Unit” means any Award granted under Section 8 of a
unit valued by reference to a designated amount of cash or other property other
than Shares, which value may be paid to the Participant by delivery of such
property as the Committee shall determine, including, without limitation, cash,
Shares, or any combination thereof, upon achievement of such Performance Goals
during the Performance Period as the Committee shall establish at the time of
such grant or thereafter.

(dd)         “Plan” means this Unum Group Stock Incentive Plan of 2007, as set
forth herein and as hereafter amended from time to time.

(ee)         “Qualified Performance-Based Award” means an Award intended to
qualify for the Section 162(m) Exemption, as provided in Section 11.

(ff)         “Restricted Stock” means an Award granted under Section 6.

(gg)         “Restricted Stock Units” means an Award granted under Section 7.

(hh)         “Retirement” means the Participant’s Termination of Employment
after the attainment of age 65 or the attainment of age 55 and at least 15 years
of service.

(ii)         “Section 162(m) Exemption” means the exemption from the limitation
on deductibility imposed by Section 162(m) of the Code that is set forth in
Section 162(m)(4)(C) of the Code.

(jj)         “Share” means a share of Common Stock.

(kk)         “Stock Appreciation Right” has the meaning set forth in
Section 5(b).

(ll)         “Subsidiary” means any corporation, partnership, joint venture,
limited liability company or other entity during any period in which at least a
50% voting or profits interest is owned, directly or indirectly, by the Company
or any successor to the Company.

(mm)        “Tandem SAR” has the meaning set forth in Section 5(b).

 

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(nn)         “Term” means the maximum period during which an Option or Stock
Appreciation Right may remain outstanding, subject to earlier termination upon
Termination of Employment or otherwise, as specified in the applicable Award
Agreement.

(oo)         “Termination of Employment” means the termination of the applicable
Participant’s employment with, or performance of services for, the Company and
any of its Subsidiaries or Affiliates. Unless otherwise determined by the
Committee, (i) if a Participant’s employment with the Company and its Affiliates
terminates but such Participant continues to provide services to the Company and
its Affiliates in a non-employee capacity, such change in status shall not be
deemed a Termination of Employment and (ii) a Participant employed by, or
performing services for, a Subsidiary or an Affiliate or a division of the
Company and its Affiliates shall be deemed to incur a Termination of Employment
if, as a result of a Disaffiliation, such Subsidiary, Affiliate, or division
ceases to be a Subsidiary, Affiliate or division, as the case may be, and the
Participant does not immediately thereafter become an employee of, or service
provider for, the Company or another Subsidiary or Affiliate. Temporary absences
from employment because of illness, vacation or leave of absence and transfers
among the Company and its Subsidiaries and Affiliates shall not be considered
Terminations of Employment.

    SECTION 2.         Administration

(a)         Committee.   The Plan shall be administered by the Human Capital
Committee of the Board or such other committee of the Board as the Board may
from time to time designate (the “Committee”), which shall be composed of not
less than two directors, and shall be appointed by and serve at the pleasure of
the Board. The Committee shall, subject to Section 11, have plenary authority to
grant Awards pursuant to the terms of the Plan to Eligible Individuals. Among
other things, the Committee shall have the authority, subject to the terms and
conditions of the Plan:

(i)         to select the Eligible Individuals to whom Awards may from time to
time be granted;

(ii)         to determine whether and to what extent Incentive Stock Options,
Nonqualified Options, Stock Appreciation Rights, Restricted Stock, Restricted
Stock Units, Performance Units, Other Stock-Based Awards, or any combination
thereof, are to be granted hereunder;

(iii)         to determine the number of Shares to be covered by each Award
granted hereunder;

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

(v)         subject to Section 12, to modify, amend or adjust the terms and
conditions of any Award;

 

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

(vii)         to interpret the terms and provisions of the Plan and any Award
issued under the Plan (and any agreement relating thereto);

(viii)         subject to Section 12, to accelerate the vesting or lapse of
restrictions of any outstanding Award, based in each case on such considerations
as the Committee in its sole discretion determines;

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

(x)         to determine whether, to what extent and under what circumstances
cash, Shares 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 Participant;

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

(xii)         to otherwise administer the Plan.

(b)         Procedures.

(i)         The Committee may act only by a majority of its members then in
office, except that the Committee may, except to the extent prohibited by
applicable law or the listing standards of the Applicable Exchange and subject
to Section 11, 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 person or persons selected by it.

(ii)         Subject to Section 11(c), any authority granted to the Committee
may also be exercised by the full Board. To the extent that any permitted action
taken by the Board conflicts with action taken by the Committee, the Board
action shall control.

(c)         Discretion of Committee.   Subject to Section 1(f), 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 delegate
at the time of the grant 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 Company, Participants, and
Eligible Individuals.

(d)         Cancellation or Suspension.   Subject to Section 5(d), the Committee
shall have full power and authority to determine whether, to what extent and
under what circumstances any Award shall be canceled or suspended. In
particular, but without limitation, all outstanding Awards to any Participant
may be canceled if the Participant, without the consent of the Committee, while
employed by the Company or after termination of such employment, becomes

 

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associated with, employed by, renders services to, or owns any interest in
(other than any nonsubstantial interest, as determined by the Committee), any
business that is in competition with the Company or with any business in which
the Company has a substantial interest, as determined by the Committee or any
one or more Senior Managers or committee of senior managers to whom the
authority to make such determination is delegated by the Committee.

(e)         Award Agreements.   The terms and conditions of each Award, as
determined by the Committee, shall be set forth in a written (or electronic)
Award Agreement, which shall be delivered to the Participant receiving such
Award upon, or as promptly as is reasonably practicable following, the grant of
such Award. If the Committee, in its discretion, includes a Waiver and Release
in the Award Agreement, it shall be in compliance with all applicable laws and
regulations applicable to such a provision. The effectiveness of an Award shall
be subject to the Award Agreement’s being signed by the Company and/or the
Participant receiving the Award unless otherwise provided in the Award
Agreement. Award Agreements may be amended only in accordance with Section 12
hereof.

    SECTION 3.         Common Stock Subject to Plan

(a)         Plan Maximums.   The maximum number of Shares that may be granted
pursuant to Awards under the Plan shall be 35,000,000. The maximum number of
Shares that may be granted pursuant to Options intended to be Incentive Stock
Options shall be 1,000,000 Shares. Shares subject to an Award under the Plan may
be authorized and unissued Shares.

(b)         Individual Limits.   No Participant may be granted Awards covering
in excess of 1,000,000 Shares during any calendar year.

(c)         Rules for Calculating Shares Delivered.   For purposes of the limits
set forth in Sections 3(a) and 3(b), each Full Value Award shall be counted as
2.7 Shares. To the extent that any Award is forfeited, or any Option and the
related Tandem SAR (if any) or Free-Standing SAR terminates, expires or lapses
without being exercised, or any Award is settled for cash, the Shares subject to
such Awards not delivered as a result thereof shall again be available for
Awards under the Plan. If the exercise price of any Option and/or the tax
withholding obligations relating to any Award 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 the first sentence of Section 3(a).

(d)         Adjustment Provision.   In the event of a merger, consolidation,
acquisition of property or shares, stock rights offering, liquidation,
separation, spinoff, Disaffiliation, extra-ordinary dividend of cash or other
property, or similar event affecting the Company or any of its Subsidiaries
(each, a “Corporate Transaction”), the Committee or the Board may in its
discretion make such substitutions or adjustments as it deems appropriate and
equitable to (A) the aggregate number and kind of Shares or other securities
reserved for issuance and delivery under the Plan, (B) the various maximum
limitations set forth in Sections 3(a) and 3(b) upon certain types of Awards and
upon the grants to individuals of certain types of Awards, (C) the number and
kind of Shares or other securities subject to outstanding Awards; and (D) the
exercise price of outstanding Awards. In the event of a stock dividend, stock
split, reverse stock split,

 

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reorganization, share combination, or recapitalization or similar event
affecting the capital structure of the Company (each, a “Share Change”), the
Committee or the Board shall make such substitutions or adjustments as it deems
appropriate and equitable to (A) the aggregate number and kind of Shares or
other securities reserved for issuance and delivery under the Plan, (B) the
various maximum limitations set forth in Sections 3(a) and 3(b) upon certain
types of Awards and upon the grants to individuals of certain types of Awards,
(C) the number and kind of Shares or other securities 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 stockholders 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 Company and
securities of entities other than the Company) for the Shares subject to
outstanding Awards; and (3) in connection with any Disaffiliation, 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 Company and securities of entities other than the Company), by
the affected Subsidiary, Affiliate, or division or by the entity that controls
such Subsidiary, Affiliate, or division following such Disaffiliation (as well
as any corresponding adjustments to Awards that remain based upon Company
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 Company’s financial
statements, notes to the financial statements, management’s discussion and
analysis or other the Company’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.

(e)         Section 409A.   Notwithstanding the foregoing: (i) any adjustments
made pursuant to Section 3(d) 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 3(d) 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 3(d) 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 to be subject thereto.

 

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    SECTION 4.         Eligibility

Awards may be granted under the Plan to Eligible Individuals; provided, however,
that Incentive Stock Options may be granted only to employees of the Company and
its subsidiaries or parent corporation (within the meaning of Section 424(f) of
the Code).

    SECTION 5.         Options and Stock Appreciation Rights

(a)         Types of Options.   Options may be of two types: Incentive Stock
Options and Nonqualified Options. The Award Agreement for an Option shall
indicate whether the Option is intended to be an Incentive Stock Option or a
Nonqualified Option.

(b)         Types and Nature of Stock Appreciation Rights.   Stock Appreciation
Rights may be “Tandem SARs,” which are granted in conjunction with an Option, or
“Free-Standing SARs,” which are not granted in conjunction with an Option. Upon
the exercise of a Stock Appreciation Right, the Participant shall be entitled to
receive an amount in cash, Shares, or both, in value equal to the product of
(i) the excess of the Fair Market Value of one Share over the exercise price of
the applicable Stock Appreciation Right, multiplied by (ii) the number of Shares
in respect of which the Stock Appreciation Right has been exercised. The
applicable Award Agreement 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.

(c)         Tandem SARs.   A Tandem SAR may be granted at the Grant Date of the
related 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, and shall have the same exercise price as the
related Option. A Tandem SAR shall terminate or be forfeited upon the exercise
or forfeiture of the related Option, and the related Option shall terminate or
be forfeited upon the exercise or forfeiture of the Tandem SAR.

(d)         Exercise Price.   The exercise price per Share subject to an Option
or Free-Standing SAR shall be determined by the Committee and set forth in the
applicable Award Agreement, and shall not be less than the Fair Market Value of
a share of the Common Stock on the applicable Grant Date. In no event may any
Option, Tandem SAR, or Free-Standing SAR granted under this Plan be amended,
other than pursuant to Section 3(d), to decrease the exercise price thereof, be
cancelled in conjunction with the grant of any new Option or Free-Standing SAR
with a lower exercise price, or otherwise be subject to any action that would be
treated, for accounting purposes, as a “repricing” of such Option or
Free-Standing SAR, unless such amendment, cancellation, or action is approved by
the Company’s stockholders.

(e)         Term.   The Term of each Option and each Free-Standing SAR shall be
fixed by the Committee, but shall not exceed ten years from the Grant Date.

(f)         Vesting and Exercisability.   Except as otherwise provided herein,
Options and Free-Standing SARs shall be exercisable at such time or times and
subject to such terms and conditions as shall be determined by the Committee,
provided that, except as otherwise determined by the Committee, in no event
shall the normal vesting schedule of an Option or

 

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Free-Standing SAR provide that such Option or Free-Standing SAR vest prior to
the first anniversary of the date of grant (other than in the case of death or
Disability).

(g)         Method of Exercise.   Subject to the provisions of this Section 5,
Options and Free-Standing SARs may be exercised, in whole or in part, at any
time during the applicable term by giving written notice of exercise to the
Company specifying the number of shares of Common Stock as to which the Option
or Free-Standing SAR is being exercised. In the case of the exercise of an
Option, such notice shall be accompanied by payment in full of the purchase
price (which shall equal the product of such number of shares multiplied by the
applicable exercise price) by certified or bank check or such other instrument
as the Company may accept. If approved by the Committee, payment, in full or in
part, may also be made as follows:

(i)         Payments made 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).

(ii)         To the extent permitted by applicable law, payment may be made by
delivering a properly executed exercise notice to the Company, together with a
copy of irrevocable instructions to a broker to deliver promptly to the Company
the amount of sale or loan proceeds necessary to pay the purchase price, and, if
requested, the amount of any federal, state, local or foreign withholding taxes.
To facilitate the foregoing, the Company may, to the extent permitted by
applicable law, enter into agreements for coordinated procedures with one or
more brokerage firms. To the extent permitted by applicable law, the Committee
may also provide for Company loans to be made for purposes of the exercise of
Options.

(iii)         Payment may be made by instructing the Company to withhold a
number of shares of Common Stock having a Fair Market Value (based on the Fair
Market Value of the Common Stock on the date the applicable Option is exercised)
equal to product of (A) the exercise price multiplied by (B) the number of
shares of Common Stock in respect of which the Option shall have been exercised.

(h)         Delivery; Rights of Stockholders.   No Shares shall be delivered
pursuant to the exercise of an Option until the exercise price therefor has been
fully paid and applicable taxes have been withheld. The applicable Participant
shall have all of the rights of a stockholder of the Company holding the class
or series of Common Stock that is subject to the Option or Stock Appreciation
Right (including, if applicable, the right to vote the applicable Shares and the
right to receive dividends), when the Participant (i) has given written notice
of exercise, (ii) if requested, has given the representation described in
Section 14(a), and (iii) in the case of an Option, has paid in full for such
Shares.

(i)         Nontransferability of Options and Stock Appreciation Rights.   No
Option or Free-Standing SAR shall be transferable by a Participant other than,
for no value or consideration, (i) by will or by the laws of descent and
distribution, or (ii) in the case of a Nonqualified Option or Free-Standing SAR,
as otherwise expressly permitted by the Committee including, if so permitted,
pursuant to a transfer to the Participant’s family members, whether directly or

 

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indirectly or by means of a trust or partnership or otherwise. For purposes of
this Plan, unless otherwise determined by the Committee, “family member” shall
have the meaning given to such term in General Instructions A.1(a)(5) to Form
S-8 under the Securities Act of 1933, as amended, and any successor thereto. A
Tandem SAR shall be transferable only with the related Option as permitted by
the preceding sentence. Any Option or Stock Appreciation Right shall be
exercisable, subject to the terms of this Plan, only by the applicable
Participant, the guardian or legal representative of such Participant, or any
person to whom such Option or Stock Appreciation Right is permissibly
transferred pursuant to this Section 5(i), it being understood that the term
“Participant” includes such guardian, legal representative and other transferee;
provided, however, that the term “Termination of Employment” shall continue to
refer to the Termination of Employment of the original Participant.

(j)         Termination of Employment.   A Participant’s Options and Stock
Appreciation Rights shall be forfeited upon his or her Termination of
Employment, except as set forth below:

(i)         Upon a Participant’s Termination of Employment for any reason other
than death, Disability, Retirement or for Cause, any Option or Stock
Appreciation Right held by the Participant that was exercisable immediately
before the Termination of Employment may be exercised at any time until the
earlier of (A) the 90th day following such Termination of Employment and
(B) expiration of the Term thereof;

(ii)         Upon a Participant’s Termination of Employment by reason of the
Participant’s death, any Option or Stock Appreciation Right held by the
Participant shall vest and be exercisable at any time until the earlier of
(A) the third anniversary of the date of such death and (B) the expiration of
the Term thereof;

(iii)         Upon a Participant’s Termination of Employment by reason of
Disability, any Option or Stock Appreciation Right held by the Participant shall
vest and be exercisable at any time until the expiration of the Term thereof;

(iv)         Upon a Participant’s Termination of Employment for Retirement, any
Option or Stock Appreciation Right held by the Participant shall vest and be
exercisable at any time until the earlier of (A) the fifth anniversary of such
Termination of Employment and (B) expiration of the Term thereof; and

(k)         Notwithstanding the foregoing, the Committee shall have the power,
in its discretion, to apply different rules concerning the consequences of a
Termination of Employment, provided, that if such rules are less favorable to
the Participant than those set forth above, such rules are set forth in the
applicable Award Agreement.

    SECTION 6.         Restricted Stock

(a)         Nature of Awards and Certificates.   Shares of Restricted Stock are
actual Shares 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

 

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applicable Participant and shall bear an appropriate 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
Unum Group, Stock Incentive Plan of 2007 and an Award Agreement. Copies of such
Plan and Agreement are on file at the offices of Unum Group, 1 Fountain Square,
Chattanooga, Tennessee 37402.”

The Committee may require that the certificates evidencing such shares be held
in custody by the Company until the restrictions thereon shall have lapsed and
that, as a condition of any Award of Restricted Stock, the applicable
Participant shall have delivered a stock power, endorsed in blank, relating to
the Common Stock covered by such Award.

(b)         Terms and Conditions.   Shares of Restricted Stock shall be subject
to the following terms and conditions:

(i)         The Committee shall, prior to or at the time of grant, condition
(A) the vesting of an Award of Restricted Stock upon the continued service of
the applicable Participant or (B) the grant or 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. In the event that
the Committee conditions the grant or 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 grant or 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.

(ii)         Subject to the provisions of the Plan and the applicable Award
Agreement, 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 Restricted Stock. Subject to the terms of the Plan
and the applicable Award Agreement, any Award of Restricted Stock shall be
subject to vesting during the Restriction Period of at least three years
following the date of grant, provided that a Restriction Period of at least one
year following the date of grant is permissible if vesting is conditioned upon
the achievement of Performance Goals, and provided, further that an Award may
vest in part on a pro rata basis prior to the expiration of any Restriction
Period, and provided, further, that up to five percent of Shares available for
grant as Restricted Stock (together with all other Shares available for grant as
Full-Value Awards) may be granted without regard to the foregoing requirements
and the Committee may accelerate the vesting and lapse any restrictions with
respect to any such Restricted Stock Awards. All Restricted Stock Awards shall
be paid with 2 1/2 months of the close of the year in which the Award has vested
and all restrictions with respect to such Award have lapsed.

 

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(iii)         Except as provided in this Section 6 and in the applicable Award
Agreement, the applicable Participant shall have, with respect to the Shares of
Restricted Stock, all of the rights of a stockholder of the Company holding the
class or series of 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 in the applicable Award
Agreement and subject to Section 14(e), (A) cash dividends on the class or
series of Common Stock that is the subject of the Restricted Stock Award shall
be automatically deferred and reinvested in additional Restricted Stock, held
subject to the vesting of the underlying Restricted Stock, and (B) subject to
any adjustment pursuant to Section 3(d), dividends payable in Common Stock shall
be paid in the form of Restricted Stock of the same class as the Common Stock
with which such dividend was paid, held subject to the vesting of the underlying
Restricted Stock.

(iv)         If and when any applicable Performance Goals are satisfied and the
Restriction Period expires without a prior forfeiture of the Shares of
Restricted Stock for which legended certificates have been issued, unlegended
certificates for such Shares shall be delivered to the Participant upon
surrender of the legended certificates.

    SECTION 7.         Restricted Stock Units

(a)         Nature of Awards.   Restricted Stock Units are Awards denominated in
Shares that will be settled, subject to the terms and conditions of the
Restricted Stock Units, in an amount in cash, Shares, or both, based upon the
Fair Market Value of a specified number of Shares.

(b)         Terms and Conditions.   Restricted Stock Units shall be subject to
the following terms and conditions:

(i)         The Committee shall, prior to or at the time of grant, condition
(A) the vesting of Restricted Stock Units upon the continued service of the
applicable Participant or (B) the grant or 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. In the event that the
Committee conditions the grant or 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 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 or at a later time specified by the Committee or in
accordance with an election of the Participant, if the Committee so permits.

(ii)         Subject to the provisions of the Plan and the applicable Award
Agreement, during the period, if any, set by the Committee, commencing with the
date of such Restricted Stock Units 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 Restricted Stock Units.

 

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Subject to the terms of the Plan and the applicable Award Agreement, any
Restricted Stock Units shall be subject to vesting during the Restriction Period
of at least three years following the date of grant, provided that a Restriction
Period of at least one year following the date of grant is permissible if
vesting is conditioned upon the achievement of Performance Goals, and provided,
further that a Restricted Stock Unit may vest in part prior to the expiration of
any Restriction Period, and provided, further, that up to five percent of Shares
available for grant as Restricted Stock Units (together with all other Shares
available for grant as Full-Value Awards) may be granted without regard to the
foregoing requirements and the Committee may accelerate the vesting and lapse
any restrictions with respect to any such Restricted Stock Units. All Restricted
Stock Units shall be paid with 2 1/2 months of the close of the year in which
the Unit has vested and all restrictions with respect to such Unit have lapsed

(iii)         The Award Agreement for Restricted Stock Units shall specify
whether, to what extent and on what terms and conditions the applicable
Participant shall be entitled to receive payments of cash, Common Stock or other
property corresponding to the dividends payable on the Common Stock (subject to
Section 14(e) below).

    SECTION 8.         Performance Units.

Performance Units may be issued hereunder to Eligible Individuals, 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
Performance Goals to be achieved during any Performance Period and the length of
the Performance Period shall be determined by the Committee upon the grant of
each Performance Unit, provided that the Performance Period shall be no less
than one year following the date of grant. 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 recipient. Performance Units
may be paid in cash, Shares, other property or any combination thereof, in the
sole discretion of the Committee as set forth in the applicable Award Agreement.
The performance levels to be achieved for each Performance Period and the amount
of the Award to be distributed shall be conclusively determined by the
Committee. Performance Units may be paid in a lump sum or in installments
following the close of the Performance Period. 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 dollars ($5,000,000).

    SECTION 9.         Other Stock-Based Awards

Other Stock-Based Awards may be granted under the Plan, provided that any Other
Stock-Based Awards that are Awards of Common Stock that are unrestricted shall
only be granted in lieu of other compensation due and payable to the
Participant. Subject to the terms of the Plan, any Other Stock-Based Award that
is a Full-Value Award shall be subject to vesting during a Restriction Period of
at least three years following the date of grant, provided that a Restriction
Period of at least one year following the date of grant is permissible if
vesting is

 

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conditioned upon the achievement of Performance Goals, and provided, further
that an Other Stock-Based Award that is a Full-Value Award may vest in part on a
pro rata basis prior to the expiration of any Restriction Period, provided,
further, that up to five percent of Shares available for grant as Other
Stock-Based Awards that are Full-Value Awards (together with all other Shares
available for grant as Full-Value Awards) may be granted with a Restriction
Period of at least one year following the date of grant regardless of whether
vesting is conditioned upon the achievement of Performance Goals. All Other
Stock Based Awards shall be paid with 2 1/2 months of the close of the year in
which the Award has vested and all restrictions with respect to such Award have
lapsed

    SECTION 10.         Change in Control Provisions

(a)         Impact of Event.   Notwithstanding any other provision of the Plan
to the contrary, in the event of a Change in Control (as defined below), except
to the extent the Committee specifically provides otherwise in an Award
Agreement, and except as provided in Section 3(d) and in Section 10(d),
immediately upon the occurrence of a Change in Control:

(i)         any Options and Stock Appreciation Rights outstanding which are not
then exercisable and vested shall become fully exercisable and vested;

(ii)         the restrictions and deferral limitations applicable to any
Restricted Stock shall lapse, and such Restricted Stock shall become free of all
restrictions and become fully vested and transferable;

(iii)         all Restricted Stock Units shall be considered to be earned and
payable in full, and any deferral or other restriction shall lapse and such
Restricted Stock Units shall be settled in cash as promptly as is practicable;
and

(iv)         the Committee may also make additional adjustments and/or
settlements of outstanding Awards as it deems appropriate and consistent with
the Plan’s purposes.

(b)         Definition of Change in Control.   For purposes of the Plan, a
“Change in Control” shall mean any of the following events:

(i)         during any period of two consecutive years, individuals who, at the
beginning or such period, constitute the Board (the “Incumbent Directors”) cease
for any reason to constitute at least a majority of the Board, provided that any
person becoming a director and whose election or nomination for election was
approved by a vote of at least two-thirds of the Incumbent Directors then on the
Board (either by a specific vote or by approval of the proxy statement of the
Company in which such person is named as a nominee for director, without written
objection to such nomination) shall be an Incumbent Director; provided, however,
that no individual initially elected or nominated as a director of the Company
as a result of an actual or threatened election contest (as described in Rule
14a-11 under the Act) (“Election Contest”) or other actual or threatened
solicitation of proxies or consents by or on behalf of any “person” (as such
term is defined in Section 3(a)(9) of the Act and as used in Sections 13(d)(3)
and 14(d)(2) of the Act) other than the Board (“Proxy Contest”), including by
reason of any agreement

 

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intended to avoid or settle any Election or Contest or Proxy Contest, shall be
deemed an Incumbent Director;

(ii)         any person is or becomes a “beneficial owner” (as defined in Rule
13d-3 under the Act), directly or indirectly, of securities of the Company
representing 20% (30% with respect to deferred compensation subject to Internal
Revenue Code Section 409A) or more of the combined voting power of the Company’s
then outstanding securities eligible to vote for the election of the Board (the
“Company Voting Securities”); provided, however , that the event described in
this paragraph (ii) shall not be deemed to be a Change in Control of the Company
by virtue of any of the following acquisitions: (A) by the Company of any
subsidiary, (B) by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any subsidiary, (C) by an underwriter temporarily
holding securities pursuant to an offering of such securities, (D) pursuant to a
Non-Qualifying Transaction (as defined in paragraph (iii), or (E) a transaction
(other than one described in (iii) below) in which Company Voting Securities are
acquired from the Company, if a majority of the Incumbent Directors approve a
resolution providing expressly that the acquisition pursuant to this clause
(E) does not constitute a Change in Control of the Company under this paragraph
(ii);

(iii)         the consummation of a merger, consolidation, statutory share
exchange or similar form of corporate transaction involving the Company or any
of its subsidiaries that requires the approval of the Company’s stockholders,
whether for such transaction or the issuance of securities in the transaction (a
“Reorganization”), or sale or other disposition of all or substantially all of
the Company’s assets to an entity that is not an affiliate of the Company (a
“Sale”), unless immediately following such Reorganization or Sale: (A) more than
50% of the total voting power of (x) the corporation resulting from such
Reorganization or the corporation which has acquired all or substantially all of
the assets of the Company (in either case, the “Surviving Corporation”), or
(y) if applicable, the ultimate parent corporation that directly or indirectly
has beneficial ownership of 100% of the voting securities eligible to elect
directors of the Surviving Corporation (the “Parent Corporation”), is
represented by the Company Voting Securities that were outstanding immediately
prior to such Reorganization or Sale (or, if applicable, is represented by
shares into which such Company Voting Securities were converted pursuant to such
Reorganization or Sale), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company Voting
Securities among the holders thereof immediately prior to the Reorganization or
Sale, (B) no person (other than any employee benefit plan (or related trust)
sponsored or maintained by the Surviving Corporation or the Parent Corporation)
is or becomes the beneficial owner, directly or indirectly, of 20% (30% with
respect to deferred compensation subject to Internal Revenue Code Section 409A)
or more of the total voting power of the outstanding voting securities eligible
to elect directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) and (C) at least a majority of the
members of the board of directors of the Parent Corporation (or, if there is no
Parent Corporation, the Surviving Corporation) following the consummation of the
Reorganization or Sale were Incumbent Directors at the time of the Board’s
approval of the execution of the initial agreement providing for such
Reorganization or

 

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Sale (any Reorganization or Sale which satisfies all of the criteria specified
in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying Transaction”);
or

(iv)         the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company.

Notwithstanding the foregoing, a Change in Control of the Company shall not be
deemed to occur solely because any person acquires beneficial ownership of more
than 20% (30% with respect to deferred compensation subject to Internal Revenue
Code Section 409A) of the Company Voting Securities as a result of the
acquisition of Company Voting Securities by the Company which reduces the number
of Company Voting Securities outstanding; provided, that if after such
acquisition by the Company such person becomes the beneficial owner of
additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such person, a
Change in Control of the Company shall then occur.

(c)         Special Change in Control Post-Termination Exercise Rights.   Unless
otherwise provided in the applicable Award Agreement, notwithstanding any other
provision of the Plan to the contrary, upon the Termination of Employment of a
Participant, during the 24-month period following a Change in Control, for any
reason other than for Cause, any Option or Stock Appreciation Right held by the
Participant as of the date of the Change in Control that remains outstanding as
of the date of such Termination of Employment may thereafter be exercised, until
the later of (i) the last date on which such Option or Stock Appreciation Right
would be exercisable in the absence of this Section 10(c) and (ii) the earlier
of (A) the third anniversary of such Change in Control and (B) expiration of the
Term of such Option or Stock Appreciation Right.

(d)         Notwithstanding the foregoing, if any Award is subject to
Section 409A of the Code, this Section 10 shall be applicable only to the extent
specifically provided in the Award Agreement and permitted pursuant to
Section 11(e).

    SECTION 11.         Qualified Performance-Based Awards; Section 16(b);
Section 409A

(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” (within the meaning of Section 162(m)(3) of the Code) in
the tax year in which such Option or Stock Appreciation Right is expected to be
deductible to the Company qualify for 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
(including, without limitation, to require that all such Awards be granted by a
committee composed solely of members who satisfy the requirements for being
“outside directors” for purposes of the Section 162(m) Exemption (“Outside
Directors”)). 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” (within the meaning of Section 162(m)(3) of the Code) 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

 

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consistent with such designation (including, without limitation, that all such
Awards be granted by a committee composed solely of Outside Directors). 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 the achievement of one or more Performance Goals, together with the
satisfaction of any other conditions, such as continued employment, as the
Committee may determine to be appropriate.

(c)         The full Board shall not be permitted to exercise authority granted
to the Committee to the extent that the grant or exercise of such authority
would cause an Award designated as a Qualified Performance-Based Award not to
qualify for, or to cease to qualify for, the Section 162(m) Exemption.

(d)         The provisions of this Plan are intended to ensure that no
transaction under the Plan is subject to (and not exempt from) the short-swing
recovery rules of Section 16(b) of the Exchange Act (“Section 16(b)”).
Accordingly, the composition of the Committee shall be subject to such
limitations as the Board deems appropriate to permit transactions pursuant to
this Plan to be exempt (pursuant to Rule 16b-3 promulgated under the Exchange
Act) from Section 16(b), and no delegation of authority by the Committee shall
be permitted if such delegation would cause any such transaction to be subject
to (and not exempt from) Section 16(b).

(e)         It is the intention of the Company 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 Change in Control, shall be set forth in the
applicable Award Agreement, and shall comply in all respects with Section 409A
of the Code.

    SECTION 12.         Term, Amendment and Termination

(a)         Effectiveness.   The Plan was approved by the Board on March 21,
2007, subject to and contingent upon approval by at least a majority of the
outstanding shares of the Company. The Plan will be effective as of the date of
such approval by the Company’s stockholders (the “Effective Date”).

(b)         Termination.   The Plan will terminate on the tenth anniversary of
the Effective Date. Awards outstanding as of such date shall not be affected or
impaired by the termination of the Plan.

(c)         Amendment of Plan.   The Board or the Committee may amend, alter, or
discontinue the Plan, but no amendment, alteration or discontinuation shall be
made which

 

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would materially impair the rights of the Participant with respect to a
previously granted Award without such Participant’s consent, except such an
amendment made to comply with applicable law, including without limitation
Section 409A of the Code, stock exchange rules or accounting rules. In addition,
no such amendment shall be made without the approval of the Company’s
stockholders (a) to the extent such approval is required (1) by applicable law
or the listing standards of the Applicable Exchange as in effect as of the date
hereof or (2) under applicable law or the listing standards of the Applicable
Exchange as may be required after the date hereof, (b) to the extent such
amendment would materially increase the benefits accruing to Participants under
the Plan, (c) to the extent such amendment would materially increase the number
of securities which may be issued under the Plan, (d) to the extent such
amendment would materially modify the requirements for participation in the Plan
or (e) that would accelerate the vesting of any Restricted Stock or Restricted
Stock Units under the Plan except as otherwise provided in the Plan.

(d)         Amendment of Awards.   Subject to Section 5(d), the Committee may
unilaterally amend the terms of any Award theretofore granted, but no such
amendment shall cause a Qualified Performance-Based Award to cease to qualify
for the Section 162(m) Exemption or without the Participant’s consent materially
impair the rights of any Participant with respect to an Award, except such an
amendment made to cause the Plan or Award to comply with applicable law, stock
exchange rules or accounting rules.

    SECTION 13.         Unfunded Status of Plan

It is presently intended that the Plan constitute an “unfunded” plan for
incentive and deferred compensation. The Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver Common Stock or make payments; provided, however, that unless the
Committee otherwise determines, the existence of such trusts or other
arrangements is consistent with the “unfunded” status of the Plan.

    SECTION 14.         General Provisions

(a)         Conditions for Issuance.   The Committee may require each person
purchasing or receiving Shares pursuant to an Award to represent to and agree
with the Company 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. Notwithstanding any other provision of the Plan or agreements made
pursuant thereto, the Company shall not be required to issue or deliver any
certificate or certificates for Shares under the Plan prior to fulfillment of
all of the following conditions: (i) listing or approval for listing upon notice
of issuance, of such Shares on the Applicable Exchange; (ii) any registration or
other qualification of such Shares of the Company under any state or federal law
or regulation, or the maintaining in effect of any such registration or other
qualification which the Committee shall, in its absolute discretion upon the
advice of counsel, deem necessary or advisable; and (iii) obtaining any other
consent, approval, or permit from any state or federal governmental agency which
the Committee shall, in its absolute discretion after receiving the advice of
counsel, determine to be necessary or advisable.

 

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(b)         Additional Compensation Arrangements.   Nothing contained in the
Plan shall prevent the Company or any Subsidiary or Affiliate from adopting
other or additional compensation arrangements for its employees.

(c)         No Contract of Employment.   The Plan shall not constitute a
contract of employment, and adoption of the Plan shall not confer upon any
employee any right to continued employment, nor shall it interfere in any way
with the right of the Company or any Subsidiary or Affiliate to terminate the
employment of any employee at any time.

(d)         Required Taxes.   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 Company, or make
arrangements satisfactory to the Company 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 Company, 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) required to be withheld for tax purposes, all in accordance with
such procedures as the Committee establishes. The obligations of the Company
under the Plan shall be conditional on such payment or arrangements, and the
Company and its Affiliates 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.

(e)         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 sufficient Shares are available under Section 3 for such reinvestment or
payment (taking into account then outstanding Awards). In the event that
sufficient Shares 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 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 14(e).

(f)         Designation of Death Beneficiary.   The Committee shall establish
such procedures as it deems appropriate for a Participant to designate a
beneficiary to whom any amounts payable in the event of such Participant’s death
are to be paid or by whom any rights of such eligible Individual, after such
Participant’s death, may be exercised.

(g)         Subsidiary Employees.   In the case of a grant of an Award to any
employee of a Subsidiary of the Company, the Company may, if the Committee so
directs, issue or transfer the Shares, if any, covered by the Award to the
Subsidiary, for such lawful consideration as the Committee may specify, upon the
condition or understanding that the Subsidiary will transfer the Shares to the
employee in accordance with the terms of the Award specified by the Committee

 

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pursuant to the provisions of the Plan. All Shares underlying Awards that are
forfeited or canceled should revert to the Company.

(h)         Governing Law and Interpretation.   The Plan and all Awards made and
actions taken thereunder shall be governed by and construed in accordance with
the laws of the State of Delaware, 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.

(i)         Non-Transferability.   Except as otherwise provided in Section 5(i)
or by the Committee, Awards under the Plan are not transferable except by will
or by laws of descent and distribution.

(j)         Foreign Employees and Foreign Law Considerations.   The Committee
may grant Awards to Eligible Individuals who are foreign nationals, who are
located outside the United States or who are not compensated from a payroll
maintained in the United States, or who are otherwise subject to (or could cause
the Company to be subject to) legal or regulatory provisions of countries or
jurisdictions outside the United States, 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.

(k)         Deferrals.   The Committee shall be authorized to establish
procedures pursuant to which the payment of any Award may be deferred. Subject
to the provisions of this Plan and any Award Agreement, 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.
Notwithstanding the foregoing, the Committee shall not take or omit to take any
action that would cause an option to fail to comply with Section 409A of the
Code.

(l)     To the extent required to comply with Section 409A of the Code, as
determined by the Company’s outside counsel, one or more payments under this
Plan shall be delayed to the six month anniversary of the Participant’s
separation from service, within the meaning of Section 409A. In addition,
payments under this Plan may be delayed if timely payment is administratively
impracticable and the impracticability was unforeseeable, if making a timely
payment would jeopardize the ability of Company to continue as a going concern,
or if deduction of the payment is restricted by Code Section 162(m) and a
reasonable person would not have anticipated that restriction at the time the
legally binding right to the payment arose. In each case, payment must be made
as soon as the reason for the delay ceases to exist.

 

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