Kansas City Southern

2008 Stock Option and
Performance Award Plan

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Table of Contents

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KANSAS CITY SOUTHERN

2008 STOCK OPTION AND PERFORMANCE AWARD PLAN

Article 1.

Effective Date, Objectives and Duration

1.1 Effective Date of the Plan. Kansas City Southern, a Delaware corporation
(the “Company”), hereby establishes the Kansas City Southern 2008 Stock Option
and Performance Award Plan (the “Plan”) as set forth herein effective
October 14, 2008 (“Effective Date”), subject to approval by the Company’s
stockholders.

1.2 Objectives of the Plan. The Plan is intended (a) to allow selected employees
and officers of and consultants to the Company and its Affiliates to acquire or
increase equity ownership in the Company, thereby strengthening their commitment
to the success of the Company and stimulating their efforts on behalf of the
Company, and to assist the Company and its Affiliates in attracting new
employees, officers and consultants and retaining existing employees, officers
and consultants, (b) to optimize the profitability and growth of the Company and
its Affiliates through incentives which are consistent with the Company’s goals,
(c) to provide employees, officers and consultants with an incentive for
excellence in individual performance, (d) to promote teamwork among employees,
officers, consultants and non-employee directors, and (e) to attract and retain
highly qualified persons to serve as non-employee directors and to promote
ownership by such non-employee directors of a greater proprietary interest in
the Company, thereby aligning such non-employee directors’ interests more
closely with the interests of the Company’s stockholders.

1.3 Duration of the Plan. The Plan shall commence on the Effective Date and
shall remain in effect, subject to the right of the Board or the Committee to
amend or terminate the Plan at any time pursuant to Article 16 hereof, until the
earlier of October 14, 2018, or the date all Shares subject to the Plan shall
have been purchased or acquired and the restrictions on all Restricted Shares
granted under the Plan shall have lapsed, according to the Plan’s provisions.
The termination of the Plan shall not adversely affect any Awards outstanding on
the date of termination.

Article 2.

Definitions

Whenever used in the Plan, the following terms shall have the meanings set forth
below:

2.1 “Affiliate” means any Person that directly or indirectly, through one or
more intermediaries, controls, or is controlled by or is under common control
with the Company, and, for all purposes other than for purposes of grants of
Incentive Stock Options under Section 6.4, a United States or foreign
corporation or partnership or other similar entity with respect to which the
Company owns, directly or indirectly, 50% (or such lesser percentage as the
Committee may specify, which percentage may be changed from time to time and may
be different for different entities) or more of the voting power of such entity.

2.2 “Award” means Options (including non-qualified options and Incentive Stock
Options), Restricted Shares, Restricted Share Units, Bonus Shares, Stock
Appreciation Rights, Limited Stock Appreciation Rights, Performance Units (which
may be paid in cash or Shares), Performance Shares, Deferred Stock, Dividend
Equivalents, or Other Stock-Based Awards granted under the Plan.

2.3 “Award Agreement” means the written agreement (which may be in paper or
electronic form as determined by the Committee) by which an Award shall be
evidenced.

                  2.4   “Board” means the Board of Directors of the Company.    
 
 
    2.5     “Cause”(i)   means unless otherwise defined in an Award Agreement,
 
             

(i) before the occurrence of a Change of Control, any one or more of the
following, as determined by the Committee:

(A) a Grantee’s commission of a crime which, in the judgment of the Committee,
resulted or is likely to result in damage or injury, financial or otherwise, to
the Company or an Affiliate;

(B) the material violation by the Grantee of written policies of the Company or
an Affiliate;

(C) the habitual neglect or failure by the Grantee in the performance of his or
her duties to the Company or an Affiliate (but only if such neglect or failure
is not remedied within a reasonable remedial period after Grantee’s receipt of
written notice from the Company which describes such neglect or failure in
reasonable detail and specifies the remedial period); or

(D) action or inaction by the Grantee in connection with his or her duties to
the Company or an Affiliate resulting, in the judgment of the Committee, in
material injury to the Company or an Affiliate; and

(ii) from and after the occurrence of a Change of Control, the occurrence of any
one or more of the following, as determined in the good faith and reasonable
judgment of the Committee:

(A) Grantee’s conviction for committing an act of fraud, embezzlement, theft, or
any other act constituting a felony involving moral turpitude or causing
material damage or injury, financial or otherwise, to the Company;

(B) a demonstrably willful and deliberate act or failure to act which is
committed in bad faith, without reasonable belief that such action or inaction
is in the best interests of the Company, which causes material damage or injury,
financial or otherwise, to the Company (but only if such act or inaction is not
remedied within 15 business days of Grantee’s receipt of written notice from the
Company which describes the act or inaction in reasonable detail); or

(C) the consistent gross neglect of duties or consistent wanton negligence by
the Grantee in the performance of the Grantee’s duties (but only if such neglect
or negligence is not remedied within a reasonable remedial period after
Grantee’s receipt of written notice from the Company which describes such
neglect or negligence in reasonable detail and specifies the remedial period).

2.6 “Change of Control”, unless otherwise defined in the Award Agreement, shall
be deemed to have occurred if

(i) a majority of the members of the Board is replaced during any twelve
(12) month period with directors whose appointment or election was not endorsed
by a majority of the members of the Board in office immediately prior to the
date of such appointment or election; or

(ii) any “person” (meaning for purposes of this Section 2.6 person as such term
is used in Sections 13(d) and 14(d) of the Exchange Act to the extent consistent
with and not in violation of Code Section 409A) or “group” (meaning for purposes
of this Section 2.6 group as such term is used in Section 13(d)(3) or 14(d)(2)
of the 1934 Act to the extent consistent with and not in violation of Code
Section 409A) has acquired during a twelve (12) month period ending on the date
of the most recent acquisition by such person or group, ownership of stock of
the Company possessing 30% or more of the total voting power of the outstanding
stock of the Company; or

(iii) any person or group has acquired ownership of stock of the Company that
constitutes more than 50% of the total fair market value or total voting power
of the outstanding stock of the Company; or

(iv) any person or group has acquired during a twelve (12) month period ending
on the date of the most recent acquisition by such person or group, assets of
the Company that have a total gross fair market value of more than 40% of the
total gross fair market value of all of the assets of the Company immediately
before such acquisition.

2.7 “Code” means the Internal Revenue Code of 1986 (and any successor Internal
Revenue Code), as amended from time to time. References to a particular section
of the Code include references to regulations and rulings thereunder and to
successor provisions.

2.8 “Code Section 409A Rules and Policies” means rules, regulations, policies
and procedures established by the Committee from time to time as authorized in
Section 3.2(xi).

2.9 “Committee” has the meaning set forth in Section 3.1(i).

2.10 “Common Stock” means the common stock, $0.01 par value per share, of the
Company.

2.11 “Company” has the meaning set forth in Section 1.1.

2.12 “Covered Employee” means a Grantee who, as of the last day of the fiscal
year in which the value of an Award is deductible by the Company for federal
income tax purposes subject to applicable limitations under Code Section 162(m),
is one of the group of “covered employees,” within the meaning of Code
Section 162(m), with respect to the Company.

2.13 “Deferred Stock” means a right granted under Section 11.1 to receive Shares
at the end of a specified deferral period.

2.14 “Disability” means, unless otherwise defined in an Award Agreement, the
inability to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months.

2.15 “Dividend Equivalent” means a right to receive payments equal to dividends
or property, if and when paid or distributed, on Shares.

2.16 “Eligible Person” means any employee (including any officer) or
non-employee director of, or non-employee consultant to, the Company or any
Affiliate, or potential employee (including a potential officer) or non-employee
director of, or non-employee consultant to, the Company or an Affiliate. Solely
for purposes of Section 5.5(ii), the term Eligible Employee includes any current
or former employee or non-employee director of, or consultant to, an Acquired
Entity (as defined in Section 5.5(ii)) who holds Acquired Entity Awards (as
defined in Section 5.5(ii)) immediately prior to the Acquisition Date (as
defined in Section 5.5(ii)).

2.17 “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time. References to a particular section of the Exchange Act include
references to successor provisions.

2.18 “Fair Market Value” means (a) with respect to any property other than
Shares, the fair market value of such property determined by such methods or
procedures as shall be established from time to time by the Committee, and
(b) with respect to Shares, unless otherwise determined by the Committee as of
any date, (i) if the Shares are listed for trading on the New York Stock
Exchange, the closing sale price of the Shares on such date, as reported on the
New York Stock Exchange Composite Tape or such other source as the Committee
deems reliable, or if no such reported sale of the Shares shall have occurred on
such date, on the last day prior to such date on which there was such a reported
sale; (ii) if the Shares are not so listed, but is listed on another national
securities exchange, the closing sale price of the Shares on such date as
reported on such exchange, or if no such reported sale of the Shares shall have
occurred on such date, on the last day prior to such date on which there was
such a reported sale; (iii) if the Shares are not listed for trading on a
national securities exchange but nevertheless are publicly traded and reported
(through the OTC Bulletin Board or otherwise), the closing sale price of the
Shares on such date, or if no such reported sale of the Shares shall have
occurred on such date, on the last day prior to such date on which there was
such a reported sale; or (iv) if the Shares are not publicly traded and
reported, the fair market value as established in good faith by the Committee.

2.19 “Grant Date”(i) means the date on which an Award is granted or such later
date as specified in advance by the Committee.

2.20 “Grantee” means a person who has been granted an Award.

2.21 “Incentive Stock Option” means an Option that is intended to meet the
requirements of Section 422 of the Code.

2.22 “including” or “includes” means “including, without limitation,” or
“includes, without limitation,” respectively.

2.23 “Limited Stock Appreciation Right” has the meaning set forth in
Section 7.1.

2.24 “Minimum Consideration” means $.01 per Share or such other amount that is
from time to time considered to be capital for purposes of Section 154 of the
Delaware General Corporation Law.

2.25 “Other Stock-Based Award” means a right, granted under Article 13 hereof,
that relates to or is valued by reference to Shares or other Awards relating to
Shares.

2.26 “Option” means an option granted under Article 6 of the Plan.

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

2.28 “Option Term” means the period beginning on the Grant Date of an Option and
ending on the date such Option expires, terminates or is cancelled.

2.29 “Performance-Based Exception” means the performance-based exception from
the tax deductibility limitations of Code Section 162(m) contained in Code
Section 162(m)(4)(C) (including the special provisions for options thereunder).

2.30 “Performance Measures” has the meaning set forth in Section 4.4.

2.31 “Performance Period” means the time period during which performance goals
must be met.

2.32 “Performance Share” and “Performance Unit” have the respective meanings set
forth in Article 9.

2.33 “Period of Restriction” means the period during which, if conditions
specified in the Award Agreement are not satisfied, Restricted Shares are
subject to forfeiture, or the transfer of Restricted Shares is limited, or both.

2.34 “Person” means any individual, sole proprietorship, partnership, joint
venture, limited liability company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, entity or
government instrumentality, division, agency, body or department.

2.35 “Restricted Shares” means Shares that are both subject to forfeiture and
are nontransferable if the Grantee does not satisfy the conditions specified in
the Award Agreement applicable to such Shares.

2.36 “Restricted Share Units” means rights to receive Shares which rights are
forfeitable if the Grantee does not satisfy the conditions specified in the
Award Agreement.

2.37 “Retirement” means for any Grantee who is an employee, except as otherwise
specified in the Award Agreement or as specified by the Committee in rules,
regulations or policies, with respect to Restricted Shares, Termination of
Affiliation by the Grantee on or after the last business day of the month in
which the Grantee has both attained age fifty-five (55) and completed at least
ten (10) years of service with the Company or an Affiliate, and with respect to
all other Awards, Termination of Affiliation by the Grantee on or after having
both attained age fifty-five (55) and completed at least ten (10) years of
service with the Company or an Affiliate.

2.38 “Rule 16b-3” means Rule 16b-3 promulgated by the SEC under the Exchange
Act, as amended from time to time, together with any successor rule, as in
effect from time to time.

2.39 “SEC” means the United States Securities and Exchange Commission, or any
successor thereto.

2.40 “Section 16 Non-Employee Director” means a member of the Board who
satisfies the requirements to qualify as a “non-employee director” under
Rule 16b-3.

2.41 “Section 16 Person” means a person who is subject to potential liability
under Section 16(b) of the Exchange Act with respect to transactions involving
equity securities of the Company.

2.42 “Share” means a share of Common Stock, and such other securities of the
Company as may be substituted or resubstituted for Shares pursuant to
Section 4.2 hereof.

2.43 “Stock Appreciation Right” or “SAR” means a right granted to an Eligible
Person pursuant to Article 7 to receive, upon exercise by the Grantee, an amount
equal to the number of Shares with respect to which the SAR is granted
multiplied by the excess of (i) the Fair Market Value of one Share on the date
of exercise or, if the Committee shall so determine in the case of any such
right other than one related to any Incentive Stock Option, at any time during a
specified period before the date of exercise provided the Fair Market Value of
one Share on such date is less than the Fair Market Value of one Share on the
date of exercise, over (ii) the grant price of the right as specified in the
Award Agreement.

2.44 “Surviving Company” means the Company or the surviving corporation in any
merger or consolidation, including the Company if the Company is the surviving
corporation, or the direct or indirect parent company of the Company or such
surviving corporation following a Change of Control.

2.45 “Termination of Affiliation” occurs, except where otherwise provided in the
Award Agreement, on the first day on which an individual is for any reason no
longer providing services to the Company or an Affiliate in the capacity of an
employee, officer, consultant or non-employee director or with respect to an
individual who is an employee, officer or non-employee director of or a
consultant to an Affiliate, the first day on which such entity ceases to be an
Affiliate of the Company. A Termination of Affiliation will occur on account of,
or by reason of, a Change of Control if within two (2) years (or such other
period specified in the Award Agreement) following the Change of Control the
Grantee is involuntarily terminated by the Company or an Affiliate (other than
for Cause) or voluntarily terminates employment for good reason as set forth in
the Award Agreement. Where specified in the Award Agreement or in the Code
Section 409A Rules and Policies, a Termination of Affiliation is a separation
from service within the meaning of Code Section 409A.

2.46 “Vesting Date” means a date specified in the Award Agreement on which the
Award will become nonforfeitable subject to any conditions specified therein.

Article 3.

Administration

3.1 Committee.

(i) Subject to Section 3.2, the Plan shall be administered by a committee
(“Committee”), the members of which shall be appointed by the Board from time to
time and may be removed by the Board from time to time; provided that for
purposes of Awards to non-employee directors, “Committee” shall mean the full
Board. The Committee shall consist of two or more directors of the Company, all
of whom qualify as “outside directors” within the meaning of Code Section 162(m)
and Section 16 Non-Employee Directors and all of whom qualify as independent
under the New York Stock Exchange listing standards and under the listing
standards of any other exchange on which the Company’s securities are listed as
in effect at any applicable time. The number of members of the Committee shall
from time to time be increased or decreased, and shall be subject to such
conditions, in each case if and to the extent the Board deems it appropriate,
including to permit transactions in Shares pursuant to the Plan to satisfy such
conditions of Rule 16b-3 and the Performance-Based Exception as then in effect.

(ii) The Committee may delegate to the Chief Executive Officer of the Company or
to another committee of the Company any or all of the authority of the Committee
with respect to Awards to Grantees, other than Grantees who are non-employee
directors, executive officers, or are (or are expected to be) Covered Employees
and/or are Section 16 Persons at the time any such delegated authority is
exercised, to the extent such delegation is permissible under Delaware law.

3.2 Powers of Committee. Subject to and consistent with the provisions of the
Plan, the Committee has full and final authority and sole discretion as follows:

(i) to determine when, to whom and in what types and amounts Awards should be
granted;

(ii) to grant Awards in any number, and to determine the terms and conditions
applicable to each Award (including the number of Shares or the amount of cash
or other property to which an Award will relate, any exercise price, grant price
or purchase price, any limitation or restriction, any schedule for or
performance conditions relating to the earning of the Award or the lapse of
limitations, forfeiture restrictions, restrictions on exercisability or
transferability, any performance goals including those relating to the Company
and/or an Affiliate and/or any division or department thereof and/or an
individual, and/or vesting based on the passage of time, based in each case on
such considerations as the Committee shall determine);

(iii) to determine the benefit payable under any Performance Unit, Performance
Share, Dividend Equivalent, or Other Stock-Based Award and to determine whether
any performance or vesting conditions have been satisfied;

(iv) to determine whether or not specific Awards shall be granted in connection
with other specific Awards, and if so, whether they shall be exercisable
cumulatively with, or alternatively to, such other specific Awards and all other
matters to be determined in connection with an Award;

(v) to determine the Option Term and the SAR term;

(vi) to determine the amount, if any, that a Grantee shall pay for Restricted
Shares, whether to permit or require the payment of cash dividends thereon to be
deferred and the terms related thereto, when Restricted Shares (including
Restricted Shares acquired upon the exercise of an Option) shall be forfeited,
and whether such shares shall be held in escrow;

(vii) to determine whether, to what extent and under what circumstances an Award
may be settled in, or the exercise price of an Award may be paid in, cash,
Shares, other Awards or other property, or an Award may be accelerated, vested,
canceled, forfeited or surrendered or any terms of the Award may be waived, and
to accelerate the exercisability of, and to accelerate or waive any or all of
the terms and conditions applicable to, any Award or any group of Awards for any
reason;

(viii) to determine with respect to Awards whether, to what extent and under
what circumstances cash, Shares, other Awards, other property and other amounts
payable with respect to an Award will be deferred, either at the election of the
Grantee or if and to the extent specified in the Award Agreement automatically
or at the election of the Committee (whether to limit loss of deductions
pursuant to Code Section 162(m) or otherwise);

(ix) to offer to exchange or buy out any previously granted Award for a payment
in cash, Shares or other Award;

(x) to construe and interpret the Plan and to make all determinations, including
factual determinations, necessary or advisable for the administration of the
Plan;

(xi) to make, amend, suspend, waive and rescind rules, regulations, policies and
procedures relating to the Plan, including rules relating to electronic Award
Agreements, rules with respect to the exercisability and nonforfeitability of
Awards upon the Termination of Affiliation of a Grantee, and rules (including
special definitions where applicable) established for the compliance of the
Plan, Awards and Award Agreements with Code Section 409A;

(xii) to appoint such agents as the Committee may deem necessary or advisable to
administer the Plan;

(xiii) to determine the terms and conditions of all Award Agreements (which need
not be identical) and, with the consent of the Grantee, to amend any such Award
Agreement at any time, among other things, to change the Option Price or grant
price for an SAR or to permit transfers of such Awards to the extent permitted
by the Plan; provided that the consent of the Grantee shall not be required for
any amendment (i) which does not adversely affect the rights of the Grantee, or
(ii) which is necessary or advisable (as determined by the Committee) to carry
out the purpose of the Award as a result of any new applicable law or change in
an existing applicable law, or (iii) to the extent the Plan or Award Agreement
specifically permits amendment without consent;

(xiv) to cancel, with the consent of the Grantee, outstanding Awards and to
grant new Awards in substitution therefor;

(xv) to impose such additional terms and conditions upon the grant, exercise or
retention of Awards as the Committee may, before or concurrently with the grant
thereof, deem appropriate, including limiting the percentage of Awards which may
from time to time be exercised by a Grantee;

(xvi) to make such adjustments or modifications to Awards to Grantees working
outside the United States as are advisable to fulfill the purposes of the Plan
or to comply with applicable local law and to establish sub-plans for Eligible
Persons outside the United States with such provisions as are consistent with
the Plan as may be suitable in other jurisdictions;

(xvii) to make adjustments in the terms and conditions of, and the criteria in,
Awards in recognition of unusual or nonrecurring events (including events
described in Section 4.2) affecting the Company or an Affiliate or the financial
statements of the Company or an Affiliate, or in response to changes in
applicable laws, regulations or accounting principles; provided, however, that
in no event shall such adjustment increase the value of an Award for a person
expected to be a Covered Employee for whom the Committee desires to have the
Performance-Based Exception apply;

(xviii) to correct any defect or supply any omission or reconcile any
inconsistency, and to construe and interpret the Plan, the rules and
regulations, and Award Agreement or any other instrument entered into or
relating to an Award under the Plan; and

(xix) to take any other action with respect to any matters relating to the Plan
for which it is responsible and to make all other decisions and determinations
as may be required under the terms of the Plan or as the Committee may deem
necessary or advisable for the administration of the Plan.

Notwithstanding the authority of the Committee set forth in Sections 3.2(i)
through 3.2(xix), inclusive, and notwithstanding any other discretionary power
granted to the Committee under the Plan, except in connection with a corporate
transaction involving the Company (including, without limitation, any stock
dividend, stock split, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination, or
exchange of shares), the terms of outstanding Awards may not be amended to
reduce the exercise price of outstanding Options or SARs or cancel outstanding
Options or SARs in exchange for cash, other Awards or Options or SARs with an
exercise price that is less than the exercise price of the original Options or
SARs without the prior approval of the Company’s stockholders.

All determinations on all matters relating to the Plan or any Award Agreement
may be made in the sole and absolute discretion of the Committee. If not
specified in the Plan, the time at which the Committee must or may make any
determination shall be determined by the Committee, and any such determination
may thereafter be modified by the Committee. Any action of the Committee with
respect to the Plan or any Award Agreement shall be final, conclusive and
binding on all persons, including the Company, its Affiliates, any Grantee, any
person claiming any rights under the Plan from or through any Grantee, and
stockholders, except to the extent the Committee subsequently modifies its prior
action or takes further action that is inconsistent with its prior action. The
express grant of any specific power to the Committee, and the taking of any
action by the Committee, shall not be construed as limiting any power or
authority of the Committee. The Committee may delegate to officers or managers
of the Company or any Affiliate the authority, subject to such terms as the
Committee shall determine, to perform specified functions under the Plan
(subject to Sections 4.3 and 5.6(iii)). No member of the Committee shall be
liable for any action or determination made with respect to the Plan or any
Award.

Article 4.

Shares Subject to the Plan, Maximum Awards, and 162(m) Compliance

4.1 Number of Shares Available for Grants. Subject to adjustment as provided in
Section 4.2, the number of Shares hereby reserved for issuance under the Plan
shall be 2,300,000; and the number of Shares for which Awards may be granted to
any Grantee on any Grant Date, when aggregated with the number of Shares for
which Awards have previously been granted to such Grantee in the same calendar
year, shall not exceed 2,000,000 Shares. Shares issued pursuant to Awards made
pursuant to Section 5.5(ii) will not be charged against the Shares authorized
for issuance under the Plan.

Only Shares actually issued shall be charged against the Shares authorized for
issuance under the Plan. If any Shares subject to an Award granted hereunder are
forfeited or such Award otherwise terminates without the delivery of such
Shares, the Shares subject to such Award, to the extent of any such forfeiture
or termination, shall again be available for grant under the Plan.

The Committee shall from time to time determine the appropriate methodology for
calculating the number of Shares to which an Award relates pursuant to the Plan.
Shares delivered pursuant to the Plan may be, in whole or in part, authorized
and unissued Shares, or treasury Shares, including Shares repurchased by the
Company for purposes of the Plan.

4.2 Adjustments in Authorized Shares and Awards; Liquidation, Dissolution or
Change of Control.

(i) Adjustment in Authorized Shares and Awards. In the event that the Committee
determines that any extraordinary dividend or other distribution (whether in the
form of cash, Shares, or other property), recapitalization, forward or reverse
stock split, subdivision, consolidation or reduction of capital, reorganization,
merger, consolidation, scheme of arrangement, split-up, spin-off or combination
involving the Company or repurchase or exchange of Shares or other securities of
the Company or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares such
that any adjustment is determined by the Committee to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan, then the Committee shall, in such manner as
it may deem equitable, and in a manner consistent with and not in violation of
Code Section 409A, adjust any or all of (a) the number and type of Shares (or
other securities or property) with respect to which Awards may be granted,
(b) the number and type of Shares (or other securities or property) subject to
outstanding Awards, (c) the grant or exercise price with respect to any Award
or, if deemed appropriate, make provision for a cash payment to the holder of an
outstanding Award, (d) the number and kind of Shares of outstanding Restricted
Shares or relating to any other outstanding Award in connection with which
Shares are subject, and (e) the number of Shares with respect to which Awards
may be granted to a Grantee, as set forth in Section 4.3; provided, in each
case, that with respect to Stock Options and SARs, no such adjustment shall be
authorized to the extent that such adjustment would cause the Option or SAR
(determined as if such Option or SAR was an Incentive Stock Option) to violate
Section 424(a) of the Code; and provided further that the number of Shares
subject to any Award denominated in Shares shall always be a whole number.

(ii) Liquidation, Dissolution or Change of Control. Notwithstanding any
provisions hereunder to the contrary, in the case of any liquidation,
dissolution or Change of Control of the Company, the Committee, in its sole
discretion, and in a manner consistent with and not in violation of Code
Section 409A, may (i) cancel any or all outstanding Awards of Options, SARs,
Performance Shares, Performance Units and Restricted Share Units, in exchange
for a payment (in cash, or in securities or other property) in the amount that
the Grantee would have received if such Performance Shares, Performance Units
and Restricted Share Units were vested and settled and if such Options and SARs
were fully vested and exercised immediately prior to the liquidation,
dissolution or Change of Control, and without payment with respect to the
cancellation of any Option or SAR if at the time of such cancellation the Option
Price with respect to such Option or the grant price with respect to such SAR
exceeds the Fair Market Value at the time of such cancellation of the Shares
subject to the Option or the SAR, (ii) accelerate the vesting of any Restricted
Shares immediately prior to the Change of Control, and (iii) accelerate the
vesting and settlement of any Deferred Stock immediately prior to such Change of
Control, reduced in each case by any applicable Federal, state and local taxes
required to be withheld by the Company. If the Committee fails to exercise the
discretion to cancel some or all outstanding Awards (or in the case of
Restricted Shares and Deferred Stock to accelerate vesting and settlement of
such Awards) in connection with a liquidation, dissolution or Change of Control
of the Company pursuant to this Section 4.2(ii), any Awards for which the
Committee fails to exercise such discretion shall remain outstanding (subject to
adjustment in accordance with Section 4.2(i)) following such liquidation,
dissolution or Change of Control of the Company.

4.3 Compliance with Section 162(m) of the Code.

(i) Section 162(m) Compliance. To the extent the Committee determines that
compliance with the Performance-Based Exception is desirable with respect to an
Award, this section 4.3(i) shall apply. Each Award that is intended to meet the
Performance-Based Exception and is granted to a person the Committee believes is
likely to be a Covered Employee at the time such Award is settled shall comply
with the requirements of the Performance-Based Exception; provided, however,
that to the extent Code Section 162(m) requires periodic stockholder approval of
performance measures, such approval shall not be required for the continuation
of the Plan or as a condition to grant any Award hereunder after such approval
is required. In addition, in the event that changes are made to Code
Section 162(m) to permit flexibility with respect to the Award or Awards
available under the Plan, the Committee may, subject to this Section 4.3, make
any adjustments to such Awards as it deems appropriate.

(ii) Annual Individual Limitations. No Grantee may be granted Awards for
Options, SARs, Restricted Shares, Restricted Share Units, or Performance Shares
(or any other Award which is determined by reference to the value of Shares or
appreciation in the value of Shares) in any calendar year with respect to more
than 2,000,000 Shares; provided, however, that these Awards are subject to
adjustment as provided in Section 4.2 and except as otherwise provided in
Section 5.5(ii). In the case of a Performance Unit Award that is
cash-denominated and for which the limitation set forth in the preceding
sentence would not operate as an effective limitation under Code Section 162(m),
no Grantee may be granted an Award in any calendar year authorizing the receipt
of an amount that exceeds $5,000,000.

4.4 Performance-Based Exception Under Section 162(m). Unless and until the
Committee proposes for stockholder vote and stockholders approve a change in the
general performance measures set forth in this Section 4.4, for Awards (other
than Options and SARs) designed to qualify for the Performance-Based Exception,
the objective Performance Measure(s) shall be chosen from among the following:

(i) Earnings (either in the aggregate or on a per-share basis);

     
(ii)
(iii)
(iv)
  Net income (before or after taxes);
Operating income;
Cash flow;

(v) Return measures (including return on assets, equity, or sales);

(vi) Earnings before or after either, or any combination of, taxes, interest or
depreciation and amortization;

(vii) Gross revenues;

(viii) Share price (including growth measures and stockholder return or
attainment by the Shares of a specified value for a specified period of time);

(ix) Reductions in expense levels in each case, where applicable, determined
either on a Company-wide basis or in respect of any one or more business units;

(x) Net economic value;

     
(xi)
(xii)
(xiii)
  Market share;
Operating profit;
Costs;

(xiv) Operating and maintenance cost management and employee productivity;

(xv) Stockholder returns (including return on assets, investments, equity, or
gross sales);

(xvi) Economic value added;

(xvii) Aggregate product unit and pricing targets;

(xviii) Strategic business criteria, consisting of one or more objectives based
on meeting specified revenue, market share, market penetration, geographic
business expansion goals, objectively identified project milestones, production
volume levels, cost targets, and goals relating to acquisitions or divestitures;

(xix) Achievement of business or operational goals such as market share and/or
business development;

     
(xx)
(xxi)
(xxii)
(xxiii)
(xxiv)
  Results of customer satisfaction surveys;
Safety record;
Network and service reliability;
Debt ratings, debt leverage and debt service; and/or
Operating ratio;

provided that applicable performance measures may be applied on a pre- or
post-tax basis; and provided further that the Committee may, on the Grant Date
of an Award intended to comply with the Performance-Based Exception, and in the
case of other grants, at any time, provide that the formula for such Award may
include or exclude items to measure specific objectives, such as losses from
discontinued operations, extraordinary gains or losses, the cumulative effect of
accounting changes, acquisitions or divestitures, foreign exchange impacts and
any unusual, nonrecurring gain or loss. For Awards intended to comply with the
Performance-Based Exception, the Committee shall set the Performance Measures
within the time period prescribed by Section 162(m) of the Code. The levels of
performance required with respect to Performance Measures may be expressed in
absolute or relative levels and may be based upon a set increase, set positive
result, maintenance of the status quo, set decrease or set negative result.
Performance Measures may differ for Awards to different Grantees. The Committee
shall specify the weighting (which may be the same or different for multiple
objectives) to be given to each performance objective for purposes of
determining the final amount payable with respect to any such Award. Any one or
more of the Performance Measures may apply to the Grantee, a department, unit,
division or function within the Company or any one or more Affiliates; and may
apply either alone or relative to the performance of other businesses or
individuals (including industry or general market indices) or relative to the
past performance of the Company or a department, unit, division or function
within the Company or any one or more Affiliates.

The Committee shall have the discretion to adjust the determinations of the
degree of attainment of the pre-established performance goals; provided,
however, that Awards which are designed to qualify for the Performance-Based
Exception may not (unless the Committee determines to amend the Award so that it
no longer qualified for the Performance-Based Exception) be adjusted upward (the
Committee shall retain the discretion to adjust such Awards downward). The
Committee may not, unless the Committee determines to amend the Award so that it
no longer qualifies for the Performance-Based Exception, delegate any
responsibility with respect to Awards intended to qualify for the
Performance-Based Exception. All determinations by the Committee as to the
achievement of the Performance Measure(s) shall be in writing prior to payment
of the Award.

In the event that applicable laws change to permit Committee discretion to alter
the governing performance measures without obtaining stockholder approval of
such changes, and still qualify for the Performance-Based Exception, the
Committee shall have sole discretion to make such changes without obtaining
stockholder approval.

Article 5.

Eligibility and General Conditions of Awards

5.1 Eligibility. The Committee may in its discretion grant Awards to any
Eligible Person, whether or not he or she has previously received an Award.

5.2 Award Agreement. To the extent not set forth in the Plan, the terms and
conditions of each Award shall be set forth in an Award Agreement.

5.3 General Terms, Termination of Affiliation and Change of Control. Except as
provided in an Award Agreement or as otherwise provided below in this
Section 5.3, all Options or SARs that have not been exercised, or any other
Awards that remain subject to a risk of forfeiture or which are not otherwise
vested, or which have outstanding Performance Periods, at the time of a
Termination of Affiliation shall be forfeited to the Company. The Committee may
impose such restrictions on any Shares acquired pursuant to the exercise or
vesting of an Award as it may deem advisable, including restrictions under
applicable federal securities laws.

(i) Options and SARs. Except as otherwise provided in an Award Agreement:

(A) If Termination of Affiliation occurs for a reason other than Retirement,
death, Disability or Cause, Options and SARs which were vested and exercisable
immediately before such Termination of Affiliation, or become exercisable upon
such Termination of Affiliation, shall remain exercisable for a period of three
(3) months following such Termination of Affiliation (but not for more than ten
(10) years from the Grant Date of the Award or expiration of the Option Term, if
earlier) and shall then terminate.

(B) If Termination of Affiliation occurs by reason of Retirement, Options and
SARs will become immediately vested and exercisable upon such Termination of
Affiliation and shall remain exercisable for a period of five (5) years
following such Termination of Affiliation (but not more than ten (10) years from
the Grant Date of the Award or expiration of the Option Term, if earlier) and
shall then terminate.

(C) If Termination of Affiliation occurs by reason of death or Disability,
Options and SARs will become immediately vested and exercisable upon such
Termination of Affiliation and shall remain exercisable for a period of one (1)
year following such Termination of Affiliation (but not for more than ten (10)
years from the Grant Date of the Award or expiration of the Option Term, if
earlier) and shall then terminate.

(D) If Termination of Affiliation occurs on account of a Change of Control, any
unexercised Option or SAR, whether or not exercisable on the date of the Change
of Control, shall thereupon be fully exercisable and may be exercised, in whole
or in part, subject to the provisions of Section 5.3(i)(A).

(E) If Termination of Affiliation is for Cause, then any unexercised Option or
SAR shall be thereupon cancelled.

(ii) Restricted Shares and Restricted Share Units. Except as otherwise provided
in an Award Agreement:

(A) If Termination of Affiliation occurs by reason of death prior to the last
day of the Period of Restriction, Restricted Shares and Restricted Share Units
will become immediately vested.

(B) If Termination of Affiliation occurs by reason of Retirement prior to the
last day of the Period of Restriction, then upon such Termination of Affiliation
the Grantee will become immediately vested in a number of the Grantee’s
Restricted Shares and Restricted Share Units which will be determined by
multiplying the total number of the Grantee’s Restricted Shares and Restricted
Share Units by a fraction, the numerator of which shall be the number of
consecutive 12-month periods of employment completed by the Grantee with the
first such period commencing on the Grant Date, and the denominator of which
shall be the total number of 12-month periods in the Period of Restriction. Any
Restricted Shares and Restricted Share Units that remain unvested following such
Termination of Affiliation shall be forfeited by the Grantee.

(C) If Termination of Affiliation occurs by reason of Disability prior to the
last day of the Period of Restriction, then upon such Termination of Affiliation
the Grantee will become immediately vested in a number of the Grantee’s
Restricted Shares and Restricted Share Units which will be determined by
multiplying the total number of the Grantee’s Restricted Shares and Restricted
Share Units by a fraction, the numerator of which shall be the number of
consecutive 12-month periods of employment completed by the Grantee with the
first such period commencing on the Grant Date, and the denominator of which
shall be the total number of 12-month periods in the Period of Restriction. Any
Restricted Shares and Restricted Share Units that remain unvested following such
Termination of Affiliation shall be forfeited by the Grantee.

(D) If Termination of Affiliation occurs prior to the last day of the Period of
Restriction on account of a Change of Control, Restricted Shares and Restricted
Share Units will become immediately vested.

(E) If Termination of Affiliation occurs prior to the last day of the Period of
Restriction for any reason other than death or Disability or Retirement or a
Change of Control, all Restricted Shares and Restricted Share Units shall be
forfeited by the Grantee.

(F) Any Restricted Shares that are forfeited by the Grantee shall be reacquired
by the Company, and the Grantee shall sign any document and take any other
action required to assign such Shares back to the Company.

(iii) Deferred Stock. Except as otherwise provided in an Award Agreement:

(A) If Termination of Affiliation occurs by reason of death or Disability or
Retirement or a Change of Control, Shares subject to a Deferred Stock Award will
become immediately vested. The Company shall settle all Deferred Stock as
provided in the Award Agreement.

(B) If Termination of Affiliation occurs by reason other than death or
Disability or Retirement or a Change of Control, the Grantee’s Deferred Stock,
to the extent not vested before such Termination of Affiliation, will be
cancelled and forfeited to the Company.

(iv) Performance Shares and Performance Units. Except as otherwise provided in
an Award Agreement, Performance Shares and Performance Units will become
nonforfeitable on the Vesting Date, and if, prior to the Vesting Date,

(A) A Termination of Affiliation occurs during a Performance Period for a reason
other than Disability, Retirement, Change of Control or death, all Performance
Shares and Performance Units shall be forfeited upon such Termination of
Affiliation.

(B) A Termination of Affiliation occurs during a Performance Period by reason of
Disability or Retirement, the Grantee shall become vested immediately in the
Award earned with respect to any completed Performance Period as of the date of
the Grantee’s Termination of Affiliation, and will forfeit the Award with
respect to any Performance Periods that are not completed as of the date of the
Grantee’s Termination of Affiliation.

(C) A Termination of Affiliation occurs on account of a Change of Control or by
reason of death, the Grantee shall become immediately vested in the earned Award
with respect to any completed Performance Period as of the date of the Grantee’s
Termination of Affiliation, and with respect to any Performance Period that is
not complete as of the date of Grantee’s Termination of Affiliation, the Grantee
will vest in the Award that would be earned for such Performance Period as if
the performance goals for such Performance Period were met at target.

(v) Dividend Equivalents. If Dividend Equivalents have been credited with
respect to any Award and such Award (in whole or in part) is forfeited, all
Dividend Equivalents issued in connection with such forfeited Award (or portion
of an Award) shall also be forfeited to the Company.

(vi) Waiver by Committee. Notwithstanding the foregoing provisions of this
Section 5.3, the Committee may in its sole discretion as to all or part of any
Award as to any Grantee, at the time the Award is granted or thereafter,
determine that Awards shall become exercisable or vested upon a Termination of
Affiliation, determine that Awards shall continue to become exercisable or
vested in full or in installments after Termination of Affiliation, extend the
period for exercise of Options or SARs following Termination of Affiliation (but
not beyond ten (10) years from the date of grant of the Option or SAR), or
provide that any Restricted Share Award, Deferred Stock Award or Performance
Award shall in whole or in part not be forfeited upon such Termination of
Affiliation.

5.4 Nontransferability of Awards.

(i) Each Award and each right under any Award shall be exercisable only by the
Grantee during the Grantee’s lifetime, or, if permissible under applicable law,
by the Grantee’s guardian or legal representative or by a transferee receiving
such Award pursuant to a qualified domestic relations order (a “QDRO”) as
defined in the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder or by an agent acting exclusively for
the benefit of the Grantee pursuant to a power of attorney. Nothing herein shall
be construed as requiring the Committee to honor a QDRO except to the extent
required under applicable law.

(ii) No Award (prior to the time, if applicable, Shares are delivered in respect
of such Award), and no right under any Award, may be assigned, alienated,
pledged, attached, sold or otherwise transferred or encumbered by a Grantee
otherwise than by will or by the laws of descent and distribution (or in the
case of Restricted Shares, to the Company) or pursuant to a QDRO, and any such
purported assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall be void and unenforceable against the Company or any
Affiliate; provided that the designation of a beneficiary to receive benefits in
the event of the Grantee’s death shall not constitute an assignment, alienation,
pledge, attachment, sale, transfer or encumbrance.

(iii) Notwithstanding subsections (i) and (ii) above, to the extent provided in
the Award Agreement, Deferred Stock and Awards other than Incentive Stock
Options, may be transferred, without consideration, to a Permitted Transferee.
For this purpose, a “Permitted Transferee” in respect of any Grantee means any
member of the Immediate Family of such Grantee, any trust of which all of the
primary beneficiaries are such Grantee or members of his or her Immediate
Family, or any partnership (including limited liability companies and similar
entities) of which all of the partners or members are such Grantee or members of
his or her Immediate Family; and the “Immediate Family” of a Grantee means the
Grantee’s spouse, children, stepchildren, grandchildren, parents, stepparents,
siblings, grandparents, nieces and nephews or the spouse of any of the foregoing
individuals. Such Award may be exercised by such transferee in accordance with
the terms of such Award. If so determined by the Committee, a Grantee may, in
the manner established by the Committee, designate a beneficiary or
beneficiaries to exercise the rights of the Grantee, and to receive any
distribution with respect to any Award upon the death of the Grantee. A
transferee, beneficiary, guardian, legal representative or other person claiming
any rights under the Plan from or through any Grantee shall be subject to the
provisions of the Plan and any applicable Award Agreement, except to the extent
the Plan and Award Agreement otherwise provide with respect to such persons, and
to any additional restrictions or limitations deemed necessary or appropriate by
the Committee.

5.5 Stand-Alone, Tandem and Substitute Awards.

(i) Awards granted under the Plan may, in the discretion of the Committee, be
granted either alone or in addition to, in tandem with, or in substitution for,
any other Award granted under the Plan or any award or benefit granted by the
Company or any Affiliate under any other plan, program, arrangement, contract or
agreement (a “Non-Plan Award”); provided that if the stand-alone, tandem or
substitute Award is intended to qualify for the Performance-Based Exception, it
must separately satisfy the requirements of the Performance-Based Exception. If
an Award is granted in substitution for another Award or any Non-Plan Award, the
Committee shall require the surrender of such other Award or Non-Plan Award in
consideration for the grant of the new Award. Awards granted in addition to or
in tandem with other Awards or Non-Plan Awards may be granted either at the same
time as or at a different time from the grant of such other Awards or Non-Plan
Awards.

(ii) The Committee may, in its discretion and on such terms and conditions as
the Committee considers appropriate in the circumstances, grant Awards under the
Plan (“Substitute Awards”) in substitution for stock and stock-based awards
(“Acquired Entity Awards”) held by current and former employees or non-employee
directors of, or consultants to, another corporation or entity who become
Eligible Persons as the result of a merger or consolidation of the employing
corporation or other entity (the “Acquired Entity”) with the Company or an
Affiliate or the acquisition by the Company or an Affiliate of property or stock
of the Acquired Entity immediately prior to such merger, consolidation or
acquisition (“Acquisition Date”) in order to preserve for the Grantee the
economic value of all or a portion of such Acquired Entity Award at such price
as the Committee determines necessary to achieve preservation of economic value
and in a manner consistent with and not in violation of Code Section 409A. The
limitations of Sections 4.1 and 4.3 on the number of Shares reserved or
available for grants, and the limitations under Sections 6.3 and 7.3 with
respect to Option Prices and grant prices for SARs, shall not apply to
Substitute Awards granted under this subsection (ii).

5.6 Compliance with Rule 16b-3.

(i) Six-Month Holding Period Advice. Unless a Grantee could otherwise dispose of
or exercise a derivative security or dispose of Shares delivered under the Plan
without incurring liability under Section 16(b) of the Exchange Act, the
Committee may advise or require a Grantee to comply with the following in order
to avoid incurring liability under Section 16(b): (a) at least six months must
elapse from the date of acquisition of a derivative security under the Plan to
the date of disposition of the derivative security (other than upon exercise or
conversion) or its underlying equity security, and (b) Shares granted or awarded
under the Plan other than upon exercise or conversion of a derivative security
must be held for at least six months from the date of grant of an Award.

(ii) Reformation to Comply with Exchange Act Rules. To the extent the Committee
determines that a grant or other transaction by a Section 16 Person should
comply with applicable provisions of Rule 16b-3 (except for transactions
exempted under alternative Exchange Act rules), the Committee shall take such
actions as necessary to make such grant or other transaction so comply, and if
any provision of this Plan or any Award Agreement relating to a given Award does
not comply with the requirements of Rule 16b-3 as then applicable to any such
grant or transaction, such provision will be construed or deemed amended, if the
Committee so determines, to the extent necessary to conform to the then
applicable requirements of Rule 16b-3.

(iii) Rule 16b-3 Administration. Any function relating to a Section 16 Person
shall be performed solely by the Committee if necessary to ensure compliance
with applicable requirements of Rule 16b-3, to the extent the Committee
determines that such compliance is desired. Each member of the Committee or
person acting on behalf of the Committee shall be entitled to, in good faith,
rely or act upon any report or other information furnished to him by any
officer, manager or other employee of the Company or any Affiliate, the
Company’s independent certified public accountants or any executive compensation
consultant or attorney or other professional retained by the Company to assist
in the administration of the Plan.

5.7 Cancellation and Rescission of Awards. Unless the Award Agreement specifies
otherwise, the Committee may cancel, rescind, suspend, withhold, or otherwise
limit or restrict any unexercised Award at any time if the Grantee is not in
compliance with all applicable provisions of the Award Agreement and the Plan or
if the Grantee has a Termination of Affiliation for Cause.

Article 6.

Stock Options

6.1 Grant of Options. Subject to and consistent with the provisions of the Plan,
Options may be granted to any Eligible Person in such number, and upon such
terms, and at any time and from time to time as shall be determined by the
Committee. Without in any manner limiting the generality of the foregoing, the
Committee may grant to any Eligible Person, or permit any Eligible Person to
elect to receive, an Option in lieu of or in substitution for any other
compensation (whether payable currently or on a deferred basis, and whether
payable under this Plan or otherwise) which such Eligible Person may be eligible
to receive from the Company or an Affiliate.

6.2 Award Agreement. Each Option grant shall be evidenced by an Award Agreement
that shall specify the Option Price, the Option Term (not to exceed ten
(10) years from its Grant Date), the number of Shares to which the Option
pertains, the time or times at which such Option shall be exercisable and such
other provisions as the Committee shall determine.

6.3 Option Price. The Option Price of an Option under this Plan shall be
determined in the sole discretion of the Committee, but in no case shall the
Option Price be less than 100% of the Fair Market Value of a Share on the Grant
Date.

6.4 Grant of Incentive Stock Options. At the time of the grant of any Option,
the Committee may in its discretion designate that such Option shall be made
subject to additional restrictions to permit it to qualify as an Incentive Stock
Option. Any Option designated as an Incentive Stock Option:

(i) shall be granted only to an employee of the Company or a Subsidiary
Corporation (as defined below);

(ii) shall be granted within ten (10) years from the earlier of the date the
Plan is adopted or the date the Plan is approved by stockholders of the Company;

(iii) shall have an Option Price of not less than 100% of the Fair Market Value
of a Share on the Grant Date, and, if granted to a person who owns capital stock
(including stock treated as owned under Section 424(d) of the Code) possessing
more than 10% of the total combined voting power of all classes of capital stock
of the Company or any Subsidiary Corporation (a “10% Owner”), have an Option
Price not less than 110% of the Fair Market Value of a Share on its Grant Date;

(iv) shall have an Option Term of not more than ten (10) years (five years if
the Grantee is a 10% Owner) from its Grant Date, and shall be subject to earlier
termination as provided herein or in the applicable Award Agreement;

(v) shall not have an aggregate Fair Market Value (as of the Grant Date) of the
Shares with respect to which Incentive Stock Options (whether granted under the
Plan or any other stock option plan of the Grantee’s employer or any parent or
Subsidiary Corporation (“Other Plans”)) are exercisable for the first time by
such Grantee during any calendar year (“Current Grant”), determined in
accordance with the provisions of Section 422 of the Code, which exceeds
$100,000 (the “$100,000 Limit”);

(vi) shall, if the aggregate Fair Market Value of the Shares (determined on the
Grant Date) with respect to the Current Grant and all Incentive Stock Options
previously granted under the Plan and any Other Plans which are exercisable for
the first time during a calendar year (“Prior Grants”) would exceed the $100,000
Limit, be, as to the portion in excess of the $100,000 Limit, exercisable as a
separate option that is not an Incentive Stock Option at such date or dates as
are provided in the Current Grant;

(vii) shall require the Grantee to notify the Committee of any disposition of
any Shares delivered pursuant to the exercise of the Incentive Stock Option
under the circumstances described in Section 421(b) of the Code (relating to
holding periods and certain disqualifying dispositions) (“Disqualifying
Disposition”), within 10 days of such a Disqualifying Disposition;

(viii) shall by its terms not be assignable or transferable other than by will
or the laws of descent and distribution and may be exercised, during the
Grantee’s lifetime, only by the Grantee; provided, however, that the Grantee
may, to the extent provided in the Plan in any manner specified by the
Committee, designate in writing a beneficiary to exercise his or her Incentive
Stock Option after the Grantee’s death; and

(ix) shall, if such Option nevertheless fails to meet the foregoing
requirements, or otherwise fails to meet the requirements of Section 422 of the
Code for an Incentive Stock Option, be treated for all purposes of this Plan,
except as otherwise provided in subsections (iv) and (v) above, as an Option
that is not an Incentive Stock Option.

Notwithstanding the foregoing and Section 3.2, the Committee may, without the
consent of the Grantee, at any time before the exercise of an Option (whether or
not an Incentive Stock Option), take any action necessary to prevent such Option
from being treated as an Incentive Stock Option.

For purposes of this Section 6.4, “Subsidiary Corporation” means a corporation
other than the Company in an unbroken chain of corporations beginning with the
Company if, at the time of granting the Option, each of the corporations other
than the last corporation in the unbroken chain owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

6.5 Payment. Except as otherwise provided by the Committee in an Award
Agreement, Options shall be exercised by the delivery of a written notice of
exercise to the Company, setting forth the number of Shares with respect to
which the Option is to be exercised, accompanied by full payment for the Shares
made by any one or more of the following means subject to the approval of the
Committee:

(i) cash, personal check or wire transfer;

(ii) Shares, valued at their Fair Market Value on the date of exercise (or by
delivering a certification or attestation of ownership of such Shares);

(iii) with the approval of the Committee, Restricted Shares held by the Grantee,
with each Share valued at the Fair Market Value of a Share on the date of
exercise; or

(iv) subject to applicable law (including the prohibited loan provisions of
Section 402 of the Sarbanes-Oxley Act of 2002), pursuant to procedures approved
by the Committee, through the sale of the Shares acquired on exercise of the
Option through a broker-dealer to whom the Grantee has submitted an irrevocable
notice of exercise and irrevocable instructions to deliver promptly to the
Company the amount of sale proceeds sufficient to pay for such Shares, together
with, if requested by the Company, the amount of federal, state, local or
foreign withholding taxes payable by Grantee by reason of such exercise.

The Committee may in its discretion specify that, if any Restricted Shares
(“Tendered Restricted Shares”) are used to pay the Option Price, (x) all the
Shares acquired on exercise of the Option shall be subject to the same
restrictions as the Tendered Restricted Shares, determined as of the date of
exercise of the Option, or (y) a number of Shares acquired on exercise of the
Option equal to the number of Tendered Restricted Shares shall be subject to the
same restrictions as the Tendered Restricted Shares, determined as of the date
of exercise of the Option.

Article 7.

Stock Appreciation Rights and Limited Stock Appreciation Rights

7.1 Issuance. Subject to and consistent with the provisions of the Plan, the
Committee, at any time and from time to time, may grant SARs to any Eligible
Person either alone or in addition to other Awards granted under the Plan. Such
SARs may, but need not, be granted in connection with a specific Option granted
under Article 6. Any SAR related to a non-qualified Option (i.e., an Option that
is not intended to be an Incentive Stock Option) may be granted at the same time
such Option is granted or at any time thereafter before exercise or expiration
of such Option. Any SAR related to an Incentive Stock Option must be granted at
the same time such Option is granted. The Committee may impose such conditions
or restrictions on the exercise of any SAR as it shall deem appropriate. Subject
to and consistent with the provisions of the Plan, the Committee, at any time
and from time to time, may grant Limited Stock Appreciation Rights to any
Eligible Person either alone or in addition to other Awards granted under the
Plan. Each Limited Stock Appreciation Right shall be identified with a Share
subject to an Option or SAR held by the Grantee, which may include an Option or
SAR previously granted under the Plan. Upon the exercise, expiration,
termination, forfeiture or cancellation of the Option or SAR with which an
Limited Stock Appreciation Right is identified, such Limited Stock Appreciation
Right shall terminate.

7.2 Award Agreements. Each SAR grant shall be evidenced by an Award Agreement in
such form as the Committee may approve and shall contain such terms and
conditions not inconsistent with other provisions of the Plan as shall be
determined from time to time by the Committee; provided that no SAR grant shall
have a term of more than ten (10) years from the date of grant of the SAR.

7.3 Grant Price. The grant price of an SAR shall be determined by the Committee
in its sole discretion; provided that the grant price shall not be less than the
lesser of 100% of the Fair Market Value of a Share on the date of the grant of
the SAR, or the Option Price under the non-qualified Option to which the SAR
relates.

7.4 Exercise and Payment.

(i) Upon the exercise of SARs, the Grantee shall be entitled to receive payment
from the Company in an amount determined by multiplying: (A) the excess of the
Fair Market Value of a Share on the date of exercise over 100% of the Fair
Market Value of a Share on the Grant Date of the SAR (or such higher strike
price as specified in the Award Agreement), by (B) the number of Shares with
respect to which the SAR is exercised; provided that the Committee may provide
in the Award Agreement that the benefit payable on exercise of an SAR shall not
exceed such percentage of the Fair Market Value of a Share on the Grant Date as
the Committee shall specify. The Fair Market Value of a Share on the Grant Date
and date of exercise of SARs shall be determined in the same manner as the Fair
Market Value of a Share on the date of grant of an Option is determined. SARs
shall be deemed exercised on the date written notice of exercise in a form
acceptable to the Committee is received by the Secretary of the Company. Unless
the Award Agreement provides otherwise, the Company shall make payment in
respect of any SAR within five (5) days of the date the SAR is exercised. Any
payment by the Company in respect of an SAR may be made in cash, Shares, other
property, or any combination thereof, as the Committee, in its sole discretion,
shall determine.

(ii) The provisions of this Section 7.4(ii) shall apply to a Limited Stock
Appreciation Right except as otherwise provided in the Award Agreement. Each
Limited Stock Appreciation Right shall automatically be exercised upon a
Termination of Affiliation on account of a Change of Control. The exercise of a
Limited Stock Appreciation Right shall result in the cancellation of the Option
or SAR with which such Limited Stock Appreciation Right is identified, to the
extent of such exercise. Within 10 business days after the exercise of a Limited
Stock Appreciation Right, the Company shall pay to the Grantee, in cash, an
amount equal to the difference between (A) the Fair Market Value of a Share on
the exercise date; minus (B) either (i) in the case of a Limited Stock
Appreciation Right identified with an Option, the Option Price of such Option or
(ii) in the case of a Limited Stock Appreciation Right identified with an SAR,
the strike price of such SAR.

7.5 Grant Limitations. The Committee may at any time impose any other
limitations upon the exercise of SARs which, in the Committee’s sole discretion,
are necessary or desirable in order for Grantees to qualify for an exemption
from Section 16(b) of the Exchange Act.

Article 8.

Restricted Shares and Restricted Share Units

8.1 Grant of Restricted Shares and Restricted Share Units. Subject to and
consistent with the provisions of the Plan, the Committee, at any time and from
time to time, may grant Restricted Shares and Restricted Share Units to any
Eligible Person in such amounts as the Committee shall determine.

8.2 Award Agreement. Each grant of Restricted Shares and Restricted Share Units
shall be evidenced by an Award Agreement that shall specify the Period(s) of
Restriction, the number of Restricted Shares or Restricted Share Units granted,
and such other provisions as the Committee shall determine. The Committee may
impose such conditions and/or restrictions on any Restricted Shares and
Restricted Share Units granted pursuant to the Plan as it may deem advisable,
including, but not limited to, restrictions based upon the achievement of
specific performance goals, time-based restrictions, time-based restrictions
following the attainment of the performance goals, and/or restrictions under
applicable securities laws.

8.3 Consideration for Restricted Shares. The Committee shall determine the
amount, if any, that a Grantee shall pay for Restricted Shares, which shall be
(except with respect to Restricted Shares that are treasury shares) at least the
Minimum Consideration for each Restricted Share. Such payment shall be made in
full by the Grantee before the delivery of the shares and in any event no later
than 10 business days after the Grant Date for such shares.

8.4 Effect of Forfeiture of Restricted Shares. If Restricted Shares are
forfeited, and if the Grantee was required to pay for such shares or acquired
such Restricted Shares upon the exercise of an Option, the Grantee shall be
deemed to have resold such Restricted Shares to the Company at a price equal to
the lesser of (x) the amount paid by the Grantee for such Restricted Shares, or
(y) the Fair Market Value of a Share on the date of such forfeiture. The Company
shall pay to the Grantee the deemed sale price as soon as is administratively
practical. Such Restricted Shares shall cease to be outstanding, and shall no
longer confer on the Grantee thereof any rights as a stockholder of the Company,
from and after the date of the event causing the forfeiture, whether or not the
Grantee accepts the Company’s tender of payment for such Restricted Shares.

8.5 Restricted Shares Book Entry, Escrow, Certificate Legends. The Committee may
provide that Restricted Shares be held in book entry with the transfer agent
until there is a lapse of the Period of Restriction with respect to such
Restricted Shares and certificates are issued or until such Restricted Shares
are forfeited, or the Committee may provide that the certificates for any
Restricted Shares (x) shall be held (together with a stock power executed in
blank by the Grantee) in escrow by the Secretary of the Company until such
Restricted Shares become nonforfeitable or are forfeited and/or (y) shall bear
an appropriate legend restricting the transfer of such Restricted Shares under
the Plan. If any Restricted Shares become nonforfeitable, the Company shall
cause certificates for such shares to be delivered without such legend.

Article 9.

Performance Units and Performance Shares

9.1 Grant of Performance Units and Performance Shares. Subject to and consistent
with the provisions of the Plan, Performance Units or Performance Shares may be
granted to any Eligible Person in such amounts and upon such terms, and at any
time and from time to time, as shall be determined by the Committee.

9.2 Value/Performance Goals. The Committee shall set performance goals in its
discretion which, depending on the extent to which they are met, will determine
the number or value of Performance Units or Performance Shares that will be paid
to the Grantee. With respect to Covered Employees and to the extent the
Committee deems it appropriate to comply with Section 162(m) of the Code, all
performance goals shall be objective Performance Measures satisfying the
requirements for the Performance-Based Exception, and shall be set by the
Committee within the time period prescribed by Section 162(m) of the Code and
related regulations.

(i) Performance Unit. Each Performance Unit may be denominated in cash and shall
have an initial value that is established by the Committee at the time of grant.

(ii) Performance Share. Each Performance Share shall have an initial value equal
to the Fair Market Value of a Share on the date of grant.

9.3 Earning and Form and Timing of Payment of Performance Units and Performance
Shares. After the applicable Performance Period has ended, the amount earned by
the Grantee shall be based on the level of achievement of performance goals set
by the Committee. If a Performance Unit or Performance Share Award is intended
to comply with the Performance-Based Exception, the Committee shall certify the
level of achievement of the performance goals in writing before the Award is
settled.

The settlement of Performance Units or Performance Shares shall be in Shares,
unless at the discretion of the Committee and as set forth in the Award
Agreement, settlement is to be in cash or in some combination of cash and
Shares.

If a Grantee is promoted, demoted or transferred to a different business unit of
the Company during a Performance Period, then, to the extent the Committee
determines that the Award, the performance goals, or the Performance Period are
no longer appropriate, the Committee may adjust, change, eliminate or cancel the
Award, the performance goals, or the applicable Performance Period, as it deems
appropriate in order to make them appropriate and comparable to the initial
Award, the performance goals, or the Performance Period; provided, however, no
such action may be taken by the Committee with respect to an Award if the
Grantee is or becomes or is anticipated to become a Covered Employee if such
action would disqualify the Award from the Performance-Based Exception.

Payment of earned Performance Units or Performance Shares shall be made in a
lump sum following the latest to occur of (a) the vesting event, or (b) the
determination of the level of achievement of the performance goals for the
applicable Performance Period; provided, however, payment may be deferred to a
later date in accordance with a deferral rule, policy or procedure established
pursuant to Article 15. The Committee may pay earned Performance Units or
Performance Shares in the form of cash or in Shares (or in a combination
thereof). Such Shares may be granted subject to any restrictions deemed
appropriate by the Committee. The form of payout of such Awards shall be set
forth in the Award Agreement pertaining to the grant of the Award.

At the discretion of the Committee, a Grantee may be entitled to receive any
dividends or Dividend Equivalents declared with respect to Shares deliverable in
connection with grants of Performance Units or Performance Shares which have
been earned, but not yet delivered to the Grantee.

Article 10.

Bonus Shares

Subject to the terms of the Plan, the Committee may grant Bonus Shares to any
Eligible Person, in such amount and upon such terms and at any time and from
time to time as shall be determined by the Committee. The terms of such Bonus
Shares shall be set forth in the Award Agreement pertaining to the grant of the
Award.

Article 11.

      Deferred Stock
11.1
  Grant of Deferred Stock.
 
   

(i) Subject to and consistent with the provisions of the Plan, the Committee, at
any time and from time to time, may grant Deferred Stock to any Eligible Person,
in such amount and upon such terms as the Committee shall determine, including
the conditions under such Deferred Stock will vest.

(ii) In addition, if and to the extent permitted by the Committee, an Eligible
Person may elect (a “Deferral Election”) at such times and consistent with and
not in violation of Code Section 409A and such rules and procedures adopted by
the Committee, to receive all or any portion of his salary and/or bonus in the
form of a number of shares of Deferred Stock equal to the quotient of the amount
of salary and/or cash bonus to be paid in the form of Deferred Stock divided by
the Fair Market Value of a Share on the date such salary or bonus would
otherwise be paid in cash.

11.2 Delivery and Limitations. Delivery of Shares will occur upon expiration of
the deferral period specified for the Award of Deferred Stock by the Committee.
A Grantee awarded Deferred Stock will have no voting rights with respect to such
Deferred Stock. Except to the extent provided otherwise in the Award Agreement,
a Grantee will have the rights to receive Dividend Equivalents in respect of
Deferred Stock, which Dividend Equivalents shall be deemed reinvested in
additional Shares of Deferred Stock.

Article 12.

Dividend Equivalents

The Committee is authorized to grant Awards of Dividend Equivalents alone or in
conjunction with another Award. The Committee may provide that Dividend
Equivalents shall be paid or distributed when accrued or shall be deemed to have
been reinvested in additional Shares or additional Awards or otherwise
reinvested.

Article 13.

Other Stock-Based Awards

The Committee is authorized, subject to limitations under applicable law, to
grant such other Awards that are denominated or payable in, valued in whole or
in part by reference to, or otherwise based on, or related to, Shares, as deemed
by the Committee to be consistent with the purposes of the Plan including Shares
awarded which are not subject to any restrictions or conditions and Awards
valued by reference to the value of securities of or the performance of
specified Affiliates. Subject to and consistent with the provisions of the Plan,
the Committee shall determine the terms and conditions of such Awards. Except as
provided by the Committee, Shares delivered pursuant to a purchase right granted
under this Article 13 shall be purchased for such consideration, paid for by
such methods and in such forms, including cash, Shares, outstanding Awards or
other property, as the Committee shall determine.

Article 14.

Beneficiary Designation

Each Grantee under the Plan may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his or her death before he or
she receives any or all of such benefit. Each such designation shall revoke all
prior designations by the same Grantee, shall be in a form prescribed by the
Company, and will be effective only when filed by the Grantee in writing with
the Company during the Grantee’s lifetime. In the absence of any such
designation, benefits remaining unpaid at the Grantee’s death shall be paid to
the Grantee’s estate.

Article 15.

Deferrals

The Committee may permit or require a Grantee to defer receipt of the payment of
cash or the delivery of Shares that would otherwise be due by virtue of the
exercise of an Option or SAR, the lapse or waiver of restrictions with respect
to Restricted Shares, the satisfaction of any requirements or goals with respect
to Performance Units or Performance Shares, or the grant of Bonus Shares. If any
such deferral is required or permitted, such deferral shall be in accordance
with applicable rules, policies and/or procedures established by the Committee,
including, but not limited to, the Code Section 409A Rules and Policies. Except
as otherwise provided in the Award Agreement or pursuant to applicable Grantee
elections, and subject to the Code Section 409A Rules and Policies, any payment
or any Shares that are subject to such deferral shall be made or delivered to
the Grantee upon the Grantee’s Termination of Affiliation.

Article 16.

Amendment, Modification, and Termination

16.1 Amendment, Modification, and Termination. Subject to Section 16.3, the
Board may, at any time and from time to time, alter, amend, suspend, discontinue
or terminate the Plan in whole or in part without the approval of the Company’s
stockholders, except that any amendment or alteration shall be subject to the
approval of the Company’s stockholders if (a) such stockholder approval is
required by any federal or state law or regulation or the rules of any stock
exchange or automated quotation system on which the Shares may then be listed or
quoted, or (b) the Board, in its discretion, determines to submit such
amendments or alterations to stockholders for approval. The Board may delegate
to the Committee any or all of the authority of the Board under this
Section 16.1.

16.2 Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
Events. 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 dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan;
provided that no such adjustment shall be authorized to the extent that such
authority would be inconsistent with the Plan’s meeting the requirements of the
Performance-Based Exception.

16.3 Awards Previously Granted. Except as otherwise specifically permitted in
the Plan or an Award Agreement, no termination, amendment, or modification of
the Plan shall adversely affect in any material way any Award previously granted
under the Plan, without the written consent of the Grantee of such Award.

Article 17.

      Withholding
17.1
  Required Withholding.
 
   

(i) The Committee in its sole discretion may provide that when taxes are to be
withheld in connection with the exercise of an Option or SAR, or upon the lapse
of restrictions on Restricted Shares, or upon the transfer of Deferred Stock, or
upon payment of any other benefit or right under this Plan (the date on which
such exercise occurs or such restrictions lapse or such payment of any other
benefit or right occurs hereinafter referred to as the “Tax Date”), the Grantee
may elect to make payment for the withholding of federal, state, local and
foreign taxes, including Social Security and Medicare (“FICA”) taxes by one or a
combination of the following methods:

(A) payment of an amount in cash equal to the amount to be withheld;

(B) delivering part or all of the amount to be withheld in the form of Shares
valued at their Fair Market Value on the Tax Date;

(C) requesting the Company to withhold from those Shares that would otherwise be
received upon exercise of the Option or SAR, upon the lapse of restrictions on
Restricted Shares or Restricted Share Units, upon the transfer of Deferred
Stock, or upon the payment of a Performance Shares Award, a number of Shares
having a Fair Market Value on the Tax Date equal to the amount to be withheld;
or

(D) withholding from any compensation otherwise due to the Grantee.

The maximum amount of tax withholding with respect to any Awards to be satisfied
by withholding Shares upon the Tax Date pursuant to clause (C) above shall not
exceed the minimum statutory amount of taxes, including FICA taxes, required to
be withheld under federal, state, local and foreign law. An election by Grantee
under this subsection is irrevocable. Any fractional share amount and any
additional withholding not paid by the withholding or surrender of Shares or
delivery of Shares must be paid in cash. If no timely election is made, the
Grantee must deliver cash to satisfy all tax withholding requirements.

(ii) Any Grantee who makes a Disqualifying Disposition (as defined in
Section 6.4(vi)) or an election under Section 83(b) of the Code shall remit to
the Company, and the Company shall have the right to withhold, an amount
sufficient to satisfy all resulting tax withholding requirements in the same
manner as set forth in subsection (i).

17.2 Notification under Code Section 83(b). If the Grantee, in connection with
the exercise of any Option, or the grant of Restricted Shares, makes the
election permitted under Section 83(b) of the Code to include in such Grantee’s
gross income in the year of transfer the amounts specified in Section 83(b) of
the Code, then such Grantee shall notify the Company of such election within
10 days of filing the notice of the election with the Internal Revenue Service,
in addition to any filing and notification required pursuant to regulations
issued under Section 83(b) of the Code. The Committee may, in connection with
the grant of an Award or at any time thereafter, prohibit a Grantee from making
the election described above.

Article 18.

Additional Provisions

18.1 Successors. 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.

18.2 Gender and Number. 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.

18.3 Severability. If any part of the Plan is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not invalidate any other part of the Plan. Any Section or part
of a Section so declared to be unlawful or invalid shall, if possible, be
construed in a manner which will give effect to the terms of such Section or
part of a Section to the fullest extent possible while remaining lawful and
valid.

18.4 Requirements of Law. The granting of Awards and the delivery 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. Notwithstanding any provision of the Plan or any
Award, Grantees shall not be entitled to exercise, or receive benefits under,
any Award, and the Company (and any Affiliate) shall not be obligated to deliver
any Shares or deliver benefits to a Grantee, if such exercise or delivery would
constitute a violation by the Grantee or the Company of any applicable law or
regulation.

18.5 Securities Law Compliance.

(i) If the Committee deems it necessary to comply with any applicable securities
law, or the requirements of any stock exchange upon which Shares may be listed,
the Committee may impose any restriction on Awards or Shares acquired pursuant
to Awards under the Plan as it may deem advisable. All certificates for Shares
delivered under the Plan pursuant to any Award or the exercise thereof shall be
subject to such stop transfer orders and other restrictions as the Committee may
deem advisable under the rules, regulations and other requirements of the SEC,
any stock exchange upon which Shares are then listed, any applicable securities
law, and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions. If so requested
by the Company, the Grantee shall make a written representation to the Company
that he or she will not sell or offer to sell any Shares unless a registration
statement shall be in effect with respect to such Shares under the Securities
Act of 1993, as amended, and any applicable state securities law or unless he or
she shall have furnished to the Company, in form and substance satisfactory to
the Company, that such registration is not required.

(ii) If the Committee determines that the exercise or nonforfeitability of, or
delivery of benefits pursuant to, any Award would violate any applicable
provision of securities laws or the listing requirements of any national
securities exchange or national market system on which are listed any of the
Company’s equity securities, then the Committee may postpone any such exercise,
nonforfeitability or delivery, as applicable, but the Company shall use all
reasonable efforts to cause such exercise, nonforfeitability or delivery to
comply with all such provisions at the earliest practicable date.

18.6 No Rights as a Stockholder. No Grantee shall have any rights as a
stockholder of the Company with respect to the Shares (other than Restricted
Shares) which may be deliverable upon exercise or payment of such Award until
such Shares have been delivered to him or her. Restricted Shares, whether held
by a Grantee or in escrow by the Secretary of the Company, shall confer on the
Grantee all rights of a stockholder of the Company, except as otherwise provided
in the Plan or Award Agreement. At the time of a grant of Restricted Shares, the
Committee may require the payment of cash dividends thereon to be deferred and,
if the Committee so determines, reinvested in additional Restricted Shares.
Stock dividends and deferred cash dividends issued with respect to Restricted
Shares shall be subject to the same restrictions and other terms as apply to the
Restricted Shares with respect to which such dividends are issued. The Committee
may in its discretion provide for payment of interest on deferred cash
dividends.

18.7 Nature of Payments. Unless otherwise specified in the Award Agreement,
Awards shall be special incentive payments to the Grantee and shall not be taken
into account in computing the amount of salary or compensation of the Grantee
for purposes of determining any pension, retirement, death or other benefit
under (a) any pension, retirement, profit sharing, bonus, insurance or other
employee benefit plan of the Company or any Affiliate, except as such plan shall
otherwise expressly provide, or (b) any agreement between (i) the Company or any
Affiliate and (ii) the Grantee, except as such agreement shall otherwise
expressly provide.

18.8 Non-Exclusivity of Plan. Neither the adoption of the Plan by the Board nor
its submission to the stockholders of the Company for approval shall be
construed as creating any limitations on the power of the Board to adopt such
other compensatory arrangements for employees as it may deem desirable.

18.9 Governing Law. The Plan, and all agreements hereunder, shall be construed
in accordance with and governed by the laws of the State of Delaware, other than
its laws respecting choice of law.

18.10 Share Certificates. All certificates for Shares delivered under the terms
of the Plan shall be subject to such stop-transfer orders and other restrictions
as the Committee may deem advisable under federal or state securities laws,
rules and regulations thereunder, and the rules of any national securities laws,
rules and regulations thereunder, and the rules of any national securities
exchange or automated quotation system on which Shares are listed or quoted. The
Committee may cause a legend or legends to be placed on any such certificates to
make appropriate reference to such restrictions or any other restrictions or
limitations that may be applicable to Shares. In addition, during any period in
which Awards or Shares are subject to restrictions or limitations under the
terms of the Plan or any Award Agreement, or during any period during which
delivery or receipt of an Award or Shares has been deferred by the Committee or
a Grantee, the Committee may require any Grantee to enter into an agreement
providing that certificates representing Shares deliverable or delivered
pursuant to an Award shall remain in the physical custody of the Company or such
other person as the Committee may designate.

18.11 Unfunded Status of Awards; Creation of Trusts. The Plan is intended to
constitute an “unfunded” plan for incentive and deferred compensation. With
respect to any payments not yet made to a Grantee pursuant to an Award, nothing
contained in the Plan or any Award Agreement shall give any such Grantee any
rights that are greater than those of a general creditor of the Company;
provided, however, that the Committee may authorize the creation of trusts or
make other arrangements to meet the Company’s obligations under the Plan to
deliver cash, Shares or other property pursuant to any Award which trusts or
other arrangements shall be consistent with the “unfunded” status of the Plan
unless the Committee otherwise determines.

18.12 Affiliation. Nothing in the Plan or an Award Agreement shall interfere
with or limit in any way the right of the Company or any Affiliate to terminate
any Grantee’s employment or consulting contract at any time, nor confer upon any
Grantee the right to continue in the employ of or as an officer of or as a
consultant to the Company or any Affiliate.

18.13 Participation. No employee or officer shall have the right to be selected
to receive an Award under this Plan or, having been so selected, to be selected
to receive a future Award.

18.14 Military Service. Awards shall be administered in accordance with
Section 414(u) of the Code and the Uniformed Services Employment and
Reemployment Rights Act of 1994 as amended, supplemented or replaced from time
to time.

18.15 Construction. The following rules of construction will apply to the Plan:
(a) the word “or” is disjunctive but not necessarily exclusive, and (b) words in
the singular include the plural, words in the plural include the singular, and
words in the neuter gender include the masculine and feminine genders and words
in the masculine or feminine gender include the other neuter genders.

18.16 Headings. The headings of articles and sections are included solely for
convenience of reference, and if there is any conflict between such headings and
the text of this Plan, the text shall control.

18.17 Obligations. Unless otherwise specified in the Award Agreement, the
obligation to deliver, pay or transfer any amount of money or other property
pursuant to Awards under this Plan shall be the sole obligation of a Grantee’s
employer; provided that the obligation to deliver or transfer any Shares
pursuant to Awards under this Plan shall be the sole obligation of the Company.

18.18 Stockholder Approval. All Awards granted on or after the Effective Date
and prior to the date the Company’s stockholders approve the Plan are expressly
conditioned upon and subject to approval of the Plan by the Company’s
stockholders.

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