exv10w21






Exhibit
10.21


 


 


AVALONBAY COMMUNITIES, INC.


1994
STOCK INCENTIVE PLAN


As Amended and Restated on December 8, 2004


 


SECTION 1.           GENERAL
PURPOSE OF THE PLAN; DEFINITIONS


 


The name of the plan is the AvalonBay Communities,
Inc. 1994 Stock Incentive Plan (the “Plan”). 
The purpose of the Plan is to encourage and enable the officers,
employees, Directors and other key persons of AvalonBay Communities, Inc. (the “Company”)
and its Subsidiaries upon whose judgment, initiative and efforts the Company
largely depends for the successful conduct of its business to acquire a
proprietary interest in the Company.  It
is anticipated that providing such persons with a direct stake in the Company’s
welfare will assure a closer identification of their interests with those of the
Company, thereby stimulating their efforts on the Company’s behalf and
strengthening their desire to remain with the Company.


The following terms shall be defined as set forth
below:


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


“Award” or “Awards,”
except where referring to a particular category of grant under the Plan, shall
include Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock
Awards, Deferred Stock Awards, Unrestricted Stock Awards, Performance Share
Awards and Dividend Equivalent Rights.


“Board” means the Board of Directors of the
Company.


“Cause” means, except as provided in an
individual agreement or by the Committee, a vote of the Board of Directors
resolving that the participant should be dismissed as a result of (i) any
material breach by the participant of any agreement to which the participant
and the Company are parties, (ii) any act (other than retirement) or omission
to act by the participant which may have a material and adverse effect on the
business of the Company or any Subsidiary or on the participant’s ability to
perform services for the Company or any Subsidiary, including, without
limitation, the commission of any crime (other than ordinary traffic
violations), or (iii) any material misconduct or neglect of duties by the
participant in connection with the business or affairs of the Company or any
Subsidiary.


“Change of Control” is defined in Section 16.


“Code” means the Internal Revenue Code of 1986,
as amended, and any successor Code, and related rules, regulations and
interpretations.


“Committee” means the Committee of the Board
referred to in Section 2.


“Covered Employee” means a participant designated prior to
the grant of a Qualified Performance-based Award by the Committee who is or may
be a “covered employee” within the 


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meaning of Section
162(m)(3) of the Code in the year in which the Qualified Performance-based
Award is expected to be taxable to such participant.


“Deferred Stock Award” means Awards granted pursuant to Section
7.


“Disability” means, except as provided in an
individual agreement or by the Committee, an individual’s inability to perform
his normal required services for the Company and its Subsidiaries for a period
of six consecutive months by reason of the individual’s mental or physical
disability, as determined by the Committee in good faith in its sole
discretion.


“Dividend Equivalent Right” means Awards granted pursuant to
Section 11.


“Effective Date” means the consummation of the merger
contemplated by the Agreement and Plan of Merger, by and  between the Company and Avalon Properties,
Inc. dated as of March 9, 1998.


“Fair Market Value” on any given date means the last
reported sale price at which Stock is traded on such date or, if no Stock is
traded on such date, the most recent date on which Stock was traded, as
reflected on the New York Stock Exchange or, if applicable, any other national
stock exchange on which the Stock is traded.


“Incentive Stock Option” means any Stock Option designated as,
and qualified as, an “incentive stock option” as defined in Section 422 of the
Code.


“Non-Employee Director” means a member of the Board who is not
also an employee of the Company or any Subsidiary.


“Non-Qualified Stock Option” means any Stock Option that is not an
Incentive Stock Option.


“Option” or “Stock
Option” means any option to purchase shares of Stock granted
pursuant to Section 5.


“Performance Cycle” means one or more periods of time, which
may be of varying and overlapping durations, as the Committee may select, over
which the attainment of one or more performance criteria will be measured for
the purpose of determining a participant’s right to and the payment of a
Performance Share Award, Restricted Stock Award or Deferred Stock Award.


“Performance Share Award” means Awards granted pursuant to Section
9.


“Qualified Performance-based Award”
means any Restricted Stock Award, Deferred Stock Award or Performance Share
Award that is intended to qualify as “performance-based compensation” under
Section 162(m) of the Code and the regulations promulgated thereunder.


“Restricted Stock Award” mean Awards granted pursuant to Section
6.


“Retirement” means:


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 (a)                               with respect to all Awards made on or before December
8, 2004:


the employee’s
termination of employment with the Company and its Subsidiaries, other than for
Cause, after attainment of age 55, but only if upon such termination of
employment the employee has been employed in the aggregate for a period of at
least 120 contiguous months by the Company, by any company of which the Company
is the successor by name change or reincorporation, by Avalon Properties, Inc.
or by Trammell Crow Residential, or any affiliate of any of the foregoing (a “Predecessor
Company”); and


(b)                                 with respect to all Awards made after
December 8, 2004:


                                                the termination of an Award holder’s
employment (and other business relationships) with the Company and its
Subsidiaries, other than for Cause, following the date on which the sum of the
following equals or exceeds 70 years: (i) the number of full months of the
Award holder’s employment and other business relationships with the Company and
any predecessor Company and (ii) the Award holder’s age on the date of termination;
provided that:


(x)                                   the Award holder’s employment by (or
other business relationships with) the Company and any Predecessor Company have
continued for a period of at least 120 contiguous full months at the time of
termination and, on the date of termination, the Award holder is at least 50
years old;


(y)                                 in the case of termination of employment,
the employee gives at least six months’ prior written notice to the Company of
his or her intention to retire; and


(z)                                   in the case of termination of employment,
the employee enters into a “Non-Compete and Non-Solicitation Agreement,” as
hereinafter defined, and a general release of all claims in a form that is
reasonably satisfactory to the Company.


                As used in the foregoing sentence, “Non-Compete and
Non-Solicitation Agreement” shall mean a written agreement between the employee
and the Company providing that, for a period of at least 12 months following
the employee’s termination of employment with the Company (A) the employee
shall not, without the prior written consent of the Company, become associated
with, or engage in any “Restricted Activities” with respect to any “Competing
Enterprise,” as such terms are hereinafter defined, whether as an officer,
employee, principal, partner, agent, consultant, independent contractor or
shareholder, and (B) the employee shall not, without the prior written consent
of the Company, solicit or attempt to solicit for employment with or on behalf
of any Competing Enterprise any employee of the Company or any of its affiliates
or any person who was formerly employed by the Company or any of its affiliates
within the preceding six months, unless such person’s employment was terminated
by the Company or any of such affiliates. 
“Competing Enterprise,” for purposes of this section, shall mean any
person, corporation, partnership, venture or other entity which is engaged in
the 


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business of managing,
owning, leasing, or joint-venturing multifamily rental real estate within 30
miles of multifamily rental real estate owned or under management by the
Company or its affiliates.  “Restricted
Activities,” for purposes of this section, shall mean executive, managerial,
directorial, administrative, strategic, business development or supervisory
responsibilities and activities relating to any aspects of multifamily rental
real estate ownership, management, multifamily rental real estate franchising,
and multifamily rental real estate joint-venturing.


“Stock” means the Common Stock, $.01 par value
per share, of the Company, subject to adjustments pursuant to Section 3.


“Subsidiary” means any corporation or other entity
(other than the Company) in any unbroken chain of corporations or other
entities, beginning with the Company if each of the corporations or entities
(other than the last corporation or entity in the unbroken chain) owns stock or
other interests possessing 50% or more of the total combined voting power of
all classes of stock or other interests in one of the other corporations or entities
in the chain.


“Unrestricted Stock Award” means Awards granted pursuant to
Section 8.


 


SECTION 2.           ADMINISTRATION OF PLAN; COMMITTEE
AUTHORITY TO SELECT PARTICIPANTS AND DETERMINE AWARDS


 


(a)           Committee.  The Plan shall be administered by all of the Non-Employee
Director members of the Compensation Committee of the Board, or a committee of
not less than two Non-Employee Directors performing similar functions, as
appointed by the Board from time to time. 
Any authority granted to the Committee may also be exercised by the full
Board.  To the extent that any permitted
action taken by the Board conflicts with action taken by the Committee, the
Board action shall control.


(b)           Powers
of Committee.  The Committee 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, other employees, Non-Employee Directors and other key
persons of the Company and its Subsidiaries 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, Restricted Stock Awards, Deferred
Stock Awards, Unrestricted Stock Awards, Performance Share Awards and Dividend
Equivalent Rights, 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
determine and modify the terms and conditions, including restrictions, not
inconsistent with the terms of the Plan, of any Award, which terms and
conditions may differ among individual Awards and participants, and to approve
the form of written instruments evidencing the Awards;


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(v)           to
accelerate the exercisability or vesting of all or any portion of any Award in
circumstances involving a Change of Control or the death, disability or
termination of employment of a Plan participant;


(vi)          subject
to the provisions of Section 5(a)(ii), to extend the period in which Stock
Options may be exercised;


(vii)         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 constituting interest (at rates determined
by the Committee) or dividends or deemed dividends on such deferrals; and


(viii)        to
adopt, alter and repeal such rules, guidelines and practices for administration
of the Plan and for its own acts and proceedings as it shall deem advisable; to
interpret the terms and provisions of the Plan and any Award (including related
written instruments); to make all determinations it deems advisable for the
administration of the Plan; to decide all disputes arising in connection with
the Plan; and to otherwise supervise the administration of the Plan.


All decisions and interpretations of the Committee
shall be binding on all persons, including the Company and Plan participants.


(c)           Delegation
of Authority to Grant Awards.  The
Committee, in its discretion, may delegate to the Chief Executive Officer of
the Company all or part of the Committee’s authority and duties with respect to
Awards, including the granting thereof, to individuals who are not subject to
the reporting and other provisions of Section 16 of the Act or Covered
Employees.  The Committee may revoke or
amend the terms of a delegation at any time but such action shall not
invalidate any prior actions of the Committee’s delegate or delegates that were
consistent with the terms of the Plan.


(d)           Indemnification.  Neither the Board nor the Committee, nor any
member of either or any delegatee thereof, shall be liable for any act,
omission, interpretation, construction or determination made in good faith in
connection with the Plan, and the members of the Board and the Committee (and
any delegatee thereof) shall be entitled in all cases to indemnification and
reimbursement by the Company in respect of any claim, loss, damage or expense
(including, without limitation, reasonable attorneys’ fees) arising or
resulting therefrom to the fullest extent permitted by law and/or under any
directors’ and officers’ liability insurance coverage which may be in effect
from time to time.


 


SECTION 3.           SHARES
ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION


 


(a)           Shares
Issuable.  The maximum number of
shares of Stock reserved and available for issuance under the Plan, at any
given time, shall be the difference between (I) the sum of (a) 6,576,859 shares
of Stock (i.e., the number as of March 1, 2001), plus (b) upon the passing of
each December 31 starting with December 31, 2001, a percentage of the total
number of shares of Stock (the “Year End Outstanding Shares”) actually
outstanding on such date (assuming all 


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units of
limited partnership interest in subsidiary partnerships structured as DownREITs
that may, upon presentation for redemption, be exchanged for shares of Stock
are so exchanged), less (II) any shares of Stock issued under the Plan prior to
such time which have not been added back as described below in this Section
3(a).  The percentage referred to in the
prior sentence shall be determined in accordance with the following table:


	
  If
  shares of Stock underlying those Options granted during the calendar year
  constitute the following percentage of all shares of Stock underlying all
  Awards (including Options) made during the calendar year:

  	
   

  	
  Then the
  number of shares of Stock reserved and available for issuance under the Plan
  would be increased by adding a number of shares of Stock equal to the
  following percentage of the “Year End Outstanding Shares”:

  
	
   

  	
   

  	
   

  
	
  50.00 to 52.49%

  	
   

  	
  0.48%

  
	
  52.50 to
  54.99   

  	
   

  	
  0.50   

  
	
  55.00 to
  57.49   

  	
   

  	
  0.52   

  
	
  57.50 to
  59.99   

  	
   

  	
  0.55   

  
	
  60.00 to
  62.49   

  	
   

  	
  0.58   

  
	
  62.50 to
  64.99   

  	
   

  	
  0.61   

  
	
  65.00 to
  67.49   

  	
   

  	
  0.64   

  
	
  67.50 to
  69.99   

  	
   

  	
  0.68   

  
	
  70.00 to
  72.49   

  	
   

  	
  0.72   

  
	
  72.50 to
  74.99   

  	
   

  	
  0.76   

  
	
  75.00 to
  77.49   

  	
   

  	
  0.82   

  
	
  77.50 to
  79.99   

  	
   

  	
  0.87   

  
	
  80.00 to
  82.49   

  	
   

  	
  0.94   

  
	
  82.50 to
  84.99   

  	
   

  	
  0.96   

  
	
  85.00% or
  more   

  	
   

  	
  1.00   

  



 


 


For purposes of determining the percentage of all
awards made under the Plan during a calendar year that were in the form of
Options, only Options that have an exercise price equal to the Fair Market
Value on the date of grant shall count as Options.  For purposes hereof, subsidiary partnerships
structured as DownREITs shall include, but not be limited to, Bay Countrybrook,
L.P., Bay Pacific Northwest L.P., Avalon DownREIT V, L.P. and Avalon Ballston
II, L.P.


Notwithstanding the foregoing, the maximum number of
shares of Stock for which Incentive Stock Options may be issued under the Plan
shall not exceed 2,500,000.  Further
notwithstanding the foregoing, at least 50% of all Awards granted under the
Plan during any calendar year shall be in the form of Options with an exercise
price not less than 100% of Fair Market Value on the date of grant.  For purposes of determining the number of
shares of Stock reserved and available for issuance from time to time, the
shares of Stock underlying any Awards which are forfeited, canceled, reacquired
by the Company, satisfied without the issuance of Stock or otherwise 


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terminated (other than by exercise) shall be added
back to the shares of Stock available for issuance under the Plan.


Stock Options with respect to no more than 300,000
shares of Stock may be granted to any one individual participant during any one
calendar year period.  Shares issued
under the Plan may be authorized but unissued shares or shares reacquired by
the Company.


                Example:     To
illustrate how the formula in the above table would work, assume that during
calendar year 2002 the only awards made by the Company under the Stock
Incentive Plan were an aggregate of 400,000 stock options and shares of
restricted stock.  Of these, 320,000 (or
80%) were options and 80,000 (or 20%) were restricted shares.  As of December 31, 2002, assume that the
Company had outstanding 67,000,000 shares of Common Stock and 1,000,000 units
of limited partnership in DownREITs that may be exchanged for shares of Common
Stock.  Therefore, following the table
above, this means that on December 31, 2002, the Company would increase
the number of available shares under the Stock Incentive Plan by multiplying
68,000,000 by 0.94%, (i.e., 639,200 shares of Common Stock would be added to
the number of available shares reserved under the Stock Incentive Plan).


(b)           Recapitalizations.  If, through or as a result of any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other similar transaction, the outstanding shares
of Stock are increased or decreased or are exchanged for a different number or
kind of shares or other securities of the Company, or additional shares or new
or different shares or other securities of the Company or other non-cash assets
are distributed with respect to such shares of Stock or other securities, the
Committee shall make an appropriate or proportionate adjustment in (i) the
maximum number of shares reserved for issuance under the Plan, (ii) the number
of Stock Options or shares of Stock that can be granted to any one individual
participant, (iii) the number and kind of shares or other securities subject to
any then outstanding Awards under the Plan, and (iv) the price for each share
subject to any then outstanding Stock Options under the Plan, without changing
the aggregate exercise price (i.e., the exercise price multiplied by the number
of Stock Options) as to which such Stock Options remain exercisable.  The adjustment by the Committee shall be
final, binding and conclusive.  No
fractional shares of Stock shall be issued under the Plan resulting from any
such adjustment, but the Committee in its discretion may make a cash payment in
lieu of fractional shares.


(c)           Mergers.  Upon consummation of a consolidation or
merger or sale of all or substantially all of the assets of the Company in
which outstanding shares of Stock are exchanged for securities, cash or other
property of an unrelated corporation or business entity or in the event of a
liquidation of the Company (in each case, a “Transaction”), the Board may, in
its discretion, take any one or more of the following actions, as to
outstanding Stock Options:  (i) provide
that such Stock Options shall be assumed, or equivalent options shall be
substituted, by the acquiring or succeeding corporation (or an affiliate
thereof), (ii) upon written notice to the optionees, provide that all
unexercised Stock Options will terminate immediately prior to the consummation
of the Transaction unless exercised by the optionee within a specified period
following the date of such notice, and/or (iii) in the event of a business
combination under the terms of which holders of the Stock of the Company will
receive upon consummation thereof a 


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cash
payment for each share surrendered in the business combination, make or provide
for a cash payment to the optionees equal to the difference between (A) the
value (as determined by the Committee) of the consideration payable per share
of Stock pursuant to the business combination (the “Merger Price”) times the
number of shares of Stock subject to such outstanding Stock Options (to the
extent then exercisable at prices not in excess of the Merger Price) and (B)
the aggregate exercise price of all such outstanding Stock Options in exchange
for the termination of such Stock Options. 
In the event Stock Options will terminate upon the consummation of the
Transaction, each optionee shall be permitted, within a specified period
determined by the Committee, to exercise all non-vested Stock Options, subject
to the consummation of the Transaction.


(d)           Substitute
Awards.  The Committee may grant
Awards under the Plan in substitution for stock and stock based awards held by
employees of another corporation who concurrently become employees of the
Company or a Subsidiary as the result of a merger or consolidation of the
employing corporation with the Company or a Subsidiary or the acquisition by
the Company or a Subsidiary of property or stock of the employing corporation.  The Committee may direct that the substitute
awards be granted on such terms and conditions as the Committee considers
appropriate in the circumstances.  Any
substitute awards granted under this Plan shall not count against the share limitation
set forth in Section 3(a).


 


SECTION 4.           ELIGIBILITY


 


Participants in the Plan will be such full or
part-time officers, other employees,  Non-Employee
Directors and key persons of the Company and its Subsidiaries who are
responsible for or contribute to the management, growth or profitability of the
Company and its Subsidiaries and who are selected from time to time by the
Committee, in its sole discretion.  Key
persons, for purposes of this Plan, shall include consultants and prospective
employees.


 


SECTION 5.           STOCK
OPTIONS


 


Any Stock Option granted under the Plan shall be in
such form as the Committee may from time to time approve.


Stock Options granted under the Plan may be either
Incentive Stock Options or Non-Qualified Stock Options.  Incentive Stock Options may be granted only
to employees of the Company or any Subsidiary that is a “subsidiary corporation”
within the meaning of Section 424(f) of the Code.  To the extent that any option does not
qualify as an Incentive Stock Option, it shall constitute a Non-Qualified Stock
Option.


No Awards shall be granted under the Plan after May 8,
2011.


(a)           Stock
Options Granted to Employees and Key Persons.  The Committee in its discretion may grant
Stock Options to employees and key persons of the Company or any
Subsidiary.  Stock Options granted to
employees and key persons pursuant to this Section 5(a) shall be subject
to the following terms and conditions and shall contain such additional terms
and conditions, not inconsistent with the terms of the Plan, as the Committee
shall deem desirable.  If the Committee
so determines, Stock Options may be granted in lieu of cash compensation at the



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participant’s
election, subject to such terms and conditions as the Committee may establish,
as well as in addition to other compensation.


(i)            Exercise
Price.  The exercise price per share
for the Stock covered by a Stock Option granted pursuant to this Section 5(a)
shall be determined by the Committee at the time of grant but shall be not less
than 100% of Fair Market Value on the date of grant (other than options granted
in lieu of cash compensation).  If an
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 and an Incentive Stock Option is granted to such employee, the
option price shall be not less than 110% of Fair Market Value on the grant
date.


(ii)           Option
Term.  The term of each Stock Option
shall be fixed by the Committee, but no Stock Option shall be exercisable more
than ten years after the date the option is granted.  If an employee 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 and an Incentive Stock Option is granted to
such employee, the term of such option shall be no more than five years from
the date of grant.


(iii)          Exercisability;
Rights of a Shareholder.  Stock
Options shall become vested and exercisable at such time or times, whether or
not in installments, as shall be determined by the Committee at or after the
grant date.  The Committee may at any time
accelerate the exercisability of all or any portion of any Stock Option.  An optionee shall have the rights of a
shareholder only as to shares acquired upon the exercise of a Stock Option and
not as to unexercised Stock Options.


(iv)          Method
of Exercise.  Stock Options may be
exercised in whole or in part, by giving written notice of exercise to the
Company, specifying the number of shares to be purchased.  Payment of the purchase price may be made by
one or more of the following methods:


(A)          In cash, by certified bank check or
other instrument acceptable to the Committee;


(B)           Through the delivery (or attestation
to the ownership) of shares of Stock that have been purchased by the optionee
on the open market or that have been beneficially owned by the optionee for at
least six months and are not then subject to restrictions under any Company
plan.  Such surrendered shares shall be
valued at Fair Market Value on the exercise date; or


(C)           By the optionee delivering to the
Company a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company cash or a check
payable and acceptable to the Company to pay the purchase price; provided that
in the event the optionee chooses to pay the purchase price as so provided, the
optionee and the broker shall comply with such procedures and enter into such
agreements of indemnity and other agreements as the Committee shall prescribe
as a 


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condition of such payment procedure.  Payment instruments will be received subject
to collection.


The
delivery of certificates representing shares of Stock to be purchased pursuant
to the exercise of a Stock Option will be contingent upon receipt from the
optionee (or a purchaser acting in his stead in accordance with the provisions
of the Stock Option) by the Company of the full purchase price for such shares
and the fulfillment of any other requirements contained in the Stock Option or
applicable provisions of laws.  In the
event an optionee chooses to pay the purchase price by previously-owned shares
of Stock through the attestation method, the shares of Stock transferred to the
optionee upon the exercise of the Stock Option shall be net of the number of
shares attested to.


(v)           Termination
by Reason of Death.  If any optionee’s
employment (or other business relationship) by the Company and its Subsidiaries
terminates by reason of death, the Stock Option may thereafter be exercised, to
the extent exercisable at the date of death, by the legal representative or
legatee of the optionee, for a period of six months (or such longer period as
the Committee shall specify at any time in the option, employment or other
agreement) from the date of death, or until the expiration of the stated term
of the Option, if earlier.


(vi)          Termination
by Reason of Disability.


(A)          Any Stock Option held by an optionee
whose employment (or other business relationship) by the Company and its
Subsidiaries has terminated by reason of Disability may thereafter be exercised,
to the extent it was exercisable at the time of such termination, for a period
of twelve months (or such longer period as the Committee shall specify at any
time in the option, employment or other agreement) from the date of such
termination of employment (or other business relationship), or until the
expiration of the stated term of the Option, if earlier.


(B)           Except as otherwise provided by the
Committee at the time of grant, the death of an optionee during a period
provided in this Section 5(a)(vi) for the exercise of a Non-Qualified Stock
Option shall extend such period for six months from the date of death, subject
to termination on the expiration of the stated term of the Option, if earlier.


(vii)         Termination
by Reason of Retirement.


(A)          Any Stock Option held by an optionee
whose employment by (and other business relationships with) the Company and its
Subsidiaries is terminated by reason of Retirement may thereafter be exercised,
to the extent it was exercisable at the time of such termination (after giving
effect to clause (C) immediately below), for a period of twelve months (or such
other period as the Committee shall specify at any time in the option,
employment or other agreement) from the date of such termination, or until the
expiration of the stated term of the Option, if earlier.


(B)           Except as otherwise provided by the
Committee at any time, the death of an optionee during a period provided in
this Section 5(a)(vii) for the exercise of 


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a Stock Option shall extend such period for six months
from the date of death, subject to termination on the expiration of the stated
term of the Option, if earlier.


(C)           Any Stock Option held by an optionee
whose employment by (and other business relationships with) the Company and its
Subsidiaries is terminated by reason of Retirement shall be automatically
vested as of the date of such termination notwithstanding that the provisions
of the related stock option agreement may not provide for such automatic
vesting.


(viii)        Termination
for Cause.  If any optionee’s
employment (or other business relationship) by the Company and its Subsidiaries
has been terminated for Cause, any Stock Option held by such optionee shall
immediately terminate and be of no further force and effect; provided, however,
that the Committee may, in its sole discretion, provide that such stock option
can be exercised for a period of up to 30 days from the date of termination of
employment (or other business relationship) or until the expiration of the
stated term of the Option, if earlier.


(ix)           Other
Termination.  Unless otherwise
determined by the Committee, if an optionee’s employment (or other business
relationship) by the Company and its Subsidiaries terminates for any reason
other than death, Disability, Retirement or for Cause, any Stock Option held by
such optionee may thereafter be exercised, to the extent it was exercisable on
the date of termination of employment (or other business relationship), for
three months (or such longer period as the Committee shall specify at any time
in the option, employment or other agreement) from the date of termination of
employment (or other business relationship) or until the expiration of the
stated term of the Option, if earlier.


(x)            Annual
Limit on Incentive Stock Options.  To
the extent required for “incentive stock option” treatment under Section 422 of
the Code, the aggregate Fair Market Value (determined as of the time of grant)
of the Stock with respect to which Incentive Stock Options granted under this
Plan and any other plan of the Company or its Subsidiaries become exercisable
for the first time by an optionee during any calendar year shall not exceed
$100,000.


(xi)           Form
of Settlement.  Shares of Stock
issued upon exercise of a Stock Option shall be free of all restrictions under
the Plan, except as otherwise provided in this Plan.


(b)           Reload
Options.  At the discretion of the
Committee, Options granted under the Plan may include a so-called “reload”
feature pursuant to which an optionee exercising an option by the delivery of a
number of shares of Stock in accordance with Section 5(a)(iv)(B) hereof
would automatically be granted an additional Option (with an exercise price
equal to the Fair Market Value of the Stock on the date the additional Option
is granted and with the same expiration date as the original Option being
exercised, and with such other terms as the Committee may provide) to purchase
that number of shares of Stock equal to the number delivered to exercise the
original Option.


11








 








 


(c)           Non-transferability
of Options.  No Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution and all Stock Options shall be exercisable, during the
optionee’s lifetime, only by the optionee, or by the optionee’s legal
representative or guardian in the event of the optionee’s incapacity.  Notwithstanding the foregoing, the Committee
may permit the optionee to transfer his Non-Qualified Stock Options to
members of his immediate family, or to trusts for the benefit of such family
members, or to partnerships in which such family members are the only partners,
provided that the transferee agrees in writing with the Company to be bound by
all of the terms and conditions of this Plan, the applicable option agreement
and all insider trading rules of the Company.


 


SECTION 6.           RESTRICTED
STOCK AWARDS


 


(a)           Nature
of Restricted Stock Award.  The
Committee may grant Restricted Stock Awards to any participant.  A Restricted Stock Award is an Award
entitling the recipient to acquire, at no cost or for a purchase price
determined by the Committee, shares of Stock subject to such restrictions and
conditions as the Committee may determine at the time of grant (“Restricted
Stock”).  Conditions may be based on
continuing employment (or other business relationship) and/or achievement of
pre-established performance goals and objectives.  In addition, a Restricted Stock Award may be
granted to an employee by the Committee in lieu of a cash bonus due to such
employee pursuant to any other plan of the Company.  In the event of termination of employment
and/or other business relationships by reason of Retirement, then in such event
any Restricted Stock Awards held by the terminated Award holder on the date of
termination shall be automatically vested as of the date of termination
notwithstanding that the provisions of the related Restricted Stock Award may
not provide for such automatic vesting.


(b)           Automatic
Grant of Restricted Stock to Independent Directors.


(i)            Each
Non-Employee Director who is serving as a Director of the Company on the fifth
business day after the 2003 annual meeting of stockholders shall automatically
be granted on such day 2,500 shares of Restricted Stock, and, thereafter each
Non-Employee Director who is serving as a Director of the Company on the fifth
business day after each annual meeting of stockholders, beginning with the 2004
annual meeting of stockholders, shall automatically be granted on such day a
number of shares of Restricted Stock equal to $100,000 based upon the closing
price of shares of the Company’s Common Stock on the New York Stock Exchange on
the Grant Date of the preceding year (such number to be rounded to the nearest
whole number).  By way of example it is
noted that the 2003 Grant Date was May 21, 2003 and that the closing stock
price on such date was $43.14, which means that on the 2004 Grant Date each
Non-Employee Director will be granted 2,318 shares of Restricted Stock (i.e,
$100,000/$43.14).  Except as otherwise
provided in the award agreement, such shares of Restricted Stock shall vest
twenty percent (20%) on the date of issuance and twenty percent (20%) on each
of the first four anniversaries of the date of issuance.


(ii)           Each
Non-Employee Director may, pursuant to the provisions of Section 7(b), elect to
receive Deferred Stock instead of Restricted Stock provided in this Section
6(b).


12








 








 


Any
Deferred Stock granted in lieu of Restricted Stock shall be subject to the same
vesting requirements applicable to the Restricted Stock.


(c)           Acceptance
of Award.  To the extent applicable,
a participant who is granted a Restricted Stock Award shall have no rights with
respect to such Award unless the participant shall have accepted the Award
within 60 days (or such shorter time period as the Committee may specify)
following the award date by making payment to the Company, if required, in
cash, by certified or bank check or other instrument or form of payment
acceptable to the Committee in an amount equal to the specified purchase price,
if any, of the shares covered by the Award and by executing and delivering to
the Company a written instrument that sets forth the terms and conditions of
the Restricted Stock in such form as the Committee shall determine.


(d)           Rights
as a Shareholder.  Upon complying
with Section 6(c) above, a participant shall have all the rights of a
shareholder with respect to the Restricted Stock including voting and dividend
rights, subject to non-transferability restrictions and Company repurchase or
forfeiture rights described in this Section 6 and subject to such other
conditions contained in the written instrument evidencing the Restricted Stock
Award.  Unless the Committee shall
otherwise determine, certificates evidencing shares of Restricted Stock shall
remain in the possession of the Company until such shares are vested as
provided in Section 6(f) below.


(e)           Restrictions.  Except as provided in an individual agreement
or as otherwise determined by the Committee, shares of Restricted Stock may not
be sold, assigned, transferred, pledged or otherwise encumbered or disposed
of.  Except as provided in an individual
agreement or as otherwise determined by the Committee, in the event of
termination of employment (or other business relationship) by the Company and
its Subsidiaries for any reason (including death, retirement, Disability, and
for Cause), the Company shall have the right, at the discretion of the Committee,
to repurchase shares of Restricted Stock with respect to which conditions have
not lapsed at their purchase price, or to require forfeiture of such shares to
the Company if acquired at no cost, from the participant or the participant’s
legal representative.  The Company must
exercise such right of repurchase or forfeiture not later than the 90th day
following such termination of employment (or other business relationship),
unless otherwise specified in the written instrument evidencing the Restricted
Stock Award.


(f)            Vesting
of Restricted Stock.  The Committee
at the time of grant shall specify the date or dates and/or the attainment of
pre-established performance goals, objectives and other conditions on which the
non-transferability of the Restricted Stock and the Company’s right of
repurchase or forfeiture shall lapse. 
Except as provided in Section 16, the vesting period for Restricted
Stock shall be at least three years, except that in the case of Restricted
Stock that becomes transferable and no longer subject to forfeiture upon the
attainment of such pre-established performance goals, objectives and other
conditions, the vesting period shall be at least one year.  Subsequent to such date or dates and/or the
attainment of such pre-established performance goals, objectives and other
conditions, the shares on which all restrictions have lapsed shall no longer be
Restricted Stock and shall be deemed “vested.”


(g)           Waiver,
Deferral and Reinvestment of Dividends. 
The written instrument evidencing the Restricted Stock Award may require
or permit the immediate payment, waiver, deferral or investment of dividends
paid on the Restricted Stock.


13








 








SECTION 7.           DEFERRED
STOCK AWARDS


 


(a)           Nature
of Deferred Stock Awards.   A
Deferred Stock Award is an Award of phantom stock units to a participant,
subject to restrictions and conditions as the Committee may determine at the
time of grant.  Conditions may be based
on continuing employment (or other business relationship) and/or achievement of
pre-established performance goals and objectives.  The grant of a Deferred Stock Award is
contingent on the participant executing the Deferred Stock Award
agreement.  The terms and conditions of
each such agreement shall be determined by the Committee, and such terms and
conditions may differ among individual Awards and participants.  At the end of the deferral period, the
Deferred Stock Award, to the extent vested, shall be paid to the participant in
the form of shares of Stock.  In the event
of termination of employment or other business relationships by reason of
Retirement, then in such event any Deferred Stock Awards held by the terminated
Award holder on the date of termination shall be automatically vested as of the
date of termination notwithstanding that the provisions of the related Deferred
Stock Award agreement may not provide for such automatic vesting.


(b)           Election
to Receive Deferred Stock Awards in Lieu of Compensation.  The Committee may, in its sole discretion,
permit a participant, including a Non-Employee Director, to elect to receive a
portion of the cash compensation or Restricted Stock Award otherwise due to
such participant in the form of a Deferred Stock Award.  Any such election shall be made in writing
and shall be delivered to the Company no later than the date specified by the
Committee and in accordance with rules and procedures established by the
Committee.  The Committee shall have the
sole right to determine whether and under what circumstances to permit such elections
and to impose such limitations and other terms and conditions thereon as the
Committee deems appropriate.


(c)           Rights
as a Stockholder.  During the
deferral period, a participant shall have no rights as a stockholder; provided,
however, that the participant may be credited with Dividend Equivalent Rights
with respect to the phantom stock units underlying his Deferred Stock Award,
subject to such terms and conditions as the Committee may determine.


(d)           Restrictions.  A Deferred Stock Award may not be sold,
assigned, transferred, pledged or otherwise encumbered or disposed of during
the deferral period.


(e)           Termination.  Except as may otherwise be provided by the
Committee either in the Award, employment or other agreement or, subject to
Section 14 below, in writing after the Award agreement is issued, a participant’s
right in all Deferred Stock Awards that have not vested shall automatically
terminate upon the participant’s termination of employment (or cessation of
business relationship) with the Company and its Subsidiaries for any reason.


 


SECTION 8.           UNRESTRICTED
STOCK AWARDS


 


The Committee may, in its sole discretion, grant (or
sell at a purchase price determined by the Committee) an Unrestricted Stock
Award to any participant which will entitle such participant to receive shares
of Stock free of any restrictions under the Plan (“Unrestricted Stock”).  Unrestricted Stock Awards may be granted or
sold as described in the preceding 


14








 








 


sentence in respect of
past services or other valid consideration, or in lieu of any cash compensation
due to such participant.


 


SECTION 9.           PERFORMANCE
SHARE AWARDS


 


(a)           Nature
of Performance Shares.  A Performance
Share Award is an award entitling the recipient to acquire shares of Stock upon
the attainment of specified performance goals. 
The Committee may make Performance Share Awards independent of or in
connection with the granting of any other Award under the Plan.  Performance Share Awards may be granted under
the Plan to any participants, including those who qualify for awards under
other performance plans of the Company. 
The Committee in its sole discretion shall determine whether and to whom
Performance Share Awards shall be made, the performance goals applicable under
each such Award, the periods during which performance is to be measured, and
all other limitations and conditions applicable to the awarded Performance
Shares; provided, however, that the Committee may rely on the performance goals
and other standards applicable to other performance unit plans of the Company
in setting the standards for Performance Share Awards under the Plan.


(b)           Restrictions
on Transfer.  Performance Share
Awards and all rights with respect to such Awards may not be sold, assigned, transferred,
pledged or otherwise encumbered.


(c)           Rights
as a Shareholder.  A participant
receiving a Performance Share Award shall have the rights of a shareholder only
as to shares actually received by the participant under the Plan and not with
respect to shares subject to the Award but not actually received by the
participant.  A participant shall be
entitled to receive a stock certificate evidencing the acquisition of shares of
Stock under a Performance Share Award only upon satisfaction of all conditions
specified in the written instrument evidencing the Performance Share Award (or
in a performance plan adopted by the Committee).


(d)           Termination.  Except as may otherwise be provided by the
Committee in the Award, employment or other agreement, a participant’s rights
in all Performance Share Awards shall automatically terminate upon the
participant’s termination of employment (or other business relationship) by the
Company and its Subsidiaries for any reason (including death, Disability and
for Cause).


(e)           Acceleration,
Waiver, Etc.  At any time prior to or
upon the participant’s termination of employment (or other business
relationship) by the Company and its Subsidiaries, the Committee may in its
sole discretion accelerate, waive or, subject to Section 14, amend any or
all of the goals, restrictions or conditions imposed under any Performance
Share Award.


 


SECTION 10.         QUALIFIED
PERFORMANCE-BASED AWARDS TO COVERED EMPLOYEES


 


Notwithstanding anything to the contrary contained
herein, if any Restricted Stock Award, Deferred Stock Award or Performance
Share Award granted to a Covered Employee is intended to qualify as “performance-based
compensation” under Section 162(m) of the Code and 


15








 








 


the regulations promulgated
thereunder (a “Performance-based Award”), such Award shall comply with the
provisions set forth below:


(a)           Performance
Criteria.  The performance criteria
used in performance goals governing Performance-based Awards granted to Covered
Employees may include any or all of the following:  (i) the Company’s return on equity, assets,
capital or investment, (ii) pre-tax or after-tax profit levels of the Company
or any Subsidiary, a division, an operating unit or a business segment of the
Company, or any combination of the foregoing; (iii) cash flow, funds from
operations or similar measure; (iv) total shareholder return; (v) changes in
the market price of the Stock; (vi) market share; or (vii) earnings per share.


(b)           Grant
of Qualified Performance-based Awards. 
With respect to each Performance-based Award granted to a Covered
Employee, the Committee shall select, within the first 90 days of a Performance
Cycle (or, if shorter, within the maximum period allowed under Section 162(m)
of the Code) the performance criteria for such grant, and the achievement
targets with respect to each performance criterion (including a threshold level
of performance below which no amount will become payable with respect to such
Award).  Each Performance-based Award
will specify the amount payable, or the formula for determining the amount
payable, upon achievement of the various applicable performance targets.  The performance criteria established by the
Committee may be (but need not be) different for each Performance Cycle and
different goals may be applicable to Performance-based Awards to different
Covered Employees.


(c)           Payment
of Qualified Performance-based Awards. 
Following the completion of a Performance Cycle, the Committee shall
meet to review and certify in writing whether, and to what extent, the
performance criteria for the Performance Cycle have been achieved and, if so,
to also calculate and certify in writing the amount of the Qualified
Performance-based Awards earned for the Performance Cycle.  The Committee shall then determine the actual
size of each Covered Employee’s Qualified Performance-based Award, and, in
doing so, may reduce or eliminate the amount of the Qualified Performance-based
Award for a Covered Employee if, in its sole judgment, such reduction or
elimination is appropriate.


(d)           Maximum
Award Payable.  The maximum Qualified
Performance-based Award payable to any one Covered Employee under the Plan for
a Performance Cycle is 200,000 shares of Stock (subject to adjustment as
provided in Section 3(b) hereof).


 


SECTION 11.         DIVIDEND
EQUIVALENT RIGHTS


 


(a)           Dividend
Equivalent Rights.  A Dividend
Equivalent Right is an Award entitling the recipient to receive credits based
on cash dividends that would have been paid on the shares of Stock specified in
the Dividend Equivalent Right (or other award to which it relates) if such
shares had been issued to and held by the recipient.  A Dividend Equivalent Right may be granted
hereunder to any participant as a component of another Award or as a
freestanding award.  The terms and
conditions of Dividend Equivalent Rights shall be specified in the grant.  Dividend equivalents credited to the holder
of a Dividend Equivalent Right may be paid currently or may be deemed to be
reinvested in additional shares of Stock, which may thereafter accrue
additional equivalents.  Any such
reinvestment shall be at Fair Market Value on the date 


16








 








 


of
reinvestment or such other price as may then apply under a dividend
reinvestment plan sponsored by the Company, if any.  Dividend Equivalent Rights may be settled in
cash or shares of Stock or a combination thereof, in a single installment or
installments.  A Dividend Equivalent
Right granted as a component of another Award may provide that such Dividend
Equivalent Right shall be settled upon exercise, settlement, or payment of, or
lapse of restrictions on, such other award, and that such Dividend Equivalent
Right shall expire or be forfeited or annulled under the same conditions as
such other award.  A Dividend Equivalent
Right granted as a component of another Award may also contain terms and
conditions different from such other award.


(b)           Interest
Equivalents.  Any Award under this
Plan that is settled in whole or in part in cash on a deferred basis may
provide in the grant for interest equivalents to be credited with respect to
such cash payment.  Interest equivalents
may be compounded and shall be paid upon such terms and conditions as may be
specified by the grant.


(c)           Termination.  Except as may otherwise be provided by the
Committee in the Award, employment or other agreement, a participant’s rights
in all Dividend Equivalent Rights or interest equivalents shall automatically
terminate upon the participant’s termination of employment (or cessation of
business relationship) with the Company and its Subsidiaries for any reason.


 


SECTION 12.         TAX
WITHHOLDING


 


(a)           Payment
by Participant.  Each participant
shall, no later than the date as of which the value of an Award or of any Stock
or other amounts received thereunder first becomes includable in the gross
income of the participant for Federal income tax purposes, pay to the Company,
or make arrangements satisfactory to the Committee regarding payment of, any
Federal, state, or local taxes of any kind required by law to be withheld with
respect to such income.  The Company and
its Subsidiaries shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment of any kind otherwise due to the
participant.  The Company’s obligation to
deliver stock certificates to any participant (or his agent or broker) is
subject to and conditioned on tax obligations being satisfied by the
participant.  To the extent a participant
(or his agent or broker) accepts delivery of stock certificates, the
participant shall be deemed to agree to indemnify the Company for any damages
resulting from the participant’s failure to satisfy any tax obligations.


(b)           Payment
in Shares.  Subject to approval by
the Committee, a participant may elect to have such minimum tax withholding
obligation satisfied, in whole or in part, by (i) authorizing the Company to
withhold from shares of Stock to be issued pursuant to any Award a number of
shares with an aggregate Fair Market Value (as of the date the withholding is
effected) that would satisfy the minimum withholding amount due, (ii)
transferring to the Company shares of Stock owned by the participant with an
aggregate Fair Market Value (as of the date the withholding is effected) that
would satisfy the minimum withholding amount due, or (iii) in a combination of
(i) and (ii).


17








 








SECTION 13.         TRANSFER,
LEAVE OF ABSENCE, ETC.


 


For purposes of the Plan, the following events shall
not be deemed a termination of employment (or other business relationship):


(a)           a
transfer to the employment (or other business relationship) of the Company from
a Subsidiary or from the Company to a Subsidiary, or from one Subsidiary to
another Subsidiary; or


(b)           an
approved leave of absence for military service or sickness, or for any other
purpose approved by the Company, if the employee’s right to re-employment (or
other business relationship) is guaranteed either by a statute or by contract
or under the policy pursuant to which the leave of absence was granted or if
the Committee otherwise so provides in writing.


 


SECTION 14.         AMENDMENTS
AND TERMINATION


 


The Board may at any time amend or discontinue the
Plan and the Committee may at any time amend or cancel any outstanding Award
for the purpose of satisfying changes in law or for any other lawful purpose,
but no such action shall (a) adversely affect rights under any outstanding
Award without the holder’s written consent or (b) without the prior approval of
the Company’s stockholders, reduce the exercise price of or otherwise reprice,
including through replacement grants, any outstanding Stock Option.  To the extent required by the Code to ensure
that Options that have been granted hereunder as Incentive Stock Options
continue to qualify as Incentive Stock Options, Plan amendments shall be
subject to approval by the Company’s stockholders.


 


SECTION 15.         STATUS OF
PLAN


 


With respect to the portion of any Award which has not
been exercised and any payments in cash, Stock or other consideration not
received by a participant, a participant shall have no rights greater than
those of a general creditor of the Company unless the Committee shall otherwise
expressly determine in connection with any Award or Awards.  In its sole discretion, the Committee may
authorize the creation of trusts or other arrangements to meet the Company’s
obligations to deliver Stock or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the provision of the foregoing sentence.


 


SECTION 16.         CHANGE OF
CONTROL PROVISIONS


 


Notwithstanding anything in this Plan to the contrary,
upon the occurrence of a Change of Control as defined in this Section 16:


(a)           Each
Stock Option shall automatically become fully exercisable.


(b)           Restrictions
and conditions on Restricted Stock Award, Deferred Stock Awards and Performance
Share Awards shall automatically be deemed waived, and the recipients of such
Awards shall become entitled to receipt of the Stock subject to such Awards
unless the Committee shall otherwise expressly provide at the time of grant.


18








 








 


(c)            “Change of Control” shall mean the
occurrence of any one or more of the following events:


(i)            Any
individual, entity or group (a “Person”) within the meaning of Sections 13(d)
and 14(d) of the Act (other than the Company, any corporation, partnership,
trust or other entity controlled by the Company (a “Subsidiary”), or any
trustee, fiduciary or other person or entity holding securities under any
employee benefit plan or trust of the Company or any of its Subsidiaries),
together with all “affiliates” and “associates” (as such terms are defined in
Rule 12b-2 under the Act) of such Person, becomes the “beneficial owner” (as
such term is defined in Rule 13d-3 under the Act) of securities of the
Company representing 30% or more of the combined voting power of the Company’s
then outstanding securities having the right to vote generally in an election
of the Company’s Board (“Voting Securities”), other than as a result of (A) an
acquisition of securities directly from the Company or any Subsidiary or (B) an
acquisition by any corporation pursuant to a reorganization, consolidation or
merger if, following such reorganization, consolidation or merger the
conditions described in clauses (A), (B) and (C) of subparagraph (iii) of this
Section 16(c) are satisfied; or


(ii)           Individuals
who, as of the Effective Date, constitute the Company’s Board (the “Incumbent
Directors”) cease for any reason to constitute at least a majority of the
Board, provided, however, that any individual becoming a director of the
Company subsequent to the Effective Date (excluding, for this purpose, (A) any
such individual whose initial assumption of office is in connection with an
actual or threatened election contest relating to the election of members of
the Board of Directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board, including by reason
of agreement intended to avoid or settle any such actual or threatened contest
or solicitation, and (B) any individual whose initial assumption of office is
in connection with a reorganization, merger or consolidation, involving an
unrelated entity), whose election or nomination for election by the Company’s
stockholders was approved by a vote of at least a majority of the persons then
comprising Incumbent Directors shall for purposes of this Plan be considered an
Incumbent Director;


(iii)          The
approval by the shareholders of a reorganization, merger or consolidation of
the Company, or, if consummation of such reorganization, merger or
consolidation is subject, at the time of such approval by shareholders, to the
consent of any government or governmental agency, obtaining such consent
(either explicitly or implicitly by consummation), unless, following such
reorganization, merger or consolidation, (A) more than 50% of, respectively,
the then outstanding shares of common stock of the corporation resulting from
such reorganization, merger or consolidation and the combined voting power of
the then outstanding voting securities of such corporation entitled to vote
generally in the election of directors will beneficially own, directly or
indirectly, by all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the outstanding Voting Securities
immediately prior to such reorganization, merger or consolidation, (B) no
Person (excluding the Company, any employee benefit plan (or related trust) of
the Company, a Subsidiary or the corporation resulting from such
reorganization, merger or consolidation or any subsidiary thereof, and any
Person beneficially owning, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 30% or more of the outstanding Voting
Securities), will beneficially own, directly or indirectly, 30% or more of,
respectively, the then outstanding shares 


19








 








 


of
common stock of the corporation resulting from such reorganization, merger or
consolidation or the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors, and (C) at least a majority of the members of the board of directors
of the corporation resulting from such reorganization, merger or consolidation
will have been members of the Incumbent Board at the time of the execution of
the initial agreement providing for such reorganization, merger or
consolidation;


(iv)          Approval
by the shareholders of the Company of a complete liquidation or dissolution of
the Company; or


(v)           The
approval by the shareholders of the sale, lease, exchange or other disposition
of all or substantially all of the assets of the Company, or, if consummation
of such sale, lease, exchange or other disposition is subject, at the time of
such approval by shareholders, to the consent of any government or governmental
agency, obtaining such consent (either explicitly or implicitly by
consummation), other than to a corporation, with respect to which following
such sale, lease, exchange or other disposition (A) more than 50% of,
respectively, the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors will
beneficially own, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners of the outstanding
Voting Securities immediately prior to such sale, lease, exchange or other
disposition, (B) no Person (excluding the Company and any employee benefit plan
(or related trust) of the Company or a Subsidiary or such corporation or a
subsidiary thereof and any Person beneficially owning, immediately prior to
such sale, lease, exchange or other disposition, directly or indirectly, 30% or
more of the outstanding Voting Securities), will beneficially own, directly or
indirectly, 30% or more of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the
election of directors and (C) at least a majority of the members of the board
of directors of such corporation will have been members of the Incumbent Board
at the time of the execution of the initial agreement or action of the Board
providing for such sale, lease, exchange or other disposition of assets of the
Company.


Notwithstanding the foregoing, a “Change of Control”
shall not be deemed to have occurred for purposes of this Agreement solely as
the result of an acquisition of securities by the Company which, by reducing
the number of shares of Voting Securities outstanding, increases the
proportionate voting power represented by the Voting Securities beneficially
owned by any Person to 30% or more of the combined voting power of all then
outstanding Voting Securities; provided, however, that if any Person referred
to in this sentence shall thereafter become the beneficial owner of any
additional shares of Stock or other Voting Securities (other than pursuant to a
stock split, stock dividend or similar transaction), then a “Change of Control”
shall be deemed to have occurred for purposes of this Agreement.


 


SECTION 17.         GENERAL
PROVISIONS


 


(a)           No
Distribution; Compliance with Legal Requirements.  The Committee may require each person
acquiring shares pursuant to an Award to represent to and agree with the 


20








 








 


Company
in writing that such person is acquiring the shares without a view to
distribution thereof.


No shares of Stock shall be issued pursuant to an
Award until all applicable securities law and other legal and stock exchange
requirements have been satisfied.  The
Committee may require the placing of such stop-orders and restrictive legends
on certificates for Stock and Awards as it deems appropriate.


(b)           Delivery
of Stock Certificates.  Delivery of
stock certificates to participants under this Plan shall be deemed effected for
all purposes when the Company or a stock transfer agent of the Company shall
have delivered such certificates in the United States mail, addressed to the
participant, at the participant’s last known address on file with the Company.


(c)           Other
Compensation Arrangements; No Employment Rights.  Nothing contained in this Plan shall prevent
the Board from adopting other or additional compensation arrangements,
including trusts, subject to stockholder approval if such approval is required;
and such arrangements may be either generally applicable or applicable only in
specific cases.  The adoption of the Plan
and the grant of Awards do not confer upon any employee any right to continued
employment with the Company or any Subsidiary.


(d)           Trading
Policy Restrictions.  Option
exercises and other Awards under the Plan shall be subject to such Company’s
insider trading policy, as in effect from time to time.


(e)           Designation
of Beneficiary.  Each participant to
whom an Award has been made under the Plan may designate a beneficiary or
beneficiaries to exercise any Award or receive any payment under any Award
payable on or after the participant’s death. 
Any such designation shall be on a form provided for that purpose by the
Committee and shall not be effective until received by the Committee.  If no beneficiary has been designated by a
deceased participant, or if the designated beneficiaries have predeceased the
participant, the beneficiary shall be the participant’s estate.


 


SECTION 18.         EFFECTIVE
DATE OF PLAN


 


This Plan was amended and restated as of March 21,
2001.


 


SECTION 19.         GOVERNING
LAW


 


This Plan shall be governed by Maryland law except to
the extent such law is preempted by federal law.


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  DATE OF APPROVAL
  OF INITIAL PLAN BY SHAREHOLDERS:

  	
   

  	
  February 15,
  1994

  
	
  DATE OF APPROVAL
  OF FIRST AMENDED AND RESTATED PLAN BY BOARD OF DIRECTORS:

  	
   

  	
  August 28, 1996

  
	
  DATE OF APPROVAL
  OF FIRST AMENDED AND RESTATED PLAN BY SHAREHOLDERS:

  	
   

  	
  April 25, 1997

  
	
  DATE OF APPROVAL
  OF SECOND AMENDED AND RESTATED PLAN BY BOARD OF DIRECTORS:

  	
   

  	
  February 26,
  1998

  
	
  DATE OF APPROVAL
  OF THIRD AMENDED AND RESTATED PLAN BY BOARD OF DIRECTORS:

  	
   

  	
  April 13,
  1998

  
	
  DATE OF APPROVAL
  OF THIRD AMENDED AND RESTATED PLAN BY SHAREHOLDERS:

  	
   

  	
  June 4, 1998

  
	
  DATE OF APPROVAL
  OF AMENDMENTS TO THIRD AMENDED AND RESTATED PLAN BY BOARD OF DIRECTORS:

  	
   

  	
  July 24, 1998

  
	
  DATE OF APPROVAL
  OF FOURTH AMENDED AND RESTATED PLAN BY SHAREHOLDERS:

  	
   

  	
  May 8, 2001

  
	
  DATE OF APPROVAL
  OF AMENDMENTS TO FOURTH AMENDED AND RESTATED PLAN BY BOARD OF DIRECTORS:

  	
   

  	
  May 14, 2003

  
	
  DATE OF APPROVAL
  OF FIFTH AMENDED AND RESTATED PLAN BY BOARD OF DIRECTORS

  	
   

  	
  December 8, 2004

  



 


 


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