**Exhibit 10.1**

 

 

**Amendedand Restated 2005 Long-Term Incentive Plan**

 

 

Sabre Holdings Corporation

 

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**CONTENTS**

 
| Section 1.  Purpose; Definitions          |   |
|-----------------------------------------------------|--------|
|                                                |   |
| Section 2.  Administration                |   |
|                                                |   |
| Section 3.  Stock Subject to Plan         |   |
|                                                |   |
| Section 4.  Eligibility                   |   |
|                                                |   |
| Section 5.  Stock Options                 |   |
|                                                |   |
| Section 6.  Stock Appreciation Rights     |   |
|                                                |   |
| Section 7.  Restricted Stock              |   |
|                                                |   |
| Section 8.  Deferred Stock                |   |
|                                                |   |
| Section 9.  Stock Purchase Rights         |   |
|                                                |   |
| Section 10.  Other Stock-Based Awards     |   |
|                                                |   |
| Section 11.  Performance Related Awards   |   |
|                                                |   |
| Section 12.  Change in Control Provisions |   |
|                                                |   |
| Section 13.  Amendments and Termination   |   |
|                                                |   |
| Section 14.  Unfunded Status of Plan      |   |
|                                                |   |
| Section 15.  General Provisions           |   |
|                                                |   |
| Section 16.  Term of Plan                 |   |

 

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**SabreHoldings CorporationAmended and Restated 2005 Long-Term Incentive Plan**

 

**Section 1.****  Purpose; Definitions**

 

The Sabre Holdings Corporation Amended andRestated 1996 Long-Term Incentive Plan is hereby amended and restated (the “2005Restatement”) and renamed the Sabre Holdings Corporation Amended and Restated2005 Long-Term Incentive Plan (the “Plan”). The 2005 Restatement will be effective May 17, 2005, subject to itsapproval by shareholders on that date; provided, however, that, as applied toawards of Deferred Stock (as defined below) that are granted and/or becomevested on or after January 1, 2005, the 2005 Restatement shall beeffective as of January 1, 2005. Awards of Deferred Stock that are both earned and vested on orprior to December 31, 2004 shall continue to be governed by the terms ofthe Plan that were in effect prior to this 2005 Restatement.  As applied to awards of Deferred Stock, the2005 Restatement is intended as good faith compliance with the provisions ofthe American Jobs Creation Act of 2004.

 

The purpose of the Plan is to enable SabreHoldings Corporation (the “Company”) to attract, retain, and rewardnon-employee directors, executive officers, managers, and key employees of theCompany and its Subsidiaries and Affiliates, and strengthen the mutuality ofinterests between such individuals and the Company’s shareholders, by offeringsuch individuals performance-based stock incentives and/or other equityinterests or equity-based incentives in the Company, as well asperformance-based incentives payable in cash. The Plan is an amendment and restatement of the Company’s Amended andRestated 1996 Long-Term Incentive Plan, which was intended to replace andsupersede the Company’s 1996 Long-Term Incentive Plan (the “1996 Plan”).

 

For purposes of the Plan, the following termsshall be defined as set forth below

 

(a)                                  “**Affiliate**” means any entity other than theCompany and its Subsidiaries that is designated by the Board as a participatingemployer under the Plan, provided that the Company directly or indirectly ownsat least twenty percent (20%) of the combined voting power of all classes ofstock of such entity or at least twenty percent (20%) of the ownershipinterests in such entity.

 

(b)                                 “**Board**” means the Board of Directors of theCompany.

 

(c)                                  “**Book****Value**”means, as of any given date, on a per share basis (a) the Stockholders’Equity in the Company as of the end of the immediately preceding fiscal year asreflected in the Company’s consolidated balance sheet, subject to suchadjustments as the Committee shall specify at or after grant, divided by (b) thenumber of then outstanding shares of Stock as of such year-end date (asadjusted by the Committee for subsequent events).

 

(d)                                 “**Cause**” means, but is not limited to, any ofthe following actions: theft, dishonesty or fraud, insubordination, persistentinattention to duties or excessive absenteeism, violation of the Company’s WorkPrinciples, Business Ethics or other policies, or state or federal law, or anyother conduct which would disqualify the participant from entitlement to unemploymentbenefits. The determination of whether Cause exists shall be made in theCompany’s sole discretion.

 

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(e)                                  “**Code**” means the Internal Revenue Code of1986, as amended from time to time, and any successor thereto.

 

(f)                                    “**Committee**” means the Committee referred toin Section 2 of the Plan.  If at anytime no Committee shall be in office, then the functions of the Committeespecified in the Plan shall be exercised by the Board.

 

(g)                                 “**Company**” means Sabre Holdings Corporation,a corporation organized under the laws of the State of Delaware, or anysuccessor corporation.

 

(h)                                 “**Deferred Stock**” means an award madepursuant to Section 8 below of the right to receive Stock at the end of aspecified deferral period.

 

(i)                                     “**Disability**” means disability as determinedunder procedures established by the Committee for purposes of this Plan;provided, however, that for the purposes of Section 8(b)(iii) and Section 12(a)(ii)(C),the term “**Disability**” shall mean acondition under which a participant either (i) is unable to engage in anysubstantial gainful activity by reason of any medically determinable physicalor mental impairment that can be expected to result in death or can be expectedto last for a continuous period of not less than twelve months, or (ii) is,by reason of any medically determinable physical or mental impairment that canbe expected to result in death or can be expected to last for a continuousperiod of not less than twelve months, receiving income replacement benefitsfor a period of not less than three months under an accident and health plancovering employees of the Company.

 

(j)                                     “**Effective****Date**”means May 14, 2002.  Except asotherwise provided for herein with respect to awards of Deferred Stock, theeffective date of this 2005 Restatement is May 17, 2005.

 

(k)                                  “**Exchange Act**” means the Securities ExchangeAct of 1934, as amended from time to time, and any successor thereto.

 

(l)                                     “**Fair****Market****Value**” means, as of any givendate, unless otherwise determined by the Committee in good faith, the meanbetween the highest and lowest quoted selling price, regular was, of the Stockon the New York Stock Exchange or, if no such sale of Stock occurs on the NewYork Stock Exchange on such date, the fair market value of the Stock asdetermined by the Committee in good faith.

 

(m)                               “**Incentive Stock Option**” means any StockOption intended to be and designated as and incentive Stock Option” within themeaning of Section 422 of the Code.

 

(n)                                 “**Key Employee**”****shall mean a “key employee” as defined in Section 416(i) ofthe Code without regard to paragraph (5) thereof.

 

(o)                                 “**Nonqualified Stock Option**” means any StockOption that is not an Incentive Stock Option.

 

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(p)                                 “**Other Stock-Based Award**” means an awardunder Section 10 below that is valued in whole or in part by reference to,or is otherwise based on, Stock.

 

(q)                                 “**Performance Award**” means an award under Section 11below that is valued based on the level of attainment of performance objectivesrelated to the performance measures set forth in Section 11.

 

(r)                                    “**Person**” means “person” as defined in Section 3(a)(9) ofthe Exchange Act and as used in Sections 13(d) and 14(d) thereof,including a “group” as defined in Section 13(d) of the Exchange Actbut excluding the Company and Subsidiary and any employee benefit plansponsored or maintained by the Company or any Subsidiary (including any trusteeof such plan acting as trustee).

 

(s)                                  “**Plan**” means Sabre Holdings Corporation’sAmended and Restated 2005 Long-Term Incentive Plan (formerly known as theAmended and Restated 1996 Long-Term Incentive Plan), as hereinafter amendedfrom time to time.

 

(t)                                    “**Restricted****Stock**” means an award of shares of Stock that is subject torestrictions under Section 7 below.

 

(u)                                 “**Stock**” means the Class A Common Stock,$.01 par value per share, of the Company.

 

(v)                                 “**Stock****Appreciation****Right**” means the right toparticipate in an increase in the value of a share of Stock pursuant to anaward granted under Section 6.

 

(w)                               “**Stock****Option**”or “**Option**” means any option topurchase shares of Stock (including Restricted Stock and Deferred Stock, if theCommittee so determines) granted pursuant to Section 5 below.

 

(x)                                   “**Stock****Purchase****Right**” means the right to purchaseStock pursuant to Section 9.

 

(y)                                 “**Subsidiary**” means a corporation (other thanthe Company) in an unbroken chain of corporations beginning with the Company ifeach of the corporations (other than the last corporation in the unbrokenchain) owns stock possessing fifty percent (50%) or more of the total combinedvoting power of all classes of stock in one of the other corporations in thechain.

 

In addition, the terms “Change in Control,” “PotentialChange in Control,” “Change in Control Price,” “Good Reason,” and “Notice ofTermination” shall have the meanings set forth, respectively, in Sections12(b), (c), (d), (e), and (f) below.

 

**Section 2.****  Administration**

 

The Plan shall be administered by a committeeof not less than two members of the Board, who shall be appointed by, and serveat the pleasure of, the Board. In selecting the members of the Committee, theBoard shall take into account the requirements for the members of the Committeeto be treated as “Outside Directors” within the meaning of Section 162(m)of the Code and “Non-Employee Directors” for purposes of Rule 16b-3, aspromulgated under Section 16 of the Exchange Act. The functions of theCommittee specified in the Plan shall be

 

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exercised by the Board, if and to the extent that no Committee existswhich has the authority to so administer the Plan or to the extent that theCommittee is not comprised solely of Non-Employee Directors for purposes of Rule 16b-3,as promulgated under Section 16 of the Exchange Act.

 

The Committee shall have full authority togrant, pursuant to the terms of the Plan, to non-employee directors, executiveofficers, managers, and key Employees, eligible under Section 4: (i) StockOptions and Incentive Stock Options: (ii) Stock Appreciation Rights: (iii) RestrictedStock: (iv) Deferred Stock: (v) Stock Purchase Rights: (vi) OtherStock-Based Awards: and/or (vii) Performance Awards.

 

In particular the Committee shall have theauthority:

 
| (i)    |   | To select the non-employee directors,  executive officers, managers, and key employees of the Company and its  Subsidiaries and Affiliates to whom Stock Options, Incentive Stock Options,  Stock Appreciation Rights, Restricted Stock, Deferred Stock, Stock Purchase  Rights, Other Stock-Based Awards, and/or Performance Awards may from time to  time be granted hereunder;                                                                                |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (ii)   |   | To determine whether and to what extent  Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights,  Restricted Stock, Deferred Stock, Stock Purchase Rights, Other Stock Based  Awards, and/or Performance Awards or any combination thereof, are to be  granted hereunder to one or more eligible employees and non-employee  directors;                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (iii)  |   | Subject to the provisions of Sections 3, 5  and 11, to determine the number of shares to be covered by each such award  granted hereunder;                                                                                                                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (iv)   |   | To determine the terms and conditions, not  inconsistent with the terms of the Plan, of any award granted hereunder  (including, but not limited to, the share price and any restriction or  limitation, or any vesting acceleration or waiver of forfeiture restrictions  regarding any Stock Option or other award and or the shares of Stock relating  thereto, based in each case on such factors as the Committee shall determine  in its sole discretion); |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (v)    |   | To determine whether and under what  circumstances a Stock Option may be settled in cash, Restricted Stock and/or  Deferred Stock under Section 5(l) or (m), as applicable, instead of Stock;                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (vi)   |   | To determine whether and under what  circumstances an award of Restricted Stock or Deferred Stock may be settled  in cash;                                                                                                                                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (vii)  |   | To determine whether, to what extent and  under what circumstances Option grants and/or other awards under the Plan  and/or other cash awards made by the Company are to be made, and operate, on  a tandem basis vis-à-vis other awards under the Plan and/or cash awards made  outside of the Plan, or on an additive basis;                                                                                                                              |

 

 

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| (viii) |   | To determine whether, to what extent and  under what circumstances Stock and other amounts payable with respect to an  award under this Plan shall be deferred either automatically or at the  election of the participant (including providing for and determining the  amount (if any) of any deemed earnings on any deferred amount during any  deferral period); |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                 |
| (ix)   |   | To determine the terms and restrictions  applicable to Stock Purchase Rights and the Stock purchased by exercising  such Rights; and                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                 |
| (x)    |   | To designate the Corporate Secretary of the  Company, other executive officers or employees of the Company or competent  professional advisors to assist the Committee in the administration of the  Plan, and to grant authority to such persons to execute agreements or other  documents on its behalf.                                                           |

 

 

The Committee shall have the authority toadopt, alter, and repeal such rules, guidelines and practices governing thePlan as it shall, from time to time, deem advisable: to interpret the terms andprovisions of the Plan and any award issued under the Plan (and any agreementsrelating thereto): and to otherwise supervise the administration of the Plan.

 

All decisions made by the Committee pursuantto the provisions of the Plan shall be made in the Committee’s sole discretionand shall be final and binding on all persons, including the Company and Planparticipants.

 

**Section 3.****  Stock Subject to Plan**

 

Effective May 14, 2002, the total numberof shares of Stock reserved and available for distribution under the Plan wasincreased by 14,000,000 shares. Along with the 13,000,000 shares previouslyreserved (which have grown to be 13,635,410 as a result of the adjustment forthe dividend preceding the Company’s spin-off from AMR Corporation) the totalnumber of shares reserved under the plan is 27,635,410 shares.

 

From and after May 17, 2005, no morethan five million (5,000,000) shares of Stock shall be granted in the form ofRestricted Stock, Deferred Stock, Stock Purchase Rights, Other Stock BasedAwards, Performance Awards.  The fivemillion (5,000,000) share limit is inclusive of the approximately forty-onethousand (41,000) shares remaining of the previous two million (2,000,000)share Restricted Stock limit and the approximately one million (1.000,000)shares remaining of the previous one million (1,000,000) share limit ofDeferred Stock, Stock Purchase Rights, Performance Awards, or Other Stock BasedAwards, but does not include shares of Stock subject to awards of RestrictedStock, Deferred Stock, Stock Purchase Rights, Performance Awards, or OtherStock Based Awards that were granted prior to May 17, 2005.

 

Subject to Section 6(b)(iv) below,if any shares of Stock that have been optioned cease to be subject to a StockOption or an Incentive Stock Option, or if any such shares of Stock that aresubject to any Restricted Stock or Deferred Stock award, Stock Purchase Right,Performance Awards, or Other Stock-Based Award granted hereunder are forfeitedor any such award otherwise terminates without a payment being made to theparticipant in the form of Stock, such shares shall not be counted against theshare limits set forth in this Section 3 and shall again be available fordistribution in connection with future awards under the Plan.

 

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In the event of any merger, reorganization,consolidation, recapitalization, Stock dividend, large non-recurring cashdividend (as determined by the Committee), Stock split or other change incorporate structure affecting the Stock, such substitution or adjustment shallbe made in the aggregate number of shares reserved for issuance under the Plan,in the number and option price of shares subject to outstanding Options grantedunder the Plan, in the number and purchase price of shares subject tooutstanding Stock Purchase Rights under the Plan, and in the number of sharessubject to other outstanding awards granted under the Plan as may be determinedto be appropriate by the Committee, in its sole discretion, provided that thenumber of shares subject to any award shall always be a whole number. Suchadjusted option price shall also be used to determine the amount payable by theCompany upon the exercise of any Stock Appreciation Right.

 

**Section 4.****  Eligibility**

 

Non-employee directors, executive officers,managers, and other key employees of the Company and its Subsidiaries andAffiliates who are responsible for or contribute to the management, growthand/or profitability of the business of the Company and/or its Subsidiaries andAffiliates are eligible to be granted awards under the Plan.

 

**Section 5.****  Stock Options**

 

Stock Options may be granted alone, inaddition to or in tandem with other awards granted under the Plan. Any StockOption granted under the Plan shall be in such form as the Committee may fromtime to time approve.

 

Stock Options granted under the Plan may beof two types:  (i) Incentive StockOptions and (ii) Nonqualified Stock Options.

 

The Committee shall have the authority togrant to any optionee Incentive Stock Options, Nonqualified Stock Options, orboth types of Stock Options (in each case with or without Stock AppreciationRights); provided that, in no event shall the number of shares of Stock subjectto any Stock Options granted to any employee during any twelve (12) monthperiod (determined without regard to whether any option is cancelled) exceedone million (1,000,000) shares, as such number may be adjusted pursuant to Section 3.

 

Options granted under the Plan shall besubject to the following terms and conditions and shall contain such additionalterms and conditions, not inconsistent with the terms of the Plan, as theCommittee shall deem desirable:

 

(a)                                  **Option Price**.  The Option price per share of Stockpurchasable under a Stock Option shall be determined by the Committee at thetime of grant but shall be not less than one hundred percent (100%) of the FairMarket Value of the Stock at grant, provided however, that the Option price pershare of Stock purchasable under a Stock Option that is granted in connection witha merger, stock exchange, or other acquisition as a substitute or replacementaward for options held by optionees of the acquired entity may be less than onehundred percent (100%) of the Fair Market Value of the Stock at the time ofgrant.

 

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(b)                                 **Option****Term**.  The term ofeach Stock Option shall be fixed by the Committee, but no Stock Option shall beexercisable more than ten (10) years after the date the Option is granted.

 

(c)                                  **Exercisability**.  Stock Options shall be exercisable at suchtime or times and subject to such terms and conditions as shall be determinedby the Committee at or after grant: provided, however, that, except as providedin Section 12, or unless otherwise determined by the Committee at or aftergrant, no Stock Option shall be exercisable prior to the first anniversary dateof the granting of the Option. If the Committee provides, in its solediscretion, that any Stock Option is exercisable only in installments, theCommittee may waive such installment exercise provisions at any time at orafter grant in whole or in part, based on such factors as the Committee shalldetermine, in its sole discretion.

 

(d)                                 **Method of Exercise**.  Subject to whatever installment exerciseprovisions apply under Section 5(c), Stock Options may be exercised inwhole or in part at any time during the option period, by giving written noticeof exercise to the Company, or its designated representative, specifying thenumber of shares to be purchased.

 

Such notice shall be accompanied by paymentin full of the purchase price, either by check, note or such other instrumentas the Committee may accept.  Asdetermined by the Committee, in its sole discretion, at or after grant, paymentin full or in part may also be made in the form of unrestricted Stock alreadyowned by the optionee or, in the case of the exercise of a Nonqualified StockOption, in the form of Restricted Stock, or Deferred Stock subject to an awardhereunder (based, in each case, on the Fair Market Value of the Stock on thedate the Option is exercised).

 

If payment of the option exercise price of aNonqualified Stock Option is made in whole or in part in the form of RestrictedStock or Deferred Stock, such Restricted Stock or Deferred Stock (and any replacementshares relating thereto) shall remain (or be) restricted or deferred, as thecase may be, in accordance with the original terms of the Restricted Stockaward or Deferred Stock award in question, and any additional Stock receivedupon the exercise shall be subject to the same forfeiture restrictions ordeferral limitations, unless otherwise determined by the Committee, in its solediscretion, at or after grant.

 

No shares of Stock shall be issued until fullpayment therefore has been made. An optionee shall generally have the rights todividends or other rights of a shareholder with respect to the shares subjectto the Option when the optionee has given written notice of exercise, has paidin full for such shares, and, if requested, has given the representationdescribed in Section 15(a).

 

(e)                                  **Transferability of Options**.  Unless the Committee shall permit (on suchterms and conditions as it shall establish) an Option to be transferred to amember of the participant’s immediate family or to a trust or similar vehiclefor the benefit of such immediate family members, no Option shall be assignableor transferable except by will or the laws of descent and distribution, andexcept to the extent required by law, no right or interest of any participantsshall be subject to any lien, obligation or liability of the participant.

 

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(f)                                    **Termination by Death**.  Subject to Section 5(k), if an optionee’semployment by or service with the Company and any Subsidiary or Affiliateterminates by reason of death, any Stock Option held by such optionee maythereafter be exercised in accordance with the terms and conditions establishedby the Committee.

 

(g)                                 **Termination by Reason of Disability**.  Subject to Section 5(k), if an optionee’semployment by or service with the Company and any Subsidiary or Affiliateterminates by reason of Disability, any Stock Option held by such optionee maythereafter be exercised by the optionee in accordance with the terms andconditions established by the Committee. In the event of termination ofemployment or service by reason of Disability, if an Incentive Stock Option isexercised after the expiration of the exercise periods that apply for purposesof Section 422 of the Code, such Stock Option will thereafter be treatedas a Nonqualified Stock Option.

 

(h)                                 **Termination for Cause**.  Subject to Section 5(k), if an optionee’semployment by the Company and any Subsidiary or Affiliate is terminated forCause, the Stock Option shall thereupon terminate, whether or not exercisableat that time.

 

(i)                                     **Other Termination**.  Unless otherwise determined by the Committee,if an optionee’s employment by or service with the Company and any Subsidiaryor Affiliate terminates for any reason other than death or Disability, theStock Option shall thereupon terminate.

 

(j)                                     **Incentive Stock Options**.  Anything in the Plan to the contrarynotwithstanding, no term of this Plan relating to Incentive Stock Options shallbe interpreted, amended or altered, nor shall any discretion or authoritygranted under the Plan be so exercised, so as to disqualify the Plan under Section 422of the Code, or, without the consent of the optionee(s) affected, to disqualifyany Incentive Stock Option under such Section 422.

 

(k)                                  **Buyout Provisions**.  The Committee may at any time offer to buyout for payment in cash, Stock, Deferred Stock or Restricted Stock, an Optionpreviously granted, based on such terms and conditions as the Committee shallestablish and communicate to the participant at the time that such offer ismade.

 

(l)                                     **Settlement Provisions**.  If the option agreement so provides at grantor is amended after grant but prior to the exercise to so provide (with theoptionee’s consent), the Committee may require that all or part of the shares tobe issued with respect to the spread value of an exercised Option take the formof Deferred or Restricted Stock, which shall be valued on the date of exerciseon the basis of the Fair Market Value (as determined by the Committee) of suchDeferred or Restricted Stock determined without regard to the deferrallimitations and/or forfeiture restrictions involved.

 

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## **(m)**                               Repricing.The price payable for any Shareissued under the Plan may not be decreased after the date of grant, nor may anOption or Stock Appreciation Right granted under the Plan be surrendered to theCompany as consideration for the grant of a new Option or Stock AppreciationRight with a lower price payable per Share; except that the Committee may makeadjustments pursuant to Section 3.

 

**Section 6.****  Stock Appreciation Rights**

 

(a)                                  **Grant and Exercise**.  Stock Appreciation Rights may be grantedalone or in conjunction with all or part of any Stock Option granted under thePlan: provided that, in no event shall the number of shares subject to StockAppreciation Rights granted to any employee during any twelve (12) month periodexceed one million (1,000,000) shares, as such number may be adjusted pursuantto Section 3. In the case of a Nonqualified Stock Option, such rights maybe granted either at or after the time of the grant of such Stock Option. Inthe case of an Incentive Stock Option, such rights may be granted only at thetime of grant of such Stock Option.

 

The term of each Stock Appreciation Rightgranted independent of a Stock Option shall be fixed by the Committee, but noStock Appreciation Right shall be exercisable more than ten (10) yearsafter the date the Stock Appreciation Right is granted. A Stock AppreciationRight or applicable portion thereof granted with respect to a given StockOption shall terminate and no longer be exercisable upon the termination orexercise of the related Stock Option, subject to such provisions as theCommittee may specify at grant where a Stock Appreciation Right is granted withrespect to less than the full number of shares covered by a related StockOption.

 

A Stock Appreciation Right may be exercisedby an optionee, subject to Section 6(b), in accordance with the proceduresestablished by the Committee for such purposes. Upon such exercise, theoptionee shall be entitled to receive an amount determined in the mannerprescribed in Section 6(b). Stock Options relating to exercised StockAppreciation Rights shall no longer be exercisable to the extent that therelated Stock Appreciation Rights have been exercised.

 

(b)                                 **Terms and Conditions**.  Stock Appreciation Rights****shall be subject to such terms andconditions, not inconsistent with the provisions of the Plan, as shall bedetermined from time to time by the Committee, including the following:

 

(i)                                     StockAppreciation Rights shall be exercisable at such time or times as shall bedetermined by the Committee at or after grant: provided, however, that StockAppreciation Rights granted in conjunction with Stock Options shall beexercisable only at such time or times and to the extent that the Stock Optionsto which they relate shall be exercisable in accordance with the provisions of Section 5and this Section 6 of the Plan.

 

(ii)                                  Uponthe exercise of a Stock Appreciation Right, an optionee shall be entitled toreceive an amount in shares of Stock equal in value to the excess of the FairMarket Value on the date of exercise of one share of Stock over the exerciseprice per share determined by the Committee at the time of grant multiplied bythe number of shares in respect of which the Stock Appreciation Right shallhave been exercised, which exercise price shall not be less than one hundredpercent (100%) of the Fair Market

 

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Value of one share of Stock on the date ofgrant. When payment is to be made, the number of shares to be paid shall becalculated on the basis of the Fair Market Value of the shares on the date ofexercise.  Notwithstanding anything inthis Section 6(b) to the contrary, Stock Appreciation Rightgrants made to employees who are not subject to Section 409A of the Codemay be settled in either cash or shares, in compliance with localregulations.  For employees who aresubject to section 409A of the Code the Committee may provide, atthe time a Stock Appreciation Right is granted, that the Stock AppreciationRight may be settled in cash or shares of Stock in the sole discretion of theCommittee, so long as any Stock Appreciation Right that may be settled in cashcomply with all of the applicable provisions of Section 409A of the Codeand any regulations promulgated thereunder.

 

(iii)                               Exceptto the extent the Committee may authorize or permit Stock Appreciation Rightsto be transferred to, or for the benefit of, members of the participant’sfamily, no Stock Appreciation Right shall be transferable by the participantotherwise than by will or by the law’s of descent and distribution, and allStock Appreciation Rights shall be exercisable, during the participant’slifetime only by the participant.

 

(iv)                              Uponthe exercise of a Stock Appreciation Right granted in conjunction with a StockOption under the Plan, the number of shares issued under such StockAppreciation Right based on the value of the Stock Appreciation Right at thetime of exercise shall be deemed to be issued for purposes of the shareauthorization set forth in Section 3 of the Plan.

 

**Section 7.****  Restricted Stock**

 

(a)                                  **Administration**.  Subject to the limitations set forth in Section 3,shares of Restricted Stock may be issued either alone or, in addition to, or intandem with, other awards granted under the Plan and or cash awards madeoutside of the Plan. The Committee shall determine the eligible persons towhom, and the time or times at which, grants of Restricted Stock will be made,the number of shares to be awarded, the price (if any) to be paid by therecipient of Restricted Stock (subject to Section 7(b)), the time or timeswithin which such awards may be subject to forfeiture, and all other terms andconditions of the awards.

 

The Committee may condition the grant ofRestricted Stock upon the attainment of specified performance goals or suchother factors as the Committee may determine, in its sole discretion.

 

The provisions of Restricted Stock awardsneed not be the same with respect to each recipient.

 

(b)                                 **Awards and Certificates**.  The prospective recipient of a RestrictedStock award shall not have any rights with respect to such award, unless anduntil such recipient has executed an agreement evidencing the award and hasdelivered a fully executed copy thereof to the Company, and has otherwisecomplied with the applicable terms and conditions of such award.

 

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(i)                                     Thepurchase price for shares of Restricted Stock shall be equal to or less thantheir par value and may be zero.

 

(ii)                                  Awardsof Restricted Stock must be accepted within a reasonable period (or suchspecific period as the Committee may specify at grant) after the award date, byexecuting an award agreement and paying whatever price (if any) is requiredunder Section 7(b)(i).

 

(c)                                  **Terms and Conditions**.  The shares of Restricted Stock awardedpursuant to this Section 7 shall he subject to the following restrictionsand conditions:

 

(i)                                     Subjectto the provisions of this Plan and the award agreement, during a period set bythe Committee commencing with the date of such award (the “Restriction Period”),the participant shall not be permitted to sell, transfer, pledge or assignshares of Restricted Stock awarded under the Plan. Within these limits, theCommittee, in its sole discretion, may provide for the lapse of suchrestrictions in installments and may accelerate or waive such restrictions inwhole or in part, based on service, performance and or such other factors orcriteria as the Committee may determine, in its sole discretion.

 

(ii)                                  Exceptas provided in this paragraph (ii) and Section 7(c)(i), theCommittee, in its sole discretion, as determined at the time of the award, maypermit the participant to have, with respect to the shares of Restricted Stock,all of the rights of a shareholder of the Company, including the right to votethe shares, and the right to receive any cash dividends. The Committee, in itssole discretion, as determined at the time of award, may permit or require thepayment of cash dividends and may permit or require such cash dividends to bedeferred and, if the Committee so determines, reinvested, subject to Section 15(e),in additional Restricted Stock to the extent shares are available under Section 3,or otherwise reinvested. Pursuant to Section 3 above, Stock dividendsissued with respect to Restricted Stock shall be treated as additional sharesof Restricted Stock that are subject to the same restrictions and other termsand conditions that apply to the shares with respect to which such dividendsare issued,

 

(iii)                               Subjectto the applicable provisions of the award agreement and this Section 7,upon termination of a participant’s employment or service with the Company andany Subsidiary or Affiliate for any reason during the Restriction Period, allshares still subject to restriction will vest, or be forfeited, in accordancewith the terms and conditions established by the Committee at or after grant.

 

(iv)                              Ifand when the Restriction Period expires without a prior forfeiture of theRestricted Stock subject to such Restriction Period, certificates for anappropriate number of unrestricted shares shall be delivered to the participantpromptly (unless the Committee decides pursuant to Section 2(vi) tosettle the award in cash).

 

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(d)                                 **Minimum****Value Provisions**. In order to better ensure that award payments actually reflect theperformance of the Company, Subsidiaries, Affiliates and service of theparticipant, the Committee may provide, in its sole discretion, for a tandemperformance-based or other award designed to guarantee a minimum value, payablein cash or Stock to the recipient of a Restricted Stock award, subject to suchperformance, future service, deferral and other terms and conditions as may bespecified by the Committee.

 

**Section 8.****  Deferred Stock**

 

(a)                                  **Administration**.  Deferred Stock may be awarded either alone,in addition to, or in tandem with other awards granted under the Plan and/orcash awards made outside of the Plan. The Committee shall determine theeligible persons to whom and the time or times at which Deferred Stock shall beawarded, the number of shares of Deferred Stock to be awarded to any person,the duration of the period (the “Deferral Period”) during which, and theconditions under which, receipt of the Stock will be deferred, and the otherterms and conditions of the award in addition to those set forth in Section 8(b).

 

The Committee may condition the grant ofDeferred Stock upon the attainment of specified performance goals or such otherfactors or criteria as the Committee shall determine, in its sole discretion.

 

The provisions of Deferred Stock awards neednot be the same with respect to each recipient.

 

(b)                                 **Terms and Conditions**.  The shares of Deferred Stock awarded pursuantto this Section 8(b) shall be subject to the following terms andconditions:

 

(i)                                     Subjectto the provision of this Plan and the award agreement referred to in Section 8(b)(vi) below,Deferred Stock awards may not be sold, assigned, transferred, pledged orotherwise encumbered during the Deferral Period. At the expiration of theDeferral Period (or the Elective Deferral Period referred to in Section 8(b)(v),where applicable), share certificates shall be delivered to the participant, orhis legal representative, in a number equal to the shares covered by theDeferred Stock award (unless the Committee decides pursuant to Section 2(vi) tosettle the award in cash).

 

(ii)                                  Unlessotherwise determined by the Committee at grant, amounts equal to any dividendsdeclared during the Deferral Period with respect to the number of sharescovered by a Deferred Stock award will be paid to the participant currently, ordeferred and deemed to be reinvested in additional Deferred Stock, or otherwisereinvested, all as determined at or, with respect to any Deferred Stock awardthat is earned and vested as of December 31, 2004 (but not withrespect to any awards of Deferred Stock that are granted and/or become vestedon or after January 1, 2005) after the time of the award by the Committee,in its sole discretion.

 

(iii)                               Subjectto the provisions of the award agreement and this Section 8, upontermination of a participant’s employment or service with the Company

 

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and any Subsidiary or Affiliate for anyreason during the Deferral Period for a given award, the Deferred Stock inquestion will vest, or be forfeited, in accordance with the terms andconditions established by the Committee at or after grant.  Notwithstanding anything herein to thecontrary, with respect to any awards of Deferred Stock that are granted and/orbecome vested on or after January 1, 2005, no unrestricted Stock subjectto such an award may be distributed to a participant who is a Key Employee onaccount of a termination of employment sooner than the date that is six monthsfollowing the date of such a participant’s termination of employment with theCompany for any reason other than the participant’s death or Disability.

 

(iv)                              Basedon service, performance, and/or such other factors or criteria as the Committeemay determine, the Committee may, at or after grant, accelerate the vesting ofall or any part of any Deferred Stock award and/or, with respect to anyDeferred Stock award that is earned and vested as of December 31,2004 (but not with respect to any awards of Deferred Stock that are grantedand/or become vested on or after January 1, 2005), waive the deferral limitationsfor all or any part of such award. Notwithstanding anything herein to the contrary, the distribution to aparticipant of unrestricted Stock with respect to an award of Deferred Stockthat is granted and/or becomes vested on or after January 1, 2005 may notbe accelerated.

 

(v)                                 Aparticipant may elect (a “Subsequent Election”) to further defer receipt of anaward (or an installment of an award) for a specified period or until aspecified event (the “Elective Deferral Period”), subject to the Committee’sapproval and to such terms as are determined by the Committee, all in its solediscretion. With respect to awards of Deferred Stock that were earned andvested as of December 31, 2004, subject to any exceptions adopted by theCommittee, such Subsequent Election must generally be made at least twelve (12)months prior to completion of the Deferral Period of such Deferred Stock award(or such installment).  With respect toawards of Deferred Stock that are granted and/or become vested on or after January 1,2005, any Subsequent Election must (i) be made in the manner specified bythe Committee at least one (1) calendar year prior to the completion ofthe Deferral Period of such Deferred Stock award (or such installment), (ii) nottake effect until at least one (1) calendar year after the SubsequentElection is submitted, and (iii) provide for the deferral of the date ofthe distribution for a minimum of five (5) additional years.

 

(vi)                              Eachaward shall be confirmed by, and subject to the terms of, a Deferred Stockagreement executed by the Company and the participant.

 

(c)                                  **Minimum Value Provisions**.  In order to better ensure that award paymentsactually reflect the performance of the Company, Subsidiaries, Affiliates andservice of the participant, the Committee may provide, in its sole discretion,for a tandem performance-based

 

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or other award designed to guarantee a minimum value, payable in cashor Stock to the recipient of a Deferred Stock award, subject to suchperformance, future service, deferral and other terms and conditions as may bespecified by the Committee.

 

**Section 9.****  Stock Purchase Rights**

 

(a)                                  **Awards and Administration**.  The Committee may grant eligible participantsStock Purchase Rights which shall enable such participants to purchase Stock(including Deferred Stock and Restricted Stock) at price(s) determined by theCommittee at or after grant.

 

The Committee shall also impose suchdeferral, forfeiture, and/or other terms and conditions as it shall determine,in its sole discretion, on such Stock Purchase Rights or the exercise thereof.

 

The terms of Stock Purchase Rights awardsneed not be the same with respect to each participant.

 

Each Stock Purchase Right award shall beconfirmed by, and be subject to the terms of, a Stock Purchase Rightsagreement.

 

(b)                                 **Exercisability. **Stock Purchase Rights shall beexercisable for such period after grant as is determined by the Committee.

 

**Section 10****.  Other Stock-Based Awards**

 

(a)                                  **Administration**. Other awards of Stockand other awards that are valued in whole or in part by reference to, or areotherwise based on, Stock (“Other Stock-Based Awards”), including, withoutlimitation, stock purchase rights, performance shares, convertible preferredstock, convertible debentures, exchangeable securities and Stock awards oroptions valued by reference to Book Value or subsidiary performance, may begranted either along with, or in addition to, or in tandem with, Stock Options,Stock Appreciation Rights, Restricted Stock, Deferred Stock, or Stock PurchaseRights granted under the Plan and/or cash awards made outside of the Plan.

 

Subject to the provisions of the Plan, theCommittee shall have authority to determine the persons to whom and the time ortimes at which such awards shall be made, the number of shares of Stock to beawarded pursuant to such awards, and all other conditions of the awards. TheCommittee may also provide for the grant of Stock upon the completion of aspecified performance period.

 

The provision of Other Stock-Based Awardsneed not be the same in respect to each recipient.

 

(b)                                 **Terms and Conditions**.  Other Stock-Based Awards made pursuant tothis Section 10 shall be subject to the following terms and conditions:

 

(i)                                     Subjectto the provisions of this Plan and the award agreement referred to in Section 10(b)(v) below,shares subject to awards made under this Section 10 may not be sold,assigned, transferred, pledged, or otherwise

 

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encumbered prior to the date on which theshares are issued, or, if later, the date on which any applicable restriction,performance, or deferral period lapses.

 

(ii)                                  Subjectto the provision of this Plan and the award agreement and unless otherwisedetermined by the Committee at grant, the recipient of an award under this Section 10shall be entitled to receive, currently, or on a deferred basis, interest ordividends or interest or dividend equivalents with respect to the number ofshares covered by the award, as determined at the time of the award by theCommittee, in its sole discretion, and the Committee may provide that suchamounts (if any) shall be deemed to have been reinvested in additional Stock orotherwise reinvested.

 

(iii)                               Anyaward under Section 10 and any Stock covered by any such award shall vestor be forfeited to the extent so provided in the award agreement as determinedby the Committee, in its sole discretion.

 

(iv)                              Subjectto any restrictions imposed by Section 409A of the Code, in the event ofthe participant’s Disability or death, or in cases of special circumstances,the Committee may, in its sole discretion, waive in whole or in part any or allof the remaining limitations imposed hereunder (if any) with respect to any orall of an award under this Section l0.

 

(v)                                 Eachaward under this Section 10 shall be confirmed by, and subject to theterms of, an agreement or other instrument by the Company and by theparticipant.

 

(vi)                              Stock(including securities convertible into Stock) issued on a bonus basis underthis Section 10 may be issued for no cash consideration. Stock (includingsecurities convertible into Stock) purchased pursuant to a purchase rightawarded under this Section 10 shall be priced at least fifty percent (50%)of the Fair Market Value of the Stock on the date of grant.

 

**Section 11.****  Performance Related Awards**

 

(a)                                  **Performance Objectives**.  Notwithstanding anything else contained inthe Plan to the contrary, unless the Committee otherwise determines at the timeof grant, a cash-based award or any award of Restricted Stock, Deferred Stock,or Other Stock-Based Awards to an executive officer who is subject to thereporting requirements of Section 16(a) of the Exchange Act, asamended, other than an award which will vest solely on the basis of the passageof time, shall become vested, if at all, upon the determination by theCommittee that performance objectives established by the Committee have beenattained, in whole or in part (a “Performance Award”). Such performanceobjectives shall be determined over a measurement period or periods establishedby the Committee and related to at least one of the following criteria, whichmay be determined solely by reference to the performance of (i) theCompany, (ii) a Subsidiary, (iii) an Affiliate, (iv) a divisionor unit of any of the foregoing, or based on comparison performance of any ofthe foregoing relative to other companies: (A) return on assets: (B) returnon equity; (C) total shareholder return: (D) revenues: (E) cashflows, revenues, and/or earnings relative to other

 

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parameters: (F) operating income: (G) return on investment: (H) changesin the value of the Company’s common stock: and (I) operating margin (the “PerformanceCriteria”). Excluding Stock Options and/or Stock Appreciation Rights grantedhereunder, the maximum number of shares of Stock that may be awarded to any oneparticipant and that may be subject to any such Performance Award in any twelve(12) month period shall not exceed 200,000 shares, as such number may beadjusted pursuant to Section 3.

 

(b)                                 **Annual Incentive Compensation**.  The Committee may, in addition to thePerformance Awards described above, pay cash amounts under the Plan to anyexecutive officer of the Company and any Subsidiary or Affiliate who is subjectto the reporting requirements of Section 16(a) of the Exchange Actupon the achievement, in whole or in part, of performance goals or objectivesestablished in writing by the Committee with respect to such performanceperiods as the Committee shall determine. Any such goals or objectives shall bebased on one or more of the Performance Criteria.  Notwithstanding anything else containedherein to the contrary, the maximum amount of any such cash payment to anysingle executive officer with respect to any calendar year shall not exceed thelesser of (A) $2,000,000 and (B) twice the executive officer’s annualbase salary as in effect on the last day of the preceding fiscal year.

 

(c)                                  **Interpretation**.  Notwithstanding anything else in the Plan tothe contrary, to the extent a Performance Related Award is intended to qualifyas performance-based compensation within the meaning of Section 162(m)(4)(C) ofthe Code, the Committee shall not be entitled to exercise any discretion if theexercise of such discretion would cause such award to fail to qualify asperformance-based compensation.

 

**Section 12.****  Change in Control Provisions**

 

(a)                                  **Impact of Event**.  In the event of either:

 

(1)                                  a“Change in Control” as defined in Section 12(b), or

 

(2)                                  a“Potential Change in Control” as defined in Section 12(c), but only if andto the extent so determined by the Committee or the Board at or after grantsubject to any right of approval expressly reserved by the Committee or theBoard at the time of such determination,

 

the following shall occur:

 

(i)                                     Anyissued and outstanding Stock Options, Stock Appreciation Rights, RestrictedStock, Performance Shares, Stock Equivalent Units, Deferred Stock, StockPurchase Rights, Other Stock-Based Awards, Performance Awards, or any otherequity-based compensation (collectively, “Equity Awards”) shall continue ineffect or, if such continuation is not possible, shall be equitably convertedto equivalent Equity Awards of any successor entity.

 

(ii)                                  Ifsuch continuation or conversion is not possible (but only if it is notpossible), all such Equity Awards shall become fully vested and exercisable inaccordance with the following:

 

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(A)                              AnyStock Appreciation Rights and any Stock Options awarded under the Plan notpreviously exercisable and vested shall become fully exercisable and vested.

 

(B)                                Therestrictions or deferral limitations applicable to any Restricted Stock,Deferred Stock, Stock Purchase Rights. Other Stock-Based Awards, and Performance Awards in each case to theextent not already vested under the Plan, shall lapse and such shares andawards shall be deemed fully vested and any Performance Criteria shall bedeemed met at target.

 

(C)                                Notwithstandinganything herein to the contrary, in no event shall amounts in respect of awardsof Deferred Stock any Other Stock-Based Awards that, as determined by theCommittee in its sole discretion, provide for the deferral of compensation, ineach case that are granted or become vested on or after January 1, 2005,be distributed prior to the occurrence of either (i) a termination of theparticipant’s employment with the Company (or six months thereafter for Key Employees), (ii) the participant’sdeath or Disability, or (iii) a “change in the ownership or effectivecontrol” of the Company or in the “ownership of a substantial portion of theassets” of the Company within the meanings ascribed to such terms in TreasuryDepartment regulations issued under Section 409A of the Code.

 

(iii)                               Ifany Equity Awards are not vested in accordance with (ii) above, but ratherare continued or converted as provided in (i) above, then they shallbecome vested if the participant is involuntarily terminated without Cause orvoluntarily terminates for Good Reason (as defined herein) within one (1) yearafter a Change in Control, and, if subject to an exercise right, shall remainfully exercisable for at least three (3) months following such termination(or, if longer, pursuant to the terms of such Equity Awards).

 

(iv)                              Ifany Equity Awards are not continued or converted, but rather become fullyvested and exercisable as provided in paragraph (ii) above, then the valueof all outstanding Stock Options, Stock Appreciation Rights, Restricted Stock,Deferred Stock, Stock Purchase Rights, Other Stock-Based Awards, andPerformance Awards in each case to the extent vested, shall, unless determinedotherwise by the Committee in its sole discretion at or after grant but priorto any Change in Control, be cashed out on the basis of the “Change in ControlPrice” as defined in Section 12(d) as of the date such Change inControl or such Potential Change in Control is

 

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determined to have occurred or such otherdate as the Committee may determine prior to the Change in Control.

 

(b)                                 **Definition of “Change in Control”**.  For purposes of Section 12(a), a “Changein Control” means the happening of any of the following:

 

(i)                                     Whenany Person, directly or indirectly, becomes the “beneficial owner” (as definedin Rule 13d-3 under the Exchange Act, as amended from time to time) ofsecurities of the Company representing twenty-five percent (25%) or more of thecombined voting power of the Company’s then outstanding securities:

 

(ii)                                  Theindividuals who, as of the Effective Date of this Plan, constitute the Board(the “Incumbent Board”) cease for any reason to constitute at least a majorityof the Board; provided, however, that any individual becoming a director subsequentto the Effective Date of the Plan whose election, or nomination for election bythe Company’s shareholders, was approved by a vote of at least a majority ofthe directors then comprising the Incumbent Board shall be considered as thoughsuch individual were a member of the Incumbent Board, but excluding, for thispurpose, any such individual whose initial assumption of office occurs as aresult of an actual or threatened election contest with respect to the electionor removal of directors or other actual or threatened solicitation of proxiesor consents by or on behalf of a Person other than the Board; or

 

(iii)                               Consummationof a reorganization, merger or consolidation or sale or other disposition ofall or substantially all of the assets of the Company or the acquisition ofassets of another corporation (a “Business Combination”), in each case, unless,following such Business Combination, (A) all or substantially all of theindividuals and entities who were the beneficial owners, respectively, of thethen outstanding share of stock of the Company (the “Outstanding Company Stock”)and the combined voting power of the then outstanding voting securities of theCompany entitled to vote generally in the election of directors (the “OutstandingCompany Voting Securities”) immediately prior to such Business Combinationbeneficially own, directly or indirectly, more than sixty percent (60%) of,respectively, the then Outstanding Company Stock and the combined voting powerof the then Outstanding Company Voting Securities entitled to vote generally inthe election of directors, as the case may be, of the corporation resultingfrom such Business Combination (including, without limitation, a corporationwhich as a result of such transaction owns the Company or all or substantiallyall of the Company’s assets either directly or throughout one or moresubsidiaries), (B) no Person (excluding any employee benefit plan (orrelated trust) of the Company or such corporation resulting from such BusinessCombination) beneficially owns, directly or indirectly, twenty-five percent(25%) or more of respectively, the then Outstanding Company Stock resultingfrom such Business Combination or the combined voting power of the then

 

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Outstanding Company Voting Securities exceptto the extent that such ownership existed prior to the Business Combination,and (C) at least a majority of the members of the board of directors ofthe corporation resulting from such Business Combination were members of theIncumbent Board at the time of the execution of the initial agreement, or ofthe action of the Board, providing for such Business Combination; or

 

(iv)                              Approvalby the shareholders of the Company of a complete liquidation or dissolution ofthe Company.

 

(c)                                  **Definition of Potential Change in Control**.  For purposes of Section 12(a), a “PotentialChange in Control” means the happening of any one of the following:

 

(i)                                     Theapproval by shareholders of an agreement by the Company, the consummation ofwhich would result in a Change in Control of the Company as defined in Section 12(b);or

 

(ii)                                  Theacquisition of beneficial ownership, directly or indirectly, by any entity,person or group (other than the Company or a Subsidiary or any Company employeebenefit plan (including any trustee of such plan acting as such trustee)) ofsecurities of the Company representing five percent (5%) or more of thecombined voting power of the Company’s outstanding securities and the adoptionby the Board of Directors of a resolution to the effect that a Potential Changein Control of the Company has occurred for purposes of this Plan.

 

(d)                                 **Change in Control Price**.  For the purposes of the Section 12, “Changein Control Price” means the highest price per share paid in any transactionreported on the New York Stock Exchange Composite Index, or paid or offered inany bona fide transaction related to a potential or actual Change in Control ofthe Company at any time during the sixty (60) day period immediately precedingthe occurrence of the Change in Control (or, where applicable, the occurrenceof the Potential Change in Control event), in each case as determined by theCommittee except that, in the case of Incentive Stock Options and StockAppreciation Rights relating to Incentive Stock Options, such price shall bebased only on transactions reported for the date on which the optioneeexercises such Stock Appreciation Rights or, where applicable, the date onwhich a cashout occurs under Section 12(a)(iv).

 

(e)                                  **Definition of Good Reason. **For purposes of Section 12(a) above,the participant will be entitled to terminate employment with the Company andits Subsidiaries for “Good Reason” after a Change in Control if:

 

(i)                                     withoutthe participant’s written consent, one or more of the following events occursat any time during the first twelve (12) months after such Change in Control:

 

(1)                                  theparticipant’s base salary rate or annual incentive compensation target isreduced below that in effect immediately prior to the Change in Control for anyreason other than for Cause;

 

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(2)                                  theparticipant’s principal office is moved, without the participant’s consent, toa location that is more than fifty (50) statute miles from its locationimmediately prior to the Change in Control;

 

(3)                                  forany reason other than for Cause, the participant suffers a significant adversechange in the nature or scope of the authorities, powers, functions,responsibilities or duties attached to the position with the Company which theparticipant held immediately prior to the Change in Control;

 

(5)                                  asuccessor where applicable, does not assume and agree to the terms of thisPlan; or

 

(6)                                  theCompany purports to terminate participant’s employment other than in accordancewith a Notice of Termination, as described below.

 

(ii)                                  theparticipant notifies the Company in writing (addressed in care of the Chairmanof the Board of the Company) of the occurrence of such event;

 

(iii)                               withinthirty (30) days following receipt of such written notice, the Company does notcure such event to the reasonable satisfaction of the participant and deliverto the participant a written statement that it has done so; and

 

(iv)                              withinsixty (60) days following the expiration of the period specified in Section (12)(e)(iii) above(without the occurrence of a cure and written notice thereof as described in Section (12)(e)(iii) above),the participant voluntarily terminates employment with the Company.

 

(v)                                 Notwithstandinganything to the contrary in Section 12(e), no accelerated vesting willoccur by reason of this Plan in the event of:

 

(A)                              Terminationof the participant’s employment with the Company by reason of the participant’sdeath or Disability, so long as neither the participant nor the Companypreviously received a Notice of Termination for the participant;

 

(B)                                Terminationby the participant of the participant’s employment with the Company at or afterage sixty-five (65) if the participant is then eligible for retirement; or

 

(C)                                Terminationof the participant’s employment with the Company for Cause.

 

(f)                                    **Notice of Termination**.  Any termination of the participant’semployment, by the Participant, as contemplated by Section 12(e) abovewill be communicated by written notice to the Company delivered in person or bycertified mail.  Any “Notice ofTermination” will:

 

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(i) state the effective date of termination, which will not beless than thirty (30) days or more than sixty (60) days after the date theNotice of Termination is delivered (the “Termination Date”),  (ii) state the specific provision inthis Plan being relied upon for termination; (iii) state the facts andcircumstances claimed to provide a basis for such termination in reasonabledetail.

 

**Section 13.****  Amendments and Termination**

 

The Board may amend, alter, or discontinuethe Plan, but no amendment, alteration, or discontinuation shall be made whichwould impair the rights of an optionee or participant under a Stock Option,Incentive Stock Option, Stock Appreciation Right, Restricted or Deferred Stockaward, Stock Purchase Right, Other Stock-Based Award, or Performance Awardtheretofore granted, without the optionee’s or participant’s consent.

 

The Committee and/or the Company’s BenefitsAdministration Committee may amend the terms of any Stock Option or other awardtheretofore granted, prospectively or retroactively, except that, unlessotherwise permitted by Section 3 above, (i) no such amendment shallimpair the rights of any holder without the holder’s consent; (ii) no suchamendment may decrease the minimum Stock Option Exercise Price set forth in subsection 5(a),unless any such amendment is approved by the Company’s shareholders; and (iii) theprovisions of subsection 5(n) may not be amended, unless any suchamendment is approved by the Company’s shareholders.

 

Subject to the above provisions, the Boardshall have broad authority to amend the Plan to take in to account changes inapplicable securities and tax laws and accounting rules, as well as otherdevelopments.

 

**Section 14.****  Unfunded Status of Plan**

 

The Plan is intended to constitute an “unfunded”plan for incentive and deferred compensation. With respect to any payments notyet made to a participant or optionee by the Company, nothing contained hereinshall give any such participant or optionee any rights that are greater thanthose of a general creditor of the Company. In its sole discretion, theCommittee may authorize the creation of trusts or other arrangements to meetthe obligations created under the Plan to deliver Stock or payments in lieu ofor with respect to awards hereunder: provided, however, that unless theCommittee otherwise determines with the consent of the affected participant,the existence of such trusts or other arrangements is consistent with the “unfunded”status of the Plan.

 

**Section 15.****  General Provisions**

 

(a)                                  The Committee mayrequire each person purchasing shares pursuant to a Stock Option or other awardunder the Plan to represent to and agree with the Company in writing that theoptionee or participant is acquiring the shares without a view to distributionthereof. The certificates for such shares may include any legend, which theCommittee deems appropriate to reflect any restrictions on transfer.

 

All certificates for shares of Stock or othersecurities delivered under the Plan shall be subject to such stock-transferorders and other restrictions as the Committee may deem advisable under therules, regulations, and other requirements of the Securities and ExchangeCommission, any stock exchange upon which the Stock is then listed, and anyapplicable federal or state

 

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securities law, and the Committee may cause a legend or legends to be puton any such certificates to make appropriate reference to such restrictions.

 

(b)                                 Nothing contained inthis Plan shall prevent the Board from adopting other or additionalcompensation arrangements, subject to stockholder approval if such approval isrequired, and such arrangements may be either generally applicable orapplicable only in specific cases.

 

(c)                                  The adoption of thePlan shall not confer upon any employee of the Company or any Subsidiary orAffiliate any right to continued employment or service as a director with theCompany or a Subsidiary or Affiliate, as the case may be, nor shall itinterfere in any way with the right of the Company or a Subsidiary or Affiliateto terminate the employment of any of its employees or service of a director atany time.

 

(d)                                 Except as theparticipant and the Company may otherwise agree, no later than the date as ofwhich an amount first becomes includable in the gross income of the participantfor federal income tax purposes with respect to any award under the Plan, theparticipant shall pay to the Company, or make arrangements satisfactory to theCommittee regarding the payment of any federal, state, or local taxes of anykind required by law to be withheld with respect to such amount. Unlessotherwise determined by the Committee, withholding obligations may be settledwith Stock, including Stock that is part of the award that gives rise to thewithholding requirement. The obligations of the Company under the Plan shall beconditional on such payment of arrangements and the Company and itsSubsidiaries or Affiliates shall, to the extent permitted by law, have theright to deduct any such taxes from any payment of any kind otherwise due tothe participant.

 

(e)                                  The actual or deemedreinvestment of dividends or dividend equivalents in additional RestrictedStock (or in Deferred Stock or other types of Plan awards) at the time of anydividend payment shall only be permissible if sufficient shares of Stock areavailable under Section 3 for such reinvestment (taking into account thenoutstanding Stock Options. Stock Purchase Rights, and other Plan awards).

 

(f)                                    The Plan and allawards made and actions taken thereunder shall be governed by and construed inaccordance with the laws of the State of Delaware.

 

**Section 16.****  Term of Plan**

 

No Stock Option, Incentive Stock Option,Stock Appreciation Right, Restricted Stock award, Deferred Stock award, StockPurchase Right, Other Stock-Based Award, or Performance Award shall be grantedpursuant to the Plan on or after the tenth (10th) anniversary of the date ofshareholder approval, but awards granted prior to such tenth (10th) anniversarymay extend beyond that date.

 

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