Exhibit
10.14


 


 


 


 


 


 


 


 


 


 


 


 












FALCON
FINANCIAL INVESTMENT TRUST


 


EQUITY INCENTIVE PLAN


 












 








 


 


TABLE OF CONTENTS


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  PURPOSE

  	
  1

  
	
  2.

  	
  DEFINITIONS

  	
  1

  
	
  3.

  	
  ADMINISTRATION OF THE PLAN

  	
  5

  
	
   

  	
  3.1.

  	
  Board

  	
  5

  
	
   

  	
  3.2.

  	
  Committee.

  	
  5

  
	
   

  	
  3.3.

  	
  Terms of Awards.

  	
  6

  
	
   

  	
  3.4.

  	
  Deferral Arrangement.

  	
  7

  
	
   

  	
  3.5.

  	
  No Liability.

  	
  7

  
	
  4.

  	
  SHARES SUBJECT TO THE PLAN

  	
  7

  
	
  5.

  	
  EFFECTIVE DATE, DURATION AND AMENDMENTS

  	
  8

  
	
   

  	
  5.1.

  	
  Effective Date.

  	
  8

  
	
   

  	
  5.2.

  	
  Term.

  	
  8

  
	
   

  	
  5.3.

  	
  Amendment and Termination of the Plan

  	
  8

  
	
  6.

  	
  AWARD ELIGIBILITY AND LIMITATIONS

  	
  8

  
	
   

  	
  6.1.

  	
  Service Providers; Outside Trustees; Other Persons

  	
  8

  
	
   

  	
  6.2.

  	
  Successive Awards.

  	
  8

  
	
   

  	
  6.3.

  	
  Limitation on Shares Subject to Awards and Cash Awards.

  	
  9

  
	
   

  	
  6.4.

  	
  Limitations on Incentive Stock Options.

  	
  9

  
	
   

  	
  6.5.

  	
  Stand-Alone, Additional, Tandem, and Substitute Awards

  	
  9

  
	
  7.

  	
  AWARD AGREEMENT

  	
  9

  
	
  8.

  	
  TERMS AND CONDITIONS OF OPTIONS

  	
  10

  
	
   

  	
  8.1.

  	
  Option Price

  	
  10

  
	
   

  	
  8.2.

  	
  Vesting.

  	
  10

  
	
   

  	
  8.3.

  	
  Term.

  	
  10

  
	
   

  	
  8.4.

  	
  Termination of Service.

  	
  10

  
	
   

  	
  8.5.

  	
  Limitations on Exercise of Option.

  	
  11

  
	
   

  	
  8.6.

  	
  Method of Exercise.

  	
  11

  
	
   

  	
  8.7.

  	
  Rights of Holders of Options

  	
  11

  
	
   

  	
  8.8.

  	
  Delivery of Share Certificates or Book Entry.

  	
  11

  
	
   

  	
  8.9.

  	
  No Option Repricing.

  	
  11

  
	
  9.

  	
  TRANSFERABILITY OF OPTIONS

  	
  12

  
	
   

  	
  9.1.

  	
  Transferability of Options

  	
  12

  
	
   

  	
  9.2.

  	
  Family Transfers.

  	
  12

  
	
  10.

  	
  SHARE APPRECIATION RIGHTS

  	
  12

  
	
   

  	
  10.1.

  	
  Right to Payment.

  	
  12

  
	
   

  	
  10.2.

  	
  Other Terms.

  	
  12

  
	
  11.

  	
  RESTRICTED SHARES AND SHARE UNITS

  	
  13

  
	
   

  	
  11.1.

  	
  Grant of Restricted Shares or Share Units.

  	
  13

  
	
   

  	
  11.2.

  	
  Restrictions.

  	
  13

  
	
   

  	
  11.3.

  	
  Restricted Share Certificates.

  	
  13

  
	
   

  	
  11.4.

  	
  Rights of Holders of Restricted Shares.

  	
  13

  



 


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  11.5.

  	
  Rights of Holders of Share Units.

  	
  14

  
	
   

  	
   

  	
  11.5.1.

  	
  Voting and Dividend Rights.

  	
  14

  
	
   

  	
   

  	
  11.5.2.

  	
  Creditor’s Rights.

  	
  14

  
	
   

  	
  11.6.

  	
  Termination of Service.

  	
  14

  
	
   

  	
  11.7.

  	
  Purchase of Restricted Shares.

  	
  14

  
	
   

  	
  11.8.

  	
  Delivery of Shares.

  	
  14

  
	
  12.

  	
  UNRESTRICTED SHARE AWARDS

  	
  15

  
	
  13.

  	
  FORM OF PAYMENT FOR OPTIONS AND RESTRICTED SHARES

  	
  15

  
	
   

  	
  13.1.

  	
  General Rule.

  	
  15

  
	
   

  	
  13.2.

  	
  Surrender of Shares.

  	
  15

  
	
   

  	
  13.3.

  	
  Cashless Exercise.

  	
  15

  
	
   

  	
  13.4.

  	
  Other Forms of Payment.

  	
  15

  
	
  14.

  	
  DIVIDEND EQUIVALENT RIGHTS

  	
  16

  
	
   

  	
  14.1.

  	
  Dividend Equivalent Rights.

  	
  16

  
	
   

  	
  14.2.

  	
  Termination of Service.

  	
  16

  
	
  15.

  	
  PERFORMANCE AND ANNUAL INCENTIVE AWARDS

  	
  16

  
	
   

  	
  15.1.

  	
  Performance Conditions

  	
  16

  
	
   

  	
  15.2.

  	
  Performance or Annual Incentive Awards Granted to Designated Covered
  Employees

  	
  17

  
	
   

  	
   

  	
  15.2.1.

  	
  Performance Goals Generally.

  	
  17

  
	
   

  	
   

  	
  15.2.2.

  	
  Business Criteria.

  	
  17

  
	
   

  	
   

  	
  15.2.3.

  	
  Timing For Establishing Performance Goals.

  	
  17

  
	
   

  	
   

  	
  15.2.4.

  	
  Performance or Annual Incentive Award Pool.

  	
  18

  
	
   

  	
   

  	
  15.2.5.

  	
  Settlement of Performance or Annual Incentive Awards; Other Terms.

  	
  18

  
	
   

  	
  15.3.

  	
  Written Determinations.

  	
  18

  
	
   

  	
  15.4.

  	
  Status of Section 15.2 Awards Under Code Section 162(m)

  	
  18

  
	
  16.

  	
  PARACHUTE LIMITATIONS

  	
  19

  
	
  17.

  	
  REQUIREMENTS OF LAW

  	
  19

  
	
   

  	
  17.1.

  	
  General.

  	
  19

  
	
   

  	
  17.2.

  	
  Rule 16b-3.

  	
  20

  
	
  18.

  	
  EFFECT OF CHANGES IN CAPITALIZATION

  	
  20

  
	
   

  	
  18.1.

  	
  Changes in Shares.

  	
  20

  
	
   

  	
  18.2.

  	
  Reorganization in Which the Company Is the Surviving Entity Which
  does not Constitute a Corporate Transaction.

  	
  21

  
	
   

  	
  18.3.

  	
  Corporate Transaction.

  	
  21

  
	
   

  	
  18.4.

  	
  Adjustments.

  	
  22

  
	
   

  	
  18.5.

  	
  No Limitations on Company.

  	
  22

  
	
  19.

  	
  GENERAL PROVISIONS

  	
  23

  
	
   

  	
  19.1.

  	
  Disclaimer of Rights

  	
  23

  
	
   

  	
  19.2.

  	
  Nonexclusivity of the Plan

  	
  23

  
	
   

  	
  19.3.

  	
  Withholding Taxes

  	
  23

  
	
   

  	
  19.4.

  	
  Captions

  	
  24

  
	
   

  	
  19.5.

  	
  Other Provisions

  	
  24

  



 


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  19.6.

  	
  Number And Gender

  	
  24

  
	
   

  	
  19.7.

  	
  Severability

  	
  24

  
	
   

  	
  19.8.

  	
  Governing Law

  	
  24

  



 


-iii-

















 


 


 


FALCON FINANCIAL INVESTMENT TRUST


 


EQUITY INCENTIVE PLAN


 


 


                Falcon Financial
Investment Trust, a Maryland real estate investment trust (the “Company”), sets
forth herein the terms of its Equity Incentive Plan (the “Plan”), as follows:


1.                                      PURPOSE


               This Plan is intended to (a) provide
incentive to eligible persons to stimulate their efforts toward the continued
success of the Company and to operate and manage their businesses in a manner
that will provide for the long-term growth and profitability of the Company;
and (b) provide a means of obtaining, rewarding and retaining key
personnel.  To this end, the Plan provides for the grant of share options, share
appreciation rights, restricted shares, shares units, unrestricted shares,
dividend equivalent rights and cash awards. 
Any of these awards may, but need not, be made as performance incentives
to reward attainment of annual or long-term performance goals in accordance
with the terms hereof.  Options granted
under the Plan may be non-qualified stock options or incentive stock options,
as provided herein.


2.                                      DEFINITIONS


               For purposes of
interpreting the Plan and related documents (including Award Agreements), the
following definitions shall apply:


 


2.1           “Affiliate” means, with respect to the Company, any company or
other trade or business that controls, is controlled by or is under common
control with the Company within the meaning of Rule 405 of Regulation C under
the Securities Act, including, without limitation, any Subsidiary.


 


2.2           “Annual Incentive Award” means an Award
made subject to attainment of performance goals (as described in Section 15)
over a performance period of up to and including one year (the fiscal year,
unless otherwise specified by the Committee).


 


2.3           “Award” means a grant of an
Option, Share Appreciation Right, Restricted Shares, Unrestricted Shares, Share
Unit, Dividend Equivalent Rights, or cash award  under the Plan.


 


2.4           “Award Agreement” means the
written agreement between the Company and a Grantee that evidences and sets out
the terms and conditions of an Award.


 


2.5           “Benefit Arrangement” shall
have the meaning set forth in Section 16 hereof.


 


2.6           “Board” means the Board of
Trustees of the Company.


 

















 


 


2.7           “Cause”  means, as determined by the Board and
unless otherwise provided in an applicable agreement with the Company or an
Affiliate, (i) gross negligence or willful misconduct in connection with the
performance of duties; (ii) conviction of a criminal offense (other than
minor traffic offenses); or (iii) material breach of any term of any
employment, consulting or other services, confidentiality, intellectual
property or non-competition agreements, if any, between the Service Provider
and the Company or an Affiliate.


 


2.8           “Code” means the Internal
Revenue Code of 1986, as now in effect or as hereafter amended.


 


2.9           “Committee” means the
Compensation Committee of the Board.


 


2.10         “Company” means Falcon
Financial Investment Trust.


 


2.11         “Corporate Transaction” means (i) the dissolution or liquidation of the
Company or a merger, consolidation, or reorganization of the Company with one
or more other entities in which the Company is not the surviving entity, (ii) a
sale of substantially all of the assets of the Company to another person or
entity, or (iii) any transaction (including without limitation a merger or
reorganization in which the Company is the surviving entity) which results in
any person or entity (other than persons who are shareholders or Affiliates
immediately prior to the transaction) owning 50% or more of the combined voting
power of all classes of shares of the Company.


2.12         “Covered Employee” means a Grantee who is a
Covered Employee within the meaning of Section 162(m)(3) of the Code.


2.13         “Disability” means the Grantee is unable to
perform each of the essential duties of such Grantee’s position by reason of a
medically determinable physical or mental impairment which is potentially
permanent in character or which can be expected to last for a continuous period
of not less than 12 months; provided, however, that, with respect to rules
regarding expiration of an Incentive Stock Option following termination of the
Grantee’s Service, Disability shall mean the Grantee is unable to engage in any
substantial gainful activity by reason of a medically determinable physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than 12 months.


2.14         “Dividend Equivalent” means a right,
granted to a Grantee under Section 14 hereof, to receive cash, Shares,
other Awards or other property equal in value to dividends paid with respect to
a specified number of Shares, or other periodic payments.


 


2

















 


2.15         “Effective Date” means  November __, 2003.


 


2.16         “Exchange Act” means the Securities
Exchange Act of 1934, as now in effect or as hereafter amended.


 


2.17         “Fair Market Value”  means the value of a Share, determined as
follows:  if on the Grant Date or other
determination date the Shares is listed on an established national or regional
stock exchange, is admitted to quotation on The Nasdaq Stock Market, Inc. or is
publicly traded on an established securities market, the Fair Market Value of a
Share shall be the closing price of the Shares on such exchange or in such
market (if there is more than one such exchange or market the Board shall
determine the appropriate exchange or market) on the Grant Date or such other
determination date (or if there is no such reported closing price, the Fair
Market Value shall be the mean between the highest bid and lowest asked prices
or between the high and low sale prices on such trading day) or, if no sale of
Shares is reported for such trading day, on the next preceding day on which any
sale shall have been reported.  If the
Shares is not listed on such an exchange, quoted on such system or traded on
such a market, Fair Market Value shall be the value of the Shares as determined
by the Board in good faith.


2.18          “Family Member” means a
person who is a spouse, former spouse, child, stepchild, grandchild, parent,
stepparent, grandparent, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother, sister, brother-in-law, or sister-in-law,
including adoptive relationships, of the Grantee, any person sharing the
Grantee’s household (other than a tenant or employee), a trust in which any one or more of these
persons have more than fifty percent of the beneficial interest, a foundation
in which any one or more of these persons (or the Grantee) control the
management of assets, and any other entity in which one or more of these
persons (or the Grantee) own more than fifty
percent of the voting interests.


 


2.19         “Grant Date” means, as
determined by the Board or the Committee, the latest to occur of  (i) the date as of which the
Board or such Committee approves an Award, (ii) the date on which the recipient
of an Award first becomes eligible to receive an Award under Section 6 hereof, or (iii) such other
date as may be specified by the Board or such Committee.


 


2.20         “Grantee” means a person who
receives or holds an Award under the Plan.


 


2.21         “Incentive Stock Option”
means an “incentive stock option” within the meaning of Section 422 of the
Code, or the corresponding provision of any subsequently enacted tax statute,
as amended from time to time.


 


2.22         “Non-qualified Stock Option”
means an Option that is not an Incentive Stock Option.


 


2.23         “Option” means an option to
purchase one or more shares of Shares pursuant to the Plan.


 


 


3

















 


2.24         “Option Price” means the
purchase price for each Share subject to an Option.


 


2.25         “Other Agreement” shall have
the meaning set forth in Section 16 hereof.


 


2.26         “Outside Trustee” means a
member of the Board who is not an officer or employee of the Company.


 


2.27         “Performance Award” means an Award made
subject to the attainment of performance goals (as described in Section 15)
over a performance period of more than one year.


2.28         “Plan” means this Falcon
Financial Investment Trust Equity Incentive Plan.


 


2.29         “Purchase Price”  means the purchase price for each Share
pursuant to a grant of Restricted Shares or Unrestricted Shares.


 


2.30         “Reporting Person” means a
person who is required to file reports under Section 16(a) of the Exchange
Act.


 


2.31         “Restricted Shares” means
shares of Shares, awarded to a Grantee pursuant to Section 11 hereof.


 


2.32         “SAR
Exercise Price”
means the per share exercise price of an SAR granted to a Grantee under Section 10
hereof.


 


2.33         “Securities Act” means the
Securities Act of 1933, as now in effect or as hereafter amended.


 


2.34         “Service” means service as an employee, officer, Outside
Trustee or other Service Provider of the Company or an Affiliate.  Unless otherwise stated in the applicable
Award Agreement, a Grantee’s change in position or duties shall not result in
interrupted or terminated Service, so long as such Grantee continues to be an
employee, officer, Outside Trustee or other Service Provider of the Company or
an Affiliate.  Subject to the preceding
sentence, whether a termination of Service shall have occurred for purposes of
the Plan shall be determined by the Board, which determination shall be final,
binding and conclusive.


 


2.35         “Service Provider” means an
employee, officer or Outside Trustee of the Company or an Affiliate, or a
consultant or adviser currently providing services to the Company or an
Affiliate.


 


2.36         “Shares” means the common Shares,
par value $.01 per share, of the Company.


 


 


4

















 


2.37         “Share
Appreciation Right”
or “SAR”
means a right granted to a Grantee under Section 10 hereof.


 


2.38         “Share Unit” means a bookkeeping entry
representing the equivalent of a Share, awarded to a Grantee pursuant to Section 11
hereof.


 


2.39         “Subsidiary” means any
“subsidiary corporation” of the Company within the meaning of Section 424(f) of
the Code.


 


2.40         “Termination Date” means the
date upon which an Option shall terminate or expire, as set forth in Section 8.3
hereof.


 


2.41         “Ten Percent Shareholder” means an employee
who owns more than ten percent (10%) of the total combined voting power of all
classes of outstanding shares of the Company, its parent or any of its
Subsidiaries.  In determining share
ownership, the attribution rules of Section 424(d) of the Code shall be
applied.


2.42         
“Unrestricted Shares” means an Award pursuant to Section 12 hereof.


3.                                      ADMINISTRATION OF THE PLAN


3.1.                            Board


                The Board shall
have such powers and authorities related to the administration of the Plan as
are consistent with the Company’s declaration
of trust and bylaws and applicable law. 
The Board shall have full power and authority to take all actions and to
make all determinations required or provided for under the Plan, any Award or
any Award Agreement, and shall have full power and authority to take all such
other actions and make all such other determinations not inconsistent with the
specific terms and provisions of the Plan that the Board deems to be necessary
or appropriate to the administration of the Plan, any Award or any Award
Agreement.  All such actions and
determinations shall be by the affirmative vote of a majority of the members of
the Board present at a meeting or by unanimous consent of the Board executed in
writing in accordance with the Company’s declaration of trust and bylaws and applicable law.  The interpretation and construction by the
Board of any provision of the Plan, any Award or any Award Agreement shall be
final, binding and conclusive.


3.2.                            Committee.


The Board from
time to time may delegate to the Committee such powers and authorities related
to the administration and implementation of the Plan, as set forth in Section 3.1
above and other applicable provisions, as the Board shall determine, consistent
with the declaration
of trust and bylaws of the Company and applicable law.  The Board may also appoint one or more
separate committees of the Board, each composed of one or more trustees of the
Company who need not be Outside Trustees, who may administer the Plan with
respect to employees or other Service Providers who are not officers or
trustees of the Company, may grant Awards under the Plan to such employees 


 


5

















 


or other Service
Providers, and may determine all terms of such Awards.  In the event that the Plan, any Award or any Award Agreement entered into hereunder
provides for any action to be taken by or determination to be made by the Board,
such action may be taken or such determination may be made by the Committee if
the power and authority to do so has been delegated to the Committee by the
Board as provided for in this Section. 
Unless otherwise expressly determined by the Board, any such action or
determination by the Committee shall be final, binding and conclusive.  To the
extent permitted by law, the Committee may delegate its authority under the
Plan to a member of the Board.


3.3.                            Terms of
Awards.


                Subject to the
other terms and conditions of the Plan, the Board shall have full and final
authority to:


 


(i)            designate Grantees,


(ii)           determine the type
or types of Awards to be made to a Grantee,


(iii)          determine the number
of Shares to be subject to an Award,


(iv)          establish the terms
and conditions of each Award (including, but not limited to, the exercise price
of any Option, the nature and duration of any restriction or condition (or
provision for lapse thereof) relating to the vesting, exercise, transfer, or
forfeiture of an Award or the Shares subject thereto, and any terms or
conditions that may be necessary to qualify Options as Incentive Stock
Options),


(v)           prescribe the form of
each Award Agreement evidencing an Award, and


(vi)          amend, modify, or
supplement the terms of any outstanding Award, subject to Section  8.9.  Such authority specifically includes the
authority, in order to effectuate the purposes of the Plan but without amending
the Plan, to modify Awards to eligible individuals who are foreign nationals or
are individuals who are employed outside the United States to recognize
differences in local law, tax policy, or custom.


The Board
shall have the right, in its discretion, to make Awards in substitution or
exchange for any other award under another plan of the Company, any Affiliate,
or any business entity to be acquired by the Company or an Affiliate.  Shares issued pursuant to Awards granted in
substitution for awards held by employees of a business entity acquired by the
Company or an Affiliate shall not count against the shares available for
issuance under the Plan.  The Company
may retain the right in an Award Agreement to cause a forfeiture of the gain
realized by a Grantee on account of actions taken by the Grantee in violation
or breach of or in conflict with any non-competition agreement, any agreement
prohibiting solicitation of employees or clients of the Company or any
Affiliatethereof or any confidentiality obligation with respect to the
Company or any Affiliate  thereof or otherwise in competition with
the Company or any Affiliate thereof, to the extent specified in such Award
Agreement applicable to the Grantee. 
Furthermore, the Company may annul an Award if the Grantee is an
employee of the Company or an Affiliate thereof and is terminated for Cause as
defined in the applicable Award Agreement or the Plan, as 


 


6

















 


applicable. The
grant of any Award shall be contingent upon the Grantee executing the
appropriate Award Agreement.


3.4.                            Deferral
Arrangement.


The Board may permit or require the deferral of any
award payment into a deferred compensation arrangement, subject to such rules
and procedures as it may establish, which may include provisions for the
payment or crediting of interest or dividend equivalents, including converting
such credits into deferred Share equivalents and restricting deferrals to
comply with hardship distribution rules affecting 401(k) plans.


3.5.                            No
Liability.


               No member of the
Board or of the Committee shall be liable for any action or determination made
in good faith with respect to the Plan or any Award or Award Agreement.


4.                                      SHARES SUBJECT TO THE PLAN


               Subject to
adjustment as provided in Section 18 hereof, the number of
Shares available for issuance under the Plan shall be 616,9710.  Shares issued or
to be issued under the Plan shall be authorized but unissued shares or treasury
shares.  If any shares covered by an
Award are not purchased or are forfeited, if an Award is settled in cash or if
an Award otherwise terminates without delivery of any Shares subject thereto,
then the number of Shares counted against the aggregate number of shares
available under the Plan with respect to such Award shall, to the extent of any
such forfeiture, cash payment or termination, again be available for making
Awards under the Plan.  If the Option
Price of any Option granted under the Plan, the withholding obligation of any
Grantee with respect to an Option pursuant to Section 19.3 or any other
payment under the Plan is satisfied by tendering Shares to the Company (by
either actual delivery or by attestation) or by withholding Shares, the total
number of shares of Stock issued shall be deemed delivered for purposes of
determining the maximum number of shares of Stock available for delivery under
the Plan.


 


7

















 


5.                                      EFFECTIVE DATE, DURATION AND AMENDMENTS


5.1.                            Effective
Date.


               The Plan shall be
effective as of the Effective Date, subject to approval of the Plan by the
Company’s shareholders within one year of the Effective Date.  Upon approval of the Plan by the
shareholders of the Company as set forth above, all Awards made under the Plan
on or after the Effective Date shall be fully effective as if the shareholders
of the Company had approved the Plan on the Effective Date.  If the shareholders fail to approve the Plan
within one year after the Effective Date, any Awards made hereunder shall be
null and void and of no effect.


5.2.                            Term.


               The Plan shall
terminate automatically ten (10) years after the Effective Date and may be
terminated on any earlier date as provided in Section 5.3.


5.3.                            Amendment
and Termination of the Plan


               The Board may, at
any time and from time to time, amend, suspend, or terminate the Plan as to any
Shares as to which Awards have not been made. 
An amendment shall be contingent on approval of the Company’s
shareholders to the extent stated by the Board or required by applicable
law.  In addition, an amendment will be
contingent on approval of the Company’s shareholders if the amendment would (i)
materially increase the benefits accruing to participants under the Plan, (ii)
materially increase the aggregate number of Shares that may be issued under the
Plan, or (iii) materially modify the requirements as to eligibility for
participation in the Plan.  No Awards
shall be made after termination of the Plan. 
No amendment, suspension, or termination of the Plan shall, without the
consent of the Grantee, impair rights or obligations under any Award
theretofore awarded under the Plan.


 


6.                                      AWARD ELIGIBILITY AND LIMITATIONS


6.1.                            Service
Providers; Outside Trustees; Other Persons


               Subject to this Section 6,
Awards may be made under the Plan to: (i) 
any Service Provider to the Company or of any Affiliate, including any
such Service Provider who is an officer or trustee of the Company, or of any
Affiliate, as the Board shall determine and designate from time to time, (ii)
any Outside Trustee, and (iii) any other individual whose participation in the
Plan is determined to be in the best interests of the Company by the Board.


6.2.                            Successive
Awards.


               An eligible person
may receive more than one Award, subject to such restrictions as are provided
herein.


 


8

















 


6.3.                            Limitation
on Shares Subject to Awards and Cash Awards.


               During any time when
the Company has a class of equity security registered under Section 12 of the
Exchange Act, but only after such time as the reliance period described in
Treas. Reg. Section 1.162-27(f)(2) has expired:


 


               (i) the maximum
number of Shares subject to Options or SARs that can be issued under the Plan
to any person eligible for an Award under Section 6 hereof is two hundred thousand
(200,000) in any single calendar year;


 


               (ii) the maximum
number of shares that can be issued under the Plan, other than pursuant to an
Option, SAR or time-vested Restricted Shares grant to any person eligible for
an Award under Section 6 hereof is two hundred thousand (200,000) in any
single calendar year; and


 


               (iii) the maximum amount that may be earned as
an Annual Incentive Award or other cash Award in any fiscal year by any one
Grantee shall be $2,000,000 and the maximum amount that may be earned as a
Performance Award or other cash Award in respect of a performance period by any
one Grantee shall be $5,000,000.


 


               The preceding limitations in this Section 6.3
are subject to adjustment as provided in Section 18
hereof.


6.4.                            Limitations
on Incentive Stock Options.


               An Option shall
constitute an Incentive Stock Option only (i) if the Grantee of such Option is
an employee of the Company or any Subsidiary of the Company; (ii) to the extent
specifically provided in the related Award Agreement; and (iii) to the extent
that the aggregate Fair Market Value (determined at the time the Option is
granted) of the Shares with respect to which all Incentive Stock Options held
by such Grantee become exercisable for the first time during any calendar year
(under the Plan and all other plans of the Grantee’s employer and its
Affiliates) does not exceed $100,000. 
This limitation shall be applied by taking Options into account in the
order in which they were granted.


6.5.                            Stand-Alone,
Additional, Tandem, and Substitute Awards


                Awards granted under the Plan
may, in the discretion of the Board, be granted either alone or in addition to,
in tandem with, or in substitution or exchange for, any other Award or any
award granted under another plan of the Company, any Affiliate, or any business
entity to be acquired by the Company or an Affiliate, or any other right of a
Grantee to receive payment from the Company or any Affiliate.  Such additional, tandem, and substitute or
exchange Awards may be granted at any time. 
If an Award is granted in substitution or exchange for another Award,
the Board shall require the surrender of such other Award in consideration for
the grant of the new Award.  In
addition, Awards may be granted in lieu of cash compensation, including in lieu
of cash amounts payable under other plans of the Company or any Affiliate.


7.                                      AWARD AGREEMENT


 


9

















 


               Each Award granted
pursuant to the Plan shall be evidenced by an Award Agreement, in such form or
forms as the Board shall from time to time determine.  Award Agreements granted from time to time or at the same time
need not contain similar provisions but shall be consistent with the terms of
the Plan.  Each Award Agreement
evidencing an Award of Options shall specify whether such Options are intended
to be Non-qualified Stock Options or Incentive Stock Options, and in the
absence of such specification such options shall be deemed Non-qualified Stock
Options.


8.                                      TERMS AND CONDITIONS OF OPTIONS


8.1.                            Option Price


               The Option Price of
each Option shall be fixed by the Board and stated in the Award Agreement
evidencing such Option.  The Option
Price of each Option shall be  at
least the Fair Market Value on the Grant Date of a Share; provided, however,
that in the event that a Grantee is a Ten Percent Shareholder, the Option Price
of an Option granted to such Grantee that is intended to be an Incentive Stock
Option shall be not less than 110 percent of the Fair Market Value of a Share
on the Grant Date.  In no case shall the
Option Price of any Option be less than the par value of a Share.


8.2.                            Vesting.


                Subject to Sections 8.3
and 18 hereof, each Option granted under the Plan shall become exercisable at such
times and under such conditions as shall be determined by the Board and stated
in the Award Agreement.  For purposes of
this Section 8.2,
fractional numbers of Shares subject to an Option shall be rounded down to the
next nearest whole number. No Option granted under the Plan shall be
exercisable in whole or in part prior to the date the Plan is approved by the
Shareholders of the Company as provided in Section 5.1 hereof.


8.3.                            Term.


               Each Option granted
under the Plan shall terminate, and all rights to purchase Shares thereunder
shall cease, upon the expiration of ten years from the date such Option is
granted, or under such circumstances and on such date prior thereto as is set
forth in the Plan or as may be fixed by the Board and stated in the Award
Agreement relating to such Option (the “Termination Date”); provided, however,
that in the event that the Grantee is a Ten Percent Shareholder, an Option
granted to such Grantee that is intended to be an Incentive Stock Option shall
not be exercisable after the expiration of five years from its Grant Date.


8.4.                            Termination
of Service.


Each Award
Agreement shall set forth the extent to which the Grantee shall have the right
to exercise the Option following termination of the Grantee’s Service.  Such provisions shall be determined in the
sole discretion of the Board, need not be uniform among all Options issued
pursuant to the Plan, and may reflect distinctions based on the reasons for
termination of Service.  An Option that
is intended to be an Incentive Stock 


 


10

















 


Option shall no
longer exercisable as an Incentive Stock Option ninety (90) days after the
termination of the Grantee’s Service.


8.5.                            Limitations
on Exercise of Option.


               Notwithstanding any
other provision of the Plan, in no event may any Option be exercised, in whole
or in part, prior to the date the Plan is approved by the shareholders of the
Company as provided herein, or after ten years following the Grant Date, or
after the occurrence of an event referred to in Section 18 hereof which
results in termination of the Option.


8.6.                            Method of
Exercise.


               An Option that is
exercisable may be exercised by the Grantee’s delivery to the Company of
written notice of exercise on any business day, at the Company’s principal
office, on the form specified by the Company. 
Such notice shall specify the number of Shares with respect to which the
Option is being exercised and shall be accompanied by payment in full of the
Option Price of the shares for which the Option is being exercised.


 


8.7.                            Rights of
Holders of Options


               Unless otherwise
stated in the applicable Award Agreement, an individual holding or exercising
an Option shall have none of the rights of a shareholder (for example, the
right to receive cash or dividend payments or distributions attributable to the
subject Shares or to direct the voting of the subject Shares ) until the Shares
covered thereby are fully paid and issued to him.  Except as provided in Section 18 hereof, no adjustment shall
be made for dividends, distributions or other rights for which the record date
is prior to the date of such issuance.


8.8.                            Delivery of
Share Certificates or Book Entry.


               Promptly after the exercise
of an Option by a Grantee and the payment in full of the Option Price, such
Grantee shall be entitled to the issuance of a share certificate or
certificates evidencing his or her ownership of the Shares subject to the
Option.  Notwithstanding any other
provision of this Plan to the contrary, the Company may elect to satisfy any
requirement under this Plan for the delivery of share certificates through the
use of book-entry.


.


8.9.                            No Option
Repricing.


               Notwithstanding any
other provision in the Plan to the contrary, the Option Price of an Option may
not be amended or modified after the Grant Date, and an Option may not be
surrendered in consideration of or exchanged for cash, a grant of Restricted
Shares or a new option having an Option Price below that of the Option which
was surrendered or exchanged without approval of the Company’s shareholders.


 


11

















 


9.                                      TRANSFERABILITY OF OPTIONS


9.1.                            Transferability
of Options


                Except as provided in Section 9.2,
during the lifetime of a Grantee, only the Grantee (or, in the event of legal
incapacity or incompetency, the Grantee’s guardian or legal representative) may
exercise an Option.  Except as provided
in Section
9.2, no Option shall be assignable or transferable by the Grantee to
whom it is granted, other than by will or the laws of descent and distribution.


9.2.                            Family
Transfers.


                If authorized in the applicable Award Agreement, a
Grantee may transfer, not for value, all or part of an Option which is not an
Incentive Stock Option to any Family Member. 
For the purpose of this Section 9.2, a “not for value” transfer is
a transfer which is (i) a gift, (ii) a transfer under a domestic relations
order in settlement of marital property rights; or (iii) a transfer to an
entity in which more than fifty percent of the voting interests are owned by
Family Members (or the Grantee) in exchange for an interest in that
entity.  Following a transfer under this
Section
9.2, any such Option shall continue to be subject to the same terms
and conditions as were applicable immediately prior to transfer.  Subsequent transfers of transferred Options
are prohibited except to Family Members of the original Grantee in accordance
with this Section
9.2
or by will or the laws of descent and distribution.  The events of termination of Service of Section 8.4 hereof shall
continue to be applied with respect to the original Grantee, following which
the Option shall be exercisable by the transferee only to the extent, and for
the periods specified, in Section 8.4.


 


10.                               SHARE APPRECIATION RIGHTS


The
Board is authorized to grant Share Appreciation Rights (“SARs”) to Grantees on
the following terms and conditions:


10.1.                     Right to Payment.


               A SAR shall confer on the Grantee
to whom it is granted a right to receive, upon exercise thereof, the excess of
(A) the Fair Market Value of one Share on the date of exercise over (B) the
grant price of the SAR as determined by the Board.  The Award Agreement for an SAR shall specify the grant price of
the SAR, which shall  be fixed at the
Fair Market Value of a Share on the date of grant.


10.2.                     Other Terms.


               The Board shall determine at the
date of grant or thereafter, the time or times at which and the circumstances
under which a SAR may be exercised in whole or in part (including based on
achievement of performance goals and/or future service requirements), the time
or times at which SARs shall cease to be or become exercisable following
termination of Service or upon other conditions, the method of exercise, method
of 


 


12

















 


settlement, form
of consideration payable in settlement which may be cash or Shares, method by
or forms in which Shares will be delivered or deemed to be delivered to
Grantees, whether or not a SAR shall be in tandem or in combination with any
other Award, and any other terms and conditions of any SAR.


 


11.                               RESTRICTED SHARES AND SHARE UNITS


11.1.                     Grant of Restricted
Shares or Share Units.


               The Board may from
time to time grant Restricted Shares or Share Units to persons eligible to
receive Awards under Section 6 hereof, subject to such
restrictions, conditions and other terms, if any, as the Board may
determine.  Awards of Restricted Shares
may be made for no consideration (other than par value of the shares which is
deemed paid by Services already rendered).


11.2.                     Restrictions.


               At the time a grant
of Restricted Shares or Share Units is made, the Board may, in its sole
discretion, establish a period of time (a “restricted period”) applicable to
such Restricted Shares or Share Units. 
Each Award of Restricted Shares or Share Units may be subject to a
different restricted period.  The Board
may, in its sole discretion, at the time a grant of Restricted Shares or Share
Units is made, prescribe restrictions in addition to or other than the
expiration of the restricted period, including the satisfaction of corporate or
individual performance objectives, which may be applicable to all or any
portion of the Restricted Shares or Share Units in accordance with Section 15.1
and 15.2.  Neither
Restricted Shares nor Share Units may be sold, transferred, assigned, pledged
or otherwise encumbered or disposed of during the restricted period or prior to
the satisfaction of any other restrictions prescribed by the Board with respect
to such Restricted Shares or Share Units.


11.3.                     Restricted Share
Certificates.


               The Company shall
issue, in the name of each Grantee to whom Restricted Shares has been granted,
share certificates representing the total number of Restricted Shares granted
to the Grantee, as soon as reasonably practicable after the Grant Date.  The Board may provide in an Award Agreement
that either (i)  the Secretary of the
Company, or his delegate, shall hold such certificates for the Grantee’s
benefit until such time as the Restricted Shares is forfeited to the Company or
the restrictions lapse, or (ii)  such
certificates shall be delivered to the Grantee, provided, however,
that all such certificates, regardless of whether held by the Secretary, his
delegate or delivered to the Grantee, 
shall bear a legend or legends that comply with the applicable
securities laws and regulations and makes appropriate reference to the
restrictions imposed under the Plan and the Award Agreement.


11.4.                     Rights of Holders
of Restricted Shares.


               Unless the Board
otherwise provides in an Award Agreement, holders of Restricted Shares shall
have the right to vote such Shares and the right to receive any dividends
declared or paid with respect to such Shares. 
The Board may provide that any dividends paid on Restricted Shares must
be reinvested in Shares, which may or may not be subject to 


 


13

















 


the same vesting conditions and restrictions applicable to such
Restricted Shares.  All distributions,
if any, received by a Grantee with respect to Restricted Shares as a result of
any share split, share dividend, combination of shares, or other similar
transaction shall be subject to the restrictions applicable to the original
Grant.


11.5.                     Rights of Holders
of Share Units.


11.5.1.             Voting and Dividend Rights.


               Unless the Board
otherwise provides in an Award Agreement, holders of Share Units shall have no
rights as shareholders of the Company. 
The Board may provide in an Award Agreement evidencing a grant of Share
Units that the holder of such Share Units shall be entitled to receive, upon
the Company’s payment of a cash dividend on its outstanding Shares, a cash
payment for each Share Unit held equal to the per-share dividend paid on the
Shares.  Such Award Agreement may also
provide that such cash payment will be deemed reinvested in additional Share
Units at a price per unit equal to the Fair Market Value of a Share on the date
that such dividend is paid.


 


11.5.2.             Creditor’s Rights.


               A holder of Share
Units shall have no rights other than those of a general creditor of the
Company.  Share Units represent an
unfunded and unsecured obligation of the Company, subject to the terms and
conditions of the applicable Award Agreement.


11.6.                     Termination of
Service.


               Unless the Board
otherwise provides in an Award Agreement or in writing after the Award Agreement is issued, upon the termination of a Grantee’s Service, any
Restricted Shares or Share Units held by such Grantee that have not vested, or
with respect to which all applicable restrictions and conditions have not
lapsed, shall immediately be deemed forfeited. 
Upon forfeiture of Restricted Shares or Share Units, the Grantee shall
have no further rights with respect to such Award, including but not limited to
any right to vote Restricted Shares or any right to receive dividends with
respect to Restricted Shares or Share Units.


11.7.                     Purchase of
Restricted Shares.


The Grantee shall
be required, to the extent required by applicable law, to purchase the
Restricted Shares from the Company at a Purchase Price equal to the greater of
(i) the aggregate par value of the Shares represented by such Restricted Shares
or (ii) the Purchase Price, if any, specified in the Award Agreement relating
to such Restricted Shares.  The Purchase
Price shall be payable in a form described in Section 13 or, in the
discretion of the Board, in consideration for past Services rendered to the
Company or an Affiliate.


11.8.                     Delivery of Shares.


               Upon the expiration
or termination of any restricted period and the satisfaction of any other
conditions prescribed by the Board, the restrictions applicable to Restricted
Shares or Share Units settled in Shares shall lapse, and, unless otherwise
provided in the Award 


 


14

















 


Agreement, a share certificate for such shares shall be delivered, free
of all such restrictions, to the Grantee or the Grantee’s beneficiary or
estate, as the case may be.  Share Units
may also be settled in cash upon the determination of the Board or as specified
in the applicable Award Agreement.


12.                               UNRESTRICTED SHARE AWARDS


                The Board may, in its sole
discretion, grant (or sell at par value or such other higher purchase price
determined by the Board) an Unrestricted Share Award to any Grantee pursuant to
which such Grantee may receive Shares free of any restrictions (“Unrestricted
Shares”) under the Plan.  Unrestricted
Share Awards may be granted or sold as described in the preceding sentence in
lieu of cash bonuses due to such Grantee.


13.                               FORM OF PAYMENT FOR OPTIONS AND RESTRICTED SHARES


13.1.                     General Rule.


Payment of the
Option Price for the shares purchased pursuant to the exercise of an Option or
the Purchase Price for Restricted Shares shall be made in cash or in cash
equivalents acceptable to the Company.


13.2.                     Surrender of
Shares.


To the extent the
Award Agreement so provides, payment of the Option Price for shares purchased
pursuant to the exercise of an Option or the Purchase Price for Restricted
Shares may be made all or in part through the tender to the Company of Shares,
which shares, if acquired from the Company, shall have been held for at least
six months at the time of tender and which shall be valued, for purposes of
determining the extent to which the Option Price or Purchase Price has been
paid thereby, at their Fair Market Value on the date of exercise.


13.3.                     Cashless Exercise.


With respect to an
Option only (and not with respect to Restricted Shares), to the extent the
Award Agreement so provides and subject to compliance with applicable law,
payment of the Option Price for shares purchased pursuant to the exercise of an
Option may be made all or in part by delivery (on a form acceptable to the
Board) of an irrevocable direction to a licensed securities broker acceptable
to the Company to sell Shares and to deliver all or part of the sales proceeds
to the Company in payment of the Option Price and any withholding taxes
described in Section 19.3.


13.4.                     Other Forms of
Payment.


To the extent the Award Agreement so provides, payment of the Option
Price for shares purchased pursuant to exercise of an Option or the Purchase
Price for Restricted 


 


15

















 


Shares may be made in any other form that is consistent with applicable
laws, regulations and rules.


14.                               DIVIDEND EQUIVALENT RIGHTS


14.1.                     Dividend Equivalent
Rights.


                A Dividend Equivalent Right is
an Award entitling the recipient to receive credits based on cash distributions
that would have been paid on the Shares 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 Grantee only as a component of
an Option Award and only on a one-for-one basis with such Option Award.  The terms and conditions of Dividend
Equivalent Rights shall be specified in the grant.  Dividend Equivalent Rights may be settled in cash or Shares or a
combination thereof, as determined in the sole discretion of the Board.  A Dividend Equivalent Right shall provide
that such Dividend Equivalent Right shall be settled upon the exercise of the
related Option and that the Dividend Equivalent Right shall expire or be forfeited
under the same conditions as the related Option.


14.2.                     Termination of
Service.


                Except as may otherwise be provided by the Board
either in the Award Agreement or in writing after the Award Agreement is
issued, a Grantee’s rights in all Dividend Equivalent Rights or interest
equivalents shall automatically terminate upon the Grantee’s termination of
Service for any reason.


15.                               PERFORMANCE AND ANNUAL INCENTIVE AWARDS


15.1.                     Performance
Conditions


The right of a Grantee
to exercise or receive a grant or settlement of any Award, and the timing thereof,
may be subject to such performance conditions as may be specified by the
Board.  The Board may use such business
criteria and other measures of performance as it may deem appropriate in
establishing any performance conditions, and may exercise its discretion to
reduce the amounts payable under any Award subject to performance conditions,
except as limited under Sections 15.2 hereof in the case of a
Performance Award or Annual Incentive Award intended to qualify under Code
Section 162(m).  If and to the extent
required under Code Section 162(m), any power or authority relating to a
Performance Award or Annual Incentive Award intended to qualify under Code
Section 162(m), shall be exercised by the Committee and not the Board.


 


16

















 


15.2.                     Performance or
Annual Incentive Awards Granted to Designated Covered Employees


If and to the extent
that the Committee determines that a Performance or Annual Incentive Award to
be granted to a Grantee who is designated by the Committee as likely to be a
Covered Employee should qualify as “performance-based compensation” for
purposes of Code Section 162(m), the grant, exercise and/or settlement of such
Performance or Annual Incentive Award shall be contingent upon achievement of
pre-established performance goals and other terms set forth in this Section 15.2.


15.2.1.             Performance Goals Generally.


               The performance goals for such
Performance or Annual Incentive Awards shall consist of one or more business
criteria and a targeted level or levels of performance with respect to each of
such criteria, as specified by the Committee consistent with this Section 15.2.  Performance
goals shall be objective and shall otherwise meet the requirements of Code
Section 162(m) and regulations thereunder including the requirement that the
level or levels of performance targeted by the Committee result in the
achievement of performance goals being “substantially uncertain.”  The Committee may determine that such
Performance or Annual Incentive Awards shall be granted, exercised and/or
settled upon achievement of any one performance goal or that two or more of the
performance goals must be achieved as a condition to grant, exercise and/or
settlement of such Performance or Annual Incentive Awards.  Performance goals may differ for Performance
or Annual Incentive Awards granted to any one Grantee or to different Grantees.


 


15.2.2.             Business Criteria.


               One or more of the following
business criteria for the Company, on a consolidated basis, and/or specified
subsidiaries or business units of the Company (except with respect to the total
shareholder return and earnings per share criteria), shall be used exclusively
by the Committee in establishing performance goals for such Performance or
Annual Incentive Awards: (1) total shareholder return; (2) such total
shareholder return as compared to total return (on a comparable basis) of a
publicly available index such as, but not limited to, the Standard & Poor’s
500 Stock Index; (3) net income; (4) pretax earnings; (5) funds from operation
(FFO), (6) earnings before interest expense, taxes, depreciation and
amortization (EBITDA); (7) pretax operating earnings after interest expense and
before bonuses, service fees, and extraordinary or special items; (8) operating
margin; (9) earnings per share; (10) return on equity; (11) return on assets,
(12) return on capital; (13) return on investment; (14) operating earnings;
(15) working capital; (16) ratio of debt to shareholders’ equity, (17) revenue
and (18) book value.


 


15.2.3.                       Timing For
Establishing Performance Goals.


               Performance goals shall be
established not later than 90 days after the beginning of any performance
period applicable to such Performance or Annual Incentive Awards, or at such
other date as may be required or permitted for “performance-based compensation”
under Code Section 162(m).


 


17

















 


15.2.4.                       Performance
or Annual Incentive Award Pool.


               The Committee may establish a
Performance or Annual Incentive Award pool, which shall be an unfunded pool,
for purposes of measuring Company performance in connection with Performance or
Annual Incentive Awards.


 


15.2.5.                       Settlement
of Performance or Annual Incentive Awards; Other Terms.


               Settlement of such Performance or
Annual Incentive Awards shall be in cash, Shares, other Awards or other
property, in the discretion of the Committee. 
The Committee may, in its discretion, reduce the amount of a settlement
otherwise to be made in connection with such Performance or Annual Incentive
Awards.  The Committee shall specify the
circumstances in which such Performance or Annual Incentive Awards shall be
paid or forfeited in the event of termination of Service by the Grantee prior
to the end of a performance period or settlement of Performance Awards.


15.3.                     Written
Determinations.


All determinations by
the Committee as to the establishment of performance goals, the amount of any
Performance Award pool or potential individual Performance Awards and as to the
achievement of performance goals relating to Performance Awards, and the amount
of any Annual Incentive Award pool or potential individual Annual Incentive
Awards and the amount of final Annual Incentive Awards, shall be made in
writing in the case of any Award intended to qualify under Code Section
162(m).  To the extent required to
comply with Code Section 162(m), the Committee may delegate any responsibility
relating to such Performance Awards or Annual Incentive Awards.


15.4.                     Status of Section
15.2 Awards Under Code Section 162(m)


It is the intent of the
Company that Performance Awards and Annual Incentive Awards under Section 15.2
hereof granted to persons who are designated by the Committee as likely to be
Covered Employees within the meaning of Code Section 162(m) and regulations
thereunder shall, if so designated by the Committee, constitute “qualified
performance-based compensation” within the meaning of Code Section 162(m) and
regulations thereunder.  Accordingly,
the terms of Section 15.2, including the definitions of Covered Employee
and other terms used therein, shall be interpreted in a manner consistent with
Code Section 162(m) and regulations thereunder.  The foregoing notwithstanding, because the Committee cannot
determine with certainty whether a given Grantee will be a Covered Employee
with respect to a fiscal year that has not yet been completed, the term Covered
Employee as used herein shall mean only a person designated by the Committee,
at the time of grant of Performance Awards or an Annual Incentive Award, as
likely to be a Covered Employee with respect to that fiscal year.  If any provision of the Plan or any
agreement relating to such Performance Awards or Annual Incentive Awards does
not comply or is inconsistent with the requirements of Code Section 162(m) or
regulations thereunder, such provision shall be construed or deemed amended to
the extent necessary to conform to such requirements.


 


18

















 


16.                               PARACHUTE LIMITATIONS


                Notwithstanding any other provision of this Plan or of any other
agreement, contract, or understanding heretofore or hereafter entered into by a
Grantee with the Company or any Affiliate, except an agreement, contract, or
understanding between the Grantee and the Company or any Affiliate that
modifies or excludes application of this paragraph (an “Other Agreement”), and
notwithstanding any formal or informal plan or other arrangement for the direct
or indirect provision of compensation to the Grantee (including groups or
classes of Grantees or beneficiaries of which the Grantee is a member), whether
or not such compensation is deferred, is in cash, or is in the form of a
benefit to or for the Grantee (a “Benefit Arrangement”), if the Grantee is a
“disqualified individual,” as defined in Section 280G(c) of the Code, any
Option, Restricted Shares or Share Unit held by that Grantee and any right to
receive any payment or other benefit under this Plan shall not become
exercisable or vested (i) to the extent that such right to exercise, vesting,
payment, or benefit, taking into account all other rights, payments, or
benefits to or for the Grantee under this Plan, all Other Agreements, and all
Benefit Arrangements, would cause any payment or benefit to the Grantee under
this Plan to be considered a “parachute payment” within the meaning of
Section 280G(b)(2) of the Code as then in effect (a “Parachute Payment”) and
(ii) if, as a result of receiving a Parachute Payment, the aggregate
after-tax amounts received by the Grantee from the Company under this Plan, all
Other Agreements, and all Benefit Arrangements would be less than the maximum
after-tax amount that could be received by the Grantee without causing any such
payment or benefit to be considered a Parachute Payment.  In the event that the receipt of any such
right to exercise, vesting, payment, or benefit under this Plan, in conjunction
with all other rights, payments, or benefits to or for the Grantee under any
Other Agreement or any Benefit Arrangement would cause the Grantee to be
considered to have received a Parachute Payment under this Plan that would have
the effect of decreasing the after-tax amount received by the Grantee as
described in clause (ii) of the preceding sentence, then the Grantee shall
have the right, in the Grantee’s sole discretion, to designate those rights,
payments, or benefits under this Plan, any Other Agreements, and any Benefit
Arrangements that should be reduced or eliminated so as to avoid having the
payment or benefit to the Grantee under this Plan be deemed to be a Parachute
Payment.


 


17.                               REQUIREMENTS OF LAW


17.1.                     General.


               The Company shall not be required
to sell or issue any Shares under any Award if the sale or issuance of such
shares would constitute a violation by the Grantee, any other individual
exercising an Option, or the Company of any provision of any law or regulation
of any governmental authority, including without limitation any federal or
state securities laws or regulations. 
If at any time the Company shall determine, in its discretion, that the
listing, registration or qualification of any shares  subject to an Award upon any securities exchange or under any
governmental regulatory body is necessary or desirable as a condition of, or in
connection with, the issuance or purchase of shares hereunder, no Shares may be
issued or sold to the Grantee or any other individual exercising an Option
pursuant to such Award 


 


19

















 


unless
such listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Company, and
any delay caused thereby shall in no way affect the date of termination of the
Award.  Specifically, in connection with
the Securities Act, upon the exercise of any Option or the delivery of any
Shares underlying an Award, unless a registration statement under such Act is
in effect with respect to the Shares covered by such Award, the Company shall
not be required to sell or issue such shares unless the Board has received
evidence satisfactory to it that the Grantee or any other individual exercising
an Option may acquire such shares 
pursuant to an exemption from registration under the Securities
Act.  Any determination in this
connection by the Board shall be final, binding, and conclusive.  The Company may, but shall in no event be
obligated to, register any securities covered hereby pursuant to the Securities
Act.  The Company shall not be obligated
to take any affirmative action in order to cause the exercise of an Option or
the issuance of Shares pursuant to the Plan to comply with any law or
regulation of any governmental authority. 
As to any jurisdiction that expressly imposes the requirement that an
Option shall not be exercisable until the Shares covered by such Option are registered
or are exempt from registration, the exercise of such Option (under
circumstances in which the laws of such jurisdiction apply) shall be deemed
conditioned upon the effectiveness of such registration or the availability of
such an exemption.


17.2.                     Rule 16b-3.


               During any time when the Company
has a class of equity security registered under Section 12 of the Exchange Act,
it is the intent of the Company that Awards pursuant to the Plan and the
exercise of Options granted hereunder will qualify for the exemption provided
by Rule 16b-3 under the Exchange Act. 
To the extent that any provision of the Plan or action by the Board does
not comply with the requirements of Rule 16b-3, it shall be deemed inoperative to
the extent permitted by law and deemed advisable by the Board, and shall not
affect the validity of the Plan.  In the
event that Rule 16b-3 is revised or replaced, the Board may exercise its
discretion to modify this Plan in any respect necessary to satisfy the
requirements of, or to take advantage of any features of, the revised exemption
or its replacement.


 


18.                               EFFECT OF CHANGES IN CAPITALIZATION


18.1.                     Changes in Shares.


               If the number of
outstanding Shares is increased or decreased or the Shares are changed into or
exchanged for a different number or kind of shares or other securities of the
Company on account of any recapitalization, reclassification, share split,
reverse split, combination of shares, exchange of shares, share dividend or
other distribution payable in capital shares, or other increase or decrease in
such shares effected without receipt of consideration by the Company occurring
after the Effective Date, the number and kinds of shares for which grants of
Options and other Awards may be made under the Plan shall be adjusted proportionately
and accordingly by the Company.  In
addition, the number and kind of shares for which Awards are outstanding shall
be adjusted proportionately and accordingly so that the proportionate interest
of the Grantee immediately following such event shall, to the extent
practicable, be the same as immediately before such event.  Any such adjustment in 


 


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outstanding Options or SARs shall not change the aggregate Option Price
or SAR Exercise Price payable with respect to shares that are subject to the
unexercised portion of an outstanding Option or SAR, as applicable, but shall
include a corresponding proportionate adjustment in the Option Price or SAR
Exercise Price per share.  The
conversion of any convertible securities of the Company shall not be treated as
an increase in shares effected without receipt of consideration.   Notwithstanding the foregoing, in the event
of any distribution to the Company’s shareholders of securities of any other
entity or other assets without receipt of consideration by the Company, the
Company may, in such manner as the Company deems appropriate, adjust (i) the
number and kind of shares subject to outstanding Awards and/or (ii) the
exercise price of outstanding Options and Share Appreciation Rights to reflect
such distribution.


18.2.                     Reorganization in
which the Company is the Surviving Entity which does not Constitute a Corporate
Transaction.


               Subject to Section 18.3 hereof, if
the Company shall be the surviving entity in any reorganization, merger, or
consolidation of the Company with one or more other entities which does not
constitute a Corporate Transaction, any Option or SAR theretofore granted
pursuant to the Plan shall pertain to and apply to the securities to which a
holder of the number of Shares subject to such Option or SAR would have been
entitled immediately following such reorganization, merger, or consolidation,
with a corresponding proportionate adjustment of the Option Price or SAR
Exercise Price per share so that the aggregate Option Price or SAR Exercise
Price thereafter shall be the same as the aggregate Option Price or SAR
Exercise Price of the shares remaining subject to the Option or SAR immediately
prior to such reorganization, merger, or consolidation.  Subject to any contrary language in an Award
Agreement evidencing an Award, any restrictions applicable to such Award shall
apply as well to any replacement shares received by the Grantee as a result of
the reorganization, merger or consolidation.


18.3.                     Corporate
Transaction.


                             Subject
to the exceptions set forth in the last sentence of this Section 18.3 and the last
sentence of Section 18.4:


 


                             (i)
upon the occurrence of a Corporate Transaction, all outstanding Restricted
Shares shall be deemed to have vested, and all restrictions and conditions
applicable to such Restricted Shares shall be deemed to have lapsed,
immediately prior to the occurrence of such Corporate Transaction, and


 


                             (ii)
either of the following two actions shall be taken:


 


                                            (A)
fifteen days prior to the scheduled consummation of a Corporate Transaction,
all Options and SARs outstanding hereunder shall become immediately exercisable
and shall remain exercisable for a period of fifteen days, or


 


                                            (B)
the Board may elect, in its sole discretion, to cancel any outstanding Awards
of Options, Restricted Shares, and/or SARs and pay or deliver, or cause to be
paid or delivered, to the holder thereof an amount in cash or securities having
a value (as determined 


 


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by the Board acting in good faith), in the case of Restricted Shares,
equal to the formula or fixed price per share paid to holders of Shares and, in
the case of Options or SARs, equal to the product of the number of Shares subject
to the Option or SAR (the “Award Shares”) multiplied by the amount, if any, by
which (I) the formula or fixed price per share paid to holders of Shares
pursuant to such transaction exceeds (II) the Option Price or SAR Exercise
Price applicable to such Award Shares.


 


                             With
respect to the Company’s establishment of an exercise window, (i) any exercise
of an Option or SAR during such fifteen-day period shall be conditioned upon
the consummation of the event and shall be effective only immediately before the
consummation of the event, and (ii) upon consummation of any Corporate
Transaction the Plan, and all outstanding but unexercised Options and SARs
shall terminate.  The Board shall send
written notice of an event that will result in such a termination to all
individuals who hold Options and SARs not later than the time at which the
Company gives notice thereof to its shareholders.  This Section 18.3 shall not apply to any
Corporate Transaction to the extent that provision is made in writing in
connection with such Corporate Transaction for the assumption or continuation
of the Options, SARs and Restricted Shares theretofore granted, or for the
substitution for such Options, SARs and Restricted Shares for new options and
share appreciation rights and new restricted shares relating to the shares of a
successor entity, or a parent or subsidiary thereof, with appropriate
adjustments as to the number of shares (disregarding any consideration that is
not common shares) and option and share appreciation right exercise prices, in
which event the Plan, Options, SARs and Restricted Shares theretofore granted
shall continue in the manner and under the terms so provided.


 


18.4.                     Adjustments.


               Adjustments under
this Section 18
related to Shares or securities of the Company shall be made by the Board,
whose determination in that respect shall be final, binding and
conclusive.  No fractional shares or
other securities shall be issued pursuant to any such adjustment, and any
fractions resulting from any such adjustment shall be eliminated in each case
by rounding downward to the nearest whole share. The Board shall determine the
effect of a Corporate Transaction upon Awards other than Options, SARs, and
Restricted Shares, and such effect shall be set forth in the appropriate Award
Agreement.  The Board may provide in the
Award Agreements at the time of grant, or any time thereafter with the consent
of the Grantee, for different provisions to apply to an Award in place of those
described in Sections 18.1, 18.2, and 18.3.


18.5.                     No Limitations on
Company.


               The making of Awards
pursuant to the Plan shall not affect or limit in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations, or changes
of its capital or business structure or to merge, consolidate, dissolve, or
liquidate, or to sell or transfer all or any part of its business or assets.


 


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19.                               GENERAL PROVISIONS


19.1.                     Disclaimer of
Rights


               No provision in the
Plan or in any Award or Award Agreement shall be construed to confer upon any
individual the right to remain in the employ or service of the Company or any
Affiliate, or to interfere in any way with any contractual or other right or
authority of the Company either to increase or decrease the compensation or
other payments to any individual at any time, or to terminate any employment or
other relationship between any individual and the Company.  In addition, notwithstanding anything
contained in the Plan to the contrary, unless otherwise stated in the
applicable Award Agreement, no Award granted under the Plan shall be affected
by any change of duties or position of the Grantee, so long as such Grantee
continues to be a trustee, officer, consultant or employee of the Company or an
Affiliate.  The obligation of the
Company to pay any benefits pursuant to this Plan shall be interpreted as a
contractual obligation to pay only those amounts described herein, in the
manner and under the conditions prescribed herein.  The Plan shall in no way be interpreted to require the Company to
transfer any amounts to a third party trustee or otherwise hold any amounts in
trust or escrow for payment to any Grantee or beneficiary under the terms of
the Plan.


19.2.                     Nonexclusivity of
the Plan


               Neither the adoption
of the Plan nor the submission of the Plan to the shareholders of the Company
for approval shall be construed as creating any limitations upon the right and
authority of the Board to adopt such other incentive compensation arrangements
(which arrangements may be applicable either generally to a class or classes of
individuals or specifically to a particular individual or particular
individuals) as the Board in its discretion determines desirable, including,
without limitation, the granting of share options otherwise than under the
Plan.


19.3.                     Withholding Taxes


               The Company or an
Affiliate, as the case may be, shall have the right to deduct from payments of
any kind otherwise due to a Grantee any Federal, state, or local taxes of any
kind required by law to be withheld with respect to the vesting of or other
lapse of restrictions applicable to an Award or upon the issuance of any Shares
upon the exercise of an Option or pursuant to an Award.  At the time of such vesting, lapse, or
exercise, the Grantee shall pay to the Company or the Affiliate, as the case
may be, any amount that the Company or the Affiliate may reasonably determine
to be necessary to satisfy such withholding obligation.  Subject to the prior approval of the Company
or the Affiliate, which may be withheld by the Company or the Affiliate, as the
case may be, in its sole discretion, the Grantee may elect to satisfy such
obligations, in whole or in part, (i) by causing the Company or the
Affiliate to withhold Shares otherwise issuable to the Grantee or (ii) by
delivering to the Company or the Affiliate Shares already owned by the
Grantee.  The Shares so delivered or
withheld shall have an aggregate Fair Market Value equal to such withholding
obligations.  The Fair Market Value of
the Shares used to satisfy such withholding obligation shall be determined by
the Company or the Affiliate as of the date that the amount of tax to be
withheld is to be determined.  A Grantee
who has made an 


 


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election pursuant to this Section 19.3 may satisfy his or her
withholding obligation only with Shares that are not subject to any repurchase,
forfeiture, unfulfilled vesting, or other similar requirements.


19.4.                     Captions


               The use of captions
in this Plan or any Award Agreement is for the convenience of reference only
and shall not affect the meaning of any provision of the Plan or such Award
Agreement.


19.5.                     Other Provisions


               Each Award granted
under the Plan may contain such other terms and conditions not inconsistent
with the Plan as may be determined by the Board, in its sole discretion.


19.6.                     Number And Gender


               With respect to
words used in this Plan, the singular form shall include the plural form, the
masculine gender shall include the feminine gender, etc., as the context
requires.


19.7.                     Severability


               If any provision of
the Plan or any Award Agreement shall be determined to be illegal or
unenforceable by any court of law in any jurisdiction, the remaining provisions
hereof and thereof shall be severable and enforceable in accordance with their
terms, and all provisions shall remain enforceable in any other jurisdiction.


19.8.                     Governing Law


The validity and
construction of this Plan and the instruments evidencing the Award hereunder
shall be governed by the laws of the State of Maryland, other than any
conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of this Plan and the instruments evidencing the
Awards granted hereunder to the substantive laws of any other jurisdiction.


 


*    *    *


 


 


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