**EXHIBIT 10.2****SPANISH BROADCASTING SYSTEM, INC.****2006 OMNIBUS EQUITY COMPENSATION PLAN**Adopted bySpanish Broadcasting System, Inc.Board of Directors on March 3, 2006Approved bySpanish Broadcasting System, Inc.Stockholders on July 18, 2006

 
**SPANISH BROADCASTING SYSTEM, INC.****2006 OMNIBUS EQUITY COMPENSATION PLAN****1.****Purpose**     The purpose of the Spanish Broadcasting System, Inc. 2006Omnibus Equity Compensation Plan (the “Plan”) is toprovide (i) designated employees of Spanish BroadcastingSystem, Inc. (the “Company”) and its subsidiaries, and(ii) non-employee members of the board of directors of theCompany with the opportunity to receive grants of stock options,stock units, stock awards, dividend equivalents and otherstock-based awards. The Company believes that the Plan willencourage the participants to contribute materially to theoverall growth of the Company, thereby benefitting theCompany’s shareholders, and will align the economicinterests of the participants with those of the shareholders.The Plan shall be effective as of July 18, 2006, subject toapproval by the shareholders of the Company.**2.****Definitions**     Whenever used in this Plan, the following terms will have therespective meanings set forth below:          (a) *“Board”*means the Company’s Board    of Directors.           (b) *“Change of Control”*shall mean a    change in the ownership of the voting power or effective control    of the Company, or in the ownership of a substantial portion of    the assets of the Company, as determined in accordance with the    rules and guidance set forth in Internal Revenue Service Notice    2005-1 and any further regulations or guidance issued by the    Internal Revenue Service under Code Section 409.           (c) *“Code”*means the Internal Revenue Code    of 1986, as amended.           (d) *“Committee”*means (i) with    respect to Grants to Employees, the Compensation Committee of    the Board or another committee appointed by the Board to    administer the Plan, (ii) with respect to Grants made to    Non-Employee Directors, the Board, and (iii) with respect    to Grants that are intended to be “qualified    performance-based compensation” under section 162(m)    of the Code as well as Grants to Employees who are officers, a    committee that consists of two or more persons appointed by the    Board, all of whom shall be “outside directors” as    defined under section 162(m) of the Code and related    Treasury regulations and “non-employee directors” as    defined under    Rule 16b-3    promulgated under the Exchange Act. The Board or committee, as    applicable, that has authority with respect to a specific Grant    shall be referred to as the “Committee” with respect    to that Grant.           (e) *“Company”*means Spanish Broadcasting    System, Inc. and any successor corporation.           (f) *“Company Stock”*means the common stock    of the Company or such other securities of the Company that may    be substituted for common stock pursuant to Section 5(e)    provided that such stock qualifies as “service recipient    stock” as defined under section 409A of the Code and    the applicable regulations thereunder.           (g) *“Disability”*means a physical or    mental incapacity that renders a Participant incapable of    engaging in any substantial gainful employment, or that has    lasted for a continuous period of no less than six consecutive    months, or six months in any twelve-month period, as determined    by the Committee in good faith in its sole discretion, provided    that if a Participant has entered into an employment agreement    with the Company or a subsidiary, the definition of disability,    if any, set forth in that agreement shall be substituted for the    above definition. All determinations as to the date and extent    of disability shall be made by the Committee upon the basis of    such evidence as it deems necessary or desirable.           (h) *“Dividend Equivalent”*means an amount    determined by multiplying the number of shares of Company Stock    subject to a Grant by the per-share cash dividend, or the    per-share fair market value
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     (as determined by the Committee) of any dividend in    consideration other than cash, paid by the Company on its    Company Stock.           (i) *“Effective Date”* of the Plan means    July 18, 2006, subject to approval of the Plan by the    shareholders of the Company.           (j) *“Employee”*means an employee of the    Employer (including an officer or director who is also an    employee).           (k) *“Employer”*means the Company and its    subsidiaries.           (l) *“Exchange Act”*means the Securities    Exchange Act of 1934, as amended.           (m) *“Exercise Price”*means the per share    price at which shares of Company Stock may be purchased under an    Option, as designated by the Committee.           (n) *“Fair Market Value”*of Company Stock    means as of any given date, unless the Committee determines    otherwise with respect to a particular Grant, (i) if the    principal trading market for the Company Stock is a national    securities exchange such as the New York Stock Exchange or the    Nasdaq National Market, the last reported sale price of Company    Stock on the relevant date or (if there were no trades on that    date) the latest preceding date upon which a sale was reported,    (ii) if the Company Stock is not principally traded on such    exchange or market, the mean between the last reported    “bid” and “asked” prices of Company Stock on    the relevant date, as reported on Nasdaq or, if not so reported,    as reported by the National Daily Quotation Bureau, Inc. or as    reported in a customary financial reporting service, as    applicable and as the Committee determines, or (iii) if the    Company Stock is not publicly traded or, if publicly traded, is    not subject to reported transactions or “bid” or    “asked” quotations as set forth above, the Fair Market    Value per share shall be as determined by the Committee through    the reasonable application of a reasonable valuation method.           (o) *“Grant”*means an Option, Stock Unit,    Stock Award, SAR, Dividend Equivalent or Other Stock-Based Award    granted under the Plan.           (p) *“Grant Agreement”*means the written    instrument that sets forth the terms and conditions of a Grant,    including all amendments thereto.           (q) *“Incentive Stock Option”*means an    Option that is intended to meet the requirements of an incentive    stock option under section 422 of the Code or any successor    provision thereto.           (r) *“Non-Employee Director”*means a member    of the Board who is not an employee of the Employer.           (s) *“Nonqualified Stock Option”*means an    Option that is not intended to be an Incentive Stock Option.           (t) *“Option”*means a right granted to a    Participant to purchase shares of Company Stock, as described in    Section 7.           (u) *“Other Stock-Based Award”*means any    Grant based on, measured by or payable in Company Stock (other    than a Grant described in Sections 7, 8, 9 or 10    of the Plan), as described in Section 11.           (v) *“Participant”*means an Employee or    Non-Employee Director designated by the Committee to participate    in the Plan.           (w) *“Plan”*means this Spanish Broadcasting    System, Inc. 2006 Omnibus Equity Compensation Plan, as in effect    from time to time.           (x) *“SAR”*means a stock appreciation right    as described in Section 10.           (y) *“Stock Award”*means an award of    Company Stock as described in Section 9.           (z) *“Stock Unit”*means an award of a    phantom unit representing a share of Company Stock, as described    in Section 8.
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**3.     Administration**     (a) *Committee.* The Plan shall be administeredand interpreted by the Committee. In its sole discretion, theBoard may at anytime and from time to time exercise any and allrights and duties of the Committee under the Plan except withrespect to a matter that underRule 16b-3 of theExchange Act or section 162(m) of the Code or anyregulations or rules issued thereunder is required to bedetermined in the sole discretion of the Committee. Committeemembers may resign at any time by delivering written notice tothe Board. Vacancies in the Committee may only be filled by theBoard. To the extent permitted by applicable law, ministerialfunctions may be performed by an administrative committeecomprised of Company employees appointed by the Committee. Anydelegation hereunder shall be subject to the restrictions andlimits that the Committee specifies at the time of suchdelegation, and the Committee may at any time rescind theauthority so delegated or appoint a new delegate. At all times,the delegate appointed under this Section 3 shall serve insuch capacity at the pleasure of the Committee.     (b) *Committee Authority.* A majority of theCommittee shall constitute a quorum. The acts of a majority ofthe members present at any meeting at which a quorum is present,and acts approved in writing by a majority of the Committee inlieu of a meeting, shall be deemed the acts of the Committee.Each member of the Committee is entitled to, in good faith, relyor act upon any report or other information furnished to thatmember by any officer or other employee of the Company or anysubsidiary, the Company’s independent certified publicaccountants, or any executive compensation consultant or otherprofessional retained by the Company to assist in theadministration of the Plan. The Committee shall have the soleauthority to (i) determine the Participants to whom Grantsshall be made under the Plan, (ii) determine the type, sizeand terms and conditions of the Grants to be made to each suchParticipant, (iii) determine the time when the grants willbe made and the duration of any applicable exercise orrestriction period, including the criteria for exercisabilityand the acceleration of exercisability; provided, however, thatthe Committee shall not have the authority to accelerate thevesting or waive the forfeiture of any performance based awardsgranted pursuant to Section 12, (iv) amend the termsand conditions of any previously issued Grant, subject to theprovisions of Section 18 below, and (v) deal with anyother matters arising under the Plan.     (c) *Committee Determinations.* The Committeeshall have full power and express discretionary authority toadminister and interpret the Plan, to make factualdeterminations and to adopt or amend such rules, regulations,agreements and instruments for implementing the Plan and for theconduct of its business as it deems necessary or advisable, inits sole discretion. The Committee’s interpretations of thePlan and all determinations made by the Committee pursuant tothe powers vested in it hereunder shall be conclusive andbinding on all persons having any interest in the Plan or in anyawards granted hereunder. All powers of the Committee shall beexecuted in its sole discretion, in the best interest of theCompany, not as a fiduciary, and in keeping with the objectivesof the Plan and need not be uniform as to similarly situatedParticipants.**4.****Grants**     (a) Grants under the Plan may consist of Options asdescribed in Section 7, Stock Units as described inSection 8, Stock Awards as described in Section 9, andSARs or Other Stock-Based Awards as described inSection 10. All Grants shall be subject to such terms andconditions as the Committee deems appropriate and as arespecified in writing by the Committee to the Participant in theGrant Agreement.     (b) All Grants shall be made conditional upon theParticipant’s acknowledgement, in writing or by acceptanceof the Grant, that all decisions and determinations of theCommittee shall be final and binding on the Participant, his orher beneficiaries and any other person having or claiming aninterest under such Grant. Grants under a particular section ofthe Plan need not be uniform as among the Participants.     (c) The Committee may make Grants that are contingent on,and subject to, shareholder approval of the Plan or an amendmentto the Plan.
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**5.****Shares Subject to the Plan**     (a) *Shares Authorized.* The total aggregatenumber of shares of Company Stock that may be issued under thePlan is 3.5 million (3,500,000) shares, subject toadjustment as described in subsection (e) below.     (b) *Limit on Stock Awards, Stock Units and OtherStock-Based Awards.* Within the aggregate limit describedin subsection (a), the maximum number of shares of CompanyStock that may be issued under the Plan pursuant to StockAwards, Stock Units and Other Stock-Based Awards during the termof the Plan is 3.5 million (3,500,000) shares, subject toadjustment as described in subsection (e) below.     (c) *Source of Shares; Share Counting.* Sharesissued under the Plan may be authorized but unissued shares ofCompany Stock or reacquired shares of Company Stock, includingshares purchased by the Company on the open market for purposesof the Plan. If and to the extent Options or SARs granted underthe Plan terminate, expire, or are canceled, forfeited,exchanged or surrendered without having been exercised, and ifand to the extent that any Stock Awards, Stock Units, or OtherStock-Based Awards are forfeited or terminated prior to vesting,or otherwise are not paid in full, the shares reserved for suchGrants shall again be available for purposes of the Plan. Sharesof Company Stock surrendered in payment of the Exercise Price ofan Option shall again be available for purposes of the Plan.Shares of Company Stock withheld for payment of applicable taxwithholding obligations with respect to the exercise or othertaxation of a Grant shall again be available for purposes of thePlan. If SARs are exercised, only the net number of sharesactually issued upon exercise of the SARs shall be consideredissued under the Plan for purposes of this subsection (c).To the extent that Grants are paid in cash, and not in shares ofCompany Stock, any shares previously reserved for issuancepursuant to such Grants shall again be available for purposes ofthe Plan. Notwithstanding the foregoing, no shares shall becomeavailable pursuant to this section 5(c) to the extent thatthe transaction resulting in the return of shares occurs morethan ten years after the date of the most recent shareholderapproval of the Plan or such return of shares would constitute a“material revision” of the Plan subject to shareholderapproval under then applicable rules of the Nasdaq Marketplace Rules (or any applicable exchange or quotation system).     (d) *Individual Limits.* All Grants under thePlan shall be expressed in shares of Company Stock. The maximumaggregate number of shares of Company Stock with respect towhich all Grants may be made under the Plan to any individualduring any calendar year shall be 1 million (1,000,000)shares, subject to adjustment as described insubsection (e) below. The individual limits of thissubsection (d) shall apply without regard to whetherthe Grants are to be paid in Company Stock or cash. All cashpayments (other than with respect to Dividend Equivalents) shallequal the Fair Market Value of the shares of Company Stock towhich the cash payments relate.     (e) *Adjustments.* If there is any change inthe number or kind of shares of Company Stock outstanding(i) by reason of a stock dividend, spinoff,recapitalization, stock split, or combination or exchange ofshares, (ii) by reason of a merger, reorganization orconsolidation, (iii) by reason of a reclassification orchange in par value, or (iv) by reason of any otherextraordinary or unusual event affecting the outstanding CompanyStock as a class without the Company’s receipt ofconsideration, or if the value of outstanding shares of CompanyStock is substantially reduced as a result of a spinoff or theCompany’s payment of an extraordinary dividend ordistribution, the maximum number of shares of Company Stockavailable for issuance under the Plan, the maximum number ofshares of Company Stock for which any individual may receiveGrants in any year, the number of shares covered by outstandingGrants, the kind of shares issued and to be issued under thePlan, and the price per share or the applicable market value ofsuch Grants shall be appropriately adjusted by the Committee, asit may deem reasonably necessary, to reflect any increase ordecrease in the number of, or change in the kind or value of,issued shares of Company Stock to preclude, to the extentpracticable, the enlargement or dilution of rights and benefitsunder such Grants; provided, however, that any fractional sharesresulting from such adjustment shall be eliminated. Anyadjustments determined by the Committee shall be final, bindingand conclusive. Any adjustment affecting a Grant made pursuantto Section 12 shall be made consistent with therequirements of section 162 (m) of the Code.
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**6.****Eligibility for Participation**     (a) *Eligible Persons.* All Employees,including Employees who are officers or members of the Board,and all Non-Employee Directors shall be eligible to participatein the Plan.     (b) *Selection of Participants.* The Committeeshall select the Employees and Non-Employee Directors to receiveGrants and shall determine the number of shares of Company Stocksubject to each Grant.**7.****Options**     (a) *General Requirements.* The Committee maygrant Options to an Employee or Non-Employee Director upon suchterms and conditions as the Committee deems appropriate underthis Section 7. The Committee shall determine the number ofshares of Company Stock that will be subject to each Grant ofOptions to Employees and Non-Employee Directors.     (b) *Type of Option, Price and Term.*          (i) The Committee may grant Incentive Stock Options or    Nonqualified Stock Options or any combination of the two, all in    accordance with the terms and conditions set forth herein.    Incentive Stock Options may be granted only to Employees of the    Company or its parents or subsidiaries, as defined in    section 424 of the Code. Nonqualified Stock Options may be    granted to Employees or Non-Employee Directors.           (ii) The Exercise Price of Company Stock subject to an    Option shall be determined by the Committee and may be equal to    or greater than the Fair Market Value of a share of Company    Stock on the date the Option is granted; provided, however, that    an Incentive Stock Option may not be granted to an Employee who,    at the time of grant, owns stock possessing more than 10% of the    total combined voting power of all classes of stock of the    Company or any parent or subsidiary, as defined in    section 424 of the Code, unless the Exercise Price per    share is not less than 110% of the Fair Market Value of the    Company Stock on the date of grant.           (iii) The Committee shall determine the term of each    Option, which shall not exceed ten years from the date of grant.    However, an Incentive Stock Option that is granted to an    Employee who, at the time of grant, owns stock possessing more    than 10% of the total combined voting power of all classes of    stock of the Company or any parent or subsidiary, as defined in    section 424 of the Code, may not have a term that exceeds    five years from the date of grant.     (c) *Exercisability of Options.*          (i) Options shall become exercisable in accordance with    such terms and conditions as may be determined by the Committee    and specified in the Grant Agreement. The Committee may    accelerate the exercisability of any or all outstanding Options    at any time for any reason.           (ii) The Committee may provide in a Grant Agreement that    the Participant may elect to exercise part or all of an Option    before it otherwise has become exercisable. Any shares so    purchased shall be restricted shares and shall be subject to a    repurchase right in favor of the Company during a specified    restriction period, with the repurchase price equal to the    lesser of (A) the Exercise Price or (B) the Fair    Market Value of such shares at the time of repurchase, or such    other restrictions as the Committee deems appropriate.           (iii) Options granted to persons who are non-exempt    employees under the Fair Labor Standards Act of 1938, as    amended, may not be exercisable for at least six months after    the date of grant (except that such Options may become    exercisable, as determined by the Committee, upon the    Participant’s death, Disability or retirement, or upon a    Change of Control or other circumstances permitted by applicable    regulations).     (d) *Termination of Employment or Service.*Except as provided in the Grant Agreement, an Option may only beexercised while the Participant is employed by the Employer, orproviding service as a Non-
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Employee Director. The Committee shall determine in the GrantAgreement under what circumstances and during what time periodsa Participant may exercise an Option after termination ofemployment or service.     (e) *Exercise of Options.* A Participant mayexercise an Option that has become exercisable, in whole or inpart, by delivering a notice of exercise to the Company. TheParticipant shall pay the Exercise Price for the Option(i) in cash, (ii) if permitted by the Committee, bydelivery of or attestation to ownership of shares of CompanyStock owned by the Participant and having a Fair Market Value onthe date of exercise equal to the Exercise Price, (iii) bypayment through a broker in accordance with procedures permittedby Regulation T of the Federal Reserve Board, or(iv) by such other method as the Committee may approve.Shares of Company Stock used to exercise an Option shall havebeen held by the Participant for the requisite period of time toavoid adverse accounting consequences to the Company withrespect to the Option. Payment for the shares pursuant to theOption, and any required withholding taxes, must be received bythe time specified by the Committee depending on the type ofpayment being made, but in all cases prior to the issuance ofthe Company Stock.     (f) *Limits on Incentive Stock Options.* EachIncentive Stock Option shall provide that, if the aggregate FairMarket Value of the stock on the date of the grant with respectto which Incentive Stock Options are exercisable for the firsttime by a Participant during any calendar year, under the Planor any other stock option plan of the Company or a parent orsubsidiary, as defined in section 424 of the Code, exceeds$100,000, then the Option, as to the excess, shall be treated asa Nonqualified Stock Option.     (g) The Participant shall give the Company prompt notice ofany disposition of shares of Company Stock acquired by exerciseof an Incentive Stock Option within two years from the date ofgrant of such Option or one year after the transfer of suchshares of Company Stock to the Participant.**8.****Stock Units**     (a) *General Requirements.* The Committee maygrant Stock Units to an Employee or Non-Employee Director, uponsuch terms and conditions as the Committee deems appropriateunder this Section 8. Each Stock Unit shall represent theright of the Participant to receive a share of Company Stock oran amount based on the value of a share of Company Stock. AllStock Units shall be credited to bookkeeping accounts on theCompany’s records for purposes of the Plan.     (b) *Terms of Stock Units.* The Committee maygrant Stock Units that are payable on terms and conditionsdetermined by the Committee, which may include payment based onachievement of performance goals. Stock Units may be paid at theend of a specified vesting or performance period, or payment maybe deferred to a date authorized by the Committee in a mannerthat complies with section 409A of the Code. The Committeeshall determine the number of Stock Units to be granted and therequirements applicable to such Stock Units.     (c) *Payment With Respect to Stock Units.*Payment with respect to Stock Units shall be made in cash, inCompany Stock, or in a combination of the two, as determined bythe Committee. The Grant Agreement shall specify the maximumnumber of shares that can be issued under the Stock Units.     (d) *Requirement of Employment or Service.* TheCommittee shall determine in the Grant Agreement under whatcircumstances a Participant may retain Stock Units aftertermination of the Participant’s employment or service, andthe circumstances under which Stock Units may be forfeited.**9.****Stock Awards**     (a) *General Requirements.* The Committee mayissue shares of Company Stock to an Employee or Non-EmployeeDirector under a Stock Award, upon such terms and conditions asthe Committee deems appropriate under this Section 9.Shares of Company Stock issued pursuant to Stock Awards may beissued for cash consideration or for no cash consideration, andsubject to restrictions or no restrictions, as determined by theCommittee. The Committee may establish conditions under whichrestrictions on Stock Awards shall lapse over a period of timeor according to such other criteria as the Committee deems
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appropriate, including restrictions based upon the achievementof specific performance goals. The Committee shall determine thenumber of shares of Company Stock to be issued pursuant to aStock Award.     (b) *Requirement of Employment or Service.* TheCommittee shall determine in the Grant Agreement under whatcircumstances a Participant may retain Stock Awards aftertermination of the Participant’s employment or service, andthe circumstances under which Stock Awards may be forfeited orrepurchased by the Company.     (c) *Restrictions on Transfer.* While StockAwards are subject to restrictions, a Participant may not sell,assign, transfer, pledge or otherwise dispose of the shares of aStock Award except upon death as described inSection 15(a). Each certificate for a share of a StockAward shall contain a legend giving appropriate notice of therestrictions in the Grant. The Participant shall be entitled tohave the legend removed when all restrictions on such shareshave lapsed. The Company may retain possession of anycertificates for Stock Awards until all restrictions on suchshares have lapsed.     (d) *Right to Vote and to Receive Dividends.*The Committee shall determine to what extent, and under whatconditions, the Participant shall have the right to vote sharesof Stock Awards and to receive any dividends or otherdistributions paid on such shares during the restriction period.**10.****Stock Appreciation Rights and Other Stock-Based    Awards**     (a) *SARs.* The Committee may grant SARs to anEmployee or Non-Employee Director separately or in tandem withan Option. The following provisions are applicable to SARs:          (i) *Base Amount.* The Committee shall    establish the base amount of the SAR at the time the SAR is    granted. The base amount of each SAR shall be equal to the per    share Exercise Price of the related Option or, if there is no    related Option, an amount that is at least equal to the Fair    Market Value of a share of Company Stock as of the date of Grant    of the SAR.           (ii) *Tandem SARs.* The Committee may grant    tandem SARs either at the time the Option is granted or at any    time thereafter while the Option remains outstanding; provided,    however, that, in the case of an Incentive Stock Option, SARs    may be granted only at the date of the grant of the Incentive    Stock Option. In the case of tandem SARs, the number of SARs    granted to a Participant that shall be exercisable during a    specified period shall not exceed the number of shares of    Company Stock that the Participant may purchase upon the    exercise of the related Option during such period. Upon the    exercise of an Option, the SARs relating to the Company Stock    covered by such Option shall terminate. Upon the exercise of    SARs, the related Option shall terminate to the extent of an    equal number of shares of Company Stock.           (iii) *Exercisability.* A SAR shall be    exercisable during the period specified by the Committee in the    Grant Agreement and shall be subject to such vesting and other    restrictions as may be specified in the Grant Agreement. The    Committee may grant SARs that are subject to achievement of    performance goals or other conditions. The Committee may    accelerate the exercisability of any or all outstanding SARs at    any time for any reason. The Committee shall determine in the    Grant Agreement under what circumstances and during what periods    a Participant may exercise a SAR after termination of employment    or service. A tandem SAR shall be exercisable only while the    Option to which it is related is exercisable.           (iv) *Grants to Non-Exempt Employees.* SARs    granted to persons who are non-exempt employees under the Fair    Labor Standards Act of 1938, as amended, may not be exercisable    for at least six months after the date of grant (except that    such SARs may become exercisable, as determined by the    Committee, upon the Participant’s death, Disability or    retirement, or upon a Change of Control or other circumstances    permitted by applicable regulations).           (v) *Value of SARs.* When a Participant    exercises SARs, the Participant shall receive in settlement of    such SARs an amount equal to the value of the stock appreciation    for the number of
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     SARs exercised. The stock appreciation for a SAR is the amount    by which the Fair Market Value of the underlying Company Stock    on the date of exercise of the SAR exceeds the base amount of    the SAR as described in subsection (i).           (vi) *Form of Payment.* The Committee shall    determine whether the stock appreciation for a SAR shall be paid    in the form of shares of Company Stock, cash or a combination of    the two. For purposes of calculating the number of shares of    Company Stock to be received, shares of Company Stock shall be    valued at their Fair Market Value on the date of exercise of the    SAR. If shares of Company Stock are to be received upon exercise    of a SAR, cash shall be delivered in lieu of any fractional    share.     (b) *Other Stock-Based Awards.* The Committeemay grant other awards not specified in Sections 7, 8or 9 above that are based on or measured by Company Stockto Employees and Non-Employee Directors, on such terms andconditions as the Committee deems appropriate. Other Stock-BasedAwards may be granted subject to achievement of performancegoals or other conditions and may be payable in Company Stock orcash, or in a combination of the two, as determined by theCommittee in the Grant Agreement.**11.****Dividend Equivalents.**     (a) *General Requirements.* When the Committeemakes a Grant under the Plan or anytime between the date of aGrant and the date the Grant is exercised, vests or expires, theCommittee may grant Dividend Equivalents in connection with theGrant, under such terms and conditions as the Committee deemsappropriate under this Section 11. Dividend Equivalents maybe paid to Participants currently or may be deferred, asdetermined by the Committee. All Dividend Equivalents that arenot paid currently shall be credited to bookkeeping accounts onthe Company’s records for purposes of the Plan. DividendEquivalents may be accrued as a cash obligation, or may beconverted to Stock Units for the Participant, and deferredDividend Equivalents may accrue interest, all as determined bythe Committee. The Committee may provide that DividendEquivalents shall be payable based on the achievement ofspecific performance goals. Dividend Equivalents granted withrespect to Options or SARs that are intended to be qualifiedperformance based compensation shall be payable, with respect topre-exercise periods, regardless of whether such Option or SARis subsequently exercised.     (b) *Payment with Respect to DividendEquivalents.* Dividend Equivalents may be payable in cashor shares of Company Stock or in a combination of the two, asdetermined by the Committee.**12.****Qualified Performance-Based Compensation**     (a) *Designation as Qualified Performance-BasedCompensation.* The Committee may determine that StockUnits, Stock Awards, Dividend Equivalents or Other Stock-BasedAwards granted to an Employee shall be considered“qualified performance-based compensation” undersection 162(m) of the Code, in which case the provisions ofthis Section 12 shall apply and control over any contraryprovision in this Plan. The Committee may also grant Options orSARs under which the exercisability of the Options is subject toachievement of performance goals as described in thisSection 12 or otherwise.     (b) *Performance Goals.* When Grants are madeunder this Section 12, the Committee shall establish inwriting (i) the objective performance goals that must bemet, (ii) the period during which performance will bemeasured, (iii) the maximum amounts that may be paid if theperformance goals are met, and (iv) any other conditionsthat the Committee deems appropriate and consistent with therequirements of section 162(m) of the Code for“qualified performance-based compensation.” Theperformance goals shall satisfy the requirements for“qualified performance-based compensation,” includingthe requirement that the achievement of the goals besubstantially uncertain at the time they are established andthat the performance goals be established in such a way that athird party with knowledge of the relevant facts could determinewhether and to what extent the performance goals have been met.The Committee shall not have discretion to increase the amountof compensation that is payable, but may
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reduce the amount of compensation that is payable, pursuant toGrants identified by the Committee as “qualifiedperformance-based compensation.”     (c) *Criteria Used for Objective PerformanceGoals.* The Committee shall use objectively determinableperformance goals based on one or more of the followingcriteria: stock price, earnings per share, price-earningsmultiples, net earnings, operating earnings, revenue, number ofdays sales outstanding in accounts receivable, productivity,margin, EBITDA (earnings before interest, taxes, depreciationand amortization), net capital employed, return on assets,shareholder return, return on equity, return on capitalemployed, growth in assets, unit volume, sales, cash flow,market share, relative performance to a comparison groupdesignated by the Committee, or strategic business criteriaconsisting of one or more objectives based on meeting specifiedrevenue goals, market penetration goals, customer growth,geographic business expansion goals, cost targets or goalsrelating to acquisitions or divestitures. The performance goalsmay relate to one or more business units or the performance ofthe Company as a whole, or any combination of the foregoing.Performance goals need not be uniform as among Participants.     (d) *Timing of Establishment of Goals.* TheCommittee shall establish the performance goals in writingeither before the beginning of the performance period or duringa period ending no later than the earlier of(i) 90 days after the beginning of the performanceperiod or (ii) the date on which 25% of the performanceperiod has been completed, or such other date as may be requiredor permitted under applicable regulations undersection 162(m) of the Code.     (e) *Certification of Results.* The Committeeshall certify the performance results for the performance periodspecified in the Grant Agreement after the performance periodends. The Committee shall determine the amount, if any, to bepaid pursuant to each Grant based on the achievement of theperformance goals and the satisfaction of all other terms of theGrant Agreement.     (f) *Death, Disability or Other Circumstances.*The Committee may provide in the Grant Agreement that Grantsunder this Section 12 shall be payable, in whole or inpart, in the event of the Participant’s death orDisability, a Change of Control or under other circumstancesconsistent with the Treasury regulations and rulings undersection 162(m) of the Code.**13.****Deferrals**     The Committee may permit or require a Participant to deferreceipt of the payment of cash or the delivery of shares thatwould otherwise be due to the Participant in connection with anyGrant. The Committee shall establish rules and procedures forany such deferrals, consistent with applicable requirements ofsection 409A of the Code. Notwithstanding any provision ofthe Plan to the contrary, in the event that following theEffective Date the Committee determines that a Grant may besubject to section 409A of the Code and related Departmentof Treasury guidance, the Committee may adopt such amendments tothe Plan and the applicable Grant Agreements or take any otheractions that the Committee determines are necessary orappropriate to (a) exempt the Grant from section 409Aof the Code and/or preserve the intended tax treatment of thebenefits with respect to the Grant, or (b) comply with therequirements of section 409A of the Code and the applicableguidance.**14.****Withholding of Taxes**     (a) *Required Withholding.* All Grants underthe Plan shall be subject to applicable federal (includingFICA), state and local tax withholding requirements. The Companymay require that the Participant or other person receiving orexercising Grants pay to the Company the amount of any federal,state or local taxes that the Company is required to withholdwith respect to such Grants, or the Company may deduct fromother wages paid by the Company the amount of any withholdingtaxes due with respect to such Grants.     (b) *Election to Withhold Shares.* If theCommittee so permits, a Participant may elect to satisfy theCompany’s tax withholding obligation with respect to Grantspaid in Company Stock by having shares withheld, at the timesuch Grants become taxable, up to an amount that does not exceedthe minimum
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applicable withholding tax rate for federal (including FICA),state and local tax liabilities. The election must be in a formand manner prescribed by the Committee.**15.****Transferability of Grants**     (a) *Restrictions on Transfer.* No right orinterest of a Participant in any Grant may be pledged,encumbered or hypothecated to or in favor of any party otherthan the Company or a subsidiary. Except as described insubsection  (b) below, only the Participantmay exercise rights under a Grant during the Participant’slifetime, and a Participant may not transfer those rights exceptby will or by the laws of descent and distribution. When aParticipant dies, the personal representative or other personentitled to succeed to the rights of the Participant mayexercise such rights. Any such successor must furnish proofsatisfactory to the Company of his or her right to receive theGrant under the Participant’s will or under the applicablelaws of descent and distribution.     (b) *Transfer of Nonqualified Stock Options to or forFamily Members.* Notwithstanding the foregoing, theCommittee may provide, in a Grant Agreement, that a Participantmay transfer Nonqualified Stock Options to family members,charitable institutions or one or more trusts or other entitiesfor the benefit of or owned by family members, consistent withthe applicable securities laws, according to such terms as theCommittee may determine; provided that the Participant receivesno consideration for the transfer of an Option and thetransferred Option shall continue to be subject to the sameterms and conditions as were applicable to the Optionimmediately before the transfer.**16.****Consequences of a Change of Control**     (a) In the event of a Change of Control, the Committee maytake any one or more of the following actions with respect to orall outstanding Grants, without the consent of any Participant:(i) the Committee may determine that outstanding Optionsand SARs shall be fully exercisable, and restrictions onoutstanding Stock Awards and Stock Units shall lapse, as of thedate of the Change of Control or at such other time as theCommittee determines, (ii) the Committee may require thatParticipants surrender their outstanding Options and SARs inexchange for one or more payments by the Company, in cash orCompany Stock as determined by the Committee, in an amount equalto the amount by which the then Fair Market Value of the sharesof Company Stock subject to the Participant’s unexercisedOptions and SARs exceeds the Exercise Price, if any, and on suchterms as the Committee determines, (iii) after givingParticipants an opportunity to exercise their outstandingOptions and SARs, the Committee may terminate any or allunexercised Options and SARs at such time as the Committee deemsappropriate, (iv) with respect to Participants holdingStock Units, Other Stock-Based Awards or Dividend Equivalents,the Committee may determine that such Participants shall receiveone or more payments in settlement of such Stock Units, OtherStock-Based Awards or Dividend Equivalents, in such amount andform and on such terms as may be determined by the Committee, or(v) the Committee may determine that Grants that remainoutstanding after the Change of Control shall be converted tosimilar grants of, or assumed by, the surviving corporation (ora parent or subsidiary of the surviving corporation orsuccessor). Such acceleration, surrender, termination,settlement or conversion shall take place as of the date of theChange of Control or such other date as the Committee mayspecify.     (b) *Other Transactions.* The Committee mayprovide in a Grant Agreement that a sale or other transactioninvolving a subsidiary or other business unit of the Companyshall be considered a Change of Control for purposes of a Grant,or the Committee may establish other provisions that shall beapplicable in the event of a specified transaction.**17.****Requirements for Issuance of Shares**     No Company Stock shall be issued in connection with any Granthereunder unless and until all legal requirements applicable tothe issuance of such Company Stock have been complied with tothe satisfaction of the Committee. The Committee shall have theright to condition any Grant made to any Participant hereunderon such Participant’s undertaking in writing to comply withsuch restrictions on his or her subsequent disposition of suchshares of Company Stock as the Committee shall deem necessary or
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advisable, and certificates representing such shares may belegended to reflect any such restrictions. Certificatesrepresenting shares of Company Stock issued under the Plan willbe subject to such stop-transfer orders and other restrictionsas may be required by applicable laws, regulations andinterpretations, including any requirement that a legend beplaced thereon. No Participant shall have any right as ashareholder with respect to Company Stock covered by a Grantuntil shares have been issued to the Participant.**18.****Amendment and Termination of the Plan**     (a) *Amendment.* The Board may amend orterminate the Plan at any time; provided, however, that theBoard shall not amend the Plan without approval of theshareholders of the Company if such approval is required inorder to comply with the Code or applicable laws, or to complywith applicable stock exchange requirements. No amendment ortermination of this Plan shall, without the consent of theParticipant, materially impair any rights or obligations underany Grant previously made to the Participant under the Plan,unless such right has been reserved in the Plan or the GrantAgreement, or except as provided in Sections 13 aboveor 19(b) below. Notwithstanding anything in the Plan to thecontrary, the Board may amend the Plan in such manner as itdeems appropriate in the event of a change in applicable law orregulations.     (b) *No Repricing Without ShareholderApproval.* Notwithstanding anything in the Plan to thecontrary, the Committee may not reprice Options, nor may theBoard amend the Plan to permit repricing of Options, unless theshareholders of the Company provide prior approval for suchrepricing. The term “repricing” shall have the meaninggiven that term in section 303A(8) of the New York StockExchange Listed Company Manual, as in effect from time to time.     (c) *Shareholder Approval for “QualifiedPerformance-Based Compensation.”* If Grants are madeunder Section 12 above, the Plan must be reapproved by theCompany’s shareholders no later than the first shareholdersmeeting that occurs in the fifth year following the year inwhich the shareholders previously approved the provisions ofSection 12, if additional Grants are to be made underSection 12 and if required by section 162(m) of theCode or the regulations thereunder.     (d) *Termination of Plan.* The Plan shallterminate on the day immediately preceding the tenth anniversaryof its Effective Date, unless the Plan is terminated earlier bythe Board or is extended by the Board with the approval of theshareholders. The termination of the Plan shall not impair thepower and authority of the Committee with respect to anoutstanding Grant.**19.****Miscellaneous**     (a) *Grants in Connection with Corporate Transactionsand Otherwise.* Nothing contained in this Plan shall beconstrued to (i) limit the right of the Committee to makeGrants under this Plan in connection with the acquisition, bypurchase, lease, merger, consolidation or otherwise, of thebusiness or assets of any corporation, firm or association,including Grants to employees thereof who become Employees, orfor other proper corporate purposes, or (ii) limit theright of the Company to grant stock options or make otherstock-based awards outside of this Plan. Without limiting theforegoing, the Committee may make a Grant to an employee ofanother corporation who becomes an Employee by reason of acorporate merger, consolidation, acquisition of stock orproperty, reorganization or liquidation involving the Company insubstitution for a grant made by such corporation. The terms andconditions of the Grants may vary from the terms and conditionsrequired by the Plan and from those of the substituted stockincentives, as determined by the Committee.     (b) *Compliance with Law.* The Plan, theexercise of Options and the obligations of the Company to issueor transfer shares of Company Stock under Grants shall besubject to all applicable laws and to approvals by anygovernmental or regulatory agency as may be required. Withrespect to persons subject to section 16 of the ExchangeAct, it is the intent of the Company that the Plan and alltransactions under the Plan comply with all applicableprovisions ofRule 16b-3 or itssuccessors under the Exchange Act. In addition, it is the intentof the Company that Incentive Stock Options comply with theapplicable provisions of section 422 of the Code, thatGrants of “qualified performance-based compensation”comply
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with the applicable provisions of section 162(m) of theCode and that, to the extent applicable, Grants comply with therequirements of section 409A of the Code. To the extentthat any legal requirement of section 16 of the ExchangeAct or section 422, 162(m) or 409A of the Code as setforth in the Plan ceases to be required under section 16 ofthe Exchange Act or section 422, 162(m) or 409A of theCode, that Plan provision shall cease to apply. The Committeemay revoke any Grant if it is contrary to law or modify a Grantto bring it into compliance with any valid and mandatorygovernment regulation. The Committee may also adopt rulesregarding the withholding of taxes on payments to Participants.The Committee may, in its sole discretion, agree to limit itsauthority under this Section.     (c) *Enforceability.* The Plan shall be bindingupon and enforceable against the Company and its successors andassigns.     (d) *Funding of the Plan; Limitation onRights.* This Plan shall be unfunded. The Company shallnot be required to establish any special or separate fund or tomake any other segregation of assets to assure the payment ofany Grants under this Plan. Nothing contained in the Plan and noaction taken pursuant hereto shall create or be construed tocreate a fiduciary relationship between the Company and anyParticipant or any other person. No Participant or any otherperson shall under any circumstances acquire any propertyinterest in any specific assets of the Company. To the extentthat any person acquires a right to receive payment from theCompany hereunder, such right shall be no greater than the rightof any unsecured general creditor of the Company.     (e) *Rights of Participants.* Nothing in thisPlan shall entitle any Employee, Non-Employee Director or otherperson to any claim or right to receive a Grant under this Plan.Neither this Plan nor any action taken hereunder shall beconstrued as giving any individual any rights to be retained byor in the employment or service of the Employer.     (f) *No Fractional Shares.* No fractionalshares of Company Stock shall be issued or delivered pursuant tothe Plan or any Grant. The Committee shall determine whethercash, other awards or other property shall be issued or paid inlieu of such fractional shares or whether such fractional sharesor any rights thereto shall be forfeited or otherwise eliminated.     (g) *Employees Subject to Taxation Outside the UnitedStates.* With respect to Participants who are subject totaxation in countries other than the United States, theCommittee may make Grants on such terms and conditions as theCommittee deems appropriate to comply with the laws of theapplicable countries, and the Committee may create suchprocedures, addenda and subplans and make such modifications asmay be necessary or advisable to comply with such laws.     (h) *Governing Law.* The validity,construction, interpretation and effect of the Plan and GrantAgreements issued under the Plan shall be governed and construedby and determined in accordance with the laws of the State ofNew York, without giving effect to the conflict of lawsprovisions thereof.     (i) *Indemnification.* To the extent allowablepursuant to applicable law, each member of the Committee or ofthe Board shall be indemnified or held harmless by the Companyfrom any loss, cost, liability or expense that may be imposedupon or reasonably incurred by such member in connection with orresulting from any claim, action, suit or proceeding to which heor she may be involved by reason of any action or failure to actpursuant to the Plan and against and from any and all amountspaid by him or her in satisfaction of judgment in such action,suit or proceeding against him or her; provided he or she givesthe Company an opportunity to handle and defend the same beforehe or she undertakes to handle and defend it on his or her ownbehalf. The foregoing right of indemnification shall not beexclusive of any other rights of indemnification to which suchpersons may be entitled pursuant to the Company’sCertificate of Corporation or Bylaws as a matter of law, orotherwise, any power that the Company may have to indemnify themor hold them harmless.     (j) *Relationship to other Benefits.* Nopayment pursuant to the Plan shall be taken into account indetermining any benefits pursuant to any pension, retirement,savings, profit sharing, group insurance, welfare or otherbenefit plan of the Company or any subsidiary except to theextent otherwise expressly provided in writing in such otherplan or in agreement thereunder.     (k) *Expenses.* The expenses of administeringthe Plan shall be borne by the Company.
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