EX-10.1

 

 

OMI CORPORATION

2006 Incentive Compensation Plan

 

 

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TABLE OF CONTENTS

ARTICLE I.
ESTABLISHMENT; PURPOSES; AND DURATION

    Page  1.1 .  Establishment of the Plan  1  1.2 .  Purposes of the Plan  1 
1.3 .  Duration of the Plan  1      ARTICLE II. DEFINITIONS 2.1 .  “Affiliate” 
1  2.2 .  “Award”  2  2.3 .  “Award Agreement”  2  2.4 .  “Beneficial
Ownership”  2  2.5 .  “Board” or “Board of Directors”  2  2.6 .  “Cash-Based
Award”  2  2.7 .  “Cause”  2  2.8 .  “Change of Control”  2  2.9 .  “Code”  3 
2.10 .  “Committee”  3  2.11 .  “Consultant”  3  2.12 .  “Director”  3  2.13 . 
“Disability”  3  2.14 .  “Dividend Equivalents”  3  2.15 .  “Effective Date”  3 
2.16 .  “Employee”  3  2.17 .  “Exchange Act”  3  2.18 .  “Fair Market Value” 
3  2.19 .  “Fiscal Year”  4  2.20 .  “Freestanding SAR”  4  2.21 .  “Grant
Price”  4  2.22 .  “Incentive Stock Option” or “ISO”  4  2.23 .  “Insider”  4 
2.24 .  “Non-Employee Director”  4  2.25 .  “Nonqualified Stock Option” or
“NQSO”  4  2.26 .  “Notice”  4  2.27 .  “Option” or “Stock Option”  4  2.28 . 
“Option Price”  4  2.29 .  “Other Stock-Based Award”  4  2.30 .  “Participant” 
4  2.31 .  “Performance Period”  4  2.32 .  “Performance Share”  4 

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    Page  2.33 .  “Performance Unit”  4  2.34 .  “Period of Restriction”  4 
2.35 .  “Person”  4  2.36 .  “Qualified Change of Control”  4  2.37 . 
“Restricted Stock”  4  2.38 .  “Restricted Stock Unit”  5  2.39 .  “Retirement” 
5  2.40 .  “Rule 16b-3”  5  2.41 .  “Securities Act”  5  2.42 .  “Share”  5 
2.43 .  “Stock Appreciation Right” or “SAR”  5  2.44 .  “Subsidiary”  5  2.45 . 
“Substitute Awards”  5  2.46 .  “Tandem SAR”  5  2.47 .  “Termination”  5     
ARTICLE III. ADMINISTRATION 3.1 .  General  5  3.2 .  Committee  6  3.3 . 
Authority of the Committee  6  3.4 .  Award Agreements  7  3.5 .  Discretionary
Authority; Decisions Binding  7  3.6 .  Attorneys; Consultants  8  3.7 . 
Delegation of Administration  8      ARTICLE IV. SHARES SUBJECT TO THE PLAN    
    4.1 .  Number of Shares Available for Grants  8  4.2 .  Adjustments in
Authorized Shares  9  4.3 .  No Limitation on Corporate Actions  9      ARTICLE
V. ELIGIBILITY AND PARTICIPATION         5.1 .  Eligibility  10  5.2 .  Actual
Participation  10      ARTICLE VI. STOCK OPTIONS 6.1 .  Grant of Options  10 
6.2 .  Award Agreement  10  6.3 .  Option Price  10    ii

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    Page  6.4 .  Duration of Options  10  6.5 .  Exercise of Options  10  6.6 . 
Payment  11  6.7 .  Rights as a Shareholder  11  6.8 .  Termination of
Employment or Service  11  6.9 .  Limitations on Incentive Stock Options  12   
  ARTICLE VII. STOCK APPRECIATION RIGHTS         7.1 .  Grant of SARs  12  7.2
.  Grant Price  13  7.3 .  Exercise of Tandem SARs  13  7.4 .  Exercise of
Freestanding SARs  13  7.5 .  Award Agreement  13  7.6 .  Term of SARs  13  7.7
.  Payment of SAR Amount  13  7.8 .  Rights as a Shareholder  14  7.9 . 
Termination of Employment or Service  14      ARTICLE VIII. RESTRICTED STOCK AND
RESTRICTED STOCK UNITS         8.1 .  Awards of Restricted Stock and Restricted
Stock Units  14  8.2 .  Award Agreement  14  8.3 .  Nontransferability of
Restricted Stock  14  8.4 .  Period of Restriction and Other Restrictions  14 
8.5 .  Delivery of Shares, Payment of Restricted Stock Units  15  8.6 .  Forms
of Restricted Stock Awards  15  8.7 .  Voting Rights  15  8.8 .  Dividends and
Other Distributions  15  8.9 .  Termination of Employment or Service  16  8.10
.  Compliance With Section 409A  16      ARTICLE IX. PERFORMANCE UNITS,
PERFORMANCE SHARES, AND CASH-BASED AWARDS         9.1 .  Grant of Performance
Units, Performance Shares and Cash-Based Awards  16  9.2 .  Value of Performance
Units, Performance Shares and Cash-Based Awards  16  9.3 .  Earning of
Performance Units, Performance Shares and Cash-Based Awards  16  9.4 .  Form and
Timing of Payment of Performance Units, Performance Shares and Cash-Based
Awards  17  9.5 .  Rights as a Shareholder  17  9.6 .  Termination of Employment
or Service  17  9.7 .  Compliance With Section 409A  17 

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ARTICLE X. OTHER STOCK-BASED AWARDS       Page  10.1 .  Other Stock-Based
Awards  17  10.2 .  Value of Other Stock-Based Awards  17  10.3 .  Payment of
Other Stock-Based Awards  18  10.4 .  Termination of Employment or Service  18 
10.5 .  Compliance With Section 409A  18      ARTICLE XI. DIVIDEND EQUIVALENTS
11.1 .  Dividend Equivalents   18      ARTICLE XII. TRANSFERABILITY OF AWARDS;
BENEFICIARY DESIGNATION 12.1 .  Transferability of Incentive Stock Options  19 
12.2 .  All Other Awards  19  12.3 .  General  19      ARTICLE XIII. RIGHTS OF
PARTICIPANTS 13.1 .  Rights or Claims  19  13.2 .  Adoption of the Plan  20 
13.3 .  Vesting  20  13.4 .  No Effects on Benefits  20  13.5 .  One or More
Types of Awards  20      ARTICLE XIV. CHANGE OF CONTROL 14.1 .  Treatment of
Outstanding Awards  20  14.2 .  No Implied Rights; Other Limitations  22  14.3
.  Termination, Amendment, and Modifications of Change of Control Provisions 
22  14.4 .  Compliance with Section 409A  22      ARTICLE XV. AMENDMENT,
MODIFICATION, AND TERMINATION 15.1 .  Amendment, Modification, and Termination 
23  15.2 .  Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events  23 

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ARTICLE XVI. TAX WITHHOLDING AND OTHER TAX MATTERS       Page  16.1 .  Tax
Withholding  24  16.2 .  Withholding or Tendering Shares  24  16.3 . 
Restrictions  24  16.4 .  Special ISO Obligations  24  16.5 .  Section 83(b)
Election  24  16.6 .  No Guarantee of Favorable Tax Treatment  25      ARTICLE
XVII. LIMITS OF LIABILITY; INDEMNIFICATION 17.1 .  Limits of Liability  25  17.2
.  Indemnification  25      ARTICLE XVIII. SUCCESSORS 18.1 .  General  26     
ARTICLE XIX. MISCELLANEOUS 19.1 .  Drafting Context  26  19.2 .  Forfeiture
Events  26  19.3 .  Severability  26  19.4 .  Transfer, Leave of Absence  26 
19.5 .  Exercise and Payment of Awards  27  19.6 .  Deferrals  27  19.7 . 
Loans  27  19.8 .  No Effect on Other Plans  27  19.9 .  Section 16 of Exchange
Act  27  19.10 .  Requirements of Law; Limitations on Awards  28  19.11 . 
Participants Deemed to Accept Plan  28  19.12 .  Governing Law  28  19.13 . 
Plan Unfunded  29  19.14 .  Administration Costs  29  19.15 .  Uncertificated
Shares  29  19.16 .  No Fractional Shares  29  19.17 .  Deferred Compensation 
29  19.18 .  Participants Based Outside of the United States  29 

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OMI CORPORATION

2006 INCENTIVE COMPENSATION PLAN

     OMI Corporation, a Marshall Islands corporation (the “Company”), has
adopted the OMI Corporation 2006 Incentive Compensation Plan (the “Plan”) for
the benefit of non-employee directors of the Company, officers and eligible
employees and consultants of the Company and any Subsidiaries and Affiliates (as
each term defined below), as follows:

ARTICLE I
ESTABLISHMENT; PURPOSES; AND DURATION

     1.1. Establishment of the Plan. The Company hereby establishes this
incentive compensation plan to be known as the “OMI Corporation 2006 Incentive
Compensation Plan”, as set forth in this document. The Plan permits the grant of
Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights,
Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares,
Cash-Based Awards and Other Stock-Based Awards. The Plan was adopted by the
Board of Directors (as defined below) on February 16, 2006. The Plan shall
become effective upon approval by the shareholders of the Company, which
approval must occur within the period beginning on such adoption date and ending
on April 26, 2007 (the “Effective Date”). The Plan shall remain in effect as
provided in Section 1.3.

     1.2. Purposes of the Plan. The purposes of the Plan are to provide
additional incentives to non-employee directors of the Company and to those
officers, employees and consultants of the Company, Subsidiaries and Affiliates
whose substantial contributions are essential to the continued growth and
success of the business of the Company and the Subsidiaries and Affiliates, in
order to strengthen their commitment to the Company and the Subsidiaries and
Affiliates, and to attract and retain competent and dedicated individuals whose
efforts will result in the long-term growth and profitability of the Company and
to further align the interests of such non-employee directors, officers,
employees and consultants with the interests of the shareholders of the Company.
To accomplish such purposes, the Plan provides that the Company may grant
Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights,
Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares,
Cash-Based Awards and Other Stock-Based Awards.

     1.3. Duration of the Plan. The Plan shall commence on the Effective Date,
as described in Section 1.1, and shall remain in effect, subject to the right of
the Board of Directors to amend or terminate the Plan at any time pursuant to
Article XV, until all Shares subject to it shall have been delivered, and any
restrictions on such Shares have lapsed, pursuant to the Plan’s provisions.
However, in no event may an Award be granted under the Plan on or after ten
years from the Effective Date.

ARTICLE II
DEFINITIONS

     Whenever used in the Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized:

     2.1. “Affiliate” means any entity other than the Company and any Subsidiary
that is affiliated with the Company through stock or equity ownership or
otherwise and is designated as an Affiliate for purposes of the Plan by the
Committee; provided, however, that, notwithstanding any other provisions of the
Plan to the contrary, for purposes of NQSOs and SARs, if an individual who
otherwise qualifies as an Employee or Non-Employee Director provides services to
such an entity and not to the Company or a Subsidiary, such entity may only be
designated an Affiliate if the Company qualifies as a “service recipient,”
within the meaning of Code Section 409A, with respect to such individual;
provided further that such definition

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of “service recipient” shall be determined by (a) applying Code Section
1563(a)(1), (2) and (3), for purposes of determining a controlled group of
corporations under Code Section 414(b), using the language “at least 50 percent”
instead of “at least 80 percent” each place it appears in Code Section
1563(a)(1), (2) and (3), and by applying Treasury Regulations Section 1.414(c)
-2, for purposes of determining trades or businesses (whether or not
incorporated) that are under common control for purposes of Code Section 414(c),
using the language “at least 50 percent” instead of “at least 80 percent” each
place it appears in Treasury Regulations Section 1.414(c) -2, and (b) where the
use of Shares with respect to the grant of an Option or SAR to such an
individual is based upon legitimate business criteria, by applying Code Section
1563(a)(1), (2) and (3), for purposes of determining a controlled group of
corporations under Code Section 414(b), using the language “at least 20 percent”
instead of “at least 80 percent” at each place it appears in Code Section
1563(a)(1), (2) and (3), and by applying Treasury Regulations Section 1.414(c)
-2, for purposes of determining trades or businesses (whether or not
incorporated) that are under common control for purposes of Code Section 414(c),
using the language “at least 20 percent” instead of “at least 80 percent” at
each place it appears in Treasury Regulations Section 1.414(c) -2.

     2.2. “Award” means, individually or collectively, a grant under the Plan of
Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights,
Restricted Stock Awards, Restricted Stock Units, Performance Shares, Performance
Units, Cash-Based Awards, and Other Stock-Based Awards.

     2.3. “Award Agreement” means either: (a) a written agreement entered into
by the Company and a Participant setting forth the terms and provisions
applicable to an Award granted under the Plan, or (b) a written or electronic
statement issued by the Company to a Participant describing the terms and
provisions of such Award, including any amendment or modification thereof. The
Committee may provide for the use of electronic, internet or other non-paper
Award Agreements, and the use of electronic, internet or other non-paper means
for the acceptance thereof and actions thereunder by a Participant.

     2.4. “Beneficial Ownership” (including correlative terms) shall have the
meaning given such term in Rule 13d-3 promulgated under the Exchange Act.

     2.5. “Board” or “Board of Directors” means the Board of Directors of the
Company.

     2.6. “Cash-Based Award” means an Award granted to a Participant, as
described in Article IX.

     2.7. “Cause” shall have the definition given such term in a Participant’s
Award Agreement, or in the absence of any such definition, as determined in good
faith by the Committee.

     2.8. “Change of Control” means:

  (a) a “change in control” with respect to the Company that would be required
to be reported in response to Item 1(a) of the Company’s current report on Form
8-K, pursuant to Section 13 or 15(d) of the Exchange Act, or equivalent for
foreign filers; provided that, without limitation, a “Change of Control” shall
be deemed to have occurred at such time as any Person is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of twenty percent (20%) or more of the combined voting power of
the then outstanding securities of the Company (other than, in any such event, a
sale or other disposition to or for the benefit of any employee benefit plan (or
related trust) of the Company or a subsidiary of the Company, or acquisition or
offer to acquire, by or on behalf of, the Company or a Subsidiary or any group
comprised solely of such entities, of Shares); provided, however, that a “Change
of Control” shall not be deemed to have occurred if such a Person files and
maintains a Schedule 13G pursuant to Rule 13d-1 under the Exchange Act in
connection with its purchase of such securities; provided further, however, that
upon the filing of a Schedule 13D pursuant to such rule by such Person in
connection with such securities, there shall be deemed to be an immediate
“Change of Control”; or         (b) the individuals who constitute the
“Incumbent Board” cease for any reason to constitute at least a majority of the
Board. The “Incumbent Board” shall mean those individuals who constitute the
Board immediately following the Effective Date, or any additional individual who
becomes a member of the Board and whose election, or nomination for election, by
the            

 

 

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    shareholders of the Company was approved by a vote of at least three-fourths
of the members of the Board comprising the Incumbent Board (either by a specific
vote or by approval of the proxy statement of the Company in which such
individual was named as a nominee for member of the Board without objection to
such nomination); provided however, that no individual shall be considered a
member of the Incumbent Board if such individual initially assumed office as a
result of either an actual or threatened “Election Contest” (as described in
Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board (a “Proxy Contest”) including by reason of any agreement intended to avoid
or settle any Election Contest or Proxy Contest.

     2.9. “Code” means the Internal Revenue Code of 1986, as it may be amended
from time to time, including rules and regulations promulgated thereunder and
successor provisions and rules and regulations thereto.

     2.10. “Committee” means the Compensation Committee of the Board of
Directors or a subcommittee thereof, or such other committee designated by the
Board to administer the Plan.

     2.11. “Consultant” means an independent contractor who performs services
for the Company or a Subsidiary or Affiliate in a capacity other than as an
Employee or Director.

     2.12. “Director” means any individual who is a member of the Board of
Directors of the Company.

     2.13. “Disability” means the inability to engage in any substantial gainful
occupation to which the relevant individual is suited by education, training or
experience, by reason of any medically determinable physical or mental
impairment, which condition can be expected to result in death or continues for
a continuous period of not less than twelve (12) months; provided, however,
that, for purposes of ISOs, “Disability” shall mean “permanent and total
disability” as set forth in Section 22(e)(3) of the Code.

     2.14. “Dividend Equivalents” means the equivalent value (in cash or Shares)
of dividends that would otherwise be paid on the Shares subject to an Award but
that have not been issued or delivered, as described in Article XI.

     2.15.“Effective Date” shall have the meaning ascribed to such term in
Section 1.1.

     2.16. “Employee” means any person designated as an employee of the Company,
a Subsidiary and/or an Affiliate on the payroll records thereof. An Employee
shall not include any individual during any period he or she is classified or
treated by the Company, a Subsidiary or an Affiliate as an independent
contractor, a consultant, or any employee of an employment, consulting, or
temporary agency or any other entity other than the Company, a Subsidiary and/or
an Affiliate without regard to whether such individual is subsequently
determined to have been, or is subsequently retroactively reclassified as a
common-law employee of the Company, a Subsidiary and/or an Affiliate during such
period. As further provided in Section 19.4, for purposes of the Plan, upon
approval by the Committee, the term Employee may also include Employees whose
employment with the Company, a Subsidiary or an Affiliate has been terminated
subsequent to being granted an Award under the Plan. For the avoidance of doubt,
a Director who would otherwise be an “Employee” within the meaning of this
Section.

     2.17. “Exchange Act” means the Securities Exchange Act of 1934, as it may
be amended from time to time, including the rules and regulations promulgated
thereunder and successor provisions and rules and regulations thereto.

     2.18. “Fair Market Value” means the fair market value of the Shares as
determined by the Committee by the reasonable application of such reasonable
valuation method, consistently applied, as the Committee deems appropriate;
provided, however, that, with respect to ISOs, for purposes of Section 6.3 and
6.9(c), such fair market value shall be determined subject to Section 422(c)(7)
of the Code; provided further, however, that if the Shares are readily tradable
on an established securities market, Fair Market Value on any date shall be the
last sale price reported for the Shares on such market on such date or, if no
sale is reported on such date, on the last date preceding such date on which a
sale was reported. In each case, the Committee shall determine Fair Market Value
in a manner that satisfies the applicable requirements of Code Section 409A.

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     2.19. “Fiscal Year” means the calendar year, or such other consecutive
twelve-month period as the Committee may select.

     2.20. “Freestanding SAR” means an SAR that is granted independently of any
Options, as described in Article VII.

     2.21. “Grant Price” means the price established at the time of grant of an
SAR pursuant to Article VII, used to determine whether there is any payment due
upon exercise of the SAR.

     2.22. “Incentive Stock Option” or “ISO” means a right to purchase Shares
under the Plan in accordance with the terms and conditions set forth in Article
VI and which is designated as an Incentive Stock Option and which is intended to
meet the requirements of Section 422 of the Code.

     2.23. “Insider” means an individual who is, on the relevant date, an
officer, director or ten percent (10%) Beneficial Owner of any class of the
Company’s equity securities that is registered pursuant to Section 12 of the
Exchange Act, as determined by the Committee in accordance with Section 16 of
the Exchange Act.

     2.24. “Non-Employee Director” means a Director who is not an Employee.

     2.25. “Nonqualified Stock Option” or “NQSO” means a right to purchase
Shares under the Plan in accordance with the terms and conditions set forth in
Article VI and which is not intended to meet the requirements of Section 422 of
the Code or otherwise does not meet such requirements.

     2.26. “Notice” means notice provided by a Participant to the Company in a
manner prescribed by the Committee.

     2.27. “Option” or “Stock Option” means an Incentive Stock Option or a
Nonqualified Stock Option, as described in Article VI.

     2.28. “Option Price” means the price at which a Share may be purchased by a
Participant pursuant to an Option.

     2.29. “Other Stock-Based Award” means an equity-based or equity-related
Award described in Section 10.1, granted in accordance with the terms and
conditions set forth in Article X.

     2.30. “Participant” means any eligible individual as set forth in Article V
who holds one or more outstanding Awards.

     2.31. “Performance Period” means the period of time during which the
performance goals must be met in order to determine the degree of payout and/or
vesting with respect to, or the amount or entitlement to, an Award.

     2.32. “Performance Share” means an Award of a performance share granted to
a Participant, as described in Article IX.

     2.33. “Performance Unit” means an Award of a performance unit granted to a
Participant, as described in Article IX.

     2.34. “Period of Restriction” means the period during which Shares of
Restricted Stock or Restricted Stock Units are subject to a substantial risk of
forfeiture, and, in the case of Restricted Stock, the transfer of Shares of
Restricted Stock is limited in some way, as provided in Article VIII.

     2.35. “Person” means “person” as such term is used for purposes of Section
13(d) or 14(d) of the Exchange Act, including any individual, corporation,
limited liability company, partnership, trust, unincorporated organization,
government or any agency or political subdivision thereof, or any other entity
or any group of persons.

     2.36. “Qualified Change of Control” means a Change of Control that
qualifies as a change in the ownership or effective control of the Company, or
in the ownership of a substantial portion of the assets of the Company, within
the meaning of Section 409A(a)(2)(A)(v) of the Code.

     2.37. “Restricted Stock” means an Award granted to a Participant pursuant
to Article VIII.

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     2.38. “Restricted Stock Unit” means an Award, whose value is equal to a
Share, granted to a Participant pursuant to Article VIII.

     2.39. “Retirement” means Termination of a Participant due to either (a)
retirement in accordance with any employee pension benefit plan maintained by
the Company that is intended to satisfy the requirements of Section 401(a) of
the Code entitling such Participant to a full pension under such plan or (b)
retirement with the consent of the Committee.

     2.40. “Rule 16b-3” means Rule 16b-3 under the Exchange Act, or any
successor rule, as the same may be amended from time to time.

     2.41. “Securities Act” means the Securities Act of 1933, as it may be
amended from time to time, including the rules and regulations promulgated
thereunder and successor provisions and rules and regulations thereto.

     2.42. “Share” means a share of common stock, par value $0.50 per share, of
the Company (including any new, additional or different stock or securities
resulting from any change in corporate capitalization as listed in Section 4.2)
.

     2.43. “Stock Appreciation Right” or “SAR” means an Award, granted alone (a
“Freestanding SAR”) or in connection with a related Option (a “Tandem SAR”),
designated as an SAR, pursuant to the terms of Article VII.

     2.44. “Subsidiary” means any present or future corporation which is or
would be a “subsidiary corporation” of the Company as the term is defined in
Section 424(f) of the Code.

     2.45. “Substitute Awards” means Awards granted or Shares issued by the
Company in assumption of, or in substitution or exchange for, options or other
awards previously granted, or the right or obligation to grant future options or
other awards, by a company acquired by the Company, a Subsidiary and/or an
Affiliate or with which the Company, a Subsidiary and/or an Affiliate combines,
or otherwise in connection with any merger, consolidation, acquisition of
property or stock, or reorganization involving the Company, a Subsidiary or an
Affiliate, including a transaction described in Code Section 424(a).

     2.46. “Tandem SAR” means a SAR that is granted in connection with a related
Option pursuant to Article VII.

     2.47. “Termination” means the time when a Participant ceases the
performance of services for the Company, any Affiliate or Subsidiary, as
applicable, for any reason, with or without Cause, including a Termination by
resignation, discharge, death, Disability or Retirement, but excluding (a) a
Termination where there is a simultaneous reemployment (or commencement of
service) or continuing employment (or service) of a Participant by the Company,
Affiliate or any Subsidiary, (b) at the discretion of the Committee, a
Termination that results in a temporary severance, and (c) at the discretion of
the Committee, a Termination of an Employee that is immediately followed by the
Participant’s service as a Non-Employee Director.

ARTICLE III
ADMINISTRATION

     3.1. General. The Committee shall have exclusive authority to operate,
manage and administer the Plan in accordance with its terms and conditions.
Notwithstanding the foregoing, in its absolute discretion, the Board may at any
time and from time to time exercise any and all rights, duties and
responsibilities of the Committee under the Plan, including establishing
procedures to be followed by the Committee, but excluding matters which under
any applicable law, regulation or rule, including any exemptive rule under
Section 16 of the Exchange Act (including Rule 16b-3), are required to be
determined in the sole discretion of the Committee. If and to the extent that
the Committee does not exist or cannot function, the Board may take any action
under the Plan that would otherwise be the responsibility of the Committee,
subject to the limitations set forth in the immediately preceding sentence.

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     3.2. Committee. The members of the Committee shall be appointed from time
to time by, and shall serve at the discretion of, the Board of Directors. The
Committee shall consist of not less than two (2) non-employee members of the
Board, each of whom satisfies such criteria of independence as the Board may
establish and such additional regulatory or listing requirements as the Board
may determine to be applicable or appropriate. Appointment of Committee members
shall be effective upon their acceptance of such appointment. Committee members
may be removed by the Board at any time either with or without cause, and such
members may resign at any time by delivering notice thereof to the Board. Any
vacancy on the Committee, whether due to action of the Board or any other
reason, shall be filled by the Board. The Committee shall keep minutes of its
meetings. A majority of the Committee shall constitute a quorum and a majority
of a quorum may authorize any action. Any decision reduced to writing and signed
by a majority of the members of the Committee shall be fully effective as if it
has been made at a meeting duly held.

     3.3. Authority of the Committee. The Committee shall have full
discretionary authority to grant, pursuant to the terms of the Plan, Awards to
those individuals who are eligible to receive Awards under the Plan. Except as
limited by law or by the Certificate of Incorporation or By-Laws of the Company,
and subject to the provisions herein, the Committee shall have full power, in
accordance with the other terms and provisions of the Plan, to:

(a) Select Employees, Non-Employee Directors and Consultants who may receive
Awards under the Plan and become Participants;         (b) Determine eligibility
for participation in the Plan and decide all questions concerning eligibility
for, and the amount of, Awards under the Plan;   (c) Determine the sizes and
types of Awards;   (d) Determine the terms and conditions of Awards, including
the Option Prices of Options and the Grant Prices of SARs;   (e) Grant Awards as
an alternative to, or as the form of payment for grants or rights earned or
payable under, other bonus or compensation plans, arrangements or policies of
the Company or a Subsidiary or Affiliate;   (f) Grant Substitute Awards on such
terms and conditions as the Committee may prescribe, subject to compliance with
the ISO rules under Code Section 422 and the nonqualified deferred compensation
rules under Code Section 409A, where applicable;   (g) Make all determinations
under the Plan concerning Termination of any Participant’s employment or service
with the Company or a Subsidiary or Affiliate, including whether such
Termination occurs by reason of Cause, Disability or Retirement or in connection
with a Change of Control and whether a leave constitutes a Termination;   (h)
Construe and interpret the Plan and any agreement or instrument entered into
under the Plan, including any Award Agreement;   (i) Establish and administer
any terms, conditions, restrictions, limitations, forfeiture, vesting or
exercise schedule, and other provisions of or relating to any Award;   (j)
Establish and administer any performance goals in connection with any Awards,
including performance criteria and applicable Performance Periods, determine the
extent to which any performance goals and/or other terms and conditions of an
Award are attained or are not attained;   (k)

Construe any ambiguous provisions, correct any defects, supply any omissions and
reconcile any inconsistencies in the Plan and/or any Award Agreement or any
other instrument relating to any Awards;

 

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(l) Establish, adopt, amend, waive and/or rescind rules, regulations,
procedures, guidelines, forms and/or instruments for the Plan’s operation or
administration;   (m) Make all valuation determinations relating to Awards and
the payment or settlement thereof;   (n) Grant waivers of terms, conditions,
restrictions and limitations under the Plan or applicable to any Award, or
accelerate the vesting or exercisability of any Award;   (o) Subject to the
provisions of Article XV, amend or adjust the terms and conditions of any
outstanding Award and/or adjust the number and/or class of shares of stock
subject to any outstanding Award;   (p) At any time and from time to time after
the granting of an Award, specify such additional terms, conditions and
restrictions with respect to such Award as may be deemed necessary or
appropriate to ensure compliance with any and all applicable laws or rules,
including terms, restrictions and conditions for compliance with applicable
securities laws or listing rules, methods of withholding or providing for the
payment of required taxes and restrictions regarding a Participant’s ability to
exercise Options through a cashless (broker-assisted) exercise;   (q) Offer to
buy out an Award previously granted, based on such terms and conditions as the
Committee shall establish with and communicate to the Participant at the time
such offer is made;   (r) Determine whether, and to what extent and under what
circumstances Awards may be settled in cash, Shares or other property or
canceled or suspended; and   (s) Exercise all such other authorities, take all
such other actions and make all such other determinations as it deems necessary
or advisable for the proper operation and/or administration of the Plan.

     3.4. Award Agreements. The Committee shall, subject to applicable laws and
rules, determine the date an Award is granted. Each Award shall be evidenced by
an Award Agreement; however, two or more Awards granted to a single Participant
may be combined in a single Award Agreement. An Award Agreement shall not be a
precondition to the granting of an Award; provided, however, that (a) the
Committee may, but need not, require as a condition to any Award Agreement’s
effectiveness, that such Award Agreement be executed on behalf of the Company
and/or by the Participant to whom the Award evidenced thereby shall have been
granted (including by electronic signature or other electronic indication of
acceptance), and such executed Award Agreement be delivered to the Company, and
(b) no person shall have any rights under any Award unless and until the
Participant to whom such Award shall have been granted has complied with the
applicable terms and conditions of the Award. The Committee shall prescribe the
form of all Award Agreements, and, subject to the terms and conditions of the
Plan, shall determine the content of all Award Agreements. Any Award Agreement
may be supplemented or amended in writing from time to time as approved by the
Committee; provided that the terms and conditions of any such Award Agreement as
supplemented or amended are not inconsistent with the provisions of the Plan. In
the event of any dispute or discrepancy concerning the terms of an Award, the
records of the Committee or its designee shall be determinative.

     3.5. Discretionary Authority; Decisions Binding. The Committee shall have
full discretionary authority in all matters related to the discharge of its
responsibilities and the exercise of its authority under the Plan. All
determinations, decisions, actions and interpretations by the Committee with
respect to the Plan and any Award Agreement, and all related orders and
resolutions of the Committee shall be final, conclusive and binding on all
Participants, the Company and its shareholders, any Subsidiary or Affiliate and
all persons having or claiming to have any right or interest in or under the
Plan and/or any Award Agreement. The Committee shall consider such factors as it
deems relevant to making or taking such decisions, determinations, actions and
interpretations, including the recommendations or advice of any Director or
officer or employee of the Company, any director, officer or employee of a
Subsidiary or Affiliate and such attorneys, consultants and accountants as the
Committee may select. A Participant or other holder of an Award may contest a
decision or action by the Committee with respect to such person or Award only on
the grounds that such decision or action was arbitrary or capricious or was
unlawful, and any review

7

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of such decision or action shall be limited to determining whether the
Committee’s decision or action was arbitrary or capricious or was unlawful.

     3.6. Attorneys; Consultants. The Committee may consult with counsel who may
be counsel to the Company. The Committee may, with the approval of the Board,
employ such other attorneys and/or consultants, accountants, appraisers,
brokers, agents and other persons, any of whom may be an Employee, as the
Committee deems necessary or appropriate. The Committee, the Company and its
officers and Directors shall be entitled to rely upon the advice, opinions or
valuations of any such persons. The Committee shall not incur any liability for
any action taken in good faith in reliance upon the advice of such counsel or
other persons.

     3.7. Delegation of Administration. Except to the extent prohibited by
applicable law, including any applicable exemptive rule under Section 16 of the
Exchange Act (including Rule 16b-3), or the applicable rules of a stock
exchange, the Committee may, in its discretion, allocate all or any portion of
its responsibilities and powers under this Article III to any one or more of its
members and/or delegate all or any part of its responsibilities and powers under
this Article III to any person or persons selected by it; provided, however,
that the Committee may not delegate its authority to correct defects, omissions
or inconsistencies in the Plan. Any such authority delegated or allocated by the
Committee under this Section 3.7 shall be exercised in accordance with the terms
and conditions of the Plan and any rules, regulations or administrative
guidelines that may from time to time be established by the Committee, and any
such allocation or delegation may be revoked by the Committee at any time.

ARTICLE IV
SHARES SUBJECT TO THE PLAN

     4.1. Number of Shares Available for Grants. The shares of stock subject to
Awards granted under the Plan shall be Shares. Such Shares subject to the Plan
may be either authorized and unissued shares (which will not be subject to
preemptive rights) or previously issued shares acquired by the Company or any
Subsidiary. Subject to adjustment as provided in Section 4.2, the total number
of Shares that may be delivered pursuant to Awards under the Plan shall be five
million (5,000,000) Shares (the “Share Reserve”). For purposes of this Section
4.1, (a) each Share delivered pursuant to an Option shall reduce the Share
Reserve by one (1) Share; (b) each Share subject to the exercised portion of a
SAR (whether the distribution upon exercise is made in cash, Shares or a
combination of cash and Shares) shall reduce the Share Reserve by one (1) Share;
(c) each Share delivered pursuant to a Restricted Stock Unit Award, Performance
Share Award, Performance Unit Award, or Other Stock-Based Award shall reduce the
Share Reserve by one and one-half (1.5) Shares; (c) each Share delivered
pursuant to a Restricted Stock Award without a purchase price, or with a
per-share purchase price lower than one hundred percent (100%) of the Fair
Market Value of a Share on the grant date of such Restricted Stock Award, shall
reduce the Share Reserve by one and one-half (1.5) Shares; (d) each Share
delivered pursuant to a Restricted Stock Award with a per-share purchase price
at least equal to one hundred percent (100%) of the Fair Market Value of a Share
on the grant date of such Restricted Stock Award shall reduce the Share Reserve
by one (1) Share; and (e) to the extent that a distribution pursuant to an Award
is made in cash, the Share Reserve shall be reduced by the number of Shares
subject to the redeemed, paid or exercised portion of such Award. Subject to the
immediately preceding sentence and, in the case of ISOs, any limitations
applicable thereto under the Code, if any Shares are subject to an Option, SAR,
or other Award which for any reason expires or is terminated or canceled without
having been fully exercised or satisfied, or are subject to any Restricted Stock
Award (including any Shares subject to a Participant’s Restricted Stock Award
that are repurchased by the Company at the Participant’s cost), Restricted Stock
Unit Award or other Award granted under the Plan which are forfeited, the Shares
subject to such Award shall, to the extent of any such expiration, termination,
cancellation or forfeiture, be available for delivery in connection with future
Awards under the Plan. However, notwithstanding any other provisions of this
Section 4.1 to the contrary, (i) Shares withheld or tendered to pay the exercise
price or withholding taxes with respect to an outstanding Award shall not again
be made available for issuance

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pursuant to Awards under the Plan, and (ii) the payment of cash dividends or
Dividend Equivalents (whether in cash or Shares) in connection with Awards shall
not reduce the Share Reserve. Any Shares delivered under the Plan upon exercise
or satisfaction of Substitute Awards shall not reduce the Shares available for
delivery under the Plan; provided, however, that the total number of Shares that
may be delivered pursuant to Incentive Stock Options granted under the Plan
shall be equal to the Share Reserve, as adjusted pursuant to this Section 4.1,
but without application of the foregoing provisions of this sentence.

     4.2. Adjustments in Authorized Shares. In the event of any corporate event
or transaction (including a change in the Shares or the capitalization of the
Company), such as a reclassification, recapitalization, merger, consolidation,
reorganization (whether or not such reorganization comes within the definition
of such term in Section 368 of the Code), issuance of warrants or rights,
dividend or other distribution (whether in the form of cash, stock or other
property), stock split or reverse stock split, spin-off, split-up, combination
or exchange of shares, repurchase of shares, or other like change in corporate
structure, partial or complete liquidation of the Company or distribution (other
than normal cash dividends) to shareholders of the Company, or any similar
corporate event or transaction, the Committee, in its discretion, in order to
prevent dilution or enlargement of Participants’ rights under the Plan, shall
substitute or adjust, as applicable, the number, class and kind of securities
which may be delivered under Section 4.1; the number, class and kind, and/or
price (such as the Option Price of Options or the Grant Price of SARs) of
securities subject to outstanding Awards; and other value determinations
applicable to outstanding Awards; provided, however, that the number of Shares
subject to any Award shall always be a whole number. The Committee, in its sole
discretion, may also make appropriate adjustments and modifications in the terms
of any outstanding Awards to reflect or related to any such events, adjustments,
substitutions or changes, including modifications of performance goals and
changes in the length of Performance Periods. Any adjustment, substitution or
change pursuant to this Section 4.2 made with respect to an Award intended to be
an Incentive Stock Option shall be made only to the extent consistent with such
intent, unless the Committee determines otherwise. The Committee shall not make
any adjustment pursuant to this Section 4.2 that would cause an Award that is
otherwise exempt from Code Section 409A to become subject to Code Section 409A,
or that would cause an Award that is subject to Code Section 409A to fail to
satisfy the requirements of Code Section 409A. All determinations of the
Committee as to adjustments or changes, if any, under this Section 4.2 shall be
conclusive and binding on the Participants.

     4.3. No Limitation on Corporate Actions. The existence of the Plan and any
Awards granted hereunder shall not affect in any way the right or power of the
Company, any Subsidiary or any Affiliate to make or authorize any adjustment,
recapitalization, reorganization or other change in its capital structure or
business structure, any merger or consolidation, any issuance of debt, preferred
or prior preference stock ahead of or affecting the Shares, additional shares of
capital stock or other securities or subscription rights thereto, any
dissolution or liquidation, any sale or transfer of all or part of its assets or
business or any other corporate act or proceeding. Further, except as expressly
provided herein or by the Committee, (i) the issuance by the Company of Shares
or any class of securities convertible into shares of stock of any class, for
cash, property, labor or services, upon direct sale, upon the exercise of rights
or warrants to subscribe therefor, or upon conversion of shares or obligations
of the Company convertible into such shares or other securities, (ii) the
payment of a dividend in property other than Shares, (iii) the occurrence of any
capital change described in Section 4.2 or (iv) the occurrence of any similar
transaction, and in any case whether or not for fair value, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number of
Shares subject to Awards theretofore granted or the Option Price, Grant Price or
purchase price per share applicable to any Award, unless the Committee shall
determine, in its discretion, that an adjustment is necessary or appropriate.

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ARTICLE V
ELIGIBILITY AND PARTICIPATION

     5.1. Eligibility. Employees, Non-Employee Directors and Consultants shall
be eligible to become Participants and receive Awards in accordance with the
terms and conditions of the Plan, subject to the limitations on the granting of
ISOs set forth in Section 6.9(a).

     5.2. Actual Participation. Subject to the provisions of the Plan, the
Committee may, from time to time, select Participants from all eligible
Employees, Non-Employee Directors and Consultants and shall determine the nature
and amount of each Award.

ARTICLE VI
STOCK OPTIONS

     6.1. Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Participants in such number, and upon such terms, and
at any time and from time to time as shall be determined by the Committee. The
Committee may grant an Option or provide for the grant of an Option, either from
time to time in the discretion of the Committee or automatically upon the
occurrence of specified events, including the achievement of performance goals,
the satisfaction of an event or condition within the control of the recipient of
the Option or within the control of others. The granting of an Option shall take
place when the Committee by resolution, written consent or other appropriate
action determines to grant such Option for a particular number of Shares to a
particular Participant at a particular Option Price.

     6.2. Award Agreement. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the maximum duration of the
Option, the number of Shares to which the Option pertains, the conditions upon
which the Option shall become exercisable and such other provisions as the
Committee shall determine, which are not inconsistent with the terms of the
Plan; provided that if an Award Agreement does not contain exercisability
criteria, the Option governed by such Award Agreement shall become exercisable
in equal parts on each of the first five (5) anniversaries of the date on which
the Option was granted, subject to the other terms and conditions of the Award
Agreement and the Plan. The Award Agreement also shall specify whether the
Option is intended to be an ISO or an NQSO. To the extent that any Option does
not qualify as an ISO (whether because of its provisions or the time or manner
of its exercise or otherwise), such Option, or the portion thereof which does
not so qualify, shall constitute a separate NQSO.

     6.3. Option Price. The Option Price for each Option shall be determined by
the Committee and set forth in the Award Agreement; provided that, subject to
Section 6.9(c), the Option Price of an Option shall be not less than one hundred
percent (100%) of the Fair Market Value of a Share on the date the Option is
granted; provided further, that Substitute Awards or Awards granted in
connection with an adjustment provided for in Section 4.2, in the form of stock
options, shall have an Option Price per Share that is intended to maintain the
economic value of the Award that was replaced or adjusted, as determined by the
Committee.

     6.4. Duration of Options. Each Option granted to a Participant shall expire
at such time as the Committee shall determine at the time of grant and set forth
in the Award Agreement; provided, however, that no Option shall be exercisable
later than the tenth (10th) anniversary of its date of grant, subject to the
respective last sentences of Sections 6.5 and 6.9(c) .

     6.5. Exercise of Options. Options shall be exercisable at such times and be
subject to such restrictions and conditions as the Committee shall in each
instance determine and set forth in the Award Agreement, which need not be the
same for each grant or for each Option or Participant; provided, however, that
no Option (unless it is a Substitute Award) may (a) become exercisable until the
expiration of a period of at least six (6) months after the grant date of such
Option or (b) become exercisable in full prior to three (3) years from the grant
date of such Option, except in the event of the Optionee’s death, Disability or

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Retirement or a Change of Control, or, with respect to clause (b) immediately
preceding, other circumstances specified by the Committee. An Agreement may
provide that the period of time over which an Option other than an ISO may be
exercised shall be automatically extended if on the scheduled expiration date of
such Option the Optionee’s exercise of such Option would violate applicable
securities laws; provided, however, that during such extended exercise period
the Option may only be exercised to the extent the Option was exercisable in
accordance with its terms immediately prior to such scheduled expiration date;
provided further, however, that such extended exercise period shall end not
later than thirty (30) days after the exercise of such Option first would no
longer violate such laws.

     6.6. Payment. Options shall be exercised by the delivery of a written
notice of exercise to the Company, in a form specified or accepted by the
Committee, or by complying with any alternative exercise procedures that may be
authorized by the Committee, setting forth the number of Shares with respect to
which the Option is to be exercised, accompanied by full payment for such
Shares, which shall include applicable taxes, if any, in accordance with Article
XVI. The Option Price upon exercise of any Option shall be payable to the
Company in full either: (a) in cash or its equivalent; (b) subject to such
terms, conditions and limitations as the Committee may prescribe, by tendering
(either by actual delivery or attestation) unencumbered Shares previously
acquired by the Participant exercising such Option having an aggregate Fair
Market Value at the time of exercise equal to the total Option Price, (c) by a
combination of (a) and (b); or (d) by any other method approved or accepted by
the Committee in its sole discretion, including, if the Committee so determines,
a cashless (broker-assisted) exercise that complies with all applicable laws.
Subject to any governing rules or regulations, as soon as practicable after
receipt of a written notification of exercise and full payment in accordance
with the preceding provisions of this Section 6.6, the Company shall deliver to
the Participant exercising an Option, in the Participant’s name, evidence of
book entry Shares, or, upon the Participant’s request, Share certificates, in an
appropriate amount based upon the number of Shares purchased under the Option,
subject to Section 19.10. Unless otherwise determined by the Committee, all
payments under all of the methods described above shall be paid in United States
dollars.

     6.7. Rights as a Shareholder. No Participant or other person shall become
the beneficial owner of any Shares subject to an Option, nor have any rights to
dividends or other rights of a shareholder with respect to any such Shares,
until the Participant has actually received such Shares following exercise of
his or her Option in accordance with the provisions of the Plan and the
applicable Award Agreement.

     6.8. Termination of Employment or Service. Except as otherwise provided in
the Award Agreement, an Option may be exercised only to the extent that it is
then exercisable, and if at all times during the period beginning with the date
of granting of such Option and ending on the date of exercise of such Option the
Participant is an Employee or Non-Employee Director, and shall terminate
immediately upon a Termination of the Participant. An Option shall cease to
become newly exercisable upon a Termination of the holder thereof.
Notwithstanding the immediately foregoing sentences, an Option may be exercised
following Termination as provided below in this Section 6.8, unless otherwise
provided in the Award Agreement:

(a)

In the event a Participant ceases to be an Employee because of Retirement or
ceases to be a Non-Employee Director because of voluntary resignation, the
Participant shall have the right to exercise his or her Option, to the extent
exercisable as of the date of such Retirement or voluntary resignation,
respectively, at any time within one (1) year after Retirement or voluntary
resignation, respectively.

  (b)
In the event a Participant ceases to be an Employee or Non-Employee Director due
to Disability, the Option held by the Participant may be exercised, to the
extent exercisable as of the date of such Termination, at any time within one
(1) year after such Termination. 
 

(c)
In the event a Participant’s employment with or rendering of services as a
Consultant to the Company or any Affiliate or Subsidiary or a Participant’s
rendering of services as a Non-Employee Director to the Company ceases for
reasons other than those described in subsections (a) or (b) immediately above
and not due to Termination for 

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Cause, his or her Option, to the extent exercisable as of the date of such
Termination, may be exercised at any time prior to the first (1st) anniversary
of the date of such Termination.
    (d)
In the event a Participant dies either while an Employee, Consultant or
Non-Employee Director or after Termination under circumstances described in
subsections (a), (b) or (c) immediately above within the applicable time period
described therein, any Options held by such Participant, to the extent such
Options would have been exercisable in accordance with the applicable subsection
of this Section 6.8 as of the date of the Participant’s death, may be exercised
at any time within one (1) year after the Participant’s death by the
Participant’s beneficiary or the executors or administrators of the
Participant’s estate or by any person or persons who shall have acquired the
Option directly from the Participant by bequest or inheritance, in accordance
herewith.

      Notwithstanding the foregoing provisions of this Section 6.8 to the
contrary, the Committee may determine in its discretion that an Option may be
exercised following any such Termination, whether or not exercisable at the time
of such Termination. Subsections (a), (b), (c) and (d) of this Section 6.8, and
the immediately preceding sentence, shall be subject to the condition that in no
event may an Option be exercised after a Participant’s Termination for Cause or
after the expiration date of such Option specified in the applicable Award
Agreement.

     6.9. Limitations on Incentive Stock Options.

(a) General. No ISO shall be granted to any individual otherwise eligible to
participate in the Plan who is not an Employee of the Company or a Subsidiary on
the date of granting of such Option. Any ISO granted under the Plan shall
contain such terms and conditions, consistent with the Plan, as the Committee
may determine to be necessary to qualify such Option as an “incentive stock
option” under Section 422 of the Code. Any ISO granted under the Plan may be
modified by the Committee to disqualify such Option from treatment as an
“incentive stock option” under Section 422 of the Code.   (b) $100,000 Per Year
Limitation. Notwithstanding any intent to grant ISOs, an Option granted under
the Plan will not be considered an ISO to the extent that it, together with any
other “incentive stock options” (within the meaning of Section 422 of the Code,
but without regard to subsection (d) of such Section) under the Plan and any
other “incentive stock option” plans of the Company, any Subsidiary and any
“parent corporation” of the Company within the meaning of Section 424(e) of the
Code, are exercisable for the first time by any Participant during any calendar
year with respect to Shares having an aggregate Fair Market Value in excess of
$100,000 (or such other limit as may be required by the Code) as of the time the
Option with respect to such Shares is granted. The rule set forth in the
preceding sentence shall be applied by taking Options into account in the order
in which they were granted.   (c) Options Granted to Certain Shareholders. No
ISO shall be granted to an individual otherwise eligible to participate in the
Plan who owns (within the meaning of Section 424(d) of the Code), at the time
the Option is granted, more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or a Subsidiary or any “parent
corporation” of the Company within the meaning of Section 424(e) of the Code.
This restriction does not apply if at the time such ISO is granted the Option
Price of the ISO is at least 110% of the Fair Market Value of a Share on the
date such ISO is granted, and the ISO by its terms is not exercisable after the
expiration of five years from such date of grant.

ARTICLE VII
STOCK APPRECIATION RIGHTS

     7.1. Grant of SARs. Subject to the terms and conditions of the Plan, SARs
may be granted to Participants at any time and from time to time as shall be
determined by the Committee. The Committee may grant an SAR (a) in connection
and

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simultaneously with the grant of an Option (a Tandem SAR) or (b) independent of,
and unrelated to, an Option (a Freestanding SAR). The Committee shall have
complete discretion in determining the number of Shares to which a SAR pertains
(subject to Article IV) and, consistent with the provisions of the Plan, in
determining the terms and conditions pertaining to any SAR.

     7.2. Grant Price. The Grant Price for each SAR shall be determined by the
Committee and set forth in the Award Agreement, subject to the limitations of
this Section 7.2. The Grant Price for each Freestanding SAR shall be not less
than one hundred percent (100%) of the Fair Market Value of a Share on the date
such Freestanding SAR is granted, except in the case of Substitute Awards or
Awards granted in connection with an adjustment provided for in Section 4.2. The
Grant Price of a Tandem SAR shall be equal to the Option Price of the related
Option.

     7.3. Exercise of Tandem SARs. Tandem SARs may be exercised for all or part
of the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR shall be
exercisable only when and to the extent the related Option is exercisable and
may be exercised only with respect to the Shares for which the related Option is
then exercisable. A Tandem SAR shall entitle a Participant to elect, in the
manner set forth in the Plan and the applicable Award Agreement, in lieu of
exercising his or her unexercised related Option for all or a portion of the
Shares for which such Option is then exercisable pursuant to its terms, to
surrender such Option to the Company with respect to any or all of such Shares
and to receive from the Company in exchange therefor a payment described in
Section 7.7. An Option with respect to which a Participant has elected to
exercise a Tandem SAR shall, to the extent of the Shares covered by such
exercise, be canceled automatically and surrendered to the Company. Such Option
shall thereafter remain exercisable according to its terms only with respect to
the number of Shares as to which it would otherwise be exercisable, less the
number of Shares with respect to which such Tandem SAR has been so exercised.
Notwithstanding any other provision of the Plan to the contrary, with respect to
a Tandem SAR granted in connection with an ISO: (a) the Tandem SAR will expire
no later than the expiration of the related ISO; (b) the value of the payment
with respect to the Tandem SAR may not exceed the difference between the Fair
Market Value of the Shares subject to the related ISO at the time the Tandem SAR
is exercised and the Option Price of the related ISO; and (c) the Tandem SAR may
be exercised only when the Fair Market Value of the Shares subject to the ISO
exceeds the Option Price of the ISO.

     7.4. Exercise of Freestanding SARs. Freestanding SARs may be exercised upon
whatever terms and conditions the Committee, in its sole discretion, in
accordance with the Plan, determines and sets forth in the Award Agreement;
provided, however, that no SAR (unless it is a Substitute Award) may (a) become
exercisable until the expiration of a period of at least six (6) months after
the grant date of such SAR or (b) become exercisable in full prior to three (3)
years from the grant date of such SAR, except in the event of the holder’s
death, Disability or Retirement or a Change of Control, or, with respect to
clause (b) immediately preceding, other circumstances specified by the
Committee.

     7.5. Award Agreement. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the number of Shares to which the SAR pertains, the
Grant Price, the term of the SAR, and such other terms and conditions as the
Committee shall determine in accordance with the Plan.

     7.6. Term of SARs. The term of a SAR granted under the Plan shall be
determined by the Committee, in its sole discretion; provided, however, that the
term of any Tandem SAR shall be the same as the related Option and no SAR shall
be exercisable more than ten (10) years after it is granted, subject to the last
sentence of Section 6.5 in the case of a Tandem SAR.

     7.7. Payment of SAR Amount. An election to exercise SARs shall be deemed to
have been made on the date of Notice of such election to the Company. Upon
exercise of a SAR, a Participant shall be entitled to receive payment from the
Company in an amount determined by multiplying:

                    The excess of the Fair Market Value of a Share on the date
of exercise over the Grant Price of the SAR; by

                    The number of Shares with respect to which the SAR is
exercised.

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     Notwithstanding the foregoing provisions of this Section 7.7 to the
contrary, the Committee may establish and set forth in the applicable Award
Agreement a maximum amount per Share that will be payable upon the exercise of a
SAR. At the discretion of the Committee, such payment upon exercise of a SAR
shall be in cash, in Shares of equivalent Fair Market Value, or in some
combination thereof.

     7.8. Rights as a Shareholder. A Participant receiving a SAR shall have the
rights of a Shareholder only as to Shares, if any, actually issued to such
Participant upon satisfaction or achievement of the terms and conditions of the
Award, and in accordance with the provisions of the Plan and the applicable
Award Agreement, and not with respect to Shares to which such Award relates but
which are not actually issued to such Participant.

     7.9. Termination of Employment or Service. Each SAR Award Agreement shall
set forth the extent to which the Participant shall have the right to exercise
the SAR following such Participant’s Termination, subject to Section 6.8, as
applicable to any Tandem SAR. Such provisions shall be determined in the sole
discretion of the Committee, need not be uniform among all SARs issued pursuant
to the Plan, and may reflect distinctions based on the reasons for Termination.

ARTICLE VIII
RESTRICTED STOCK AND RESTRICTED STOCK UNITS

     8.1. Awards of Restricted Stock and Restricted Stock Units. Subject to the
terms and provisions of the Plan, the Committee, at any time and from time to
time, may grant Shares of Restricted Stock and/or Restricted Stock Units to
Participants in such amounts as the Committee shall determine. Subject to the
terms and conditions of this Article VIII and the Award Agreement, upon delivery
of Shares of Restricted Stock to a Participant, or creation of a book entry
evidencing a Participant’s ownership of Shares of Restricted Stock, pursuant to
Section 8.6, the Participant shall have all of the rights of a shareholder with
respect to such Shares, subject to the terms and restrictions set forth in this
Article VIII or the applicable Award Agreement or as determined by the
Committee. Restricted Stock Units shall be similar to Restricted Stock, except
no Shares are actually awarded to a Participant who is granted Restricted Stock
Units on the date of grant, and such Participant shall have no rights of a
shareholder with respect to such Restricted Stock Units.

     8.2. Award Agreement. Each Restricted Stock and/or Restricted Stock Unit
Award shall be evidenced by an Award Agreement that shall specify the Period of
Restriction, the number of Shares of Restricted Stock or the number of
Restricted Stock Units granted, and such other provisions as the Committee shall
determine in accordance with the Plan. Any Restricted Stock Award must be
accepted by the Participant within a period of ninety (90) days (or such shorter
period as determined by the Committee at the time of award) after the award
date, by executing such Restricted Stock Award Agreement and providing the
Committee or its designee a copy of such executed Award Agreement and payment of
the applicable purchase price of such Shares of Restricted Stock, if any, as
determined by the Committee.

     8.3. Nontransferability of Restricted Stock. Except as provided in this
Article VIII, Shares of Restricted Stock may not be sold, transferred, pledged,
assigned, encumbered, alienated, hypothecated or otherwise disposed of until the
end of the applicable Period of Restriction established by the Committee and
specified in the Restricted Stock Award Agreement.

     8.4. Period of Restriction and Other Restrictions. The Period of
Restriction shall lapse based on continuing service as a Non-Employee Director
or Consultant or continuing employment with the Company, a Subsidiary or an
Affiliate, the achievement of performance goals, the satisfaction of other
conditions or restrictions or upon the occurrence of other events, in each case,
as determined by the Committee, at its discretion, and stated in the Award
Agreement. The Period of Restriction applicable to any Shares of Restricted
Stock or Restricted Stock Units, which do not constitute a Substitute Award,
shall not lapse in full earlier than three (3) years from the date of grant of
such Award, or, in the case of any Shares of Restricted Stock or Restricted
Stock Units subject to performance-based conditions determining the entitlement
to the Award or restricting the

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grant size, or the transfer or vesting of the Award, one (1) year from the date
of grant, except in the event of the Participant’s death, Disability or
Retirement or a Change of Control, or other circumstances specified by the
Committee.

     8.5. Delivery of Shares, Payment of Restricted Stock Units. Subject to
Section 19.10, after the last day of the Period of Restriction applicable to a
Participant’s Shares of Restricted Stock, and after all conditions and
restrictions applicable to such Shares of Restricted Stock have been satisfied
or lapse (including satisfaction of any applicable withholding tax obligations),
pursuant to the applicable Award Agreement, such Shares of Restricted Stock
shall become freely transferable by such Participant. After the last day of the
Period of Restriction applicable to a Participant’s Restricted Stock Units, and
after all conditions and restrictions applicable to Restricted Stock Units have
been satisfied or lapse (including satisfaction of any applicable withholding
tax obligations), pursuant to the applicable Award Agreement, such Restricted
Stock Units shall be settled by delivery of Shares, a cash payment determined by
reference to the then-current Fair Market Value of Shares or a combination of
Shares and such cash payment as the Committee, in its sole discretion, shall
determine, either by the terms of the Award Agreement or otherwise.

     8.6. Forms of Restricted Stock Awards. Each Participant who receives an
Award of Shares of Restricted Stock shall be issued a stock certificate or
certificates evidencing the Shares covered by such Award registered in the name
of such Participant, which certificate or certificates may contain an
appropriate legend. The Committee may require a Participant who receives a
certificate or certificates evidencing a Restricted Stock Award to immediately
deposit such certificate or certificates, together with a stock power or other
appropriate instrument of transfer, endorsed in blank by the Participant, with
signatures guaranteed in accordance with the Exchange Act if required by the
Committee, with the Secretary of the Company or an escrow holder as provided in
the immediately following sentence. The Secretary of the Company or such escrow
holder as the Committee may appoint shall retain physical custody of each
certificate representing a Restricted Stock Award until the Period of
Restriction and any other restrictions imposed by the Committee or under the
Award Agreement with respect to the Shares evidenced by such certificate expire
or shall have been removed. The foregoing to the contrary notwithstanding, the
Committee may, in its discretion, provide that a Participant’s ownership of
Shares of Restricted Stock prior to the lapse of the Period of Restriction or
any other applicable restrictions shall, in lieu of such certificates, be
evidenced by a “book entry” (i.e., a computerized or manual entry) in the
records of the Company or its designated agent in the name of the Participant
who has received such Award. Such records of the Company or such agent shall,
absent manifest error, be binding on all Participants who receive Restricted
Stock Awards evidenced in such manner. The holding of Shares of Restricted Stock
by the Company or such an escrow holder, or the use of book entries to evidence
the ownership of Shares of Restricted Stock, in accordance with this Section
8.6, shall not affect the rights of Participants as owners of the Shares of
Restricted Stock awarded to them, nor affect the restrictions applicable to such
shares under the Award Agreement or the Plan, including the Period of
Restriction.

     8.7. Voting Rights. Unless otherwise determined by the Committee and set
forth in a Participant’s Award Agreement, to the extent permitted or required by
law, as determined by the Committee, Participants holding Shares of Restricted
Stock may be granted the right to exercise full voting rights with respect to
those Shares during the Period of Restriction. A Participant shall have no
voting rights with respect to any Restricted Stock Units.

     8.8. Dividends and Other Distributions. During the Period of Restriction,
Participants holding Shares of Restricted Stock shall be credited with any cash
dividends paid with respect to such Shares while they are so held, unless
determined otherwise by the Committee and set forth in the Award Agreement. The
Committee may apply any restrictions to such dividends that the Committee deems
appropriate. Except as set forth in the Award Agreement, in the event of (a) any
adjustment as provided in Section 4.2, or (b) any shares or securities are
received as a dividend, or an extraordinary dividend is paid in cash, on Shares
of Restricted Stock, any new or additional Shares or securities or any
extraordinary dividends paid in cash received by a recipient of Restricted Stock
shall be subject to the same terms and conditions, including the Period of
Restriction, as relate to the original Shares of Restricted Stock.

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     8.9. Termination of Employment or Service. Except as otherwise provided in
this Section 8.9, during the Period of Restriction, any Restricted Stock Units
and/or Shares of Restricted Stock held by a Participant shall be forfeited and
revert to the Company (or, if Shares of Restricted Sock were sold to the
Participant, the Participant shall be required to resell such Shares to the
Company at cost) upon the Participant’s Termination or the failure to meet or
satisfy any applicable performance goals or other terms, conditions and
restrictions to the extent set forth in the applicable Award Agreement. Each
applicable Award Agreement shall set forth the extent to which, if any, the
Participant shall have the right to retain Restricted Stock Units and/or Shares
of Restricted Stock following such Participant’s Termination. Such provisions
shall be determined in the sole discretion of the Committee, shall be included
in the applicable Award Agreement, need not be uniform among all such Awards
issued pursuant to the Plan, and may reflect distinctions based on the reasons
for, or circumstances of, such Termination.

     8.10. Compliance With Section 409A. Unless the Committee provides otherwise
in an Award Agreement, each Restricted Stock Unit shall be paid in full to the
Participant no later than the fifteenth day of the third month after the end of
the first calendar year in which the Restricted Stock Unit is no longer subject
to a “substantial risk of forfeiture” within the meaning of Code Section 409A.
If the Committee provides in an Award Agreement that a Restricted Stock Unit is
intended to be subject to Code Section 409A, the Award Agreement shall include
terms that are intended to satisfy the requirements of Section 409A.

ARTICLE IX
PERFORMANCE UNITS, PERFORMANCE SHARES, AND CASH-BASED AWARDS

     9.1. Grant of Performance Units, Performance Shares and Cash-Based Awards.
Subject to the terms of the Plan, Performance Units, Performance Shares, and/or
Cash-Based Awards may be granted to Participants in such amounts and upon such
terms, and at any time and from time to time, as shall be determined by the
Committee, in accordance with the Plan. A Performance Unit, Performance Share or
Cash-Based Award entitles the Participant who receives such Award to receive
Shares or cash upon the attainment of performance goals and/or satisfaction of
other terms and conditions determined by the Committee when the Award is granted
and set forth in the Award Agreement. Such entitlements of a Participant with
respect to his or her outstanding Performance Unit, Performance Share or
Cash-Based Award shall be reflected by a bookkeeping entry in the records of the
Company, unless otherwise provided by the Award Agreement. The terms and
conditions of such Awards shall be consistent with the Plan and set forth in the
Award Agreement and need not be uniform among all such Awards or all
Participants receiving such Awards.

     9.2. Value of Performance Units, Performance Shares and Cash-Based Awards.
Each Performance Unit shall have an initial value that is established by the
Committee at the time of grant. Each Performance Share shall have an initial
value equal to the Fair Market Value of a Share on the date of grant. Each
Cash-Based Award shall have a value as shall be determined by the Committee. The
Committee shall set performance goals in its discretion which, depending on the
extent to which they are met, will determine the number and/or value of
Performance Units and Performance Shares and Cash-Based Awards that will be paid
out to the Participant.

     9.3. Earning of Performance Units, Performance Shares and Cash-Based
Awards. Subject to the terms of the Plan, after the applicable Performance
Period has ended, the holder of Performance Units, Performance Shares or
Cash-Based Awards shall be entitled to receive payment on the number and value
of Performance Units, Performance Shares or Cash-Based Awards earned by the
Participant over the Performance Period, to be determined as a function of the
extent to which the corresponding performance goals and/or other terms and
conditions have been achieved or satisfied. The Committee shall determine the
extent to which any such pre-established performance goals and/or other terms
and conditions of a Performance Unit, Performance Share or Cash-Based Award are
attained or not attained following conclusion of the applicable Performance
Period. The Committee may, in its discretion, waive any such performance goals
and/or other terms and conditions relating to any such Award. No Performance
Units, Performance Shares or Cash-Based Awards shall be fully earned prior to
one (1) year from

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the date of grant of any such Award, except in the event of the Participant’s
death, Disability or Retirement or a Change of Control, or other circumstances
specified by the Committee.

     9.4. Form and Timing of Payment of Performance Units, Performance Shares
and Cash-Based Awards. Payment of earned Performance Units, Performance Shares
and Cash-Based Awards shall be as determined by the Committee and as set forth
in the Award Agreement. Subject to the terms of the Plan, the Committee, in its
sole discretion, may pay earned Performance Units, Performance Shares and
Cash-Based Awards in the form of cash or in Shares (or in a combination thereof)
which have an aggregate Fair Market Value equal to the value of the earned
Performance Units, Performance Shares or Cash-Based Awards as soon as
practicable after the end of the Performance Period and following the
Committee’s determination of actual performance against the performance goals
and/or other terms and conditions established by the Committee. Such Shares may
be granted subject to any restrictions imposed by the Committee, including
pursuant to Section 19.10. The determination of the Committee with respect to
the form of payment of such Awards shall be set forth in the Award Agreement
pertaining to the grant of the Award.

     9.5. Rights as a Shareholder. A Participant receiving a Performance Unit,
Performance Share or Cash-Based Award shall have the rights of a shareholder
only as to Shares, if any, actually received by the Participant upon
satisfaction or achievement of the terms and conditions of such Award and not
with respect to Shares subject to the Award but not actually issued to such
Participant.

     9.6. Termination of Employment or Service. Each Award Agreement shall set
forth the extent to which the Participant shall have the right to retain
Performance Units, Performance Shares and/or Cash-Based Award following such
Participant’s Termination. Such provisions shall be determined in the sole
discretion of the Committee, shall be included in the applicable Award
Agreement, need not be uniform among all such Awards issued pursuant to the
Plan, and may reflect distinctions based on the reasons for Termination.

     9.7. Compliance With Section 409A. Unless the Committee provides otherwise
in an Award Agreement, each Performance Unit, Performance Share and/or
Cash-Based Award shall be paid in full to the Participant no later than the
fifteenth day of the third month after the end of the first calendar year in
which such Award is no longer subject to a “substantial risk of forfeiture”
within the meaning of Code Section 409A. If the Committee provides in an Award
Agreement that a Performance Share, Performance Unit or Cash-Based Award is
intended to be subject to Code Section 409A, the Award Agreement shall include
terms that are intended to satisfy the requirements of Section 409A.

ARTICLE X
OTHER STOCK-BASED AWARDS

     10.1. Other Stock-Based Awards. The Committee may grant types of
equity-based or equity-related Awards not otherwise described by the terms of
the Plan (including the grant or offer for sale of unrestricted Shares), in such
amounts (subject to Article IV) and subject to such terms and conditions, as the
Committee shall determine. Such Other Stock-Based Awards may involve the
transfer of actual Shares to Participants, or payment in cash or otherwise of
amounts based on the value of Shares and may include Awards designed to comply
with or take advantage of the applicable local laws of jurisdictions other than
the United States.

     10.2. Value of Other Stock-Based Awards. Each Other Stock-Based Award shall
be expressed in terms of Shares or units based on Shares, as determined by the
Committee. The Committee may establish performance goals in its discretion, and
any such performance goals shall be set forth in the applicable Award Agreement.
If the Committee exercises its discretion to establish performance goals, the
number and/or value of Other Stock-Based Awards that will be paid out to the
Participant will depend on the extent to which such performance goals are met.

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     10.3. Payment of Other Stock-Based Awards. Payment, if any, with respect to
an Other Stock-Based Award shall be made in accordance with the terms of the
Award, as set forth in the Award Agreement, in cash or Shares as the Committee
determines. The full vesting or lapse of restrictions and limitations applicable
to any Other Stock-Based Award shall not occur more rapidly than during the
three (3) year period immediately following the date of grant of such Award, or,
in the case of any Other Stock-Based Award subject to performance-based
conditions determining the entitlement to the Award or restricting the grant
size, the transfer of Shares or the vesting of the Award, one (1) year from the
date of grant, except in the event of the Participant’s death, Disability or
Retirement or a Change of Control, or other circumstances specified by the
Committee.

     10.4. Termination of Employment or Service. The Committee shall determine
the extent to which the Participant shall have the right to receive Other
Stock-Based Awards following the Participant’s Termination. Such provisions
shall be determined in the sole discretion of the Committee, such provisions may
be included in the applicable Award Agreement, but need not be uniform among all
Other Stock-Based Awards issued pursuant to the Plan, and may reflect
distinctions based on the reasons for Termination.

     10.5. Compliance With Section 409A. Unless the Committee provides otherwise
in an Award Agreement, each Other Stock-Based Award shall be paid in full to the
Participant no later than the fifteenth day of the third month after the end of
the first calendar year in which the Other Stock-Based Award is no longer
subject to a “substantial risk of forfeiture” within the meaning of Code Section
409A. If the Committee provides in an Award Agreement that a Cash-Based Award or
Other Stock-Based Award is intended to be subject to Code Section 409A, the
Award Agreement shall include terms that are intended to satisfy the
requirements of Section 409A.

ARTICLE XI
DIVIDEND EQUIVALENTS

     11.1. Dividend Equivalents . Unless otherwise provided by the Committee, no
adjustment shall be made in the Shares issuable or taken into account under
Awards on account of cash dividends that may be paid or other rights that may be
issued to the holders of Shares prior to issuance of such Shares under such
Award. The Committee may grant Dividend Equivalents based on the dividends
declared on Shares that are subject to any Award, including any Award the
payment or settlement of which is deferred pursuant to Section 19.6. Dividend
Equivalents may be credited as of the dividend payment dates, during the period
between the date the Award is granted and the date the Award becomes payable or
terminates or expires. Dividend Equivalents may be subject to any limitations
and/or restrictions determined by the Committee. Dividend Equivalents shall be
converted to cash or additional Shares by such formula and at such time, and
shall be paid at such times, as may be determined by the Committee. Unless the
Award Agreement provides otherwise, Dividend Equivalents shall be paid to the
Participant at least annually, not later than the fifteenth day of the third
month following the end of the calendar year in which the Dividend Equivalents
are credited (or, if later, the fifteenth day of the third month following the
end of the calendar year in which the Dividend Equivalents are no longer subject
to a substantial risk of forfeiture within the meaning of Code Section 409A).
Any Dividend Equivalents that are accumulated and paid after the date specified
in the preceding sentence shall be explicitly set forth in a separate
arrangement that provides for the payment of the dividend equivalents at a time
and in a manner that satisfies the requirements of Code Section 409A. No
Dividend Equivalents shall relate to Shares underlying an Option or SAR unless
such Dividend Equivalent rights are explicitly set forth as a separate
arrangement and do not cause any such Option or SAR to be subject to Code
Section 409A.

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ARTICLE XII
TRANSFERABILITY OF AWARDS; BENEFICIARY DESIGNATION

     12.1. Transferability of Incentive Stock Options. No ISO or Tandem SAR
granted in connection with an ISO may be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution or in accordance with Section 12.3. Further, all ISOs
and Tandem SARs granted in connection with ISOs granted to a Participant shall
be exercisable during his or her lifetime only by such Participant.

     12.2. All Other Awards. Except as otherwise provided in Section 8.5 or
Section 12.3 or a Participant’s Award Agreement or otherwise determined at any
time by the Committee, no Award granted under the Plan may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution; provided that the Committee may permit
further transferability, on a general or a specific basis, and may impose
conditions and limitations on any permitted transferability, subject to Section
12.1 and any applicable Period of Restriction; provided further, however, that
no Award may be transferred for value or other consideration without first
obtaining approval thereof by the shareholders of the Company. Further, except
as otherwise provided in a Participant’s Award Agreement or otherwise determined
at any time by the Committee, or unless the Committee decides to permit further
transferability, subject to Section 12.1 and any applicable Period of
Restriction, all Awards granted to a Participant under the Plan, and all rights
with respect to such Awards, shall be exercisable or available during his or her
lifetime only by or to such Participant. With respect to those Awards, if any,
that are permitted to be transferred to another individual, references in the
Plan to exercise or payment related to such Awards by or to the Participant
shall be deemed to include, as determined by the Committee, the Participant’s
permitted transferee. In the event any Award is exercised by or otherwise paid
to the executors, administrators, heirs or distributees of the estate of a
deceased Participant, or such a Participant’s beneficiary, or the transferee of
an Award, in any such case, pursuant to the terms and conditions of the Plan and
the applicable Agreement and in accordance with such terms and conditions as may
be specified from time to time by the Committee, the Company shall be under no
obligation to issue Shares thereunder unless and until the Company is satisfied,
as determined in the discretion of the Committee, that the person or persons
exercising such Award, or to receive such payment, are the duly appointed legal
representative of the deceased Participant’s estate or the proper legatees or
distributees thereof or the named beneficiary of such Participant, or the valid
transferee of such Award, as applicable. Any purported assignment, transfer or
encumbrance of an Award that does not comply with this Section 12.2 shall be
void and unenforceable against the Company.

     12.3. General. Each Participant may, from time to time, name any
beneficiary or beneficiaries who shall be permitted to exercise his or her
Option or SAR or to whom any benefit under the Plan is to be paid in case of the
Participant’s death before he or she fully exercises his or her Option or SAR or
receives any or all of such benefit. Each such designation shall revoke all
prior designations by the same Participant, shall be in a form prescribed by the
Company, and will be effective only when filed by the Participant in writing
with the Company during the Participant’s lifetime. In the absence of any such
beneficiary designation, a Participant’s unexercised Option or SAR, or amounts
due but remaining unpaid to such Participant, at the Participant’s death, shall
be exercised or paid as designated by the Participant by will or by the laws of
descent and distribution.

ARTICLE XIII
RIGHTS OF PARTICIPANTS

     13.1. Rights or Claims. No individual shall have any rights or claims under
the Plan except in accordance with the provisions of the Plan and any applicable
Award Agreement. The grant of an Award under the Plan shall not confer any
rights upon the Participant holding such Award other than such terms, and
subject to such conditions, as are specified in the Plan as being applicable to
such type of Award, or to all Awards, or as are expressly set forth in the Award
Agreement evidencing such Award. Without limiting the generality of the
foregoing, nothing contained in the Plan or in any Award Agreement shall be
deemed to:

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  (a)      Give any Employee or Non-Employee Director the right to be retained
in the service of the Company, an Affiliate and/or a Subsidiary, whether in any
particular position, at any particular rate of compensation, for any particular
period of time or otherwise;     (b)      Restrict in any way the right of the
Company, an Affiliate and/or a Subsidiary to terminate, change or modify any
Employee’s employment or any Non-Employee Director’s service as a Director at
any time with or without Cause;     (c)      Confer on any Consultant any right
of continued relationship with the Company, an Affiliate and/or a Subsidiary, or
alter any relationship between them, including any right of the Company or an
Affiliate or Subsidiary to terminate, change or modify its relationship with a
Consultant;     (d)      Give any Employee, Non-Employee Director or Consultant
the right to receive any bonus, whether payable in cash or in Shares, or in any
combination thereof, from the Company, an Affiliate and/or a Subsidiary, nor be
construed as limiting in any way the right of the Company, an Affiliate and/or a
Subsidiary to determine, in its sole discretion, whether or not it shall pay any
Employee, Non-Employee Director or Consultant bonuses, and, if so paid, the
amount thereof and the manner of such payment; or     (e)      Give any
Participant any rights whatsoever with respect to an Award except as
specifically provided in the Plan and the Award Agreement.

     13.2. Adoption of the Plan. The adoption of the Plan shall not be deemed to
give any Employee, Non-Employee Director or Consultant or any other individual
any right to be selected as a Participant or to be granted an Award, or, having
been so selected, to be selected to receive a future Award.

     13.3. Vesting. Notwithstanding any other provision of the Plan, a
Participant’s right or entitlement to exercise or otherwise vest in any Award
not exercisable or vested at the time of grant shall only result from continued
services as a Non-Employee Director or Consultant or continued employment, as
the case may be, with the Company or any Subsidiary or Affiliate, or
satisfaction of any other performance goals or other conditions or restrictions
applicable, by its terms, to such Award.

     13.4. No Effects on Benefits. Payments and other compensation received by a
Participant under an Award are not part of such Participant’s normal or expected
compensation or salary for any purpose, including calculating termination,
indemnity, severance, resignation, redundancy, end of service payments, bonuses,
long-service awards, pension or retirement benefits or similar payments under
any laws, plans, contracts, arrangements or otherwise. No claim or entitlement
to compensation or damages arises from the termination of the Plan or diminution
in value of any Award or Shares purchased or otherwise received under the Plan.

     13.5. One or More Types of Awards. A particular type of Award may be
granted to a Participant either alone or in addition to other Awards under the
Plan.

ARTICLE XIV
CHANGE OF CONTROL

     14.1. Treatment of Outstanding Awards. In the event of a Change of Control,
unless otherwise specifically prohibited by any applicable laws, rules or
regulations or otherwise provided in any applicable Award Agreement, as in
effect prior to the occurrence of the Change of Control, specifically with
respect to a Change of Control:

(a) Immediately prior to the occurrence of such Change of Control, any and all
Options, SARs and Other Stock-Based Awards (if applicable) which are outstanding
shall immediately become fully exercisable as to all Shares covered thereby,
notwithstanding anything to the contrary in the Plan or the Award Agreement,
and, in the event of a Participant’s Termination (including termination of
employment or services with any successor of the Company, a Subsidiary

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     or an Affiliate) under any circumstances during the one year period
following the Change of Control, all Options, SARs and Other Stock-Based Awards
(if applicable) held by such Participant (or such Participant’s beneficiary or
transferee) shall remain exercisable at least until the first anniversary of
such Termination or the expiration of the term of such Option, SAR or Other
Stock-Based Award, if earlier.   (b) Immediately prior to the occurrence of such
Change of Control, any restrictions, performance goals or other conditions
applicable to Restricted Stock Units, Shares of Restricted Stock and Other
Stock-Based Awards previously awarded to Participants shall be immediately
canceled or deemed achieved, the Period of Restriction applicable thereto shall
immediately terminate, and all restrictions on transfer, sale, assignment,
pledge or other disposition applicable to any such Shares of Restricted Stock
shall immediately lapse, notwithstanding anything to the contrary in the Plan or
the Award Agreement.   (c) Immediately prior to the occurrence of such Change of
Control, all Awards which are outstanding shall immediately become fully vested
and nonforfeitable.   (d) The target payment opportunities attainable under any
outstanding Awards of Performance Units, Performance Shares, Cash-Based Awards
and other Awards shall be deemed to have been fully earned for the entire
Performance Period(s) immediately prior to the effective date of the Change of
Control, unless actual performance exceeds the target, in which case actual
performance shall be used. There shall be paid out to each Participant holding
such an Award denominated in Shares, not later than five (5) days prior to the
effective date of the Change of Control, a pro rata number of Shares (or the
equivalent Fair Market Value thereof, as determined by the Committee, in cash)
based upon an assumed achievement of all relevant targeted performance goals,
unless actual performance exceeds the target, in which case actual performance
shall be used, and upon the length of time within the Performance Period which
has elapsed prior to the Change of Control. Awards denominated in cash shall be
paid pro rata to applicable Participants in cash within thirty (30) days
following the effective date of the Change of Control, with the pro-ration
determined as a function of the length of time within the Performance Period
which has elapsed prior to the Change of Control, and based on an assumed
achievement of all relevant targeted performance goals, unless actual
performance exceeds the target, in which case actual performance shall be used.
  (e) Any Award the payment or settlement of which was deferred under Section
19.6 or otherwise shall be paid or distributed immediately prior to the Change
of Control, except as otherwise provided by the Committee in accordance with
Section 14.1(f) .   (f) In its discretion, and on such terms and conditions as
it deems appropriate, the Committee may provide, either by the terms of the
Award Agreement applicable to any Award or by resolution adopted prior to the
occurrence of the Change of Control, that any outstanding Award shall be
adjusted by substituting for each Share subject to such Award immediately prior
to the transaction resulting in the Change of Control the consideration (whether
stock or other securities of the surviving corporation or any successor
corporation to the Company, or a parent or subsidiary thereof, or that may be
issuable by another corporation that is a party to the transaction resulting in
the Change of Control) received in such transaction by holders of Shares for
each Share held on the closing or effective date of such transaction, in which
event the aggregate Option Price or Grant Price, as applicable, of the Award
shall remain the same; provided, however, that if such consideration received in
such transaction is not solely stock of a successor, surviving or other
corporation, the Committee may provide for the consideration to be received upon
exercise or payment of an Award, for each Share subject to such Award, to be
solely stock or other securities of the successor, surviving or other
corporation, as applicable, equal in fair market value, as determined by the
Committee, to the per-Share consideration received by holders of Shares in such
transaction.

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(g) In its discretion, and on such terms and conditions as it deems appropriate,
the Committee may provide, either by the terms of the Award Agreement applicable
to any Award or by resolution adopted prior to the occurrence of the Change of
Control, that any outstanding Award (or portion thereof) shall be converted into
a right to receive cash, on or as soon as practicable following the closing date
or expiration date of the transaction resulting in the Change of Control in an
amount equal to the highest value of the consideration to be received in
connection with such transaction for one Share, or, if higher, the highest Fair
Market Value of a Share during the thirty (30) consecutive business days
immediately prior to the closing date or expiration date of such transaction,
less the per-Share Option Price, Grant Price or outstanding unpaid purchase
price, as applicable to the Award, multiplied by the number of Shares subject to
such Award, or the applicable portion thereof.   (h) The Committee may, in its
discretion, provide that an Award can or cannot be exercised after, or will
otherwise terminate or not terminate as of, a Change of Control.

     14.2. No Implied Rights; Other Limitations. No Participant shall have any
right to prevent the consummation of any of the acts described in Section 4.2 or
14.1 affecting the number of Shares available to, or other entitlement of, such
Participant under the Plan or such Participant’s Award. Any actions or
determinations of the Committee under this Article XVI need not be uniform as to
all outstanding Awards, nor treat all Participants identically. Notwithstanding
the adjustments described in Section 14.1, in no event may any Option or SAR be
exercised after ten (10) years from the date it was originally granted, and any
changes to ISOs pursuant to this Article XIV shall, unless the Committee
determines otherwise, only be effective to the extent such adjustments or
changes do not cause a “modification” (within the meaning of Section 424(h)(3)
of the Code) of such ISOs or adversely affect the tax status of such ISOs.

     14.3. Termination, Amendment, and Modifications of Change of Control
Provisions. Notwithstanding any other provision of the Plan (but subject to the
limitations of Section 14.1(h), the last sentence of Section 15.1 and Section
15.2) or any Award Agreement provision, the provisions of this Article XIV may
not be terminated, amended, or modified on or after the date of a Change of
Control to materially impair any Participant’s Award theretofore granted and
then outstanding under the Plan without the prior written consent of such
Participant.

     14.4. Compliance with Section 409A. Notwithstanding any other provisions of
the Plan or any Award Agreement to the contrary, if a Change of Control that is
not a Qualified Change of Control occurs, and payment or distribution of an
Award constituting deferred compensation subject to Section 409A of the Code
would otherwise be made or commence on the date of such Change of Control
(pursuant to the Plan, the Award Agreement or otherwise), (a) the vesting of
such Award shall accelerate in accordance with the Plan and the Award Agreement,
(b) such payment or distribution shall not be made or commence prior to the
earliest date on which Code Section 409A permits such payment or distribution to
be made or commence without additional taxes or penalties under Section 409A,
and (c) in the event any such payment or distribution is deferred in accordance
with the immediately preceding clause (b), such payment or distribution that
would have been made prior to the deferred payment or commencement date, but for
Code Section 409A, shall be paid or distributed on such earliest payment or
commencement date, together, if determined by the Committee, with interest at
the rate established by the Committee. The Committee shall not extend the period
to exercise an Option or Stock Appreciation Right to the extent that such
extension would cause the Option or Stock Appreciation Right to become subject
to Code Section 409A. Additionally, the Committee shall not take any action
pursuant to this Article XIV that would cause an Award that is otherwise exempt
from Code Section 409A to become subject to Code Section 409A, or that would
cause an Award that is subject to Code Section 409A to fail to satisfy the
requirements of Code Section 409A.

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ARTICLE XV
AMENDMENT, MODIFICATION, AND TERMINATION

     15.1. Amendment, Modification, and Termination. The Board may, at any time
and with or without prior notice, amend, alter, suspend, or terminate the Plan,
and the Committee may, to the extent permitted by the Plan, amend the terms of
any Award theretofore granted, including any Award Agreement, in each case,
retroactively or prospectively; provided, however, that no such amendment,
alteration, suspension, or termination of the Plan shall be made which, without
first obtaining approval of the shareholders of the Company (where such approval
is necessary to satisfy (i) the then-applicable requirements of Rule 16b-3, (ii)
any requirements under the Code relating to ISOs, or (iii) any applicable law,
regulation or rule (including the applicable regulations and rules of the SEC
and any national securities exchange)), would:

  (a)      Except as is provided in Section 4.2, increase the maximum number of
Shares which may be sold or awarded under the Plan;     (b)      Except as is
provided in Section 4.2, decrease the minimum Option Price or Grant Price
requirements of Sections 6.3 and 7.2, respectively;     (c)      Change the
class of persons eligible to receive Awards under the Plan;     (d)      Extend
the duration of the Plan or the period during which Options or SARs may be
exercised under Section 6.4 or 7.6, as applicable; or     (e)      Otherwise
require shareholder approval to comply with any applicable law, regulation or
rule (including the applicable regulations and rules of the SEC and any national
securities exchange).

     In addition, (A) no such amendment, alteration, suspension or termination
of the Plan or any Award theretofore granted, including any Award Agreement,
shall be made which would materially impair the previously accrued rights of a
Participant under any outstanding Award without the written consent of such
Participant, provided, however, that the Board may amend or alter the Plan and
the Committee may amend or alter any Award, including any Agreement, either
retroactively or prospectively, without the consent of the applicable
Participant, (x) so as to preserve or come within any exemptions from liability
under Section 16(b) of the Exchange Act, pursuant to the rules and releases
promulgated by the SEC (including Rule 16b-3), or (y) if the Board or the
Committee determines in its discretion that such amendment or alteration either
(I) is required or advisable for the Company, the Plan or the Award to satisfy,
comply with or meet the requirements of any law, regulation, rule or accounting
standard or (II) is not reasonably likely to significantly diminish the benefits
provided under such Award, or that such diminishment has been or will be
adequately compensated, and (B) except as is provided in Section 4.2, but
notwithstanding any other provisions of the Plan, neither the Board nor the
Committee may take any action: (1) to amend the terms of an outstanding Option
or SAR to reduce the Option Price or Grant Price thereof, cancel an Option or
SAR and replace it with a new Option or SAR with a lower Option Price or Grant
Price, or that has an economic effect that is the same as any such reduction or
cancellation; (2) to cancel an outstanding Option or SAR having an Option Price
or Grant Price above the then-current Fair Market Value of the Shares in
exchange for the grant of another type of Award or (3) to amend the minimum
exercisability or vesting provisions of Sections 6.5, 7.4, 8.4, 9.3 and 10.3 to
shorten or decrease such provisions, without, in each such case, first obtaining
approval of the shareholders of the Company of such action.

     15.2. Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Board or the Committee may make adjustments in the
terms and conditions of, and the criteria included in, Awards in recognition of
unusual or nonrecurring events (including the events described in Section 4.2)
affecting the Company or the financial statements of the Company or of changes
in applicable laws, regulations, or accounting principles, whenever the
Committee determines that such adjustments are appropriate in order to prevent
unintended dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan. Any such adjustment with respect
to an Award intended to be an ISO shall be made only to the extent consistent
with such intent, unless the Board or the Committee determines otherwise.
Additionally,

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neither the Board nor the Committee shall not make any adjustment pursuant to
this Article XV that would cause an Award that is otherwise exempt from Code
Section 409A to become subject to Code Section 409A, or that would cause an
Award that is subject to Code Section 409A to fail to satisfy the requirements
of Code Section 409A. The determination of the Committee as to the foregoing
adjustments, if any, shall be conclusive and binding on Participants under the
Plan.

ARTICLE XVI
TAX WITHHOLDING AND OTHER TAX MATTERS

     16.1. Tax Withholding. The Company and/or any Subsidiary or Affiliate are
authorized to withhold from any Award granted or payment due under the Plan the
amount of all Federal, state, local and non-United States taxes due in respect
of such Award or payment and take any such other action as may be necessary or
appropriate, as determined by the Committee, to satisfy all obligations for the
payment of such taxes. The recipient of any payment or distribution under the
Plan shall make arrangements satisfactory to the Company, as determined in the
Committee’s discretion, for the satisfaction of any tax obligations that arise
by reason of any such payment or distribution. The Company shall not be required
to make any payment or distribution under or relating to the Plan or any Award
until such obligations are satisfied or such arrangements are made, as
determined by the Committee in its discretion.

     16.2. Withholding or Tendering Shares. Without limiting the generality of
Section 16.1, the Committee may in its discretion permit a Participant to
satisfy or arrange to satisfy, in whole or in part, the tax obligations incident
to an Award by: (a) electing to have the Company withhold Shares or other
property otherwise deliverable to such Participant pursuant to his or her Award
(provided, however, that the amount of any Shares so withheld shall not exceed
the amount necessary to satisfy required Federal, state, local and non-United
States withholding obligations using the minimum statutory withholding rates for
Federal, state, local and/or non-U.S. tax purposes, including payroll taxes,
that are applicable to supplemental taxable income) and/or (b) tendering to the
Company Shares owned by such Participant (or by such Participant and his or her
spouse jointly) and purchased or held for the requisite period of time as may be
required to avoid the Company’s or the Affiliates’ or Subsidiaries’ incurring an
adverse accounting charge, based, in each case, on the Fair Market Value of the
Shares on the payment date as determined by the Committee. All such elections
shall be irrevocable, made in writing, signed by the Participant, and shall be
subject to any restrictions or limitations that the Committee, in its sole
discretion, deems appropriate.

     16.3. Restrictions. The satisfaction of tax obligations pursuant to this
Article XVI shall be subject to such restrictions as the Committee may impose,
including any restrictions required by applicable law or the rules and
regulations of the SEC, and shall be construed consistent with an intent to
comply with any such applicable laws, rule and regulations.

     16.4. Special ISO Obligations. The Committee may require a Participant to
give prompt written notice to the Company concerning any disposition of Shares
received upon the exercise of an ISO within: (i) two (2) years from the date of
granting such ISO to such Participant or (ii) one (1) year from the transfer of
such Shares to such Participant or (iii) such other period as the Committee may
from time to time determine. The Committee may direct that a Participant with
respect to an ISO undertake in the applicable Award Agreement to give such
written notice described in the preceding sentence, at such time and containing
such information as the Committee may prescribe, and/or that the certificates
evidencing Shares acquired by exercise of an ISO refer to such requirement to
give such notice.

     16.5. Section 83(b) Election. If a Participant makes an election under
Section 83(b) of the Code to be taxed with respect to an Award as of the date of
transfer of Shares rather than as of the date or dates upon which the
Participant would otherwise be taxable under Section 83(a) of the Code, such
Participant shall deliver a copy of such election to the Company immediately
after filing such election with the Internal Revenue Service. Neither the
Company nor any Subsidiary or Affiliate shall have any liability or
responsibility relating to or arising out of the filing or not filing of any
such election or any defects in its construction.

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     16.6. No Guarantee of Favorable Tax Treatment. Although the Company intends
to administer the Plan so that Awards will be exempt from, or will comply with,
the requirements of Code Section 409A, the Company does not warrant that any
Award under the Plan will qualify for favorable tax treatment under Code Section
409A or any other provision of federal, state, local, or non-United States law.
The Company shall not be liable to any Participant for any tax, interest, or
penalties the Participant might owe as a result of the grant, holding, vesting,
exercise, or payment of any Award under the Plan.

ARTICLE XVII
LIMITS OF LIABILITY; INDEMNIFICATION

     17.1. Limits of Liability.

  (a)      Any liability of the Company or a Subsidiary or Affiliate to any
Participant with respect to any Award shall be based solely upon contractual
obligations created by the Plan and the Award Agreement.     (b)      None of
the Company, any Subsidiary, any Affiliate, any member of the Board or the
Committee or any other person participating in any determination of any question
under the Plan, or in the interpretation, administration or application of the
Plan, shall have any liability, in the absence of bad faith, to any party for
any action taken or not taken in connection with the Plan, except as may
expressly be provided by statute.     (c)      Each member of the Committee,
while serving as such, shall be considered to be acting in his or her capacity
as a director of the Company. Members of the Board of Directors and members of
the Committee acting under the Plan shall be fully protected in relying in good
faith upon the advice of counsel and shall incur no liability except for gross
negligence or willful misconduct in the performance of their duties.     (d)   
  The Company shall not be liable to a Participant or any other person as to:
(i) the non-issuance of Shares as to which the Company has been unable to obtain
from any regulatory body having relevant jurisdiction the authority deemed by
the Committee or the Company’s counsel to be necessary to the lawful issuance
and sale of any Shares hereunder, and (ii) any tax consequence expected, but not
realized, by any Participant or other person due to the receipt, exercise or
settlement of any Option or other Award.  

     17.2. Indemnification. Subject to the requirements of Marshall Islands law,
each individual who is or shall have been a member of the Committee or of the
Board, or an officer of the Company to whom authority was delegated in
accordance with Article III, shall be indemnified and held harmless by the
Company against and from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan and against and from any and all amounts paid by
him or her in settlement thereof, with the Company’s approval, or paid by him or
her in satisfaction of any judgment in any such action, suit, or proceeding
against him or her, provided he or she shall give the Company an opportunity, at
its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf, unless such loss, cost,
liability, or expense is a result of the individual’s own willful misconduct or
except as provided by statute. The foregoing right of indemnification shall not
be exclusive of any other rights of indemnification to which such individual may
be entitled under the Company’s Certificate of Incorporation or By-Laws, as a
matter of law, or otherwise, or any power that the Company may have to indemnify
or hold harmless such individual.

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ARTICLE XVIII
SUCCESSORS

     18.1. General. All obligations of the Company under the Plan with respect
to Awards granted hereunder shall be binding on any successor to the Company,
whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all of
the business and/or assets of the Company.

ARTICLE XIX
MISCELLANEOUS

     19.1. Drafting Context. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural. The words
“Article,” “Section,” and “paragraph” herein shall refer to provisions of the
Plan, unless expressly indicated otherwise. The words “include,” “includes,” and
“including” herein shall be deemed to be followed by “without limitation”
whether or not they are in fact followed by such words or words of similar
import, unless the context otherwise requires.

     19.2. Forfeiture Events.

(a)       Notwithstanding any provision of the Plan to the contrary, the
Committee shall have the authority to determine (and may so provide in any
Agreement) that a Participant’s (including his or her estate’s, beneficiary’s or
transferee’s) rights (including the right to exercise any Option or SAR),
payments and benefits with respect to any Award shall be subject to reduction,
cancellation, forfeiture or recoupment in the event of the Participant’s
Termination for Cause or due to voluntary resignation; serious misconduct;
violation of the Company’s or a Subsidiary’s or Affiliate’s policies; breach of
fiduciary duty; unauthorized disclosure of any trade secret or confidential
information of the Company or a Subsidiary or Affiliate; breach of applicable
noncompetition, nonsolicitation, confidentiality or other restrictive covenants;
or other conduct or activity that is in competition with the business of the
Company or any Subsidiary or Affiliate, or otherwise detrimental to the
business, reputation or interests of the Company and/or any Subsidiary or
Affiliate; or upon the occurrence of certain events specified in the applicable
Award Agreement (in any such case, whether or not the Participant is then an
Employee, Non-Employee Director or Consultant). The determination of whether a
Participant’s conduct, activities or circumstances are described in the
immediately preceding sentence shall be made by the Committee in its good faith
discretion, and pending any such determination, the Committee shall have the
authority to suspend the exercise, payment, delivery or settlement of all or any
portion of such Participant’s outstanding Awards pending an investigation of the
matter.     (b)       If the Company is required to prepare an accounting
restatement due to the material noncompliance of the Company, as a result of
misconduct, with any financial reporting requirement under the securities laws,
if the Participant knowingly or grossly negligently engaged in the misconduct,
or knowingly or grossly negligently failed to prevent the misconduct, or if the
Participant is one of the individuals subject to automatic forfeiture under
Section 304 of the Sarbanes-Oxley Act of 2002, the Participant shall reimburse
the Company the amount of any payment in settlement of an Award earned or
accrued during the twelve- (12-) month period following the first public
issuance or filing with the SEC (whichever just occurred) of the financial
document embodying such financial reporting requirement.

     19.3. Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.

     19.4. Transfer, Leave of Absence. For purposes of the Plan, a transfer of
an Employee from the Company to an Affiliate or Subsidiary (or, for purposes of
any ISO granted under the Plan, only a Subsidiary), or vice versa, or from one
Affiliate or

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Subsidiary to another (or in the case of an ISO, only from one Subsidiary to
another), and a leave of absence, duly authorized in writing by the Company or a
Subsidiary or Affiliate, shall not be deemed a Termination of the Employee for
purposes of the Plan or with respect to any Award (in the case of ISOs, to the
extent permitted by the Code). The Committee shall have the discretion to
determine the effects upon any Award, upon an individual’s status as an
Employee, Non-Employee Director or Consultant for purposes of the Plan
(including whether a Participant shall be deemed to have experienced a
Termination or other change in status) and upon the exercisability, vesting,
termination or expiration of any Award in the case of: (a) any Participant who
is employed by an entity that ceases to be an Affiliate or Subsidiary (whether
due to a spin-off or otherwise), (b) any transfer of a Participant between
locations of employment with the Company, an Affiliate, and/or Subsidiary or
between the Company, an Affiliate or Subsidiary or between Affiliates or
Subsidiaries, (c) any leave of absence of a Participant, (d) any change in a
Participant’s status from an Employee to a Consultant or a Non-Employee
Director, or vice versa; and (e) upon approval by the Committee, any Employee
who experiences a Termination but becomes employed by a partnership, joint
venture, corporation or other entity not meeting the requirements of an
Affiliate or Subsidiary, subject, in each case, to the requirements of Code
Section 422 applicable to any ISOs and Code Section 409A applicable to any
Options and SARs.

     19.5. Exercise and Payment of Awards. An Award shall be deemed exercised or
claimed when the Secretary of the Company or any other Company official or other
person designated by the Committee for such purpose receives appropriate written
notice from a Participant, in form acceptable to the Committee, together with
payment of the applicable Option Price, Grant Price or other purchase price, if
any, and compliance with Article XVI, in accordance with the Plan and such
Participant’s Award Agreement.

     19.6. Deferrals. To the extent provided in the Award Agreement, the
Committee may permit or require a Participant to defer such Participant’s
receipt of the payment of cash or the delivery of Shares that would otherwise be
due to such Participant by virtue of the lapse or waiver of the Period of
Restriction or other restrictions with respect to Restricted Stock or the
payment or satisfaction of Restricted Stock Units, Performance Units,
Performance Shares, Cash-Based Awards or Other Stock-Based Awards. If any such
deferral election is required or permitted, (a) such deferral shall represent an
unfunded and unsecured obligation of the Company and shall not confer the rights
of a shareholder unless and until Shares are issued thereunder; (b) the number
of Shares subject to such deferral shall, until settlement thereof, be subject
to adjustment pursuant to Section 4.2; and (c) the Committee shall establish
rules and procedures for such deferrals and payment or settlement thereof, which
may be in cash, Shares or any combination thereof, and such deferrals may be
governed by the terms and conditions of any deferred compensation plan of the
Company or Affiliate specified by the Committee for such purpose.
Notwithstanding any provisions of the Plan to the contrary, in no event shall
any deferral under this Section 19.6 be permitted if the Committee determines
that such deferral would result in the imposition of additional tax under Code
Section 409A of the Code.

     19.7. Loans. The Company may, in the discretion of the Committee, extend
one or more loans to Participants in connection with the exercise or receipt of
an Award granted to any such Participant; provided, however, that the Company
shall not extend loans to any Participant if prohibited by law or the rules of
any stock exchange or quotation system on which the Company’s securities are
listed. The terms and conditions of any such loan shall be established by the
Committee.

     19.8. No Effect on Other Plans. Neither the adoption of the Plan nor
anything contained herein shall affect any other compensation or incentive plans
or arrangements of the Company or any Subsidiary or Affiliate, or prevent or
limit the right of the Company or any Subsidiary or Affiliate to establish any
other forms of incentives or compensation for their directors, officers,
eligible employees or consultants or grant or assume options or other rights
otherwise than under the Plan.

     19.9. Section 16 of Exchange Act. Unless otherwise stated in the Award
Agreement, notwithstanding any other provision of the Plan, any Award granted to
an Insider shall be subject to any additional limitations set forth in any
applicable exemptive rule under Section 16 of the Exchange Act (including Rule
16b-3) that are requirements for the application of such exemptive rule, and the
Plan and the Award Agreement shall be deemed amended to the extent necessary to
conform to such limitations.

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     19.10. Requirements of Law; Limitations on Awards.

(a)       The granting of Awards and the issuance of Shares under the Plan shall
be subject to all applicable laws, rules, and regulations, and to such approvals
by any governmental agencies or national securities exchanges as may be
required.     (b)       If at any time the Committee shall determine, in its
discretion, that the listing, registration and/or qualification of Shares upon
any securities exchange or under any state, Federal or non-United States law, or
the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the sale or purchase of
Shares hereunder, the Company shall have no obligation to allow the grant,
exercise or payment of any Award, or to issue or deliver evidence of title for
Shares issued under the Plan, in whole or in part, unless and until such
listing, registration, qualification, consent and/or approval shall have been
effected or obtained, or otherwise provided for, free of any conditions not
acceptable to the Committee.     (c)        If at any time counsel to the
Company shall be of the opinion that any sale or delivery of Shares pursuant to
an Award is or may be in the circumstances unlawful or result in the imposition
of excise taxes on the Company or any Subsidiary or Affiliate under the
statutes, rules or regulations of any applicable jurisdiction, the Company shall
have no obligation to make such sale or delivery, or to make any application or
to effect or to maintain any qualification or registration under the Securities
Act, or otherwise with respect to Shares or Awards and the right to exercise or
payment of any Option or Award shall be suspended until, in the opinion of such
counsel, such sale or delivery shall be lawful or will not result in the
imposition of excise taxes on the Company or any Subsidiary or Affiliate.    
(d)       Upon termination of any period of suspension under this Section 19.10,
any Award affected by such suspension which shall not then have expired or
terminated shall be reinstated as to all Shares available before such suspension
and as to the Shares which would otherwise have become available during the
period of such suspension, but no suspension shall extend the term of any Award.
    (e)       The Committee may require each person receiving Shares in
connection with any Award under the Plan to represent and agree with the Company
in writing that such person is acquiring such Shares for investment without a
view to the distribution thereof, and/or provide such other representations and
agreements as the Committee may prescribe. The Committee, in its absolute
discretion, may impose such restrictions on the ownership and transferability of
the Shares purchasable or otherwise receivable by any person under any Award as
it deems appropriate. Any such restrictions shall be set forth in the applicable
Award Agreement, and the certificates evidencing such shares may include any
legend that the Committee deems appropriate to reflect any such restrictions.  
  (f)       An Award and any Shares received upon the exercise or payment of an
Award shall be subject to such other transfer and/or ownership restrictions
and/or legending requirements as the Committee may establish in its discretion
and may be referred to on the certificates evidencing such Shares, including
restrictions under applicable Federal securities laws, under the requirements of
any stock exchange or market upon which such Shares are then listed and/or
traded, and under any blue sky or state securities laws applicable to such
Shares.

     19.11. Participants Deemed to Accept Plan. By accepting any benefit under
the Plan, each Participant and each person claiming under or through any such
Participant shall be conclusively deemed to have indicated their acceptance and
ratification of, and consent to, all of the terms and conditions of the Plan and
any action taken under the Plan by the Board, the Committee or the Company, in
any case in accordance with the terms and conditions of the Plan.

     19.12. Governing Law. Except as to matters concerning the issuance of
Shares or other matters of corporate governance, which shall be determined, and
related Plan and Award provisions shall be construed, under the laws of the
Marshall Islands, the Plan and each Award Agreement shall be governed by the
laws of the State of New York, excluding any conflicts or choice of law rule or
principle that might otherwise refer construction or interpretation of the Plan
to the substantive law of another

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jurisdiction. Unless otherwise provided in the Award Agreement, Participants are
deemed to submit to the exclusive jurisdiction and venue of the federal or state
courts of the State of New York, to resolve any and all issues that may arise
out of or relate to the Plan or any related Award Agreement.

     19.13. Plan Unfunded. The Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets to assure the issuance of Shares or the payment of cash
upon exercise or payment of any Award. Proceeds from the sale of Shares pursuant
to Options or other Awards granted under the Plan shall constitute general funds
of the Company.

     19.14. Administration Costs. The Company shall bear all costs and expenses
incurred in administering the Plan, including expenses of issuing Shares
pursuant to any Options or other Awards granted hereunder.

     19.15. Uncertificated Shares. To the extent that the Plan provides for
issuance of certificates to reflect the transfer of Shares, the transfer of such
Shares may nevertheless be effected on a noncertificated basis, to the extent
not prohibited by applicable law or the rules of any stock exchange.

     19.16. No Fractional Shares. An Option or other Award shall not be
exercisable with respect to a fractional Share or the lesser of fifty (50)
shares or the full number of Shares then subject to the Option or other Award.
No fractional Shares shall be issued upon the exercise or payment of an Option
or other Award.

     19.17. Deferred Compensation. If any Award would be considered deferred
compensation as defined under Code Section 409A and would fail to meet the
requirements of Code Section 409A, then such Award shall be null and void;
provided, however, that the Committee may permit deferrals of compensation
pursuant to the terms of a Participant’s Award Agreement, a separate plan, or a
subplan which (in each case) meets the requirements of Code Section 409A.
Additionally, to the extent any Award is subject to Code Section 409A,
notwithstanding any provision herein to the contrary, the Plan does not permit
the acceleration of the time or schedule of any distribution related to such
Award, except as permitted by Code Section 409A.

     19.18. Participants Based Outside of the United States. Notwithstanding any
provision of the Plan to the contrary, in order to comply with the laws or
practices of countries other than the United States in which the Company, any
Affiliate, and/or any Subsidiary operates or has Employees, Non-Employee
Directors or Consultants, the Committee, in its sole discretion, shall have the
power and authority to:

  (a)      Determine which Affiliates and Subsidiaries shall be covered by the
Plan;     (b)      Determine which Employees, Non-Employee Directors and/or
Consultants outside the United States are eligible to participate in the Plan;  
  (c)      Grant Awards (including substitutes for Awards), and modify the terms
and conditions of any Awards, on such terms and conditions as the Committee
determines necessary or appropriate to permit participation in the Plan by
individuals otherwise eligible to so participate who are non-United States
nationals or employed outside the United States, or otherwise to comply with
applicable non-United States laws or conform to applicable requirements or
practices of jurisdictions outside the United States;     (d)      Establish
subplans and adopt or modify exercise procedures and other terms and procedures,
to the extent such actions may be necessary or advisable. Any subplans and
modifications to Plan terms and procedures established under this Section 19.18
by the Committee shall be attached to the Plan as appendices; and     (e)     
Take any action, before or after an Award is made, that the Committee, in its
discretion, deems advisable to obtain approval or comply with any necessary
local government regulatory exemptions or approvals.  

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     Notwithstanding the above, the Committee may not take any actions
hereunder, and no Awards shall be granted, that would violate any applicable
law.

* * *

 

 

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