Exhibit 10.34

EXELON CORPORATION

2011 LONG-TERM INCENTIVE PLAN

(As Amended Effective December 18, 2014)

I. INTRODUCTION

1.1 Purposes. The purposes of the Exelon Corporation 2011 Long-Term Incentive
Plan (this “Plan”) are (i) to align the interests of the Company’s stockholders
and the recipients of awards under this Plan by increasing the proprietary
interest of such recipients in the Company’s growth and success, (ii) to advance
the interests of the Company by attracting and retaining officers and other key
management employees and (iii) to motivate such persons to act in the long-term
best interests of the Company and its stockholders.

1.2 Certain Definitions.

“Affiliate” shall mean any Person (including a Subsidiary) that directly or
indirectly controls, is controlled by, or is under common control with, the
Company. For purposes of this definition the term “control” with respect to any
Person means the power to direct or cause the direction of management or
policies of such Person, directly or indirectly, whether through the ownership
of Voting Securities, by contract or otherwise.

“Agreement” shall mean the written agreement evidencing an award hereunder
between the Company and the recipient of such award.

“Beneficial Owner” shall mean such term as defined in Rule 13d-3 under the
Exchange Act.

“Board” shall mean the Board of Directors of the Company.

“Cause” shall mean (a) with respect to an employee whose entitlement to
severance benefits upon termination of employment is governed by an individual
change in control agreement, the meaning of such term specified in such
agreement, (b) with respect to an employee whose entitlement to severance
benefits upon termination of employment is governed by the Exelon Corporation
Senior Management Severance Plan or any other executive severance plan, as in
effect from time to time, the meaning of such term specified in such plan, or
(c) with respect to any other employee, the meaning of such term specified in
the Exelon Corporation Severance Benefit Plan, as amended from time to time, or
any successor plan thereto, regardless of whether such employee is eligible to
participate in such plan.

“Change in Control” shall have the meaning set forth in Section 5.8.

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“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Committee” shall mean the Committee designated by the Board, consisting of two
or more members of the Board, each of whom may be (i) a “Non-Employee Director”
within the meaning of Rule 16b-3 under the Exchange Act, (ii) an “outside
director” within the meaning of Section 162(m) of the Code and
(iii) “independent” within the meaning of the rules of the New York Stock
Exchange or, if the Common Stock is not listed on the New York Stock Exchange,
within the meaning of the rules of the principal national stock exchange on
which the Common Stock is then traded.

“Common Stock” shall mean the common stock, without par value, of the Company.

“Company” shall mean Exelon Corporation, a Pennsylvania corporation, or any
successor thereto.

“Company Plan” shall have the meaning set forth in Section 5.8(b)(i).

“Corporate Transaction” shall have the meaning set forth in Section 5.8(a).

“Disability” shall have the meaning specified in any long term disability plan
maintained by the Company in which the participant is eligible to participate;
provided that a Disability shall not be deemed to have occurred until the
Company has terminated such participant’s employment in connection with such
disability and the participant has commenced the receipt of long-term disability
benefits under such plan. If an participant is not eligible to participate in a
long-term disability plan maintained by the Company, then Disability shall mean
a termination of such participant’s employment by the Company due to the
inability of such participant to perform the essential functions such
participant’s position, with or without reasonable accommodation, for a
continuous period of at least twelve months, as determined solely by the
Committee.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Fair Market Value” shall mean the closing transaction price of a share of
Common Stock as reported on the New York Stock Exchange on the date as of which
such value is being determined or, if the Common Stock is not listed on the New
York Stock Exchange, the closing transaction price of a share of Common Stock on
the principal national stock exchange on which the Common Stock is traded on the
date as of which such value is being determined or, if there shall be no
reported transactions for such date, on the next preceding date for which
transactions were reported; provided, however, that if the Common Stock is not
listed on a national stock exchange or if Fair Market Value for any date cannot
be so determined, Fair Market Value shall be determined by the Committee by
whatever means or method as the Committee, in the good faith exercise of its
discretion, shall at such time deem appropriate and in accordance with
Section 409A of the Code.

 

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“Free-Standing SAR” shall mean an SAR which is not granted in tandem with, or by
reference to, an option, which entitles the holder thereof to receive, upon
exercise, shares of Common Stock (which may be Restricted Stock), cash or a
combination thereof with an aggregate value equal to the excess of the Fair
Market Value of one share of Common Stock on the date of exercise over the base
price of such SAR, multiplied by the number of such SARs which are exercised.

“Good Reason” shall mean (i) with respect to an employee whose entitlement to
severance benefits upon termination of employment is governed by an individual
change in control agreement, the meaning of such term specified in such
agreement, or (ii) with respect to a employee whose entitlement to severance
benefits upon termination of employment is governed by the Exelon Corporation
Senior Management Severance Plan or any other executive severance plan, as in
effect from time to time, the meaning of such term specified in such plan.

“Incentive Stock Option” shall mean an option to purchase shares of Common Stock
that meets the requirements of Section 422 of the Code, or any successor
provision, which is intended by the Committee to constitute an Incentive Stock
Option.

“Incumbent Board” shall have the meaning set forth in Section 5.8(b)(ii).

“Nonqualified Stock Option” shall mean an option to purchase shares of Common
Stock which is not an Incentive Stock Option.

“Performance Measures” shall mean the criteria and objectives, established by
the Committee, which shall be satisfied or met (i) as a condition to the grant
or exercisability of all or a portion of an option or SAR or (ii) during the
applicable Restriction Period or Performance Period as a condition to the
vesting of the holder’s interest, in the case of a Restricted Stock Award, of
the shares of Common Stock subject to such award, or, in the case of a
Restricted Stock Unit Award or Performance Unit Award, to the holder’s receipt
of the shares of Common Stock subject to such award or of payment with respect
to such award. To the extent necessary for an award to be qualified
performance-based compensation under Section 162(m) of the Code and the
regulations thereunder, such criteria and objectives shall include one or more
of the following measures, each of which may be based on absolute standards or
peer industry group comparatives and may be applied at various organizational
levels (e.g., corporate, business unit, division): (1) cumulative shareholder
value added (SVA), (2) customer satisfaction, (3) revenue, (4) primary or
fully-diluted earnings per share of Common Stock, (5) net income, (6) total
shareholder return, (7) earnings before interest taxes (EBIT), (8) cash flow,
including operating cash flows, free cash flow, discounted cash flow return on
investment and cash flow in excess of cost of capital, or any combination
thereof, (9) economic value added, (10) return on equity, (11) return on
capital, (12) return on assets, (13) net operating profits after taxes,
(14) stock price increase, (15) return on sales, (16) debt to equity ratio,
(17) payout ratio, (18) asset turnover, (19) ratio of share price to book value
of shares, (20) price/earnings ratio, (21) employee satisfaction,
(22) diversity, (23) market share, (24) operating income, (25) pre-tax income,
(26) safety, (27) diversification of business opportunities, (28) expense
ratios, (29) total expenditures, (30) completion of key projects, (31) dividend
payout as percentage of net income, (32) earnings before interest, taxes,
depreciation and amortization (EBITDA), or (33) any individual performance
objective which is measured solely in terms of quantitative targets related to
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Company, any Subsidiary or the Company’s or Subsidiary’s business. Such
individual performance measures related to the Company, a Subsidiary or the
Company’s or Subsidiary’s business may include: (A) production-related factors
such as generating capacity factor, performance against the INPO index,
generating equivalent availability, heat rates and production cost,
(B) transmission and distribution-related factors such as customer satisfaction,
reliability (based on outage frequency and duration), and cost, (C) customer
service-related factors such as customer satisfaction, service levels and
responsiveness and bad debt collections or losses, and (D) relative performance
against other similar companies in targeted areas. The measures may be weighted
differently for holders of awards based on their management level and the extent
to which their responsibilities are primarily corporate or business
unit-related, and may be based in whole or in part on the performance of the
Company, a Subsidiary, division and/or other operational unit under one or more
of such measures. In the sole discretion of the Committee, but subject to
Section 162(m) of the Code, the Committee may amend or adjust the Performance
Measures or other terms and conditions of an outstanding award in recognition of
unusual or nonrecurring events affecting the Company or its financial statements
or changes in law or accounting principles.

“Performance Option” shall mean an Incentive Stock Option or Nonqualified Stock
Option, the grant of which or the exercisability of all or a portion of which is
contingent upon the attainment of specified Performance Measures within a
specified Performance Period.

“Performance Period” shall mean any period designated by the Committee during
which (i) the Performance Measures applicable to an award shall be measured and
(ii) the conditions to vesting applicable to an award shall remain in effect.

“Performance Share Award” shall mean a Restricted Stock Award or Restricted
Stock Unit Award, the vesting of which is subject to the attainment of specified
Performance Measures within a specified Performance Period.

“Performance Unit” shall mean a right to receive, contingent upon the attainment
of specified Performance Measures within a specified Performance Period and the
expiration of any applicable Restriction Period, a specified cash amount or, in
lieu thereof, shares of Common Stock having a Fair Market Value equal to such
cash amount.

“Performance Unit Award” shall mean an award of Performance Units under this
Plan.

“Person” shall mean 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.

“Plan” shall have the meaning set forth in Section 1.1.

“Prior Plan” shall mean the Exelon Corporation 2006 Long-Term Incentive Plan, as
amended.

 

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“Restricted Stock” shall mean shares of Common Stock which are subject to a
Restriction Period and which may, in addition thereto, be subject to the
attainment of specified Performance Measures within a specified Performance
Period.

“Restricted Stock Award” shall mean an award of Restricted Stock under this
Plan.

“Restricted Stock Unit” shall mean a right to receive one share of Common Stock
or, in lieu thereof, the Fair Market Value of such share of Common Stock in
cash, which shall be contingent upon the expiration of a specified Restriction
Period and which may, in addition thereto, be contingent upon the attainment of
specified Performance Measures within a specified Performance Period.

“Restricted Stock Unit Award” shall mean an award of Restricted Stock Units
under this Plan.

“Restriction Period” shall mean any period designated by the Committee during
which (i) the Common Stock subject to a Restricted Stock Award may not be sold,
transferred, assigned, pledged, hypothecated or otherwise encumbered or disposed
of, except as provided in this Plan or the Agreement relating to such award, or
(ii) the conditions to vesting applicable to a Restricted Stock Unit Award shall
remain in effect.

“Restrictive Covenant” shall have the meaning set forth in Section 2.3(g).

“Retirement” shall mean the retirement of a holder of an award from employment
with the Company on or after attaining the minimum age specified for early or
normal retirement in any then effective qualified defined benefit retirement
plan of the Company in which such holder is a participant, provided that such
holder has also attained age 50 and completed at least ten years of service with
the Company and the Subsidiaries. For purposes of this definition, the holder’s
age and service shall be determined taking into account any deemed age or
service awarded to the holder for benefit accrual purposes under any
nonqualified defined benefit retirement plan of the Company in which the holder
is a participant.

“SAR” shall mean a stock appreciation right, which may be a Free-Standing SAR or
a Tandem SAR.

“SEC Person” shall mean any person (as such term is used in Rule 13d-5 under the
Exchange Act) or group (as such term is defined in Sections 3(a)(9) and 13(d)(3)
of the Exchange Act), other than (i) the Company or an Affiliate, or (ii) any
employee benefit plan (or any related trust) of the Company or any of its
Affiliates.

“Stock Award” shall mean a Restricted Stock Award or a Restricted Stock Unit
Award, including any such award which is granted as a Performance Share Award.

“Subsidiary” shall mean any corporation, limited liability company, partnership,
joint venture or similar entity in which the Company owns, directly or
indirectly, an equity interest possessing more than 50% of the combined voting
power of the total outstanding equity interests of such entity.

 

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“Tandem SAR” shall mean an SAR which is granted in tandem with, or by reference
to, an option (including a Nonqualified Stock Option granted prior to the date
of grant of the SAR), which entitles the holder thereof to receive, upon
exercise of such SAR and surrender for cancellation of all or a portion of such
option, shares of Common Stock (which may be Restricted Stock), cash or a
combination thereof with an aggregate value equal to the excess of the Fair
Market Value of one share of Common Stock on the date of exercise over the base
price of such SAR, multiplied by the number of shares of Common Stock subject to
such option, or portion thereof, which is surrendered.

“Tax Date” shall have the meaning set forth in Section 5.5.

“Ten Percent Holder” shall have the meaning set forth in Section 2.1(a).

“20% Owner” shall have the meaning set forth in Section 5.8(b)(i).

“Voting Securities” shall mean with respect to a corporation, securities of such
corporation that are entitled to vote generally in the election of directors of
such corporation.

1.3 Administration. This Plan shall be administered by the Committee. Any one or
a combination of the following awards may be made under this Plan to eligible
persons: (i) options to purchase shares of Common Stock in the form of Incentive
Stock Options or Nonqualified Stock Options (which may include Performance
Options), (ii) SARs in the form of Tandem SARs or Free-Standing SARs,
(iii) Stock Awards in the form of Restricted Stock or Restricted Stock Units
(which may include Performance Share Awards) and (iv) Performance Units. The
Committee shall, subject to the terms of this Plan, select eligible persons for
participation in this Plan and determine the form, amount and timing of each
award to such persons and, if applicable, the number of shares of Common Stock,
the number of SARs, the number of Restricted Stock Units and the number of
Performance Units subject to such an award, the exercise price or base price
associated with the award, the time and conditions of exercise or settlement of
the award and all other terms and conditions of the award, including, without
limitation, the form of the Agreement evidencing the award. The Committee may,
in its sole discretion and for any reason at any time, subject to the
requirements of Section 162(m) of the Code and regulations thereunder in the
case of an award intended to be qualified performance-based compensation, take
action such that (i) any or all outstanding options and SARs shall become
exercisable in part or in full, (ii) all or a portion of the Restriction Period
applicable to any outstanding Restricted Stock or Restricted Stock Units shall
lapse, (iii) all or a portion of the Performance Period applicable to any
outstanding Performance Share Award or Performance Units shall lapse and
(iv) the Performance Measures (if any) applicable to any outstanding award shall
be deemed to be satisfied at the target or any other level not exceeding the
maximum allowable under its terms. The Committee shall, subject to the terms of
this Plan, interpret this Plan and the application thereof, establish rules and
regulations it deems necessary or desirable for the administration of this Plan
and may impose, incidental to the grant of an award, conditions with respect to
the award, such as limiting competitive employment or other activities. All such
interpretations, rules, regulations and conditions shall be conclusive and
binding on all parties.

 

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The Committee may delegate some or all of its power and authority hereunder to
the Board or, subject to applicable law, to the Chief Executive Officer or other
officer of the Company as the Committee deems appropriate; provided, however,
that (i) the Committee may not delegate its power and authority to the Board or
the Chief Executive Officer or other officer of the Company with regard to the
grant of an award to any person who is a “covered employee” within the meaning
of Section 162(m) of the Code or who, in the Committee’s judgment, is likely to
be a covered employee at the time during the period an award hereunder to such
employee would be outstanding, (ii) the Committee may not delegate its power and
authority to the Chief Executive Officer or other officer of the Company with
regard to the selection for participation in this Plan of an officer or other
person subject to Section 16 of the Exchange Act or whose title with the Company
is “executive vice president” or higher, or decisions concerning the timing,
pricing or amount of an award to such an officer or other person and (iii) the
awards granted by the Chief Executive Officer pursuant to such delegation shall
not exceed the limits set forth in Section 1.6(c) and 1.6(d).

No member of the Board or Committee, and neither the Chief Executive Officer nor
any other officer to whom the Committee delegates any of its power and authority
hereunder, shall be liable for any act, omission, interpretation, construction
or determination made in connection with this Plan in good faith, and the
members of the Board and the Committee and the Chief Executive Officer or other
officer shall be entitled to indemnification and reimbursement by the Company in
respect of any claim, loss, damage or expense (including attorneys’ fees)
arising therefrom to the full extent permitted by law (except as otherwise may
be provided in the Company’s Articles of Incorporation and/or By-laws) and under
any directors’ and officers’ liability insurance that may be in effect from time
to time.

A majority of the Committee shall constitute a quorum. The acts of the Committee
shall be either (i) acts of a majority of the members of the Committee present
at any meeting at which a quorum is present or (ii) acts approved in writing by
all of the members of the Committee without a meeting.

1.4 Eligibility. Participants in this Plan shall consist of such officers and
other key management employees, and persons expected to become officers and
other key management employees, of the Company and its Subsidiaries as the
Committee in its sole discretion may select from time to time. The Committee’s
selection of a person to participate in this Plan at any time shall not require
the Committee to select such person to participate in this Plan at any other
time. For purposes of this Plan, references to employment by the Company shall
also mean employment by a Subsidiary.

1.5 Shares Available. Subject to adjustment as provided in Section 5.7, the
aggregate number of shares of Common Stock available for awards granted under
the Plan in the form of options, SARs, Stock Awards or Performance Units shall
be the sum of (i) five million

 

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(5,000,000), plus (ii) the number of shares of Common Stock which as of the
effective date of this Plan remain available for future awards pursuant to
Section 1.5 of the Prior Plan, and reduced by the sum of the aggregate number of
shares of Common Stock which become subject to outstanding options, outstanding
Free-Standing SARs and outstanding Stock Awards granted under the Plan and
shares of Common Stock delivered upon the settlement of Performance Units
granted under the Plan. To the extent that shares of Common Stock subject to an
outstanding option, SAR or stock award granted under the Plan or any predecessor
plan are not issued or delivered by reason of the expiration, termination,
cancellation or forfeiture of such award (excluding shares subject to an option
cancelled upon settlement in shares of a related tandem SAR or shares subject to
a tandem SAR cancelled upon exercise of a related option), then such shares of
Common Stock shall again be available under this Plan. Shares of Common Stock to
be delivered under this Plan shall be made available from authorized and
unissued shares of Common Stock, or authorized and issued shares of Common Stock
reacquired and held as treasury shares or otherwise or a combination thereof.

1.6 Award Limits.

(a) Subject to adjustment as provided in Section 5.7, no individual may be
granted awards under the Plan during any calendar year that, in the aggregate,
may be settled by delivery of more than two million (2,000,000) shares of Common
Stock. In addition, with respect to awards the value of which is based on the
Fair Market Value of Common Stock and that may be settled in cash (in whole or
in part), no individual may be paid during any calendar year cash amounts
relating to such awards that exceed the greater of the Fair Market Value of the
number of shares of Common Stock set forth in the preceding sentence either at
the date of grant or at the date of settlement. This Section 1.6(a) sets forth
two separate limitations, so that awards that may be settled solely by delivery
of Common Stock will not operate to reduce the amount or value of cash-only
awards, and vice versa; nevertheless, awards that may be settled in Common Stock
or cash must not exceed either limitation.

(b) With respect to awards, the value of which is not based on the Fair Market
Value of Common Stock, no individual may receive during any calendar year cash
or shares of Common Stock with a Fair Market Value at the date of settlement
that, in the aggregate, exceeds five million dollars ($5,000,000).

(c) Subject to adjustment as provided in Section 5.7, the number of shares of
Common Stock subject to options and SARs granted in any single year by the Chief
Executive Officer, pursuant to a delegation by the Committee in accordance with
Section 1.3 of this Plan, shall not exceed 1,200,000 in the aggregate or 40,000
with respect to any individual employee.

(d) Subject to adjustment as provided in Section 5.7, the number of shares of
Common Stock subject to Stock Awards and Performance Units granted in any single
year by the Chief Executive Officer, pursuant to a delegation by the Committee
in accordance with Section 1.3 of this Plan, shall not exceed 600,000 in the
aggregate or 20,000 with respect to any individual employee.

 

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II. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

2.1 Stock Options. The Committee may, in its discretion, grant options to
purchase shares of Common Stock to such eligible persons as may be selected by
the Committee. Each option, or portion thereof, that is not an Incentive Stock
Option, shall be a Nonqualified Stock Option. Each option shall be granted
within 10 years after the date on which this Plan is approved by the Board. To
the extent that the aggregate Fair Market Value (determined as of the date of
grant) of shares of Common Stock with respect to which options designated as
Incentive Stock Options are exercisable for the first time by a participant
during any calendar year (under this Plan or any other plan of the Company, or
any parent or Subsidiary) exceeds the amount (currently $100,000) established by
the Code, such options shall constitute Nonqualified Stock Options.

Options shall be subject to the following terms and conditions and shall contain
such additional terms and conditions, not inconsistent with the terms of this
Plan, as the Committee shall deem advisable:

(a) Number of Shares and Purchase Price. The number of shares of Common Stock
subject to an option and the purchase price per share of Common Stock
purchasable upon exercise of the option shall be determined by the Committee;
provided, however, that the purchase price per share of Common Stock purchasable
upon exercise of a Nonqualified Stock Option or an Incentive Stock Option shall
not be less than 100% of the Fair Market Value of a share of Common Stock on the
date of grant of such option; provided further, that if an Incentive Stock
Option shall be granted to any person who, at the time such option is granted,
owns capital stock possessing more than 10 percent of the total combined voting
power of all classes of capital stock of the Company (or of any parent or
Subsidiary) (a “Ten Percent Holder”), the purchase price per share of Common
Stock shall not be less than the price (currently 110% of Fair Market Value)
required by the Code in order to constitute an Incentive Stock Option.

(b) Option Period and Exercisability. The period during which an option may be
exercised shall be determined by the Committee; provided, however, that no
option shall be exercised later than 10 years after its date of grant; provided
further, that if an Incentive Stock Option shall be granted to a Ten Percent
Holder, such option shall not be exercised later than five years after its date
of grant. The Committee may, in its discretion, determine that an option is to
be granted as a Performance Option and may establish an applicable Performance
Period and Performance Measures which shall be satisfied or met as a condition
to the grant of such option or to the exercisability of all or a portion of such
option. The Committee shall determine whether an option shall become exercisable
in cumulative or non-cumulative installments and in part or in full at any time.
An exercisable option, or portion thereof, may be exercised only with respect to
whole shares of Common Stock.

(c) Method of Exercise. An option may be exercised (i) by giving written notice
to the Company specifying the number of whole shares of Common Stock to be
purchased and accompanying such notice with payment therefor in full, and
without any extension of credit, either (A) in cash, (B) by delivery (either
actual delivery or by attestation procedures established by the Company) to the
Company of previously owned whole shares of Common Stock having a

 

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Fair Market Value, determined as of the date of exercise, equal to the aggregate
purchase price payable by reason of such exercise, (C) authorizing the Company
to withhold whole shares of Common Stock which would otherwise be delivered
having an aggregate Fair Market Value, determined as of the date of exercise,
equal to the amount necessary to satisfy such obligation, provided that the
Committee determines that such withholding of shares does not cause the Company
to recognize an increased compensation expense under applicable accounting
principles, (D) except as may be prohibited by applicable law, in cash by a
broker-dealer acceptable to the Company to whom the optionee has submitted an
irrevocable notice of exercise or (E) a combination of (A), (B) and (C), in each
case to the extent set forth in the Agreement relating to the option, (ii) if
applicable, by surrendering to the Company any Tandem SARs which are cancelled
by reason of the exercise of the option and (iii) by executing such documents as
the Company may reasonably request. Any fraction of a share of Common Stock
which would be required to pay such purchase price shall be disregarded and the
remaining amount due shall be paid in cash by the optionee. No shares of Common
Stock shall be issued and no certificate representing Common Stock shall be
delivered until the full purchase price therefor and any withholding taxes
thereon, as described in Section 5.5, have been paid.

2.2 Stock Appreciation Rights. The Committee may, in its discretion, grant SARs
to such eligible persons as may be selected by the Committee. The Agreement
relating to an SAR shall specify whether the SAR is a Tandem SAR or a
Free-Standing SAR.

SARs shall be subject to the following terms and conditions and shall contain
such additional terms and conditions, not inconsistent with the terms of this
Plan, as the Committee shall deem advisable:

(a) Number of SARs and Base Price. The number of SARs subject to an award shall
be determined by the Committee. Any Tandem SAR related to an Incentive Stock
Option shall be granted at the same time that such Incentive Stock Option is
granted. The base price of a Tandem SAR shall be the purchase price per share of
Common Stock of the related option. The base price of a Free-Standing SAR shall
be determined by the Committee; provided, however, that such base price shall
not be less than 100% of the Fair Market Value of a share of Common Stock on the
date of grant of such SAR.

(b) Exercise Period and Exercisability. The Agreement relating to an award of
SARs shall specify whether such award may be settled in shares of Common Stock
(including shares of Restricted Stock) or cash or a combination thereof. The
period for the exercise of an SAR shall be determined by the Committee;
provided, however, that no SAR shall be exercised later than 10 years after its
date of grant; and provided, further, that no Tandem SAR shall be exercised
later than the expiration, cancellation, forfeiture or other termination of the
related option. The Committee may, in its discretion, establish Performance
Measures which shall be satisfied or met as a condition to the grant of an SAR
or to the exercisability of all or a portion of an SAR. The Committee shall
determine whether an SAR may be exercised in cumulative or non-cumulative
installments and in part or in full at any time. An exercisable SAR, or portion
thereof, may be exercised, in the case of a Tandem SAR, only with respect to
whole shares of Common Stock and, in the case of a Free-Standing SAR, only with
respect to a whole number of SARs. If an

 

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SAR is exercised for shares of Restricted Stock, a certificate or certificates
representing such Restricted Stock shall be issued in accordance with
Section 3.2(c), or such shares shall be transferred to the holder in book entry
form with restrictions on the Shares duly noted, and the holder of such
Restricted Stock shall have such rights of a stockholder of the Company as
determined pursuant to Section 3.2(d). Prior to the exercise of an SAR for
shares of Common Stock, including Restricted Stock, the holder of such SAR shall
have no rights as a stockholder of the Company with respect to the shares of
Common Stock subject to such SAR.

(c) Method of Exercise. A Tandem SAR may be exercised (i) by giving written
notice to the Company specifying the number of whole SARs which are being
exercised, (ii) by surrendering to the Company any options which are cancelled
by reason of the exercise of the Tandem SAR and (iii) by executing such
documents as the Company may reasonably request. A Free-Standing SAR may be
exercised (A) by giving written notice to the Company specifying the whole
number of SARs which are being exercised and (B) by executing such documents as
the Company may reasonably request.

2.3 Termination of Employment.

(a) Retirement or Disability. Subject to Sections 2.3(e) and 2.3(g) below, and
unless otherwise specified in the Agreement relating to an option or SAR, as the
case may be, if the Company ceases to employ the holder of an option or SAR by
reason of such holder’s Retirement or Disability, each option and SAR held by
such holder shall be fully exercisable, and may thereafter be exercised by such
holder (or such holder’s legal representative or similar person) until and
including the earlier to occur of (i) the date which is five years after the
effective date of such holder’s termination of employment and (ii) the
expiration date of the term of such option or SAR.

(b) Death. Unless otherwise specified in the Agreement relating to an option or
SAR, as the case may be, if the Company ceases to employ the holder of an option
or SAR by reason of such holder’s death, each option and SAR held by such holder
shall be fully exercisable, and may thereafter be exercised by such holder’s
executor, administrator, legal representative, beneficiary or similar person
until and including the earlier to occur of (i) the date which is three years
after the date of death and (ii) the expiration date of the term of such option
or SAR.

(c) Cause. If the Company ceases to employ the holder of an option or SAR due to
a termination of employment by the Company for Cause, each option and SAR held
by such holder shall be cancelled and cease to be exercisable as of the earlier
to occur of (i) the effective date of such termination of employment and
(ii) the date on which the holder first engaged in conduct giving rise to a
termination for Cause, and the Company thereafter may require the repayment of
any amounts received by such holder in connection with an exercise of such
option or SAR following such cancellation date.

(d) Other Termination. Subject to Sections 2.3(e), 2.3(f) and 2.3(g) below and
unless otherwise specified in the Agreement relating to an option or SAR, as the
case may be, if the Company ceases to employ the holder of an option or SAR for
any reason other than as

 

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described in Section 2.3(a) through Section 2.3(c), then each option and SAR
held by such holder shall be exercisable only to the extent that such option or
SAR is exercisable on the effective date of such holder’s termination of
employment, and may thereafter be exercised by such holder (or such holder’s
legal representative or similar person) until and including the earlier to occur
of (i) the date which is 90 days after the effective date of such holder’s
termination of employment and (ii) the expiration date of the term of such
option or SAR.

(e) Death Following Termination of Employment. Unless otherwise specified in the
Agreement relating to an option or SAR, as the case may be, if the holder of an
option or SAR dies during the applicable post-termination exercise period
described in Section 2.3(d), each option and SAR held by such holder shall be
exercisable only to the extent that such option or SAR, as the case may be, is
exercisable on the date of such holder’s death and may thereafter be exercised
by the holder’s executor, administrator, legal representative, beneficiary or
similar person until and including the earlier to occur of (i) the date which is
one year after the date of death and (ii) the expiration date of the term of
such option or SAR.

(f) Breach of Restrictive Covenant. Notwithstanding Sections 2.3(a) through (e),
if the holder of an option or SAR breaches his or her obligations to the Company
or any of its affiliates under a noncompetition, nonsolicitation,
confidentiality, intellectual property or other restrictive covenant (a
“Restrictive Covenant”), each option and SAR held by such holder shall be
cancelled and cease to be exercisable as of the date on which the holder first
breached such Restrictive Covenant, and the Company thereafter may require the
repayment of any amounts received by such holder in connection with an exercise
of such option or SAR following such cancellation date.

(g) Certain Terminations After Change in Control. Unless otherwise specified in,
and subject to all conditions set forth in, the Agreement relating to an option
or SAR, as the case may be, or any individual change in control agreement or
severance plan, and notwithstanding any other provision of this Section 2.3, if
within 24 months following a Change in Control, the Company ceases to employ the
holder of an option or SAR due to a termination of employment (i) by the Company
other than for Cause, or (ii) with respect to a holder whose position is at
least salary band E09 (or its equivalent), by the holder for Good Reason, such
holder’s outstanding options shall immediately become fully exercisable and may
thereafter be exercised by such holder (or such holder’s legal representative or
similar person) until and including the earlier to occur of (A) the date which
is five years after the effective date of such holder’s termination of
employment and (B) the expiration date of the term of such option or SAR.

2.4 No Repricing. The Committee shall not without the approval of the
stockholders of the Company, (i) reduce the purchase price or base price of any
previously granted option or SAR, (ii) cancel any previously granted option or
SAR in exchange for another option or SAR with a lower purchase price or base
price or (iii) cancel any previously granted option or SAR in exchange for cash
or another award if the purchase price of such option or the base price of such
SAR exceeds the Fair Market Value of a share of Common Stock on the date of such
cancellation, in each case, other than in connection with a Change in Control or
the adjustment provisions set forth in Section 5.7.

 

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III. STOCK AWARDS

3.1 Stock Awards. The Committee may, in its discretion, grant Stock Awards to
such eligible persons as may be selected by the Committee. The Agreement
relating to a Stock Award shall specify whether the Stock Award is a Restricted
Stock Award or a Restricted Stock Unit Award. The Committee may, in its
discretion, determine that a Restricted Stock Award or Restricted Stock Unit
Award is to be granted as a Performance Share Award and may establish an
applicable Performance Period and Performance Measures which shall be satisfied
or met as a condition to the grant or vesting of all or a portion of such award.

3.2 Terms of Restricted Stock Awards. Restricted Stock Awards shall be subject
to the following terms and conditions and shall be subject to such additional
terms and conditions, not inconsistent with the terms of this Plan, as the
Committee shall deem advisable.

(a) Number of Shares and Other Terms. The number of shares of Common Stock
subject to a Restricted Stock Award and the Restriction Period and Performance
Measures (if any) applicable to a Restricted Stock Award shall be determined by
the Committee.

(b) Vesting and Forfeiture. The Agreement relating to a Restricted Stock Award
shall provide, in the manner determined by the Committee, in its discretion, and
subject to the provisions of this Plan, for the vesting of the shares of Common
Stock subject to such award (i) if the holder of such award remains continuously
in the employment of the Company during the specified Restriction Period and
(ii) in the case of a Performance Share Award, if specified Performance Measures
are satisfied or met during a specified Performance Period, and for the
forfeiture of the shares of Common Stock subject to such award (x) if the holder
of such award does not remain continuously in the employment of the Company
during the specified Restriction Period or (y) in the case of a Performance
Share Award, if specified Performance Measures are not satisfied or met during a
specified Performance Period. The restrictions applicable to each Performance
Share Award shall lapse no earlier than one year after the applicable grant
date, except to the extent an award Agreement provides otherwise in the case of
a Change in Control or a participant’s death, Disability or termination of
employment.

(c) Stock Issuance. During the Restriction Period, the shares of Restricted
Stock shall be held by a custodian in book entry form with restrictions on such
shares duly noted or, alternatively, a certificate or certificates representing
a Restricted Stock Award shall be registered in the holder’s name and may bear a
legend, in addition to any legend which may be required pursuant to Section 5.6,
indicating that the ownership of the shares of Common Stock represented by such
certificate is subject to the restrictions, terms and conditions of this Plan
and the Agreement relating to the Restricted Stock Award. All such certificates
shall be deposited with the Company, together with stock powers or other
instruments of assignment (including a power of attorney), each endorsed in
blank with a guarantee of signature if deemed necessary or appropriate, which
would permit transfer to the Company of all or a portion of the shares of Common
Stock subject to the Restricted Stock Award in the event such award is forfeited
in whole or in part. Upon termination of any applicable Restriction Period (and
the satisfaction or attainment of applicable Performance Measures), subject to
the Company’s right to require

 

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payment of any taxes in accordance with Section 5.5, the restrictions shall be
removed from the requisite number of any shares of Common Stock that are held in
book entry form, and all certificates evidencing ownership of the requisite
number of shares of Common Stock shall be delivered to the holder of such award.

(d) Rights with Respect to Restricted Stock Awards. Unless otherwise set forth
in the Agreement relating to a Restricted Stock Award, and subject to the terms
and conditions of a Restricted Stock Award, the holder of such award shall have
all rights as a stockholder of the Company, including, but not limited to,
voting rights, the right to receive dividends and the right to participate in
any capital adjustment applicable to all holders of Common Stock; provided,
however, that (i) a distribution with respect to shares of Common Stock, other
than a regular cash dividend, and (ii) a regular cash dividend with respect to
shares of Common Stock that are subject to performance-based vesting conditions,
in each case shall be deposited with the Company and shall be subject to the
same restrictions as the shares of Common Stock with respect to which such
distribution was made.

3.3 Terms of Restricted Stock Unit Awards. Restricted Stock Unit Awards shall be
subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of this Plan, as the
Committee shall deem advisable.

(a) Number of Shares and Other Terms. The number of shares of Common Stock
subject to a Restricted Stock Unit Award and the Restriction Period and
Performance Measures (if any) applicable to a Restricted Stock Unit Award shall
be determined by the Committee.

(b) Vesting and Forfeiture. The Agreement relating to a Restricted Stock Unit
Award shall provide, in the manner determined by the Committee, in its
discretion, and subject to the provisions of this Plan, for the vesting of such
Restricted Stock Unit Award (i) if the holder of such award remains continuously
in the employment of the Company during the specified Restriction Period and
(ii) in the case of a Performance Share Award, if specified Performance Measures
are satisfied or met during a specified Performance Period, and for the
forfeiture of the shares of Common Stock subject to such award (x) if the holder
of such award does not remain continuously in the employment of the Company
during the specified Restriction Period or (y) in the case of a Performance
Share Award, if specified Performance Measures are not satisfied or met during a
specified Performance Period. Each Performance Share Award shall become vested
no earlier than one year after the applicable grant date, except to the extent
an award Agreement provides otherwise in the case of a Change in Control or a
participant’s death, Disability or termination of employment.

(c) Settlement of Vested Restricted Stock Unit Awards. The Agreement relating to
a Restricted Stock Unit Award shall specify (i) whether such award may be
settled in shares of Common Stock, including Restricted Stock, or cash or a
combination thereof and (ii) whether the holder thereof shall be entitled to
receive, on a current or deferred basis, dividend equivalents and, if determined
by the Committee, interest on, or the deemed reinvestment of, any deferred
dividend equivalents, with respect to the number of shares of Common Stock
subject to such award. Prior to the settlement of a Restricted Stock Unit Award,
the holder of such award shall have no rights as a stockholder of the Company
with respect to the shares of Common Stock subject to such award.

 

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3.4 Termination of Employment. All of the terms relating to the satisfaction of
Performance Measures and the termination of the Restriction Period or
Performance Period relating to a Stock Award, or any forfeiture and cancellation
of such award upon a termination of employment with the Company of the holder of
such award, whether by reason of Disability, Retirement, death or any other
reason, shall be determined by the Committee and set forth in the applicable
award Agreement.

IV. PERFORMANCE UNIT AWARDS

4.1 Performance Unit Awards. The Committee may, in its discretion, grant
Performance Unit Awards to such eligible persons as may be selected by the
Committee.

4.2 Terms of Performance Unit Awards. Performance Unit Awards shall be subject
to the following terms and conditions and shall be subject to such additional
terms and conditions, not inconsistent with the terms of this Plan, as the
Committee shall deem advisable.

(a) Number of Performance Units and Performance Measures. The number of
Performance Units subject to a Performance Unit Award and the Performance
Measures and Performance Period applicable to a Performance Unit Award shall be
determined by the Committee.

(b) Vesting and Forfeiture. The Agreement relating to a Performance Unit Award
shall provide, in the manner determined by the Committee, in its discretion, and
subject to the provisions of this Plan, for the vesting of such Performance Unit
Award if the specified Performance Measures are satisfied or met during the
specified Performance Period and for the forfeiture of such award if the
specified Performance Measures are not satisfied or met during the specified
Performance Period.

(c) Settlement of Vested Performance Unit Awards. The Agreement relating to a
Performance Unit Award shall specify whether such award may be settled in shares
of Common Stock (including shares of Restricted Stock) or cash or a combination
thereof. If a Performance Unit Award is settled in shares of Restricted Stock,
such shares of Restricted Stock shall be issued to the holder in book entry form
or a certificate or certificates representing such Restricted Stock shall be
issued in accordance with Section 3.2(c) and the holder of such Restricted Stock
shall have such rights as a stockholder of the Company as determined pursuant to
Section 3.2(d). Prior to the settlement of a Performance Unit Award in shares of
Common Stock, including Restricted Stock, the holder of such award shall have no
rights as a stockholder of the Company.

4.3 Termination of Employment. All of the terms relating to the satisfaction of
Performance Measures and the termination of the Performance Period relating to a
Performance Unit Award, or any forfeiture and cancellation of such award upon a
termination of employment with the Company of the holder of such award, whether
by reason of Disability, Retirement, death or any other reason, shall be
determined by the Committee and set forth in the applicable award Agreement.

 

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V. GENERAL

5.1 Effective Date and Term of Plan. This Plan shall be submitted to the
stockholders of the Company for approval at the Company’s 2010 annual meeting of
stockholders and, if approved by the affirmative vote of a majority of the
shares of Common Stock present in person or represented by proxy at such annual
meeting of stockholders, shall become effective as of January 1, 2011. This Plan
shall terminate ten (10) years after its effective date, unless terminated
earlier by the Committee. Termination of this Plan shall not affect the terms or
conditions of any award granted prior to termination.

Awards hereunder may be made at any time prior to the termination of this Plan,
provided that, subject to Section 2.1, no award may be made later than ten
(10) years after the effective date of this Plan. In the event that this Plan is
not approved by the stockholders of the Company, this Plan and any awards
hereunder shall be void and of no force or effect.

5.2 Amendments. The Committee may amend this Plan as it shall deem advisable,
subject to any requirement of stockholder approval required by applicable law,
rule or regulation, including Section 162(m) of the Code and any rule of the New
York Stock Exchange, or, if the Common Stock is not listed on the New York Stock
Exchange, any rule of the principal national stock exchange on which the Common
Stock is then traded; provided, however, that no amendment may impair the rights
of a holder of an outstanding award without the consent of such holder.

5.3 Agreement. Each award under this Plan shall be evidenced by an Agreement
setting forth the terms and conditions applicable to such award. No award shall
be valid until an Agreement is executed by the Company and the recipient of such
award and, upon execution by each party and delivery of the Agreement to the
Company within the time period specified by the Company, such award shall be
effective as of the effective date set forth in the Agreement.

5.4 Non-Transferability. No award shall be transferable other than by will, the
laws of descent and distribution or pursuant to beneficiary designation
procedures approved by the Company or, to the extent expressly permitted in the
Agreement relating to such award, to the holder’s family members, a trust or
entity established by the holder for estate planning purposes or a charitable
organization designated by the holder. Except to the extent permitted by the
foregoing sentence or the Agreement relating to an award, each award may be
exercised or settled during the holder’s lifetime only by the holder or the
holder’s legal representative or similar person. Except as permitted by the
second preceding sentence, no award may be sold, transferred, assigned, pledged,
hypothecated, encumbered or otherwise disposed of (whether by operation of law
or otherwise) or be subject to execution, attachment or similar process. Upon
any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or
otherwise dispose of any award, such award and all rights thereunder shall
immediately become null and void.

 

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5.5 Tax Withholding. The Company shall have the right to require, prior to the
issuance or delivery of any shares of Common Stock or the payment of any cash
pursuant to an award made hereunder, or upon the vesting of any award that is
considered deferred compensation, payment by the holder of such award of any
federal, state, local or other taxes which may be required to be withheld or
paid in connection with such award. An Agreement may provide that (i) the
Company shall withhold whole shares of Common Stock which would otherwise be
delivered to a holder, having an aggregate Fair Market Value determined as of
the date the obligation to withhold or pay taxes arises in connection with an
award (the “Tax Date”), or withhold an amount of cash which would otherwise be
payable to a holder, in the amount necessary to satisfy any such obligation or
(ii) the holder may satisfy any such obligation by any of the following means:
(A) a cash payment to the Company, (B) authorizing the Company to withhold whole
shares of Common Stock which would otherwise be delivered having an aggregate
Fair Market Value, determined as of the Tax Date, or withhold an amount of cash
which would otherwise be payable to a holder, equal to the amount necessary to
satisfy any such obligation, (C) in the case of the exercise of an option and
except as may be prohibited by applicable law, a cash payment by a broker-dealer
acceptable to the Company to whom the optionee has submitted an irrevocable
notice of exercise or (D) any combination of (A) and (B), in each case to the
extent set forth in the Agreement relating to the award. Shares of Common Stock
to be delivered or withheld may not have an aggregate Fair Market Value in
excess of the amount determined by applying the minimum statutory withholding
rate. Any fraction of a share of Common Stock which would be required to satisfy
such an obligation shall be disregarded and the remaining amount due shall be
paid in cash by the holder.

5.6 Restrictions on Shares. Each award made hereunder shall be subject to the
requirement that if at any time the Company determines that the listing,
registration or qualification of the shares of Common Stock subject to such
award upon any securities exchange or under any law, or the consent or approval
of any governmental body, or the taking of any other action is necessary or
desirable as a condition of, or in connection with, the delivery of shares
thereunder, such shares shall not be delivered unless such listing,
registration, qualification, consent, approval or other action shall have been
effected or obtained, free of any conditions not acceptable to the Company. The
Company may require that certificates evidencing shares of Common Stock
delivered pursuant to any award made hereunder bear a legend indicating that the
sale, transfer or other disposition thereof by the holder is prohibited except
in compliance with the Securities Act of 1933, as amended, and the rules and
regulations thereunder.

5.7 Adjustment. In the event any stock split, stock dividend, recapitalization,
reorganization, merger, consolidation, combination, exchange of shares,
liquidation, spin-off or other similar change in capitalization or event, or any
distribution to holders of Common Stock (other than a regular cash dividend)
occurs on or after the date this Plan is approved by the stockholders of the
Company, the number and class of securities available for all awards under this
Plan, the maximum number of securities with respect to which awards may be
granted during any year to any one person, the maximum number of shares subject
to awards granted during any year by the Chief Executive Officer, the number and
class of securities subject to each outstanding option and the purchase price
per security, and the terms of each outstanding SAR, Restricted Stock Award,
Restricted Stock Unit Award, Performance Share Award and

 

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Performance Unit Award, including the number and class of securities subject
thereto, shall be appropriately adjusted by the Committee, such adjustments to
be made in the case of outstanding options and SARs without an increase in the
aggregate purchase price or base price. The decision of the Committee regarding
any such adjustment shall be final, binding and conclusive. If any such
adjustment would result in a fractional security being (a) available under this
Plan, such fractional security shall be disregarded, or (b) subject to an award
under this Plan, the Company shall pay the holder of such award, in connection
with the first vesting, exercise or settlement of such award, in whole or in
part, occurring after such adjustment, an amount in cash determined by
multiplying (i) the fraction of such security (rounded to the nearest hundredth)
by (ii) the excess, if any, of (A) the Fair Market Value on the vesting,
exercise or settlement date over (B) the exercise or base price, if any, of such
award.

5.8 Corporate Transactions; Change in Control.

(a) If the Company shall be a party to a reorganization, merger, or
consolidation or sale or other disposition of more than 50% of the operating
assets of the Company (determined on a consolidated basis), other than in
connection with a sale-leaseback or other arrangement resulting in the continued
utilization of such assets (or the operating products of such assets) (a
“Corporate Transaction”), the Board (as constituted prior to any Change in
Control resulting from such Corporate Transaction) may, in its discretion:

(i) require that (A) some or all outstanding options and SARs shall immediately
become exercisable in full or in part, (B) the Restriction Period applicable to
some or all outstanding Restricted Stock Awards and Restricted Stock Unit Awards
shall lapse in full or in part, (C) the Performance Period applicable to some or
all outstanding Performance Share Awards and Performance Unit Awards shall lapse
in full or in part, and (D) the Performance Measures applicable to some or all
outstanding awards shall be deemed to be satisfied at the target or any other
level not exceeding the maximum levels allowable under their respective terms;

(ii) require that shares of capital stock of the corporation resulting from such
Corporate Transaction, or a parent corporation thereof, be substituted for some
or all of the shares of Common Stock subject to an outstanding award, with an
appropriate and equitable adjustment to such award as determined by the Board in
accordance with Section 5.7; and/or

(iii) require outstanding awards, in whole or in part, to be surrendered to the
Company by the holder, and to be immediately cancelled by the Company, and to
provide for the holder to receive (A) a cash payment in an amount equal to
(1) in the case of an option or an SAR, the number of shares of Common Stock
then subject to the portion of such option or SAR surrendered, to the extent
such option or SAR is then exercisable or becomes exercisable pursuant to clause
(i), multiplied by the excess, if any, of the Fair Market Value of a share of
Common Stock as of the date of the Corporate Transaction, over the purchase
price or base

 

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price per share of Common Stock subject to such option or SAR, (2) in the case
of a Stock Award, the number of shares of Common Stock then subject to the
portion of such award surrendered, to the extent the Restriction Period and
Performance Period, if any, on such Stock Award have lapsed or will lapse
pursuant to clause (i) and to the extent that the Performance Measures, if any,
have been satisfied or are deemed satisfied pursuant to clause (i), multiplied
by the Fair Market Value of a share of Common Stock as of the date of the
Corporate Transaction, and (3) in the case of a Performance Unit Award, the
value of the Performance Units then subject to the portion of such award
surrendered, to the extent the Performance Period applicable so such award has
lapsed or will lapse pursuant to clause (i) and to the extent the Performance
Measures applicable to such award have been satisfied or are deemed satisfied
pursuant to clause (i); (B) shares of capital stock of the corporation resulting
from such Corporate Transaction, or a parent corporation thereof, having a fair
market value not less than the amount determined under clause (A) above; or
(C) a combination of the payment of cash pursuant to clause (A) above and the
issuance of shares pursuant to clause (B) above.

(b) For purposes of Sections 2.3(f) and 5.8(a), “Change in Control” shall mean,
except as otherwise provided below, the first to occur of any of the following
events:

(i) any SEC Person becomes the Beneficial Owner of 20% or more of the then
outstanding common stock of the Company or of Voting Securities representing 20%
or more of the combined voting power of all the then outstanding Voting
Securities of the Company (such an SEC Person, a “20% Owner”); provided,
however, that for purposes of this subsection (i), the following acquisitions
shall not constitute a Change in Control: (1) any acquisition directly from the
Company (excluding any acquisition resulting from the exercise of an exercise,
conversion or exchange privilege unless the security being so exercised,
converted or exchanged was acquired directly from the Company), (2) any
acquisition by the Company, (3) any acquisition by an employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation
controlled by the Company (a “Company Plan”), or (4) any acquisition by any
corporation pursuant to a transaction which complies with paragraphs (A),
(B) and (C) of subsection (iii) of this definition; provided further, that for
purposes of clause (2), if any 20% Owner of the Company other than the Company
or any Company Plan becomes a 20% Owner by reason of an acquisition by the
Company, and such 20% Owner of the Company shall, after such acquisition by the
Company, become the Beneficial Owner of any additional outstanding common shares
of the Company or any additional outstanding Voting Securities of the Company
(other than pursuant to any dividend reinvestment plan or arrangement maintained
by the Company) and such beneficial ownership is publicly announced, such
additional beneficial ownership shall constitute a Change in Control; or

 

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(ii) Individuals who, as of the effective date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Incumbent Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company’s shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest (as such terms are used in
Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or

(iii) Consummation of a Corporate Transaction by the Company; excluding,
however, a Corporate Transaction pursuant to which:

(A) all or substantially all of the individuals and entities who are the
Beneficial Owners, respectively, of the outstanding common stock of Company and
outstanding Voting Securities of the Company immediately prior to such Corporate
Transaction beneficially own, directly or indirectly, more than 60% of,
respectively, the then-outstanding shares of common stock and the combined
voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Corporate Transaction (including, without limitation, a
corporation which, as a result of such transaction, owns the Company or all or
substantially all of the assets of the Company either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Corporate Transaction of the outstanding common stock
of Company and outstanding Voting Securities of the Company, as the case may be;

(B) no SEC Person (other than the corporation resulting from such Corporate
Transaction, and any Person which beneficially owned, immediately prior to such
corporate Transaction, directly or indirectly, 20% or more of the outstanding
common stock of the Company or the outstanding Voting Securities of the Company,
as the case may be) becomes a 20% Owner, directly or indirectly, of the
then-outstanding common stock of the corporation resulting from such Corporate
Transaction or the combined voting power of the outstanding voting securities of
such corporation; and

(C) individuals who were members of the Incumbent Board will constitute at least
a majority of the members of the board of directors of the corporation resulting
from such Corporate Transaction; or

 

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(iv) Approval by the Company’s shareholders of a plan of complete liquidation or
dissolution of the Company, other than a plan of liquidation or dissolution
which results in the acquisition of all or substantially all of the assets of
the Company by an affiliated company.

Notwithstanding the occurrence of any of the foregoing events, a Change in
Control shall not occur with respect to an award if, in advance of such event,
the holder of such award agrees in writing that such event shall not constitute
a Change in Control.

5.9 Deferrals. The Committee may determine that the delivery of shares of Common
Stock or the payment of cash, or a combination thereof, upon the exercise or
settlement of all or a portion of any award made hereunder shall be deferred, or
the Committee may, in its sole discretion, approve deferral elections made by
holders of awards. Deferrals shall be for such periods and upon such terms as
shall be set forth in a deferral plan or program established by the Committee in
its sole discretion in accordance with Section 409A of the Code.

5.10 No Right of Participation or Employment. Unless otherwise set forth in an
employment agreement, no person shall have any right to participate in this
Plan. Neither this Plan nor any award made hereunder shall confer upon any
person any right to continued employment with the Company, any Subsidiary or any
affiliate of the Company or affect in any manner the right of the Company, any
Subsidiary or any affiliate of the Company to terminate the employment of any
person at any time without liability hereunder.

5.11 Rights as Stockholder. No person shall have any right as a stockholder of
the Company with respect to any shares of Common Stock or other equity security
of the Company which is subject to an award hereunder unless and until such
person becomes a stockholder of record with respect to such shares of Common
Stock or equity security.

5.12 Designation of Beneficiary. A holder of an award may file with the
Committee a written designation of one or more persons as such holder’s
beneficiary or beneficiaries (both primary and contingent) in the event of the
holder’s death or incapacity. To the extent an outstanding option or SAR granted
hereunder is exercisable, such beneficiary or beneficiaries shall be entitled to
exercise such option or SAR pursuant to procedures prescribed by the Committee.

Each beneficiary designation shall become effective only when filed in writing
with the Committee during the holder’s lifetime on a form prescribed by the
Committee. The spouse of a married holder domiciled in a community property
jurisdiction shall join in any designation of a beneficiary other than such
spouse. The filing with the Committee of a new beneficiary designation shall
cancel all previously filed beneficiary designations.

If a holder fails to designate a beneficiary, or if all designated beneficiaries
of a holder predecease the holder, then each outstanding option and SAR
hereunder held by such holder, to the extent exercisable, may be exercised by
such holder’s executor, administrator, legal representative or similar person.

 

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5.13 Governing Law. This Plan, each award hereunder and the related Agreement,
and all determinations made and actions taken pursuant thereto, to the extent
not otherwise governed by the Code or the laws of the United States, shall be
governed by the laws of the Commonwealth of Pennsylvania and construed in
accordance therewith without giving effect to principles of conflicts of laws.

5.14 Foreign Employees. Without amending this Plan, the Committee may grant
awards to eligible persons who are foreign nationals on such terms and
conditions different from those specified in this Plan as may in the judgment of
the Committee be necessary or desirable to foster and promote achievement of the
purposes of this Plan and, in furtherance of such purposes the Committee may
make such modifications, amendments, procedures, subplans and the like as may be
necessary or advisable to comply with provisions of laws in other countries or
jurisdictions in which the Company or its Subsidiaries operates or has
employees.

 

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