Exhibit 10.1

ABERCROMBIE & FITCH CO.
2005 LONG-TERM INCENTIVE PLAN

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ABERCROMBIE & FITCH CO.
2005 LONG-TERM INCENTIVE PLAN

                          Page             1.     Purpose     1     2.    
Definitions     1     3.     Administration     2     4.     Stock Subject to
Plan     4     5.     Eligibility; Per-Person Award Limitations     4     6.    
Specific Terms of Awards     5     7.     Performance-Based Compensation     9  
  8.     Certain Provisions Applicable to Awards     10     9.     Change of
Control     11     10.     Additional Award Forfeiture Provisions     13     11.
    General Provisions     14  

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ABERCROMBIE & FITCH CO.
2005 LONG-TERM INCENTIVE PLAN
      1. Purpose. The purpose of this 2005 Long-Term Incentive Plan (the “Plan”)
is to aid Abercrombie & Fitch Co., a Delaware corporation (together with its
successors and assigns, the “Company”), in attracting, retaining, motivating and
rewarding certain employees and non-employee directors of the Company or its
subsidiaries or affiliates, to provide for equitable and competitive
compensation opportunities, to recognize individual contributions and reward
achievement of Company goals, and promote the creation of long-term value for
stockholders by closely aligning the interests of Participants with those of
stockholders. The Plan authorizes stock based incentives for Participants.
      2. Definitions. In addition to the terms defined in Section 1 above and
elsewhere in the Plan, the following capitalized terms used in the Plan have the
respective meanings set forth in this Section:

        (a) “Annual Limit” shall have the meaning specified in Section 5(b).    
      (b) “Award” means any Option, SAR, Restricted Stock, Restricted Stock
Unit, or Deferred Stock Award together with any related right or interest,
granted to a Participant under the Plan.           (c) “Beneficiary” means the
legal representatives of the Participant’s estate entitled by will or the laws
of descent and distribution to receive the benefits under a Participant’s Award
upon a Participant’s death, provided that, if and to the extent authorized by
the Committee, a Participant may be permitted to designate a Beneficiary, in
which case the “Beneficiary” instead will be the person, persons, trust or
trusts (if any are then surviving) which have been designated by the Participant
in his or her most recent written and duly filed beneficiary designation to
receive the benefits specified under the Participant’s Award upon such
Participant’s death.           (d) “Board” means the Company’s Board of
Directors.           (e) “Change of Control” has the meanings specified in
Section 9.           (f) “Code” means the Internal Revenue Code of 1986, as
amended. References to any provision of the Code or regulation thereunder shall
include any successor provisions and regulations, and reference to regulations
includes any applicable guidance or pronouncement of the Department of the
Treasury and Internal Revenue Service.           (g) “Committee” means the
Compensation Committee of the Board, the composition and governance of which is
established in the Committee’s Charter as approved from time to time by the
Board and subject to Section 303A.05 of the Listed Company Manual of the New
York Stock Exchange, and other corporate governance documents of the Company. No
action of the Committee shall be void or deemed to be without authority due to
the failure of any member, at the time the action was taken, to meet any
qualification standard set forth in the Committee Charter or the Plan. The full
Board may perform any function of the Committee hereunder except to the extent
limited under Section 303A.05 of the Listed Company Manual, in which case the
term “Committee” shall refer to the Board.           (h) “Covered Employee”
means an Eligible Person who is a Covered Employee as specified in
Section 11(j).           (i) “Deferred Stock Award” means a right, granted to
non-employee directors under the Plan, to receive Stock in accordance with the
terms and conditions of the 1998 Directors’ Deferred

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  Compensation Plan, as amended in 2003, or any successor plan providing for the
deferral of compensation by non-employee directors.           (j) “Effective
Date” means the effective date specified in Section 11(q).          
(k) “Eligible Person” has the meaning specified in Section 5, provided that
Michael S. Jeffries is specifically excluded from participating in Awards made
pursuant to the Plan.           (l) “Exchange Act” means the Securities Exchange
Act of 1934, as amended. References to any provision of the Exchange Act or rule
(including a proposed rule) thereunder shall include any successor provisions
and rules.           (m) “Fair Market Value” means the fair market value of
Stock, Awards or other property as determined in good faith by the Committee or
under procedures established by the Committee. Unless otherwise determined by
the Committee, the Fair Market Value of Stock shall be the opening price per
share of Stock reported on a consolidated basis for securities listed on the
principal stock exchange or market on which Stock is traded on the day as of
which such value is being determined or, if there is no opening price on that
day, then the closing price on the last previous day on which a closing price
was reported.           (n) “Incentive Stock Option” or “ISO” means any Option
designated as an incentive stock option within the meaning of Code Section 422
and qualifying thereunder.           (o) “Option” means a right, granted under
the Plan, to purchase Stock.           (p) “Participant” means a person who has
been granted an Award under the Plan which remains outstanding, including a
person who is no longer an Eligible Person.           (q) “Restricted Stock”
means Stock granted under the Plan which is subject to certain restrictions and
to a risk of forfeiture.           (r) “Restricted Stock Unit” or “RSU” means a
right, granted under the Plan, to receive Stock, cash or other Awards or a
combination thereof at the end of a specified deferral period.          
(s) “Retirement” means, unless otherwise stated by the Committee (or the Board)
in an applicable Award agreement, Participant’s voluntary termination of
employment (with the approval of the Board) after achieving 65 years of age.    
      (t) “Rule 16b-3” means Rule 16b-3, as from time to time in effect and
applicable to Participants, promulgated by the Securities and Exchange
Commission under Section 16 of the Exchange Act.           (u) “Stock” means the
Company’s Common Stock, par value $0.01 per share, and any other equity
securities of the Company or other issuer that may be substituted or
resubstituted for Stock pursuant to Section 11(c).           (v) “Stock
Appreciation Rights” or “SAR” means a right granted to a Participant under
Section 6(c).

      3. Administration.
      (a) Authority of the Committee. The Plan shall be administered by the
Committee, which shall have full and final authority, in each case subject to
and consistent with the provisions of the Plan, to select Eligible Persons to
become Participants; to grant Awards; to determine the type and number of
Awards, the

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dates on which Awards may be exercised and on which the risk of forfeiture or
deferral period relating to Awards shall lapse or terminate, the acceleration of
any such dates, the expiration date of any Award, whether, to what extent, and
under what circumstances an Award may be settled, or the exercise price of an
Award may be paid, in cash, Stock, other Awards, or other property, and other
terms and conditions of, and all other matters relating to, Awards; to prescribe
documents evidencing or setting terms of Awards (such Award documents need not
be identical for each Participant), amendments thereto, and rules and
regulations for the administration of the Plan and amendments thereto (including
outstanding Awards); to construe and interpret the Plan and Award documents and
correct defects, supply omissions or reconcile inconsistencies therein; and to
make all other decisions and determinations as the Committee may deem necessary
or advisable for the administration of the Plan. Decisions of the Committee with
respect to the administration and interpretation of the Plan shall be final,
conclusive, and binding upon all persons interested in the Plan, including
Participants, Beneficiaries, transferees under Section 11(b) and other persons
claiming rights from or through a Participant, and stockholders.
      (b) Manner of Exercise of Committee Authority. 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 act through subcommittees, including for purposes of perfecting
exemptions under Rule 16b-3 or qualifying Awards under Code Section 162(m) as
performance-based compensation, in which case the subcommittee shall be subject
to and have authority under the charter applicable to the Committee, and the
acts of the subcommittee shall be deemed to be acts of the Committee hereunder.
The Committee may delegate the administration of the Plan to one or more
officers or employees of the Company, and such administrator(s) may have the
authority to execute and distribute Award agreements or other documents
evidencing or relating to Awards granted by the Committee under this Plan, to
maintain records relating to Awards, to process or oversee the issuance of Stock
under Awards, to interpret and administer the terms of Awards and to take such
other actions as may be necessary or appropriate for the administration of the
Plan and of Awards under the Plan, provided that in no case shall any such
administrator be authorized (i) to grant Awards under the Plan, (ii) to take any
action that would result in the loss of an exemption under Rule 16b-3 for Awards
granted to or held by Participants who at the time are subject to Section 16 of
the Exchange Act in respect of the Company or that would cause Awards intended
to qualify as “performance-based compensation” under Code Section 162(m) to fail
to so qualify, (iii) to take any action inconsistent with Section 157 and other
applicable provisions of the Delaware General Corporation Law, or (iv) to make
any determination required to be made by the Committee under the New York Stock
Exchange corporate governance standards applicable to listed company
compensation committees (currently, Rule 303A.05). Any action by any such
administrator within the scope of its delegation shall be deemed for all
purposes to have been taken by the Committee and, except as otherwise
specifically provided, references in this Plan to the Committee shall include
any such administrator. The Committee established pursuant to Section 1.3(a)
and, to the extent it so provides, any subcommittee, shall have sole authority
to determine whether to review any actions and/or interpretations of any such
administrator, and if the Committee shall decide to conduct such a review, any
such actions and/or interpretations of any such administrator shall be subject
to approval, disapproval or modification by the Committee.
      (c) Limitation of Liability. The Committee and each member thereof, and
any person acting pursuant to authority delegated by the Committee, shall be
entitled, in good faith, to rely or act upon any report or other information
furnished by any executive officer, other officer or employee of the Company or
a subsidiary or affiliate, the Company’s independent auditors, consultants or
any other agents assisting in the administration of the Plan. Members of the
Committee, any person acting pursuant to authority

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delegated by the Committee, and any officer or employee of the Company or a
subsidiary or affiliate acting at the direction or on behalf of the Committee or
a delegee shall not be personally liable for any action or determination taken
or made in good faith with respect to the Plan, and shall, to the extent
permitted by law, be fully indemnified and protected by the Company with respect
to any such action or determination.
      4. Stock Subject to Plan.
      (a) Overall Number of Shares Available for Delivery. The total number of
shares of Stock reserved and available for delivery in connection with Awards
under the Plan shall be two percent of the sum of (i) the total common shares
outstanding and (ii) the unexercised options and restricted stock units held by
employees and non-employee directors as of April 6, 2005, or 1,982,710 shares.
Subject to limitations provided in Section 6(b)(iv), any of the 1,982,710
authorized shares may be granted as ISOs. The total number of shares available
is subject to adjustment as provided in Section 11(c). Any shares of Stock
delivered under the Plan shall consist of authorized and unissued shares or
treasury shares.
      (b) Share Counting Rules. The Committee may adopt reasonable counting
procedures to ensure appropriate counting, avoid double counting (as, for
example, in the case of tandem or substitute awards) and make adjustments in
accordance with this Section 4(b). To the extent that an Award under the Plan is
canceled, expired, forfeited, settled in cash, settled by issuance of fewer
shares than the number underlying the Award, or otherwise terminated without
delivery of shares to the Participant, the shares retained by or returned to the
Company will be available under the Plan; and shares that are withheld from such
an Award or separately surrendered by the Participant in payment of any exercise
price or taxes relating to such an Award shall be deemed to constitute shares
not delivered to the Participant and will be available under the Plan. In
addition, in the case of any Award granted in assumption of or in substitution
for an award of a company or business acquired by the Company or a subsidiary or
affiliate or with which the Company or a subsidiary or affiliate combines,
shares issued or issuable in connection with such substitute Award shall not be
counted against the number of shares reserved under the Plan.
      5. Eligibility; Per-Person Award Limitations.
      (a) Eligibility. Awards may be granted under the Plan only to Eligible
Persons. For purposes of the Plan, an “Eligible Person” means (i) an employee of
the Company or any subsidiary or affiliate who is subject to Section 16 of the
Exchange Act at the time of grant, including any person who has been offered
employment by the Company or a subsidiary or affiliate, provided that such
prospective employee may not receive any payment or exercise any right relating
to an Award until such person has commenced employment with the Company or a
subsidiary or affiliate, and (ii) any non-employee directors of the Company or
any subsidiary or affiliate. An employee on leave of absence may be considered
as still in the employ of the Company or a subsidiary or affiliate for purposes
of eligibility for participation in the Plan, if so determined by the Committee.
For purposes of the Plan, a joint venture in which the Company or a subsidiary
has a substantial direct or indirect equity investment shall be deemed an
affiliate, if so determined by the Committee. Holders of awards granted by a
company or business acquired by the Company or a subsidiary or affiliate, or
with which the Company or a subsidiary or affiliate combines, who will become
Eligible Persons are eligible for grants of substitute awards granted in
assumption of or in substitution for such outstanding awards previously granted
under the Plan in connection with such acquisition or combination transaction,
if so determined by the Committee.
      (b) Per-Person Award Limitations. In each calendar year during any part of
which the Plan is in effect, an Eligible Person may be granted Awards under each
of Section 6(b), 6(c), 6(d), or 6(e) relating to up to his or her Annual Limit
(such Annual Limit to apply separately to the type of Award authorized under

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each specified subsection). A Participant’s Annual Limit, in any year during any
part of which the Participant is then eligible under the Plan, shall equal two
hundred and fifty thousand (250,000) shares plus the amount of the Participant’s
unused Annual Limit relating to the same type of Award as of the close of the
previous year, subject to adjustment as provided in Section 11(c).
      (c) Limits on Non-Employee Director Awards. Non-employee directors may be
granted any type of Award under the Plan, but a non-employee director may be
granted Awards relating to no more than 10,000 shares annually, subject to
adjustment as provided in Section 11(c). Such annual limit shall not include any
Deferred Stock Awards granted in lieu of other forms of compensation.
      6. Specific Terms of Awards.
      (a) General. Awards may be granted on the terms and conditions set forth
in this Section 6. In addition, the Committee may impose on any Award or the
exercise thereof, at the date of grant or thereafter (subject to Sections 11(e)
and 11(k)), such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine, including terms
requiring forfeiture of Awards in the event of termination of employment or
service by the Participant and terms permitting a Participant to make elections
relating to his or her Award. The Committee shall retain full power and
discretion with respect to any term or condition of an Award that is not
mandatory under the Plan, subject to Section 11(k). The Committee shall require
the payment of lawful consideration for an Award to the extent necessary to
satisfy the requirements of the Delaware General Corporation Law, and may
otherwise require payment of consideration for an Award except as limited by the
Plan.
      (b) Options. The Committee is authorized to grant Options to Participants
on the following terms and conditions:

        (i) Exercise Price. The exercise price per share of Stock purchasable
under an Option (including both ISOs and non-qualified Options) shall be
determined by the Committee, provided that, notwithstanding anything contained
herein to the contrary such exercise price shall be (A) fixed as of the grant
date, and (B) not less than the Fair Market Value of a share of Stock on the
grant date. Notwithstanding the foregoing, any substitute award granted in
assumption of or in substitution for an outstanding award granted by a company
or business acquired by the Company or a subsidiary or affiliate, or with which
the Company or a subsidiary or affiliate combines, may be granted with an
exercise price per share of Stock other than as required above.          
(ii) No Repricing. Without the approval of stockholders, the Committee will not
amend or replace previously granted Options in a transaction that constitutes a
“repricing,” as such term is used in Section 303A.08 of the Listed Company
Manual of the New York Stock Exchange.           (iii) Option Term; Time and
Method of Exercise. The Committee shall determine the term of each Option,
provided that in no event shall the term of any Option exceed a period of ten
years from the date of grant. The Committee shall determine the time or times at
which or the circumstances under which an Option may be exercised in whole or in
part, provided that, notwithstanding anything contained herein to the contrary,
the sole and exclusive basis for determining both the vesting and exercisability
of an option will be the passage of a specific period of time or the occurrence
or non-occurrence of certain specific non-performance related events (e.g.
death, disability, termination of employment and Change of Control). In
addition, the Committee shall determine the methods by which such exercise price
may be paid or deemed to be paid and the form of such payment (subject to
Sections 11(k) and 11(l)), including, without limitation, cash, Stock (including
by withholding Stock

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  deliverable upon exercise), other Awards or awards granted under other plans
of the Company or any subsidiary or affiliate, or other property (including
through broker-assisted “cashless exercise” arrangements, to the extent
permitted by applicable law), and the methods by or forms in which Stock will be
delivered or deemed to be delivered in satisfaction of Options to Participants.
          (iv) ISOs. Notwithstanding anything to the contrary in this Section 6,
in the case of the grant of an Option intending to qualify as an ISO: (i) if the
Participant owns stock possessing more than 10 percent of the combined voting
power of all classes of stock of the Company (a “10% Shareholder”), the purchase
price of such Option must be at least 110 percent of the fair market value of
the Common Stock on the date of grant and the Option must expire within a period
of not more than five (5) years from the date of grant, and (ii) termination of
employment will occur when the person to whom an Award was granted ceases to be
an employee (as determined in accordance with Section 3401(c) of the Code and
the regulations promulgated thereunder) of the Company and its subsidiaries.
Notwithstanding anything in this Section 6 to the contrary, Options designated
as ISOs shall not be eligible for treatment under the Code as ISOs to the extent
that either (iii) the aggregate fair market value of shares of Common Stock
(determined as of the time of grant) with respect to which such Options are
exercisable for the first time by the Participant during any calendar year
(under all plans of the Company and any Subsidiary) exceeds $100,000, taking
Options into account in the order in which they were granted, and (iv) such
Options otherwise remain exercisable but are not exercised within three
(3) months of termination of employment (or such other period of time provided
in Section 422 of the Code).

      (c) Stock Appreciation Rights. The Committee is authorized to grant SARs
to Participants on the following terms and conditions:

        (i) Right to Payment. An SAR shall confer on the Participant to whom it
is granted a right to receive, upon exercise thereof, shares of Stock having a
value equal to the excess of (A) the Fair Market Value of one share of Stock on
the date of exercise (or, in the case of a “Limited SAR,” the Fair Market Value
determined by reference to the Change of Control Price, as defined under the
applicable award agreement) over (B) the exercise or settlement price of the SAR
as determined by the Committee. Stock Appreciation Rights may be granted to
Participants from time to time either in tandem with or as a component of other
Awards granted under the Plan (“tandem SARs”) or not in conjunction with other
Awards (“freestanding SARs”) and may, but need not, relate to a specific Option
granted under Section 6(b). The per share price for exercise or settlement of
SARs (including both tandem SARs and freestanding SARs) shall be determined by
the Committee, but in the case of SARs that are granted in tandem to an Option
shall not be less than the exercise price of the Option and in the case of
freestanding SARs shall be (A) fixed as of the grant date, and (B) not less than
the Fair Market Value of a share of Stock on the grant date.           (ii) No
Repricing. Without the approval of stockholders, the Committee will not amend or
replace previously granted SARs in a transaction that constitutes a “repricing,”
as such term is used in Section 303A.08 of the Listed Company Manual of the New
York Stock Exchange.           (iii) Other Terms. The Committee shall determine
the term of each SAR, provided that in no event shall the term of an SAR exceed
a period of ten years from the date of grant. The Committee shall determine at
the date of grant or thereafter, the time or times at which and the
circumstances under which a SAR may be exercised in whole or in part (including
based on future service requirements), the method of exercise, method of
settlement, method by or forms in which Stock will

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  be delivered or deemed to be delivered to Participants, and whether or not a
SAR shall be free-standing or in tandem or combination with any other Award.
Limited SARs that may only be exercised in connection with a Change of Control
or termination of service following a Change of Control as specified by the
Committee may be granted on such terms, not inconsistent with this Section 6(c),
as the Committee may determine. The Committee may require that an outstanding
Option be exchanged for an SAR exercisable for Stock having vesting, expiration,
and other terms substantially the same as the Option, so long as such exchange
will not result in additional accounting expense to the Company.

      (d) Restricted Stock. The Committee is authorized to grant Restricted
Stock to Participants on the following terms and conditions:

        (i) Grant and Restrictions. Subject to Section 6(d)(ii), Restricted
Stock shall be subject to such restrictions on transferability, risk of
forfeiture and other restrictions, if any, as the Committee may impose, which
restrictions may lapse separately or in combination at such times, under such
circumstances (including based on achievement of performance conditions and/or
future service requirements), in such installments or otherwise and under such
other circumstances as the Committee may determine at the date of grant or
thereafter. Except to the extent restricted under the terms of the Plan and any
Award document relating to the Restricted Stock, a Participant granted
Restricted Stock shall have all of the rights of a stockholder, including the
right to vote the Restricted Stock and the right to receive dividends thereon
(subject to any mandatory reinvestment or other requirement imposed by the
Committee). Upon any forfeiture of Restricted Stock a Participant shall cease to
have any rights of a stockholder and shall return any certificates representing
such Restricted Stock to the Company.           (ii) Limitation on Vesting. The
grant, issuance, retention, vesting and/or settlement of Restricted Stock shall
occur at such time and in such installments as determined by the Committee or
under criteria established by the Committee. Subject to Section 10, the
Committee shall have the right to make the timing of the grant and/or the
issuance, ability to retain, vesting and/or settlement of Restricted Stock
subject to continued employment, passage of time and/or such performance
conditions as deemed appropriate by the Committee; provided that the grant,
issuance, retention, vesting and/or settlement of a Restricted Stock Award that
is based in whole or in part on performance conditions and/or the level of
achievement versus such performance conditions shall be subject to a performance
period of not less than one year, and any Award based solely upon continued
employment or the passage of time shall vest over a period not less than three
years from the date the Award is made, provided that such vesting may occur
ratably over the three-year period. The foregoing minimum vesting conditions
need not apply (A) in the case of the death, disability or Retirement of the
Participant or termination in connection with a Change of Control, and (B) with
respect to up to an aggregate of 5% of the shares of Stock authorized under the
Plan, which may be granted (or regranted upon forfeiture) as Restricted Stock or
RSUs without regard to such minimum vesting requirements.          
(iii) Certificates for Stock. Restricted Stock granted under the Plan may be
evidenced in such manner as the Committee shall determine. If certificates
representing Restricted Stock are registered in the name of the Participant, the
Committee may require that such certificates bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such
Restricted Stock, that the Company retain physical possession of the
certificates, and that the Participant deliver a stock power to the Company,
endorsed in blank, relating to the Restricted Stock.

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        (iv) Dividends and Splits. As a condition to the grant of an Award of
Restricted Stock, the Committee may require that any dividends paid on a share
of Restricted Stock shall be either (A) paid with respect to such Restricted
Stock at the dividend payment date in cash, in kind, or in a number of shares of
unrestricted Stock having a Fair Market Value equal to the amount of such
dividends, or (B) automatically reinvested in additional Restricted Stock or
held in kind, which shall be subject to the same terms as applied to the
original Restricted Stock to which it relates. Unless otherwise determined by
the Committee, Stock distributed in connection with a Stock split or Stock
dividend, and other property distributed as a dividend, shall be subject to
restrictions and a risk of forfeiture to the same extent as the Restricted Stock
with respect to which such Stock or other property has been distributed.

      (e) Restricted Stock Units. The Committee is authorized to grant RSUs to
Participants, subject to the following terms and conditions:

        (i) Award and Restrictions. Subject to Section 6(e)(ii), RSUs shall be
subject to such restrictions on transferability, risk of forfeiture and other
restrictions, if any, as the Committee may impose, which restrictions may lapse
separately or in combination at such times, under such circumstances (including
based on achievement of performance conditions and/or future service
requirements), in such installments or otherwise and under such other
circumstances as the Committee may determine at the date of grant or thereafter.
A Participant granted RSUs shall not have any of the rights of a stockholder,
including the right to vote, until Stock shall have been issued in the
Participant’s name pursuant to the RSUs, except that the Committee may provide
for dividend equivalents pursuant to Section 6(e)(iii) below).          
(ii) Limitation on Vesting. The grant, issuance, retention, vesting and/or
settlement of RSUs shall occur at such time and in such installments as
determined by the Committee or under criteria established by the Committee.
Subject to Section 10, the Committee shall have the right to make the timing of
the grant and/or the issuance, ability to retain, vesting and/or settlement of
RSUs subject to continued employment, passage of time and/or such performance
conditions as deemed appropriate by the Committee; provided that the grant,
issuance, retention, vesting and/or settlement of an RSU that is based in whole
or in part on performance conditions and/or the level of achievement versus such
performance conditions shall be subject to a performance period of not less than
one year, and any Award based solely upon continued employment or the passage of
time shall vest over a period not less than three years from the date the Award
is made, provided that such vesting may occur ratably over the three-year
period. The foregoing minimum vesting conditions need not apply (A) in the case
of the death, disability or Retirement of the Participant or termination in
connection with a Change of Control, and (B) with respect to up to an aggregate
of 5% of the shares of Stock authorized under the Plan, which may be granted (or
regranted upon forfeiture) as Restricted Stock or RSUs without regard to such
minimum vesting requirements.           (iii) Dividend Equivalents. Unless
otherwise determined by the Committee, dividend equivalents on the specified
number of shares of Stock covered by an Award of RSUs shall be either (A) paid
with respect to such RSUs at the dividend payment date in cash or in shares of
unrestricted Stock having a Fair Market Value equal to the amount of such
dividends, or (B) deferred with respect to such RSUs, either as a cash deferral
or with the amount or value thereof automatically deemed reinvested in
additional RSUs, other Awards or other investment vehicles having a Fair Market
Value equal to the amount of such dividends, as the Committee shall determine or
permit a Participant to elect.

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      (f) Deferred Stock Awards. Non-employee directors may voluntarily defer
all or a part of their retainers, meeting fees, and Stock-based Awards under the
provisions of the 1998 Directors’ Deferred Compensation Plan, as amended in
2003, or any successor plan providing for deferral of compensation by
non-employee directors. The dollar value of such deferrals is credited to a
notional account in the form of Deferred Stock Awards. The deferred account
balances will be settled in the form of Stock issued under the Plan, based on
each non-employee director’s election.
      7. Performance-Based Compensation.
      (a) Performance Goals Generally. If the Committee specifies that any
Restricted Stock or RSU Award is intended to qualify as “performance-based
compensation” for purposes of Code Section 162(m), the grant, issuance, vesting
and/or settlement of such Award shall be contingent upon achievement of
preestablished performance goals and other terms set forth in this Section 7.
The performance goal for such Awards shall consist of one or more business
criteria and the level or levels of performance with respect to each of such
criteria, as specified by the Committee consistent with this Section 7. The
performance goal shall be an objective business criteria enumerated under
Section 7(c) and shall otherwise meet the requirements of Code Section 162(m)
and regulations thereunder, including the requirement that the level or levels
of performance targeted by the Committee result in the achievement of
performance goals being “substantially uncertain”. Performance goals may differ
for Awards granted to any one Participant or to different Participants.
      (b) Timing for Establishing Performance Conditions. A performance goal
shall be established not later than the earlier of (A) 90 days after the
beginning of any performance period applicable to such performance-based Award
or (B) the time 25% of such performance period has elapsed.
      (c) Business Criteria. For purposes of this Plan, a “performance goal”
shall mean any one or more of the following business criteria, either
individually, alternatively or in any combination, applied to either the Company
as a whole or to a business unit or subsidiary, either individually,
alternatively or in any combination, and measured either annually or
cumulatively over a period of years, on an absolute basis or relative to a
pre-established target, to previous years’ results or to a designated comparison
group, in each case as specified by the Committee:

        (1) gross sales, net sales, or comparable store sales;          
(2) gross margin, cost of goods sold, mark-ups or mark-downs;          
(3) selling, general and administrative expenses;           (4) operating
income, earnings from operations, earnings before or after taxes, earnings
before or after interest, depreciation, amortization, or extraordinary or
special items;           (5) net income or net income per common share (basic or
diluted);           (6) inventory turnover or inventory shrinkage;          
(7) return on assets, return on investment, return on capital, or return on
equity;           (8) cash flow, free cash flow, cash flow return on investment,
or net cash provided by operations;           (9) economic profit or economic
value created;           (10) stock price or total stockholder return; and

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        (11) market penetration, geographic expansion or new concept
development; customer satisfaction; staffing; diversity; training and
development; succession planning; employee satisfaction; acquisitions or
divestitures of subsidiaries, affiliates or joint ventures.

      (d) Written Determinations. Determinations by the Committee as to the
establishment of performance conditions, the amount potentially payable in
respect of performance-based Awards, the level of actual achievement of the
specified performance conditions relating to such Awards, and the amount of any
final Award shall be recorded in writing in the case of Awards intended to
qualify under Section 162(m). Specifically, the Committee shall certify in
writing, in a manner conforming to applicable regulations under Section 162(m),
prior to settlement of each such Award granted to a Covered Employee, that the
performance objective relating to the performance-based Award and other material
terms of the Award upon which settlement of the Award was conditioned have been
satisfied.
      (e) Settlement of performance-based Awards; Other Terms. Settlement of
performance-based Awards shall be in cash or Stock, in the Committee’s
discretion. The Committee may, in its discretion, reduce the amount of a
settlement otherwise to be made in connection with such Awards. Any settlement
which changes the form of payment from that originally specified shall be
implemented in a manner such that the Award and other related Awards do not,
solely for that reason, fail to qualify as “performance-based compensation” for
purposes of Code Section 162(m). The Committee shall specify the circumstances
in which such Awards shall be paid or forfeited in the event of a Participant’s
death, disability or Retirement, in connection with a Change of Control or,
subject to the one-year performance condition set forth in Sections 6(d)(ii) and
(e)(ii), in connection with any other termination of employment prior to the end
of a performance period or settlement of such Awards.
      (f) Right of Recapture. If at any time after the date on which a
Participant has been granted or becomes vested in an Award pursuant to the
achievement of a performance goal under Section 7(c), the Committee determines
that the earlier determination as to the achievement of the performance goal was
based on incorrect data and that in fact the performance goal had not been
achieved or had been achieved to a lesser extent than originally determined and
a portion of an Award would not have been granted, vested or paid, given the
correct data, then (i) such portion of the Award that was granted shall be
forfeited and any related shares (or if such shares were disposed of the cash
equivalent) shall be returned to the Company as provided by the Committee,
(ii) such portion of the Award that became vested shall be deemed to be not
vested and any related shares (or if such shares were disposed of the cash
equivalent) shall be returned to the Company as provided by the Committee, and
(iii) such portion of the Award paid to the Participant shall be paid by the
Participant to the Company upon notice from the Company as provided by the
Committee.
      8. Certain Provisions Applicable to Awards.
      (a) Stand-Alone, Additional, and Tandem Awards. Awards granted under the
Plan may, in the Committee’s discretion, be granted either alone or in addition
to, in tandem with, or in substitution or exchange for, any other Award or any
award granted under another plan of the Company, any subsidiary or affiliate, or
any business entity to be acquired by the Company or a subsidiary or affiliate,
or any other right of a Participant to receive payment from the Company or any
subsidiary or affiliate. Awards granted in addition to or in tandem with other
Awards or awards may be granted either as of the same time as or a different
time from the grant of such other Awards or awards.
      (b) Term of Awards. The term of each Award shall be for such period as may
be determined by the Committee, subject to the express limitations set forth in
Sections 6(b)(iii) and 6(c)(iii) or elsewhere in the Plan.

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      (c) Form and Timing of Payment under Awards. Subject to the terms of the
Plan (including Sections 11(k) and (l)) and any applicable Award document,
payments to be made by the Company or a subsidiary or affiliate upon the
exercise of an Option or other Award or settlement of an Award may be made in
such forms as the Committee shall determine, including, without limitation,
cash, Stock, other Awards or other property, and may be made in a single payment
or transfer, in installments, or on a deferred basis. The settlement of any
Award may be accelerated, and cash paid in lieu of Stock in connection with such
settlement, in the Committee’s discretion or upon occurrence of one or more
specified events, subject to Sections 6(b)(iv), 11(k) and 11(l).
      9. Change of Control.
      (a) Impact of Event. Unless the Board or Committee provides otherwise
(either at the time of grant of an Award or thereafter) prior to a Change of
Control, this Section 9(a) shall govern the treatment of any Option, SAR,
Restricted Stock or RSU, the exercisability, vesting and/or settlement of which
is based solely upon continued employment or passage of time. In the case of an
Award subject to this Section 9(a) that the acquiring or surviving company in
the Change of Control assumes upon and maintains following the Change of Control
(which Award shall be adjusted as to the number and kind of shares as may be
determined appropriate by the Committee prior to the Change of Control), if
there occurs an involuntary termination without cause of the Participant holding
such Award (excluding voluntary resignation, death, disability or Retirement)
within three months prior to or eighteen months following the Change of Control
such Award shall be treated as provided in clause (i) or (ii) of this
Section 9(a), as applicable. In the case of an Award subject to this
Section 9(a) that the acquiring or surviving company in the Change of Control
does not assume upon the Change of Control, immediately prior to the Change of
Control such Award shall be treated as provided in clause (i) or (ii) of this
Section 9(a), as applicable. The treatment provided for under this Section 9(a)
is as follows:

        (i) in the case of an Option or SAR, the Participant shall have the
ability to exercise such Option or SAR, including any portion of the Option or
SAR not previously exercisable, until the earlier of the expiration of the
Option or SAR under its original term and a date that is two years (or such
longer post-termination exercisability term as may be specified in the Option or
SAR) following such date of termination of employment; and           (ii) in the
case of Restricted Stock or RSUs, the Award shall become fully vested and shall
be settled in full. The Committee may also, through the terms of an Award or
otherwise, provide for an absolute or conditional exercise, payment or lapse of
conditions or restrictions on an Award which shall only be effective if, upon
the announcement of a transaction intended to result in a Change of Control, no
provision is made in such transaction for the assumption and continuation of
outstanding Awards.

      (b) Effect of Change of Control upon performance-based Awards. Unless the
Committee specifies otherwise in the terms of an Award prior to a Change of
Control, this Section 9(b) shall control the treatment of any Restricted Stock
or RSU if at the time of the Change of Control the grant, issuance, retention,
vesting and/or settlement of such Award is based in whole or in part on
performance criteria and level of achievement versus such criteria. In the case
of an Award subject to this Section 9(b) in which fifty percent (50%) or more of
the performance period applicable to the Award has elapsed as of the date of the
Change of Control, the Participant shall be entitled to payment, vesting or
settlement of such Award based upon performance through a date occurring within
three months prior to the date of the Change of Control, as determined by the
Committee prior to the Change of Control, and pro-rated based upon the
percentage of

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the performance period that has elapsed between the date such Award was granted
and the date of the Change of Control. In the case of an Award subject to this
Section 9(b) in which less than fifty percent (50%) of the performance period
applicable to the Award has elapsed as of the date of the Change of Control, the
Participant shall be entitled to payment, vesting or settlement of the target
amount of such Award, as determined by the Committee prior to the Change of
Control, pro-rated based upon the percentage of the performance period that has
elapsed between the date such Award was granted and the date of the Change of
Control. The Committee may determine either in advance or at the time of the
Change of Control the treatment of the pro-rata portion of an Award attributable
to the portion of the performance period occurring after the date of the Change
of Control.
      Notwithstanding the foregoing, in no event shall the treatment specified
in Sections 9(a) and (b) apply with respect to an Award prior to the earliest to
occur of (A) the date such amounts would have been distributed in the absence of
the Change of Control, (B) a Participant’s “separation from service” (as defined
under Section 409A of the Code) with the Company (or six months thereafter for
“specified employees”), (C) the Participant’s death or “disability” (as defined
in Section 409A(a)(2)(C) of the Code), or (D) a “change in the ownership or
effective control” of the Company or in the “ownership of a substantial portion
of the assets” of the Company within the meanings ascribed to such terms in
Treasury Department regulations issued under Section 409A of the Code, if and to
the extent that the Committee determines, in its sole discretion, that the
effect of such treatment prior to the time specified in this Section 9(b)(A),
(B), (C) or (D) would be the imposition of the additional tax under
Section 409A(a)(1)(B) of the Code on a Participant holding such Award.
      (c) Definition of Change of Control. For purposes of the Plan, the term
“Change of Control” shall mean, unless otherwise defined in an Award agreement,
an occurrence of a nature that would be required to be reported by the Company
in response to Item 6(e) of Schedule 14A of Regulation 14A issued under the
Exchange Act. Without limiting the inclusiveness of the definition in the
preceding sentence, a Change of Control of the Company shall be deemed to have
occurred as of the first day that any one or more of the following conditions is
satisfied:

        (i) any person is or becomes the “beneficial owner” (as that term is
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 20% or more of the combined voting power
of the Company’s then outstanding securities and such person would be deemed an
“Acquiring Person” for purposes of the Rights Agreement dated as of July 16,
1998, as amended, between the Company and National City Bank, as successor
Rights Agent (the “Rights Agreement”); or           (ii) any of the following
occur: (A) any merger or consolidation of the Company, other than a merger or
consolidation in which the voting securities of the Company immediately prior to
the merger or consolidation continue to represent (either by remaining
outstanding or being converted into securities of the surviving entity) 80% or
more of the combined voting power of the Company or surviving entity immediately
after the merger or consolidation with another entity; (B) any sale, exchange,
lease, mortgage, pledge, transfer, or other disposition (in a single transaction
or a series of related transactions) of assets or earning power aggregating more
than 50% of the assets or earning power of the Company on a consolidated basis;
(C) any complete liquidation or dissolution of the Company; (D) any
reorganization, reverse stock split or recapitalization of the Company that
would result in a Change of Control as otherwise defined herein; or (E) any
transaction or series of related transactions having, directly or indirectly,
the same effect as any of the foregoing.

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      10. Additional Award Forfeiture Provisions.
      (a) Forfeiture of Options and Other Awards and Gains Realized Upon Prior
Option Exercises or Award Settlements. Unless otherwise determined by the
Committee, each Award granted hereunder, other than Awards granted to
non-employee directors, shall be subject to the following additional forfeiture
conditions, to which the Participant, by accepting an Award hereunder, agrees.
If any of the events specified in Section 10(b)(i), (ii), or (iii) occurs (a
“Forfeiture Event”), all of the following forfeitures will result:

        (i) The unexercised portion of each Option held by the Participant,
whether or not vested, and any other Award not then settled will be immediately
forfeited and canceled upon the occurrence of the Forfeiture Event; and    
      (ii) The Participant will be obligated to repay to the Company, in cash,
within five business days after demand is made therefor by the Company, the
total amount of Award Gain (as defined herein) realized by the Participant upon
each exercise of an Option or settlement of an Award that occurred on or after
(A) the date that is six months prior to the occurrence of the Forfeiture Event,
if the Forfeiture Event occurred while the Participant was employed by the
Company or a subsidiary or affiliate, or (B) the date that is six months prior
to the date the Participant’s employment by the Company or a subsidiary or
affiliate terminated, if the Forfeiture Event occurred after the Participant
ceased to be so employed. For purposes of this Section, the term “Award Gain”
shall mean (i), in respect of a given Option exercise, the product of (X) the
Fair Market Value per share of Stock at the date of such exercise (without
regard to any subsequent change in the market price of shares) minus the
exercise price times (Y) the number of shares as to which the Option was
exercised at that date, and (ii), in respect of any other settlement of an Award
granted to the Participant, the Fair Market Value of the cash or Stock paid or
payable to Participant (regardless of any elective deferral) less any cash or
the Fair Market Value of any Stock or property (other than an Award or award
which would have itself then been forfeitable hereunder and excluding any
payment of tax withholding) paid by the Participant to the Company as a
condition of or in connection such settlement.

      (b) Events Triggering Forfeiture. The forfeitures specified in
Section 10(a) will be triggered upon the occurrence of any one of the following
Forfeiture Events at any time during Participant’s employment by the Company or
a subsidiary or affiliate, or during the one-year period following termination
of such employment:

        (i) Participant, acting alone or with others, directly or indirectly,
(A) engages, either as employee, employer, consultant, advisor, or director, or
as an owner, investor, partner, or stockholder unless Participant’s interest is
insubstantial, in any business in an area or region in which the Company
conducts business at the date the event occurs, which is directly in competition
with a business then conducted by the Company or a subsidiary or affiliate;
(B) induces any customer or supplier of the Company or a subsidiary or
affiliate, with which the Company or a subsidiary or affiliate has a business
relationship, to curtail, cancel, not renew, or not continue his or her or its
business with the Company or any subsidiary or affiliate; or (C) induces, or
attempts to influence, any employee of or service provider to the Company or a
subsidiary or affiliate to terminate such employment or service. The Committee
shall, in its discretion, determine which lines of business the Company conducts
on any particular date and which third parties may reasonably be deemed to be in
competition with the Company. For purposes of this Section 10(b)(i), a
Participant’s interest as a stockholder is insubstantial if it represents
beneficial ownership of less than five percent of the outstanding class of
stock, and a Participant’s interest as an owner, investor, or partner is
insubstantial if it represents ownership, as

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  determined by the Committee in its discretion, of less than five percent of
the outstanding equity of the entity;           (ii) Participant discloses,
uses, sells, or otherwise transfers, except in the course of employment with or
other service to the Company or any subsidiary or affiliate, any confidential or
proprietary information of the Company or any subsidiary or affiliate, including
but not limited to information regarding the Company’s current and potential
customers, organization, employees, finances, and methods of operations and
investments, so long as such information has not otherwise been disclosed to the
public or is not otherwise in the public domain (other than by Participant’s
breach of this provision), except as required by law or pursuant to legal
process, or Participant makes statements or representations, or otherwise
communicates, directly or indirectly, in writing, orally, or otherwise, or takes
any other action which may, directly or indirectly, disparage or be damaging to
the Company or any of its subsidiaries or affiliates or their respective
officers, directors, employees, advisors, businesses or reputations, except as
required by law or pursuant to legal process; or           (iii) Participant
fails to cooperate with the Company or any subsidiary or affiliate in any way,
including, without limitation, by making himself or herself available to testify
on behalf of the Company or such subsidiary or affiliate in any action, suit, or
proceeding, whether civil, criminal, administrative, or investigative, or
otherwise fails to assist the Company or any subsidiary or affiliate in any way,
including, without limitation, in connection with any such action, suit, or
proceeding by providing information and meeting and consulting with members of
management of, other representatives of, or counsel to, the Company or such
subsidiary or affiliate, as reasonably requested.

      (c) Agreement Does Not Prohibit Competition or Other Participant
Activities. Although the conditions set forth in this Section 10 shall be deemed
to be incorporated into an Award, a Participant is not thereby prohibited from
engaging in any activity, including but not limited to competition with the
Company and its subsidiaries and affiliates. Rather, the non-occurrence of the
Forfeiture Events set forth in Section 10(b) is a condition to the Participant’s
right to realize and retain value from his or her compensatory Options and
Awards, and the consequence under the Plan if the Participant engages in an
activity giving rise to any such Forfeiture Event are the forfeitures specified
herein. The Company and Participant shall not be precluded by this provision or
otherwise from entering into other agreements concerning the subject matter of
Sections 10(a) and 10(b).
      (d) Committee Discretion. The Committee may, in its discretion, waive in
whole or in part the Company’s right to forfeiture under this Section, but no
such waiver shall be effective unless evidenced by a writing signed by a duly
authorized officer of the Company. In addition, the Committee may impose
additional conditions on Awards, by inclusion of appropriate provisions in the
document evidencing or governing any such Award.
      11. General Provisions.
      (a) Compliance with Legal and Other Requirements. The Company may, to the
extent deemed necessary or advisable by the Committee and subject to
Section 11(k), postpone the issuance or delivery of Stock or payment of other
benefits under any Award until completion of such registration or qualification
of such Stock or other required action under any federal or state law, rule or
regulation, listing or other required action with respect to any stock exchange
or automated quotation system upon which the Stock or other securities of the
Company are listed or quoted, or compliance with any other obligation of the
Company, as the Committee may consider appropriate, and may require any
Participant to make such representations, furnish such information and comply
with or be subject to such other conditions as it may

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consider appropriate in connection with the issuance or delivery of Stock or
payment of other benefits in compliance with applicable laws, rules, and
regulations, listing requirements, or other obligations. The foregoing
notwithstanding, in connection with a Change of Control, the Company shall take
or cause to be taken no action, and shall undertake or permit to arise no legal
or contractual obligation, that results or would result in any postponement of
the issuance or delivery of Stock or payment of benefits under any Award or the
imposition of any other conditions on such issuance, delivery or payment, to the
extent that such postponement or other condition would represent a greater
burden on a Participant than existed on the 90th day preceding the Change of
Control.
      (b) Limits on Transferability; Beneficiaries. No Award or other right or
interest of a Participant under the Plan shall be pledged, hypothecated or
otherwise encumbered or subject to any lien, obligation or liability of such
Participant to any party (other than the Company or a subsidiary or affiliate
thereof), or assigned or transferred by such Participant otherwise than by will
or the laws of descent and distribution or to a Beneficiary upon the death of a
Participant, and such Awards or rights that may be exercisable shall be
exercised during the lifetime of the Participant only by the Participant or his
or her guardian or legal representative, except that Awards and other rights
(other than ISOs and SARs in tandem therewith) may be transferred to one or more
transferees during the lifetime of the Participant, and may be exercised by such
transferees in accordance with the terms of such Award, but only if and to the
extent such transfers are permitted by the Committee, subject to any terms and
conditions which the Committee may impose thereon (which may include limitations
the Committee may deem appropriate in order that offers and sales under the Plan
will meet applicable requirements of registration forms under the Securities Act
of 1933 specified by the Securities and Exchange Commission). A Beneficiary,
transferee, or other person claiming any rights under the Plan from or through
any Participant shall be subject to all terms and conditions of the Plan and any
Award document applicable to such Participant, except as otherwise determined by
the Committee, and to any additional terms and conditions deemed necessary or
appropriate by the Committee.
      (c) Adjustments. In the event that any large, special and non-recurring
dividend or other distribution (whether in the form of cash or property other
than Stock), recapitalization, forward or reverse split, Stock dividend,
reorganization, merger, consolidation, spin-off, combination, repurchase, share
exchange, liquidation, dissolution or other similar corporate transaction or
event affects the Stock such that an adjustment is determined by the Committee
to be appropriate, then the Committee shall, in an equitable manner as
determined by the Committee, adjust any or all of (i) the number and kind of
shares of Stock or other securities of the Company or other issuer which are
subject to the Plan, (ii) the number and kind of shares of Stock or other
securities of the Company or other issuer by which annual per-person Award
limitations are measured under Section 5, including the share limits applicable
to non-employee director Awards under Section 5(c), (iii) the number and kind of
shares of Stock or other securities of the Company or other issuer subject to or
deliverable in respect of outstanding Awards and (iv) the exercise price,
settlement price or purchase price relating to any Award or, if deemed
appropriate, the Committee may make provision for a payment of cash or property
to the holder of an outstanding Option (subject to Sections 11(k) and 11(l)) or
other Award. In addition, the Committee is authorized to make adjustments in the
terms and conditions of, and the criteria included in, Awards (including
performance-based Awards and performance goals and any hypothetical funding pool
relating thereto) in recognition of unusual or nonrecurring events (including,
without limitation, events described in the preceding sentence, as well as
acquisitions and dispositions of businesses and assets affecting any performance
conditions), or in response to changes in applicable laws, regulations, or
accounting principles; provided that no such adjustment shall be authorized or
made if and to the extent that the existence of such authority (i) would cause
Options, SARs, Restricted Stock or RSUs granted under the Plan to Participants
designated by the Committee as Covered Employees and intended to

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qualify as “performance-based compensation” under Code Section 162(m) and
regulations thereunder to otherwise fail to qualify as “performance-based
compensation” under Code Section 162(m) and regulations thereunder, or
(ii) would cause the Committee to be deemed to have authority to change the
targets, within the meaning of Treasury Regulation 1.162-27(e)(4)(vi), under the
performance goals relating to Options or SARs granted to Covered Employees and
intended to qualify as “performance-based compensation” under Code
Section 162(m) and regulations thereunder.
      (d) Tax Provisions.

        (i) Withholding. The Company and any subsidiary or affiliate is
authorized to withhold from any Award granted, any payment relating to an Award
under the Plan, including from a distribution of Stock, or any payroll or other
payment to a Participant, amounts of withholding and other taxes due or
potentially payable in connection with any transaction or event involving an
Award, or to require a Participant to remit to the Company an amount in cash or
other property (including Stock) to satisfy such withholding before taking any
action with respect to an Award, and to take such other action as the Committee
may deem advisable to enable the Company and Participants to satisfy obligations
for the payment of withholding taxes and other tax obligations relating to any
Award. This authority shall include authority to withhold or receive Stock or
other property and to make cash payments in respect thereof in satisfaction of a
Participant’s withholding obligations, either on a mandatory or elective basis
in the discretion of the Committee, or in satisfaction of other tax obligations.
The Company can delay the delivery to a Participant of Stock under any Award to
the extent necessary to allow the Company to determine the amount of withholding
to be collected and to collect and process such withholding.          
(ii) Required Consent to and Notification of Code Section 83(b) Election. No
election under Section 83(b) of the Code (to include in gross income in the year
of transfer the amounts specified in Code Section 83(b)) or under a similar
provision of the laws of a jurisdiction outside the United States may be made
unless expressly permitted by the terms of the Award document or by action of
the Committee in writing prior to the making of such election. In any case in
which a Participant is permitted to make such an election in connection with an
Award, the Participant shall notify the Company of such election within ten days
of filing notice of the election with the Internal Revenue Service or other
governmental authority, in addition to any filing and notification required
pursuant to regulations issued under Code Section 83(b) or other applicable
provision.           (iii) Requirement of Notification Upon Disqualifying
Disposition Under Code Section 421(b). If any Participant shall make any
disposition of shares of Stock delivered pursuant to the exercise of an ISO
under the circumstances described in Code Section 421(b) (i.e., a disqualifying
disposition), such Participant shall notify the Company of such disposition
within ten days thereof.

      (e) Changes to the Plan. The Board may amend, suspend or terminate the
Plan or the Committee’s authority to grant Awards under the Plan without the
consent of stockholders or Participants; provided, however, that any amendment
to the Plan shall be submitted to the Company’s stockholders for approval not
later than the earliest annual meeting for which the record date is at or after
the date of such Board action:

        (i) if such stockholder approval is required by any federal or state law
or regulation or the rules of the New York Stock Exchange or any other stock
exchange or automated quotation system on which the Stock may then be listed or
quoted; or

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        (ii) if such amendment would materially increase the number of shares
reserved for issuance and delivery under the Plan; or           (iii) if such
amendment would alter the provisions of the Plan restricting the Company’s
ability to grant Options or SARs with an exercise price that is not less than
the Fair Market Value of Stock; or           (iv) in connection with any action
to amend or replace previously granted Options or SARs in a transaction that
constitutes a “repricing,” as such term is used in Section 303A.08 of the Listed
Company Manual of the New York Stock Exchange.

The Board may otherwise, in its discretion, determine to submit other amendments
to the Plan to stockholders for approval; and provided further, that, without
the consent of an affected Participant, no such Board (or any Committee) action
may materially and adversely affect the rights of such Participant under any
outstanding Award (for this purpose, actions that alter the timing of federal
income taxation of a Participant will not be deemed material unless such action
results in an income tax penalty on the Participant). With regard to other terms
of Awards, the Committee shall have no authority to waive or modify any such
Award term after the Award has been granted to the extent the waived or modified
term would be mandatory under the Plan for any Award newly granted at the date
of the waiver or modification.
      (f) Right of Setoff. The Company or any subsidiary or affiliate may, to
the extent permitted by applicable law, deduct from and set off against any
amounts the Company or a subsidiary or affiliate may owe to the Participant from
time to time (including amounts payable in connection with any Award, owed as
wages, fringe benefits, or other compensation owed to the Participant), such
amounts as may be owed by the Participant to the Company, including but not
limited to amounts owed under Section 10(a), although the Participant shall
remain liable for any part of the Participant’s payment obligation not satisfied
through such deduction and setoff. By accepting any Award granted hereunder, the
Participant agrees to any deduction or setoff under this Section 11(f).
      (g) Unfunded Status of Awards; Creation of Trusts. To the extent that any
Award is deferred compensation, the Plan is intended to constitute an “unfunded”
plan for deferred compensation with respect to such Award. With respect to any
payments not yet made to a Participant or obligation to deliver Stock pursuant
to an Award, nothing contained in the Plan or any Award shall give any such
Participant any rights that are greater than those of a general creditor of the
Company; provided that the Committee may authorize the creation of trusts and
deposit therein cash, Stock, other Awards or other property, or make other
arrangements to meet the Company’s obligations under the Plan. Such trusts or
other arrangements shall be consistent with the “unfunded” status of the Plan
unless the Committee otherwise determines with the consent of each affected
Participant.
      (h) Nonexclusivity of the 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 or a
committee thereof to adopt such other incentive arrangements, apart from the
Plan, as it may deem desirable, including incentive arrangements and awards
which do not qualify under Code Section 162(m), and such other arrangements may
be either applicable generally or only in specific cases.
      (i) Payments in the Event of Forfeitures; Fractional Shares. Unless
otherwise determined by the Committee, in the event of a forfeiture of an Award
with respect to which a Participant paid cash consideration, the Participant
shall be repaid the amount of such cash consideration. In addition, nothing
herein shall prevent the Committee from authorizing the payment in cash of any
amounts with respect to forfeited Awards. No fractional shares of Stock shall be
issued or delivered pursuant to the Plan or any

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Award. The Committee shall determine whether cash, other Awards or other
property shall be issued or paid in lieu of such fractional shares or whether
such fractional shares or any rights thereto shall be forfeited or otherwise
eliminated.
      (j) Compliance with Code Section 162(m). It is the intent of the Company
that Options and SARs granted to Covered Employees and other Awards designated
as Awards to Covered Employees subject to Section 7 shall constitute qualified
“performance-based compensation” within the meaning of Code Section 162(m) and
regulations thereunder, unless otherwise determined by the Committee at the time
of allocation of an Award. Accordingly, the terms of Section 7, including the
definitions of Covered Employee and other terms used therein, shall be
interpreted in a manner consistent with Code Section 162(m) and regulations
thereunder. The foregoing notwithstanding, because the Committee cannot
determine with certainty whether a given Participant will be a Covered Employee
with respect to a fiscal year that has not yet been completed, the term Covered
Employee as used herein shall mean only a person designated by the Committee as
likely to be a Covered Employee with respect to a specified fiscal year. If any
provision of the Plan or any Award document relating to an Award that is
designated as intended to comply with Code Section 162(m) does not comply or is
inconsistent with the requirements of Code Section 162(m) or regulations
thereunder, such provision shall be construed or deemed amended to the extent
necessary to conform to such requirements, and no provision shall be deemed to
confer upon the Committee or any other person discretion to increase the amount
of compensation otherwise payable in connection with any such Award upon
attainment of the applicable performance objectives.
      (k) Certain Limitations on Awards to Ensure Compliance with Code
Section 409A. Notwithstanding anything herein to the contrary, any Award that is
deferred compensation within the meaning of Code Section 409A shall be
automatically modified and limited to the extent that the Committee determines
necessary to avoid the imposition of the additional tax under
Section 409A(a)(1)(B) of the Code on a Participant holding such Award.
      (l) Certain Limitations Relating to Accounting Treatment of Awards. Other
provisions of the Plan notwithstanding, the Committee’s authority under the Plan
(including under Sections 8(c), 11(c) and 11(d)) is limited to the extent
necessary to ensure that any Option or other Award of a type that the Committee
has intended to be subject to fixed accounting with a measurement date at the
date of grant or the date performance conditions are satisfied under APB 25
shall not become subject to “variable” accounting solely due to the existence of
such authority, unless the Committee specifically determines that the Award
shall remain outstanding despite such “variable” accounting.
      (m) Governing Law. The validity, construction, and effect of the Plan, any
rules and regulations relating to the Plan and any Award document shall be
determined in accordance with the laws of the State of Delaware, without giving
effect to principles of conflicts of laws, and applicable provisions of federal
law.
      (n) Awards to Participants Outside the United States. The Committee may
modify the terms of any Award under the Plan made to or held by a Participant
who is then resident or primarily employed outside of the United States in any
manner deemed by the Committee to be necessary or appropriate in order that such
Award shall conform to laws, regulations, and customs of the country in which
the Participant is then resident or primarily employed, or so that the value and
other benefits of the Award to the Participant, as affected by foreign tax laws
and other restrictions applicable as a result of the Participant’s residence or
employment abroad shall be comparable to the value of such an Award to a
Participant who is resident or primarily employed in the United States. An Award
may be modified under this Section 11(n) in a manner

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that is inconsistent with the express terms of the Plan, so long as such
modifications will not contravene any applicable law or regulation or result in
actual liability under Section 16(b) for the Participant whose Award is
modified.
      (o) Limitation on Rights Conferred under Plan. Neither the Plan nor any
action taken hereunder shall be construed as (i) giving any Eligible Person or
Participant the right to continue as an Eligible Person or Participant or in the
employ or service of the Company or a subsidiary or affiliate, (ii) interfering
in any way with the right of the Company or a subsidiary or affiliate to
terminate any Eligible Person’s or Participant’s employment or service at any
time (subject to the terms and provisions of any separate written agreements),
(iii) giving an Eligible Person or Participant any claim to be granted any Award
under the Plan or to be treated uniformly with other Participants and employees,
or (iv) conferring on a Participant any of the rights of a stockholder of the
Company unless and until the Participant is duly issued or transferred shares of
Stock in accordance with the terms of an Award or an Option is duly exercised.
Except as expressly provided in the Plan and an Award document, neither the Plan
nor any Award document shall confer on any person other than the Company and the
Participant any rights or remedies thereunder.
      (p) Severability; Entire Agreement. If any of the provisions of the Plan
or any Award document is finally held to be invalid, illegal or unenforceable
(whether in whole or in part), such provision shall be deemed modified to the
extent, but only to the extent, of such invalidity, illegality or
unenforceability, and the remaining provisions shall not be affected thereby;
provided, that, if any of such provisions is finally held to be invalid,
illegal, or unenforceable because it exceeds the maximum scope determined to be
acceptable to permit such provision to be enforceable, such provision shall be
deemed to be modified to the minimum extent necessary to modify such scope in
order to make such provision enforceable hereunder. The Plan and any agreements
or documents designated by the Committee as setting forth the terms of an Award
contain the entire agreement of the parties with respect to the subject matter
thereof and supersede all prior agreements, promises, covenants, arrangements,
communications, representations and warranties between them, whether written or
oral with respect to the subject matter thereof.
      (q) Plan Effective Date and Termination. The Plan shall become effective
if, and at such time as, the stockholders of the Company have approved it in
accordance with applicable law and stock exchange requirements. Unless earlier
terminated by action of the Board of Directors, the authority of the Committee
to make grants under the Plan shall terminate on the date that is ten years
after the latest date upon which stockholders of the Company have approved the
Plan, and the Plan will remain in effect until such time as no Stock remains
available for delivery under the Plan or as set forth above and the Company has
no further rights or obligations under the Plan with respect to outstanding
Awards under the Plan.

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