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                              CERIDIAN CORPORATION
                    2001 DIRECTOR PERFORMANCE INCENTIVE PLAN

1.       PURPOSE OF PLAN.

         The purpose of the Ceridian Corporation 2001 Director Performance
Incentive Plan (the "Plan") is to advance the interests of Ceridian
Corporation, a Delaware corporation formerly known as New Ceridian
Corporation (the "Company"), and its stockholders by enabling the Company to
attract and retain the services of experienced and knowledgeable non-employee
directors, to increase the proprietary interests of such non-employee
directors in the Company's long-term success and their identification with
the interests of the Company's stockholders.

2.       DEFINITIONS.

         The following terms will have the meanings set forth below, unless
the context clearly otherwise requires:

         2.1 "ANNUAL RETAINER" means the annual cash retainer or meeting fees
payable to an Eligible Director for services as a member of the Board paid to
an Eligible Director during the fiscal year, excluding any cash retainer or
meeting fees paid an Eligible Director for serving as the chair of a
committee during the fiscal year.

         2.2 "ANNUAL RETAINER ELECTION" means the election made or deemed to
have been made by an Eligible Director relating to their Annual Retainer, as
provided in Section 7.1 hereof.

         2.3 "AWARD" means an Option, Restricted Stock Award, or Retainer
Share Award granted to an Eligible Director pursuant to the Plan.

         2.4 "BOARD" means the Board of Directors of the Company.

         2.5 "BROKER EXERCISE NOTICE" means a written notice pursuant to
which an Eligible Director, upon exercise of an Option, irrevocably instructs
a broker or dealer to sell a sufficient number of shares or loan a sufficient
amount of money to pay all or a portion of the exercise price of the Option
and/or any related withholding tax obligations and remit such sums to the
Company and directs the Company to deliver stock certificates to be issued
upon such exercise directly to such broker or dealer.

         2.6 "CHANGE OF CONTROL" means any of the following events:

                  (a) a merger or consolidation to which the Company is a
party if the individuals and entities who were stockholders of the Company
immediately prior to the effective date of such merger or consolidation have
beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of
less than 50% of the total combined voting power for election of directors of
the surviving corporation immediately following the effective date of such
merger or consolidation;

                  (b) the direct or indirect beneficial ownership (as defined
in Rule 13d-3 under the Exchange Act) in the aggregate of securities of the
Company representing 25% or more of the total combined voting power of the
Company's then issued and outstanding securities by any person or entity, or
group of associated persons or entities acting in concert;

                  (c) the sale of the properties and assets of the Company,
substantially as an entirety, to any person or entity which is not a
wholly-owned subsidiary of the Company;

                  (d) the stockholders of the Company approve any plan or
proposal for the liquidation of the Company;

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                  (e) a change in the composition of the Board at any time
during any consecutive 24 month period such that the "Continuity Directors"
cease for any reason to constitute at least a 70% majority of the Board. For
purposes of this clause, "Continuity Directors" means those members of the
Board who either (1) were directors at the beginning of such consecutive 24
month period, or (2) were elected by, or on the nomination or recommendation
of, at least a two-thirds majority of the then-existing Board of Directors; or

                  (f) such other event or transaction as the Board shall
determine constitutes a Change of Control.

         2.7 "CODE" means the Internal Revenue Code of 1986, as amended.

         2.8 "COMMITTEE" means the group of individuals administering the
Plan, as provided in Section 3 of the Plan.

         2.9 "COMMON STOCK" means the common stock of the Company, par value
$0.01 per share, or the number and kind of shares of stock or other
securities into which such Common Stock may be changed in accordance with
Section 4.3 of the Plan.

         2.10 "DEFERRED SHARES" shall have the meaning set forth in Section
7.3(a) hereof.

         2.11 "DEFERRED STOCK ACCOUNT" means a book keeping account
established and maintained by the Committee to evidence amounts credited with
respect to an Eligible Director's election to receive a portion of his or her
Annual Retainer in the form of Retainer Deferred Share Awards.

         2.12 "DISABILITY" means the disability of an Eligible Director such
as would entitle the Eligible Director to receive disability income benefits
pursuant to the long-term disability plan of the Company then covering the
Eligible Director or, if no such plan exists or is applicable to the Eligible
Director, the permanent and total disability of the Eligible Director within
the meaning of Section 22(e)(3) of the Code.

         2.13 "ELIGIBLE DIRECTORS" means all non-employee directors, within
the meaning of Rule 16b-3(b)(3)(i) or any successor provision, of the Company
who are not employees of the Company or any subsidiary of the Company.

         2.14 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

         2.15 "FAIR MARKET VALUE" means, with respect to the Common Stock, as
of any date (or, if no shares were traded or quoted on such date, as of the
next preceding date on which there was such a trade or quote), the closing
market price per share of the Common Stock, at the end of the regular trading
session, which as of the effective date of this Plan is 4:00 p.m., New York
City time, as reported on the New York Stock Exchange Composite Tape on that
date.

         2.16 "ISSUANCE YEAR" means the year in which the Award was made to
an Eligible Director.

         2.17 "OPTION" means a right to purchase 4,000 shares of Common Stock
(subject to adjustment as provided in Section 4.3 of the Plan) granted to an
Eligible Director pursuant to Section 6 of the Plan that does not qualify as
an "incentive stock option" within the meaning of Section 422 of the Code.

         2.18 "RESTRICTED SHARES" means shares of Common Stock that are the
subject of a Restricted Stock Award, and therefore subject to the
restrictions on transferability and the risk of forfeiture imposed by the
provisions of Sections 5 and 8.1 of the Plan.

         2.19 "RESTRICTED STOCK AWARD" means an award of Restricted Shares to
an Eligible Director pursuant to Section 5 of the Plan.


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         2.20 "RETAINER DEFERRED SHARE AWARD" means that portion of the
Annual Retainer that an Eligible Director has elected to defer in the form of
a credit to the Eligible Director's Deferred Stock Account pursuant to
Section 7.3 of the Plan.

         2.21 "RETAINER RESTRICTED SHARE AWARD" means that portion of an
Eligible Director's Annual Retainer that the Eligible Director has elected to
receive in the form of Restricted Shares pursuant to Section 7.2 of the Plan.

         2.22 "RETAINER SHARE AWARD" means a Retainer Deferred Share Award
and/or a Retainer Restricted Share Award.

         2.23 "SECURITIES ACT" means the Securities Act of 1933, as amended.

3.       PLAN ADMINISTRATION.

         The Plan will be administered by the Nominating and Board Governance
Committee of the Board, or any successor committee thereto (the "Committee").
The Committee may retain such actuarial, accounting, legal, clerical and
other services as may reasonably be required in the administration of the
Plan, and may pay reasonable compensation for such services. The Company will
pay all costs of administering the Plan. All questions of interpretation of
the Plan will be determined by the Committee, each determination,
interpretation or other action made or taken by the Committee pursuant to the
provisions of the Plan will be conclusive and binding for all purposes and on
all persons, and no member of the Committee will be liable for any action or
determination made in good faith with respect to the Plan or any Award
granted under the Plan. The Committee, however, will have no power to
determine the eligibility for participation in the Plan, the number of shares
of Common Stock to be subject to Awards, or the timing, pricing or other
terms and conditions of the Awards.

4.       SHARES AVAILABLE FOR ISSUANCE.

         4.1 MAXIMUM NUMBER OF SHARES AVAILABLE. Subject to adjustment as
provided in Section 4.3 of the Plan, the maximum number of shares of Common
Stock that will be available for issuance under the Plan will be 350,000
shares. The shares available for issuance under the Plan may, at the election
of the Committee, be either treasury shares or shares authorized but
unissued, and, if treasury shares are used, all references in the Plan to the
issuance of shares will, for corporate law purposes, be deemed to mean the
transfer of shares from treasury.

         4.2 ACCOUNTING FOR AWARDS. Shares of Common Stock that are issued
under the Plan or that are subject to outstanding Awards will be applied to
reduce the maximum number of shares of Common Stock remaining available for
issuance under the Plan. Any shares of Common Stock that are subject to an
Award that lapses, expires, or for any reason is terminated unexercised will
automatically again become available for issuance under the Plan.

         4.3 ADJUSTMENTS TO SHARES AND AWARDS. In the event of any
reorganization, merger, consolidation, recapitalization, liquidation,
reclassification, stock dividend, stock split, combination of shares, rights
offering, divestiture or extraordinary dividend (including a spin-off) or any
other change in the corporate structure or shares of the Company, the
Committee (or, if the Company is not the surviving corporation in any such
transaction, the board of directors of the surviving corporation) will make
appropriate adjustment (which determination will be conclusive) as to the
number and kind of securities available for issuance under the Plan and, in
order to prevent dilution or enlargement of the rights of Eligible Directors,
the number, kind and, where applicable, exercise price of securities subject
to outstanding Awards.


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5.       RESTRICTED STOCK AWARDS.

         5.1 GRANTS TO NEW DIRECTORS. At such time after the effective date
of this Plan as additional Eligible Directors are first elected or appointed
to the Board to fill new directorships or to fill vacancies, each such
Eligible Director will receive, on a one-time basis on the date of his or her
first election or appointment to the Board, a Restricted Stock Award. The
number of Restricted Shares to be awarded to each such Eligible Director
pursuant to such Restricted Stock Award shall be determined by first
multiplying the dollar value of the Annual Retainer paid to Eligible
Directors by 2.5, then dividing that result by the average closing price of a
share of Common Stock, at the end of the regular trading session, which as of
the effective date of this Plan is 4:00 p.m., New York City time, on the New
York Stock Exchange for the ten trading days immediately prior to the date of
such Eligible Director's first election or appointment to the Board, and then
rounding the result to the nearest 100 shares. Notwithstanding the foregoing,
Eligible Directors who are first elected or appointed to the Board in
connection with the spin-off transaction described in the Company's
Registration Statement on Form 10, as filed with the Securities Exchange
Commission on September 27, 2000 and as subsequently amended or supplemented,
will not receive the above mentioned Restricted Stock Award.

         5.2 RESTRICTIONS. Restricted Shares issued to an Eligible Director
may not be sold, assigned or otherwise transferred, or subjected to any lien,
either voluntarily or involuntarily, by operation of law or otherwise, until
such time and only to the extent that such restrictions on transferability
have lapsed as provided in this Section 5.2 or in Section 8.1. For purposes
of this Plan, the lapsing of such transferability restrictions is referred to
as "vesting," and Restricted Shares that are no longer subject to such
transferability restrictions are referred to as "vested." Except as provided
in Section 8.1, 20% of the total number of Restricted Shares subject to a
Restricted Stock Award granted pursuant to Section 5.1 hereof will vest on
each of the first five anniversary dates of the date such Restricted Stock
Award was first granted. Notwithstanding anything to the contrary set forth
in the Plan, if a Change of Control of the Company occurs and the Restricted
Stock Award has been outstanding for two months, the Restricted Shares
subject to the Restricted Stock Award shall immediately and fully vest.

         5.3 DIVIDENDS AND DISTRIBUTIONS. Unless the Committee determines
otherwise in its sole discretion (either in the agreement evidencing the
Restricted Stock Award at the time of grant or at any time after the grant of
the Restricted Stock Award), any dividends or distributions (including
regular quarterly cash dividends) paid with respect to Restricted Shares will
be currently paid to the Eligible Director and will be subject to the same
restrictions as the Restricted Shares to which such dividends or
distributions relate. In the event the Committee determines not to pay such
dividends or distributions currently, the Committee will determine in its
sole discretion whether any interest will be paid on such dividends or
distributions. In addition, the Committee, in its sole discretion, may
require such dividends and distributions to be reinvested (and in such case
the Eligible Director consent to such reinvestment) in shares of Common Stock
that will be subject to the same restrictions as the shares to which such
dividends or distributions relate.

         5.4 RIGHTS AS A STOCKHOLDER. Except as provided in this Section 5
and in Section 8.1, an Eligible Director will have all voting, dividend and
other rights with respect to Restricted Shares issued to the Eligible
Director upon the Eligible Director becoming the holder of record of such
Restricted Shares as if such Eligible Director were a holder of record of
shares of unrestricted Common Stock.

         5.5 ENFORCEMENT OF RESTRICTIONS. To enforce the restrictions
referred to in this Section 5, the Committee will place a legend on the stock
certificates referring to such restrictions and will require Eligible
Directors, until the Restricted Shares vest, to keep the stock certificates,
together with duly endorsed stock powers, in the custody of the Company or
its transfer agent or to maintain evidence of stock ownership, together with
duly endorsed stock powers if required, in a certificateless book-entry stock
account with the Company's transfer agent for its Common Stock.

6.       OPTIONS.

         6.1 GRANT. Each Eligible Director will be granted on an annual
basis, at such time as the Eligible Director is elected or re-elected to the
Board by the stockholders of the Company, an Option. Such Option will be
granted only upon such election or re-election of the Eligible Director, and
no Option will be


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granted if the Eligible Director is not so elected or re-elected.
Notwithstanding the foregoing, an Eligible Director who is first elected to
the Board by the Company's stockholders in connection with the spin-off
transaction described in the Company's Registration Statement on Form 10, as
filed with the Securities Exchange Commission on September 27, 2000 and as
subsequently amended or supplemented, will not receive an Option under this
Section 6.1 until such eligible director is re-elected to the Board by the
stockholders of the Company.

         6.2 EXERCISE PRICE. The per share price to be paid by an Eligible
Director upon exercise of an Option will be 100% of the Fair Market Value of
one share of Common Stock on the date of grant. The total purchase price of
the shares to be purchased upon exercise of an Option will be paid entirely
in cash (including check, bank draft or money order), or such payment may be
made, in whole or in part, by tender of a Broker Exercise Notice.

         6.3 EXERCISABILITY AND DURATION. Other than as provided in Section
8.1 of the Plan, each Option will become exercisable in full six months
following its date of grant and will expire and will no longer be exercisable
10 years from its date of grant.

         6.4 MANNER OF EXERCISE. An Option may be exercised by an Eligible
Director, in whole or in part from time to time, subject to the conditions
contained in the Plan and in the agreement evidencing such Option, by
delivery in person, by facsimile or electronic transmission or through the
mail, of written notice of exercise to the Company, Attention: Corporate
Treasury, at its principal executive office in Bloomington, Minnesota and by
paying in full the total exercise price for the shares of Common Stock to be
purchased in accordance with Section 6.2 of the Plan.

         6.5 RIGHTS AS A STOCKHOLDER. As a holder of Options, an Eligible
Director will have no rights as a stockholder unless and until such Options
are exercised for shares of Common Stock and the Eligible Director becomes
the holder of record of such shares. No adjustment will be made for dividends
or distributions with respect to Options as to which there is a record date
preceding the date the Eligible Director becomes the holder of record of such
shares.

         7.  PAYMENT OF PORTION OF ANNUAL RETAINER IN RETAINER SHARE AWARD.

         7.1 ANNUAL RETAINER ELECTION. Each year an Eligible Director must
elect to receive fifty percent (50%) (or such other greater percentage as the
Committee shall determine) or more of his or her Annual Retainer in the form
of (a) Retainer Restricted Share Awards pursuant to Section 7.2 hereof, (b)
Retainer Deferred Share Awards pursuant to Section 7.3 hereof, or (c) a
combination of Retainer Restricted Share Awards and Retainer Deferred Share
Awards ("Annual Retainer Election"). The Annual Retainer Election is made by
the Eligible Director by filing, no later than December 31 of each year (or
by such other date as the Committee shall determine), an irrevocable election
with the Company on a form provided for that purpose. The Annual Retainer
Election shall be effective with respect to the Annual Retainer payable on or
after January 1 of the following year. The Annual Retainer Election form
shall specify an amount to be received in the form of Retainer Restricted
Share Awards and/or Retainer Deferred Share Awards expressed as a dollar
amount or as a percentage of the Eligible Director's Annual Retainer. The
issuance of such a Retainer Restricted Share Award or Retainer Deferred Share
Award shall be in lieu of payment of that portion of the Annual Retainer in
cash. In the event that an Eligible Director fails to make a valid Annual
Retainer Election, such Eligible Director shall be deemed to have elected to
receive fifty percent (50%) (or such other greater percentage as the
Committee shall determine) of his or her Annual Retainer in the form of
Retainer Restricted Share Awards.

         7.2 RETAINER RESTRICTED SHARE AWARDS.

                  (a) On the first trading day of each calendar year, an
Eligible Director may be granted a Retainer Restricted Share Award. The number
of shares of Common Stock to be awarded to each Eligible Director pursuant to a
Retainer Restricted Share Award shall be determined based on dividing the dollar
amount of the portion of the Annual Retainer that the Eligible Director elected
to receive (or is deemed to have elected to receive) in the form of a Retainer
Restricted Share Award by the average closing price of a share of Common Stock,
at the end of the regular trading session, which as of the effective date of
this Plan is 4:00 p.m., New York City time, on the New York Stock Exchange for


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the last ten trading days of the immediately preceding calendar year, rounded
up to the nearest whole share.


                  (b) Shares subject to a Retainer Restricted Share Award may
not be sold, assigned or otherwise transferred, or subjected to any lien,
either voluntarily or involuntarily, by operation of law or otherwise, until
such time as the Eligible Director's service as a director of the Company
ceases. In addition, a portion of the shares subject to an Eligible
Director's most recent Retainer Restricted Share Award shall be forfeited if
the Eligible Director's service as a director of the Company ceases for any
reason prior to December 31 of the Issuance Year. The portion of the shares
subject to a Retainer Restricted Share Award that shall be forfeited pursuant
to this Section 7.2(b) shall be determined by multiplying the number of
shares subject to such Retainer Restricted Share Award by a fraction, the
numerator of which is the number of days remaining in the Issuance Year after
the date of such Eligible Director's cessation of service as a director and
the denominator of which is 365, rounded down to the nearest whole share.

                  (c) Except as otherwise provided in this Section 7.2, an
Eligible Director will have all voting, dividend, distribution and other
rights with respect to shares subject to a Retainer Restricted Share Award
upon the Eligible Director becoming the holder of record of such shares as if
such Eligible Director were a holder of record of shares of unrestricted
Common Stock. Notwithstanding the foregoing, unless the Committee determines
otherwise in its sole discretion, any dividends or distributions (including
regular quarterly cash dividends) paid with respect to a Retainer Restricted
Share Award will be currently paid to the Eligible Director and will be
subject to the same restrictions as the Retainer Restricted Share Awards to
which such dividends or distributions relate. In the event the Committee
determines not to pay such dividends or distributions currently, the
Committee will determine in its sole discretion whether any interest will be
paid on such dividends or distributions. In addition, the Committee, in its
sole discretion, may require such dividends and distributions to be
reinvested (and in such case the Eligible Directors consent to such
reinvestment) in shares of Common Stock that will be subject to the same
restrictions as the shares to which such dividends or distributions relate.

                  (d) To enforce the restrictions referred to in this Section
7.2, ownership of shares subject to a Retainer Restricted Share Award will be
evidenced in a certificateless book-entry stock account in the name of each
Eligible Director with the Company's transfer agent for its Common Stock. A
certificate for the number of shares in such a book-entry account that are
not subject to forfeiture pursuant to Section 7.2(b) hereof will be issued to
the applicable Eligible Director when such director's term of service on the
Company's Board ceases.

         7.3 RETAINER DEFERRED SHARE AWARDS.



                  (a) On the first trading day of the calendar year, an
Eligible Director shall receive a credit to his or her Deferred Stock Account
equal to the number of shares of Common Stock ("Deferred Shares") determined
by dividing an amount equal to the amount of the Annual Retainer that the
Eligible Director elected to receive in the form of Retainer Deferred Share
Award by the average closing price of a share of Common Stock, at the end of
the regular trading session, which as of the effective date of this Plan is
4:00 p.m., New York City time, on the New York Stock Exchange for the last
ten trading days of the immediately preceding calendar year, rounded up to
the nearest whole share. In the event an Eligible Director's services as a
director of the Company cease for any reason prior to December 31 of the
Issuance Year, a portion of the Deferred Shares credited to the Eligible
Director's Deferred Stock Account will be forfeited in an amount equal to the
Deferred Shares multiplied by a fraction, the numerator of which is the
number of days remaining in the Issuance Year after the date of such Eligible
Director's cessation of service as a director and the denominator of which is
365, rounded up to the nearest whole share.



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                  (b) Each time a cash dividend is paid on the Common Stock,
the Eligible Director shall receive a credit to his or her Deferred Stock
Account equal to that number of shares of Common Stock (rounded to the
nearest whole share) having a Fair Market Value on the dividend payment date
equal to the amount of the cash dividend payable on the number of shares
credited to the Eligible Director's Deferred Stock Account on the dividend
record date.

                  (c) At the time of making the Annual Retainer Election,
each Eligible Director shall also complete a deferral payment election
specifying one of the payment options described in Section 7.3(d) below. The
Eligible Director may change the deferral payment election by means of filing
with the Company a subsequent Annual Retainer Election form providing for a
new deferral payment election. This subsequent deferral payment election will
take effect (i) immediately upon receipt for deferrals credited after the
date the Company receives such subsequent deferral payment election and (ii)
provided the Eligible Director remains an Eligible Director, at the beginning
of the second calendar year following the date of the revised deferral
payment election for deferrals previously credited to the Eligible Director's
Deferred Stock Account.

                  (d) An Eligible Director may elect to receive payment of
his or her Deferred Stock Account in a lump sum on January 10 of the year (or
the first business day thereafter) following the Eligible Director's
termination of service on the Board or in five, ten or fifteen annual
installments beginning on January 10 of the year (or the first business day
thereafter) following the Eligible Director's termination of service on the
Board. If an Eligible Director fails to make a deferral payment election,
such Eligible Director shall be deemed to have elected a single lump sum
payment. All payments shall be made in shares of Common Stock plus cash in
lieu of any fractional share. If an Eligible Director elects to receive
installment payments from his or her Deferred Stock Account, the amount of
each installment payment shall be computed as the number of shares credited
to the Eligible Director's Deferred Stock Account, multiplied by a fraction,
the numerator of which is one and the denominator of which is the total
number of installments elected (i.e. five, ten or fifteen) minus the number
of installments previously paid. Amounts paid prior to the final installment
payment shall be rounded to the nearest whole number of shares; the final
installment payment shall be for the whole number of shares then credited to
the Eligible Director's Deferred Stock Account, together with cash in lieu of
any fractional share. Notwithstanding the foregoing, in the event of a Change
of Control, credits to an Eligible Director's Deferred Stock Account as of
the business day immediately prior to the effective date of the transaction
constituting the Change of Control that have not been forfeited pursuant to
Section 7.3(a) hereof shall be paid in full to the Eligible Director or the
Eligible Director's beneficiary or estate, as the case may be, in whole
shares of Common Stock (together with cash in lieu of a fractional share) on
such date.

                  (e) If an Eligible Director dies before receiving all
payments to which he or she is entitled under this Section 7.3 of the Plan,
payment shall be made in accordance with the Eligible Director's designation
of a beneficiary on a form provided for that purpose and delivered to and
accepted by the Committee (as hereinafter defined) or, in the absence of a
valid designation or if the designated beneficiary does not survive the
Eligible Director, to such Eligible Director's estate.

                  (f) No right to receive payments under this Section 7.3 of
the Plan nor any shares of Common Stock credited to an Eligible Director's
Deferred Stock Account shall be assignable or transferable by an Eligible
Director other than by will or the laws of descent and distribution. The
designation of a beneficiary by an Eligible Director pursuant to Section
7.3(e) does not constitute a transfer.

                  (g) Benefits due under this Section 7.3 of the Plan shall be
funded out of the general funds of the Company. The Eligible Directors and
beneficiaries thereof shall be general, unsecured


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creditors of the Company with respect to any payments to be made pursuant to
this Section 7.3 of the Plan and shall not have any preferred interest by way
of trust, escrow, lien or otherwise in any specific assets of the Company. If
the Company shall, in fact, elect to set aside monies or other assets to meet
its obligations under this Section 7.3 of the Plan (there being no obligation
to do so), whether in a grantor trust or otherwise, the same shall,
nevertheless, be regarded as a part of the general assets of the Company
subject to the claims of its general creditors, and neither any Eligible
Director nor any beneficiary of any Eligible Director shall have a legal,
beneficial, or security interest therein.

8.       EFFECT OF TERMINATION OF SERVICE AS DIRECTOR.

         8.1 OPTIONS AND RESTRICTED SHARES.

                  (a) TERMINATION DUE TO DEATH OR DISABILITY. If an Eligible
Director's service as a director of the Company is terminated by reason of
death or Disability, all outstanding Options then held by the Eligible
Director will become immediately exercisable in full and will remain
exercisable for the remainder of their terms, and all Restricted Shares then
held by such Eligible Director shall immediately and fully vest.

                  (b) VOLUNTARY TERMINATION. If an Eligible Director
voluntarily resigns from the Board (which does not include the submission of
an offer not to stand for re-election as a director in accordance with
Company policies), the Eligible Director shall forfeit all Restricted Shares
not yet vested, and outstanding Options then held by the Eligible Director
will remain exercisable for a period of three months after such termination
(but in no event after the expiration date of any such Option) only to the
extent they were exercisable as of such termination.

                  (c) TERMINATION FOR OTHER REASONS. If an Eligible
Director's service as a director of the Company terminates for any reason
other than those specified in Sections 8.1(a) and (b), the portion of such
Eligible Director's Restricted Shares that were scheduled to vest on the next
vesting date following the date of such termination shall immediately vest,
but all remaining unvested Restricted Shares shall be forfeited, and
outstanding Options then held by the Eligible Director will remain
exercisable until the expiration date of each such Option only to the extent
such Options were exercisable as of such termination.

         8.2 RETAINER SHARE AWARDS. If an Eligible Director's service as a
director of the Company ceases for any reason or no reason at all, all
outstanding Retainer Share Awards then held by the Eligible Director shall be
treated as provided for in Sections 7.2 and 7.3 hereof.

         8.3 DATE OF TERMINATION OF SERVICE AS A DIRECTOR. An Eligible
Director's service as a director of the Company will, for purposes of the
Plan, be deemed to have terminated on the date recorded on the personnel or
other records of the Company, as determined by the Committee based upon such
records.

9.       RIGHTS OF ELIGIBLE DIRECTORS; TRANSFERABILITY OF INTERESTS.

         9.1 SERVICE AS A DIRECTOR. Nothing in the Plan will interfere with
or limit in any way the right of the stockholders of the Company to remove an
Eligible Director, and neither the Plan, nor the granting of an Award nor any
other action taken pursuant to the Plan, will constitute or be evidence of
any agreement or understanding, express or implied, that the stockholders of
the Company will re-elect an Eligible Director for any period of time or at
any particular rate of compensation.

         9.2 RESTRICTIONS ON TRANSFER OF INTERESTS. Except pursuant to
testamentary will or the laws of descent and distribution or as otherwise
expressly permitted by the Plan, no right or interest of any Eligible
Director in an Award prior to the exercise of Options or the vesting of
Restricted Shares will be assignable or transferable, or subjected to any
lien, during the lifetime of the Eligible Director, either voluntarily or
involuntarily, by operation of law or otherwise. An Eligible Director will,
however, be entitled to designate a beneficiary to receive an Award upon such
Eligible Director's death, and in the event of an Eligible Director's death,
payment of any amounts due under the Plan will be made to, and exercise of
any Options (to the extent permitted pursuant to Section 6 of the Plan) may
be made by, the Eligible Director's legal representatives, heirs and legatees.


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<PAGE>

         9.3 NON-EXCLUSIVITY OF THE PLAN. Nothing contained in the Plan is
intended to create any limitations on the power or authority of the Board to
adopt such additional or other compensation arrangements for non-employee
directors as the Board may deem necessary or desirable.

10.      SECURITIES LAW AND OTHER RESTRICTIONS.

         Notwithstanding any other provision of the Plan or any agreements
entered into pursuant to the Plan, the Company will not be required to issue
any shares of Common Stock under this Plan, and an Eligible Director may not
sell, assign, transfer or otherwise dispose of shares of Common Stock issued
pursuant to Awards granted under the Plan, unless (a) there is in effect with
respect to such shares a registration statement under the Securities Act and
any applicable state securities laws or an exemption from such registration
under the Securities Act and applicable state securities laws, and (b) there
has been obtained any other consent, approval or permit from any other
regulatory body which the Committee, in its sole discretion, deems necessary
or advisable. The Company may condition such issuance, sale or transfer upon
the receipt of any representations or agreements from the parties involved,
and the placement of any legends on certificates representing shares of
Common Stock, as may be deemed necessary or advisable by the Company in order
to comply with such securities law or other restrictions.

11.      PLAN AMENDMENT, MODIFICATION AND TERMINATION.

         The Board may suspend or terminate the Plan or any portion thereof
at any time, and may amend the Plan from time to time in such respects as the
Board may deem advisable in order that Awards under the Plan will conform to
any change in applicable laws or regulations or in any other respect the
Board may deem to be in the best interests of the Company; provided, however,
that no amendments to the Plan will be effective without approval of the
stockholders of the Company if stockholder approval of the amendment is then
required pursuant to the rules of the New York Stock Exchange or any similar
regulatory body. No termination, suspension or amendment of the Plan may
adversely affect any outstanding Award without the consent of the affected
Eligible Director; provided, however, that this sentence will not impair the
right of the Committee to take whatever action it deems appropriate under
Section 4.3 of the Plan.

12.      EFFECTIVE DATE AND DURATION OF THE PLAN.

         The Plan is effective as of November 28, 2000 ("Effective Date"), the
date it was adopted by the Board and approved by the Company's sole stockholder.
The Plan will terminate at midnight on May 31, 2005, and may be terminated prior
thereto by Board action, and no Award will be granted after such termination.
Awards outstanding upon termination of the Plan may continue to be exercised or
to vest in accordance with their terms.

13.      MISCELLANEOUS.

         13.1 GOVERNING LAW. Notwithstanding conflict of law provisions, the
validity, construction, interpretation, administration and effect of the Plan
and any rules, regulations and actions relating to the Plan will be governed
by and construed exclusively in accordance with the laws of the State of
Delaware.

         13.2 SUCCESSORS AND ASSIGNS. The Plan will be binding upon and inure
to the benefit of the successors and permitted assigns of the Company and the
Eligible Directors.

         13.3 NO REPRESENTATION OR WARRANTY. The Company makes no
representation or warranty regarding whether the tax consequences surrounding
an Award, and the Company recommends that the Eligible Director consult with
his or her own advisors before making any determination regarding the
election to receive, exercise or the sale of an Award.


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