exh1012may32008.htm


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT
10.12

    


    


    CHARMING
SHOPPES, INC.

    


    2003
Non-Employee Directors Compensation Plan

    Amended
and Restated Effective May 7, 2008

    


    


    


    1.           Purpose and Scope of the
Plan.

    


    (a)           Purpose.  The
purpose of this 2003 Non-Employee Directors Compensation Plan (the "Plan") of
Charming Shoppes, Inc. (the "Company") is to advance the interests of the
Company and its shareholders by providing for fair and adequate equity
compensation of non-employee directors and an opportunity for deferral of
compensation in order to attract and retain high quality persons to serve as
directors and to enable such persons to increase their proprietary interest in
the Company.  In furtherance of this purpose, the Plan provides for
grants of Options, Stock Appreciation Rights, Restricted Stock Units, and/or
Restricted Stock, and the opportunity for a director to elect deferred and
alter­na­tive forms of compen­sation in lieu of cash fees for
service as a director, including Deferred Shares and deferred cash.

    


    (b)           Effect of Amendment and Restatement
of the Plan.  The Company hereby amends and restates the Plan,
effective May 8, 2008 (the "Effective Date"). The Plan was initially adopted on
August 21, 1996 and was subsequently amended and restated on several
occasions.  Non-employee director compensation before the Effective
Date was governed by the Plan and other policies of the Company then in effect,
except that Section 4 hereof applies to any outstanding Deferred Shares, Section
6(a) applies to any outstanding Restricted Stock and Section 6(b) applies to
RSUs granted in 2007 and thereafter.

    


    (c)           Grandfathered
Accounts.  The amendment and restatement of January 1, 2005 and
subsequent amendments to the Plan shall not affect Grandfathered Accounts (as
defined below), which shall continue to be subject to, and governed by, the
terms and conditions of the Plan as in effect on December 31, 2004.

    


    (d)           Relation of Plan to Other Director
Compensation. The amount, timing, and other terms of cash compensation
that may be paid by the Company to non-employee directors are not governed by
this Plan, except for cash-settled equity awards hereunder and except to the
extent that opportunities for deferral of cash compensation otherwise payable to
a director, or receipt of such cash compensation in alternative forms, may be
made available to a director under this Plan.  In addition, adoption
of the Plan does not limit the authority of the Board of Directors in adopting
other compensation programs in which directors may participate.

    


    2.           Definitions.  In
addition to the terms defined in Section 1, the following terms shall be defined
as set forth below:

    


    (a)           "Account"
means the account established and maintained by the Company for RSUs granted
under Section 6 and Deferred Shares and deferred cash credited under Section
8.  A subaccount for RSUs and a subaccount for such Deferred Shares
and deferred cash may be designated within the Account.  The Account
and RSUs, Deferred Shares and deferred cash credited to the Account will be
maintained solely as bookkeeping entries by the Company to evidence unfunded
obligations of the Company.

    


    (b)           "Administrator"
means the individual or committee specified in Section 3(b) to whom the Board
has delegated authority to administer the Plan.

    


    (c)           "Beneficiary"
means the person(s) or trust(s) which have been designated by a Participant in
his or her most recent written beneficiary designation filed with the
Administrator to receive the benefits specified under the Plan upon such
Participant's death.  If, upon a Participant's death, there is no
designated Beneficiary or surviving designated Beneficiary, then the term
Beneficiary means the person(s) or trust(s) entitled by will or the laws of
descent and distribution to receive such benefits.

    


    (d)           "Board"
means the Board of Directors of the Company.  The Board may delegate
its functions to a committee of the Board as specified under Section 3(a), in
which case references to the Board shall be deemed to include such
committee.

    


    (e)           "Change
in Control" and related terms are defined in Section 12.

    


    (f)           "Code"
means the Internal Revenue Code of 1986, as amended, including regulations
thereunder and successor provisions and regulations thereto.

    


    (g)           "Deferred
Shares" means a Share Unit credited to a Participant's Account under Section 8
as a result of deferral of cash fees or other deferral permitted
hereunder.

    


    (h)           "Director
Compensation" means annual retainer fees payable to a director in his or her
capacity as such for service on the Board and service as chairman of any Board
committee, and any other fees payable to a director in his or her capacity as
such for attending meetings and other service on the Board and Board committees;
provided, however, that the Administrator may determine that specific fees will
not be deemed Director Compensation (such determination to be made in advance of
the applicable deadline for deferral of fees) and may determine that cash paid
in settlement of Cash-Settled RSUs will be deemed to be Director
Compensation.  Reimbursement of expenses does not constitute Director
Compensation.

    


    (i)           "Disability"
means a Participant's termination of service as a director of the Company due to
a physical or mental incapacity of long duration which renders the Participant
unable to perform the duties of a director of the Company.

    


    (j)           "Exchange
Act" means the Securities Exchange Act of 1934, as amended, including rules
thereunder and successor provisions and rules thereto.

    


    (k)           "Grandfathered
Account" means that portion of a Participant's Account that was earned and
vested as of December 31, 2004, and shall include earnings (including dividends
paid in accordance with Section 13(b) and dividends and dividend equivalents
paid in accordance with Section 9(a)) credited to such amount under the terms of
the Plan.  All Grandfathered Accounts shall be calculated in
accordance with Section 409A of the Code.  The Company shall maintain
a separate record of Grandfathered Accounts.

    


    (l)           "Fair
Market Value" means, with respect to Shares, the fair market value of such
Shares determined by such methods or procedures as shall be established from
time to time by the Board.  Unless otherwise determined by the Board,
the Fair Market Value of a Share as of any given date means the closing sale
price of a Share reported on the Nasdaq Global Select Market (or, if Shares are
then principally traded on a national securities exchange, in the reported
"composite transactions" for such exchange) for such date, or, if no Shares were
traded on that date, on the next preceding day on which there was such a
trade.

    


    (m)           “Mandatory
Retirement” means the termination of a director's service in accordance with any
mandatory retirement policy adopted by the Board of Directors and then in
effect.

    


    (n)           "Option"
means the right, granted to a Participant under Section 7, to purchase a
specified number of Shares at the specified exercise price for a specified
period of time under the Plan.  All Options will be non-qualified
stock options.

    


    (o)           "Participant"
means any person who has been granted an Option which remains outstanding, has
RSUs, Deferred Shares or deferred cash credited to his or her Account, or has
elected to defer receipt of Director Compensation in the form of Deferred Shares
or deferred cash under the Plan.

    


    (p)           "Plan
Year" means, with respect to a Participant, the period commencing at the time of
election of the director at an annual meeting of shareholders (or the election
of a class of directors if the Company then has a classified Board of
Directors), or the director's initial appointment to the Board if not at an
annual meeting of shareholders, and continuing until the close of business of
the day preceding the next annual meeting of shareholders.

    


    (q)           "Restricted
Stock" means Shares granted under Section 6, subject to a risk of forfeiture and
restrictions on transfer for a specified period.

    


    (r)           "RSU"
or "Restricted Share Unit" means a Share Unit credited to a Participant's
Account as a grant under Section 6, which is subject to a risk of forfeiture for
a specified period.

    


    (s)           "Shares"
means shares of common stock of the Company and such other securities as may be
substituted or resubstituted for Shares pursuant to Section 13(b).

    


    (t)           "Share
Unit" means a right to receive, at a specified settlement date, delivery of one
Share or the cash Fair Market Value of a Share at that date, subject to the
terms and conditions of the Plan.  Share Units in the form of RSUs
shall be subject to a risk of forfeiture, but Share Units in the form of
Deferred Shares will be at all times non-forfeitable.  Share Units and
related awards settleable in cash shall be referred to as "Cash-Settled" and
those settleable in Shares shall be referred to as "Share-Settled."  A
given award will be deemed to be a Share-Settled award unless it has been
specifically designated as a Cash-Settled award in this Plan or otherwise by the
Committee in writing.

    


    (u)           "Stock
Appreciation Right" or "SAR" means the right, granted to the Participant under
Section 7, to receive, upon exercise thereof, the excess of (i) the Fair Market
Value of one Share on the date of exercise over (ii) the grant price of the SAR
as determined by the Board at the time of grant.

    


    (v)           "Valuation
Date" shall mean the close of business on the last business day of each calendar
quarter and, in the case of any final distribution of deferred cash from a
Participant's Account, the day as of which such distribution is made; provided,
however, that the Administrator may specify a different Valuation Date in order
to coordinate the Participant's deferred cash balance with any actual investment
by which the deferred cash balance is to be measured.

    


    3.           Administration.

    


    (a)           Authority.  Both
the Board and the Administrator (subject to the ability of the Board to restrict
the Administrator) shall administer the Plan in accordance with its terms, and
shall have all powers necessary to accomplish such purpose, including the power
and authority to construe and interpret the Plan, to define the terms used
herein, to prescribe, amend and rescind rules and regulations, agreements,
forms, and notices relating to the administration of the Plan, and to make all
other determinations necessary or advisable for the administration of the
Plan.  The Board may delegate any or all of its functions to a
committee of the Board, provided that the Board shall approve the form and
amount of compensation to directors under any provision of the
Plan.  The Administrator may perform any function of the Board under
the Plan, except for establishing the form and amount of compensation under any
provision, adopting material amendments to the Plan under Section 13(e), and any
other function from time to time specifically reserved by the Board to
itself.  Any actions of the Board or the Administrator with respect to
the Plan shall be final, conclusive, and binding upon all persons interested in
the Plan, except that any action of the Administrator will not be binding on the
Board.  The Board and Administrator may each appoint agents and
delegate thereto powers and duties under the Plan, except as otherwise limited
by the Plan.

    


    (b)           Administrator.  The
Administrator shall be the Executive Vice President, General Counsel and
Secretary of the Company, or, if that officer is unavailable, the Executive Vice
President, Chief Financial Officer, or, if that officer is unavailable, the
Executive Vice President and Director of Human Resources; provided, however,
that the Board may designate a different individual or committee to serve as
Administrator.  In any case in which a director is a member of the
Administrator, such director shall not act on or decide any matter relating
solely to himself or herself or any of his or her rights or benefits under the
Plan.  No bond or other security need be required of the Administrator
or any member thereof in any jurisdiction.

    


    (c)           Limitation of
Liability.  Each member of the Board and the Administrator
shall be entitled to, in good faith, rely or act upon any report or other
information furnished to him or her by any officer or other employee of the
Company or any subsidiary, the Company's independent certified public
accountants, or any executive compensation consultant, legal counsel, or other
professional retained by the Company to assist in the administration of the
Plan.  No member of the Board or the Administrator, nor any person to
whom ministerial duties under the Plan have been delegated, shall be personally
liable for any action, determination, or interpretation taken or made in good
faith with respect to the Plan, and any such person shall, to the extent
permitted by law, be fully indemnified and protected by the Company with respect
to any such action, determination, or interpretation.

    


    4.           Shares Available Under the
Plan.  Subject to adjustment as provided in Section 13(b), the
total number of Shares reserved and available for delivery under the Plan for
awards granted on or after June 26, 2003 shall be 600,000; provided however,
that, in no event may more than 50% of such Shares be delivered in connection
with "full-value Awards."   For this purpose, "full-value Awards"
means awards other than Options or SARs for which a Participant does not pay or
surrender rights to payment equal to at least the Fair Market Value of the award
determined at the date of grant.  Shares subject to and to be
delivered in connection with awards granted before June 26, 2003 which remain
outstanding at that date shall be drawn from the shares reserved and available
under the Plan at the time of grant.   The Shares delivered under
the Plan may consist, in whole or in part, of authorized and unissued Shares or
treasury Shares.  For purposes of this Section 4, Shares subject to an
award under the Plan (including an award granted before June 26, 2003) that is
canceled, expired, forfeited, settled in cash, or otherwise terminated without a
delivery of Shares to the Participant, including the number of Shares withheld
or surrendered in payment of any exercise or purchase price of an award and
including the number of Shares subject to an award but not delivered upon
exercise or settlement of the award, will become available for awards under the
Plan. Shares delivered in settlement of Deferred Shares shall not be deemed to
be Shares drawn from the Shares reserved and available under this Section 4, to
the fullest extent permitted under Nasdaq Marketplace Rule 4350(i)(1)(A)(ii) and
excluding Deferred Shares resulting from deferrals of Share-Settled
RSUs.

    


    5.           Eligibility.  Each
non-employee director of the Company may participate in the Plan, subject to the
terms hereof.  No person other than those specified in this Section 5
will be eligible to participate in the Plan.  The Administrator will
notify each person of his or her eligibility to participate in an elective
feature of the Plan not later than 15 days prior to any deadline for filing an
election form.

    


    6.           Grants of Restricted Stock or
RSUs.  Restricted Stock and/or RSUs shall be granted to
non-employee directors in accordance with policies established from time to time
by the Board specifying the directors or classes of directors to be granted such
awards, the number of shares of Restricted Stock or RSUs to be granted, and the
time or times at which such awards shall be granted.  An award granted
under this Section 6 shall become vested and non-forfeitable at such dates as
may be specified by the Board, and shall have such other terms as may be
established by the Board.

    


    (a)           One-Time Grant Upon First Election
as a Non-Employee Director. The policy with respect to newly appointed or
elected non-employee directors under this Section 6, effective as of June 21,
2007 and continuing until modified or revoked by the Board, shall be as
follows:

    


    
      	
               
      

            	
              (i)

            	
              Award Type and
      Amount.  Effective June 21, 2007, one-time grants of
      Restricted Stock to each newly appointed or elected non-employee director
      were discontinued.

            


    

    


    
      	
               
      

            	
              (ii)

            	
              Vesting and Forfeiture
      Terms.   With respect to Restricted Stock granted
      before June 21, 2007 under this Section 6(a), one-third of the number of
      Shares of Restricted Stock shall vest and become non-forfeitable at the
      close of business on June 1 of each of the three calendar years following
      the date of grant of such award, rounded to the nearest number of whole
      Shares, subject to the following:

            


    

    


    
      	
               
      

            	
              (A)

            	
              In
      the event of a Change in Control or termination of the Participant's
      service as a director due to death or Disability, the award, if not
      previously vested or forfeited, shall immediately vest and become
      non-forfeitable in full.

            


    

    


    
      	
               
      

            	
              (B)

            	
              In
      the event of termination of the Participant's service as a director due to
      Mandatory Retirement by the Participant, the award, if not previously
      vested or forfeited, shall immediately vest and become non-forfeitable as
      to that number of Shares of Restricted Stock as would have vested and
      become non-forfeitable if the Participant had continued to serve as a
      director through the anticipated date of the next annual meeting of
      shareholders.

            


    

    


    
      	
               
      

            	
              Unless
      otherwise determined by the Board, an award of Restricted Stock that has
      not vested at or before the time of termination of the Participant's
      service as a director  (this would include all unvested
      Restricted Stock in the event of a director's removal from service) will
      cease to vest and will be forfeited upon such termination; provided,
      however, that, if a director's service would be terminated as a result of
      the failure of such director to be reelected at an annual meeting of
      shareholders after agreeing to be nominated for reelection, such service
      will be deemed to terminate at the end of a 60-day period following such
      annual meeting if the director has not otherwise been appointed or elected
      to a seat on the Board and accepted such appointment or
      election.

            


    

    


    (b)            Annual Grant to a Non-Employee
Director.  The policy with respect to annual grants of RSUs
under this Section 6, effective as of June 21, 2007 and continuing until
modified or revoked by the Board, shall be as follows:

    


    
      	
               
      

            	
              (i)

            	
              Award Type and
      Amount.  At the date of the 2007 Annual Meeting of
      Shareholders and each subsequent annual meeting of shareholders (subject
      to delayed grant as specified below) at which a director is elected or
      reelected as a member of the Board (or at which members of another class
      of directors are elected or reelected, if the Company then has a
      classified Board), RSUs shall be automatically granted to each
      non-employee director eligible to participate in the Plan at the close of
      business on that date.  If an election of directors at an annual
      meeting is contested, the date of grant for all eligible directors shall
      be the date following the annual meeting that the independent Judge of
      Elections reports the results of the election to the Company, unless
      otherwise determined by the Board.  The number of such RSUs to
      be granted shall equal $135,000 divided by the Fair Market Value of a
      Share on the date of grant.  If a non-employee director is
      initially elected or appointed at a date that does not coincide with the
      date of an annual meeting and does not fall within 30 days preceding an
      announced annual meeting, if he or she is eligible to participate in the
      Plan at that date, he or she will be automatically granted the number of
      RSUs equal to (A) $135,000 multiplied by a fraction the numerator of which
      is the number of days from the date of grant to the anniversary of the
      most recent annual meeting and the denominator of which is 365, divided by
      (B) the Fair Market Value of a Share on the date of grant, with the
      resulting number of RSUs rounded to the nearest whole RSU; provided,
      however, that a director elected or appointed within 60 days after an
      annual meeting at which the director was not reelected will receive the
      same number of RSUs as were granted at or following the annual meeting to
      each other non-employee director.  If at the time of grant of
      RSUs under this Section 6(b) on or after May 8, 2008 there remains
      insufficient Shares available for the number of Share-Settled RSUs
      anticipated to be granted during that fiscal year (taking into account
      previously granted and outstanding Share-Settled awards), (i) in fiscal
      2009 the maximum number of Share-Settled RSUs granted to each non-employee
      director will be 3,000, and any RSUs to be granted in excess of that
      number will be Cash-Settled RSUs, and (ii) after fiscal 2009 (or earlier
      at any time that fewer than 3,000 Shares remain available per director for
      new awards to be granted at a given date) all RSUs to be granted to a
      non-employee director will be Cash-Settled
RSUs.

            


    

    


    
      	
               
      

            	
              (ii)

            	
              Vesting and Forfeiture
      Terms.   Such award shall become vested and
      non-forfeitable as to all RSUs at the close of business on June 1 of the
      year following the date of grant, subject to the
  following:

            


    

    


    
      	
               
      

            	
              (A)

            	
              In
      the event of a Change in Control or termination of the Participant's
      service as a director due to death or Disability, the award, if not
      previously vested or forfeited, shall immediately vest and become
      non-forfeitable in full.

            


    

    


    
      	
               
      

            	
              (B)

            	
              In
      the event of termination of the Participant's service as a director due to
      a voluntary termination of service or Mandatory Retirement by the
      Participant, the award, if ­­not previously vested or forfeited,
      shall immediately vest and become non-forfeitable as to that number of
      RSUs equal to the total number of RSUs multiplied by a fraction the
      numerator of which is the number of days from the date of grant to the
      date of termination of service and the denominator of which is the number
      of days from the date of grant until June 1 of the year following the date
      of grant of such award (such fraction in no event will exceed
      one).  This provision will also apply in the case of a director
      who fails to be reelected as a director at an annual meeting of
      shareholders after agreeing to be nominated for reelection, provided,
      however, that, in such a case the director's service will be deemed to
      terminate only if, at the end of a 60-day period following such annual
      meeting (but not later than December 31 if that date falls within the
      60-day period), the director has not otherwise been appointed or elected
      to a seat on the Board and accepted such appointment or
      election.

            


    

    


    Unless
otherwise determined by the Board, an award of RSUs that has not vested at or
before the time of termination of the Participant's service as a director (this
would include all unvested RSUs in the event of a director's removal from
service) as provided herein will cease to vest and will be forfeited upon such
termination.

    


    (c)           Dividends and Dividend
Equivalents.  Unless otherwise determined by the Board, cash
dividends on Restricted Stock which are not large, special and non-recurring and
which are paid prior to the lapse of the risk of forfeiture on such Restricted
Stock shall be paid to the Participant when paid to the Company's
shareholders.  Other dividends will be payable or not payable and
subject to adjustment to the Restricted Stock in accordance with Section
13(b).  Dividend Equivalents will be credited on RSUs in accordance
with Section 9(a), with the resulting additional RSUs subject to the same terms,
including risk of forfeiture, as the RSUs on which the dividend equivalent was
paid; provided, however, that such dividend equivalents may instead be paid in
cash, subject to such terms as the Administrator may determine, if reinvestment
of dividends is determined by the Administrator to be administratively
burdensome.

    


    (d)           Other Restricted Stock
Terms.  Restricted Stock shall be nontransferable by the
Participant at any time that the award remains subject to a risk of
forfeiture.  Restricted Stock granted under the Plan may be evidenced
in such manner as the Administrator shall determine.  Unless otherwise
determined by the Administrator, if certificates representing Restricted Stock
are registered in the name of the Participant, such certificates shall bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such Restricted Stock, the Company shall retain physical
possession of the certificate, and the Participant shall have delivered a stock
power to the Company, endorsed in blank, relating to the Restricted
Stock.  Upon the lapse of restrictions on Restricted Stock, the Share
certificate shall be released by the Company to the Participant with any legend
relating to such restrictions removed.

    


    (e)           Settlement of
RSUs.

    


    
      	
               
      

            	
              (i)

            	
              General Rule.
      Except as provided in (ii) – (v) below, RSUs shall be settled promptly at
      the time the RSUs become vested (and in any case within 90 days
      thereafter); provided, however, that settlement of RSUs shall be subject
      to delayed settlement if and to the extent specified in Section 10(d), (e)
      or (f) below.

            


    

    


    
      	
               
      

            	
              (ii)

            	
              Deferral
      Election.  A director may elect to defer settlement of
      RSUs by timely filing an election with the Company as provided
      below:

            


    

    


    
      	
              A.  

            	
              Timing of
      Elections. A deferral election must generally be made by the end of
      the calendar year prior to the Plan Year in which the RSU is
      granted.  However, a newly eligible Participant (within the
      meaning of Treas. Reg. § 1.409A-2(a)(7)) may make a deferral election with
      respect to an initial grant of RSUs under Section 6(b) within 30 days of
      election or appointment to the Board (which will apply only to the portion
      of the RSUs attributable to service by the director after the election has
      been filed), or at such other time as is permitted under Section 409A of
      the Code.

            


    

    


    
      	
              B.  

            	
              Effect and
      Irrevocability of Elections.  Elections relating to RSUs
      filed before the calendar year in which the Plan Year to which they relate
      begins, other than those subject to Section 9(c), shall become irrevocable
      immediately before the beginning of such calendar year unless the
      Administrator specifies an earlier time.  Elections subject to
      Section 9(c) shall become irrevocable in accordance with Section
      9(c).  Other elections shall become irrevocable upon filing or
      at such other time as may be specified by the
      Administrator.  The latest election filed with the Administrator
      shall be deemed to supersede all prior inconsistent elections that remain
      revocable at the time of filing of the latest
  election.

            


    

    


    
      	
               
      

            	
              (iii)

            	
              Matters To Be
      Elected.  The Administrator will provide a form or forms
      of election which will permit a director to make appropriate elections
      with respect to all relevant matters under this Section 6.  This
      election form may be included in the document evidencing the grant of
      RSUs.

            


    

    


    
      	
               
      

            	
              (iv)

            	
              Permitted Elections as
      to Settlement.  Elections as to the time of settlement of
      deferred RSUs shall conform to the terms of Section
  9(c).

            


    

    


    
      	
               
      

            	
              (v)

            	
              Forfeiture
      Risk.  A validly deferred RSU will remain forfeitable as
      provided herein until the RSU has become vested.  Thereafter,
      although it will still be referred to as an RSU for purposes of the Plan,
      it will be non-forfeitable.

            


    

    


    
      	
               
      

            	
              (vi)

            	
              Form
      of Settlement.  RSUs that are validly deferred will, upon such
      deferral, be treated as Deferred Shares and, to the fullest extent
      permitted under Nasdaq Marketplace Rule 4350(i)(1)(A)(ii), such Deferred
      Shares will be settled solely by delivery of actual Shares not drawn from
      the Shares reserved under Section 4, provided that Cash-Settled RSUs, if
      designated as Director Compensation by the Administrator, may be deferred
      in accordance with Section 8.

            


    

    


    7.           Grants of Options and SARs.
  Options and/or SARs shall be granted to non-employee
directors in accordance with policies established from time to time by the Board
specifying the directors or classes of directors to be granted such awards, the
number of shares to be subject to Options or SARs, and the time or times at
which such awards shall be granted, vested, exercisable, and expire, and such
other terms as may be established by the Board.

    


    (a)           Annual Grant of Option to a
Non-Employee Director. The policy with respect to annual grants of
Options under this Section 7, effective as of June 21, 2007 and continuing until
modified or revoked by the Board, shall be as follows:

    


    
      	
               
      

            	
              (i)

            	
              Award Type and
      Amount.  Effective June 21, 2007, annual grants of
      Options to non-employee directors were
  discontinued.

            


    

    


    
      	
               
      

            	
              (ii)

            	
              Vesting and Forfeiture
      Terms.  With respect to each Option granted before June
      21, 2007 under this Section 7(a), the Option shall vest and become
      exercisable in full at the close of business on the June 1 following the
      date of grant of such award, subject to the
  following:

            


    

    


    
      	
               
      

            	
              (A)

            	
              If
      such Option has not previously vested or been forfeited, it shall vest and
      become exercisable in full upon a Change in Control, upon the
      Participant's death, or upon the termination of the Participant's service
      as a director due to Disability.

            


    

    


    
      	
               
      

            	
              (B)

            	
              If
      such Option has not previously vested or been forfeited, it shall vest and
      become exercisable as to the "Pro Rata Shares" upon a termination of the
      Participant's service as a director due to a voluntary termination of
      service (i.e., excluding termination due to Disability or Mandatory
      Retirement).  For purposes of this Section 7(a)(ii), the "Pro
      Rata Shares" shall be the number of Shares determined by multiplying (1)
      the number of Shares as to which the Option would have vested and become
      exercisable if the Participant had continued to serve as a director
      through the anticipated date of the next annual meeting of shareholders by
      (2) a fraction the numerator of which is the number of days from the date
      of the latest annual meeting of shareholders through the date of the
      Participant's termination and the denominator of which is 365 (rounded up
      to the next whole share).

            


    

    


    
      	
               
      

            	
              (C)

            	
              Any
      portion of an Option that has not vested and become exercisable at the
      date of a director's Mandatory Retirement shall remain outstanding and
      become exercisable in accordance with the first sentence of this Section
      7(a)(ii), provided that such Option shall become exercisable in full upon
      a Change in Control or the death of the director, and each such portion of
      the Option that becomes exercisable after such Mandatory Retirement shall
      expire at the end of the one-year period following the date it becomes
      exercisable as provided in Section
7(a)(iii).

            


    

    


    Except in
the case of a Mandatory Retirement or as otherwise determined by the Board, any
portion of a Participant's Option that has not vested and become exercisable at
or before the time of termination of the Participant's service as a
director  (this would include the entire unvested Option in the event
of a director's removal from service) as provided herein will cease to vest and
will be forfeited upon such termination.

    


    
      	
               
      

            	
              (iii)

            	
              Option
      Term.  With respect to each Option granted before June
      21, 2007 under this Section 7(a), the Option, to the extent not previously
      forfeited, shall expire at the earlier of (i) ten years after the date of
      grant (or such earlier date as may be specified by the Board prior to
      grant), or (ii) one year after the Participant ceases to serve as a
      director of the Company for any reason except that, in the case of a
      termination due to Mandatory Retirement, any portion of the Option that
      becomes exercisable at a date following the Mandatory Retirement, as
      provided in Section 7(a)(ii)(C), shall expire one year after the date such
      portion vests and becomes exercisable.  (Note: Portions of any
      Option that were vested and exercisable at the date of Mandatory
      Retirement will expire one year after such Mandatory Retirement, but in no
      event later than ten years after the date of
  grant).

            


    

    


    (b)           Exercise Price and Grant
Price.  The exercise price per Share purchasable under an
Option will be equal to 100% of the Fair Market Value of a Share on the date of
grant of the Option.  The grant price per Share subject to an SAR will
be equal to 100% of the Fair Market Value of a Share on the date of grant of the
SAR.

    


    (c)           Option and SAR Maximum
Term. The
maximum term of an Option or SAR granted hereunder shall be ten years from the
date of grant.

    


    (d)           Payment of Exercise
Price.  The exercise price of an Option shall be paid to the
Company either in cash or by the surrender of Shares or the withholding of
Shares from those deliverable upon exercise of the Option, or any combination
thereof, or in such other lawful form or manner as may be established by the
Administrator; provided, however, that, unless otherwise determined by the
Administrator, Shares shall not be surrendered or withheld in payment of the
exercise price if such surrender or withholding would result in additional
accounting expense to the Company.

    


    8.           Deferral of Fees In Deferred Shares
and Deferred Cash.  Each director of the Company who is
eligible under Section 5 may elect, in accor­dance with Section 8(a), to
defer receipt of Director Compensation in the form of Deferred Shares under
Section 8(b) or deferred cash un­der Section 8(c).

    


    (a)           Elections.  A
director shall elect to participate in the deferral feature under this Section 8
and the terms of such participation by timely filing an election with the
Company as provided below:

    


    
      	
               
      

            	
              (i)

            	
              Timing of
      Elections. A deferral election must generally be made by the end of
      the calendar year prior to the Plan Year in which the Director
      Compensation will be earned.  However, a newly eligible
      Participant (within the meaning of Treas. Reg. § 1.409A-2(a)(7)) may make
      a deferral election with respect to Director's initial Director
      Compensation (earned after the date of such election) within 30 days of
      election or appointment to the Board, or at such other time as is
      permitted under Section 409A of the
Code.

            


    

    


    
      	
               
      

            	
              (ii)

            	
              Effect and
      Irrevocability of Elections.  Elections shall be deemed
      continuing and therefore applicable to Plan Years after the initial Plan
      Year covered by the election, until the election is modified or superseded
      by the Participant.  Elections other than those subject to
      Section 9(c) shall become irrevocable at the commencement of the calendar
      year which includes the first day of the Plan Year to which an election
      relates.  Elections relating to the time and manner of
      settlement of an Account shall become irrevocable at the specified
      deadline for the filing of such elections under Section 9(c) unless the
      Administrator specifies a different time.  The latest election
      filed with the Administrator shall be deemed to supersede all prior
      inconsistent elections that remain revocable at the time of filing of the
      latest election prior to the beginning of a Plan Year or at such other
      date as may be specified by the Administrator, provided that any date so
      specified shall ensure effective deferral of taxation and otherwise comply
      with applicable laws.

            


    

    


    
      	
               
      

            	
              (iii)

            	
              Matters To Be
      Elected.  The Administrator will provide a form or forms
      of election which will permit a director to make appropriate elections
      with respect to all relevant matters under this Section 8 and Section
      9.

            


    

    


    
      	
               
      

            	
              (iv)

            	
              Time of Filing
      Elections.  An election must be received by the
      Administrator prior to the deadline specified by the
      Administrator.  Under no circumstances may a Participant defer
      compensation to which the Participant has attained, at the time of
      deferral, a legally enforceable right to current receipt of such
      compensation.

            


    

    


    (b)           Deferral of Director Compensation in
the Form of Deferred Shares.  If a Participant has elected to
defer receipt of a specified amount of Director Compensation in the form of
Deferred Shares, a number of Deferred Shares shall be credited to the
Participant's Account, as of the date such Director Compensation otherwise would
have been payable to the Participant but for such election to defer, equal to
(i) such amount otherwise payable divided by (ii) the Fair Market Value of a
Share at that date.  Deferred Shares credited under this Section 8(b)
shall be subject to the terms and conditions of Deferred Shares specified in
Sections 9(a), 9(b), and 9(c).  The right and interest of each
Participant in Deferred Shares credited to the Participant's Account under this
Section 8(b) at all times will be nonforfeitable.

    


    (c)           Deferral of Director Compensation in
the Form of Deferred Cash.  If a Participant has elected to
defer receipt of a specified amount of Director Compensation  in the
form of deferred cash, an amount equal to such specified amount shall be
credited to the Participant's Account as of the date such Director Compensation
otherwise would have been payable to the Participant but for such election to
defer.  Deferred cash credited to a Participant's Account may be
invested in such investment vehicles as may be designated from time-to-time by
the Board or a Board committee.  The terms of any such investment
(including relating to timing, crediting of earnings and losses, and
reallocation among investment vehicles) shall be subject to such rules,
regulations and determinations as may be adopted by the Administrator. The
Company may link the earnings and losses under designated investment vehicles to
the returns of actual investments in such vehicles, which investments may be
made directly by the Company or through a rabbi trust or other intermediary;
provided, however, that the Participant shall have no rights with respect to any
specific assets that would cause the Participant to be other than an unsecured
creditor of the Company or to be otherwise in constructive receipt of any cash
or property.  The right and interest of each Participant relating to
deferred cash credited to his or her Account at all times will be
nonforfeitable.

    


    (d)           Cessation of Service as a
Director.  If any Director Compensation otherwise subject to an
election would be paid to a Participant after he or she has ceased to serve as a
director, such payment shall not be subject to deferral under this Section 8,
but shall instead be paid in accordance with the Company's regular non-employee
director compensation policies.

    


    9.           Other Terms of
Accounts.

    


    (a)           Dividend Equivalents on Share
Units.  Dividend equivalents will be credited on Share Units
(i.e., RSUs and Deferred Shares) credited to a Participant's Account as
follows:

    


    
      	
               
      

            	
              (i)

            	
              Cash and Non-Share
      Dividends.  If the Company declares and pays a dividend
      on Shares in the form of cash or property other than Shares, then a number
      of additional Share Units shall be credited to a Participant's Account as
      of the designated crediting date for such dividend equal to (i) the number
      of Share Units credited to the Account as of the record date for such
      dividend, multiplied by (ii) the amount of cash plus the Fair Market Value
      of any property other than Shares actually paid as a dividend on each
      Share at such payment date, divided by (iii) the Fair Market Value of a
      Share at such designated crediting
date.

            


    

    


    
      	
               
      

            	
              (ii)

            	
              Share Dividends and
      Splits.  If the Company declares and pays a dividend on
      Shares in the form of additional Shares, or there occurs a forward split
      of Shares, then a number of additional Share Units shall be credited to
      the Participant's Account as of the payment date for such dividend or
      forward Share split equal to (i) the number of Share Units credited to the
      Account as of the record date for such dividend or split multiplied by
      (ii) the number of additional Shares actually paid as a dividend or issued
      in such split in respect of each
Share.

            


    

    


    
      	
               
      

            	
              (iii)

            	
              Designated Crediting
      Date.  The Administrator may designate the crediting date
      for dividend equivalents under Section 9(a)(i), which may be not earlier
      than the dividend payment date and not later than six months after the
      dividend payment date.  No interest will be credited on cash
      amounts between the dividend payment date and the designated crediting
      date.

            


    

    


    (b)           Reallocation of
Accounts.  A Participant shall have no right to have amounts
credited as cash in his or her Account reallocated or switched to Share Units in
such Account or amounts credited as Share Units in such Account reallocated or
switched to deferred cash in such Account, unless otherwise determined by the
Board.  The foregoing notwithstanding, in the event of a Change in
Control, unless otherwise specifically elected by the Participant prior to the
Change in Control, the Participant's Share Unit balance in his or her Account
shall be automatically converted into deferred cash based on the Fair Market
Value of Shares as of the close of business on the day of the Change in Control
(or, if no Shares remain outstanding at that time, as of the close of business
on the day preceding the Change in Control).  If and to the extent
authorized under Section 8(c), amounts of deferred cash may be reallocated among
investment alternatives made available for cash deferrals under the
Plan.

    


    (c)           Elections as to
Settlement.  Each Participant, at the time the Participant
makes a deferral election under Section 6(e) or Section 8(a), shall file an
election with the Administrator specifying the time or times at which the
Participant's Account will be settled, following the Participant's termination
of service as a director of the Company, and whether distribution will be in a
single lump sum or in a number of annual installments not exceeding ten;
provided, however, that, if no valid election has been filed as to the time of
settlement of a Participant's Account or any portion thereof, such Account or
portion thereof shall be distributed in a single lump sum on the first business
day of the year following the year in which the Participant ceases to serve as a
director.  If installments are elected, such installments must be
annual installments commencing not later than the first year following the year
in which the Participant ceases to serve as a director (on such annual
installment date as may be specified by the Administrator) and extending over a
period not to exceed ten years.

    


    
      	
               
      

            	
              (i)

            	
              Matters Covered by
      Election.  Subject to the terms of the Plan, the
      Administrator shall determine whether all deferrals under the Plan must be
      subject to a single election as to the time or times of settlement, or
      whether settlement elections may relate to deferrals relating to a
      specified Plan Year.  If the Administrator permits elections to
      relate to a specified Plan Year, such election shall apply to the amounts
      originally credited in respect of such Plan Year and to any additional
      amounts credited as dividend equivalents or interest in respect of such
      originally credited amounts and previously credited additional
      amounts.

            


    

    


    
      	
               
      

            	
              (ii)

            	
              Modifying
      Elections.  A Participant may modify a prior election as
      to the time at which a Participant's Account (or portion thereof) will be
      settled and/or the form of settlement (i.e., lump sum or installments, or
      the number of installments) at any time by filing a new election with the
      Administrator, subject to, and in accordance with paragraphs (A) and (B),
      below.  The foregoing notwithstanding, elections under this
      Section 9(c) shall not be permitted, if permitting such an election would
      result in constructive receipt by the Participant of compensation in
      respect of the Participant's Account prior to the actual settlement of
      such Account or would violate Section 409A of the
  Code.

            


    

    


    
      	
               
      

            	
              (A)

            	
              Second
      Elections.  To the extent permitted under Section 409A of
      the Code and the regulations issued thereunder, a Participant may change
      the form of settlement (i.e., lump sum or
      installments, or the number of installments) and/or the settlement date
      selected under a deferral election, provided (a) the new election must be
      must be filed with the Administrator at least 12 full months before
      settlement would occur under the election in place prior to the change,
      (b) the new election is not effective for a period of 12 months from the
      date made, and (c) the settlement date under the modified election defers
      settlement for at least 5 years from the date settlement would otherwise
      have occur.

            


    

    


    
      	
               
      

            	
              (B)

            	
              Special 2006 – 2008
      Elections.  Notwithstanding anything in Section 6,
      Section 8 or this Section 9 to the contrary, to the extent permitted under
      Section 409A of the Code and the regulations issued thereunder, a
      Participant may make a new election on or before December 31, 2008 as to
      the settlement date and/or form (i.e., lump sum or installments, or the
      number of installments) of deferred RSUs, deferred cash and/or Deferred
      Shares credited to the Participant's Account.  However a
      Participant shall not be permitted in a given year to change an election
      in a manner that will defer settlement of amounts that the Participant
      otherwise would have received in that year or cause payments to be made in
      that year pursuant to the changed
election.

            


    

    


    (d)           Statements.  The
Administrator will furnish statements to each Participant reflecting the amounts
credited to a Partici­pant's Account, transactions therein, and other
related information no less frequently than once each calendar
year.  Statements may be combined with other information, including
information with respect to other compensation plans, being provided to the
Participant.

    


    (e)           Fractional
Shares.  The amount of Share Units credited to an Account shall
include fractional Shares calculated to at least three decimal
places.

    


    10.           Settlement of
Accounts.  The Company will settle a Participant's Account by
making one or more distributions to the Participant (or his or her Beneficiary,
following Participant's death) at the time or times, in a lump sum or
installments, as specified in the Participant's election(s) filed in accordance
with Sections 6(e) and 9(c); provided, however, that an Account will be settled
at times earlier than those specified in such election in accordance with
Sections 10(b), or 10(c); and provided further, that RSUs as to which no valid
election to defer has been filed will be settled at the date specified in
connection with the award under Section 6.

    


    (a)           Form of
Distribution.  Distributions in settlement of a Participant's
Account shall be made only in cash with respect to deferred cash, in Shares with
respect to Share-Settled Share Units (including Deferred Shares as specified
herein) and in cash with respect to Cash-Settled Share Units.

    


    (b)           Death or
Disability.  If a Participant ceases to serve as a director due
to death or Disability or dies prior to distribution of all amounts from his or
her Account, the Company shall make a single lump-sum distribution to the
Participant or his or her Beneficiary.  Any such distribution shall be
made as soon as practicable (and in any case within 90 days) following the
Participant's cessation of service due to death or Disability.

    


    (c)           Financial Emergency and Other
Payments.  Other provisions of the Plan notwithstanding, if,
upon the written application of a Participant, the Board determines that the
Participant has suffered an unforeseeable financial emergency, the Board may
direct the payment to the Participant all or a portion of the balance of the
Participant's Account and the time and manner of such payment.  For
purposes of this Plan, an unforeseeable financial emergency is an unexpected
need for cash arising from an illness, casualty loss, sudden financial reversal,
or other such unforeseeable occurrence. Cash needs arising from foreseeable
events such as the purchase of a house or education expenses for children shall
not be considered to be the result of an unforeseeable financial
emergency.  It is intended that the Committee's determination as to
whether a Participant has suffered an "unforeseeable financial emergency" and
the amount of any distribution related to such emergency shall be made
consistent with the requirements under Code Section 409A.

    


    (d)           Distribution Upon a Change in
Control.  Other provisions of the Plan notwithstanding,
settlement of RSUs and Accounts (other than Grandfathered Accounts) in the event
of a Change in Control will occur only if an event relating to the Change in
Control constitutes a change in ownership or effective control of the Company or
a change in the ownership of a substantial portion of the assets of the Company
within the meaning of Treas. Reg. § 1.409A-3(i)(5).  In such event,
the Company shall make a single lump-sum distribution to the Participant in
settlement of his or her RSUs and in settlement of his or her Account as
promptly as practicable and in any case not later than 90 days following the
event.  If a Change in Control occurs without triggering a
distribution under the preceding sentence, the distribution will instead occur
upon the occurrence of the next following event that, under Code Section 409A,
would be a permissible event triggering distributions of deferred
compensation.

    


    (e)           Distributions in Certain Cases if
Director Has Become an Employee.  Other provisions of the Plan
notwithstanding, if a director is a “Key Employee” at the time of settlement of
his or her RSUs or Account, any such settlement subject to Section 409A
(a)(2)(A)(i) that would be made within six months following a separation from
service of the Director shall instead occur at the expiration of the six-month
period under Section 409A(a)(2)(B)(i).  If distributions are delayed
pursuant to this provision, the accumulated amounts withheld on account of
Section 409A will be paid on the first business day after the end of the
six-month period.  If the Participant dies during the six-month
period, the withheld amounts shall be paid to the Participant’s Beneficiary as
soon as practicable (and in any case within 90 days) after the Participant’s
death.  In the case of installments, this delay shall not affect the
timing of any installment otherwise payable after the six-month delay
period.  The term “Key Employee” shall mean an employee who, at any
time during the 12-month period ending on the identification date, is a
“specified employee” under section 409A of the Code, as determined by the
Committee or its delegate.  The determination of Key Employees,
including the number and identity of persons considered specified employees and
the identification date, shall be made by the Committee or its delegate in
accordance with the provisions of sections 416(i) and 409A of the Internal
Revenue Code and the regulations issued thereunder.  This paragraph
10(e) shall not apply to Grandfathered Accounts, which shall continue to be
subject to, and governed by, the terms of the Plan as in effect on December 31,
2004.

     

    (f)           Separation from Service.
  Other provisions of the Plan notwithstanding, settlement of
RSUs and Accounts triggered by a Participant’s termination of service and
intended to qualify under Section 409A(a)(2)(A)(i) shall be made only at the
time that the Participant has had a “separation from service” within the meaning
of Section 409A(a)(2)(A)(i) (or earlier at such time, after a termination of
service as a director but subject to Section 13(h) below, that there occurs
another event triggering a distribution under the Plan or the applicable Award
agreement in compliance with Section 409A).

    


    11.           Limitations on Deferrals and Related
Participant Rights.  The rights of a Participant with respect
to deferrals under Sections 6, 8, 9, and 10, including any right to modify an
election as to the time of settlement under Section 9(c), shall be limited or
suspended at any time if and to the extent required by law or if the existence
of such right would cause a Participant to be deemed to be in constructive
receipt of amounts credited to his or her Account or otherwise cause the
Participant's deferral of taxation with respect to compensation deferred
hereunder to be ineffective.  The Plan is intended to comply with the
applicable requirements of Code Section 409A and its corresponding regulations
and related guidance, and shall be maintained and administrated in accordance
with Code Section 409A.  Notwithstanding anything in the Plan to the
contrary, distributions from the Plan may only be made in a manner, and upon an
event, permitted by Code Section 409A, and the Company shall have no authority
to accelerate distributions relating to deferrals subject to Code Section 409A
in excess of the authority permitted under Section 409A.

    


    12.           Definitions Relating to Change in
Control.  For purposes of this Plan, the following definitions
shall apply:

    


    (a)         "Beneficial
Owner," "Beneficially Owns," and "Beneficial Ownership" shall have the meanings
ascribed to such terms for purposes of Section 13(d) of the Exchange Act and the
rules thereunder, except that, for purposes of this Section 12, "Beneficial
Ownership" (and the related terms) shall include Voting Securities that a Person
has the right to acquire pursuant to any agreement, or upon exercise of
conversion rights, warrants, options or otherwise, regardless of whether any
such right is exercisable within 60 days of the date as of which Beneficial
Ownership is to be determined.

    


    (b)         "Change
in Control" means and shall be deemed to have occurred if, after June 21,
2007,

    


    
      	
               
      

            	
              (i)

            	
              any
      Person, other than the Company or a Related Party, acquires directly or
      indirectly the Beneficial Ownership of any Voting Security of the Company
      and immediately after such acquisition such Person has, directly or
      indirectly, the Beneficial Ownership of Voting Securities representing 20
      percent or more of the total voting power of all the then-outstanding
      Voting Securities; or

            


    

    


    
      	
               
      

            	
              (ii)

            	
              those
      individuals who as of June 21, 2007 constitute the Board or who thereafter
      are elected to the Board and whose election, or nomination for election,
      to the Board was approved by a vote of at least two-thirds (2/3) of the
      directors then still in office who either were directors as of June 21,
      2007 or whose election or nomination for election was previously so
      approved, cease for any reason to constitute a majority of the members of
      the Board; or

            


    

    


    
      	
               
      

            	
              (iii)

            	
              there
      is consummated a merger, consolidation, recapitalization or reorganization
      of the Company, a reverse stock split of outstanding Voting Securities, or
      an acquisition of securities or assets by the Company (a "Transaction"),
      other than a Transaction which would result in the holders of Voting
      Securities having at least 80 percent of the total voting power
      represented by the Voting Securities outstanding immediately prior thereto
      continuing to hold Voting Securities or voting securities of the surviving
      entity having at least 60 percent of the total voting power represented by
      the Voting Securities or the voting securities of such surviving entity
      outstanding immediately after such Transaction and in or as a result of
      which the voting rights of each Voting Security relative to the voting
      rights of all other Voting Securities are not altered;
  or

            


    

    


    
      	
               
      

            	
              (iv)

            	
              there
      is implemented or consummated a plan of complete liquidation of the
      Company or a sale or disposition by the Company of all or substantially
      all of the Company's assets other than any such transaction which would
      result in Related Parties owning or acquiring more than 50 percent of the
      assets owned by the Company immediately prior to the
      transaction.

            


    

    


    (c)         "Person"
shall have the meaning ascribed for purposes of Section 13(d) of the Exchange
Act and the rules thereunder.

    


    (d)         "Related
Party" means (i) a majority-owned subsidiary of the Company; or (ii) a trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or any majority-owned subsidiary of the Company; or (iii) a corporation
owned directly or indirectly by the shareholders of the Company in substantially
the same proportion as their ownership of Voting Securities; or (iv) if, prior
to any acquisition of a Voting Security which would result in any Person
Beneficially Owning more than ten percent of any outstanding class of Voting
Security and which would be required to be reported on a Schedule 13D or an
amendment thereto, the Board approved the initial transaction giving rise to an
increase in Beneficial Ownership in excess of ten percent and any subsequent
transaction giving rise to any further increase in Beneficial Ownership;
provided, however, that such Person has not, prior to obtaining Board approval
of any such transaction, publicly announced an intention to take actions which,
if consummated or successful (at a time such Person has not been deemed a
"Related Party"), would constitute a Change in Control.

    


    (e)         "Voting
Securities" means any securities of the Company which carry the right to vote
generally in the election of directors.

    


    13.         General
Provisions.

    


    (a)         Limits on
Transferability.  Restricted Stock prior to the lapse of
restrictions, Options, RSUs, Deferred Shares, deferred cash, and all other
rights under the Plan will not be transferable by a Participant except by will
or the laws of descent and distribution, or to a Beneficiary in the event of a
Participant's death, and will not otherwise be subject to alienation,
anticipation, encumbrance, garnishment, attachment, levy, execution or other
legal or equitable process, nor subject to the debts, contracts, liabilities or
engagements, or torts of any Participant or his or her
Beneficiary.  Any attempt to alienate, sell, transfer, assign, pledge,
garnish, attach or take any other action subject to legal or equitable process
or encumber or dispose of any interest in the Plan shall be void.  The
foregoing notwithstanding, the Administrator may permit a Participant to
transfer Options and related rights to one or more trusts, partnerships, or
family members during the lifetime of the Participant solely for estate planning
purposes, but only if and to the extent then consistent with the registration of
any offer and sale of Shares related thereto on Form S-8, Form S-3, or such
other registration form of the Securities and Exchange Commission as may then be
permitted to be filed with respect to the Plan.  The Company may rely
upon the beneficiary designation last filed in accordance with this Section
13(a).

    


    (b)         Adjustments.  In
the event that any large, special and non-recurring dividend or other
distribution in the form of cash or other property, recapitalization, forward or
reverse split, Share dividend,  reorganization, merger, consolidation,
spin-off, combination, repurchase, share exchange, liquidation, dissolution or
other similar corporate transaction or event affects the Shares such that an
adjustment is determined by the Board to be appropriate in order to prevent
dilution or enlargement of a Participant's rights under the Plan, then the Board
shall, in such manner as it may deem equitable, adjust any or all of (i) the
number and kind of Shares reserved and available for delivery under the Plan and
to be subject to Restricted Stock, Options, SARs, RSUs and Deferred Shares
thereafter granted or credited, (ii) the limits upon the number of Shares that
may be subject to Restricted Stock, RSUs, Options and SARs automatically granted
under Sections 6 and 7 and any specification of the number automatically
granted, (iii) the number and kind of Shares outstanding as Restricted Stock,
(iv) the number and kind of Shares deliverable upon exercise of outstanding
Options and SARs, and the exercise price per Share thereof (provided that no
fractional Shares will be delivered upon exercise of any Option or SAR), and (v)
the number and kind of Shares then credited as RSUs and Deferred Shares (taking
into account any Share Units credited as dividend equivalents under Section
9(a)) and by reference to which RSUs and Deferred Shares are valued under the
Plan.

    


    (c)                Receipt and
Release.  Payments (in any form) to any Participant or
Beneficiary in accordance with the provisions of the Plan shall, to the extent
thereof, be in full satisfaction of all claims for the compensation deferred and
relating to the Account to which the payments relate against the Company, the
Board, or the Administrator, and the Administrator may require such Participant
or Beneficiary, as a condition to such payments, to execute a receipt and
release to such effect.  In the case of any payment under the Plan of
less than all amounts then credited to an Account in the form of RSUs or
Deferred Shares, the amounts paid shall be deemed to relate to the RSUs or
Deferred Shares credited to the Account at the earliest time.

    


    (d)           Compliance.  The
Company shall have no obligation to settle any Account of a Participant (in any
form) until all legal and contractual obligations of the Company relating to
establishment of the Plan and such settlement shall have been complied with in
full.  In addition, the Company shall impose such restrictions on
Shares delivered to a Participant hereunder and any other interest constituting
a security as it may deem advisable in order to comply with the Securities Act
of 1933, as amended, the requirements of the Nasdaq National Market or any other
stock exchange or automated quotation system upon which the Shares are then
listed or quoted, any state securities laws applicable to such a transfer, any
provision of the Company's Articles of Incorporation or By-Laws, or any other
law, regulation, or binding contract to which the Company is a
party.

    


    (e)              Changes to the Plan and
Awards.  The Board may amend, suspend or discontinue the Plan,
the authority to grant awards under the Plan, or any outstanding award (and any
agreement relating thereto) without the consent of any other party, including
shareholders or Participants; provided, however, that any amendment shall be
subject to shareholder approval if and to the extent then required under
applicable rules of the Nasdaq National Market or any other stock exchange or
automated quotation system upon which the Shares may then be listed or quoted;
and provided further, that, without the consent of an affected Participant, no
such action may materially impair the rights of such Participant under any award
theretofore granted.  The foregoing notwithstanding, the Board, in its
sole discretion, may terminate the Plan (in whole or in part).  If the
Board terminates the Plan, amounts credited the Participant's Account shall be
paid in accordance with the terms of the Plan.  In the event of a
Change in Control that constitutes a “change in control” event within the
meaning of Code Section 409A, the Plan shall terminate as of the date of the
Change in Control and the amounts credited to the Participant's Account shall be
distributed as soon as practicable thereafter consistent with Code Section
409A.

    


    Without
the prior approval of shareholders, the Committee will not amend or replace
previously granted Options in a transaction that constitutes a
"repricing."   For this purpose, a "repricing" means: (1)
amending the terms of an Option after it is granted to lower its exercise price;
(2) any other action that is treated as a repricing under generally accepted
accounting principles; and (3) canceling an Option at a time when its strike
price is equal to or greater than the fair market value of the underlying Stock,
in exchange for another Option, Restricted Stock, or other equity, unless the
cancellation and exchange occurs in connection with a merger, acquisition,
spin-off or other similar corporate transaction.  A cancellation and
exchange described in clause (3) of the preceding sentence will be considered a
repricing regardless of whether the Option, Restricted Stock or other equity is
delivered simultaneously with the cancellation, regardless of whether it is
treated as a repricing under generally accepted accounting principles, and
regardless of whether it is voluntary on the part of the Option
holder.

    


    (f)           Unfunded Status of Plan; Creation of
Trusts.  The Plan is intended to constitute an "unfunded" Plan
for deferred compensation and Participants shall rely solely on the unsecured
promise of the Company for payment hereunder (except insofar as Shares are
issued in connection with Restricted Stock).  With respect to any
payment not yet made to a Participant under the Plan, nothing contained in the
Plan shall give a Participant any rights that are greater than those of a
general unsecured creditor of the Company; provided, however, that the Board may
authorize the creation of trusts or make other arrangements to meet the
Company's obligations under the Plan, which trusts or other arrangements shall
be consistent with the "unfunded" status of the Plan unless the Board otherwise
determines with the consent of each affected Participant.  The
establishment and maintenance of, or allocations and credits to, the Account of
any Participant shall not vest in any Participant any right, title or interest
in and to any Plan assets or benefits except at the time or times and upon the
terms and conditions and to the extent expressly set forth in the Plan and in
accordance with the terms of any trust.

    


    (g)           Other Participant
Rights.  No Participant shall have any of the rights or
privileges of a shareholder of the Company under the Plan, including as a result
of the grant of an Option or SAR, or crediting of RSUs, Deferred Shares or other
amounts to an Account, or the creation of any Trust and deposit of Shares
therein, except at such time as such Option or SAR may have been duly exercised
or Shares may be actually delivered in settlement of an Account (in whole or in
part); provided, however, that a Participant granted Restricted Stock shall have
rights of a shareholder except to the extent that those rights are limited by
the terms of the Plan and the agreement relating to the Restricted
Stock.  No provision of the Plan, document relating to the Plan, or
transaction hereunder shall confer upon any Participant any right to continue to
serve as a director of the Company or in any other capacity with the Company or
a subsidiary or to be nominated for reelection as a director, or interfere in
any way with the right of the Company to increase or decrease the amount of any
compensation payable to such Participant.  Subject to the limitations
set forth in Section 13(a), the Plan shall inure to the benefit of, and be
binding upon, the parties hereto and their successors and assigns.

    


    (h)           Continued Service as an
Employee.  If a Participant ceases to serve as a director and,
immediately thereafter, is employed by the Company or any subsidiary, then such
Participant will not be deemed to have ceased to serve as a director at that
time, and his or her continued employment by the Company or any subsidiary will
be deemed to be continued service as a director; provided, however, that, for
purposes of Section 5, such former director will not be deemed to be a
non-employee director eligible for further grants of awards.

    


    


    (i)           Governing Law.  The
validity, construction, and effect of the Plan, any rules and regulations under
the Plan, and any agreement under the Plan shall be determined in accordance
with the Pennsylvania Business Corporation Law, to the extent applicable, other
laws (including those governing contracts) of the Commonwealth of Pennsylvania,
without giving effect to principles of conflicts of laws, and applicable federal
law.

    


    (j)           Limitation.  A
Participant and his or her Beneficiary shall assume all risk in connection with
any decrease in value of Restricted Stock, Options, RSUs or Deferred Shares, and
neither the Company, the Board nor the Administrator shall be liable or
responsible therefor.

    


    (k)           Severability.  In
the event that any provision of the Plan shall be declared illegal or invalid
for any reason, said illegality or invalidity shall not affect the remaining
provisions of the Plan but shall be fully severable, and the Plan shall be
construed and enforced as if said illegal or invalid provision had never been
inserted herein.

    


    (l)           Nonexclusivity of the
Plan.  The adoption of the Plan by the Board shall not be
construed as creating any limitation on the power of the Board to adopt such
other compensatory arrange­ments for directors as it may deem
desirable.

    


    (m)           Effective Date and Plan
Termination.  The Plan, as amended and restated herein, shall
be effective as of the Effective Date.  Unless earlier terminated by
action of the Board, the Plan will remain in effect until such time as no Shares
remain available for delivery under the Plan and the Company has no further
rights or obligations under the Plan with respect to outstanding awards or
Accounts under the Plan.

    


    


    


    


    


    Approved
by the Board of Directors May 7, 2008