KRISPY KREME DOUGHNUTS,
INC.

2012 STOCK INCENTIVE
PLAN

 

 

 

 

 

 

 

 

 







TABLE OF CONTENTS

	SECTION		PAGE
	ARTICLE 1. ESTABLISHMENT, PURPOSE, AND
    DURATION	1
	     1.1	Establishment of the Plan	1
	     1.2	Purpose of the Plan	1
	     1.3	Duration of the Plan	1
	 
	ARTICLE 2. DEFINITIONS	1
	 
	ARTICLE 3. ADMINISTRATION	5
	     3.1	The Committee	5
	     3.2	Authority of the Committee	5
	     3.3	Decisions Binding; Committee Action; Limitations of
      Liability	6
	     3.4	Participants in Foreign Countries	6
	     3.5	No Option or SAR Repricing Without Shareholder
      Approval	6
	     3.6	Delegation	6
	 
	ARTICLE 4. SHARES SUBJECT TO THE PLAN	6
	     4.1	Number of Shares	6
	     4.2	Other Plan Limits	7
	     4.3	Nonexclusivity of the Plan	7
	     4.4	Adjustments in Authorized Shares	7
	 
	ARTICLE 5. ELIGIBILITY AND PARTICIPATION	8
	 
	ARTICLE 6. STOCK OPTIONS	8
	     6.1	Grant of Options	8
	     6.2	Agreement	8
	     6.3	Option Price	8
	     6.4	Date of Grant; Duration of Options	8
	     6.5	Exercise of Options	9
	     6.6	Payment	9
	     6.7	Nontransferability	10
	     6.8	Shareholder Rights	10
	     6.9	Post-Termination Rights; Forfeiture	10
	     6.10	Notice of Disposition	10
	 
	ARTICLE 7. STOCK APPRECIATION RIGHTS	10
	     7.1	Grants of SARs	10
	     7.2	Duration of SARs	10
	     7.3	Exercise of SAR	11
	     7.4	Determination of Payment of Cash and/or
      Shares Upon Exercise of SAR	11
	     7.5	Nontransferability	11
	     7.6	Shareholder Rights	11
	     7.7	Post-Termination Rights; Forfeiture	11
	 
	ARTICLE 8. RESTRICTED STOCK AWARDS; RESTRICTED STOCK
      UNITS; STOCK AWARDS	12
	     8.1	Grants	12
	     8.2	Restricted Period; Lapse of
      Restrictions	12
	     8.3	Rights of Holder; Limitations Thereon	13
	     8.4	Delivery of Unrestricted Shares	13
	     8.5	Nonassignability	13
	     8.6	Stock Awards	14



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	ARTICLE 9. PERFORMANCE AWARDS	     	14
	     	9.1	     	Grants		14
		9.2		Earning the Award;
      Forfeiture	 	14
	 	9.3	 	Payment		14
		9.4		Shareholder
    Rights		14
		9.5		Nonassignability		14
		 
	ARTICLE 10. PHANTOM STOCK AWARDS		14
		10.1		Grants		14
		10.2		Earning the Award;
      Forfeiture		14
		10.3		Payment		15
		10.4		Shareholder
    Rights		15
		10.5		Nonassignability		15
		 
	ARTICLE 11. BENEFICIARY DESIGNATION		15
		 
	ARTICLE 12. DEFERRALS		15
		 
	ARTICLE 13. RIGHTS OF PARTICIPANTS		15
		13.1		No Right to Employment or Service		15
		13.2		Participation		15
		 
	ARTICLE 14. CHANGE IN CONTROL		16
		14.1		Definition		16
		14.2		Effect of Change in
      Control		16
		 
	ARTICLE 15. AMENDMENT, MODIFICATION AND TERMINATION		17
		15.1		Plan Amendment, Modification and
      Termination		17
		15.2		Award Amendment,
      Modification and Termination		17
		15.3		Amendments to Comply with Applicable Law,
      Etc.		17
		 
	ARTICLE 16. WITHHOLDING		17
		16.1		Tax Withholding		17
		16.2		Share
Withholding		17
		 
	ARTICLE 17. INDEMNIFICATION		17
		 
	ARTICLE 18. ADDITIONAL PROVISIONS		18
		18.1		Gender and Number		18
		18.2		Severability		18
		18.3		Compliance with Applicable Law		18
		18.4		Section 16
      Compliance		18
		18.5		Governing Law		18
		18.6		Code Section
409A		18
		18.7		Shareholder Approval		19
		18.8		Compliance With Code
      Section 162(m)		19
		18.9		Unfunded Plan; No Effect on Other
      Plans		19
		18.10		Rules of
      Construction		20
		18.11		Successors and Assigns		20
		18.12		Right of Offset		20
		18.13		Fractional Shares		20
		18.14		Uncertificated
      Shares		20
		18.15		Income and Other Taxes		20
		18.16		Compliance with
      Recoupment, Ownership and Other Policies		20
		18.17		Dividends and Dividend Equivalents		20



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KRISPY KREME DOUGHNUTS, INC.

2012 STOCK INCENTIVE PLAN

ARTICLE 1. ESTABLISHMENT, PURPOSE, AND
DURATION

          1.1 Establishment of the Plan. Krispy Kreme Doughnuts,
Inc., a North Carolina corporation (hereinafter referred to as the
“Company”), hereby establishes a stock incentive plan known as the
“Krispy Kreme Doughnuts, Inc. 2012 Stock Incentive Plan” (the “Plan”), as
set forth in this document. The Plan permits the grant of Incentive Stock
Options, Nonqualified Stock Options, Restricted Stock Awards, Restricted Stock
Units, Stock Awards, Stock Appreciation Rights, Performance Unit Awards,
Performance Share Awards and Phantom Stock Awards. The Plan shall become
effective on June 12, 2012 (the “Effective Date”), and shall remain in effect as
provided in Section 1.3.

          1.2
Purpose of the Plan. The purposes of the Plan are to promote greater
stock ownership and equity-based interests in the Company by selected Employees,
Directors and Consultants who perform services for the Company or its Parent,
Subsidiaries or other Affiliates (the “Participants”); to more closely
link the personal interests of Participants to those of the Company’s
shareholders; and to provide flexibility to the Company in its ability to
motivate, attract and retain the services of Participants upon whose judgment,
interest and special effort the successful conduct of its operation largely
depends.

          1.3
Duration of the Plan. The Plan shall commence on the Effective Date, and
shall remain in effect, subject to the right of the Board of Directors to amend
or terminate the Plan at any time pursuant to Article 15, until the day prior to
the tenth (10th) anniversary of the Effective Date.

ARTICLE 2. DEFINITIONS

    
In addition to other terms defined herein or in an Agreement, whenever
used in the Plan or an Agreement, the following terms shall have the meanings
set forth below unless the Committee determines otherwise:

	     	(a)	     	“Agreement”
      means an award agreement entered into by each Participant and the Company,
      setting forth the terms and provisions applicable to Awards granted to
      Participants under this Plan. An Agreement may also state such other
      terms, conditions and restrictions, including but not limited to terms,
      conditions and restrictions applicable to Shares or any other benefit
      underlying an Award, as may be established by the Committee.
		 
		(b)		“Affiliate”
      means any Parent or Subsidiary of the Company, and also includes any other
      business entity which is controlled by, under common control with or
      controls the Company; provided, however, that the term “Affiliate” shall
      be construed in a manner in accordance with the registration provisions of
      applicable federal securities laws if and to the extent
  required.
		 
		(c)		“Applicable
      Law” means any applicable laws, rules or regulations (or similar
      guidance), including but not limited to the Securities Act, the Exchange
      Act, the Code and the listing or other rules of any applicable stock
      exchange.
		 
		(d)		“Award” means,
      individually or collectively, a grant under this Plan of Incentive Stock
      Options, Nonqualified Stock Options, Restricted Stock Awards, Restricted
      Stock Units, Stock Awards, Performance Unit Awards, Performance Share
      Awards, Stock Appreciation Rights and Phantom Stock Awards.
		 
		(e)		“Beneficial
      Owner” or “Beneficial Ownership” shall have the meaning
      ascribed to such term in Rule 13d-3 of the General Rules and Regulations
      under the Exchange Act.
		 
		(f)		“Board” or
      “Board of Directors” means the Board of Directors of the
      Company.
		 
		(g)		“Cause” means,
      unless the Committee determines otherwise, (i) with respect to the Company
      or any Affiliate which employs the Participant or for which the
      Participant primarily performs services, the commission by the Participant
      of an act of fraud, embezzlement, theft or proven dishonesty, or
    any


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	     		     	other illegal act or
      practice (whether or not resulting in criminal prosecution or conviction),
      or any act or practice which the Committee shall, in good faith, deem to
      have resulted in the Participant’s becoming unbondable under the Company’s
      or the Affiliate’s fidelity bond; (ii) the willful engaging by the
      Participant in misconduct which is deemed by the Committee, in good faith,
      to be materially injurious to the Company or any Affiliate, monetarily or
      otherwise; or (iii) the willful and continued failure or habitual neglect
      by the Participant to perform his duties with the Company or the Affiliate
      substantially in accordance with the operating and personnel policies and
      procedures of the Company or the Affiliate generally applicable to their
      employees. Notwithstanding the foregoing, if the Participant has entered
      into an employment, consulting or other similar agreement that is binding
      as of a Participant’s Termination Date, and if such employment or other
      agreement defines “Cause,” then, unless the Committee determines
      otherwise, the definition of “Cause” in such agreement shall apply to the
      Participant in this Plan. “Cause” shall be determined by the Committee.
      Without in any way limiting the effect of the foregoing, for purposes of
      the Plan and an Award, a Participant’s employment or service shall be
      deemed to have terminated for Cause if, after the Participant’s employment
      or service has terminated, facts and circumstances are discovered that
      would have justified, in the opinion of the Committee, a termination for
      Cause.
		 
		(h)		“Code” means
      the Internal Revenue Code of 1986, as amended from time to time, or any
      successor act thereto. Any reference herein to a specific Code Section
      shall be deemed to include all related regulations or other guidance with
      respect to such Code section.
		 
		(i)		“Committee”
      means (i) the Board committee appointed by the Board to administer the
      Plan, as specified in Article 3; or (ii) in the absence of such
      appointment, or in the event the Board reserves authority to administer
      the Plan in whole or in part, the Board itself.
		 
		(j)		“Common Stock”
      means the common stock of the Company, no par value per share, or any
      successor securities thereto.
		 
		(k)		“Company” means
      Krispy Kreme Doughnuts, Inc., a North Carolina corporation, or any
      successor thereto as provided in Section 18.11.
		 
		(l)		“Consultant”
      means an independent contractor, consultant or advisor providing services
      (other than capital-raising services) to the Company or an
      Affiliate.
		 
		(m)		“Corresponding
      SAR” means an SAR that is granted in relation to a particular Option
      and that can be exercised only upon the surrender to the Company,
      unexercised, of that portion of the Option to which the SAR
    relates.
		 
		(n)		“Covered
      Employee” means a Participant who would be considered a “covered
      employee” as defined in the regulations promulgated under Code Section
      162(m) or any successor statute.
		 
		(o)		“Director”
      means any individual who is a member of the Board of Directors of the
      Company or the board of directors of an Affiliate.
		 
		(p)		“Disability”
      means, unless the Committee determines otherwise (taking into account any
      Code Section 409A considerations), a condition where the Participant
      either (i) is unable to engage in any substantial gainful activity by
      reason of any medically determinable physical or mental impairment which
      can be expected to result in death or can be expected to last for a
      continuous period of not less than 12 months; or (ii) is, by reason of any
      medically determinable physical or mental impairment which can be expected
      to result in death or can be expected to last for a continuous period of
      not less than 12 months, receiving income replacement benefits for a
      period of not less than three (3) months under an accident and health plan
      covering employees of the Company. Notwithstanding the foregoing, if the
      Participant has entered into an employment, consulting or other agreement
      that is binding as of a Participant’s Termination Date, and if such
      employment or other agreement defines “Disability,” then, unless the
      Committee determines otherwise, the definition of “Disability” in such
      agreement shall apply to the Participant in this
Plan.


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	     	(q)	      	“Effective Date” shall
      have the meaning ascribed to such term in Section 1.1.
		 
		(r)		“Employee” means any
      employee of the Company or any Parent, Subsidiary or other Affiliate
      (including entities which become Affiliates after the Effective Date);
      provided, however, that, with respect to Incentive Stock Options,
      “Employee” means any person who is considered an employee of the Company
      or any Parent or Subsidiary for purposes of Treas. Reg. Section 1.421-1(h)
      (or any successor provision related thereto). Directors who are not
      otherwise employed by the Company or an Affiliate are not considered
      Employees under this Plan.
		 		
		(s)		
      “Exchange Act” means the
      Securities Exchange Act of 1934, as amended from time to time, or any
      successor act thereto.

		 		 


	     	(t)	     	“Fair
      Market Value” shall, unless the Committee determines otherwise, be
      determined as follows:
		 
				(i)	     	If, on the relevant
      date, the Shares are traded on a national or regional securities exchange
      and closing sale prices for the Shares are customarily quoted, on the
      basis of the closing sale price on the principal securities exchange on
      which the Shares may then be traded or, if there is no such sale on the
      relevant date, then on the last previous day on which a sale was reported;
      and
		 
				(ii)		If, on the relevant
      date, the Shares are not listed on any securities exchange, but
      nevertheless are regularly quoted on an automated quotation system
      (including the OTC Bulletin Board) or by a recognized securities dealer,
      the closing sales price for such stock on such system or by such
      securities dealer on the relevant date, but if selling prices are not
      reported, the mean between the high bid and low asked prices for the
      Shares on the relevant date (or, if no such prices were reported on that
      date, on the last date such prices were reported), as reported in The Wall
      Street Journal or such other source as the Committee deems reliable;
      and
		 
				(iii)		If, on the relevant
      date, the Shares are not publicly traded as described in (i) or (ii), on
      the basis of the good faith determination of the Committee.
		 
				(iv)		Notwithstanding the
      foregoing, (A) with respect to the grant of Incentive Stock Options, the
      Fair Market Value shall be determined by the Committee in accordance with
      the applicable provisions of Section 20.2031-2 of the Federal Estate Tax
      Regulations, or in any other manner consistent with the Code Section 422;
      and (B) Fair Market Value shall be determined in accordance with Code
      Section 409A if and to the extent required.
		 
		(u)		“Good
      Reason” shall, unless the Committee determines otherwise, have the
      meaning given such term in an Agreement, if and to the extent
      applicable.
		 
		(v)		“Incentive Stock Option” or “ISO” means an option to
      purchase Shares granted under Article 6 which is designated as an
      Incentive Stock Option and is intended to meet the requirements of Code
      Section 422.
		 
		(w)		“Initial
      Value” means, with respect to a Corresponding SAR, the Option Price
      per share of the related Option, and with respect to an SAR granted
      independently of an Option, a price that is no less than the Fair Market
      Value of one Share on the date of grant.
		 
		(x)		“Insider” shall mean an Employee who is, on the relevant
      date, an officer or a director of the Company as determined under Section
      16 of the Exchange Act.
		 
		(y)		“Nonqualified Stock Option” or “NQSO” means an option
      to purchase Shares granted under Article 6, and which is not intended or
      otherwise fails to meet the requirements of Code Section 422.
		 
		(z)		“Option” means an Incentive Stock Option or a Nonqualified
      Stock Option.
		 
		(aa)		“Option
      Price” means the price at which a Share may be purchased by a
      Participant pursuant to an Option, as determined by the
    Committee.
		 
		(bb)		“Parent” means a “parent corporation,” whether now or
      hereafter existing, as defined in Code Section
424(e).


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		(cc)		“Participant” means an Employee, Director or Consultant who
      performs services for the Company or a Parent,
      Subsidiary or other Affiliate and who has been selected to participate in
      the Plan.
		 
		(dd)		“Performance Award” means a Performance Unit Award or a
      Performance Share Award as described in Article 9.
		 
	     	(ee)	     	“Performance Share Award” means a Performance Award, which,
      in accordance with the terms of Article 9 and the other provisions of the
      Plan and subject to an Agreement, may entitle the Participant, or his
      estate or beneficiary in the event of the Participant’s death, upon
      attainment of specified performance or other objectives, to receive cash,
      Shares or a combination thereof and which has a value on the grant date
      determined by reference to the Common Stock.
		 
		(ff)		“Performance Unit Award” means a Performance Award, which,
      in accordance with the terms of Article 9 and the other provisions of the
      Plan and subject to an Agreement, may entitle the Participant, or his
      estate or beneficiary in the event of the Participant’s death, upon
      attainment of specified performance or other objectives, to receive cash,
      Shares or a combination thereof and which has an initial value determined
      in a dollar amount established by the Committee.
		 
		(gg)		“Person” shall have the meaning ascribed to such term in
      Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
      thereof, including a “group” as defined in Section 13(d)
  thereof.
		 
		(hh)		“Phantom
      Stock Award” means an Award granted under Article 10, entitling a
      Participant to a payment in cash, Shares or a combination of cash and
      Shares (as determined by the Committee), following the completion of the
      applicable vesting period and compliance with the terms of the Plan and
      other terms and conditions established by the Committee. The unit value of
      a Phantom Stock Award shall be based on the Fair Market Value of a
      Share.
		 
		(ii)		“Plan” means this Krispy Kreme Doughnuts, Inc. 2012 Stock
      Incentive Plan, including any amendments or restatements
  thereto.
		 
		(jj)		“Prior
      Plan” means the Company’s 2000 Stock Incentive Plan and 1998 Stock
      Option Plan, in each case as such plan may be amended.
		 
		(kk)		“Restricted Stock Award” or “RSA” means an Award of
      Restricted Stock granted in accordance with the terms of Article 8 and the
      other provisions of the Plan, which Shares of Restricted Stock are
      nontransferable and subject to a substantial risk of
  forfeiture.
		 
		(ll)		“Restricted Stock” means the Shares subject to a Restricted
      Stock Award. Shares shall cease to be Restricted Stock when, in accordance
      with the terms hereof and the applicable Agreement, they become
      transferable and free of substantial risk of forfeiture.
		 
		(mm)		“Restricted Stock Unit” or “RSU” means an Award
      granted to a Participant pursuant to Article 8 which is settled, if at
      all, (i) by the delivery of one Share for each Restricted Stock Unit, (ii)
      in cash in an amount equal to the Fair Market Value of one Share for each
      Restricted Stock Unit, or (iii) in a combination
      of cash and Shares equal to the Fair Market Value of one Share for each
      Restricted Stock Unit, as determined by the Committee. A Restricted Stock
      Unit represents the promise of the Company to deliver Shares, cash or a
      combination thereof, as applicable, at the end of the applicable
      Restricted Period if and only to the extent the Award vests and ceases to
      be subject to forfeiture, subject to compliance with the terms of the Plan
      and Agreement and any other terms and conditions established by the
      Committee.
		 
		(nn)		“Retirement” means, unless the Committee determines
      otherwise, retiring from employment with the Company or any Affiliate at
      any time on or after the date when the Participant’s age plus years of
      service equals or exceeds sixty five (65). Notwithstanding the foregoing,
      if the Participant has entered into an employment, consulting or other
      agreement that is binding as of a Participant’s Termination Date, and if
      such employment or other agreement defines “Retirement,” then, unless the
      Committee determines otherwise, the definition of “Retirement” in such
      agreement shall apply to the Participant.


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	     	(oo)	     	“SAR” means a
      stock appreciation right that entitles the holder to receive, with respect
      to each Share encompassed by the exercise of such SAR, the amount
      determined by the Committee and specified in an Agreement. In the absence
      of such specification, the holder shall be entitled to receive in cash,
      Shares or a combination thereof, with respect to each Share encompassed by
      the exercise of such SAR, the excess of the Fair Market Value on the date
      of exercise over the Initial Value. References to “SARs” include both
      Corresponding SARs and SARs granted independently of Options, unless the
      context requires otherwise.
		 
		(pp)		“Securities
      Act” means the Securities Act of 1933, as amended from time to time,
      or any successor act thereto.
		 
		(qq)		“Shares” means
      the shares of Common Stock of the Company (including any new, additional
      or different stock or securities resulting from the changes described in
      Section 4.4).
		 
		(rr)		“Stock Award”
      means a grant of Shares under Article 8 that is not generally subject to
      restrictions and pursuant to which a certificate for the Shares is
      transferred to the Participant.
		 
		(ss)		“Subsidiary”
      means (i) in the case of an ISO, any company during any period in which it
      is a “subsidiary corporation” (as that term is defined in Code Section
      424(f)), and (ii) in the case of all other Awards, in addition to a
      “subsidiary corporation” as defined above, a partnership, limited
      liability company, joint venture or other entity in which the Company
      controls fifty percent (50%) or more of the voting power or equity
      interests.
		 
		(tt)		“Termination
      Date” means the date of termination of a Participant’s employment or
      service for any reason, as determined by the
  Committee.


ARTICLE 3. ADMINISTRATION

          3.1 The Committee. The Plan shall be administered by
the Compensation Committee of the Board (or a subcommittee thereof), or by any
other Board committee or subcommittee appointed by the Board that is granted
authority to administer the Plan. The members of the Committee shall be
appointed from time to time by, and shall serve at the discretion of, the Board
of Directors. To the extent required under Rule 16b-3 adopted under the Exchange
Act, the Committee shall be comprised solely of two or more “non-employee
directors,” as such term is defined in Rule 16b-3, or as may otherwise be
permitted under Rule 16b-3. To the extent required by Code Section 162(m), the
Plan shall be administered by a committee comprised of two or more “outside
directors” (as such term is defined in Code Section 162(m)) or as may otherwise
be permitted under Code Section 162(m). In addition, Committee members shall
qualify as “independent directors” under applicable stock exchange rules if and
to the extent required. In the absence of any such appointment of authority by
the Board to the Committee, or in the event that the Board determines to
administer the Plan in whole or in part, the Plan shall be administered by the
Board. References to the “Committee” shall refer to the Committee and, if and as
applicable, the Board.

          3.2
Authority of the Committee. Subject to the provisions of the Plan, the
Committee shall have full power to select the Participants who shall participate
in the Plan (who may change from time to time); determine the sizes and types of
Awards; determine the terms and conditions of Awards in a manner consistent with
the Plan (including but not limited to conditions regarding the vesting,
exercisability and earning of Awards, restrictions on transferability and the
duration of the Awards); approve the forms of Agreements or other instruments
related to Awards; construe and interpret the Plan and any Agreement or
instrument entered into under the Plan; establish, amend or waive rules and
regulations for the Plan’s administration; and (subject to the provisions of
Article 15) amend the terms and conditions of any outstanding Award to the
extent such terms and conditions are within the discretion of the Committee as
provided in the Plan, including accelerating the vesting, earning or
exercisability of Awards, extending the period during which Options or SARs may
be exercised (subject to any Code Section 409A considerations) and establishing
different terms and conditions relating to the effect of the termination of
employment or other services to the Company. The Committee may determine that a
Participant’s rights, payments and/or benefits with respect to an Award
(including but not limited to any Shares issued or issuable and/or cash paid or
payable with respect to an Award) shall be subject to reduction, cancellation,
forfeiture or recoupment upon the occurrence of certain specified events, in
addition to any otherwise applicable vesting or performance conditions of


5







an Award. Such events may include, but
shall not be limited to, termination of employment for Cause, violation of
policies of the Company or an Affiliate, breach of non-solicitation,
noncompetition, confidentiality or other restrictive covenants that may apply to
the Participant, other conduct by the Participant that is determined by the
Committee to be detrimental to the business or reputation of the Company or any
Affiliate, and/or other circumstances where such reduction, cancellation,
forfeiture or recoupment is required by Applicable Law. The Committee shall also
have authority to make all other determinations which may be necessary or
advisable in the Committee’s opinion for the administration of the Plan. All
expenses of administering this Plan shall be borne by the Company.

          3.3 Decisions Binding; Committee Action; Limitations of
Liability. All determinations and decisions made by the Committee pursuant
to the provisions of the Plan and all related orders and resolutions of the
Board shall be final, conclusive and binding on all Persons, including the
Company, the shareholders, Participants and their estates and beneficiaries. In
addition to action by meeting in accordance with Applicable Law, any action of
the Committee with respect to the Plan may be taken by a written instrument
signed by all of the members of the Board or Committee, as appropriate, and any
such action so taken by written consent shall be as fully effective as if it had
been taken by a majority of the members at a meeting duly held and called. No
member of the Board or Committee, as applicable, shall be liable while acting as
Plan administrator for any action or determination made in good faith with
respect to the Plan, an Award or an Agreement.

          3.4
Participants in Foreign Countries. The Committee shall have the authority
to adopt such modifications, procedures, appendices and subplans as may be
necessary or desirable to comply with provisions of the laws of foreign
countries in which the Company or any Affiliate may operate to assure the
viability of the benefits from Awards granted to Participants employed or
providing services in such countries and to meet the objectives of the
Plan.

          3.5 No
Option or SAR Repricing Without Shareholder Approval. Except as provided in
Section 4.4 hereof relating to certain antidilution adjustments, unless the
approval of shareholders of the Company is obtained, (i) Options and SARs issued
under the Plan shall not be amended to lower their exercise price, (ii) Options
and SARs issued under the Plan shall not be exchanged for cash, for other
Options or SARs with lower exercise prices, or for other equity awards at a time
when the original Option or SAR has an Option Price or Initial Value, as the
case may be, above the Fair Market Value per Share, and (iii) no other action
shall be taken with respect to Options or SARs that would be treated as a
repricing under the rules of the principal securities exchange on which the
Shares are listed.

          3.6
Delegation. Notwithstanding the other provisions of Article 3, the
Committee may delegate to one or more officers of the Company the authority to
grant Awards to eligible Participants, and to make any or all of the
determinations reserved for the Committee in the Plan and summarized in Section
3.2 with respect to such Awards (subject to any restrictions imposed by
Applicable Law and such terms and conditions as may be established by the
Committee); provided, however, that, to the extent required by Section 16 of the
Exchange Act or Code Section 162(m), the Participant, at the time of said grant
or other determination, (i) is not deemed to be an officer or director of the
Company within the meaning of Section 16 of the Exchange Act; and (ii) is not
deemed to be a Covered Employee as defined under Code Section 162(m). To the
extent that the Committee has delegated authority to grant Awards pursuant to
this Section 3.6 to one or more officers of the Company, references to the
“Committee” shall include references to such officer or officers, subject,
however, to the requirements of the Plan, Rule 16b-3, Code Section 162(m) and
other Applicable Law.

ARTICLE 4. SHARES SUBJECT TO THE PLAN


          4.1
Number of Shares.

	     	(a)	     	Maximum Number of
      Shares. Subject to adjustments under Section 4.1(e) and Section 4.4
      below, the maximum number of Shares that are available for Awards to
      Participants and their beneficiaries under the Plan shall be equal to
      3,550,000, less one (1) Share for every one (1) Share that was subject to
      an option or stock appreciation right granted after January 29, 2012 under
      a Prior Plan and one and thirty three-hundredths (1.33) Shares for every
      one (1) Share that was subject to an award other than an option or stock
      appreciation right granted after January 29, 2012 under a Prior
      Plan.


6







	     	(b)	     	Share
      Counting Rules. Any Shares that are subject to Options or SARs shall
      be counted against this limit as one (1) Share for every one (1) Share
      granted, and any Shares that are subject to Awards other than Options or
      SARs shall be counted against this limit as one and thirty
      three-hundredths (1.33) Shares for every one (1) Share granted. If (i) any
      Shares subject to an Award are forfeited, an Award expires or an Award is
      settled for cash (in whole or in part), or (ii) after January 29, 2012 any
      Shares subject to an award under a Prior Plan are forfeited, or an award
      under a Prior Plan expires or is settled for cash (in whole or in part),
      then in each such case the Shares subject to such Award or award under a
      Prior Plan shall, to the extent of such forfeiture, expiration or cash
      settlement, again be available for Awards under the Plan, in accordance
      with Section 4.1(e) below. In the event that withholding tax liabilities
      arising from an Award other than an Option or SAR or after January 29,
      2012 an award other than an option or stock appreciation right under a
      Prior Plan are satisfied by the tendering of Shares (either actually or by
      attestation) or by the withholding of Shares by the Company, then the
      Shares so tendered or withheld shall again be available for Awards in
      accordance with Section 4.1(e) below.
		 
		(c)		Awards in
      Connection with Certain Corporate Transactions. Shares subject to an
      Award made through the settlement, assumption or substitution of
      outstanding awards granted by another entity or obligations to grant
      future awards as a condition of or in connection with a merger,
      acquisition or similar transaction involving the Company shall not reduce
      the maximum number of Shares available for Awards under the Plan; and
      available shares under a shareholder approved plan of an acquired company
      (as appropriately adjusted to reflect the transaction) may be used for
      Awards under the Plan (subject to applicable stock exchange listing
      requirements) and will not reduce the maximum number of Shares available
      for Awards under the Plan.
		 
		(d)		No
      Add-Backs. Notwithstanding anything to the contrary contained herein,
      the following Shares shall not be added to the maximum number of Shares
      that are available for Awards under paragraph (a) of this Section: (i) Shares tendered by the Participant or withheld
      by the Company in payment of the purchase price of an Option or after
      January 29, 2012 an option granted under a Prior Plan, (ii) Shares tendered by the Participant or withheld by the
      Company to satisfy any tax withholding obligation with respect to Options
      or SARs or after January 29, 2012 options or stock appreciation rights
      under a Prior Plan, (iii) Shares subject to an SAR or after January 29,
      2012 a stock appreciation right under a Prior Plan that are not issued in
      connection with its stock settlement on exercise thereof, and (iv) Shares
      reacquired by the Company on the open market or otherwise using cash
      proceeds from the exercise of Options or after January 29, 2012 options
      under a Prior Plan.
		 
		(e)		Add-Back
      Multiples. Any Shares that again become available pursuant to this
      Section 4.1 shall be added back as (i) one (1) Share for every one (1)
      Share subject to Options or SARs or options or stock appreciation rights
      under a Prior Plan, and (ii) as one and thirty three-hundredths (1.33)
      Shares for every one (1) Share subject to Awards other than Options or
      SARs or awards other than options or stock appreciation rights under a
      Prior Plan.


          4.2 Other Plan Limits. Subject to adjustment under
Section 4.4, the maximum number of Shares that may be issued in connection with
ISOs shall be 3,550,000.

          4.3
Nonexclusivity of the Plan. This Plan shall not be construed as creating
any limitation on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of options and other awards otherwise than under the Plan, and such
arrangements may be either applicable generally or only in specific
cases.

          4.4
Adjustments in Authorized Shares. In the event of (i) any change in
corporate capitalization, such as a stock split, reverse stock split or stock
dividend; (ii) any corporate transaction to which Code Section 424(a) applies;
or (iii) such other event which in the judgment of the Committee necessitates an
adjustment, such adjustment shall be made in the maximum number and kind of
Shares which may be delivered under the Plan as set forth in Section 4.1 above,
and in the number and kind of and/or price of Shares subject to outstanding
Awards granted under the Plan or Prior Plan, to prevent dilution or enlargement
of rights; provided, however, that (unless the Committee determines otherwise)
the number of Shares subject to any Award shall always be a whole number and the
Committee shall make 

7








such adjustments as are necessary to
ensure Awards of whole Shares. Except as expressly provided herein, the issuance
by the Company of Shares of stock of any class, or securities convertible into
shares of stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of Shares subject to
an outstanding Award. Nothing in the Plan, an Award or an Agreement shall limit
the ability of the Company to issue additional securities (including but not
limited to the issuance of other options or other derivative securities,
warrants, additional shares or classes of Common Stock, preferred stock and/or
other convertible securities).

ARTICLE 5. ELIGIBILITY AND
PARTICIPATION

     Any Director,
Employee or Consultant of the Company or a Parent, Subsidiary or other Affiliate
of the Company shall be eligible to receive an Award under the Plan if selected
to participate by the Committee. In determining the individuals to whom such an
Award shall be granted and the number of Shares, if any, which may be granted
pursuant to that Award, the Committee shall take into account the duties of the
respective individual, his or her present and potential contributions to the
success of the Company or a Parent, Subsidiary or other Affiliate of the
Company, and such other factors as the Committee shall deem relevant in
connection with accomplishing the purpose of the Plan. 

ARTICLE 6. STOCK OPTIONS

          6.1
Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Participants at any time and from time to time as
shall be determined by the Committee; provided, however, that ISOs may only be
granted to Employees of the Company or a Parent or Subsidiary. Subject to Plan
terms, the Committee shall have sole discretion to determine the number of
Shares subject to Options granted to each Participant. An Option may be granted
with or without a Corresponding SAR. No Participant may be granted ISOs (under
the Plan and all other incentive stock option plans of the Company and any
Parent or Subsidiary) which are first exercisable in any calendar year for
Common Stock having an aggregate Fair Market Value (determined as of the date an
Option is granted) that exceeds One Hundred Thousand Dollars ($100,000). The
preceding annual limit shall not apply to NQSOs. The Committee may grant a
Participant ISOs, NQSOs or a combination thereof, and may vary such Awards among
Participants. Subject to adjustments under the principles set forth in Section
4.4 above, the maximum number of Shares subject to Options which can be granted
under the Plan during any calendar year to any individual is 1,000,000
Shares.

          6.2
Agreement. Each Option grant shall be evidenced by an Agreement that
shall specify the Option Price, the duration of the Option, the number of Shares
to which the Option pertains and such other provisions as the Committee shall
determine. The Agreement shall further specify whether the Option is intended to
be an ISO or an NQSO. Any portion of an Option that is not designated as an ISO
or otherwise fails or is not qualified as an ISO (even if designated as an ISO)
shall be a NQSO. If the Option is granted in connection with a Corresponding
SAR, the Agreement shall also specify the terms that apply to the exercise of
the Option and Corresponding SAR. The Committee may provide in the Agreement for
transfer restrictions, repurchase rights, vesting requirements and other
limitations on the Option or the Shares to be issued pursuant to the exercise of
an Option.

          6.3
Option Price. The Option Price shall not be less than one hundred percent
(100%) of the Fair Market Value of a Share on the date the Option is granted. In
no event, however, shall any Participant who owns (within the meaning of Code
Section 424(d)) stock of the Company possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company be
eligible to receive an ISO at an Option Price less than one hundred ten percent
(110%) of the Fair Market Value of a Share on the date the ISO is granted. The
Committee is authorized to issue Options, whether ISOs or NQSOs, at an Option
Price in excess of the Fair Market Value on the date the Option is granted (a
so-called “Premium Price” Option) to encourage superior performance. Further,
notwithstanding the foregoing, the Committee may in its discretion authorize the
grant of substitute or assumed options of an acquired entity with an Option
Price not equal to 100% of the Fair Market Value of the stock on the date of
grant, if the terms of such substitution or assumption otherwise comply, to the
extent deemed applicable, with Code Section 409A and/or Code Section
424(a).

          6.4 Date
of Grant; Duration of Options. An Option shall be considered to be granted
on the date that the Committee acts to grant the Option, or on such other date
as may be established by the Committee in accordance with Applicable Law. Each
Option shall expire at such time as the Committee shall determine at the time of
grant; provided, however, that no Option shall be exercisable later than the
tenth (10th) anniversary date of its 

8







grant; and, provided further, however,
that (i) any ISO granted to any Participant who at such time owns (within the
meaning of Code Section 424(d)) stock of the Company possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company shall not be exercisable later than the fifth (5th) anniversary date of
its grant, and (ii) the term of a NQSO shall, unless the Committee determines
otherwise, automatically be extended if exercise at the end of the original term
would violate Applicable Law, but such extension may not exceed thirty (30) days
from the expiration of the period during which exercise is prohibited, and any
such extension must be in accordance with Reg. Section 1.409A-1(b)(5)(v)(C)(1).

          6.5 Exercise of Options.

	       	(a)	       	General.
      Options granted under the Plan shall be vested and exercisable at such
      times and subject to such restrictions and conditions as the Committee
      shall in each instance approve, including conditions related to the
      employment of or provision of services by the Participant with the Company
      or any Parent, Subsidiary or other Affiliate, which need not be the same
      for each grant or for each Participant. Each Option shall be exercisable
      for such number of Shares and at such time or times, including periodic
      installments, as may be determined by the Committee, subject to the
      provisions of Section 6.5(b) herein. Except as otherwise provided in an
      Agreement or Article 14, the right to purchase Shares that are exercisable
      in periodic installments shall be cumulative so that when the right to
      purchase any Shares has accrued, such Shares or any part thereof may be
      purchased at any time thereafter until the expiration or termination of
      the Option. The exercise or partial exercise of either an Option or its
      Corresponding SAR shall result in the termination of the other to the
      extent of the number of Shares with respect to which the Option or
      Corresponding SAR is exercised.
		 
		(b)		Vesting
      Restrictions. Notwithstanding the provisions of Section 6.5(a),
      Options granted to an Employee under the Plan shall be subject to a
      minimum vesting period of three years (which may include installment
      vesting within such three-year period) or one year if the vesting is based
      on performance criteria other than continued service; provided, however,
      that (i) the Committee may provide for acceleration of vesting of all or a
      portion of an Option in the event of a Participant’s death, Disability or
      Retirement, or upon the occurrence of a Change in Control of the Company;
      (ii) the Committee may provide for the grant of an Option without a
      minimum vesting period or may accelerate the vesting of all or a portion
      of an Option for any reason, but only with respect to Awards for no more
      than an aggregate of ten percent (10%) of the total number of Shares
      authorized for issuance under the Plan pursuant to Section 4.1 herein (and
      including in the calculation of whether such ten percent (10%) threshold
      has been met any Awards granted to Employees without minimum vesting
      periods pursuant to subpart (iii) of Section 7.3(b) or subpart (iii) of
      Section 8.2(b) herein), upon such terms and conditions as the Committee
      shall determine; and (iii) the Committee also may provide for the grant of
      Options that have different vesting terms in the case of Options that are
      substituted for other equity awards in connection with mergers,
      consolidations or other similar transactions, Options that are granted as
      an inducement to be employed by the Company or an Affiliate or to replace
      forfeited awards from a former employer, or Options that are granted in
      exchange for foregone cash compensation.


          6.6
Payment. Options shall be exercised by the delivery of a written notice
of exercise to the Company, setting forth the number of Shares with respect to
which the Option is to be exercised, accompanied by full payment for the Shares.
The Option Price upon exercise of any Option shall be payable to the Company in
full, either: (a) in cash, (b) in cash equivalent approved by the Committee, (c)
if approved by the Committee, by tendering previously acquired Shares (or
delivering a certification of ownership of such Shares) having an aggregate Fair
Market Value at the time of exercise equal to the Option Price or portion
thereof, (d) if approved by the Committee, by withholding Shares subject to the
Option having an aggregate Fair Market Value at the time of exercise equal to
the Option Price or portion thereof, or (e) if approved by the Committee, by a
combination of (a), (b), (c) and (d). The Committee also may allow cashless
exercises as permitted under Federal Reserve Board’s Regulation T, subject to
applicable securities law restrictions, or by any other means which the
Committee determines to be consistent with the Plan’s purpose and Applicable
Law. The Committee may establish terms and conditions applicable to any such
payment methods. As soon as practicable after receipt of a written notification
of exercise and full payment, the 

9







Company shall deliver to the
Participant, in the Participant’s name, share certificates in an appropriate
amount based upon the number of Shares purchased under the Option(s), and may
place appropriate legends on the certificates representing such
Shares.

          6.7 Nontransferability. Incentive Options shall not be
transferable (including by sale, assignment, pledge or hypothecation) other than
by will or the laws of intestate succession or, in the Committee’s discretion,
as may otherwise be permitted in accordance with Treas. Reg. Section 1.421-1(b)(2) or Treas. Reg. Section 1.421-2(c) or any successor provisions thereto.
Nonqualified Options shall not be transferable (including by sale, assignment,
pledge, or hypothecation) other than by will or the laws of intestate
succession, except for transfers without consideration if and to the extent
permitted by the Committee in a manner consistent with the registration
provisions of the Securities Act. Except as may be permitted by the preceding
sentences, an Option shall be exercisable during the Participant’s lifetime only
by him or by his guardian or legal representative. The designation of a
beneficiary in accordance with the Plan does not constitute a
transfer.

          6.8
Shareholder Rights. No Participant shall have any rights as a shareholder
with respect to Shares subject to his Option until the issuance of such Shares
to the Participant pursuant to the exercise of such Option.

          6.9
Post-Termination Rights; Forfeiture. The Committee shall determine the
extent, if any, to which a Participant may have the right to exercise an Option
following termination of the Participant’s employment or service with the
Company or an Affiliate or whether such Option shall be forfeited or terminated
in whole or in part upon such event. Such rights, if any, shall be subject to
the sole discretion of the Committee, shall be stated in the individual
Agreement, need not be uniform among all Options issued pursuant to the Plan,
and may reflect distinctions based on the reasons for termination of employment
or service or for other reasons.

          6.10
Notice of Disposition. If Shares acquired upon exercise of an Incentive
Stock Option are disposed of within two years following the date of grant or one
year following the transfer of such Shares to a Participant upon exercise, the
Participant shall, promptly following such disposition, notify the Company in
writing of the date and terms of such disposition and provide such other
information regarding the disposition as the Committee may reasonably
require.

ARTICLE 7. STOCK APPRECIATION
RIGHTS

          7.1
Grants of SARs. The Committee shall designate Participants to whom SARs
are granted, and will specify the number of Shares subject to each grant. An SAR
may be granted with or without a related Option. SARs granted under this Plan
shall be subject to an Agreement in accordance with the terms of this Plan. The
Initial Price of an SAR shall not be less than one hundred percent (100%) of the
Fair Market Value of a Share on the date of grant. Notwithstanding the
foregoing, the Committee may in its discretion authorize the grant of substitute
or assumed SARs of an acquired entity with an Initial Price per share not equal
to at least 100% of the Fair Market Value of the stock on the date of grant, if
the terms of such substitution or assumption otherwise comply, to the extent
deemed applicable, with Code Section 409A and/or Code Section 424(a). A payment
to the Participant upon the exercise of an SAR may not be more than the
difference between the Fair Market Value of the Shares with respect to the SAR
on the date of exercise and the Fair Market Value of the Shares with respect to
the SAR on the date of grant of the SAR. Subject to adjustments under the
principles set forth in Section 4.4, above, the maximum number of Shares subject
to SARs which can be granted under the Plan during any calendar year to any
individual is 1,000,000 Shares (or, with respect to SARs settled in cash, the
Fair Market Value thereof determined at the time of grant of the
SAR).

          7.2
Duration of SARs. The duration of an SAR shall be set forth in the
Agreement as determined by the Committee; provided, however, that no SAR shall
be exercisable later than the tenth (10th) anniversary date of its grant; and,
provided further, that the term of an SAR (other than a Corresponding SAR
granted in relation to an ISO) shall, unless the Committee determines otherwise,
automatically be extended if exercise at the end of the original term would
violate Applicable Law, but such extension may not exceed thirty (30) days from
the expiration of the period during which exercise is prohibited, and any such
extension must be in accordance with Reg. Section 1.409A-1(b)(5)(v)(C)(1). An
SAR that is granted as a Corresponding SAR shall have the same duration as the
Option to which it relates.

10








          7.3 Exercise of SAR.

	       	(a)	       	General. An SAR
      may be exercised in whole at any time or in part from time to time and at
      such times and in compliance with such requirements as the Committee shall
      determine (subject to the provisions of Section 7.3(b) herein); provided,
      however, that a Corresponding SAR that is related to an Incentive Stock
      Option may be exercised only to the extent that the related Option is
      exercisable and only when the Fair Market Value of the Shares exceeds the
      Option Price of the related ISO. An SAR may be exercised with respect to
      any number of whole Shares less than the full number of Shares for which
      the SAR could be exercised. A partial exercise of an SAR shall not affect
      the right to exercise the SAR from time to time in accordance with this
      Plan and the applicable Agreement with respect to the remaining Shares
      subject to the SAR. The exercise of either an Option or Corresponding SAR
      shall result in the termination of the other to the extent of the number
      of Shares with respect to which the Option or its Corresponding SAR is
      exercised.
		 
		(b)		Vesting
      Restrictions. Notwithstanding the provisions of Section 7.3(a), SARs
      granted to an Employee under the Plan shall be subject to a minimum
      vesting period of three years (which may include installment vesting
      within such three-year period) or one year if the vesting is based on
      performance criteria other than continued service; provided, however, that
      (i) the Committee may provide for acceleration of vesting of all or a
      portion of an SAR in the event of a Participant’s death, Disability or
      Retirement, or upon the occurrence of a Change in Control of the Company;
      (ii) the Committee may provide for the grant of an SAR without a minimum
      vesting period or may accelerate the vesting of all or a portion of an SAR
      for any reason, but only with respect to Awards for no more than an
      aggregate of ten percent (10%) of the total number of Shares authorized
      for issuance under the Plan pursuant to Section 4.1 herein (and including
      in the calculation of whether such ten percent (10%) threshold has been
      met any Awards granted to Employees without minimum vesting periods
      pursuant to subpart (ii) of Section 6.5(b) or subpart (ii) of Section
      8.2(b) herein), upon such terms and conditions as the Committee shall
      determine; and (iii) the Committee also may provide for the grant of SARs
      that have different vesting terms in the case of SARs that are substituted
      for other equity awards in connection with mergers, consolidations or
      other similar transactions, SARs that are granted as an inducement to be
      employed by the Company or an Affiliate or to replace forfeited awards
      from a former employer, or SARs that are granted in exchange for foregone
      cash compensation.


          7.4
Determination of Payment of Cash and/or Shares Upon Exercise of SAR. At
the Committee’s discretion, the amount payable as a result of the exercise of an
SAR may be settled in cash, Shares or a combination of cash and
Shares.

          7.5
Nontransferability. SARs granted under the Plan shall be nontransferable
except by will or by the laws of intestate succession, except for transfers
without consideration if and to the extent permitted by the Committee in a
manner consistent with the registration provisions of the Securities Act. Except
as may be permitted by the preceding sentence, during the lifetime of the
Participant to whom an SAR is granted, the SAR may be exercised only by the
Participant. No right or interest of a Participant in any SAR shall be liable
for, or subject to any lien, obligation or liability of such Participant. A
Corresponding SAR shall be subject to the same restrictions on transfer as the
Option to which it relates.

          7.6
Shareholder Rights. No Participant shall have any rights as a shareholder
with respect to Shares subject to an SAR until the issuance of Shares (if any)
to the Participant pursuant to the exercise of such SAR.

          7.7
Post-Termination Rights; Forfeiture. The Committee shall determine the
extent, if any, to which a Participant may have the right to exercise an SAR
following termination of the Participant’s employment or service with the
Company or an Affiliate or whether such SAR shall be forfeited in whole or in
part upon such termination. Such rights, if any, shall be determined in the sole
discretion of the Committee, shall be stated in the individual Agreement, need
not be uniform among all SARs issued pursuant to this Plan, and may reflect
distinctions based on the reasons for termination of employment or service or
for other reasons.

11







ARTICLE 8. RESTRICTED STOCK AWARDS;
RESTRICTED STOCK UNITS; STOCK AWARDS

          8.1 Grants. The Committee may from time to time in its
discretion grant Restricted Stock Awards, Restricted Stock Units and Stock
Awards to Participants and may determine the number of Shares (if any) to be
subject to such Awards. Restricted Stock Awards and Stock Awards shall be
payable in Shares. Restricted Stock Units shall be payable in cash or Shares, or
partly in cash and partly in Shares, in accordance with the terms of the Plan
and the discretion of the Committee. The Committee shall determine the terms and
conditions of, and the amount of payment, if any, to be made by the Participant
for Shares subject to, a Restricted Stock Award, Restricted Stock Unit or Stock
Award. A grant of such an Award may, in addition to other conditions, require
the Participant to pay for such Shares, but the Committee may establish a price
below Fair Market Value at which the Participant can purchase the Shares. Each
grant of a Restricted Stock Award, Restricted Stock Unit or Stock Award shall be
evidenced by an Agreement containing such terms and conditions not inconsistent
with the Plan as the Committee shall determine to be appropriate in its sole
discretion. Subject to adjustments under the principles set forth in Section 4.4
above, the maximum number of Shares subject to a Restricted Stock Award,
Restricted Stock Unit and/or Stock Award which can be granted under the Plan
during any calendar year to any individual is 1,000,000 Shares (or, with respect
to any Restricted Stock Units settled in cash, the Fair Market Value thereof
determined at the time the Award is granted).

          8.2
Restricted Period; Lapse of Restrictions.

	       	(a)	       	General. At the
      time a Restricted Stock Award or a Restricted Stock Unit is granted, the
      Committee shall establish a period or periods of time (the “Restricted
      Period”) and other terms and conditions, if any, applicable to such
      grant (subject to the provisions of Section 8.2(b) herein). Subject to the
      other provisions of this Article 8, at the end of the Restricted Period
      and upon satisfaction of such other terms and conditions as may be
      established by the Committee, such restrictions shall lapse and the
      Restricted Stock Award or Restricted Stock Unit shall vest in the
      Participant.
		  
		(b)		Vesting
      Restrictions. Notwithstanding the provisions of Section 8.2(a),
      Restricted Stock Awards and Restricted Stock Units granted to an Employee
      under the Plan shall be subject to a minimum vesting period of three years
      (which may include installment vesting within such three-year period) or
      one year if the vesting is based on performance criteria other than
      continued service; provided, however, that (i) the Committee may provide
      for acceleration of vesting of all or a portion of a Restricted Stock
      Award or Restricted Stock Unit in the event of a Participant’s death,
      Disability or Retirement, or upon the occurrence of a Change in Control of
      the Company; (ii) the Committee may provide for the grant of Restricted
      Stock Awards or Restricted Stock Units without a minimum vesting period or
      may accelerate the vesting of all or a portion of a Restricted Stock Award
      or Restricted Stock Unit for any reason, but only with respect to Awards
      for no more than an aggregate of ten percent (10%) of the total number of
      Shares authorized for issuance under the Plan pursuant to Section 4.1
      herein (and including in the calculation of whether such ten percent (10%)
      threshold has been met any Awards granted to Employees without minimum
      vesting periods pursuant to subpart (ii) of Section 6.5(b) or subpart (ii)
      of Section 7.3(b) herein), upon such terms and conditions as the Committee
      shall determine; and (iii) the Committee also may provide for the grant of
      Restricted Stock Awards and/or Restricted Stock Units that have different
      vesting terms in the case of Restricted Stock Awards and/or Restricted
      Stock Units that are substituted for other equity awards in connection
      with mergers, consolidations or other similar transactions, Restricted
      Stock Awards or Restricted Stock Units that are granted as an inducement
      to be employed by the Company or an Affiliate or to replace forfeited
      awards from a former employer, or Restricted Stock Awards or Restricted
      Stock Units that are granted in exchange for foregone cash
      compensation.
		 
		(c)		Forfeiture.
      Except as otherwise provided in the Plan or an Agreement or determined by
      the Committee, if the employment or service of a Participant shall be
      terminated for any reason (whether by the Company or the Participant and
      whether voluntary or involuntary) and all or any part of a Restricted
      Stock Award, Restricted Stock Unit or Stock Award has not vested or been
      earned


12







	                 
      	pursuant to the terms
      of the Plan and Agreement, such Award, to the extent not then vested or
      earned, shall be forfeited immediately upon such termination and the
      Participant shall have no further rights with respect
  thereto.


          8.3
Rights of Holder; Limitations Thereon.

	       	(a)	       	Upon the
      grant of a Restricted Stock Award, a stock certificate (or certificates)
      representing the number of Shares of Restricted Stock granted to the
      Participant may be registered in the Participant’s name and held in
      custody by the Company or a bank selected by the Committee for the
      Participant’s account. Following such registration, unless the Committee
      determines otherwise, the Participant shall have the rights and privileges
      of a shareholder as to such Restricted Stock, including the right to vote
      such Restricted Stock, except that the right to receive dividends shall be
      subject to such restrictions, if any, as may be established by the
      Committee (or as may apply under Section 18.17 herein), and except further
      that, the following restrictions shall apply:
		 
				(i)	       	The Participant shall
      not be entitled to delivery of a certificate until the expiration or
      termination of the Restricted Period for the Shares represented by such
      certificate and the satisfaction of any and all other terms and conditions
      prescribed by the Committee;
		 
				(ii)		None of the Shares of
      Restricted Stock may be sold, transferred, assigned, pledged or otherwise
      encumbered or disposed of during the Restricted Period and until the
      satisfaction of any and all other conditions prescribed by the Committee;
      and
		 
				(iii)		In the event of the
      forfeiture of any Shares of Restricted Stock, such forfeited Shares shall
      be transferred to the Company without further action by the Participant
      and shall, in accordance with Section 4.1, again be available for grant
      under the Plan. If the Participant paid any amount for the Shares of
      Restricted Stock that are forfeited, then, unless the Committee determines
      otherwise, the Company shall pay the Participant the lesser of the Fair
      Market Value of the Shares on the date they are forfeited or the amount
      paid by the Participant.
		 
		(b)		Unless the
      Committee determines otherwise, (i) a Participant who is granted a
      Restricted Stock Unit shall have none of the rights of a shareholder with
      respect to any Shares underlying such Award unless and until the Shares
      (or portion thereof) are delivered to him, and (ii) a certificate or
      certificate representing Shares issuable pursuant to a Restricted Stock
      Unit (to the extent the RSU is settled in Shares) shall be issued in the
      name of the Participant promptly after the Award (or portion thereof) has
      vested and is distributable.
		 
		(c)		With respect
      to any Shares received as a result of adjustments under Section 4.4 hereof
      and any Shares received with respect to dividends declared on Shares
      subject to a Restricted Stock Award or Restricted Stock Unit, the
      Participant shall have the same rights and privileges, and be subject to
      the same restrictions, as are set forth in this Article 8, unless the
      Committee determines otherwise.


          8.4
Delivery of Unrestricted Shares. Upon the expiration or termination of
the Restricted Period for any Shares of Restricted Stock or Shares issuable
pursuant to a Restricted Stock Unit (to the extent the RSU is settled in Shares)
and the satisfaction of any and all other terms and conditions prescribed by the
Committee, the restrictions applicable to such Shares shall lapse and a stock
certificate for the number of Shares subject to the Award with respect to which
the restrictions have lapsed shall be delivered to the Participant, free of all
such restrictions except any that may be imposed by Applicable Law or any
applicable agreement. Concurrently with the delivery of a certificate for such
Shares, the holder shall be required to pay an amount necessary to satisfy any
applicable federal, state, local, and foreign tax requirements as set out in
Article 16 below.

          8.5
Nonassignability. Unless the Committee determines otherwise, no grant of,
nor any right or interest of a Participant in or to, any Restricted Stock Award
or Restricted Stock Unit or in any instrument evidencing any grant of such an
Award may be assigned, encumbered or transferred except, in the event of the
death of a Participant, by will or the laws of intestate succession.

13







          8.6 Stock Awards. Subject to the Plan terms, the
Committee may grant Stock Awards to Participants upon such terms and conditions
as it shall determine. Without limiting the foregoing, Stock Awards may be
granted as additional compensation for services or may be granted in lieu of
cash or other compensation to which a Participant may be entitled and may, but
are not required to, be subject to vesting or other conditions. Upon the grant
of a Stock Award, Shares shall be issued to the Participant not later than March
15 of the year following the year in which the Stock Award is granted (or shall
otherwise be distributed in a manner intended to be exempt from, or compliant
with, Code Section 409A if and to the extent applicable).

ARTICLE 9. PERFORMANCE
AWARDS

          9.1
Grants. The Committee may designate Participants to whom Performance
Awards will be granted from time to time and specify the number of Shares, if
any, covered by the Award. Performance Awards may be in the form of Performance
Unit Awards and/or Performance Share Awards. Subject to adjustments under the
principles set forth in Section 4.4 above, the maximum number of Shares subject
to Performance Awards which can be granted under the Plan during any calendar
year to any individual is 1,000,000 Shares (or, with respect to Performance
Awards settled in cash, the Fair Market Value thereof determined at the time the
Award is granted).

          9.2
Earning the Award; Forfeiture. A Performance Award, or portion thereof,
will be earned, and the Participant will be entitled to receive Shares, a cash
payment or a combination thereof (as determined by the Committee), only upon the
achievement by the Participant, the Company, or a Parent, Subsidiary or other
Affiliate (or divisions or business units thereof) of such performance
objectives as the Committee, in its discretion, shall prescribe. Except as
otherwise provided in the Plan or an Agreement or determined by the Committee,
if the employment or service of a Participant shall be terminated for any reason
(whether by the Company or the Participant and whether voluntary or involuntary)
and all or any part of a Performance Award has not vested or been earned
pursuant to the terms of the Plan and Agreement, such Award, to the extent not
then vested or earned, shall be forfeited immediately upon such termination and
the Participant shall have no further rights with respect thereto.

          9.3
Payment. In the discretion of the Committee, the amount payable when a
Performance Award is earned may be settled in cash, Shares or a combination of
cash and Shares. In the case of Performance Awards denominated in
Shares, the
aggregate Fair Market Value of the Shares received by the Participant, together
with any cash paid to the Participant, shall be equal to the aggregate Fair
Market Value of the number of Shares earned with respect to the Award,
determined as of the date the Award is earned.

          9.4
Shareholder Rights. No Participant shall have, as a result of receiving a
Performance Award, any rights as a shareholder until and to the extent that the
Performance Awards are earned and Shares are transferred to such Participant.
After a Performance Award is earned and to the extent paid in Shares, a
Participant will have all the rights of a shareholder with respect to the Shares
so awarded; provided that the restrictions of any agreement shall, if
applicable, continue to apply.

          9.5
Nonassignability. Unless the Committee determines otherwise, no grant of,
nor any right or interest of a Participant in or to, any Performance Award or in
any instrument evidencing any grant of such an Award may be assigned, encumbered
or transferred except, in the event of the death of a Participant, by will or
the laws of intestate succession.

ARTICLE 10. PHANTOM STOCK
AWARDS

          10.1
Grants. The Committee may designate Participants to whom Phantom Stock
Awards will be granted from time to time and specify the number of Shares, if
any, covered by the Award. Subject to adjustments under the principles set forth
in Section 4.4 above, the maximum number of Shares subject to Phantom Stock
Awards which can be granted under the Plan during any calendar year to any
individual is 1,000,000 Shares (or, with respect to Phantom Stock Awards settled
in cash, the Fair Market Value thereof determined at the time the Award is
granted).

          10.2
Earning the Award; Forfeiture. A Phantom Stock Award, or portion thereof,
will be earned, and the Participant will be entitled to receive Shares, a cash
payment or a combination thereof (as determined by the Committee), only upon the
achievement by the Participant of such terms and conditions as the Committee, in
its discretion, shall prescribe. Except as otherwise provided in the Plan or an
Agreement or determined by the Committee, if the employment or service of a
Participant shall be terminated for any reason (whether by the Company


14







or the Participant and whether
voluntary or involuntary) and all or any part of a Phantom Stock Award has not
vested or been earned pursuant to the terms of the Plan and Agreement, such
Award, to the extent not then vested or earned, shall be forfeited immediately
upon such termination and the Participant shall have no further rights with
respect thereto.

          10.3 Payment. Upon vesting of all or a part of a
Phantom Stock Award and satisfaction of such other terms and conditions as may
be established by the Committee, the Participant shall be entitled to a payment
of an amount equal to the Fair Market Value of one Share with respect to each
such Phantom Stock unit which has vested and is payable. Payment may be made, in
the discretion of the Committee, in cash or in Shares valued at their Fair
Market Value on the applicable vesting date or dates (or other date or dates
determined by the Committee), or in a combination thereof.

          10.4 Shareholder Rights. No Participant shall have, as
a result of receiving a Phantom Stock Award, any rights as a shareholder until
and to the extent that the Phantom Stock Awards are earned and Shares are
transferred to such Participant. After a Phantom Stock Award is earned and to
the extent paid in Shares, a Participant will have all the rights of a
shareholder with respect to the Shares so awarded; provided that the
restrictions of any agreement shall, if applicable, continue to
apply.

          10.5
Nonassignability. Unless the Committee determines otherwise, no grant of,
nor any right or interest of a Participant in or to, any Phantom Stock Award or
in any instrument evidencing any grant of such an Award may be assigned,
encumbered or transferred except, in the event of the death of a Participant, by
will or the laws of intestate succession.

ARTICLE 11. BENEFICIARY
DESIGNATION

    
The Committee may permit a Participant under the Plan, from time to time,
to name any beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under the Plan is to be paid in case of his or
her death before he or she receives any or all of such benefit. Each such
designation shall revoke all prior designations by the same Participant, shall
be in a form and subject to any conditions prescribed by the Company and shall
be effective only when filed by the Participant, in writing, with the Company
during the Participant’s lifetime. A beneficiary or other person claiming any
rights pursuant to the Plan is subject to all terms and conditions of the Plan
and any Agreement applicable to the Participant, except to the extent that the
Plan and/or Agreement provide otherwise, and to any additional restrictions
deemed necessary or appropriate by the Committee. In the absence of any such
designation, benefits remaining unpaid at the Participant’s death shall be paid
to the Participant’s estate, unless the Committee determines otherwise. If
required, the spouse of a married Participant domiciled in a community property
jurisdiction shall join in any designation of a beneficiary or beneficiaries
other than the spouse.

ARTICLE 12. DEFERRALS

    
The Committee may (subject to any Code Section 409A considerations)
permit or require a Participant to defer such Participant’s receipt of Shares,
cash or other benefits that would otherwise be due to such Participant by virtue
of any Award. Any such deferrals shall be subject to such terms and conditions
as may be established by the Committee and to any applicable Code Section 409A
requirements.

ARTICLE 13. RIGHTS OF
PARTICIPANTS

          13.1 No
Right to Employment or Service. Nothing in the Plan or an Agreement shall
interfere with or limit in any way the right of the Company or an Affiliate to
terminate any Participant’s employment by, or performance of services for, the
Company or an Affiliate at any time, nor confer upon any Participant any right
to continue in the employ or service of the Company or an Affiliate. For
purposes of the Plan, transfer of employment of a Participant between the
Company and any one of its Affiliates (or between Affiliates) shall not be
deemed a termination of employment.

          13.2
Participation. No Employee shall have the right to be selected to receive
an Award under this Plan, or, having been so selected, to be selected to receive
a future Award. The Committee shall have no obligation to treat Participants or
Awards uniformly.

15







ARTICLE 14. CHANGE IN
CONTROL

          14.1 Definition. For purposes of the Plan, unless an
Agreement provides otherwise, a “Change in Control” means any of the following
events:

	      
    	(a)	      
    	The acquisition (other than from
      the Company) by any Person of Beneficial Ownership of fifty percent (50%)
      or more of the combined voting power of the Company’s then outstanding
      voting securities; provided, however, that for purposes of this Section
      14.1, Person shall not include any person who on the Effective Date owns
      25% or more of the Company’s outstanding securities, and a Change in
      Control shall not be deemed to occur solely because fifty percent (50%) or
      more of the combined voting power of the Company’s then outstanding
      securities is acquired by (i) a trustee or other fiduciary holding
      securities under one or more employee benefit plans maintained by the
      Company or any of its Affiliates, or (ii) any corporation, which,
      immediately prior to such acquisition, is owned directly or indirectly by
      the shareholders of the Company in the same proportion as their ownership
      of stock in the Company immediately prior to such
acquisition.
		 
		(b)		The consummation of (i) a merger,
      consolidation or similar transaction involving the Company if the
      shareholders of the Company, immediately after such transaction, do not,
      as a result of such transaction, own, directly or indirectly, more than
      fifty percent (50%) of the combined voting power of the then outstanding
      voting securities of the corporation resulting from such transaction in
      substantially the same proportion as their ownership of the combined
      voting power of the voting securities of the Company outstanding
      immediately before such transaction, or (ii) a complete liquidation or
      dissolution of the Company, or (iii) the sale or other disposition of all
      or substantially all of the assets of the Company.
		 
		(c)		A change in the composition of
      the Board during any twenty-four (24)-month period such that the
      individuals who, as of the first date of such period, constitute the Board
      (such Board shall be hereinafter referred to as the “Incumbent
      Board”) cease for any reason to constitute at least a majority of the
      Board; provided, however, for purposes of this Section 14.1 that any
      individual who becomes a member of the Board during any such twenty-four
      (24)-month period whose election or nomination for election by the
      Company’s shareholders was approved by a vote of at least a majority of
      those individuals who are members of the Board and who were also members
      of the Incumbent Board (or deemed to be such pursuant to this proviso)
      shall be considered as though such individual were a member of the Incumbent
      Board; but, provided, further, that any such individual whose initial
      assumption of office occurs as a result of either an actual or threatened
      election contest or other actual or threatened solicitation of proxies or
      consents by or on behalf of a Person other than the Board, shall not be so
      considered as a member of the Incumbent Board.


          14.2
Effect of Change in Control. The Committee shall have discretion to
determine at any time the effect, if any, on an Award, including but not limited
to the vesting, earning and/or exercisability of an Award (in whole or in part),
in the event of a Change in Control. Without limiting the effect of the
foregoing, the Committee’s discretion shall include, but shall in no way be
limited to, the discretion to determine with respect to all or any portion of an
Award that (a) the Award shall vest, be earned and/or become exercisable upon a
Change in Control, (b) vesting, earning and/or exercisability of the Award shall
accelerate upon a Change in Control, (c) exercise of the Award must occur, if at
all, within time period(s) specified by the Committee, after which time
period(s) the Award shall, unless the Committee determines otherwise, terminate,
(d) the Award shall be assumed or substituted for another award, (e) the Award
shall be cancelled without the payment of consideration, (f) the Award shall be
cancelled in exchange for a cash payment or other consideration in an amount
determined by the Committee, (g) the Award shall be subject to such treatment
(including but not limited to cancellation, cashout, assumption or substitution)
as is provided under the terms of the agreement or other instrument establishing
terms of the Change in Control transaction (e.g., a merger agreement); and/or
(h) other actions (or no action) shall be taken with respect to the Award. The
Committee also has discretion to determine that acceleration or any other effect
of a Change in Control on an Award shall be subject to 

16







both the occurrence of a Change in
Control event and termination of employment or service of the Participant upon
such terms and conditions as may be established by the Committee. Any such
determinations of the Committee may be, but shall not be required to be, stated
in an individual Agreement.

ARTICLE 15. AMENDMENT, MODIFICATION AND
TERMINATION

          15.1 Plan Amendment, Modification and Termination. The
Board may, at any time and from time to time, alter, amend, suspend or terminate
the Plan in whole or in part; provided, that (a) approval of an amendment to the
Plan by the shareholders of the Company shall be required to the extent, if any,
that shareholder approval of such amendment is required by Applicable Law or
otherwise deemed advisable by the Board; and (b) shareholder approval shall be
required to modify the shareholder approval requirements of Section 3.5 related
to Option and SAR repricings.

          15.2
Award Amendment, Modification and Termination. Except as otherwise
provided in Section 15.3 herein, no termination, amendment or modification of
the Plan or an outstanding Award shall adversely affect in any material way any
outstanding Award without the written consent of the Participant holding such
Award.

          15.3
Amendments to Comply with Applicable Law, Etc. Notwithstanding Section
15.1 and Section 15.2 herein, the following provisions shall apply:

	       	(a)	       	The Committee shall
      have unilateral authority to amend the Plan and any Award (without
      Participant
      consent) to the extent necessary to comply with Applicable Law or changes to Applicable Law (including
      but in no way limited to Code Section 409A, Code Section 422 and federal
      securities laws).
		 
		(b)		The Committee shall
      have unilateral authority to make adjustments to the terms and conditions
      of Awards in recognition of unusual or nonrecurring events affecting the
      Company or any Affiliate, or the financial statements of the Company or
      any Affiliate, or of changes in Applicable Law, or accounting principles,
      if the Committee determines that such adjustments are appropriate in order
      to prevent dilution or enlargement of the benefits or potential benefits
      intended to be made available under the Plan or necessary or appropriate
      to comply with applicable accounting principles or Applicable
    Law.


ARTICLE 16. WITHHOLDING

          16.1 Tax
Withholding. The Company shall have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient
to satisfy federal, state, local and foreign taxes (including but not limited to
the Participant’s FICA obligation) required by law to be withheld with respect
to any taxable event arising in connection with an Award under this
Plan.

          16.2
Share Withholding. With respect to withholding required upon the exercise
of Options, or upon any other taxable event arising as a result of Awards
granted hereunder which are to be paid in the form of Shares, Participants may
elect, subject to the approval of (and any conditions established by) the
Committee, to satisfy the withholding requirement, in whole or in part, by
having the Company withhold Shares having a Fair Market Value on the date the
tax is to be determined equal to (but not in excess of) the minimum statutory
total tax which could be imposed on the transaction. In addition, Participants
may elect, subject to the approval of (and any conditions established by) the
Committee, to satisfy tax withholding requirements by tendering Shares to the
Company. All elections shall be irrevocable, made in writing, signed by the
Participant, and elections by Insiders shall additionally comply with all legal
requirements applicable to Share transactions by such Participants.

ARTICLE 17. INDEMNIFICATION

    
Each person who is or shall have been a member of the Committee or the
Board shall be indemnified and held harmless by the Company against and from any
loss, cost, liability or expense that may be imposed upon or reasonably incurred
by him or her in connection with or resulting from any claim, action, suit or
proceeding to which he or she may be a party or in which he or she may be
involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company’s approval, or paid by him or her in satisfaction of any
judgment in any such action, suit or proceeding against him or her, provided he
or she shall give the Company an opportunity, at its own expense, to handle and
defend the same 

17







before he or she undertakes to handle
and defend it on his or her own behalf. The foregoing right of indemnification
shall be in addition to any other rights of indemnification to which such
persons may be entitled under the Company’s articles of incorporation or bylaws,
as a matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.

ARTICLE 18. ADDITIONAL
PROVISIONS

          18.1 Gender and Number. Except where otherwise
indicated by the context, any masculine term used herein shall also include the
feminine, the plural shall include the singular and the singular shall include
the plural.

          18.2
Severability. If any provision of the Plan shall be held illegal or
invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included.

          18.3
Compliance with Applicable Law. The Company may impose such restrictions
on Awards, Shares and any other benefits underlying Awards hereunder as it may
deem advisable, including without limitation restrictions under the federal
securities laws, the requirements of any securities exchange or similar
organization and any blue sky, state or foreign securities laws applicable to
such securities. Notwithstanding any other Plan provision to the contrary, the
Company shall not be obligated to issue, deliver or transfer Shares under the
Plan, make any other distribution of benefits under the Plan, or take any other
action, unless such delivery, distribution or action is in compliance with
Applicable Law (including but not limited to the requirements of the Securities
Act). The Company will be under no obligation to register Shares or other
securities with the Securities and Exchange Commission or to effect compliance
with the exemption, registration, qualification or listing requirements of any
state or foreign securities laws, securities exchange or similar organization,
and the Company will have no liability for any inability or failure to do so.
The Company may cause a restrictive legend or legends to be placed on any
certificate issued pursuant to an Award hereunder in such form as may be
prescribed from time to time by Applicable Law or as may be advised by legal
counsel.

          18.4
Section 16 Compliance. To the extent applicable, with respect to
Insiders, transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successors under the Exchange Act. To
the extent any provision of the Plan or action by the Committee fails to so
comply, it shall be deemed null and void, to the extent permitted by Applicable
Law and deemed advisable by the Committee.

          18.5
Governing Law. To the extent not preempted by federal law, the Plan, and
all Agreements hereunder, shall be construed in accordance with and governed by
the laws of the State of North Carolina, without regard to the principles of
conflicts of laws.

          18.6
Code Section 409A. Notwithstanding any other provision in the Plan or an
Agreement to the contrary, if and to the extent that Code Section 409A is deemed
to apply to the Plan or any Award, it is the general intention of the Company
that the Plan and all such Awards shall, to the extent practicable, comply with,
or be exempt from, Code Section 409A, and the Plan and any such Award shall, to
the extent practicable, be construed in accordance therewith. Deferrals of
Shares, cash or any other benefit issuable pursuant to an Award otherwise exempt
from Code Section 409A in a manner that would cause Code Section 409A to apply
shall not be permitted unless such deferrals are in compliance with, or exempt
from, Code Section 409A. In the event that the Company (or a successor thereto)
has any stock which is publicly traded on an established securities market or
otherwise, distributions that are subject to Code Section 409A to any
Participant who is a “specified employee” (as defined under Code Section 409A)
upon a separation from service may only be made following the expiration of the
six-month period after the date of separation from service (with such
distributions to be made during the seventh month following separation of
service), or, if earlier than the end of the six-month period, the date of death
of the specified employee, or as otherwise permitted under Code Section 409A.
Without in any way limiting the effect of any of the foregoing, (i) in the event
that Code Section 409A requires that any special terms, provisions or conditions
be included in the Plan or any Agreement, then such terms, provisions and
conditions shall, to the extent practicable, be deemed to be made a part of the
Plan or Agreement, as applicable, and (ii) terms used in the Plan or an
Agreement shall be construed in accordance with Code Section 409A if and to the
extent required. Further, in the event that the Plan or an Agreement 

18







shall be deemed not to comply with Code
Section 409A, then neither the Company, the Board, the Committee nor its or
their designees or agents shall be liable to any Participant or other person for
actions, decisions or determinations made in good faith.

          18.7 Shareholder Approval. The Plan is subject to
approval by the shareholders of the Company, which approval must occur, if at
all, within 12 months of the Effective Date of the Plan. Awards granted prior to
such shareholder approval shall be conditioned upon and shall be effective only
upon approval of the Plan by such shareholders on or before such
date.

          18.8 Compliance With Code Section 162(m). At all times
when the Committee determines that compliance with Code Section 162(m) is
required or desired, Awards granted under this Plan to Covered Employees shall
comply with the requirements of Code Section 162(m). In addition, in the event
that changes are made to Code Section 162(m) to permit greater flexibility with
respect to any Award or Awards under the Plan, the Committee may, subject to
this Article 18.8, make any adjustments it deems appropriate.

     The payment of
any Award that is intended to qualify for the “performance-based compensation”
exception under Code Section 162(m) shall be made only upon certification by the
Committee of the attainment, over a performance period established by the
Committee, of any one or more quantifiable performance targets, which have been
established by the Committee on a corporate, divisional, business unit and/or
individual basis in accordance with Code Section 162(m) requirements. Such
targets may be either absolute or relative and, with respect to compensation
payable to Covered Employees that is intended to quality as “performance-based
compensation” under Code Section 162(m), shall be based on one or more of the
following: earnings, earnings per share, earnings before interest, taxes and
depreciation and amortization (EBITDA), revenue, growth in earnings per share,
achievement of annual operating profit plans, operating profit margin, return on
equity performance, total shareholder return, stock price, system-wide sales,
same store sales, customer satisfaction, store income as a percentage of sales,
comparable store sales growth, number of new store operating weeks, achievement
of new store sales standards, return on assets, general administrative expenses
as a percentage of revenue, or aging of accounts receivable. The specific
performance targets for each participating executive officer shall be
established in writing by the Committee within 90 days after the commencement of
the fiscal year (or within such other time period as may be required by Code
Section 162(m)) to which the performance target relates. The performance target
shall be established in such a manner that a third party having knowledge of the
relevant facts could determine whether the performance goal has been met. The
performance targets for any Awards may be adjusted or modified due to
extraordinary items, transactions, events or developments, or in recognition of,
or in anticipation of, any other unusual or nonrecurring events affecting the
Company or the financial statements of the Company, or in response to, or in
anticipation of, changes in Applicable Law, accounting principles or business
conditions, in each case as determined by the Committee (subject to any Code
Section 162(m) restrictions applicable to Covered Employees for compensation
that is intended to qualify as “performance-based compensation” under Code
Section 162(m)).

          18.9
Unfunded Plan; No Effect on Other Plans.

	       	(a)	       	The Plan shall be
      unfunded, and the Company shall not be required to create a trust or
      segregate any assets that may at any time be represented by Awards under
      the Plan. The Plan shall not establish any fiduciary relationship between
      the Company and any Participant or other person. Neither a Participant nor
      any other person shall, by reason of the Plan, acquire any right in or
      title to any assets, funds or property of the Company or any Affiliate,
      including, without limitation, any specific funds, assets or other
      property which the Company or any Affiliate, in their discretion, may set
      aside in anticipation of a liability under the Plan. A Participant shall
      have only a contractual right to Shares or other amounts, if any, payable
      under the Plan, unsecured by any assets of the Company or any Affiliate.
      Nothing contained in the Plan shall constitute a guarantee that the assets
      of such entities shall be sufficient to pay any benefits to any
      person.


19







	       	(b)	       	The amount of any
      compensation deemed to be received by a Participant pursuant to an Award
      shall not constitute compensation with respect to which any other employee
      benefits of such Participant are determined, including, without
      limitation, benefits under any bonus, pension, profit sharing, life
      insurance or salary continuation plan, except as otherwise specifically
      provided by the terms of such plan or as may be determined by the
      Committee.
		 
		(c)		The adoption of the
      Plan shall not affect any other stock incentive or other compensation
      plans in effect for the Company or any Affiliate, nor shall the Plan
      preclude the Company from establishing any other forms of stock incentive
      or other compensation for employees or service providers of the Company or
      any Affiliate.


          18.10 Rules of Construction. Headings are given to the
sections of this Plan solely as a convenience to facilitate reference. The
reference to any statute, regulation or other provision of law shall (unless the
Committee determines otherwise) be construed to refer to any amendment to or
successor of such provision of law.

          18.11
Successors and Assigns. The Plan shall be binding upon the Company, its
successors and assigns, and Participants, their executors, administrators and
permitted transferees and beneficiaries.

          18.12
Right of Offset. Notwithstanding any other provision of the Plan or an
Agreement, the Company may (subject to any Code Section 409A considerations)
reduce the amount of any payment or benefit otherwise payable to or on behalf of
a Participant by the amount of any obligation of the Participant to or on behalf
of the Company or an Affiliate that is or becomes due and payable.

          18.13
Fractional Shares. Except as otherwise provided in an Agreement or
determined by the Committee, (a) the total number of Shares issuable pursuant to
the exercise, vesting or earning of an Award shall be rounded down to the
nearest whole share, and (b) no fractional shares shall be issued. The Committee
may, in its discretion, determine that a fractional share shall be settled in
cash.

          18.14
Uncertificated Shares. Notwithstanding anything in the Plan to the
contrary, to the extent the Plan provides for the issuance of stock certificates
to reflect the issuance of Shares, the issuance may, in the Company’s
discretion, be effected on a non-certificated basis, to the extent not
prohibited by the Company’s articles of incorporation or bylaws or by Applicable
Law (including but not limited to applicable state corporate law and the
applicable rules of any stock exchange on which the Common Stock may be
traded).

          18.15
Income and Other Taxes. Participants are solely responsible and liable
for the satisfaction of all taxes and penalties that may arise in connection
with Awards (including any taxes arising under Code Section 409A), and the
Company shall not have any obligation to indemnify or otherwise hold any
Participant harmless from any or all of such taxes.

          18.16
Compliance with Recoupment, Ownership and Other Policies. As a condition
to the grant of an Award or receipt of Shares, cash or any other benefit
thereunder, the Committee may require that a Participant agree to abide by the
Company’s Equity Retention Policy, Compensation Recovery Policy, Stock Ownership
Guidelines and/or other policies, each as in effect from time to time and to the
extent applicable to the Participant. In addition, each Participant shall be
subject to such compensation recovery, recoupment, forfeiture or other similar
provisions as may apply under Applicable Law.

          18.17
Dividends and Dividend Equivalents. The Committee may, in its discretion,
provide that Awards other than Options and SARs earn dividends or dividend
equivalents; provided, however, that dividends and dividend equivalents, if any,
on unearned or unvested performance-based Awards shall not be paid (even if
accrued) unless and until the underlying Award (or portion thereof) has vested
and/or been earned. Such dividends or dividend equivalents may be paid currently
or may be credited to a Participant’s account. Any crediting of dividends or
dividend equivalents may be subject to such additional restrictions and
conditions as the Committee may establish, including reinvestment in additional
Shares or share equivalents. Notwithstanding the other provisions herein, any
dividends or dividend equivalent rights related to an Award shall be structured
in a manner so as to avoid causing the Award and related dividends or dividend
equivalent rights to be subject to Code Section 409A or shall otherwise be
structured so that the Award and dividends or dividend equivalent rights are in
compliance with Code Section 409A.

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