exv10w1



 





Exhibit 10.1




UNITED THERAPEUTICS CORPORATION



AMENDED AND RESTATED EQUITY INCENTIVE PLAN




(As amended effective as of September 24, 2004)




 









 








ARTICLE I

PURPOSE




1.1 General.




     The purpose of the United Therapeutics Corporation Equity Incentive Plan
(the “Plan”) is to promote the success, and enhance the value, of United
Therapeutics Corporation (the “Company”), by linking the personal interests of
its qualified directors, officers and other key employees to those of Company
stockholders and by providing its qualified directors, officers and other key
employees with an incentive for outstanding performance. The Plan is further
intended to provide flexibility to the Company in its ability to motivate,
attract, and retain the services of employees upon whose judgment, interest,
and special effort the successful conduct of the Company’s operation is largely
dependent. Accordingly, the Plan permits the grant of incentive awards from
time to time to selected directors, officers and key employees.



ARTICLE 2

EFFECTIVE DATE




2.1 Effective Date.




     The Plan was originally effective November 12, 1997, subject to approval
by the stockholders of the Company, which approval was duly obtained.
Amendments to the Plan were approved by the Board of Directors on April 9,
1999, subject to the approval of the stockholders of the Company. The Plan as
so amended and restated will be deemed to be approved by the stockholders if it
receives the approval of the holders of a majority of the shares of stock of
the Company in accordance with the applicable provisions of the Laws of the
State of Delaware and the By-laws of the Company. Any Awards granted under the
Plan as so amended prior to stockholder approval are effective when made
(unless the Committee specifies otherwise at the time of grant), but no Award
may be exercised or settled and no restrictions relating to any Award may lapse
before stockholder approval. If the stockholders fail to approve the Plan as
amended within twelve (12) months of April 9, 1999, any Award previously made
pursuant to the amended Plan shall be automatically canceled without any
further act.



ARTICLE 3

DEFINITIONS




3.1 Definitions.




     When appearing in this Plan with the initial letter capitalized, and the
word or phrase does not commence a sentence, the word or phrase shall generally
be given the meaning ascribed to it in this Section or in Sections 1.1 or 2.1,
unless a clearly different meaning is required by the context. The following
words and phrases shall have the following meanings:



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(a) “Award” means any Option, Stock Appreciation Right, Restricted Stock
Award, or Performance Share Award, or any other right or interest
relating to Stock or cash, granted to a Participant under the Plan.



(b) “Award Agreement” means any written agreement, contract, or other
instrument or document evidencing an Award.



(c) “Board” means the Board of Directors of the Company.



(d) “Code” means the Internal Revenue Code of 1986, as amended from time
to time.



(e) “Committee” means the committee of the Board described in Article 4.



(f) “Company” means United Therapeutics Corporation.



(g) “Disability” shall mean any illness or other physical or mental
condition of a Participant that renders the Participant incapable of
performing his customary and usual duties for the Company, or any
medically determinable illness or other physical or mental condition
resulting from a bodily injury, disease or mental disorder which, in the
judgment of the Committee, is permanent and continuous in nature. The
Committee may require such medical or other evidence as it deems
necessary to judge the nature and permanency of the Participant’s
condition. Such disability determination shall be made in accordance with
Code section 22(e)(3).



(h) “Effective Date” has the meaning assigned such term in Section 2.1.



(i) “Fair Market Value” means with respect to Stock or any other
property, the fair market value of such Stock or other property
determined by such methods or procedures as may be established from time
to time by the Committee.



(j) “Incentive Stock Option” means an Option that is intended to meet the
requirements of Section 422 of the Code or any successor provision
thereto.



(k) “Non-Qualified Stock Option” means an Option that is not an Incentive
Stock Option.



(l) “Option” means a right granted to a Participant under the Plan to
purchase Stock at a specified price during specified time periods. An
Option may be either an Incentive Stock Option or a Non-Qualified Stock
Option.



(m) “Participant” means a person who, as a director, officer or key
employee of the Company, has been granted an Award under the Plan.



(n) “Performance Award” means a right granted to a Participant under
Article 9 to receive cash, Stock, or other Awards, the payment of which
is contingent upon



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achieving certain performance goals established by the Committee
(includes “Performance Shares” and “Performance Units”).



(o) “Performance Share” means a right granted to a Participant under
Article 9 to receive shares of Company Stock, the payment of which is
contingent upon achieving certain performance goals.



(p) “Performance Units” means a right granted to a Participant under
Article 9 to receive units the value of which is equivalent to $1.00, the
payment of which is contingent upon achieving certain performance goals.



(q) “Plan” means the United Therapeutics Corporation Amended and Restated
Equity Incentive Plan, as it may be further amended from time to time.



(r) “Restricted Stock Award” means Stock granted to a Participant under
Article 10 that is subject to certain restrictions and to risk of
forfeiture.



(s) “Retirement” means a Participant’s termination of employment with the
Company after attaining any normal or early retirement age specified in
any pension, profit sharing or other retirement program sponsored by the
Company.



(t) “Stock” means the United Therapeutics Corporation par value common
stock of the Company and such other securities of the Company as may be
substituted for Stock pursuant to Article 12.



(u) “Stock Appreciation Right” or “SAR” means a right granted to a
Participant under Article 8 to receive a payment equal to the difference
between the Fair Market Value of a share of Stock as of the date of
exercise of the SAR and the grant price of the SAR, as determined
pursuant to Article 8.



(v) “1933 Act” means the Securities Act of 1933, as amended from time to
time.



(w) “1934 Act” means the Securities Exchange Act of 1934, as amended from
time to time.



ARTICLE 4

ADMINISTRATION




4.1 Committee.




     The Plan shall be administered by the Compensation Committee of the Board.
The Committee shall consist of two or more members of the Board who are (i)
“outside directors” as that term is used in Section 162 of the Code and the
regulations promulgated thereunder, and (ii) “non-employee directors,” as such
term is defined for purposes of Rule 16b-3 promulgated under Section 16 of the
1934 Act or any successor



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provision, except as may be otherwise permitted under Section 16 of the 1934 Act and the
rules and regulations promulgated thereunder.




4.2 Action by the Committee.




     For purposes of administering the Plan, the following rules of procedure
shall govern the Committee. A majority of the Committee shall constitute a
quorum. The acts of a majority of the members present at any meeting who are,
at which a quorum is present and acts approved in writing by a majority of the
Committee in lieu of a meeting shall be deemed the acts of the Committee. Each
member of the Committee is entitled, in good faith, to rely or act upon any
report or other information furnished to that member by any officer or other
employee of the Company, the Company’s independent certified public
accountants, or any executive compensation consultant or other professional
retained by the Company to assist in the administration of the Plan.



4.3 Authority of Committee.





The Committee has the exclusive power, authority and discretion to:




(a) Designate Participants;




(b) Determine the type or types of Awards to be granted to each
Participant;




(c) Determine the number of Awards to be granted and the number of shares
of Stock to which an Award will relate;




(d) Determine the terms and conditions of any Award granted under the
Plan, including but not limited to, the exercise price, grant price, or
purchase price, any restrictions or limitations on the Award, any
schedule for lapse of forfeiture restrictions or restrictions on the
exercisability of an Award, and accelerations or waivers thereof, based
in each case on such considerations as the Committee in its sole
discretion determines;




(e) Determine whether, to what extent, and under what circumstances an
Award may be granted, or the exercise price of an Award may be paid in
(cash, Stock, other Awards, or other property), or an Award may be
canceled, forfeited, or surrendered;




(f) Prescribe the form of each Award Agreement, which need not be
identical for each Participant;




(g) Decide all other matters that must be determined in connection with
an Award;




(h) Establish, adopt or revise any rules and regulations as it may deem
necessary or advisable to administer the Plan; and



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(i) Make all other decisions and determinations that may be required
under the Plan or as the Committee deems necessary or advisable to
administer the Plan.



4.4 Decisions Binding.




     The Committee is hereby granted discretionary authority to construe and
interpret the provisions of the Plan. The Committee’s interpretation of the
Plan, any Awards granted under the Plan, any Award Agreement and all decisions
and determinations by the Committee with respect to the Plan are final,
binding, and conclusive on all parties.



ARTICLE 5

SHARES SUBJECT TO THE PLAN




5.1 Number of Shares.




     Subject to adjustment as provided in Section 12.1, the aggregate number of
shares of Stock reserved and available for Awards, except with respect to
Options granted pursuant to Section 7.3, shall be 7,000,000. Subject to
adjustment as provided in Section 12.1, the aggregate number of shares of Stock
reserved and available for the Options granted pursuant to Section 7.3 shall be
7,939,517.



5.2 Lapsed Awards.




     To the extent that an Award is canceled, terminates, expires or lapses for
any reason, any shares of Stock subject to the Award will again be available
for the grant of an Award under the Plan and shares subject to SARs or other
Awards settled in cash will be available for the grant of an Award under the
Plan.



5.3 Stock Distributed.




     Any Stock distributed pursuant to an Award may consist, in whole or in
part, of authorized and unissued Stock, treasury Stock or Stock purchased on
the open market.



5.4 Limitation on Number of Shares Subject to Awards.




     Notwithstanding any provision in the Plan to the contrary, the maximum
number of shares of Stock with respect to one or more Awards that may be
granted to one Participant over any one calendar year period during the term of
the Plan shall not exceed 500,000 in the aggregate; provided, however, that the
maximum number of shares of Stock with respect to an Option granted to the
Chief Executive Officer pursuant to Section 7.3 in 2000 shall not exceed
500,000; in 2001 shall not exceed 701,353; in 2002 shall not exceed 681,434; in
2003 shall not exceed 2,757,832; and in 2004 shall not exceed 3,298,898.



ARTICLE 6




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ELIGIBILITY




6.1 General.




     Awards may be granted only to individuals who are directors (including
non-employee directors), officers or other key employees (including employees
who also are directors or officers) of or consultants to the Company or to the
Company’s subsidiaries, as determined by the Committee.



ARTICLE 7

STOCK OPTIONS




7.1 General.




     The Committee is authorized to grant Options to Participants in such
amounts as it deems appropriate in its discretion and subject to such
conditions and based on such criteria as it may deem advisable (including
performance based criteria or conditions) consistent with the other terms of
the Plan and the following:



(a) Exercise Price. The exercise price per share of Stock under an
Option shall be determined by the Committee.



(b) Time and Conditions of Exercise. The Committee shall determine the
time or times at which an Option may be exercised in whole or in part.
The Committee also shall determine the performance or other conditions,
if any, that must be satisfied before all or part of an Option may be
exercised.



(c) Payment. The Committee shall determine the methods by which the
exercise price of an Option may be paid, the form of payment, including,
without limitation, cash, shares of Stock, or other property (including
“cashless exercise” arrangements), and the methods by which shares of
Stock shall be delivered or deemed to be delivered to Participants.
Without limiting the power and discretion conferred on the Committee
pursuant to the preceding sentence, the Committee may, in the exercise of
its discretion, but need not, allow a Participant to pay the Option price
by directing the Company to withhold from the shares of Stock that would
otherwise be issued upon exercise of the Option that number of shares
having a Fair Market Value on the exercise date equal to the Option
price, all as determined pursuant to rules and procedures established by
the Committee.



(d) Evidence of Grant. All Options shall be evidenced by a written Award
Agreement between the Company and the Participant. The Award Agreement
shall include such provisions as may be specified by the Committee.



(e) Dividend Equivalents. Any Option may provide for the payment of
dividend equivalents to the Participant on a current, deferred or
contingent basis or may provide that Dividend Equivalents be credited
against the option price. The right



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to Dividend Equivalents, if so provided, shall be evidenced in the Award
Agreement.



7.2 Incentive Stock Options.




     The terms of any Incentive Stock Options granted under the Plan must
comply with the following additional rules:



(a) Exercise Price. Subject to Section 7.2 (e) below, the exercise price
per share of Stock shall be set by the Committee, provided that the
exercise price for any Incentive Stock Option shall not be less than the
Fair Market Value as of the date of the grant.



(b) Exercise. Subject to Section 7.2(e) below, in no event may any
Incentive Stock Option be exercisable for more than ten (10) years from
the date of its grant.



(c) Lapse of Option. An Option shall lapse under the following
circumstances:



(1) A vested Option shall lapse according to the Stock Option
Agreement entered into by the Participant and according to this
Plan, provided, however, that vested Incentive Stock Options not
exercised within three months after the Participant’s termination
of employment shall be treated as Non-Qualified Stock Options as
defined by the Code.



(2) If the Participant becomes disabled within the meaning of
Disability under Section 3.1(g) of the Plan, then the Option will
lapse twelve (12) months after employment ceased due to the
Disability.



(3) If the Participant dies before the Option lapses pursuant to
paragraph (1), (2) or (3) or before its original expiration as
indicated above, the Incentive Stock Option shall lapse, unless it
is previously exercised, on the date on which the Option would
have lapsed had the Participant lived and had his employment
status (i.e., whether the Participant was employed by the Company
on the date of his death or had previously terminated employment)
remained unchanged. Upon the Participant’s death, any exercisable
Incentive Stock Options may be exercised by the Participant’s
legal representative or representatives, by the person or persons
entitled to do so under the Participant’s last will and testament,
or, if the Participant shall fail to make testamentary disposition
of such Incentive Stock Options or shall die intestate, by the
person or persons entitled to receive such Incentive Stock Options
under the applicable laws of descent and distribution.



(d) Individual Dollar Limitation. The aggregate Fair Market Value
(determined at the time an Award is made) of all shares of Stock with
respect to which Incentive Stock Options are first exercisable by a
Participant in any calendar year may not exceed $100,000.00.



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(e) Ten Percent Owners. No Incentive Stock Option shall be granted to
any individual who, at the date of grant, owns stock possessing more than
ten percent of the total combined voting power of all classes of stock of
the Company unless the exercise price per share of such Option is at
least 110% of the Fair Market Value per share of Stock at the date of
grant and the Option expires no later than five (5) years after the date
of grant.



(f) Expiration of Incentive Stock Options. No Award of an Incentive
Stock Option may be made pursuant to the Plan after the day immediately
prior to the tenth anniversary of the original Effective Date (i.e.,
November 12, 19977).



(g) Right to Exercise. During a Participant’s lifetime, an Incentive
Stock Option may be exercised only by the Participant.



(h) Grants only to Employees. Incentive Stock Options may be granted
only to employees of the Company.



7.3 Incentive Stock Option Grants to Chief Executive Officer




     Pursuant to the terms of the Executive Employment Agreement entered into
by and between the Company and its Chief Executive Officer, dated April 5,
1999, as amended, the Company shall make annual grants of Incentive Stock
Options to the Chief Executive Officer. The number of shares subject to each
Incentive Stock Option shall be determined in accordance with the Employment
Agreement. The terms of the Award Agreement for such Option grants shall be in
form and substance as attached to the Employment Agreement.



ARTICLE 8

STOCK APPRECIATION RIGHTS




8.1 Grant of SARs.




     The Committee is authorized to grant SARs to Participants on the following
terms and conditions:




(a) Right to Payment. Upon the exercise of a SAR, the Participant to
whom it is granted has the right to receive all or a percentage of:



(1) The Fair Market Value of one share of Stock on the date of
exercise, minus,



(2) The grant price of the SAR as determined by the Committee. In
the case of a SAR offered in tandem with an Incentive Stock
Option, the grant price of the SAR shall not be less than the Fair
Market Value of one share of Stock on the date of grant.



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(b) Tandem Awards. SARs may be granted alone or in tandem with options.
If a SAR is granted in tandem with an option, the SAR may only be
exercised at a time when the related option is exercisable and the
difference between the Fair Market Value and the grant price is a
positive number. The exercise of the tandem SAR requires the surrender of
the related option for cancellation.



(c) Other Terms. All awards of SARs shall be evidenced by an Award
Agreement. The terms, methods of exercise, methods of settlement, form
of consideration payable in settlement, and any other terms and
conditions of any SAR shall be determined by the Committee at the time of
the grant of the Award and shall be reflected in the Award Agreement.
The grant of any SAR may include the right to Dividend Equivalents as
described in Section 7.1(e).



ARTICLE 9

PERFORMANCE AWARDS




9.1 Grant of Performance Awards.




     The Committee is authorized to grant Performance Awards to Participants on
such terms and conditions as may be selected by the Committee. The Committee
shall have the complete discretion to determine the number of Performance
Awards granted to each Participant. All grants of Performance Awards shall be
evidenced by an Award Agreement.



9.2 Right to Payment.




     A grant of Performance Awards gives the Participant rights, valued as
determined by the Committee, and payable to, or exercisable by, the Participant
to whom the Performance Awards are granted, in whole or in part, as the
Committee shall establish at grant or thereafter. The Committee shall set
performance goals and other terms or conditions to payment of the Performance
Awards in its discretion which, depending on the extent to which they are met,
will determine the number and value of Performance Shares that will be paid to
the Participant.



9.3 Other Terms.




     Performance Awards may be payable in cash, Stock, or other property, and
have such other terms and conditions as determined by the Committee and
reflected in the Award Agreement.



ARTICLE 10

RESTRICTED STOCK AWARDS




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10.1 Grant of Restricted Stock.




     The Committee is authorized to make Awards of Restricted Stock to
Participants in such amounts and subject to such terms and conditions as may be
selected by the Committee. All Awards of Restricted Stock shall be evidenced
by a Restricted Stock Award Agreement.



10.2 Issuance and Restrictions.




     Restricted Stock shall be subject to such restrictions as the Committee
may choose to impose. These restrictions may lapse separately or in combination
at such times, under such circumstances, in such installments, or otherwise, as
the Committee determines at the time of the grant of the Award or thereafter.
An award of Restricted Stock will provide the Participant with voting, dividend
and other ownership rights provided in the Award Agreement.



10.3 Forfeiture.




     Except as otherwise determined by the Committee at the time of the grant
of the Award or thereafter, upon termination of employment during the
applicable restriction period, Restricted Stock, that is at that time subject
to restrictions, shall be forfeited and reacquired by the Company; provided,
however, that the Committee may provide in
any Award Agreement that restrictions or forfeiture conditions relating to
Restricted Stock will be waived in whole or in part in the event of termination
resulting from any specified cause, and the Committee may in other cases waive
in whole or in part restrictions or forfeiture conditions relating to
Restricted Stock.



10.4 Certificates for Restricted Stock.




     Restricted Stock granted under the Plan may be evidenced in such manner as
the Committee shall determine. If certificates representing shares of
Restricted Stock are
registered in the name of the Participant, certificates must bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such Restricted Stock, and the Company shall retain physical
possession of the certificate until such time as all applicable restrictions
lapse.



ARTICLE 10A

DEFERRED SHARES




10A.1 Deferred Shares.




     The Committee is authorized to make Awards of Deferred Shares to
Participants in such amounts and subject to such terms and conditions as may be
selected by the Committee. A Deferred Share Award shall entitle the Participant
to receive Stock from the Company in the future in consideration for services
performed during the Deferral



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Period. All services required of the Participant
for receipt of the Deferred Share shall be evidenced by an Award Agreement.




10A.2 Deferral Period.




     The “Deferral Period” means the time period mandated by the Award
Agreement during which specified services are to be performed by the
Participant that will merit receipt of the Deferred Shares.



10A.3 Other Conditions.




     The Committee may authorize Dividend Equivalents, defined under Section
7.1(e), to be provided on or after the date of any grant under this Section.
During the Deferral Period the Participant has no right to transfer any rights
covered by the Award and no right to vote the Stock.



     The grant of any Deferred Shares may require the payment of additional
consideration. However, in no case shall the additional consideration exceed
the Fair Market Value of the Shares on the date of grant.



ARTICLE 11

PROVISIONS APPLICABLE TO AWARDS




11.1 Stand-Alone, Tandem, and Substitute Awards.




     Awards granted under the Plan may, in the discretion of the Committee, be
granted either alone or in addition to, in tandem with, or in substitution for,
any other Award granted under the Plan. If an Award is granted in substitution
for another Award, the Committee may require the surrender of such other Award
in consideration of the grant of the new Award. Awards granted in addition to
or in tandem with other Awards may be granted either at the same time as or at
a different time from the grant of such other Awards.



11.2 Exchange Provisions.




     The Committee may at any time offer to exchange or buy out any previously
granted Award for a payment in cash, Stock, or another Award (subject to
Section 12.1), based on the terms and conditions the Committee determines and
communicates to the Participant at the time the offer is made.



11.3 Term of Award.




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     The term of each Award shall be for the period as determined by the
Committee, provided that in no event shall the term of any Incentive Stock
Option or a Stock Appreciation Right granted in tandem with the Incentive Stock
Option exceed a period of ten years from the date of its grant.



11.4 Form of Payment for Awards.




     Subject to the terms of the Plan, the Award Agreement or any applicable
law, payments or transfers to be made by the Company on the grant or exercise
of an Award may be made in such form as the Committee determines at or after
the time of grant, including without limitation, cash, Stock, other Awards, or
other property, or any combination, and may be made in a single payment or
transfer, in installments, or on a deferred basis, in each case determined in
accordance with rules adopted by, and at the discretion of, the Committee.



11.5 Limits on Transfer.




     No right or interest of a Participant in any Award may be encumbered or
pledged to or in favor of any party other than the Company , or shall be
subject to any lien, obligation, or liability of such Participant to any other
party other than the Company . No Award shall be assignable or transferable by
a Participant other than by will or the laws of descent and distribution or,
except in the case of an Incentive Stock Option, pursuant to a qualified
domestic relations order as defined in Section 414(p)(1)(B) of the Code, if the
order satisfies Section 414(p)(1)(A) of the Code.



11.6 Beneficiaries.




     Notwithstanding Section 13.5, a Participant may, in the manner determined
by the Committee, designate a beneficiary to exercise the rights of the
Participant and to receive any distribution with respect to any Award upon the
Participant’s death. A beneficiary,
legal guardian, legal representative, or other person claiming any rights under
the Plan is subject to all terms and conditions of the Plan and any Award
Agreement applicable to the Participant, except to the extent the Plan and
Award Agreement otherwise provide, and to any additional restrictions deemed
necessary or appropriate by the Committee. If the Participant is married, a
designation of a person other than the Participant’s spouse as his beneficiary
with respect to more than 50 percent of the Participant’s interest in the Award
shall not be effective without the written consent of the Participant’s spouse.
If no beneficiary has been designated or survives the Participant, payment
shall be made to the person entitled thereto under the Participant’s will or
the laws of descent and distribution. Subject to the foregoing, a beneficiary
designation may be changed or revoked by a Participant at any time provided the
change or revocation is filed with the Committee.



11.7 Stock Certificates.




     All Stock certificates delivered under the Plan are subject to any
stop-transfer orders and other restrictions as the Committee deems necessary or
advisable to comply with federal or state securities laws, rules and
regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted,



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or traded. The
Committee may place legends on any Stock certificate to reference restrictions
applicable to the Stock.



11.8 Acceleration Upon Death or Disability.




     Notwithstanding any other provision in the Plan or any Participant’s Award
Agreement to the contrary, upon the Participant’s death or Disability, all
outstanding Options, Stock Appreciation Rights, and other Awards in the nature
of rights that may be exercised shall become fully exercisable and all
restrictions on outstanding Awards shall lapse. Any Option or Stock
Appreciation Rights Awards shall then lapse in accordance with the other
provisions of the Plan and the Award Agreement. To the extent that this
provision causes Incentive Stock Options to exceed the dollar limitation set
forth in Section 7.2(d), the excess Options shall be deemed to be Non-Qualified
Stock Options.



11.9 Acceleration Upon Certain Events.




     In the event of (i) the commencement of a public tender offer for all or
any portion of the Stock, (ii) a proposal to merge, consolidate or otherwise
combine with
another company is submitted to the stockholders of the Company for approval,
or (iii) the Board approves any transaction or event that would constitute a
change of control of the Company of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of the 1934 Act, the
Committee may in its sole discretion declare all outstanding Options, Stock
Appreciation Rights, and other Awards in the nature of rights that may be
exercised to become fully exercisable, and/or all restrictions on all
outstanding Awards to lapse, in each case as of such date as the Committee may,
in its sole discretion, declare, which may be on or before the consummation of
such tender offer or other transaction or event. To the extent that this
provision causes Incentive Stock Options to exceed the dollar limitation set
forth in Section 7.2(d), the excess Options shall be deemed to be Non-Qualified
Stock Options.



ARTICLE 12

CHANGES IN CAPITAL STRUCTURE




12.1 General.




     In the event a stock dividend is declared upon the Stock, the aggregate
number of shares of Stock reserved and available for Awards under the Plan
shall be increased proportionately, the maximum number of shares of Stock with
respect to one or more Awards that may be granted to a Participant per year
shall be increased proportionately, and the shares of Stock then subject to
each Award shall be increased proportionately
without any change in the aggregate purchase price therefor. In the event the
Stock shall be changed into or exchanged for a different number or class of
shares of stock or securities of the Company or of another company, whether
through reorganization, recapitalization, stock split, reverse stock split,
combination of shares, merger or



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consolidation, there shall be substituted for
each such share of Stock then subject to each Award as well as the aggregate
number of shares of Stock reserved and available for Awards under the Plan and
the maximum number of shares of Stock with respect to one or more Awards that
may be granted to a Participant per year the number and class of shares into
which each outstanding share of Stock shall be so exchanged. The Committee
shall make such adjustments to the aggregate purchase price for the shares then
subject to each Award as it deems necessary or advisable to put Participants in
the same relative position after such change in capital structure as before
such change.



ARTICLE 13

AMENDMENT, MODIFICATION AND TERMINATION




13.1 Amendment, Modification and Termination.




     With the approval of the Board, at any time and from time to time, the
Committee may terminate, amend or modify the Plan; provided, however, that no
amendment of the Plan may be made without approval of the stockholders of the
Company as may be required by the Code, by the insider trading rules of Section
16 of the 1934 Act, by any national securities exchange or automated quotation
system on which the Stock is listed or reported.



13.2 Awards Previously Granted.




     No termination, amendment, or modification of the Plan shall adversely
affect any Award previously granted under the Plan, without the written consent
of the Participant.



ARTICLE 14

GENERAL PROVISIONS




14.1 No Rights to Awards.




     No Participant or employee shall have any claim to be granted any Award
under the Plan, and neither the Company nor the Committee is obligated to treat
Participants and employees uniformly.



14.2 No Stockholder Rights.




     No Award gives the Participant any of the rights of a stockholder of the
Company unless and until shares of Stock are in fact issued to such person in
connection with such Award.



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14.3 Withholding.




     The Company shall have the authority and the right to deduct or withhold,
or require a Participant to remit to the Company, an amount sufficient to
satisfy federal, state, and local taxes (including the Participant’s FICA
obligation) required by law to be withheld with respect to any taxable event
arising as a result of the Plan. With respect to withholding required upon any
taxable event under the Plan, the Committee may, at the time the Award is
granted or thereafter, require that any such withholding requirement be
satisfied, in whole or in part, by withholding shares of Stock having a Fair
Market Value on the date of withholding equal to the amount to be withheld for
tax purposes, all in accordance with such procedures as the Committee
establishes.



14.4 No Right to Employment.




     Nothing in the Plan or any Award Agreement shall interfere with or limit
in any way the right of the Company to terminate any Participant’s employment
at any time, nor confer upon any Participant any right to continue in the
employ of the Company.



l4.5 Unfunded Status of Awards.




     The Plan is intended to be an “unfunded” plan for incentive and deferred
compensation. With respect to any payments not yet made to a Participant
pursuant to an Award, nothing contained in the Plan or any Award Agreement
shall give the Participant any rights that are greater than those of a general
creditor of the Company .



14.6 Indemnification.




     To the extent allowable under applicable law, each member of the Committee
shall be indemnified and held harmless by the Company from any loss, cost,
liability, or expense that may be imposed upon or reasonably incurred by such
member in connection with or resulting from any claim, action, suit, or
proceeding to which such member 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 such member in satisfaction of judgment in such
action, suit, or proceeding against him provided he gives 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 By-Laws of the Company or as a
matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.



14.7 Relationship to Other Benefits.




     No payment under the Plan shall be taken into account in determining any
benefits under any pension, retirement, savings, profit sharing, group
insurance, welfare or benefit plan of the Company.



14.8 Expenses.






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     The expenses of administering the Plan shall be borne by the Company.



14.9 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.



14.10 Gender and Number.




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



14.11 Fractional Shares.



     No fractional shares of Stock shall be issued and the Committee shall
determine, in its discretion, whether cash shall be given in lieu of fractional
shares or whether such fractional shares shall be eliminated by rounding up.



14.12 Securities Law Compliance.




     With respect to any person who is, on the relevant date, obligated to file
reports under Section 16 of the 1934 Act, transactions under the Plan are
intended to comply with Rule 16b-3(d) as transactions between the Company and
its officers or directors. To the extent any provision of the Plan or action by
the Committee fails to so comply, it shall be void to the extent permitted by
law and voidable as deemed advisable by the Committee.



14.13 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 government agencies as may be required. The Company shall
be under no obligation to register under the 1933 Act, any of the shares of
Stock paid under the Plan. If the shares paid under the Plan may in certain
circumstances be exempt from registration under the 1933 Act, the Company may
restrict the transfer of such shares in such manner as it deems advisable to
ensure the availability of any such exemption.



14.14 Governing Law.




     To the extent not governed by federal law, the Plan and all Award
Agreements shall be construed in accordance with and governed by the laws of
the District of Columbia.




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