Exhibit 10.1

 

STEWART & STEVENSON LLC
AMENDED AND RESTATED 2007 INCENTIVE COMPENSATION PLAN

 

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STEWART & STEVENSON LLC
AMENDED AND RESTATED 2007 INCENTIVE COMPENSATION PLAN

 

SECTION

 

PAGE

 

 

 

1.

Purpose

1

2.

Term

1

3.

Definitions

1

4.

Shares Available Under Plan

6

5.

Individual Limitations on Awards

7

6.

Stock Options

8

7.

Appreciation Rights

9

8.

Restricted Shares

10

9.

Restricted Stock Units

12

10.

Performance Shares and Performance Units

13

11.

Senior Executive Plan Bonuses

14

12.

Transferability

15

13.

Adjustments

15

14.

Fractional Shares

16

15.

Withholding Taxes

16

16.

Administration of the Plan

16

17.

Amendments and Other Matters

17

18.

Governing Law

18

19.

Compliance with Section 409A of the Code

19

20.

Miscellaneous Provisions

19

 

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STEWART & STEVENSON LLC
AMENDED AND RESTATED 2007 INCENTIVE COMPENSATION PLAN

 

Stewart & Stevenson LLC a Delaware limited liability company (the “Company”),
establishes the Stewart & Stevenson LLC Amended and Restated 2007 Incentive
Compensation Plan (the “Plan”), effective as of June 15, 2011, subject to the
approval of the Common Equity (as defined below) holders.

 

1.                                       Purpose.  The purpose of the Plan is to
attract and retain the best available talent and encourage the highest level of
performance by directors, executive officers and selected employees, and to
provide them incentives to put forth maximum efforts for the success of the
Company’s business, in order to serve the best interests of the Company and its
Common Equity holders.

 

2.                                       Term.  The Plan will expire on the
tenth anniversary of the date on which it is approved by the Common Equity
holders of the Company.  No further Awards will be made under the Plan on or
after such tenth anniversary.  Awards that are outstanding on the date the Plan
terminates will remain in effect according to their terms and the provisions of
the Plan.

 

3.                                       Definitions.  The following terms, when
used in the Plan with initial capital letters, will have the following meanings:

 

(a)                                  Affiliate means any Subsidiary or other
entity that is directly or indirectly controlled by the Company or any entity in
which the Company has a significant ownership interest as determined by the
Committee.

 

(b)                                 Appreciation Right means a right granted
pursuant to Section 7.

 

(c)                                  Award means the award of a Senior Executive
Plan Bonus; the grant of Appreciation Rights, Stock Options, Performance Shares,
Performance Units or Restricted Stock Units; or the grant or sale of Restricted
Shares.

 

(d)                                 Board means the Board of Directors of the
Company.

 

(e)                                  Change in Control means, except as
otherwise provided for in an Evidence of Award, any of the following events that
occurs while the Participant is employed by or serves as a director of the
Company:

 

(i)                                     any “person” (as defined in
Section 3(a)(9) of the Exchange Act, and as modified in Section 13(d) and
14(d) of the Exchange Act) other than (A) the Company or any of its
Subsidiaries, (B) any employee benefit plan of the Company or any of its
Subsidiaries, (C) any Affiliate, (D) a company owned, directly or indirectly, by
holders of equity interest in the Company in substantially the same proportions
as their ownership of the Company or (E) an underwriter temporarily holding
securities pursuant to an offering of such securities (a “Person”), becomes the
“beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or
indirectly, of securities of the Company representing

 

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more than 50% of the shares of voting stock of the Company then outstanding (the
“Outstanding Voting Stock”); provided, that an acquisition by the Company or any
of its Subsidiaries shall not be a Change in Control only if the Board (as may
be modified pursuant to Section 2(e)(iii)) approves of the acquisition; further,
provided, that if any Person’s beneficial ownership of the Outstanding Voting
Stock exceeds 50% as a result of an acquisition by the Company or any of its
Subsidiaries or any employee benefit plan of the Company or any of its
Subsidiaries, and such Person subsequently acquires beneficial ownership of
additional voting securities of the Company, such subsequent acquisition shall
be treated as an acquisition that causes such Person to own more than 50% of the
Outstanding Voting Securities;

 

(ii)                                  during any period of two consecutive years
(not including any period prior to the date of this Agreement), individuals who
at the beginning of such period constitute the members of the Board, together
with any new director(s) whose election to the Board or nomination for election
to the Board by the Company’s Common Equity holders was approved by a vote of at
least two-thirds of the directors then still in office, cease for any reason to
constitute a majority of the Board; or

 

(iii)                               the Company merges with or consolidates into
any other corporation or entity, other than a merger or consolidation which
results in the holders of the voting securities of the Company outstanding
immediately prior to such transaction holding immediately after such transaction
securities representing more than 50% of the total combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such transaction; or

 

(iv)                              the shareholders of the Company approve and
effect a plan of complete liquidation of the Company; or

 

(v)                                 the Company sells or otherwise disposes of
all or substantially all of the Company’s assets other than a sale or
disposition if the holders of the voting securities of the Company outstanding
immediately prior thereto hold securities immediately thereafter which represent
more than 50% of the combined voting power of the voting securities of the
acquirer, or parent of the acquirer, of such assets; excluding, however, from
any event described in clause (i) above any primary or secondary underwritten
public offering of the Company’s equity securities.

 

(f)                                    Code means the Internal Revenue Code of
1986, as in effect from time to time.

 

(g)                                 Committee means:

 

(i)                                     with respect to any matter arising under
the Plan that relates to a Participant who is subject to Section 16 of the
Exchange Act, the Incentive

 

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Compensation Plan Subcommittee of the Compensation Committee of the Board, which
subcommittee at all times will consist of two or more members of the
Compensation Committee of the Board, all of whom are intended (A) to meet all
applicable independence requirements of the New York Stock Exchange or the
principal national securities exchange or principal market on or in which the
Common Equity is traded and (B) to qualify as “non-employee directors” as
defined in Rule 16b-3 and as “outside directors” as defined in regulations
adopted under Section 162(m) of the Code, as such terms may be amended from time
to time, provided, however, that the failure of a member of the Subcommittee to
so qualify will not invalidate any Award granted to such Participant under the
Plan;

 

(ii)                                  with respect to any matter arising under
the Plan that relates to any other Participant, the Compensation Committee of
the Board; and

 

(iii)                               to the extent the administration of the Plan
has been assumed by the Board pursuant to Section 16, the Board.

 

(h)                                 Common Equity means (a) the Common Units, or
(b) if the Company shall convert to a corporation, the common stock, par value
$0.01 per share, of the Company or any security into which such Common Equity
may be changed by reason of any transaction or event of the type described in
Section 13.

 

(i)                                     Date of Grant means the date specified
by the Committee on which an Award will become effective.

 

(j)                                     Deferral Period means the period of time
during which Restricted Stock Units are subject to deferral limitations under
Section 9.

 

(k)                                  Eligible Director means a member of the
Board who is not an employee of the Company or any Subsidiary.

 

(l)                                     Evidence of Award means an agreement,
certificate, resolution or other type or form of writing or other evidence
approved by the Committee which sets forth the terms and conditions of an
Award.  An Evidence of Award may be in any electronic medium, may be limited to
a notation on the books and records of the Company and need not be signed by a
representative of the Company or a Participant.

 

(m)                               Exchange Act means the Securities Exchange Act
of 1934, as amended.

 

(n)                                 Grant Price means the price per share or
unit of Common Equity at which an Appreciation Right is granted.

 

(o)                                 Incentive Stock Option means a Stock Option
that is intended to qualify as an “incentive stock option” under Section 422 of
the Code or any successor provision.

 

(p)                                 Management Objectives means the measurable
performance objectives, if any, established by the Committee for a Performance
Period that are to be achieved with respect to an Award.  Management Objectives
may be described in terms of

 

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company-wide objectives (i.e., the performance of the Company and all of its
Subsidiaries) or in terms of objectives that are related to the performance of
the individual Participant or of the division, Subsidiary, department, region or
function within the Company or a Subsidiary in which the Participant receiving
the Award is employed or on which the Participant’s efforts have the most
influence.  The achievement of the Management Objectives established by the
Committee for any Performance Period will be determined without regard to any
change in accounting standards by the Financial Accounting Standards Board or
any successor entity.

 

The Management Objectives applicable to any Award to a Participant who is, or is
determined by the Committee to be likely to become, a “covered employee” within
the meaning of Section 162(m) of the Code (or any successor provision) will be
limited to specified levels of, growth in, or performance relative to peer
company or peer company group performance in, one or more of the following
performance measures (excluding the effect of extraordinary or nonrecurring
items unless the Committee specifically includes any such extraordinary or
nonrecurring item at the time such Award is granted):

 

(i)                                     profitability measures;

 

(ii)                                  revenue or sales measures;

 

(iii)                               business unit performance;

 

(iv)                              leverage measures;

 

(v)                                 stockholder return;

 

(vi)                              expense management;

 

(vii)                           asset and liability measures;

 

(viii)                        individual performance;

 

(ix)                                supply chain efficiency;

 

(x)                                   customer satisfaction;

 

(xi)                                productivity measures;

 

(xii)                             cash flow measures;

 

(xiii)                          return measures; and

 

(xiv)                         product development and/or performance

 

If the Committee determines that, as a result of a change in the business,
operations, corporate structure or capital structure of the Company, or the
manner in which the Company conducts its business, or any other events or
circumstances, the Management Objectives are no longer suitable, the Committee
may in its discretion

 

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modify such Management Objectives or the related minimum acceptable level of
achievement, in whole or in part, with respect to a Performance Period as the
Committee deems appropriate and equitable.

 

(q)                                 Market Value per Share means, at any date,
the closing sale price of the Common Equity on that date (or, if there are no
sales on that date, the last preceding date on which there was a sale) on the
principal national securities exchange or in the principal market on or in which
the Common Equity is traded, or if not so traded, as reasonably determined by
the Committee.  The Committee is authorized to adopt another fair market value
pricing method provided such method is stated in the Evidence of Award and is in
compliance with the fair market value pricing rules set forth in Section 409A of
the Code.

 

(r)                                    Option Price means the purchase price per
unit or share payable on exercise of a Stock Option.

 

(s)                                  Participant means a person who is selected
by the Committee to receive an Award under the Plan and who at that time is an
executive officer or other employee of the Company or any Subsidiary or an
Eligible Director.

 

(t)                                    Performance Share means a bookkeeping
entry that records the equivalent of one unit or share of Common Equity awarded
pursuant to Section 10.

 

(u)                                 Performance Period means, with respect to an
Award, a period of time within which the Management Objectives relating to such
Award are to be measured.  The Performance Period for a Senior Executive Plan
Bonus will be the fiscal year of the Company, and, unless otherwise expressly
provided in the Plan, the Performance Period for all other Awards will be
established by the Committee at the time of the Award.

 

(v)                                 Performance Unit means an award unit
equivalent to $1.00 (or such other value as the Committee determines) granted
pursuant to Section 10.

 

(w)                               Qualified Performance-Based Award means any
Award of Performance Shares, Performance Units, Restricted Stock or Restricted
Stock Units, or portion of such award, to a Covered Employee that is intended to
satisfy the requirements for “qualified performance-based compensation” under
Section 162(m) of the Code.

 

(x)                                   Restricted Shares means units or shares of
Common Equity granted or sold pursuant to Section 8 as to which neither the
ownership restrictions nor the restrictions on transfer have expired.

 

(y)                                 Restricted Stock Units means an Award
pursuant to Section 9 of the right to receive units or shares of Common Equity
at the end of a specified Deferral Period.

 

(z)                                   Retirement means a Participant’s
termination of employment or service as a director by reason of the
Participant’s normal retirement, in accordance with the Company’s practices,
after completing not less than ten years of service with the Company, unless the
Committee determines otherwise.

 

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(aa)                            Rule 16b-3 means Rule 16b-3 under Section 16 of
the Exchange Act as amended (or any successor rule to the same effect), as in
effect from time to time.

 

(bb)                          Senior Executive Plan Bonus means an Award of
annual incentive compensation made pursuant to and subject to the conditions set
forth in Section 11.

 

(cc)                            Spread means the excess of the Market Value per
Share on the date an Appreciation Right is exercised over (i) the Option Price
provided for in the Stock Option granted in tandem with the Appreciation Right
or (ii) if there is no tandem Stock Option, the Grant Price provided for in the
Appreciation Right, in either case multiplied by the number of units or shares
of Common Equity in respect of which the Appreciation Right is exercised.

 

(dd)                          Stock Option means the right to purchase units or
shares of Common Equity upon exercise of an option granted pursuant to
Section 6.

 

(ee)                            Subsidiary means (i) any corporation of which at
least 50% of the combined voting power of the then outstanding shares of Voting
Stock is owned directly or indirectly by the Company, (ii) any partnership of
which at least 50% of the profits interest or capital interest is owned directly
or indirectly by the Company and (iii) any other entity of which at least 50% of
the total equity interest is owned directly or indirectly by the Company.

 

(ff)                                Voting Stock means the securities entitled
to vote generally in the election of directors or persons who serve similar
functions.

 

4.                                       Shares Available Under Plan.

 

(a)                                  The aggregate number of units or shares of
Common Equity that may be (i) subject to an Award of Appreciation Rights or
Stock Options or (ii) issued or transferred as Restricted Shares and released
from all restrictions or in payment of Performance Shares, Performance Units,
Restricted Stock Units or Senior Executive Plan Bonuses will not exceed in the
aggregate 2,801,120 units or shares.  Such shares may be shares of original
issuance or treasury shares or a combination of the foregoing.  The number of
units or shares of Common Equity available under this Section 4 will be subject
to adjustment as provided in Section 13 and will be further adjusted to include
shares that relate to Awards that expire or are forfeited.  Except as provided
in clauses (A), (B) and (C) of the following sentence, units or shares of Common
Equity covered by an award granted under this Plan will not be counted as used
unless and until they are actually issued and delivered to a Participant and,
therefore, the total number of shares available under this Plan as of a given
date will not be reduced by any shares relating to prior awards that have
expired or have been forfeited or cancelled.  Notwithstanding anything to the
contrary contained herein: (A) if units or shares of Common Equity are tendered
or otherwise used in payment of the Option Price of a Stock Option, the total
number of shares covered by the Stock Option being exercised will reduce the
aggregate plan limit described above; (B) units or shares of Common Equity
withheld by the Company to satisfy the tax withholding obligation will reduce
the aggregate plan limit

 

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described above; and (C) the number of units or shares of Common Equity covered
by an Appreciation Right, to the extent that it is exercised and settled in
units or shares of Common Equity, and whether or not all units or shares of
Common Equity covered by the Appreciation Right are actually issued to the
Participant upon exercise of the right, will be considered issued or transferred
pursuant to this Plan.  In the event that the Company repurchases shares with
Stock Option proceeds, those shares will not be added to the aggregate plan
limit described above.  Upon payment in cash of the benefit provided by any
award granted under the Plan, any units or shares of Common Equity that were
covered by that award will again be available for issue or transfer hereunder. 
If, under this Plan, a Participant has elected to give up the right to receive
compensation in exchange for units or shares of Common Equity based on fair
market value, such units or shares of Common Equity will not count against the
aggregate plan limit described above.

 

(b)                                 Notwithstanding anything in this Section 4,
or elsewhere in this Plan, to the contrary and subject to adjustment as provided
in Section 13 of this Plan, the aggregate number of units or shares of Common
Equity actually issued or transferred by the Company upon the exercise of
Incentive Stock Options will not exceed 2,801,120 units or shares of Common
Equity.

 

(c)                                  Notwithstanding anything in this Section 4,
or elsewhere in this Plan, to the contrary and subject to adjustment as provided
in Section 13 of this Plan, the number of shares issued with respect to
Restricted Shares, Restricted Stock Units or Performance Shares (after taking
into account any forfeitures and cancellations) will not during the life of the
Plan in the aggregate exceed 1,400,560 units or shares of Common Equity.

 

(d)                                 Notwithstanding anything in this Plan to the
contrary, up to 10% of the maximum number of units or shares of Common Equity
that may be issued or transferred under this Plan as provided for in
Section 3(a) of this Plan, as may be adjusted under Section 13 of this Plan, may
be used for awards granted under Sections 8 through 10 of this Plan that do not
comply with the three-year or one-year vesting requirements set forth in such
Sections.

 

5.                                       Individual Limitations on Awards. 
Notwithstanding anything in Section 4, or elsewhere in this Plan to the
contrary, and subject to adjustment as provided in Section 13 of this Plan:

 

(a)                                  No Participant will be granted Stock
Options or Appreciation Rights, in the aggregate, for more than 560,224 units or
shares of Common Equity during any calendar year.

 

(b)                                 No Participant will be granted Qualified
Performance-Based Awards of Restricted Stock, Restricted Stock Units or
Performance Shares, that, in the aggregate, are for more than 560,224 units or
shares of Common Equity during any calendar year.

 

(c)                                  Notwithstanding any other provision of this
Plan to the contrary, in no event will any Participant in any calendar year
receive Qualified Performance-Based

 

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Awards of Performance Units having an aggregate maximum value as of their
respective Dates of Grant in excess of $5,000,000.

 

(d)                                 Notwithstanding any other provision of this
Plan to the contrary, in no event will any Participant in any calendar year
receive annual incentive compensation under the Senior Executive Plan that is
intended to qualify as “qualified performance-based compensation” under Code
Section 162(m) that has an aggregate maximum value in excess of $5,000,000.

 

6.                                       Stock Options.  The Committee may from
time to time authorize grants of options to any Participant to purchase units or
shares of Common Equity upon such terms and conditions as it may determine in
accordance with this Section 6.  Each grant of Stock Options may utilize any or
all of the authorizations, and will be subject to all of the requirements,
contained in the following provisions:

 

(a)                                  Each grant will specify the number of units
or shares of Common Equity to which it relates.

 

(b)                                 Each grant will specify the Option Price,
which will not be less than 100% of the Market Value per Share on the Date of
Grant.

 

(c)                                  Each grant will specify whether the Option
Price will be payable (i) in cash or by check acceptable to the Company, (ii) by
the actual or constructive transfer to the Company of units or shares of Common
Equity owned by the Participant having an aggregate Market Value per Share at
the date of exercise equal to the aggregate Option Price, (iii) with the consent
of the Committee, by authorizing the Company to withhold a number of units or
shares of Common Equity otherwise issuable to the Participant having an
aggregate Market Value per Share on the date of exercise equal to the aggregate
Option Price or (iv) by a combination of such methods of payment; provided,
however, that the payment methods described in clauses (ii) and (iii) will not
be available at any time that the Company is prohibited from purchasing or
acquiring such units or shares of Common Equity.

 

(d)                                 To the extent permitted by law, any grant
may provide for deferred payment of the Option Price from the proceeds of sale
through a bank or broker of some or all of the shares to which such exercise
relates.

 

(e)                                  Successive grants may be made to the same
Participant whether or not any Stock Options or other Awards previously granted
to such Participant remain unexercised or outstanding.

 

(f)                                    Each grant will specify the required
period or periods of continuous service by the Participant with the Company or
any Subsidiary that are necessary before the Stock Options or installments
thereof will become exercisable.

 

(g)                                 Any grant may specify the Management
Objectives that must be achieved as a condition to the exercise of the Stock
Options.

 

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(h)                                 Any grant may provide for the earlier
exercise of the Stock Options in the event of a Change in Control.

 

(i)                                     Stock Options granted under this Plan
may be (i) options, including, without limitation, Incentive Stock Options, that
are intended to qualify under particular provisions of the Code, (ii) options
that are not intended to so qualify, or (iii) combinations of the foregoing. 
Incentive Stock Options may only be granted to Participants who meet the
definition of “employees” under Section 3401(c) of the Code.

 

(j)                                     No Stock Option will be exercisable more
than 10 years from the Date of Grant.

 

(k)                                  The Committee will have the right to
substitute Appreciation Rights for outstanding Options granted to one or more
Participants; provided the terms and the economic benefit of the substituted
Appreciation Rights are at least equivalent to the terms and economic benefit of
such Options, as determined by the Committee in its discretion.

 

(l)                                     Any grant may provide for the effect on
the Stock Options or any units or shares of Common Equity issued, or other
payment made, with respect to the Stock Options of any conduct of the
Participant determined by the Committee to be injurious, detrimental or
prejudicial to any significant interest of the Company or any Subsidiary.

 

(m)                               Each grant will be evidenced by an Evidence of
Award, which may contain such terms and provisions, consistent with the Plan, as
the Committee may approve, including without limitation provisions relating to
the Participant’s termination of employment or other termination of service by
reason of Retirement, death, disability or otherwise.

 

7.                                       Appreciation Rights.  The Committee may
also from time to time authorize grants to any Participant of Appreciation
Rights upon such terms and conditions as it may determine in accordance with
this Section 7.  Appreciation Rights may be granted in tandem with Stock Options
or separate and apart from a grant of Stock Options.  An Appreciation Right will
be a right of the Participant to receive from the Company upon exercise an
amount that will be determined by the Committee at the Date of Grant and will be
expressed as a percentage of the Spread (not exceeding 100%) at the time of
exercise.  An Appreciation Right granted in tandem with a Stock Option may be
exercised only by surrender of the related Stock Option.  Each grant of an
Appreciation Right may utilize any or all of the authorizations, and will be
subject to all of the requirements, contained in the following provisions:

 

(a)                                  Each grant will state whether it is made in
tandem with Stock Options and, if not made in tandem with any Stock Options,
will specify the number of units or shares of Common Equity in respect of which
it is made.

 

(b)                                 Each grant made in tandem with Stock Options
will specify the Option Price and each grant not made in tandem with Stock
Options will specify the Grant Price, which in either case will not be less than
100% of the Market Value per Share on the Date of Grant.

 

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(c)                                  Any grant may provide that the amount
payable on exercise of an Appreciation Right may be paid (i) in cash, (ii) in
units or shares of Common Equity having an aggregate Market Value per Share
equal to the Spread (or the designated percentage of the Spread) or (iii) in a
combination thereof, as determined by the Committee in its discretion.

 

(d)                                 Any grant may specify that the amount
payable to the Participant on exercise of an Appreciation Right may not exceed a
maximum amount specified by the Committee at the Date of Grant.

 

(e)                                  Successive grants may be made to the same
Participant whether or not any Appreciation Rights or other Awards previously
granted to such Participant remain unexercised or outstanding.

 

(f)                                    Each grant will specify the required
period or periods of continuous service by the Participant with the Company or
any Subsidiary that are necessary before the Appreciation Rights or installments
thereof will become exercisable, and will provide that no Appreciation Rights
may be exercised except at a time when the Spread is positive and, with respect
to any grant made in tandem with Stock Options, when the related Stock Options
are also exercisable.

 

(g)                                 Any grant may specify the Management
Objectives that must be achieved as a condition to the exercise of the
Appreciation Rights.

 

(h)                                 Any grant may provide for the earlier
exercise of the Appreciation Rights in the event of a Change in Control.

 

(i)                                     No Appreciation Right not granted in
tandem with a Stock Option under this Plan may be exercised more than 10 years
from the Date of Grant.

 

(j)                                     Any grant may provide for the effect on
the Appreciation Rights or any units or shares of Common Equity issued, or other
payment made, with respect to the Appreciation Rights of any conduct of the
Participant determined by the Committee to be injurious, detrimental or
prejudicial to any significant interest of the Company or any Subsidiary.

 

(k)                                  Each grant will be evidenced by an Evidence
of Award, which may contain such terms and provisions, consistent with the Plan,
as the Committee may approve, including without limitation provisions relating
to the Participant’s termination of employment or other termination of service
by reason of Retirement, death, disability or otherwise.

 

8.                                       Restricted Shares.  The Committee may
also from time to time authorize grants or sales to any Participant of
Restricted Shares upon such terms and conditions as it may determine in
accordance with this Section 8.  Each grant or sale will constitute an immediate
transfer of the ownership of units or shares of Common Equity to the Participant
in consideration of the performance of services, entitling such Participant to
voting and other ownership rights, but subject to the restrictions set forth in,
or permissible under, this Section 8.  Each such grant

 

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or sale may utilize any or all of the authorizations, and will be subject to all
of the requirements, contained in the following provisions:

 

(a)                                  Each grant or sale may be made without
additional consideration or in consideration of a payment by the Participant
that is less than the Market Value per Share at the Date of Grant, except as may
otherwise be required by the Delaware General Corporation Law.

 

(b)                                 Each grant or sale may limit the
Participant’s dividend or voting rights during the period in which the shares of
Restricted Shares are subject to any such restrictions; provided, however, that
dividends or other distributions on Restricted Shares with restrictions that
lapse as a result of the achievement of Management Objectives will be deferred
until and paid contingent upon the achievement of the applicable Management
Objectives.

 

(c)                                  Each grant or sale may provide that the
Restricted Shares will be subject, for a period to be determined by the
Committee at the Date of Grant, to one or more restrictions, including without
limitation a restriction that constitutes a “substantial risk of forfeiture”
within the meaning of Section 83 of the Code and the regulations of the Internal
Revenue Service under such section.

 

(d)                                 Any grant or sale may specify the Management
Objectives that, if achieved, will result in the termination or early
termination of the restrictions applicable to the shares; provided, however,
restrictions relating to Restricted Shares that vest upon the achievement of
Management Objectives may not terminate sooner than one year from the Date of
Grant.

 

(e)                                  Any grant or sale may provide for the early
termination of any such restrictions in the event of a Change in Control.

 

(f)                                    Each grant or sale will provide that
during the period for which such restriction or restrictions are to continue,
the transferability of the Restricted Shares will be prohibited or restricted in
a manner and to the extent prescribed by the Committee at the Date of Grant
(which restrictions may include without limitation rights of repurchase or first
refusal in favor of the Company or provisions subjecting the Restricted Shares
to continuing restrictions in the hands of any transferee).  If the elimination
of restrictions is based only on the passage of time instead of the achievement
of Management Objectives, the period of time will be no shorter than three
years, except that the restrictions may be removed ratably during the three-year
period, on at least an annual basis, as determined by the Committee.

 

(g)                                 Any grant or sale may provide for the effect
on the Restricted Shares or any units or shares of Common Equity issued free of
restrictions, or other payment made, with respect to the Restricted Shares of
any conduct of the Participant determined by the Committee to be injurious,
detrimental or prejudicial to any significant interest of the Company or any
Subsidiary.

 

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(h)                                 Each grant or sale will be evidenced by an
Evidence of Award, which may contain such terms and provisions, consistent with
the Plan, as the Committee may approve, including without limitation provisions
relating to the Participant’s termination of employment or other termination of
service by reason of Retirement, death, disability or otherwise.

 

9.                                       Restricted Stock Units.  The Committee
may also from time to time authorize grants or sales to any Participant of
Restricted Stock Units upon such terms and conditions as it may determine in
accordance with this Section 9.  Each grant or sale will constitute the
agreement by the Company to issue or transfer units or shares of Common Equity
to the Participant in the future in consideration of the performance of
services, subject to the fulfillment during the Deferral Period of such
conditions as the Committee may specify.  Each such grant or sale may utilize
any or all of the authorizations, and will be subject to all of the
requirements, contained in the following provisions:

 

(a)                                  Each grant or sale may be made without
additional consideration from the Participant or in consideration of a payment
by the Participant that is less than the Market Value per Share on the Date of
Grant, except as may otherwise be required by the Delaware General Corporation
Law.

 

(b)                                 Any grant or sale may specify the Management
Objectives that, if achieved, will result in the termination or early
termination of the Deferral Period; provided, however, restrictions relating to
Restricted Stock Units that vest upon the achievement of Management Objectives
may not terminate sooner than one year from the Date of Grant.

 

(c)                                  Each grant or sale will provide that the
Restricted Stock Units will be subject to a Deferral Period, which will be fixed
by the Committee on the Date of Grant, and any grant or sale may provide for the
earlier termination of such period in the event of a Change in Control. If the
Deferral Period lapses only by the passage of time instead of the achievement of
Management Objectives, each such grant or sale will be subject to a Deferral
Period of not less than three years, except that a grant or sale may provide
that the Deferral Period will expire ratably during the three-year period, on at
least an annual basis, as determined by the Committee.

 

(d)                                 During the Deferral Period, the Participant
will not have any right to transfer any rights under the Restricted Stock Units,
will not have any rights of ownership in the Restricted Stock Units and will not
have any right to vote the units or shares of Common Equity subject to the
Restricted Stock Units, but the Committee may on or after the Date of Grant
authorize the payment of dividend equivalents on such shares in cash or Common
Equity on a current, deferred or contingent basis; provided, however, that
dividends or other distributions on units or shares of Common Equity underlying
Restricted Stock Units with restrictions that lapse as a result of the
achievement of Management Objectives will be deferred until and paid contingent
upon the achievement of the applicable Management Objectives.

 

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(e)                                  Any grant or sale may provide for the
effect on the Restricted Stock Units or any units or shares of Common Equity
issued free of restrictions, or other payment made, with respect to the
Restricted Stock Units of any conduct of the Participant determined by the
Committee to be injurious, detrimental or prejudicial to any significant
interest of the Company or any Subsidiary.

 

(f)                                    Each grant or sale will be evidenced by
an Evidence of Award, which will contain such terms and provisions as the
Committee may determine consistent with the Plan, including without limitation
provisions relating to the Participant’s termination of employment or other
termination of service by reason of Retirement, death, disability or otherwise.

 

10.                                 Performance Shares and Performance Units. 
The Committee may also from time to time authorize grants to any Participant of
Performance Shares and Performance Units, which will become payable upon
achievement of specified Management Objectives, upon such terms and conditions
as it may determine in accordance with this Section 10.  Each such grant may
utilize any or all of the authorizations, and will be subject to all of the
requirements, contained in the following provisions:

 

(a)                                  Each grant will specify the number of
Performance Shares or Performance Units to which it relates.

 

(b)                                 The Performance Period with respect to each
Performance Share and Performance Unit will be determined by the Committee at
the time of grant; provided, that such Performance Period shall not be less than
one year.

 

(c)                                  Each grant will specify the Management
Objectives that, if achieved, will result in the payment of the Performance
Shares or Performance Units.

 

(d)                                 Each grant will specify the time and manner
of payment of Performance Shares or Performance Units that have become payable,
which payment may be made in (i) cash, (ii) units or shares of Common Equity
having an aggregate Market Value per Share equal to the aggregate value of the
Performance Shares or Performance Units which have become payable or (iii) any
combination thereof, as determined by the Committee in its discretion at the
time of payment.

 

(e)                                  Any grant of Performance Shares may specify
that the amount payable with respect thereto may not exceed a maximum specified
by the Committee on the Date of Grant.  Any grant of Performance Units may
specify that the amount payable, or the number of units or shares of Common
Equity issued, with respect to the Performance Units may not exceed maximums
specified by the Committee on the Date of Grant.

 

(f)                                    On or after the Date of Grant, the
Committee may provide for the payment to the Participant of dividend equivalents
on Performance Shares in cash or Common Equity, subject in all cases to deferral
and payment on a contingent basis based on the Participant’s earning of the
Performance Shares with respect to which such dividend equivalents are paid.

 

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(g)                                 Any grant may provide for the effect on the
Performance Shares or Performance Units or any units or shares of Common Equity
issued, or other payment made, with respect to the Performance Shares or
Performance Units of any conduct of the Participant determined by the Committee
to be injurious, detrimental or prejudicial to any significant interest of the
Company or any Subsidiary.

 

(h)                                 Each grant will be evidenced by an Evidence
of Award, which will contain such terms and provisions as the Committee may
determine consistent with the Plan, including without limitation provisions
relating to the payment of the Performance Shares or Performance Units in the
event of a Change in Control and provisions relating to the Participant’s
termination of employment or other termination of service by reason of
Retirement, death, disability or otherwise; provided, however, that no such
adjustment will be made in the case of a Qualified Performance-Based Award
(other than in connection with the death or disability of the Participant or a
Change in Control) where such action would result in the loss of the otherwise
available exemption of the award under Section 162(m) of the Code.  In such
event, the Evidence of Award will specify the time and terms of delivery.

 

11.                                 Senior Executive Plan Bonuses.  The
Committee may from time to time authorize the payment of annual incentive
compensation to a Participant who is, or is determined by the Committee to be
likely to become, a “covered employee” within the meaning of Section 162(m) of
the Code (or any successor provision), which incentive compensation will become
payable upon achievement of specified Management Objectives.  Subject to
Section 5(d), Senior Executive Plan Bonuses will be payable upon such terms and
conditions as the Committee may determine in accordance with the following
provisions:

 

(a)                                  No later than 90 days after the first day
of the Company’s fiscal year, the Committee will specify the Management
Objectives that, if achieved, will result in the payment of a Senior Executive
Plan Bonus for such year.

 

(b)                                 Following the close of the Company’s fiscal
year, the Committee will certify in writing whether the specified Management
Objectives have been achieved.  Approved minutes of a meeting of the Committee
at which such certification is made will be treated as written certification for
this purpose.  The Committee will also specify the time and manner of payment of
a Senior Executive Plan Bonus that becomes payable, which payment may be made in
(i) cash, (ii) units or shares of Common Equity having an aggregate Market Value
per Share equal to the aggregate value of the Senior Executive Plan Bonus which
has become payable or (iii) any combination thereof, as determined by the
Committee in its discretion at the time of payment.

 

(c)                                  If a Change in Control occurs during a
Performance Period, the Senior Executive Plan Bonus payable to each Participant
for the Performance Period will be determined at the highest level of
achievement of the Management Objectives, without regard to actual performance
and without proration for less than a full Performance Period.  The Senior
Executive Plan Bonus will be paid at such time following the Change in Control
as the Committee determines in its discretion, but in no event later than 30
days after the date of an event that results in a Change in Control.

 

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(d)                                 Each grant may be evidenced by an Evidence
of Award, which will contain such terms and provisions as the Committee may
determine consistent with the Plan, including without limitation provisions
relating to the Participant’s termination of employment by reason of Retirement,
death, disability or otherwise.

 

12.                                 Transferability.

 

(a)                                  Except as may be specifically provided
therein, no Award may be sold, pledged, assigned or transferred in any manner
other than by will or the laws of descent and distribution, pursuant to a
qualified domestic relations order or, with the consent of the Committee, by
gifts to family members of the Participant, including to trusts in which family
members of the Participant own more than 50% of the beneficial interests, to
foundations in which family members of the Participant or the Participant
controls the management of assets and to other entities in which more than 50%
of the voting interests are owned by family members of the Participant or the
Participant.  In no event may any Award granted under the Plan be transferred
for value.  No Stock Option or Appreciation Right granted to a Participant will
be exercisable during the Participant’s lifetime by any person other than the
Participant or the Participant’s guardian or legal representative or any
permitted transferee.

 

(b)                                 The Committee may specify at the Date of
Grant that part or all of the units or shares of Common Equity that are (i) to
be issued or transferred by the Company upon the exercise of Stock Options or
Appreciation Rights, upon the termination of the Deferral Period applicable to
Restricted Stock Units or upon payment under any grant of Performance Shares or
Performance Units or (ii) no longer subject to the substantial risk of
forfeiture and restrictions on transfer referred to in Section 8 of this Plan,
will be subject to further restrictions on transfer.

 

13.                                 Adjustments.

 

(a)                                  The Committee will make or provide for such
adjustments in (i) the maximum number of units or shares of Common Equity
specified in Sections 4 and 5, (ii) the number of units or shares of Common
Equity covered by outstanding Stock Options, Appreciation Rights, Performance
Shares, Restricted Shares and Restricted Stock Units granted under the Plan,
(iii) the Option Price or Grant Price applicable to any Stock Options and
Appreciation Rights, and (iv) the kind of shares covered by any such Awards
(including shares of another issuer), as the Committee in its discretion,
exercised in good faith, determines is equitably required to prevent dilution or
enlargement of the rights of Participants that otherwise would result from
(x) any stock dividend, stock split, combination of shares, recapitalization,
increase in Common Equity or other change in the capital structure of the
Company, (y) any merger, consolidation, spin-off, split-off, spin-out, split-up,
reorganization, partial or complete liquidation or other distribution of assets,
issuance of rights or warrants to purchase securities, or (z) any other
corporate transaction or event having an effect similar to any of the
foregoing.  In the event of any such transaction or event or a Change in
Control, the Committee, in its discretion, may provide in substitution for any
or all outstanding Awards such alternative consideration as it, in good faith,
may determine to be equitable in the circumstances and may require in

 

15

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connection with such substitution the surrender of all Awards so replaced in a
manner that complies with Section 409A of the Code.  In addition, for each Stock
Option or Appreciation Right with an Option Price or Grant Price greater than
the consideration offered in connection with any such transaction or event or
Change in Control, the Committee may in its sole discretion elect to cancel such
Stock Option or Appreciation Right without any payment to the person holding
such Stock Option or Appreciation Right.

 

(b)                                 The Committee may accelerate the payment of,
or vesting with respect to, any Award under the Plan upon the occurrence of a
transaction or event described in this Section 13; provided, however, that in
the case of any Award that constitutes a deferral of compensation within the
meaning of Section 409A of the Code, the Committee will not accelerate the
payment of the Award unless it determines in good faith that such transaction or
event satisfies the requirements of a Change in Control event under guidance
issued by the Secretary of the Treasury under Section 409A; further, provided,
that any such adjustment to the number specified in Section 4(b) will be made
only if and to the extent that such adjustment would not cause any Stock Option
intended to qualify as an Incentive Stock Option to fail to so qualify.

 

14.                                 Fractional Shares.  The Company will not be
required to issue any fractional unit or share of Common Equity pursuant to the
Plan.  The Committee may provide for the elimination of fractions or for the
settlement of fractions in cash.

 

15.                                 Withholding Taxes.  To the extent that the
Company is required to withhold federal, state, local or foreign taxes in
connection with any payment made or benefit realized by a Participant or other
person under the Plan, and the amounts available to the Company for such
withholding are insufficient, it will be a condition to the receipt of such
payment or the realization of such benefit that the Participant or such other
person make arrangements satisfactory to the Company for payment of the balance
of such taxes required to be withheld.  In addition, if permitted by the
Committee, the Participant or such other person may elect to have any
withholding obligation of the Company satisfied with units or shares of Common
Equity that would otherwise be transferred to the Participant or such other
person in payment of the Participant’s Award.  However, units or shares of
Common Equity will not be withheld in excess of the minimum number of shares
required to satisfy the Company’s withholding obligation.

 

16.                                 Administration of the Plan.

 

(a)                                  Unless the administration of the Plan has
been expressly assumed by the Board pursuant to a resolution of the Board, the
Plan will be administered by the Committee.  A majority of the Committee will
constitute a quorum, and the action of the members of the Committee present at
any meeting at which a quorum is present, or acts unanimously approved in
writing, will be the acts of the Committee.

 

(b)                                 The Committee has the full authority and
discretion to administer the Plan and to take any action that is necessary or
advisable in connection with the administration of the Plan, including without
limitation the authority and discretion to interpret and construe any provision
of the Plan or of any agreement, notification or document

 

16

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evidencing an Award.  The interpretation and construction by the Committee of
any such provision and any determination by the Committee pursuant to any
provision of the Plan or of any such agreement, notification or document will be
final and conclusive.  No member of the Committee will be liable for any such
action or determination made in good faith.

 

(c)                                  It is the Company’s intention that any
Award granted under the Plan that constitutes a deferral of compensation within
the meaning of Section 409A of the Code and the guidance issued by the Secretary
of the Treasury under Section 409A satisfy the requirements of Section 409A.  In
granting such an Award, the Committee will use its best efforts to exercise its
authority under the Plan with respect to the terms of such Award in a manner
that the Committee determines in good faith will cause the Award to comply with
Section 409A and thereby avoid the imposition of penalty taxes and interest upon
the Participant receiving the Award.

 

(d)                                 If the administration of the Plan is assumed
by the Board pursuant to Section 16(a), the Board will have the same authority,
power, duties, responsibilities and discretion given to the Committee under the
terms of the Plan.

 

17.                                 Amendments and Other Matters.

 

(a)                                  The Plan may be amended from time to time
by the Committee or the Board; provided, however, that if an amendment to this
Plan (i) would materially increase the benefits accruing to participants under
this Plan, (ii) would materially increase the number of units or shares of
Common Equity that may be issued under this Plan, (iii) would materially modify
the requirements for participation in this Plan, or (iv) must otherwise be
approved by the Common Equity holders of the Company in order to comply with
applicable law or the rules of the New York Stock Exchange or, if the units or
shares of Common Equity are not traded on the New York Stock Exchange, the
principal national securities exchange upon which the units or shares of Common
Equity are traded or quoted, then, such amendment will be subject to stockholder
approval and will not be effective unless and until such approval has been
obtained.

 

(b)                                 Except in connection with a corporate
transaction or event described in Section 13 of this Plan, the terms of
outstanding awards may not be amended to reduce the Option Price of outstanding
Stock Options or the Grant Price of outstanding Appreciation Rights, or cancel
outstanding Stock Options or Appreciation Rights in exchange for cash, other
Awards or Stock Options or Appreciation Rights with an Option Price or Grant
Price, as applicable, that is less than the Option Price of the original Stock
Options or Grant Price of the original Appreciation Rights, as applicable,
without stockholder approval.  This Section 17(b) is intended to prohibit the
repricing of “underwater” Stock Options and Appreciation Rights and will not be
construed to prohibit the adjustments provided for in Section 13 of this Plan.

 

(c)                                  If permitted by Section 409A of the Code
and Section 162(m) of the Code, but subject to the paragraph that follows, in
the case of termination of employment by reason of death, disability or
Retirement, or in the event of a Change in Control, to the

 

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extent a Participant holds a Stock Option or Appreciation Right not immediately
exercisable in full, or any Restricted Shares as to which the substantial risk
of forfeiture or the prohibition or restriction on transfer has not lapsed, or
any Restricted Stock Units as to which the Deferral Period has not been
completed, or any Performance Shares or Performance Units which have not been
fully earned, or who holds units or shares of Common Equity subject to any
transfer restriction imposed pursuant to Section 12(b) of this Plan, the
Committee may, in its sole discretion, accelerate the time at which such Stock
Option or Appreciation Right may be exercised or the time at which such
substantial risk of forfeiture or prohibition or restriction on transfer will
lapse or the time when such Deferral Period will end or the time at which such
Performance Shares or Performance Units will be deemed to have been fully earned
or the time when such transfer restriction will terminate or may waive any other
limitation or requirement under any such award, except in the case of a
Qualified Performance-Based Award where such action would result in the loss of
the otherwise available exemption of the Award under Section 162(m) of the Code.

 

Subject to Section 17(b) hereof, the Committee may amend the terms of any Award
theretofore granted under this Plan prospectively or retroactively, except in
the case of a Qualified Performance-Based Award (other than in connection with
the Participant’s death or disability, or a Change in Control) where such action
would result in the loss of the otherwise available exemption of the award under
Section 162(m) of the Code.  In such case, the Committee will not make any
modification of the Management Objectives or the level or levels of achievement
with respect to such Qualified Performance-Based Award.  Subject to Section 13
above, no such amendment will impair the rights of any Participant without his
or her consent. The Board may, in its discretion, terminate this Plan at any
time. Termination of this Plan will not affect the rights of Participants or
their successors under any awards outstanding hereunder and not exercised in
full on the date of termination.

 

(d)                                 The Plan may be terminated at any time by
action of the Board.  The termination of the Plan will not adversely affect the
terms of any outstanding Award.

 

(e)                                  If the Committee determines, with the
advice of legal counsel, that any provision of the Plan would prevent the
payment of any Award intended to qualify as performance-based compensation
within the meaning of Section 162(m) of the Code from so qualifying, such Plan
provision will be invalid and cease to have any effect without affecting the
validity or effectiveness of any other provision of the Plan.  If the Committee
determines with the advice of legal counsel, that compliance with any provision
of the Plan is not required in order for the payment of any Award (i) intended
to qualify as performance based compensation with the meaning of
Section 162(m) of the Code to so qualify, or (ii) to be otherwise deductible for
federal income tax purposes, then the Committee may in its discretion not comply
with such Plan provision.

 

18.                                 Governing Law.  The Plan, all Awards and all
actions taken under the Plan and the Awards will be governed in all respects in
accordance with the laws of the State of Delaware, including without limitation,
the Delaware statute of limitations, but without giving effect to the principles
of conflicts of laws of such State.

 

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19.                                 Compliance with Section 409A of the Code.

 

(a)                                  To the extent applicable, it is intended
that this Plan and any grants made hereunder comply with the provisions of
Section 409A of the Code, so that the income inclusion provisions of
Section 409A(a)(1) of the Code do not apply to the Participants. This Plan and
any grants made hereunder will be administered in a manner consistent with this
intent. Any reference in this Plan to Section 409A of the Code will also include
any regulations or any other formal guidance promulgated with respect to such
Section by the U.S. Department of the Treasury or the Internal Revenue Service.

 

(b)                                 Neither a Participant nor any of a
Participant’s creditors or beneficiaries will have the right to subject any
deferred compensation (within the meaning of Section 409A of the Code) payable
under this Plan and grants hereunder to any anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment or garnishment. Except as
permitted under Section 409A of the Code, any deferred compensation (within the
meaning of Section 409A of the Code) payable to a Participant or for a
Participant’s benefit under this Plan and grants hereunder may not be reduced
by, or offset against, any amount owing by a Participant to the Company or any
of its Subsidiaries.

 

(c)                                  If, at the time of a Participant’s
separation from service (within the meaning of Section 409A of the Code),
(i) the Participant will be a specified employee (within the meaning of
Section 409A of the Code and using the identification methodology selected by
the Company from time to time) and (ii) the Company makes a good faith
determination that an amount payable hereunder constitutes deferred compensation
(within the meaning of Section 409A of the Code) the payment of which is
required to be delayed pursuant to the six-month delay rule set forth in
Section 409A of the Code in order to avoid taxes or penalties under Section 409A
of the Code, then the Company will not pay such amount on the otherwise
scheduled payment date but will instead pay it, without interest, on the tenth
business day of the seventh month after such separation from service.

 

(d)                                 Notwithstanding any provision of this Plan
and grants hereunder to the contrary, in light of the uncertainty with respect
to the proper application of Section 409A of the Code, the Company reserves the
right to make amendments to this Plan and grants hereunder as the Company deems
necessary or desirable to avoid the imposition of taxes or penalties under
Section 409A of the Code. In any case, a Participant will be solely responsible
and liable for the satisfaction of all taxes and penalties that may be imposed
on a Participant or for a Participant’s account in connection with this Plan and
grants hereunder (including any taxes and penalties under Section 409A of the
Code), and neither the Company nor any of its affiliates will have any
obligation to indemnify or otherwise hold a Participant harmless from any or all
of such taxes or penalties.

 

20.                                 Miscellaneous Provisions.

 

(a)                                  This Plan will not confer upon any
Participant any right with respect to continuance of employment or other service
with the Company or any Subsidiary, nor

 

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will it interfere in any way with any right the Company or any Subsidiary would
otherwise have to terminate such Participant’s employment or other service at
any time.

 

(b)                                 To the extent that any provision of this
Plan would prevent any Stock Option that was intended to qualify as an Incentive
Stock Option from qualifying as such, that provision will be null and void with
respect to such Stock Option.  Such provision, however, will remain in effect
for other Stock Options and there will be no further effect on any provision of
this Plan.

 

(c)                                  No award under this Plan may be exercised
by the holder thereof if such exercise, and the receipt of stock thereunder,
would be, in the opinion of counsel selected by the Company, contrary to law or
the regulations of any duly constituted authority having jurisdiction over this
Plan.

 

(d)                                 Absence on leave approved by a duly
constituted officer of the Company or any of its Subsidiaries will not be
considered interruption or termination of service of any employee for any
purposes of this Plan or awards granted hereunder.

 

(e)                                  No Participant will have any rights as a
stockholder with respect to any shares subject to awards granted to him or her
under this Plan prior to the date as of which he or she is actually recorded as
the holder of such shares upon the stock records of the Company.

 

(f)                                    The Committee may condition the grant of
any award or combination of awards authorized under this Plan on the surrender
or deferral by the Participant of his or her right to receive a cash bonus or
other compensation otherwise payable by the Company or a Subsidiary to the
Participant.

 

(g)                                 Except with respect to Stock Options and
Appreciation Rights, the Committee may permit Participants to elect to defer the
issuance of units or shares of Common Equity under the Plan pursuant to such
rules, procedures or programs as it may establish for purposes of this Plan and
which are intended to comply with the requirements of Section 409A of the Code. 
The Committee also may provide that deferred issuances and settlements include
the payment or crediting of dividend equivalents or interest on the deferral
amounts.

 

(h)                                 If any provision of this Plan is or becomes
invalid, illegal or unenforceable in any jurisdiction, or would disqualify this
Plan or any award under any law deemed applicable by the Committee, such
provision will be construed or deemed amended or limited in scope to conform to
applicable laws or, in the discretion of the Committee, it will be stricken and
the remainder of this Plan will remain in full force and effect.

 

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