EXHIBIT
10.23




FNB
UNITED CORP.




2003
STOCK INCENTIVE PLAN





(as
amended and restated as of December 31, 2008)











1.         
   PURPOSE.




The
purpose of this Plan is to attract and retain Key Employees and Non-Employee
Directors for FNB United Corp. (FNB) and to provide such persons with incentives
and rewards for superior performance and increased shareholder value. This Plan
will authorize the Committee to grant Incentive Stock Options, Non-Qualified
Stock Options, Restricted Shares, Stock Appreciation Rights, Deferred Shares,
Performance Shares, Performance Units and Other Stock-Based Awards to those
officers, Key Employees and Non-Employee Directors who are selected to
participate in the Plan.




2.          
  DEFINITIONS.




As used
in this Plan, the following terms shall be defined as set forth
below:




"AFFILIATE"
means (i) any entity that, directly or indirectly, is controlled by the Company,
(ii) any entity in which the Company has a significant equity interest, (iii) an
affiliate of the Company, as defined in Rule 12b-2 promulgated under Section 12
of the Exchange Act, and (iv) any entity in which the Company has at least
twenty percent (20%) of the combined voting power of the entity's outstanding
voting securities, in each case as designated by the Board as being a
participating employer in the Plan.




"AWARD"
means any Option, Stock Appreciation Right, Restricted Shares, Deferred Shares,
Performance Shares, Performance Units or Other Stock-Based Awards granted under
the Plan, whether singly, in combination, or in tandem, to a Participant by the
Committee pursuant to such terms, conditions, restrictions and/or limitations,
if any, as the Committee may establish.




"AWARD
AGREEMENT" means any written agreement, contract, or other instrument or
document evidencing any Award approved or authorized by the Committee and
delivered to a Participant.




"BASE
PRICE" means the price to be used as the basis for determining the Spread upon
the exercise of a Stock Appreciation Right.




"BOARD"
means the Board of Directors of FNB United Corp.




"CHANGE
IN CONTROL" means (a) the Company is merged or consolidated or reorganized into
or with another corporation, person or entity (including, without limitation, a
merger in which the Company is the surviving entity) and, as a result of such
transaction, the holders of the Company's Common Stock immediately before the
transaction, as a group, hold less than 50% of the combined voting power of the
outstanding securities of the surviving entity







immediately
after the transaction; (b) the Company's Common Stock is acquired in a share
exchange pursuant to Section 55-11-02 of the General Statutes of North Carolina
and, as a result of such transaction, the holders of the Company's Common Stock
immediately before the transaction, as a group, hold less than 50% of the
combined voting power of the outstanding securities of the acquiring corporation
immediately after the transaction; (c) the Company sells or otherwise transfers
assets having an aggregate fair market value (as determined in good faith by the
Board of Directors of the Company) of more than 50% of the Company's total
assets, as reflected on the most recent audited consolidated balance sheet of
the Company, and, as a result of such transaction, neither the Company nor the
holders of the Company's Common Stock immediately before the transaction, as a
group, hold 50% or more of the combined voting power of the outstanding
securities of the transferee immediately after the transaction; (d) there is a
report filed on Schedule 13D or Schedule 14D-1 of the Securities Exchange Act of
1934, as amended, by a person (other than a person that satisfies the
requirements of Rule 13d-1(b)(1) under the Exchange Act for filing such report
on Schedule 13G), which report as filed discloses that any person (as the term
"person" is used in Section 13(d) and Section 14(d) of the Exchange Act) has
become the beneficial owner (as the term "beneficial owner" is defined under
Rule 13d-3 under the Exchange Act) of securities representing more than 50% of
the Company's Common Stock (whether by purchase, recapitalization of the Company
or otherwise); or (e) if during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors of the
Company cease for any reason to constitute at least a majority thereof, unless
the election, or the nomination for election by the Company's shareholders, of
each director of the Company first elected during such period was approved by a
vote of at least two-thirds of the directors of the Company then still in office
who were directors of the Company at the beginning of any such period.
Notwithstanding the foregoing, a Change in Control shall not be deemed to have
occurred for purposes of the Plan if the Company or any Company-sponsored
employee benefit plan (or any trustee of any such plan on its behalf) files or
becomes obligated to file a report or proxy statement disclosing beneficial
ownership by a Company-sponsored employee benefit plan of more than 50% of the
Company's Common Stock.  Further notwithstanding the foregoing, with
respect to any Award that constitutes a “nonqualified deferred compensation
plan” within the meaning of Section 409A, “Change in Control” shall mean a
“change in the ownership of the corporation,” a “change in effective control of
the corporation” or a “change in the ownership of a substantial portion of the
assets of the corporation,” as such terms are defined in Section
409A.




"CODE"
means the Internal Revenue Code of 1986, as amended from time to
time.




"COMMITTEE"
means a Committee of the Board which shall have a least two members, each of
whom shall be appointed by and shall serve at the pleasure of the Board and all
of whom shall be "disinterested persons" with respect to the Plan within the
meaning of Section 16 of the Exchange Act.




"COMPANY"
means FNB United Corp. or any successor corporation.




"COVERED
OFFICER" means at any date (i) any individual who, with respect to the previous
taxable year of the Company, was a "covered employee" of the company within the
meaning of Section 162(m) of the Code; provided, however, that the term "Covered
Officer" shall not include any such individual who is designated by the
Committee, in its discretion, at the time of any Award or at any subsequent
time, as reasonably expected not to be such a "covered employee" with respect to
the current taxable year of the Company and (ii) any individual who
is




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designated
by the Committee, in its discretion, at the time of any Award or at any
subsequent time, as reasonably expected to be such a "covered employee" with
respect to the current taxable year of the Company or with respect to the
taxable year of the Company in which any applicable Award will be
paid.




"DEFERRAL
PERIOD" means the period of time during which Deferred Shares are subject to
deferral limitations enumerated in Section 10 of this Plan.




"DEFERRED
SHARES" means an Award pursuant to Section 10 of this Plan providing the right
to receive Shares at the end of a specified Deferral Period.




"DISABILITY"
means, unless otherwise defined in the applicable Award Agreement, a disability
that would qualify as a total and permanent disability under the Company's then
current long-term disability plan.  Notwithstanding the foregoing,
with respect to any Award that constitutes a “nonqualified deferred compensation
plan” within the meaning of Section 409A, “Disability” has the meaning set forth
in Section 409A.




"DIVIDEND
EQUIVALENTS" means amounts equivalent to the dividends paid on Shares of common
stock. They may be granted in connection with Awards denominated in notional
Shares, or they may be granted on a freestanding basis.




"EARLY
RETIREMENT" means, unless otherwise defined in the applicable Award Agreement,
the termination of a Participant from the employ or service of the Company or
any of its Subsidiaries or Affiliates at a time when the Participant would meet
the age and service requirements for "early retirement" under the terms of the
applicable Company pension plan.




"EXCHANGE
ACT" means the Securities Exchange Act of 1934, as amended from time to
time.




"FAIR
MARKET VALUE" on any date with respect to the Stock means (1) if the Stock is
listed on a national securities exchange, the last reported sale price of the
Stock on such exchange, or (2) if the Stock is otherwise publicly traded, the
last reported sale price of the Stock under the quotation system under which
such sale price is reported, or (3) if no such last sale price is available on
such date, the last reported sale price of the Stock for the immediately
preceding business day (a) on the national securities exchange on which the
Stock is listed or, (b) if the Stock is otherwise publicly traded, under the
quotation system under which such data are reported, or (4) if none of the
prices described above is available, the fair market value per share of the
Stock using any reasonable method determined by the Board that satisfies the
requirements of Section 409A, particularly Treasury Regulation Section
1.409A-1(b)(5)(iv).




"FNB"
means FNB United Corp. or any successor to such corporation.




"GRANT
DATE" means the date specified by the Committee on which a grant of an Award
shall become effective, which shall not be earlier than the date on which the
Committee takes action with respect thereto.




"GRANTEE"
means the person so designated in an agreement as the recipient of an Award
granted by the Company.




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"HARDSHIP"
means an unanticipated emergency that is caused by an event beyond the control
of the Participant that would result in severe financial hardship to the
Participant resulting from (i) a sudden and unexpected illness or accident of
the Participant or a dependent of the Participant, (ii) a loss of the
Participant's property due to casualty, or (iii) such other extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant, all as determined in the sole discretion of the
Committee.




"INCENTIVE
STOCK OPTION (ISO)" means any Option that is intended to qualify as an
"Incentive Stock Option" under Section 422 of the Code or any successor
provision.




"KEY
EMPLOYEE" means an employee of FNB or any Subsidiary who, in the judgment of the
Committee acting in its absolute discretion, is key to the business performance
and success of FNB.




"NON-EMPLOYEE
DIRECTOR" means a member of the Board or of an advisory board of a Subsidiary
who is not an employee of the Company or an Affiliate.




"NONQUALIFIED
STOCK OPTION" or "NQSO" means an Option that is not intended to qualify as an
Incentive Stock Option.




"NORMAL
RETIREMENT" means, unless otherwise defined in the applicable Award Agreement,
retirement of a Participant from the employ or service of the Company or any of
its Subsidiaries or Affiliates in accordance with the terms of the applicable
Company pension plan at or after attainment of age 65, or if a Participant is
not covered by any such plan, retirement on or after attainment of age
65.




"OPTION"
means any Option (ISO or NQSO) to purchase Shares granted under this
Plan.




"OPTION
PRICE" means the purchase price payable to purchase one share upon the exercise
of an Option or other Award.




"OPTIONEE"
means the person so designated in an agreement evidencing an outstanding Option
or other Award.




"OTHER
STOCK-BASED AWARD" means any Award granted under Section 12 of the
Plan.




"PARENT
CORPORATION" means any corporation, which is a parent of FNB within the meaning
of Section 424(e) of the Code.




"PARTICIPANT"
means an officer, a Key Employee or a Non-Employee Director who is selected by
the Board or the Committee to receive benefits under this Plan, provided that
Non-Employee Directors shall not be eligible to receive grants of Incentive
Stock Options.




"PERFORMANCE
OBJECTIVES" means performance goals or targets established pursuant to this Plan
for Participants who have received grants of Performance Shares or Performance
Units or, when so determined by the Committee, Deferred Shares, Options,
Restricted Shares or Other Stock-Based Awards. Performance Objectives may be
described in terms of Company-wide objectives or objectives that are related to
the performance of the




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individual
Participant or the division, department or function within the Company or
Subsidiary in which the Participant is employed. Any Performance Objectives
applicable to Awards intended to qualify as "performance-based compensation"
under Section 162(m) of the Code shall be limited to specified levels of, or
increases in, the Company's or Subsidiary's return on equity, earnings per
share, earnings growth, return on capital, return on assets, divisional return
on capital, divisional return on net assets, total shareholder return and/or
increase in the Fair Market Value of the Shares. Except in the case of
Performance Objectives related to an Award intended to qualify under Section
162(m) of the Code, if the Committee determines that a change in the business,
operations, corporate structure or capital structure of the Company, or the
manner in which it conducts its business, or other events or circumstances
render the Performance Objectives unsuitable, subject to Section 11(h) of this
Plan, the Committee, after the date of grant, may modify such Performance
Objectives, in whole or in part, as the Committee deems appropriate and
equitable.




"PERFORMANCE
PERIOD" means a period of time established under Section 11 of this Plan within
which the Performance Objectives relating to a Performance Share, Performance
Unit, Option, Deferred Share or Restricted Share are to be
achieved.




"PERFORMANCE
SHARE" means an Award pursuant to Section 11 of this Plan that provides the
Participant the opportunity to earn one or more Shares contingent upon the
achievement of one or more Performance Objectives during a Performance
Period.




"PERFORMANCE
UNIT" means an Award pursuant to Section 11 of this Plan that provides the
Participant the opportunity to earn one or more units, denominated in Shares or
cash or a combination thereof, contingent upon achieving one or more Performance
Objectives during a Performance Period.




"PERSON"
means any individual, corporation, partnership, associate, joint-stock company,
trust, unincorporated organization, government or instrumentality of a
government or other entity.




"PLAN"
means this FNB United Corp. 2003 Stock Incentive Plan as effective as of the
date adopted by the Board in 2003 and as amended from time to time
thereafter.




"RESTRICTED
SHARES" means Shares granted under Section 9 of this Plan subject to such
restrictions, including, but not limited to, service requirements and/or
Performance Objectives, as may be determined by the Committee at the time of
grant.




"RULE
16B-3" means Rule 16b-3 of the Exchange Act and any successor provision thereto
as in effect from time to time.




“SECTION
409A” means Code Section 409A, including any proposed and final regulations and
other guidance issued thereunder by the Department of the Treasury and/or the
Internal Revenue Service.




"SHARES"
or "STOCK" means Shares of the common stock of FNB United Corp. $2.50 par value,
or any security into which Shares may be converted by reason of any transaction
or event of the type referred to in Section 4 of this Plan.




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"SPREAD"
means, in the case of a Stock Appreciation Right, the amount by which the Fair
Market Value on the date when any such right is exercised exceeds the Base Price
specified in such right or, in the case of a Tandem Stock Appreciation Right,
the amount by which the Fair Market Value on the date when any such right is
exercised exceeds the Option Price specified in the related Option.




"STOCK
APPRECIATION RIGHT" means a right granted under Section 8 of this Plan,
including a Stock Appreciation Right or a Tandem Stock Appreciation
Right.




"SUBSIDIARY"
means a corporation or other entity (i) more than 50 percent of whose
outstanding Shares or securities (representing the right to vote for the
election of directors or other managing authority) are, or (ii) which does not
have outstanding Shares or securities (as may be the case in a partnership,
joint venture or unincorporated association), but more than 50 percent of whose
ownership interest (representing the right generally to make decisions for such
other entity) is, as of the date this Plan is approved by the Board and
thereafter owned or controlled directly or indirectly by the Company, provided
that for purposes of determining whether any person may be a Participant for
purposes of any grant of Incentive Stock Options, "Subsidiary" means any
corporation in which the Company owns or controls directly or indirectly more
than 50 percent of the total combined voting power represented by all classes of
stock issued by such corporation at the time of such grant.




"TANDEM
STOCK APPRECIATION RIGHT" means a Stock Appreciation Right granted pursuant to
Section 8 of this Plan that is granted in tandem with an Option or any similar
right granted under any other Plan of the Company such that the exercise of one
results in the cancellation of the other.




"TEN
PERCENT SHAREHOLDER" means a person who owns, at the time of an Award and after
taking into account the attribution rules of Section 424(d) of the Code, more
than ten percent (10%) of the total combined voting power of all classes of
stock of either FNB, a Subsidiary or a Parent Corporation.




3.           SHARES
AVAILABLE UNDER THE PLAN.




(a)           Subject
to adjustment as provided in Section 4 of this Plan, the number of Shares that
may be (i) issued or transferred upon the exercise of Options or Stock
Appreciation Rights, (ii) Awarded as Restricted Shares and released from
substantial risk of forfeiture, or (iii) issued or transferred in payment of
Deferred Shares, Performance Shares, Performance Units, or Other Stock Based
Awards, shall not in the aggregate exceed 1,145,000 Shares.  Such
Shares may be Shares of original issuance or Shares that have been reacquired by
the Company. The number of Performance Units granted under this Plan may not in
the aggregate exceed 200,000.




(b)           Upon
the payment of any Option Price by the transfer to the Company of Shares or upon
satisfaction of tax withholding obligations under the Plan by the transfer or
relinquishment of Shares, there shall be deemed to have been issued or
transferred only the number of Shares actually issued or transferred by the
Company, less the number of Shares so transferred or relinquished. In any event,
the number of Shares actually issued or transferred by the Company upon the
exercise of Incentive Stock Options may not exceed 1,145,000, subject to
adjustment as provided in Section 4 of the Plan. Upon the payment in cash of a
benefit provided by any Award under this Plan, any Shares that were subject to
such Award shall again be




6


available
for issuance or transfer under this Plan.  Performance Units that are
paid in Shares or are not earned by a Participant at the end of a Performance
Period are available for future grants of Performance Units.




(c)           If
an Award expires or terminates for any reason without being exercised in full or
is satisfied without the distribution of Stock, or Stock distributed pursuant to
an Award is forfeited or reacquired by the Company, or is surrendered upon
exercise of an Award, the Stock subject to such Award or so forfeited,
reacquired or surrendered shall again be available for distribution for purposes
of the Plan.




(d)           No
Participant may receive Awards, including Options, during any one calendar year
representing more than 50,000 Shares or more than 25,000 Performance
Units.




(e)           Any
shares issued by the Company in connection with the assumption or substitution
of outstanding grants from any acquired corporation shall not reduce the Shares
available for Awards under the Plan.




4.           ADJUSTMENTS.




In the
event that any dividend or other distribution (whether in the form of cash,
Shares, other securities, or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company, or other similar corporate transaction or event
affects the Shares such that an adjustment is necessary in order to prevent
dilution or enlargement of the rights of Optionees or Grantees, then, the
Committee shall in such manner as it may deem equitable: (i) adjust any or all
of (1) the aggregate number of Shares or other securities of the Company (or
number and kind of other securities or property) with respect to which Awards
may be granted under the Plan; (2) the number of Shares or other securities of
the Company (or number and kind of other securities or property) subject to
outstanding Awards under the Plan; and (3) the grant or exercise price with
respect to any Award under the Plan, provided that in each case, the number of
shares subject to any Award shall always be a whole number; (ii) in cancellation
of an option, provide for an equivalent award in respect of securities of the
surviving entity of any merger, consolidation or other transaction or event
having a similar effect; or (iii) in cancellation of an award, make provision
for a cash payment to the holder of an outstanding
Award.  Notwithstanding the foregoing: (x) any adjustments or
substitutions made pursuant to this Section 4 to Awards that constitute a
“nonqualified deferred compensation plan” within the meaning of Section 409A
shall be made in compliance with the requirements of Section 409A; (y) any
adjustments or substitutions made pursuant to this Section 4 to Awards that do
not constitute a “nonqualified deferred compensation plan” subject to Section
409A shall be made in such a manner as to ensure that after such adjustment or
substitution, the Awards either (A) continue not to be subject to Section 409A
or (B) comply with the requirements of Section 409A; and (z) in any event,
neither the Committee nor the Board shall have the authority to make any
adjustments or substitutions pursuant to this Section 4 to the extent the
existence of such authority would cause an Award that is not intended to be
subject to Section 409A at the date of grant to violate Section
409A.




5.
            ADMINISTRATION
      OF THE PLAN.









7












(a)           This
Plan shall be administered by one or more Committees appointed by the Board. Any
grants of Awards to officers who are subject to Section 16 of the Exchange Act
shall be made by a Committee composed of not less than two members of the Board,
each of whom shall be a "Non-Employee Director" within the meaning of Rule
16b-3. Any grant of an Award that is intended to qualify as "performance-based
compensation" under Section 162(m) of the Code shall be made by a Committee
composed of not less than two members of the Board, each of whom shall be an
"outside director" within the meaning of the regulations under Section 162(m) of
the Code. For purposes of grants of Awards to Non-Employee Directors, the entire
Board shall serve as the Committee.




(b)           The
Committee, or Committees, shall have the power and authority to grant Awards
consistent with the terms of the Plan, including the power and authority: (i) to
select the officers and other Key Employees of the Company, its Subsidiaries and
Affiliates to whom Awards may from time to time be granted; (ii) to determine
the time or times of grant, and the extent, if any, of Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards,
Deferred Stock Awards, Other Stock-Based Awards, Performance Share Awards,
Performance Unit Awards, or any combination of the foregoing, granted to any one
or more Participants; (iii) to determine the number of Shares to be covered by
any Award; (iv) to establish the terms and conditions of any Award, including,
but not limited to: (A) the Share price; (B) any restriction or limitation on
the grant, vesting or exercise of any Award (including but not limited to, the
attainment (and certification of the attainment) of one or more Performance
Objectives (or any combination thereof) that may apply to the individual
Participant, a Company business unit, including a Subsidiary or an Affiliate, or
the Company as a whole); and (C) any waiver or acceleration of vesting or
forfeiture provisions regarding any Stock Option or other Award and the Stock
relating thereto, based on such factors as the Committee shall determine; and to
determine whether, to what extent and under what circumstances Stock and other
amounts payable with respect to an Award shall be deferred either automatically
or at the election of the Participant, and whether and to what extent the
Company shall pay or credit amounts equal to interest (at rates determined by
the Committee), dividends or deemed dividends on such deferrals.




(c)           Subject
to the provisions of the Plan, the Committee shall have full and conclusive
authority to interpret and administer the Plan and any instrument or agreement
relating to, or Award made under, the Plan; to amend or modify the terms of any
Award at or after grant with the consent of the holder of the Award, except to
the extent prohibited by Section 7(b); to prescribe, amend and rescind rules and
regulations relating to the Plan; to determine the terms and provisions of the
respective Award agreements and to make all other determinations necessary or
advisable for the proper administration of the Plan.  The Committee's
determinations under the Plan need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, Awards under
the Plan (whether or not such persons are similarly situated). No member of the
Committee shall be liable to any person or entity for any action taken or
determination made in good faith with respect to the Plan or any Award granted
hereunder.




(d)           Unless
otherwise expressly provided in the Plan, all designations, determinations,
interpretations, and other decisions under or with respect to the Plan or any
Award shall be within the sole discretion of the Committee, may be made at any
time and shall be final, conclusive and binding upon all Persons, including the
Company, any Subsidiary and Affiliate,




8


and
Participant, any holder or beneficiary of any Award, any Employee and any
Non-Employee Director.




(e)           Notwithstanding
the foregoing, the Committee may not take any actions pursuant to the exercise
of its power and authority granted under this Section 5 that would (i) cause
Awards not subject to Section 409A at the date of grant either (A) to become
subject to Section 409A or (B) to fail to comply with the requirements of
Section 409A; or (ii) cause any Award subject to Section 409A to fail to comply
with the requirements of Section 409A.




6.
            ELIGIBILITY.




Any
officer, Key Employee (including any employee-director of the Company or of any
Subsidiary or Affiliate who is not a member of the Committee) or Non-Employee
Director shall be eligible to be designated a Participant; provided, however,
that, notwithstanding anything herein to the contrary, any Award that
constitutes a “stock right,” within the meaning of Section 409A, shall be
granted only to persons eligible to be designated a Participant with respect to
whom the Company is an “eligible issuer of service recipient stock” under
Section 409A.




7.
            OPTIONS.




The
Committee may from time to time authorize grants to Participants of Options to
purchase Shares upon such terms and conditions as the Committee may determine in
accordance with the following provisions:




(a)           Each
grant shall specify the number of Shares to which it pertains.




(b)           Each
grant shall specify an Option Price per Share. Except in the case of substitute
awards, the Option Price of an Option may not be less than 100% of the Fair
Market Value of the Shares with respect to which the Option is granted on the
Grant Date. If an officer or Key Employee owns or is deemed to own (by reason of
the attribution rules applicable under Section 424(d) of the Code) more than 10%
of the combined voting power of all classes of stock of the Company or any
Subsidiary or Parent Corporation (within the meaning of Section 424(e) of the
Code), and an Incentive Stock Option is granted to such officer or Key Employee,
the Option Price shall be no less than 110% of the Fair Market Value on the
Grant Date. Notwithstanding the foregoing and except as permitted by the
provisions of Sections 4 and 19(c) hereof, the Committee shall not have the
power to (i) amend the terms of previously granted Options to reduce the Option
Price of such Options, or (ii) cancel such Options and grant substitute Options
with a lower Option Price than the cancelled Options.




(c)           Each
Option may be exercised in whole or in part at any time, with respect to whole
shares only, within the period permitted for the exercise thereof and shall be
exercised by written notice of intent to exercise the Option, delivered to the
Company at its principal office, and payment in full to the Company at said
office of the amount of the Option Price for the number of Shares with respect
to which the Option is then being exercised. Each grant shall specify the form
of consideration to be paid in satisfaction of the Option Price and the manner
of payment of such consideration, which may include (i) cash in the form of
currency or check or other cash equivalent acceptable to the Company, (ii)
nonforfeitable, unrestricted Shares that have been owned by the Optionee for at
least six months and have a value at the time of exercise that is equal to the
Option Price, together with any applicable withholding taxes, (iii) any
other




9


legal
consideration that the Committee may deem appropriate, on such basis as the
Committee may determine in accordance with this Plan, (including without
limitation any form of consideration authorized under Section 7(d) below),
provided, however that, such consideration (A) may not cause Awards intended to
be exempt from Section 409A to become subject to Section 409A and (B) may not
cause the Awards subject to Section 409A to violate the requirements of Section
409A, or (iv) any combination of the foregoing.




(d)           On
or after the Grant Date of any Option other than an Incentive Stock Option, the
Committee may determine that payment of the Option Price may also be made in
whole or in part in the form of Restricted Shares or other Shares that are
subject to risk of forfeiture or restrictions on transfer.  Unless
otherwise determined by the Committee, whenever any Option Price is paid in
whole or in part by means of any of the forms of consideration specified in this
Section 7(d), the Shares received by the Optionee upon the exercise of the
Options shall be subject to the same risks of forfeiture or restrictions on
transfer as those that applied to the consideration surrendered by the Optionee,
provided that such risks of forfeiture and restrictions on transfer apply only
to the same number of Shares received by the Optionee as applied to the
forfeitable or Restricted Shares surrendered by the Optionee.




(e)           Any
grant may provide, to the extent permitted by law, for payment of the Option
Price from the proceeds of sale through a bank or broker on the date of exercise
of some or all of the Shares to which the exercise relates.




(f)           Each
Option grant may specify a period of continuous employment of the Optionee by
the Company or any Subsidiary (or, in the case of a Non-Employee Director,
service on the Board) or other terms and conditions, such as achievement of
Performance Objectives, that may be determined by the Committee that is
necessary before the Options or installments thereof shall become exercisable,
and any grant may provide for the earlier exercise of such rights in the event
of a Change in Control of the Company or other similar transaction or event;
provided, however, that such provision (A) may not cause Awards intended to be
exempt from Section 409A to become subject to Section 409A and (B) may not cause
the Awards subject to Section 409A to violate the requirements of Section
409A,.




(g)           Options
granted under this Plan may be Incentive Stock Options, Nonqualified Stock
Options, or a combination of the foregoing, provided that only Nonqualified
Stock Options may be granted to Non-Employee Directors. Each grant shall specify
whether (or the extent to which) the Option is an Incentive Stock Option or a
Nonqualified Stock Option. Notwithstanding any such designation, to the extent
that the aggregate Fair Market Value of the Shares with respect to which Options
designated as Incentive Stock Options or Tandem Stock Appreciation Rights
related to such Incentive Stock Options are exercisable for the first time by an
Optionee during any calendar year (under all Plans of the Company) exceeds
$100,000 such Options shall be treated as Nonqualified Stock
Options.




(h)           No
Option granted under this Plan may be exercised more than 10 years from the
Grant Date; provided, however, that if an Incentive Stock Option is granted to
an employee who owns or is deemed to own (by reason of the attribution rules of
Section 424(d) of the Code) more than 10% of the combined voting power of all
classes of stock of the Company or any Subsidiary or Parent Corporation (within
the meaning of Section 424(e) of the Code), the term of such Incentive Stock
Option shall be no more than five years from the date of grant.




10







(i)           Each
grant shall be evidenced by an agreement executed on behalf of the Company by
any officer thereof and delivered to the Optionee and containing such terms and
provisions as the Committee may determine consistent with this
Plan.




8.           STOCK
APPRECIATION RIGHTS.




The
Committee may also authorize grants to Participants of Stock Appreciation
Rights. A Stock Appreciation Right provides a Participant the right to receive
from the Company an amount, which shall be determined by the Committee and shall
be expressed as a percentage (not exceeding 100 percent), of the Spread at the
time of the exercise of such right. Any grant of Stock Appreciation Rights under
this Plan shall be upon such terms and conditions as the Committee may determine
in accordance with the following provisions:




(a)           Any
grant may specify that the amount payable upon the exercise of a Stock
Appreciation Right may be paid by the Company in cash, Shares or any combination
thereof and may (i) either grant to the Participant or reserve to the Committee
the right to elect among those alternatives or (ii) preclude the right of the
Participant to receive and the Company to issue Shares or other equity
securities in lieu of cash;




(b)           Any
grant may specify that the amount payable upon the exercise of a Stock
Appreciation Right shall not exceed a maximum specified by the Committee on the
Grant Date;




(c)           Any
grant may specify (i) a waiting period or periods before Stock Appreciation
Rights shall become exercisable and (ii) permissible dates or periods on or
during which Stock Appreciation Rights shall be exercisable; provided, however,
that such specifications may not permit an exercise of the Award that would
violate Section 409A;




(d)           Any
grant may specify that a Stock Appreciation Right may be exercised only in the
event of a Change in Control of the Company or other similar transaction or
event; provided, however that, such provision (A) may not cause Awards intended
to be exempt from Section 409A to become subject to Section 409A and (B) may not
cause the Awards subject to Section 409A to violate the requirements of Section
409A;




(e)           On
or after the Grant Date of any Stock Appreciation Rights, the Committee may
provide for the payment to the Participant of Dividend Equivalents thereon in
cash or Shares on a current, deferred or contingent basis; provided, that the
right to Dividend Equivalents may not cause an Award that is not otherwise
subject to Section 409A to become subject to 409A and shall be set forth as a
separate arrangement that satisfies the requirements of Section
409A;




(f)           Each
grant shall be evidenced by an agreement executed on behalf of the Company by
any officer thereof and delivered to the Optionee, which shall describe the
subject Stock Appreciation Rights, identify any related Options, state that the
Stock Appreciation Rights are subject to all of the terms and conditions of this
Plan and contain such other terms and provisions as the Committee may determine
consistent with this Plan;




(g)           Each
grant of a Tandem Stock Appreciation Right shall provide that such Tandem Stock
Appreciation Right may be exercised only (i) at a time when the related Option
(or any similar right granted under this or any other Plan of the Company) is
also exercisable and the




11


Spread is
positive; and (ii) by surrender of the related Option (or such other right) for
cancellation;




(h)           Each
grant of a Stock Appreciation Right shall specify in respect of each Stock
Appreciation Right a Base Price per Share, which shall be equal to or greater
than the Fair Market Value of the Shares on the Grant Date. Successive grants of
Stock Appreciation Rights may be made to the same Participant regardless of
whether any Stock Appreciation Rights previously granted to such Participant
remain unexercised. Each grant shall specify the period or periods of continuous
employment of the Participant by the Company or any Subsidiary that are
necessary before the Stock Appreciation Rights or installments thereof shall
become exercisable, and any grant may provide for the earlier exercise of such
rights in the event of a Change in Control of the Company or other similar
transaction or event; provided, however, such provision (A) may not cause Awards
intended to be exempt from Section 409A to become subject to Section 409A and
(B) may not cause the Awards subject to Section 409A to violate the requirements
of Section 409A.  No Stock Appreciation Right granted under this Plan
may be exercised more than 10 years from the Grant Date.  An Award
that is subject to Section 409A may not be granted in tandem with an Award that
is not otherwise subject to Section 409A.




9.           RESTRICTED
SHARES.




The
Committee may also authorize grants to Participants of Restricted Shares upon
such terms and conditions as the Committee may determine in accordance with the
following provisions:




(a)           Each
grant shall constitute an immediate transfer of the ownership of Shares to the
Participant in consideration of the performance of services, entitling such
Participant to dividend, voting and other ownership rights, subject to the
substantial risk of forfeiture and restrictions on transfer hereinafter
described.




(b)           Each
grant may be made without additional consideration from the Participant or in
consideration of a payment by the Participant that is less than the Fair Market
Value on the Grant Date.




(c)           Each
grant shall provide that the Restricted Shares covered thereby shall be subject
to a "substantial risk of forfeiture" within the meaning of Section 83 of the
Code for a period to be determined by the Committee on the Grant Date, and any
grant or sale may provide for the earlier termination of such risk of forfeiture
in the event of a Change in Control of the Company or other similar transaction
or event.




(d)           Each
grant shall provide that, during the period for which such substantial risk of
forfeiture is to continue, the transferability of the Restricted Shares shall be
prohibited or restricted in the manner and to the extent prescribed by the
Committee on the Grant Date. Such restrictions may include, without limitation,
rights of repurchase or first refusal by the Company or provisions subjecting
the Restricted Shares to a continuing substantial risk of forfeiture in the
hands of any transferee.




(e)           Any
grant or the vesting thereof may be further conditioned upon the attainment of
Performance Objectives established by the Committee in accordance with the
applicable provisions of Section 11 of this Plan regarding Performance Shares
and Performance Units.




12







(f)           Any
grant may require that any or all dividends or other distributions paid on the
Restricted Shares during the period of such restrictions be automatically
sequestered and reinvested on an immediate or deferred basis in the form of cash
or additional Shares, which may be subject to the same restrictions as the
underlying Award or such other restrictions as the Committee may
determine.  Any such arrangements with respect to distributions or
dividends paid on Restricted Shares that provide for a “deferral of
compensation” within the meaning of Section 409A, shall be set forth as a
separate arrangement that satisfies the requirements of Section
409A.




(g)           Each
grant shall be evidenced by an agreement executed on behalf of the Company by
any officer thereof and delivered to the Participant and containing such terms
and provisions as the Committee may determine consistent with this Plan. Unless
otherwise directed by the Committee, all certificates representing Restricted
Shares, together with a stock power that shall be endorsed in blank by the
Participant with respect to such Shares, shall be held in custody by the Company
until all restrictions thereon lapse.




(h)           At
the end of the restricted period and provided that any other restrictive
conditions of the Restricted Shares Award are met, or at such earlier time as
otherwise determined by the Committee, all restrictions set forth in the Award
Agreement relating to the Restricted Share Award or in the Plan shall lapse as
to the restricted Shares subject thereto, and a stock certificate for the
appropriate number of Shares, free of the restrictions and restricted stock
legend, shall be delivered to the Participant or the Participant's beneficiary
or estate, as the case may be.




10.           DEFERRED
SHARES.




The
Committee may authorize grants of Deferred Shares to Participants upon such
terms and conditions as the Committee may determine in accordance with the
following provisions; provided, that all such Awards that are subject to Section
409A shall satisfy the requirements of Section 409A:




(a)           Each
grant shall constitute the agreement by the Company to issue or transfer Shares
to the Participant in the future in consideration of the performance of
services, subject to the fulfillment during the Deferral Period of such
conditions as the Committee may specify.




(b)           Each
grant may be made without additional consideration from the Participant or in
consideration of a payment by the Participant that is less than the Fair Market
Value on the Grant Date.




(c)           Each
grant shall provide that the Deferred Shares covered thereby shall be subject to
a Deferral Period, which shall be fixed by the Committee on the Grant Date, and
any grant or sale may provide for the earlier termination of such period in the
event of a Change in Control of the Company or other similar transaction or
event; provided, that, such provision (A) may not cause Awards intended to be
exempt from Section 409A to become subject to Section 409A and (B) may not cause
the Awards subject to Section 409A to violate the requirements of Section
409A.




(d)           During
the Deferral Period, the Participant shall not have any right to transfer any
rights under the subject Award, shall not have any rights of ownership in the
Deferred Shares




13


and shall
not have any right to vote such Shares, but the Committee may on or after the
Grant Date authorize the payment of Dividend Equivalents on such Shares in cash
or additional Shares on a current, deferred or contingent basis; provided, that
the payment of Dividend Equivalents may not cause an Award that is not otherwise
subject to Section 409A to become subject to 409A and shall be set forth as a
separate arrangement that satisfies the requirements of Section
409A.




(e)           Any
grant or the vesting thereof may be further conditioned upon the attainment of
Performance Objectives established by the Committee in accordance with the
applicable provisions of Section 11 of this Plan regarding Performance Shares
and Performance Units. Except as otherwise determined by the Committee, all
Deferred Shares and all rights of the grantee to such Deferred Shares shall
terminate, without further obligation on the part of the Company, unless the
Grantee remains in continuous employment of the Company for the entire Deferral
Period in relation to which such Deferred Shares were granted and unless any
other restrictive conditions relating to the Deferred Shares are
met.




(f)           Each
grant shall be evidenced by an agreement executed on behalf of the Company by
any officer thereof and delivered to the Participant and containing such terms
and provisions as the Committee may determine consistent with this
Plan.




11.
            PERFORMANCE
      SHARES AND PERFORMANCE UNITS.




The
Committee also may authorize grants of Performance Shares and Performance Units,
which shall become payable to the Participant upon the achievement of specified
Performance Objectives, upon such terms and conditions as the Committee may
determine in accordance with the following provisions:




(a)           Each
grant shall specify the number of Performance Shares or Performance Units to
which it pertains, which may be subject to adjustment to reflect changes in
compensation or other factors.




(b)           The
Performance Period with respect to each Performance Share or Performance Unit
shall commence on a date specified by the Committee at the time of grant and may
be subject to earlier termination in the event of a Change in Control of the
Company or other similar transaction or event; provided, that, such provision
(A) may not cause Awards intended to be exempt from Section 409A to become
subject to Section 409A and (B) may not cause the Awards subject to Section 409A
to violate the requirements of Section 409A.




(c)           Each
Award shall specify the Performance Objectives that are to be achieved by the
Participant with respect to the grant or the vesting thereof.




(d)           Each
grant may specify in respect of the specified Performance Objectives a minimum
acceptable level of achievement below which no payment will be made and shall
set forth a formula or other procedure for determining the amount of any payment
to be made if performance is at or above such minimum acceptable level but falls
short of the maximum achievement of the specified Performance
Objectives.




(e)           Each
grant shall specify the time and manner of payment of Performance Shares or
Performance Units that shall have been earned, and any grant may specify that
any such




14


amount
may be paid by the Company in cash, Shares or any combination thereof and may
either grant to the Participant or reserve to the Committee the right to elect
among those alternatives.




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




(g)           Any
grant of Performance Shares may provide for the payment to the Participant of
Dividend Equivalents thereon in cash or additional Shares on a current, deferred
or contingent basis; provided, that, the payment of Dividend Equivalents may not
cause an Award that is not otherwise subject to Section 409A to become subject
to 409A and shall be set forth as a separate arrangement that satisfies the
requirements of Section 409A.




(h)           If
provided in the terms of the grant, the Committee may adjust Performance
Objectives and the related minimum acceptable level of achievement if, in the
sole judgment of the Committee, events or transactions have occurred after the
Grant Date that are unrelated to the performance of the Participant and result
in distortion of the Performance Objectives or the related minimum acceptable
level of achievement; provided, that such adjustment (A) may not cause Awards
intended to be exempt from Section 409A to become subject to Section 409A and
(B) may not cause the Awards subject to Section 409A to violate the requirements
of Section 409A.




(i)           Each
grant shall be evidenced by an agreement executed on behalf of the Company by
any officer thereof and delivered to the Participant, which shall state that the
Performance Shares or Performance Units are subject to all of the terms and
conditions of this Plan and such other terms and provisions as the Committee may
determine consistent with this Plan.




12.
            OTHER
      STOCK-BASED AWARDS.




The
Committee shall have the authority to grant to Participants an "Other
Stock-Based Award," which shall consist of any right that is (a) not an Award
described in Sections 7 through 11 above and (b) an Award of Shares or an Award
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Shares (including, without limitation,
securities convertible into Shares), as deemed by the Committee to be consistent
with the purposes of the Plan. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the terms and
conditions of any such Other Stock-Based Award.




13.
            AWARDS
      TO NON-EMPLOYEE DIRECTORS.




The Board
may grant to Non-Employee Director's awards in the form of Nonqualified Stock
Options, Stock Appreciation Rights, Restricted Shares, Deferred Shares and/or
Other Stock Based Awards, including unrestricted Shares.  The grants
may be made according to an approved formula of the Board or made at the
discretion of the Board from time to time. The Board shall determine the terms
and conditions of any such Awards, including the terms and conditions which
shall apply upon a termination of the Non-Employee Director's service as a
member of the Board or an advisory board of a Subsidiary, and shall have full
power and authority in its discretion to administer such Awards, subject to the
terms of the Plan and applicable law.




15







14.
            PROVISIONS
      APPLICABLE TO COVERED OFFICERS AND PERFORMANCE-BASED
    AWARDS.




Notwithstanding
anything in the Plan to the contrary, unless the Committee determines otherwise,
all performance-based Awards granted hereunder shall be subject to the terms and
provisions of this Section 14:




(a)           The
Committee may grant to Covered Officers performance-based Awards that vest or
become exercisable upon the attainment of performance targets related to one or
more Performance Objectives selected by the Committee from among the list of
Performance Objectives contained herein. For the purposes of this Section 14,
performance goals shall be limited to one or more of the Performance Objectives
or any combination thereof. Each Performance Objective may be expressed on an
absolute and/or relative basis, may be based on or otherwise employ comparisons
based on internal targets, the past performance of the Company and/or the past
or current performance of other companies, and in the case of earnings-based
measures, may use or employ comparisons relating to capital, shareholders'
equity and/or Shares outstanding, or to assets or net assets.




(b)           With
respect to any Covered Officer, the maximum annual number of Shares in respect
of which all performance-based Restricted Shares, Deferred Shares, Performance
Shares, Performance Units and Other Stock-Based Awards may be granted under the
Plan is 50,000 and the maximum annual amount of any Award settled in cash is
$250,000.




(c)           To
the extent necessary to comply with Section 162(m) of the Code, with respect to
Restricted Share Awards, Deferred Share Awards, Performance Share Awards,
Performance Unit Awards and Other Stock-Based Awards, no later than 90 days
following the commencement of each Performance Period (or such other time as may
be required or permitted by Section 162(m) of the Code), the Committee shall, in
writing, (i) select the Performance Objective or Objectives applicable to the
Performance Period, (ii) establish the various targets and bonus amounts which
may be earned for such Performance Period, and (iii) specify the relationship
between Performance Objectives and targets and the amounts to be earned by each
Covered Officer for such Performance Period. Following the completion of each
Performance Period, the Committee shall certify in writing whether the
applicable performance targets have been achieved and the amounts, if any,
payable to Covered Officers for such Performance Period. In determining the
amount earned by a Covered Officer for a given Performance Period, subject to
any applicable Award Agreement, the Committee shall have the right to reduce
(but not increase) the amount payable at a given level of performance to take
into account additional factors that the Committee may deem relevant to the
assessment of individual or corporate performance for the Performance
Period.




15.           TRANSFERABILITY.




(a)           Except
as provided in Section 15(b), no Award granted under this Plan may be sold,
assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed
of by a Participant other than by will or the laws of descent and distribution,
and Options and Stock Appreciation Rights shall be exercisable during a
Participant's lifetime only by the Participant or,




16


in the
event of the Participant's legal incapacity, by his guardian or legal
representative acting in a fiduciary capacity on behalf of the Participant under
state law and court supervision.




(b)           The
Committee may expressly provide in a Nonqualified Stock Option agreement (or an
amendment to such an agreement) that a Participant may transfer such
Nonqualified Stock Option to a spouse or lineal descendant (a "Family Member"),
a trust for the exclusive benefit of Family Members, a partnership or other
entity in which all the beneficial owners are Family Members, or any other
entity affiliated with the Participant that may be approved by the Committee.
Subsequent transfers of any such Nonqualified Stock Option shall be prohibited
except in accordance with this Section 15(b). All terms and conditions of any
such Nonqualified Stock Option, including provisions relating to the termination
of the Participant's employment or service with the Company or a Subsidiary,
shall continue to apply following a transfer made in accordance with this
Section 15(b).




(c)           Any
Award made under this Plan may provide that all or any part of the Shares that
are (i) to be issued or transferred by the Company upon the exercise of Options
or Stock Appreciation Rights, upon the termination of the Deferral Period
applicable to Deferred Shares or upon payment under any grant of Performance
Shares or Performance Units, or (ii) no longer subject to the substantial risk
of forfeiture and restrictions on transfer referred to in Section 9 of this
Plan, shall be subject to further restrictions upon transfer.




16.           FRACTIONAL
SHARES.




No
fractional Shares shall be issued or delivered pursuant to the Plan or any
Award, and the Committee shall determine whether cash, other securities, or
other property shall be paid or transferred in lieu of any fractional Shares or
whether such fractional Shares or any rights thereto shall be canceled,
terminated or otherwise eliminated.




17.           WITHHOLDING
TAXES.




Each
Participant is solely responsible for the payment of any tax liability
(including any taxes, interest and penalties that may arise under Section 409A)
with respect to an Award. To the extent that the
Company is required to withhold federal, state, local or foreign taxes in
connection with any payment made or benefit realized by a Participant or other
person under this Plan, it shall be a condition to the receipt of such payment
or the realization of such benefit that the Participant or such other person
make arrangements satisfactory to the Company for payment of all such taxes
required to be withheld. At the discretion of the Committee, such arrangements
may include relinquishment of a portion of such benefit.  The
Committee may provide, at its discretion, for additional cash payments to
holders of Awards to defray or offset any tax arising from the grant, vesting,
exercise or payments of any Award other than ISO's; provided, however that any
such cash payments shall be structured either (i) to comply with Section 409A or
(b) to be exempt from Section 409A.




18.
            CERTAIN
      TERMINATIONS OF EMPLOYMENT, HARDSHIP AND APPROVED LEAVES OF
      ABSENCE.




Notwithstanding
any other provision of this Plan to the contrary, in the event of termination of
employment by reason of death, Disability, Normal Retirement, Early Retirement
with the consent of the Company or leave of absence approved by the Company, or
in the event




17


of
Hardship or other special circumstances, of a Participant who holds an Option or
Stock Appreciation Right that is not immediately and fully exercisable, any
Restricted Shares as to which the substantial risk of forfeiture or the
prohibition or restriction on transfer has not lapsed, any Deferred Shares as to
which the Deferral Period is not complete, any Performance Shares or Performance
Units that have not been fully earned, or any Shares that are subject to any
transfer restriction pursuant to Section 15(b) or (c) of this Plan, the
Committee may in its sole discretion take any action that it deems to be
equitable under the circumstances or in the best interests of the Company,
including without limitation waiving or modifying any limitation or requirement
with respect to any Award under this Plan; provided that such actions, waivers
or modifications (A) may not cause Awards intended to be exempt from Section
409A to become subject to Section 409A and (B) may not cause the Awards subject
to Section 409A to violate the requirements of Section 409A.




19.
            AMENDMENTS
      AND OTHER MATTERS.




(a)           The
Board may amend, alter, suspend, discontinue or terminate the Plan or any
portion thereof at any time, subject to the limitations of Sections 7(b), 4, and
26(b)(iii) hereof; provided that no such amendment, alteration, suspension,
discontinuation or termination shall increase any of the limitations specified
in Sections 3 or 14(b) of this Plan, other than to reflect an adjustment made in
accordance with Section 4, without the further approval of the shareholders of
the Company.




(b)           Subject
to the restrictions of Sections 7(b), 4, and 26(b)(iii) hereof, the Committee
may waive any conditions or rights under, amend any terms of, or alter, suspend,
discontinue, cancel or terminate, any Award theretofore granted, prospectively
or retroactively; provided that, except for amendments made to comply with
applicable law (including without limitation Section 409A), stock exchange
rules, or accounting rules, any such waiver, amendment, alteration, suspension,
discontinuance, cancellation or termination that would adversely affect the
rights of any Participant or any holder or beneficiary of any Award theretofore
granted shall not to that extent be effective without the consent of the
affected Participant, holder or beneficiary.




(c)           Subject
to the restrictions of Sections 7(b), 4, and 26(b)(iii) hereof, the Committee is
hereby authorized to make adjustments in the terms and conditions of, and the
criteria included in, Awards in recognition of unusual or nonrecurring events
(including, without limitation, the events described in Section 4 hereof)
affecting the Company, any Subsidiary or Affiliate, or the financial statements
of the Company or any Subsidiary or Affiliate, or of changes in applicable laws
(including Section 409A), regulations, accounting principles, stock exchange
rules, or accounting rules, whenever the Committee determines that such
adjustments are appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan;
provided that no such adjustment shall be authorized to the extent that such
authority would be inconsistent with a performance-based Award's meeting the
requirements of Section 162(m) of the Code.




(d)           This
Plan shall not confer upon any Participant any right with respect to continuance
of employment or other service with the Company or any Subsidiary and shall not
interfere in any way with any right that the Company or any Subsidiary would
otherwise have to terminate any Participant's employment or other service at any
time.




18







(e)           To
the extent that any provision of this Plan would prevent any Option that was
intended to qualify under particular provisions of the Code from so qualifying,
such provision of this Plan shall be null and void with respect to such Option,
provided that such provision shall remain in effect with respect to other
Options, and there shall be no further effect on any provision of this
Plan.




20.           GOVERNING
LAW.




The
validity, construction and effect of this Plan and any Award hereunder shall be
determined in accordance with the laws (including those governing contracts) of
the State of North Carolina, without giving effect to the conflicts of law
principles thereof.




21.           NO
RIGHTS TO AWARDS.




No Person
shall have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Non-Employee Directors, or holders or
beneficiaries of Awards. The terms and conditions of Awards need not be the same
with respect to each recipient.




22.           SHARE
CERTIFICATES.




All
certificates for Shares or other securities of the Company or any Subsidiary or
Affiliate delivered under the Plan pursuant to any Award or the exercise thereof
shall be subject to such stop transfer orders and other restrictions as the
Committee may deem advisable under the Plan or the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which such Shares or other securities are then listed, and any applicable
federal or state laws, and the Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such
restrictions.




23.           AWARD
AGREEMENTS.




Each
Award hereunder shall be evidenced by an Award Agreement that shall be delivered
to the Participant and shall specify the terms and conditions of the Award and
any rules applicable thereto. In the event of a conflict between the terms of
the Plan and any Award Agreement, the terms of the Plan shall prevail. The Award
Agreement shall be executed or acknowledged by the Participant only if required
by the Committee.




24.           NO
LIMIT ON OTHER COMPENSATION ARRANGEMENTS.




Nothing
contained in the Plan shall prevent the Company or any Subsidiary or Affiliate
from adopting or continuing in effect other compensation arrangements, which
may, but need not, provide for the grant of Options, Restricted Stock, Shares
and other types of Awards provided for hereunder (subject to stockholder
approval as such approval is required), and such arrangements may be either
generally applicable or applicable only in specific cases; provided that such
arrangements may not cause any Awards granted hereunder to violate Section 409A
or cause any Awards granted hereunder that are exempt from Section 409A to
become subject to Section 409A.




19







25.           SEVERABILITY.




If any
provision of the Plan or any Award is, or becomes, or is deemed to be invalid,
illegal, or unenforceable in any jurisdiction or as to any Person or Award, or
would disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to the
applicable laws, or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the Plan or
the Award, such provision shall be stricken as to such jurisdiction, Person or
Award and the remainder of the Plan and any such Award shall remain in full
force and effect.




26.           OTHER
LAWS.




(a)           The
Committee may refuse to issue or transfer any Shares or other consideration
under an Award if, acting in its sole discretion, it determines that the
issuance or transfer of such Shares or such other consideration might violate
any applicable law or regulation or entitle the Company to recover the same
under Section 16(b) of the Exchange Act, and any payment tendered to the Company
by a Participant, other holder or beneficiary in connection with the exercise of
such Award shall be promptly refunded to the relevant Participant, holder, or
beneficiary.  Without limiting the generality of the foregoing, no
Award granted hereunder shall be construed as an offer to sell securities of the
Company, and no such offer shall be outstanding, unless and until the Committee
in its sole discretion has determined that any such offer, if made, would be in
compliance with all applicable requirements of the U.S. federal securities laws
and any other laws to which such offer, if made, would be subject.




(b)           Certain Limitations to
Ensure Compliance with Section 409A.




(i)           In General.  It is
the intent of the parties that, to the extent Section 409A is applicable, this
Plan and all payments made pursuant to any Award hereunder shall be in
compliance with the requirements of Section 409A.  To the extent
Section 409A is applicable, if any provision of this Plan, or any Award,
payment, distribution, deferral election, transaction or other action or
arrangement contemplated by this Plan shall not be in compliance with Section
409A, then such Award, payment distribution, deferral election, transaction or
other action or arrangement shall not be undertaken and, to the extent permitted
by Section 409A, the Plan shall be deemed automatically amended without further
action on the part of the shareholders of the Company or the Board to the
minimum extent necessary to comply with Section 409A and will thereafter be
given effect as so amended.  If postponing payment of any amounts due
to specified employees (within the meaning of Section 409A) under this Plan is
necessary for compliance with the requirements of Section 409A to avoid adverse
tax consequences to the Participant, then payment of such amounts shall be
postponed to comply with Section 409A.  Any and all payments that are
postponed under this Section 26(b)(i) shall be paid to the Participant in a lump
sum at the earliest time that does not result in adverse tax consequences to the
Participant under Section 409A.




(ii)           409A Awards. Without limiting
the generality of the Section 26(b)(i), the following rules will apply to Awards
that constitute a “nonqualified deferred compensation plan” within the meaning
of Section 409A (a “409A Award”):




20







(1)           Elections. If a Participant
is permitted to elect to defer an Award or any payment under an Award, such
election will be permitted only at times in compliance with Section 409A
(including transition rules thereunder).




(2)           Exercise and Distribution.
Except as provided in Section 26(b)(ii)(3) hereof, no 409A Award shall be
exercisable (if the exercise would result in a distribution) or otherwise
distributable to a Participant (or his or her beneficiary) except upon the
occurrence of one of the following (or a date related to the occurrence of one
of the following), which must be specified in a written document governing such
409A Award and otherwise meet the requirements of Treasury Regulation Section
1.409A-3:




a.           A
specified time or a fixed schedule;




b.           The
Participant’s separation from service (within the meaning of Treasury
Regulation  Section 1.409A-1(h) and other applicable rules under
Section 409A), subject to any postponement of such payment that may be required
by Section 26(b)(i) above;




c.           The
death of the Participant;




d.           The
date the Participant has experienced a Disability; and




e.           The
occurrence of a Change in Control.




(3)           No Acceleration. The exercise
or distribution of a 409A Award may not be accelerated prior to the time
specified in accordance with Section 26(b)(ii)(2) hereof, except to the extent
otherwise permitted by Section 409A including Treasury Regulation Section
1.409A-3(j).




(iii)           Limitation on
Adjustments.  Any amendment, modification, substitution,
termination, or liquidation of, or addition, waiver, cancellation, acceleration,
extension, or deferral of any conditions or rights under, this Plan or any Award
(A) must not cause Awards intended to be exempt from Section 409A to become
subject to Section 409A and (B) must not cause the Awards subject to Section
409A to violate the requirements of Section 409A.




(iv)           Scope and
Application.  For purposes of this Agreement, references to a
provision, plan, or event “satisfying” the requirements of Section 409A or being
in “compliance” with the requirements of Section 409A shall mean that such
provision, plan or event will not cause adverse tax consequences to the
Participant under Section 409A.  For purposes of this Agreement,
reverences to a provision, plan, or event that “fails to comply” with Section
409A or that “violates” Section 409A shall mean that such provision, plan, or
event will cause adverse tax consequences to the Participant under Section
409A.  Grants of Options, and Stock Appreciation Rights under this
Agreement are intended to be exempt from Section 409A unless otherwise expressly
specified by the Committee.  The rules applicable to 409A Awards under
this Section 26(b) constitute further restrictions on terms of Awards set forth
elsewhere in this Plan.




27.           NO
TRUST OR FUND CREATED.




Neither
the Plan nor any Award shall create or be construed to create a trust or
separate fund of any kind or a fiduciary relationship between the Company or any
Subsidiary or Affiliate




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and a
Participant or any other Person. To the extent that any Person acquires a right
to receive payments from the Company or any Subsidiary or Affiliate pursuant to
an Award, such right shall be no greater than the right of any unsecured general
creditor of the Company or any Subsidiary or Affiliate.




28.           HEADINGS.




Headings
are given to the Sections and subsections of the Plan solely as a convenience to
facilitate reference. Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of the Plan or any provision
thereof.




29.           EFFECTIVE
DATE AND SHAREHOLDER APPROVAL.




This Plan
shall become effective upon its approval by the Board subject to approval by the
shareholders of the Company at the next Annual Meeting of Shareholders. The
Committee may grant Awards subject to the condition that this Plan shall have
been approved by the shareholders of the Company.




30.           TERMINATION.




This Plan
shall terminate ten years from the date on which this Plan was first approved by
the Board, and no Award shall be granted after that date. Unless otherwise
expressly provided in the Plan or in an applicable Award Agreement, any Award
granted hereunder may, and the authority of the Committee to amend, alter,
adjust, suspend, discontinue or terminate any such Award or to waive any
conditions or rights under any such Award shall, continue after the authority
for grant of new Awards hereunder has been exhausted.




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