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EXHIBIT 10(i)  


 
 

LONGS DRUG STORES CORPORATION
  NON-EXECUTIVE LONG-TERM INCENTIVE PLAN    
  


1.  PURPOSE  


    The purpose of the Non-Executive Long-Term Incentive Plan is to provide a means through which Longs Drug Stores Corporation, a Maryland
Corporation, and its Subsidiaries, may attract and retain the employment of able persons and to provide a means whereby such persons can acquire and maintain stock ownership thereby strengthening
their commitment to the welfare of the Company. A further purpose of the Plan is to provide certain non-executive employees, especially store management, with incentive and reward
opportunities designed to enhance the profitable growth of the Company. 


2.  DEFINITIONS  


    The following definitions shall be applicable throughout the Plan: 


    a.  "Award"
means, individually or collectively, any Option, Stock Appreciation Right (SAR), Restricted Stock Award or Performance Share Award. 



    b.  "Award
Period" means a period of not less than three years and relates to Performance Share Awards. 


    c.  "Board"
means the Board of Directors of the Company. 


    d.  "Cause"
means, unless otherwise provided in an Award agreement, a discharge of employment for gross and willful misconduct relating to the performance by the
employee of the employee's duties to the Company or any Subsidiary, including but not limited to theft or proven dishonesty. 


    e.  "Code"
means the Internal Revenue Code of 1986, as amended from time to time. Reference in the Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any regulations under such section. 


    f.   "Committee"
means the committee of the Board appointed to administer the Plan as referred to in Section 4. 


    g.  "Company"
means Longs Drug Stores Corporation. 


    h.  "Date
of Grant" means the date on which the granting of an Award is authorized by the Committee or such later date as may be specified by the Committee in such
authorization. 


    i.   "Disability"
means a disability that totally and permanently disables the Holder and entitles the Holder to receive long-term disability plan sponsored
or maintained by the Company or a Subsidiary. 


    j.   "Eligible
Employee" means any person who satisfies the requirements of Section 6. 


    k.  "Fair
Market Value" means the fair market value of Stock, to be determined as follows: 



    (1) For
Options and SARs, it shall be the average of the highest price and the lowest price at which the Stock shall have been sold regular way on the New York Stock
Exchange—Composite Transactions (hereafter "NYSE") on a specified date, excluding any after-hours trading. 


    (2) For
Performance Share Awards, it shall be the average of the reported closing prices of the Stock on the NYSE for thirty (30) consecutive trading days prior
to the "Valuation Date." The "Valuation Date" for the purpose of granting Performance Share Awards shall be the first day of 



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the year in which the Award is made. The "Valuation Date" for the purpose of Performance Share Payments shall be the first business day following the end of the Award Period. 




    l.   "Holder"
means a person who has been granted an Option, an SAR, a Restricted Stock Award, or a Performance Share Award. 


    m.  "Normal
Retirement" means Termination by resignation of employment with the Company and any Subsidiary after attaining age sixty-five (65) or by
resignation of employment with the Company and any Subsidiary after attaining age sixty (60) if the Committee determines that such resignation constitutes a Normal Retirement for purposes of
this Plan. 


    n.  "Option"
means an Award granted under Section 7 of the Plan. 


    o.  "Performance
Share" means an Award granted under Section 9 of the Plan. 


    p.  "Plan"
means this Non-Executive Long-Term Incentive Plan. 


    q.  "Restricted
Stock Award" means an Award granted under Section 10 of the Plan. 


    r.  "SEC"
means the Securities and Exchange Commission. 


    s.  "Stock"
means Common Shares of the Company and, after substitution, such other stock as shall be substituted therefor as provided in Section 12. 



    t.   "Stock
Appreciation Right" (SAR) means an Award granted under Section 8, whether or not granted in conjunction with an Option. 


    u.  "Subsidiary"
means any corporation of which a majority of the outstanding voting stock or voting power is beneficially owned directly or indirectly by the Company. 


    v.  "Termination"
means, with respect to any person, ceasing to be an employee of the Company or any Subsidiary, other than by death. 


    w.  "Uninvited
Change in Corporate Control" means any change in (i) the ownership or effective control of the Company or any Subsidiary, or (ii) the
ownership of a substantial portion of the assets of the Company or any Subsidiary, which constitutes a change in control within the meaning of Section 280G of the Code, regulations (including
temporary and proposed regulations) promulgated thereunder and judicial interpretations thereof. 


3.  EFFECTIVE DATE, DURATION AND BOARD APPROVAL  


    This Plan shall become effective as of the date of approval of this Plan by the Board. Subject to the provisions of Section 13, Awards may be made as
provided herein for a period of ten (10) years from the date this Plan is so approved by the Board. The Plan shall continue in effect until all matters relating to the payment of Awards and
administration of the Plan have been settled. 


4.  ADMINISTRATION  


    The Plan shall be administered by the Committee, which shall consist of two or more members of the Board and shall be appointed by the Board. A majority of the
Committee shall constitute a quorum. 


    Subject
to the provisions of the Plan, the Committee shall have exclusive, discretionary power to: 



	a.
	Select
the persons to participate in the Plan.



	b.
	Determine
the Awards to be made to each person selected.



	c.
	Determine
the time or times when Awards will be made. 



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	d.
	Determine
the conditions (including performance requirements) to which the Awards may be subject.



	e.
	Prescribe
the form or forms evidencing Awards. 




    The
Committee shall have the discretionary authority, subject to the provisions of the Plan, to establish, adopt, or revise such rules and regulations and to make all such
determinations relating to the Plan as it may deem necessary or advisable for the administration of the Plan. The Committee's interpretation of the Plan or any Awards granted pursuant thereto and all
decisions and determinations by the Committee with respect to the Plan shall be final, binding, and conclusive on all parties. 


5.  GRANT OF OPTIONS, STOCK APPRECIATION RIGHTS, RESTRICTED STOCK AWARDS, AND PERFORMANCE SHARE AWARDS; SHARES SUBJECT TO THE PLAN  


    The Committee may, from time to time, grant Awards to one or more persons determined by it to be eligible for participation in the Plan in accordance with the
provisions of Section 6; provided however that: 


    a.  TOTAL
SHARES.  Subject to adjustment pursuant to Section 12, the aggregate number of shares of Stock made subject to Awards may not exceed One
Million (1,000,000). 


    b.  USE
OF SHARES.  Such shares of Stock shall be deemed to have been used in payment of Performance Shares and SARs whether actually delivered or the
Fair Market Value equivalent of such shares of Stock is paid in cash. To the extent that an Award lapses or the rights of its Holder
terminate, any shares of Stock subject to such Award shall again be available for the grant of an Award. 


    c.  ELIGIBLE
SHARES.  Stock delivered by the Company in settlement under the Plan may be authorized and unissued Stock or Stock held in the treasury of
the Company or may be purchased on the open market or by private purchase. 



6.  ELIGIBILITY  


    Employees of the Company or a Subsidiary who, in the opinion of the Committee, are not officers, directors or otherwise "insiders" (for purposes of
Rule 16(b) of the Securities Exchange Act of 1934) and are responsible for the continued growth and development and financial success of the business of the Company or any Subsidiary shall be
eligible to be granted Awards under the Plan. 


7.  STOCK OPTIONS  


    One or more Options can be granted to any Eligible Employee. Options shall be nonqualified stock options (Incentive Stock Options are not authorized to be
issued) and shall be subject to the following conditions: 


    a.  OPTION
PRICE.  The option price per share of Stock shall be set by the grant but shall in no instance be less than Fair Market Value at the Date of
Grant. 


    b.  FORM
OF PAYMENT.  At the time of the exercise of the Option, the option price shall be payable in (i) cash, (ii) shares of Stock held
by the Holder for the period required to avoid a charge to the Company's reported earnings (generally six months) or were not acquired directly or indirectly from the Company, and that are valued at
the Fair Market Value at the time the Option is exercised, and/or (iii) at the discretion of and on terms acceptable to the Committee, either by means of a "same day sale" pursuant to a program
developed by the Committee under Regulation T as promulgated by the Federal Reserve Board (a "cashless" exercise) or by a note signed by the Holder payable to the Company providing for simple
interest at a rate to be stipulated by the Committee. 


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    c.  OTHER TERMS AND CONDITIONS.  Each Option shall become exercisable in cumulative installments in such manner and within such period or periods, not to
exceed ten (10) years from its Date of Grant, as set forth in the Stock Option Agreement prescribed by the Committee. No Option shall be exercisable after the expiration of ten
(10) years from the Date of Grant. Except as set forth below, an Option shall terminate in the event of the Holder's Termination or death. 


    Unless
otherwise provided in the Stock Option Agreement, in the event of a Termination, the Holder shall have the right to exercise the Option for the following periods after such
Termination, but only to the extent that the Option was exercisable at the date of the Termination and does not otherwise expire by its terms. 



    (1) In
the event of Normal Retirement, the vested Options shall be exercisable for a period of two (2) years after the date of Termination. 



    (2) In
the event of the Holder's Termination by (a) discharge by the Company or any Subsidiary (except for Cause) within two (2) years after the date of
an Uninvited Change in Corporate Control, or (b) resignation of the Holder within the period commencing one-hundred and eighty (180) days from the date of an Uninvited Change
in Corporate Control and ending two (2) years after the date of an Uninvited Change in Corporate Control, the vested Options shall be exercisable for a period of one (1) year after the
date of Termination. 


    (3) In
the event of the Holder's Termination by resignation (except as provided in Section 7c(2) hereof) with the prior written consent of the Company or any
Subsidiary, the vested Options shall be exercisable for a period of three (3) months after the date of such resignation. Such prior written consent may be given only by the Chief Executive
Officer of the Company or any Subsidiary or any such officer delegated by the Chief Executive Officer (other than the resigning person) and must specify that it is given for the purpose of the
Holder's exercise of the Option. 


    (4) In
the event of the Holder's Termination by (a) discharge by the Company or any Subsidiary, with or without Cause (except as provided in
Section 7c(2), hereof), or (b) resignation of the Holder without the prior written consent of the Company or any Subsidiary, the vested Options shall cease to be exercisable on the date
of such discharge or resignation. 




    In
the event of Holder's death prior to Termination, or within three (3) months of a Normal Retirement, the vested Options may be exercised for a period of one (1) year
after the date of Holder's death or, if shorter, the remaining term of the Option. 


    d.  STOCK
OPTION AGREEMENT.  Each Option granted under the Plan shall be evidenced by a "Stock Option Agreement" between the Company and the Holder of
the Option containing provisions not inconsistent with the Plan, as determined by the Committee, and shall be subject to the following additional terms and conditions: 



    (1) Any
Option or portion thereof that is exercisable shall be exercisable for the full amount or for any part thereof, except as otherwise provided in the Stock Option
Agreement. 


    (2) Each
Option shall cease to be exercisable, as to any share, when the Holder purchases the share or exercises a related SAR or when the Option lapses. 


    (3) Leaves
of absence, approved by the Company or a Subsidiary, shall not constitute the termination of employment of the Holder. 




    e.  EXPIRED
OPTIONS.  If any Options awarded under the Plan shall be forfeited, cancelled, or not exercised in full, the Stock subject to such Options
may again be awarded under the Plan. 


    f.   TENDER
OFFER OR MERGER.  Notwithstanding any other provision, in the event of (i) a public tender offer for all or any portion of the Stock or
(ii) a proposal to merge, consolidate, or 


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otherwise combine with, or sell all or a substantial portion of the assets of the Company or a Subsidiary to, another company is submitted for shareholder approval, or (iii) any other Uninvited
Change in Corporate Control, then the Committee may in its sole discretion declare previously granted options to be immediately exercisable. 


8.  STOCK APPRECIATION RIGHTS  


    Any Option granted under the Plan may include an SAR, either at the time of grant or by amendment. SARs may also be granted to an Eligible Employee independent
of any prior or contemporaneous Option grant and shall be exercisable as provided therein without regard to any Option. In addition to
such terms and conditions not inconsistent with the Plan as the Committee shall impose, SARs shall be subject to the following terms: 


    a.  RIGHT
TO EXERCISE.  An SAR granted with an Option shall be exercisable to the extent and only to the extent the Option is exercisable. An SAR not
included in an Option shall have a "purchase price" ascribed thereto by the Committee in granting such SAR, which shall not be less than the Fair Market Value of the Stock on the Date of Grant. 


    b.  PAYMENT.  An
exercisable SAR shall entitle the Holder to surrender unexercised the SAR or the Option in which it is included, as the case may be, or
any portion thereof, and, to receive in exchange therefore that number of shares of Stock having an aggregate Fair Market Value, as hereinafter defined, equal to the excess of the Fair Market Value of
one share of Stock over the purchase price per share specified in such SAR or Option times the number of shares called for by the SAR or Option, or portion thereof, which is so surrendered. The
Committee shall be entitled to elect to settle the Company's obligation arising out of the exercise of an SAR by the payment of cash or partially by the payment of cash and partially by the delivery
of shares of Stock, the total value of which shall be in either case equal to the aggregate Fair Market Value of the shares of Stock it would otherwise be obligated to deliver. The Committee shall
also have the right to place such limitations and restrictions on the obligation to make such cash payments or deliver shares of Stock under SARs as it, in its sole discretion, deems to be in the best
interest of the Company. The Fair Market Value for SAR exercise purposes of shares shall be determined on the basis of prices on the trading day next preceding the date on which the SAR is exercised.
To the extent that an SAR included in an Option is exercised, such Option shall be deemed to have been exercised, and shall not be deemed to have lapsed. 



    c.  SPECIAL
RULES GOVERNING SARS.  An SAR not included in an Option shall be evidenced by an agreement between the Company and the Holder in a form
approved by the Committee. Any SAR granted under the Plan shall be subject to such terms and conditions not inconsistent with the Plan as the Committee shall impose, including the following: 



    (1) The
SAR will lapse no later than the underlying Option for SARs accompanying an Option or, for freestanding SARs, no later than ten (10) years from its Date
of Grant; and 


    (2) An
SAR accompanying an Option may be exercised only when the Fair Market Value of the Stock exceeds the option price of the Stock subject to the SAR. 




    d.  OTHER
LIMITATIONS.  An SAR shall be subject to such other limitations as the Committee shall impose. 


9.  PERFORMANCE SHARES  


    One or more Awards of Performance Shares may be made to an Eligible Employee. Performance Shares shall be credited to a Performance Share account to be
maintained for each such Holder. Each Performance Share shall be deemed to be the equivalent of one share of Stock of the Company. The Award of Performance Shares under the Plan shall not entitle the
Holder to any interest in or to any dividend, voting, or other rights of a shareholder. The value of the Performance Shares in a Holder's 


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Performance Share account at the time of Award or the time of payment shall be the Fair Market Value at any such time of an equivalent number of shares of Stock (subject to the limitation provided in
Section 9c). 


    If
any Performance Shares awarded under the Plan shall be forfeited, cancelled, or not paid out in full, such Performance Shares may again be awarded under the Plan. Shares of Stock
delivered upon payment of Performance Shares may be either treasury shares, shares purchased for the account of the participant or authorized and unissued shares, or any combination thereof. 


    a.  AWARD
GRANTS.  Grants of Performance Shares may be made by the Committee in any fiscal year during the term of the Plan. Such shares will be paid out
in full or in part on the basis of the Company's performance of such criteria as may be determined by the Committee. In determining the size of Awards, the Committee shall take into account a Holder's
responsibility level, performance, potential, cash compensation level, and the Fair Market Value of the Stock at the time of Awards, as well as such other considerations as it deems appropriate. 



    Unless
otherwise provided in the Award agreement, in the event a Holder terminates employment during an Award Period, payout would be as follows: 



    (1) Normal
Retirement: 


    The
Award would be prorated (based upon the number of completed calendar months in the Award Period) for service during the period through the Normal Retirement date, and the Award
would be paid as soon as practicable following the end of the Award Period. 


    (2) Resignation
or discharge: 


    For
resignation with the prior written consent of the Company or a Subsidiary, the Award would be prorated (based upon the number of completed calendar months in the Award Period) for
service during the period through such resignation date, and the Award would be paid as soon as practicable following the end of the Award Period. For resignation other than with such consent (and not
constituting Normal Retirement or Disability) or for discharge with or without Cause, the Award would be completely forfeited. 


    (3) Death
or Disability: 


    The
Award would be prorated (based upon the number of completed calendar months in the Award Period) for service during the period through the date of death or Disability, and the
Award would be paid as soon as practicable following the end of the Award Period. 




    Awards
cancelled or portions of Awards not paid out in full for any single Holder shall not be included for purposes of this limitation. 


    Unless
otherwise provided in the Award agreement, grants of Performance Shares shall be deemed to have been on January 1 of the year in which grants are made. 


    b.  RIGHT
TO PAYMENT OF PERFORMANCE SHARES.  Following the end of the Award Period, the Holder of a Performance Share shall be entitled to receive
payment of an amount based on the achievement of the performance measures for such Award Period, as determined by the Committee. 



    c.  FORM
AND TIMING OF PAYMENT.  No payment of Performance Shares shall be made prior to the end of an Award Period. Payment therefore shall be made as
soon as practicable after the receipt of audited financial statements relating to the last year of such period. The Committee may establish for each Award Period a Fair Market Value for purposes of
payments of Performance Shares, but in no event shall it exceed by more than two hundred percent (200%) the Fair Market Value of a share of Stock on the Date of Grant. 


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    The payment to which a Holder shall be entitled at the end of an Award Period shall be a dollar amount equal to the Fair Market Value at the Valuation Date (as defined in
Section 2k(2) hereof) of the number of shares of Stock equal to the number of Performance Shares earned and payable to him in accordance with Section 9b. Payment shall normally be made
one-half in cash and one-half in Stock; however, the Committee may authorize payment in such other combinations of cash and Stock or all in cash or all in Stock, as it deems
appropriate. 


    The
number of shares of Stock to be paid in lieu of cash will be determined by dividing the portion of the payment not paid in cash by the price per share of Stock (the average of the
highest price and the lowest price at which the Stock shall have been sold regular way on the NYSE during normal trading hours) on the date on which the shares of Stock are issued. 


    d.  TENDER
OFFER OR MERGER.  Notwithstanding any other provision of the Plan, in the event of (i) public tender offer for all or any portion of
the Stock, or (ii) a proposal to merge, consolidate or otherwise combine with, or sell all or a substantial portion of the assets of the Company or a Subsidiary to, another company is submitted
for shareholder approval, or (iii) any other Uninvited Change in Corporate Control, then the Committee may in its sole discretion declare any Award Period ended as of a specific date and
accelerate full payments of such awards accordingly. For awards based on performance criteria, the Committee shall determine the performance for the reduced Award Period and may estimate the
performance for any periods for which audited financial statements are not yet available. 


10.  RESTRICTED STOCK AWARDS  


    a.  RESTRICTION
PERIOD TO BE ESTABLISHED BY THE COMMITTEE.  One or more Awards of Restricted Stock may be made to an Eligible Employee. At the time a
Restricted Stock Award is made, the Committee shall establish a period of time (the "Restriction Period") applicable to such Award which shall be not less than one (1) year. Each Restricted
Stock Award may have a different Restriction Period, at the discretion of the Committee. In the event of (i) a public tender offer for all or any portion of the Stock, or (ii) any
proposal to merge, consolidate or otherwise combine with, or sell all or a substantial portion of the assets of the Company or a Subsidiary to, another company is submitted for shareholder approval,
or (iii) any other Uninvited Change in Corporate Control, then the Committee may in its sole discretion change or eliminate the Restriction Period. Except as permitted above, the Restriction
Period applicable to a particular Restricted Stock Award shall not be changed. 


    b.  OTHER
TERMS AND CONDITIONS.  Stock awarded pursuant to a Restricted Stock Award shall be represented by a stock certificate registered in the name of
the Holder of such Restricted Stock Award. The Holder shall have the right to enjoy all shareholder rights during the Restriction Period with the exception that: 



    (1) The
Holder shall not be entitled to delivery of the stock certificate until the Restriction Period shall have expired. 


    (2) The
Company may either issue shares subject to such restrictive legends and/or stop-transfer instructions as it deems appropriate or provide for
retention of custody of the Stock during the Restriction Period. 


    (3) A
breach of the terms and conditions established by the Committee pursuant to the Restricted Stock Award shall cause a forfeiture of the Restricted Stock Award, and
any dividends withheld thereon. 


    (4) Cash
and stock dividends may be either currently paid or withheld by the Company for the Holder's account until the Restriction Period expires, as provided in the
Restricted Stock Award Agreement. At the discretion of the Committee, interest may be paid on the amount of 



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cash dividends withheld, including cash dividends on stock dividends, at a rate and subject to such terms as determined by the Committee. 




    c.  FORFEITURE
PROVISIONS.  Unless otherwise provided in a Restricted Stock Award agreement, in the event a Holder terminates employment during a
Restriction Period, an Award would be forfeited as follows: 



    (1) Normal
Retirement: 


    The
Award would be prorated (based upon the number of completed calendar months in the Restriction Period) for service during the period through the Normal Retirement date, and the
vested
Award would be distributed as soon as practicable following retirement; the non-vested Award would be immediately forfeited. 


    (2) Resignation
or discharge: 


    For
resignation with the prior written consent of the Company or a Subsidiary, the Award would be prorated (based upon the number of completed calendar months in the Restriction
Period) for service during the period through such resignation date, and the vested Award would be distributed as soon as practicable following such resignation; the non-vested Award would
be immediately forfeited. For resignation other than with such consent (and not constituting Normal Retirement or Disability) or for discharge, with or without Cause, the Award would be completely
forfeited. 


    (3) Death
or Disability: 


    The
Award would be prorated (based upon the number of completed calendar months in the Restriction Period) for service during the period through the date of death or Disability, and
the vested Award would be distributed as soon as practicable following death or Disability; the non-vested Award would be immediately forfeited. 




    Dividends
withheld by the Company on Restricted Stock that is forfeited shall be retained by the Company. 


    d.  PAYMENT
FOR RESTRICTED STOCK.  A Holder shall not be required to make any payment for Stock received pursuant to a Restricted Stock Award. 


11.  GENERAL  


    a.  GOVERNMENT
AND OTHER REGULATIONS.  The obligation of the Company to make payment of Awards in Stock or otherwise shall be subject to all applicable
laws, rules, and regulations, and to such approvals by governmental agencies as may be required. The Company shall be under no obligation to register under the Securities Act of 1933, as amended
("Act") any of the shares of Stock
distributed under the Plan. If the shares of Stock distributed under the Plan may in certain circumstances be exempt from registration under the Act, the Company may restrict the transfer of such
shares of Stock in such manner as it deems advisable to ensure the availability of any such exemption. 


    b.  TAX
WITHHOLDING.  The Company or a Subsidiary, as appropriate, shall have the right to deduct from all Awards paid in cash any federal, state or
local taxes as required by law to be withheld with respect to such cash payments. In the case of Awards paid in Stock, the employee or other person receiving such Stock may be required to pay to the
Company or a Subsidiary, as appropriate, the amount of any such taxes which the Company or Subsidiary is required to withhold with respect to such Stock. The Company or the Subsidiary may withhold the
amount of such taxes on any Award from any other wages payable by the Company or any Subsidiary to the Holder. 


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    c.  CLAIM TO AWARDS AND EMPLOYMENT RIGHTS.  No employee of the Company or any Subsidiary or other person on their behalf shall have any claim or right to
be granted an Award under the Plan. Neither this Plan nor any action taken hereunder shall be construed as giving any employee any right to be retained in the employ of the Company or a Subsidiary or
limit the right of the Company or any Subsidiary to terminate an employee at anytime, with or without Cause. A holder of any right hereunder to receive cash or Stock in respect of any Award shall have
no rights other than those of a general creditor of the Company. Awards represent unfunded and unsecured obligations of the Company, subject to the terms and conditions of the applicable Award. 


    d.  BENEFICIARIES.  Any
payment of Awards due under this Plan to a deceased Holder shall be paid to the beneficiary duly designated by the Holder in
accordance with the Company's practices. If no such beneficiary has been designated or survives the Holder, payment shall be made to the Holder's legal representative. A beneficiary designation may be
changed or revoked by a Holder at any time provided the change or revocation is filed with the Committee prior to the Holder's death. 


    e.  NONTRANSFERABILITY.  A
person's rights and interests under the Plan, including any Award previously made to such person or any amounts payable under
the Plan, may not be assigned, pledged, or transferred except, in the event of an employee's death, to a designated beneficiary as provided in the Plan, or in the absence of such designation, by will
or the laws of descent and distribution. 


    f.   INDEMNIFICATION.  Each
person who is or shall have been a member of the Committee or of the Board shall be indemnified and held harmless by the
Company from and against any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him in connection with or resulting
from any claim, action, suit, or proceeding to which he may be a party or in which he may be involved by reason of any action or failure to act under the Plan and against and from any and all amounts
paid by him in satisfaction of judgment in any such action, suit, or proceeding against him. He shall give the Company an opportunity, at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under
the Company's Articles of Incorporation or By-Laws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless. 


    g.  RELIANCE
ON REPORTS.  Each member of the Committee and each member of the Board shall be fully justified in relying or acting in good faith upon any
report made by the independent public accountant of the Company and its Subsidiaries and upon any other information furnished in connection with the Plan by any person or persons other than himself.
In no event shall any person who is or shall have been a member of the Committee or of the Board be liable for any determination made or other action taken or any omission to act in reliance upon any
such report or information or for any action taken, including the furnishing of information, or failure to act, if in good faith. 



    h.  RELATIONSHIP
TO OTHER BENEFITS.  No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement,
profit sharing, group insurance or other benefit plan of the Company or any Subsidiary. 


    i.   EXPENSES.  The
expenses of administering the Plan shall be borne by the Company and its Subsidiaries. 


    j.   PRONOUNS.  Masculine
pronouns and other words of masculine gender shall refer to both men and women. 



    k.  TITLES
AND HEADINGS.  The titles and headings of the sections in the Plan are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings, shall control. 


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12.  CHANGES IN CAPITAL STRUCTURE  


    Options, SARs, Restricted Stock Awards, Performance Share Awards and any agreements evidencing such Awards shall be subject to adjustment by the Committee as
to the number and price per share of Stock or other considerations subject to such Awards in the event of changes in the outstanding Stock by reason of stock dividends, stock splits,
recapitalizations, reorganizations, mergers, consolidations, combinations, exchanges, or other relevant changes in capitalization occurring after the Date of Grant of any such Awards. In the event of
any such change in the outstanding Stock, the aggregate number of shares available under the Plan shall be appropriately adjusted by the Committee, whose determination shall be conclusive. 


13.  AMENDMENTS AND TERMINATION  


    The Board may at any time terminate the Plan or, with the express written consent of an individual participant, cancel or reduce or otherwise alter his
outstanding Awards thereunder if, in its judgment, the tax, accounting, or other effects of the Plan or potential payouts thereunder would not be in the best interest of the Company. The Board may, at
any time, or from time to time, amend or suspend and, if suspended, reinstate, the Plan in whole or in part, provided, however, that any amendment of the Plan shall be subject to the approval of the
Company's shareholders to the extent required by applicable laws, regulations or rules. 


14.  CLAIMS PROCEDURES  


    Claims for benefits under the Plan shall be filed in writing with the Committee in a form approved by or acceptable to the Committee. Written notice of the
disposition of a claim shall be furnished to the claimant within a reasonable period of time after the claim is filed. If the claim is denied, the notice of disposition shall set forth the reasons for
the denial. If the claimant wishes further consideration of his or her claim, the claimant may appeal a denied claim to the Committee (or to a person designated by the Committee) for further review.
Such appeal shall be filed in writing with the Committee, together with a written statement of the claimant's position, no later than 90 days following receipt by the claimant of written notice
of the denial of his or her claim. A decision on review shall be made after a full and fair review of the claim and shall be delivered in writing to the claimant within a reasonable period of time
after the Committee's receipt of the notice of appeal. All determinations of the Committee shall be final and binding on Holders and their beneficiaries, agents or legal representatives. 


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