exh10224jan312009.htm


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      EXHIBIT
10.2.24

      


    

    


    


    CHARMING
SHOPPES, INC.

    
      2004
STOCK AWARD AND INCENTIVE PLAN

      As
amended and restated December 1, 2008

      


    

    


    1.           Purpose of the
Plan.

     

    The
purpose of this 2004 Stock Award and Incentive Plan (the "Plan") is to aid
Charming Shoppes, Inc., a Pennsylvania corporation (the "Company"), in
attracting, retaining, motivating and rewarding employees and other persons who
provide substantial services to the Company or its subsidiaries or affiliates,
to provide for equitable and competitive compensation opportunities, to
recognize individual contributions and reward achievement of Company goals, and
promote the creation of long-term value for shareholders by closely aligning the
interests of Participants with those of shareholders.  The Plan
authorizes stock-based and cash-based incentives for Participants.

     

    2.           Definitions.

     

    In
addition to the terms defined in Section 1 above and elsewhere in the Plan,
the following capitalized terms used in the Plan have the respective meanings
set forth in this Section:

     

    (a)           "Award"
means any Option, SAR, Restricted Stock, Deferred Stock, Stock granted as a
bonus or in lieu of another award, Dividend Equivalent, Other Stock-Based Award,
or Performance Award, together with any related right or interest, granted to a
Participant under the Plan.

     

    (b)           "Beneficiary"
shall mean any person or trust which has been designated by a Participant in his
or her most recent written beneficiary designation filed with the Committee to
receive the benefits specified under this Plan upon such Participant's death or,
if there is no designated Beneficiary or surviving designated Beneficiary, then
any person or trust entitled by will or the laws of descent and distribution to
receive such benefits.

     

    (c)           "Board"
means the Company’s Board of Directors.

     

    (d)           "Code"
means the Internal Revenue Code of 1986, as amended. References to any provision
of the Code or regulation (including a proposed regulation) thereunder shall
include any successor provisions and regulations.

     

    (e)           "Committee"
means the Compensation and Stock Option Committee of the Board, the composition
and governance of which is established in the Committee's Charter as approved
from time to time by the Board and other corporate governance documents of the
Company.  No action of the Committee shall be void or deemed to be
without authority due to the failure of any member, at the time the action was
taken, to meet any qualification standard set forth in the Committee Charter or
this Plan.  The full Board may perform any function of the Committee
hereunder, in which case the term "Committee" shall refer to the
Board.

     

    (f)           "Covered
Employee" means an Eligible Person who is a Covered Employee as specified in
Section 10(j).

     


    
      
         


      

      
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    (g)           "Deferred
Stock" means a right, granted to a Participant under Section 6(e), to
receive Stock or other Awards or a combination thereof at the end of a specified
deferral period.  Deferred Stock may be denominated as "stock units,"
"restricted stock units," "phantom shares," "performance shares," or other
appellations.

     

    (h)           "Dividend
Equivalent" means a right, granted to a Participant under Section 6(g), to
receive cash, Stock, other Awards or other property equal in value to all or a
specified portion of the dividends paid with respect to a specified number of
shares of Stock.

     

    (i)           "Effective
Date" means the effective date specified in Section 10(p).

     

    (j)           "Eligible
Person" has the meaning specified in Section 5.

     

    (k)           "Exchange
Act" means the Securities Exchange Act of 1934, as amended. References to any
provision of the Exchange Act or rule (including a proposed rule) thereunder
shall include any successor provisions and rules.

     

    (l)           "Fair
Market Value" means the fair market value of Stock, Awards or other property as
determined in good faith by the Committee or under procedures established by the
Committee.  Unless otherwise determined by the Committee, the Fair
Market Value of Stock as of any given date means the closing sale price of a
share reported on the NASDAQ National Market (or, if Shares are then principally
traded on a national securities exchange, in the reported “composite
transactions” for such exchange) for such date, or, if no shares were traded on
that date, on the next preceding day on which there was such a trade. Fair
Market Value relating to the exercise price of any Non-409A Option or Stock
Appreciation Right shall conform to requirements under Code
Section 409A.

     

    (m)           "409A
Awards" means Awards that constitute a deferral of compensation subject to Code
Section 409A and regulations thereunder. "Non-409A Awards" means Awards
other than 409A Awards (including Awards exempt under
Treasury Regulation § 1.409A-1(b)(4) and any successor regulation, and Awards
that vested before 2005 and which therefore are "grandfathered" under
Section 409A). Although the Committee retains authority under the Plan to
grant Options and Stock Appreciation Rights and Restricted Stock on terms that
will qualify those Awards as 409A Awards, Options and Stock Appreciation Rights
and Restricted Stock are intended to be Non-409A Awards (referred to herein as
"Non-409A Options" and "Non-409A Stock Appreciation Rights") unless otherwise
expressly specified by the Committee.

    


    (m)           "Incentive
Stock Option" or "ISO" means any Option designated as an incentive stock option
within the meaning of Code Section 422 or any successor provision thereto
and qualifying thereunder.

     

    (n)           "Option"
means a right, granted to a Participant under Section 6(b), to purchase
Stock or other Awards at a specified price during specified time
periods.

     

    (o)           "Other
Stock-Based Awards" means Awards granted to a Participant under
Section 6(h).

     

    (p)           "Participant"
means a person who has been granted an Award under the Plan which remains
outstanding, including a person who is no longer an Eligible
Person.

     


    
      
         


      

      
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    (q)           "Performance
Award" means a conditional right, granted to a Participant under Sections 6(i)
and 7, to receive cash, Stock or other Awards or payments, as determined by the
Committee, based upon performance criteria specified by the
Committee.

     

    (r)           "Preexisting
Plan" means the Company’s 1993 Employees' Stock Incentive Plan, the 1999
Associates' Stock Incentive Plan and the 2000 Associates' Stock Incentive
Plan.

     

    (s)           "Qualified
Member" means a member of the Committee who is a "Non-Employee Director" within
the meaning of Rule 16b-3(b)(3), an "outside director" within the meaning of
Regulation 1.162-27 under Code Section 162(m), and "independent" within the
meaning of The Nasdaq Stock Market Inc.'s Marketplace Rules and applicable
corporate governance documents of the Company.

     

    (t)           "Restricted
Stock" means Stock granted to a Participant under Section 6(d) which is
subject to certain restrictions and to a risk of forfeiture.

     

    (u)           "Rule
16b-3" means Rule 16b-3, as from time to time in effect and applicable to
Participants, promulgated by the Securities and Exchange Commission under
Section 16 of the Exchange Act.

     

    (v)           "Stock"
means the Company’s Common Stock, and any other equity securities of the Company
that may be substituted or resubstituted for Stock pursuant to Section
10(c).

     

    (w)           "Stock
Appreciation Rights" or "SAR" means a right granted to a Participant under
Section 6(c).

     

    3.           Administration.

     

    (a)           Authority of the
Committee.  The Plan shall be administered by the Committee,
which shall have full and final authority, in each case subject to and
consistent with the provisions of the Plan, to select Eligible Persons to become
Participants; to grant Awards; to determine the type and number of Awards, the
dates on which Awards may be exercised and on which the risk of forfeiture or
deferral period relating to Awards shall lapse or terminate, the acceleration of
any such dates, the expiration date of any Award, whether, to what extent, and
under what circumstances an Award may be settled, or the exercise price of an
Award may be paid, in cash, Stock, other Awards, or other property, and other
terms and conditions of, and all other matters relating to, Awards (including
authority to specify terms of Awards applicable in the event of a change in
control); to prescribe documents evidencing or setting terms of Awards (such
Award documents need not be identical for each Participant), amendments thereto,
and rules and regulations for the administration of the Plan and amendments
thereto; to construe and interpret the Plan and Award documents and correct
defects, supply omissions or reconcile inconsistencies therein; and to make all
other decisions and determinations as the Committee may deem necessary or
advisable for the administration of the Plan. Decisions of the Committee with
respect to the administration and interpretation of the Plan shall be final,
conclusive, and binding upon all persons interested in the Plan, including
Participants, Beneficiaries, transferees under Section 10(b) and other persons
claiming rights from or through a Participant, and shareholders.

     

    (b)           Manner of Exercise of Committee
Authority.  At any time that a member of the Committee is not a
Qualified Member, any action of the Committee relating to an Award intended by
the Committee to qualify as "performance-based compensation" within the meaning
of Code Section 162(m) and regulations thereunder or intended to be covered
by an exemption under Rule 16b-3 under the
Exchange  Act  may  be taken by a
subcommittee,  designated by the Committee or the Board,
composed

     


    
      
         


      

      
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    solely of
two or more Qualified Members or may be taken by the Committee but with each
such member who is not a Qualified Member abstaining or recusing himself or
herself from such action, provided that, upon such abstention or recusal, the
Committee remains composed of two or more Qualified Members. Such action,
authorized by such a subcommittee or by the Committee upon the abstention or
recusal of such non-Qualified Member(s), shall be the action of the Committee
for purposes of the Plan. The express grant of any specific power to the
Committee, and the taking of any action by the Committee, shall not be construed
as limiting any power or authority of the Committee. To the fullest extent
authorized under applicable provisions of the Pennsylvania Business Corporation
Law, the Committee may delegate to officers or managers of the Company or any
subsidiary or affiliate, or committees thereof, the authority, subject to such
terms as the Committee shall determine, to perform such functions, including
administrative functions, as the Committee may determine, to the extent that
such delegation will not cause Awards intended to qualify as "performance-based
compensation" under Code Section 162(m) to fail to so
qualify.  In furtherance of this authorization, unless otherwise
determined by the Committee the Company's internal stock option committee shall
be authorized to grant options and other awards to any eligible employee other
than an executive officer in any fiscal year and subject to such limitations as the
Committee may specify..

     

    (c)           Limitation of
Liability.  The Committee and each member thereof, and any
person acting pursuant to authority delegated by the Committee, shall be
entitled, in good faith, to rely or act upon any report or other information
furnished to him or her by any officer or other employee of the Company or any
subsidiary, the Company’s independent certified public accountants, or any
executive compensation consultant, legal counsel, or other professional retained
by the Company to assist in the administration of the Plan.  Members
of the Committee, any person acting pursuant to authority delegated by the
Committee, and any officer or employee of the Company or a subsidiary or
affiliate acting at the direction or on behalf of the Committee or a delegee
shall not be personally liable for any action, determination, or interpretation
taken or made in good faith with respect to the Plan, and any such person shall,
to the extent permitted by law, be fully indemnified and protected by the
Company with respect to any such action, determination, or
interpretation.

     

    4.           Stock Subject to Plan and Related
Limitations.

     

    (a)           Overall Number of Shares Available
for Delivery.  Subject to adjustment as provided in Section
10(c), the total number of shares of Stock reserved and available for delivery
in connection with Awards under the Plan shall be (i) 6,500,000 plus
(ii) the number of shares remaining available at the Effective Date under
the 1993 Employees' Stock Incentive Plan and (iii) the number of shares subject
to Awards under the Plan or awards under the Preexisting Plans which become
available in accordance with Section 4(b) after the Effective
Date   Of these shares, 2,000,000 may be delivered in connection
with "full-value Awards," meaning Awards other than Options, SARs, or Awards for
which the Participant pays the intrinsic value directly or by forgoing a right
to receive a cash payment from the Company; provided, however, that full-value
Awards relating to shares in excess of the number specified in this sentence may
be granted and shares delivered in settlement thereof if the number of shares
that may thereafter be delivered in connection with non-full-value Awards is
reduced by three shares for each such excess share delivered in settlement of a
full-value Award.  The limitation on full-value Awards under this
Section 4(a) shall be subject to Section 4(b) and subject to adjustment as
provided in Section 10(c).  In order that applicable regulations under
the Code relating to ISOs shall be satisfied, the maximum number of shares of
Stock that may be delivered upon exercise of  ISOs shall be the number
specified in clauses (i) and (ii) of the first sentence of this Section 4(a),
and, if necessary to satisfy such regulations, that same maximum limit shall
apply to the number of shares of Stock that may be delivered in connection with
each other type of Award under the Plan (applicable separately to each type of
Award).  Any shares of Stock delivered under the Plan shall consist of
authorized and unissued shares or treasury shares.

     


    
      
         


      

      
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    (b)           Share Counting
Rules.  The Committee may adopt reasonable counting procedures
to ensure appropriate counting, avoid double counting (as, for example, in the
case of tandem or substitute awards) and make adjustments if the number of
shares of Stock actually delivered differs from the number of shares previously
counted in connection with an Award.  Shares that are potentially
deliverable under an Award under the Plan or an award under any Preexisting Plan
that is canceled, expired, forfeited, settled in cash or otherwise terminated
without a delivery of such shares to the Participant will not be counted as
delivered under the Plan or such Preexisting Plan but will again be available for Awards
under the Plan.  Shares that have been issued in connection
with an Award (e.g., Restricted Stock) or Preexisting Plan award that is
canceled, forfeited, or settled in cash such that those shares are returned to
the Company will again be available for Awards under the Plan.  Shares
withheld in payment of the exercise price or taxes relating to an Award or
Preexisting Plan award and shares equal to the number surrendered in payment of
any exercise price or taxes relating to an Award or Preexisting Plan award shall
be deemed to constitute shares not delivered to the Participant and shall be
deemed to be available for Awards under the Plan.  The foregoing
notwithstanding, if issued shares are returned to the Company, including upon a
cash out of Restricted Stock, surrender of shares in payment of an exercise
price or taxes relating to an Award, or withholding of shares in payment of
taxes upon vesting of Restricted Stock, such shares shall not become available
again under the Plan if the transaction resulting in the return of shares occurs
more than ten years after the date of the most recent shareholder approval of
the Plan, and otherwise shares shall not become available under this Section
4(b) in an event that would constitute a "material amendment" of the Plan
subject to shareholder approval under then applicable NASDAQ Marketplace
Rules.  In addition, in the case of any Award granted in substitution
for an award of a company or business acquired by the Company or a subsidiary or
affiliate, shares issued or issuable in connection with such substitute Award
shall not be counted against the number of shares reserved under the Plan, but
shall be available under the Plan by virtue of the Company’s assumption of the
plan or arrangement of the acquired company or business. This Section 4(b)
shall apply to the share limit imposed to conform to the Treasury regulations
governing ISOs only to the extent consistent with applicable regulations
relating to ISOs under the Code.  Because shares will count against
the number reserved in Section 4(a) upon delivery, and subject to the share
counting rules under this Section 4(b), the Committee may determine that Awards
may be outstanding that relate to a greater number of shares than the aggregate
remaining available under the Plan, so long as Awards will not result in
delivery and vesting of shares in excess of the number then available under the
Plan.

     

    (c)           Run Rate
Limitation.  The aggregate number of shares that may be subject
to Awards granted under the Plan in any fiscal year shall not exceed two percent
of the outstanding class of Common Stock fully diluted as of the last day of the
preceding fiscal year.  For this purpose, awards granted in a given
fiscal year but also cancelled or forfeited within that year will be
disregarded.

     

    5.           Eligibility and Certain Award
Limitations.

     

    (a)           Eligibility.  Awards
may be granted under the Plan only to Eligible Persons.  For purposes
of the Plan, an "Eligible Person" means an employee of the Company or any
subsidiary or affiliate, including any executive officer, a consultant or other
person who provides substantial services to the Company or a subsidiary or
affiliate (but excluding a person providing services solely as a non-employee
director), and any person who has been offered employment by the Company or a
subsidiary or affiliate, provided that such prospective employee may not receive
any payment or exercise any right relating to an Award until such person has
commenced employment with the Company or a subsidiary or affiliate. An employee
on leave of absence may be considered as still in the employ of the Company or a
subsidiary or affiliate for purposes of eligibility for participation in the
Plan.  For purposes of the Plan, a joint venture in which the Company
or a subsidiary has a substantial direct or indirect equity investment shall be
deemed an affiliate, if so determined by the Committee.

     


    
      
         


      

      
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    (b)           Per-Person Award
Limitations.  In each fiscal year during any part of which the
Plan is in effect, an Eligible Person may be granted Awards in the aggregate
relating to up to his or her Annual Limit.  A Participant's Annual
Limit, in any fiscal year during any part of which the Participant is then
eligible under the Plan, shall equal two million shares plus the amount of the
Participant's unused Annual Limit relating to Stock-denominated Awards as of the
close of the previous fiscal year, subject to adjustment as provided in Section
10(c).  In the case of a cash-denominated Award for which the
limitation set forth in the preceding sentence would not operate as an effective
limitation satisfying Treasury Regulation 1.162-27(e)(4) (including a cash
Performance Award under Section 7), an Eligible Person may not be granted Awards
authorizing the earning during any fiscal year of an amount that exceeds the
Participant's Annual Limit, which for this purpose shall equal $2 million plus
the amount of the Participant's unused cash Annual Limit as of the close of the
previous year (this limitation is separate and not affected by the number of
Awards granted during such calendar year subject to the limitation in the
preceding sentence).  For this purpose, (i) "earning" means satisfying
performance conditions so that an amount becomes payable, without regard to
whether it is to be paid currently or on a deferred basis or continues to be
subject to any service requirement or other non-performance condition, and (ii)
a Participant's Annual Limit is used to the extent a number of shares or cash
amount may be potentially earned or paid under an Award, regardless of whether
such shares or amount in fact are earned or paid.

     

    


    6.           Specific Terms of
Awards.

     

    (a)           General.  Awards
may be granted on the terms and conditions set forth in this
Section 6.  In addition, the Committee may impose on any Award or
the exercise thereof, at the date of grant or thereafter (subject to Section
10(e)), such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine, including terms
requiring forfeiture of Awards in the event of termination of employment or
service by the Participant and terms permitting a Participant to make elections
relating to his or her Award.  The Committee shall retain full power
and discretion with respect to any term or condition of an Award that is not
mandatory under the Plan.  The Committee may require payment of
consideration for an Award except as limited by the Plan.

     

    (b)           Options.  The
Committee is authorized to grant Options to Participants on the following terms
and conditions:

     

    (i)           Exercise
Price.  The exercise price per share of Stock purchasable under
an Option (including both ISOs and non-qualified Options) shall be determined by
the Committee, provided that such exercise price shall be not less than the Fair
Market Value of a share of Stock on the date of grant of such Option, subject to
Sections 6(f) and 8(a).

     

    (ii)           Option Term; Time and Method of
Exercise.  The Committee shall determine the term of each
Option, provided that in no event shall the term of any ISO or SAR in tandem
therewith exceed a period of ten years from the date of grant.  The
Committee shall determine the time or times at which or the circumstances under
which an Option may be exercised in whole or in part (including based on
achievement of performance goals and/or future service requirements), the
methods by which such exercise price may be paid or deemed to be paid and the
form of such payment (subject to Section 10(k)), including, without limitation,
cash, Stock (including through withholding of Stock deliverable upon exercise,
except that any such withholding transaction that will result in additional
accounting expense to the Company must be expressly authorized by the
Committee), other Awards or awards granted under other plans of the Company or
any subsidiary or affiliate, or other property (including through "cashless
exercise" arrangements, to the extent permitted by applicable
law),  and the methods by or forms

     


    
      
         


      

      
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    in which
Stock will be delivered or deemed to be delivered in satisfaction of Options to
Participants (including deferred delivery of shares representing the Option
"profit," at the election of the Participant or as mandated by the Committee,
with such deferred shares subject to any vesting, forfeiture or other terms as
the Committee may specify).

     

    (iii)           ISOs.  The terms of
any ISO granted under the Plan shall comply in all respects with the provisions
of Code Section 422, including but not limited to the requirement that no
ISO shall be granted more than ten years after the Effective Date.

     

    (c)           Stock Appreciation
Rights.  The Committee is authorized to grant SARs to
Participants on the following terms and conditions:

     

    (i)           Right to
Payment.  A SAR shall confer on the Participant to whom it is
granted a right to receive, upon exercise thereof, the excess of (A) the
Fair Market Value of one share of Stock on the date of exercise over
(B) the grant price of the SAR as determined by the Committee, which grant
price shall be not less than the Fair Market Value of a share of Stock on the
date of grant of such SAR.

    


    (ii)           Other Terms.  The
Committee shall determine at the date of grant or thereafter, the time or times
at which and the circumstances under which a SAR may be exercised in whole or in
part (including based on achievement of performance goals and/or future service
requirements), the method of exercise, method of settlement, form of
consideration payable in settlement, method by or forms in which Stock will be
delivered or deemed to be delivered to Participants, whether or not a SAR shall
be free-standing or in tandem or combination with any other Award, and the
maximum term of an SAR, which in no event shall exceed a period of ten years
from the date of grant.  The Committee may require that an outstanding
Option be exchanged for an SAR exercisable for Stock having vesting, expiration,
and other terms substantially the same as the Option (subject to Section
10(k)).

     

    (d)           Restricted
Stock.  The Committee is authorized to grant Restricted Stock
to Participants on the following terms and conditions:

     

    (i)           Grant and
Restrictions.  Restricted Stock shall be subject to such
restrictions on transferability, risk of forfeiture and other restrictions, if
any, as the Committee may impose, which restrictions may lapse separately or in
combination at such times, under such circumstances (including based on
achievement of performance goals and/or future service requirements), in such
installments or otherwise and under such other circumstances as the Committee
may determine at the date of grant or thereafter. Except to the extent
restricted under the terms of the Plan and any Award document relating to the
Restricted Stock, a Participant granted Restricted Stock shall have all of the
rights of a shareholder, including the right to vote the Restricted Stock and
the right to receive dividends thereon (subject to any mandatory
reinvest­ment or other requirement imposed by the Committee).

     

    (ii)           Forfeiture.  Except
as otherwise determined by the Committee, upon termination of employment or
service during the applicable restriction period, Restricted Stock that is at
that time subject to restrictions shall be forfeited and reacquired by the
Company; provided that the Committee may provide, by rule or regulation or in
any Award document, or may determine in any individual case, that restrictions
or forfeiture conditions relating to Restricted Stock will lapse in whole or in
part, including in the event of terminations resulting from specified
causes.

     


    
      
         


      

      
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    (iii)           Certificates for
Stock.  Restricted Stock granted under the Plan may be
evidenced in such manner as the Committee shall determine. If certificates
representing Restricted Stock are registered in the name of the Participant, the
Committee may require that such certificates bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such
Restricted Stock, that the Company retain physical possession of the
certificates, and that the Participant deliver a stock power to the Company,
endorsed in blank, relating to the Restricted Stock.

     

    (iv)           Dividends and
Splits.  As a condition to the grant of an Award of Restricted
Stock, the Committee may require that any dividends paid on a share of
Restricted Stock shall be either (A) paid with respect to such Restricted
Stock at the dividend payment date in cash, in kind, or in a number of shares of
unrestricted Stock having a Fair Market Value equal to the amount of such
dividends, or (B) automatically reinvested in additional Restricted Stock
or held in kind, which shall be subject to the same terms as applied to the
original Restricted Stock to which it relates, or (C) deferred as to
payment, either as a cash deferral or with the amount or value thereof
automatically deemed reinvested in shares of Deferred Stock, other Awards or
other investment vehicles, subject to such terms as the Committee shall
determine or permit a Participant to elect. Unless otherwise determined by the
Committee, Stock distributed in connection with a Stock split or Stock dividend,
and other property distributed as a dividend, shall be subject to restrictions
and a risk of forfeiture to the same extent as the Restricted Stock with respect
to which such Stock or other property has been distributed.

     

    (e)           Deferred
Stock.  The Committee is authorized to grant Deferred Stock to
Participants, which are rights to receive Stock, other Awards, or a combination
thereof at the end of a specified deferral period, subject to the following
terms and conditions:

     

    (i)           Award and
Restrictions.  Issuance of Stock will occur upon expiration of
the deferral period specified for an Award of Deferred Stock by the Committee
(or, if permitted by the Committee, as elected by the Participant). In addition,
Deferred Stock shall be subject to such restrictions on transferability, risk of
forfeiture and other restrictions, if any, as the Committee may impose, which
restrictions may lapse at the expiration of the deferral period or at earlier
specified times (including based on achievement of performance goals and/or
future service requirements), separately or in combination, in installments or
otherwise, and under such other circumstances as the Committee may determine at
the date of grant or thereafter. Deferred Stock may be satisfied by delivery of
Stock, other Awards, or a combination thereof (subject to Section 10(k)), as
determined by the Committee at the date of grant or thereafter.

     

    (ii)           Forfeiture.  Except
as otherwise determined by the Committee, upon termination of employment or
service during the applicable deferral period or portion thereof to which
forfeiture conditions apply (as provided in the Award document evidencing the
Deferred Stock), all Deferred Stock that is at that time subject to such
forfeiture conditions shall be forfeited; provided that the Committee may
provide, by rule or regulation or in any Award document, or may determine in any
individual case, that restrictions or forfeiture conditions relating to Deferred
Stock will lapse in whole or in part, including in the event of terminations
resulting from specified causes.

     

    (iii)           Dividend
Equivalents.  Unless otherwise determined by the Committee,
Dividend Equivalents on the specified number of shares of Stock covered by an
Award of Deferred Stock shall be either (A) paid with respect to such
Deferred Stock at the dividend payment date in cash or in shares
of  unrestricted Stock having  a Fair
Market  Value equal to the

     


    
      
         


      

      
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    amount of
such dividends, or (B) deferred with respect to such Deferred Stock, either
as a cash deferral or with the amount or value thereof automatically deemed
reinvested in additional Deferred Stock, other Awards or other investment
vehicles having a Fair Market Value equal to the amount of such dividends, as
the Committee shall determine or permit a Participant to elect.

     

    (f)           Bonus Stock and Awards in Lieu of
Obligations.  The Committee is authorized to grant Stock as a
bonus, or to grant Stock or other Awards in lieu of obligations of the Company
or a subsidiary or affiliate to pay cash or deliver other property under the
Plan or under other plans or compensatory arrangements, subject to such terms as
shall be determined by the Committee; provided, however, that not more than five
percent of the shares of Stock authorized under the Plan may be granted pursuant
this Section 6(f).

     

    (g)           Dividend
Equivalents.  The Committee is authorized to grant Dividend
Equivalents to a Participant, entitling the Participant to receive cash, Stock,
other Awards, or other property equivalent to all or a portion of the dividends
paid with respect to a specified number of shares of Stock. Dividend Equivalents
may be awarded on a free-standing basis or in connection with another Award. The
Committee may provide that Dividend Equivalents shall be paid or distributed
when accrued or shall be deemed to have been reinvested in additional Stock,
Awards, or other investment vehicles, and subject to restrictions on
transferability, risks of forfeiture and such other terms as the Committee may
specify.

     

    (h)           Other Stock-Based
Awards.  The Committee is authorized, subject to limitations
under applicable law, to grant to Participants such other Awards that may be
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on, or related to, Stock or factors that may influence the value
of Stock, including, without limitation, convertible or exchangeable debt
securities, other rights convertible or exchangeable into Stock, purchase rights
for Stock, Awards with value and payment contingent upon performance of the
Company or business units thereof or any other factors designated by the
Committee, and Awards valued by reference to the book value of Stock or the
value of securities of or the performance of specified subsidiaries or
affiliates or other business units. The Committee shall determine the terms and
conditions of such Awards. Stock delivered pursuant to an Award in the nature of
a purchase right granted under this Section 6(h) shall be purchased for
such consideration, paid for at such times, by such methods, and in such forms,
including, without limitation, cash, Stock, other Awards, or other property, as
the Committee shall determine; provided, however, that any such Award for which
the purchase price (together with any other cash consideration paid or forgone
by the Participant) is "discounted" such that it does not at least equal the
Fair Market Value of the underlying shares at the date the Award is granted
shall be deemed a full-value Award for purposes of this Plan.  Cash
awards, as an element of or supplement to any other Award under the Plan, may
also be granted pursuant to this Section 6(h).

     

    (i)           Performance
Awards.  Performance Awards, denominated in cash or in Stock or
other Awards, may be granted by the Committee in accordance with
Section 7.

     

    7.           Performance
Awards.

     

    (a)           Performance Awards
Generally.  The Committee is authorized to grant Performance
Awards on the terms and conditions specified in this Section 7. Performance
Awards may be denominated as a cash amount, number of shares of Stock, or
specified number of other Awards (or a combination) which may be earned upon
achievement or satisfaction of performance conditions specified by the
Committee. In addition, the Committee may specify that any other Award shall
constitute a Perform­ance Award by conditioning the right of a Participant
to exercise the Award or have it settled, and the timing
thereof,  upon  achievement  or
satisfaction  of  such  performance  conditions  as  may  be

     


    
      
         


      

      
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    specified
by the Committee. The Committee may use such business criteria and other
measures of performance as it may deem appropriate in establishing any
performance conditions, and may exercise its discretion to reduce or increase
the amounts payable under any Award subject to performance conditions, except as
limited under Sections 7(b) and 7(c) in the case of a Performance Award intended
to qualify as "performance-based compensation" under Code
Section 162(m).

     

    (b)           Performance Awards Granted to
Covered Employees.  If the Committee determines that a
Performance Award to be granted to an Eligible Person who is designated by the
Committee as likely to be a Covered Employee should qualify as
"performance-based compensation" for purposes of Code Section 162(m), the
grant, exercise and/or settlement of such Performance Award shall be contingent
upon achievement of a preestablished performance goal and other terms set forth
in this Section 7(b).

     

    (i)           Performance Goal
Generally.  The performance goal for such Performance Awards
shall consist of one or more business criteria and a targeted level or levels of
performance with respect to each of such criteria, as specified by the Committee
consistent with this Section 7(b). The performance goal shall be objective
and shall otherwise meet the requirements of Code Section 162(m) and
regulations thereunder (including Regulation 1.162-27 and successor
regula­tions thereto), including the requirement that the level or levels of
performance targeted by the Committee result in the achievement of performance
goals being "substantially uncertain." The Committee may determine that such
Performance Awards shall be granted, exercised and/or settled upon achievement
of any one performance goal or that two or more of the performance goals must be
achieved as a condition to grant, exercise and/or settlement of such Performance
Awards. Performance goals may differ for Performance Awards granted to any one
Participant or to different Participants.

     

    (ii)           Business
Criteria.  One or more of the following business criteria for
the Company, on a consolidated basis, and/or for specified subsidiaries or
affiliates or other business units of the Company, shall he used by the
Committee in establishing performance goals for such Performance Awards: (1) net
sales; (2) earnings from operations, earnings before or after taxes, earnings
before or after interest, depreciation, amortization, or extraordinary or
special items; (3) net income or net income per common share (basic or diluted);
(4) return measures, including, but not limited to, return on assets (gross or
net), return on investment, return on capital, or return on equity; (5) cash
flow, free cash flow, cash flow return on investment (discounted or otherwise),
net cash provided by operations, or cash flow in excess of cost of capital; (6)
interest expense after taxes; (7) economic value created or economic profit; (8)
operating margin or profit margin; (9) shareholder value creation measures,
including but not limited to stock price or total shareholder return; (10)
dividend payout as a percentage of net income; (11) expense targets, working
capital targets, or operating efficiency; and (12) strategic business criteria,
consisting of one or more objectives based on meeting specified market
penetration, geographic business expansion goals, cost targets, customer
satisfaction, employee satisfaction, management of employment practices and
employee benefits, supervision of litigation and information technology, and
goals relating to acquisitions or divestitures of subsidiaries, affiliates or
joint ventures. The targeted level or levels of performance with respect to such
business criteria may be established at such levels and in such terms as the
Committee may determine, in its discretion, including in absolute terms, as a
goal relative to performance in prior periods, or as a goal compared to the
performance of one or more comparable companies or an index covering multiple
companies.  The
Committee may specify that performance will be determined before payment of
bonuses, capital charges, non-recurring or extraordinary income or expense, or
other financial and general and administrative expenses for the performance
period.

     


    
      
         


      

      
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    (iii)           Performance Period; Timing for
Establishing Performance Goals.  Achievement of performance
goals in respect of such Performance Awards shall be measured over a performance
period of up to one year or more than one year, as specified by the Committee. A
performance goal shall be established not later than the earlier of (A) 90
days after the beginning of any performance period applicable to such
Performance Award or (B) the time 25% of such performance period has
elapsed.

     

    (iv)           Performance Award
Pool.  The Committee may establish a Performance Award pool,
which shall be an unfunded pool, for purposes of measuring performance of the
Company in connection with Performance Awards. The amount of such Performance
Award pool shall be based upon the achievement of a performance goal or goals
based on one or more of the business criteria set forth in Section 7(b)(ii)
during the given performance period, as specified by the Committee in accordance
with Section 7(b)(iv). The Committee may specify the amount of the
Performance Award pool as a percentage of any of such business criteria, a
percentage thereof in excess of a threshold amount, or as another amount which
need not bear a strictly mathematical relationship to such business
criteria.

     

    (v)           Settlement of Performance Awards;
Other Terms.  Settlement of such Performance Awards shall be in
cash, Stock, other Awards or other property, in the discretion of the Committee.
The Committee may, in its discretion, increase or reduce the amount of a
settlement otherwise to be made in connection with such Performance Awards, but
may not exercise discretion to increase any such amount payable to a Covered
Employee in respect of a Perform­ance Award subject to this
Section 7(b). Any settlement which changes the form of payment from that
originally specified shall be implemented in a manner such that the Performance
Award and other related Awards do not, solely for that reason, fail to qualify
as "performance-based compensation" for purposes of Code Section 162(m).
The Committee shall specify the circum­stances in which such Performance
Awards shall be paid or forfeited in the event of termination of employment by
the Participant or other event (including a change in control) prior to the end
of a performance period or settlement of such Performance Awards.

     

    (c)           Written
Determinations.  Determinations by the Committee as to the
establishment of performance goals, the amount potentially payable in respect of
Performance Awards, the level of actual achievement of the specified performance
goals relating to Performance Awards, and the amount of any final Performance
Award shall be recorded in writing in the case of Performance Awards intended to
qualify under Section 162(m). Specifically, the Committee shall certify in
writing, in a manner conforming to applicable regulations under
Section 162(m), prior to settlement of each such Award granted to a Covered
Employee, that the performance objective relating to the Performance Award and
other material terms of the Award upon which settlement of the Award was
conditioned have been satisfied.

     

    8.           Certain Provisions Applicable to
Awards.

     

    (a)           Stand-Alone, Additional, 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 or exchange for, any other Award or any award
granted under another plan of the Company, any subsidiary or affiliate, or any
business entity to be acquired by the Company or a subsidiary or affiliate, or
any other right of a Participant to receive payment from the Company or any
subsidiary or affiliate.  Awards granted in addition to or in tandem
with other Awards or awards may be granted either as of the same time as or a
different time from the grant of such other Awards or awards. Subject to
Sections 10(e) and 10(k), the Committee may determine that, in granting a new
Award, the in-

     


    
      
         


      

      
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    the-money
value of any surrendered Award or award may be applied to reduce the exercise
price of any Option, grant price of any SAR, or purchase price of any other
Award, and the fair value of any surrendered Award or award may be used to
reduce the fair-value purchase price of any other Award.

     

    (b)           Term of
Awards.  The term of each Award shall be for such period as may
be determined by the Committee, subject to the express limitations set forth in
Section 6(b)(ii) and 6(c)(ii).

     

    (c)           Form and Timing of Payment under
Awards; Deferrals.  Subject to the terms of the Plan (including
Section 10(k)) and any applicable Award document, payments to be made by the
Company or a subsidiary or affiliate upon the exercise of an Option or other
Award or settlement of an Award may be made in such forms as the Committee shall
determine, including, without limitation, cash, Stock, other Awards or other
property and may be made in it single payment or transfer, in installments, or
on a deferred basis. The settlement of any Award may be accelerated, and cash
paid in lieu of Stock in connection with such settlement, in the discretion of
the Committee or upon occurrence of one or more specified events (subject to
Section 10(k)).  Installment or deferred payments may be required by
the Committee (subject to Section 10(e)) or permitted at the election of the
Participant on terms and conditions established by the Committee. Payments may
include, without limitation, provisions for the payment or crediting of
reasonable interest on installment or deferred payments or the grant or
crediting of Dividend Equivalents or other amounts in respect of installment or
deferred payments denominated in Stock.

     

    (d)           Exemptions from Section 16(b)
Liability.  With respect to a Participant who is then subject
to the reporting requirements of Section 16(a) of the Exchange Act in
respect of the Company, the Committee shall implement transactions under the
Plan and administer the Plan in a manner that will ensure that each transaction
with respect to such a Participant is exempt from liability under Rule 16b-3 or
otherwise not subject to liability under Section 16(b)), except that this
provision shall not limit sales by such a Participant, and such a Participant
may engage in other non-exempt transactions under the Plan.  The
Committee may authorize the Company to repurchase any Award or shares of Stock
deliverable or delivered in connection with any Award (subject to Section 10(k))
in order that a Participant who is subject to Section 16 of the Exchange
Act will avoid incurring liability under Section 16(b).  Unless
otherwise specified by the Participant, equity securities or derivative
securities acquired under the Plan which are disposed of by a Participant shall
be deemed to be disposed of in the order acquired by the
Participant.

     

    (e)           Limitation on Vesting of Certain
Awards.  Full-value Awards (as defined in Section 4(a)) other
than bonus shares granted under Section 6(f) and shares issuable in connection
with dividend equivalents under Section 6(g), if their grant or vesting is
subject to performance conditions, shall have a minimum vesting period of no
less than one year, and such Awards, if neither their grant nor vesting is
subject to performance conditions, shall have a minimum vesting period of no
less than three years; provided, however, that such Awards may vest on an
accelerated basis in the event of a Participant’s death, disability, retirement,
other termination not due to the fault of the Participant, or in the event of a
change in control or other special circumstances.  For purposes of
this Section 8(e), (i) a performance period that precedes the grant of the Award
will be treated as part of the vesting period if the participant has been
notified promptly after the commencement of the performance period that he or
she has the opportunity to earn the Award based on performance and continued
service, and (ii) vesting over a one-year period or three-year period will
include periodic vesting over such period if the rate of such vesting is
proportional (or less rapid) throughout such period.

     


    
      
         


      

      
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    9.           Additional Award Forfeiture
Provisions.

     

    The Committee may condition a
Participant's right to receive a grant of an Award, to exercise the Award, to
retain cash, Stock , other Awards, or other property acquired in connection with
an Award, or to retain the profit or gain realized by a Participant in
connection with an Award, including cash or other proceeds received upon sale of
Stock acquired in connection with an Award, upon compliance by the Participant
with specified conditions relating to non-competition, confidentiality of
information relating to or possessed by the Company, non-solicitation of
customers, suppliers, and employees of the Company, cooperation in litigation,
non-dis­parage­ment of the Company and its officers, directors and
affiliates, and other restrictions upon or covenants of the Participant,
including during specified periods following termination of employment or
service to the Company.

    


    10.           General
Provisions.

     

    (a)           Compliance with Legal and Other
Requirements.  The Company may, to the extent deemed necessary
or advisable by the Committee, postpone the issuance or delivery of Stock or
payment of other benefits under any Award until completion of such registration
or qualification of such Stock or other required action under any federal or
state law, rule or regulation, listing or other required action with respect to
any stock exchange or automated quotation system upon which the Stock or other
securities of the Company are listed or quoted, or compliance with any other
obligation of the Company, as the Committee may consider appropriate, and may
require any Participant to make such representations, furnish such information
and comply with or be subject to such other conditions as it may consider
appropriate in connection with the issuance or delivery of Stock or payment of
other benefits in compliance with applicable laws, rules, and regulations,
listing requirements, or other obligations.

     

    (b)           Limits on Transferability;
Beneficiaries.  No Award or other right or interest of a
Participant under the Plan shall be pledged, hypothecated or otherwise
encumbered or subject to any lien, obligation or liability of such Participant
to any party (other than the Company or a subsidiary or affiliate thereof), or
assigned or transferred by such Participant otherwise than by will or the laws
of descent and distribution or to a Beneficiary upon the death of a Participant,
and such Awards or rights that may be exercisable shall be exercised during the
lifetime of the Participant only by the Participant or his or her guardian or
legal representative, except that Awards and other rights (other than ISOs and
SARs in tandem therewith) may be transferred to one or more transferees during
the lifetime of the Participant, and may be exercised by such transferees in
accordance with the terms of such Award, but only if and to the extent such
transfers are permitted by the Committee, subject to any terms and conditions
which the Committee may impose thereon (including limitations the Committee may
deem appropriate in order that offers and sales under the Plan will meet
applicable requirements of registration forms under the Securities Act of 1933
specified by the Securities and Exchange Commission). A Beneficiary, transferee,
or other person claiming any rights under the Plan from or through any
Participant shall be subject to all terms and conditions of the Plan and any
Award document applicable to such Participant, except as otherwise determined by
the Committee, and to any additional terms and conditions deemed necessary or
appropriate by the Committee.

     

    (c)               Adjustments.  In
the event that any large, special and non-recurring dividend or other
distribution (whether in the form of cash or property other than Stock),
recapitalization, forward or reverse split, Stock dividend, reorganization,
merger, consolidation, spin-off, combination. repurchase, share exchange,
liquidation. dissolution or other similar corporate transaction or event affects
the Stock such that an adjustment is
determined  by  the  Committee  to  be  appropriate  under  the  Plan,  then  the


    
      
         


      

      
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    Committee
may, in such manner as it may deem equitable, adjust any or all of (i) the
number and kind of shares of Stock which may be delivered in connection with
Awards granted thereafter, including the aggregate share limitation and
full-value share limitation then applicable under the Plan, (ii) the number
and kind of shares of Stock by which annual per-person Award limitations are
measured under Section 5(b), (iii) the number and kind of shares of
Stock subject to or deliverable in respect of outstanding Awards and
(iv) the exercise price, grant price or purchase price relating to any
Award or, if deemed appropriate, the Committee may make provision for a payment
of cash or property to the holder of an outstanding Award in settlement of such
Award.  The Committee shall provide for such equitable adjustments of
outstanding awards in order to preserve the positive intrinsic value of such
awards, unless in the circumstances the Participant would be able to realize
such intrinsic value in the absence of an adjustment.  In addition,
the Committee is authorized to make adjustments in the terms and conditions of,
and the criteria included in, Awards (including Performance Awards and
performance goals and any hypothetical funding pool relating thereto) in
recognition of unusual or nonrecurring events (including, without limitation,
events described in the preceding sentence, as well as acquisitions and
dispositions of businesses and assets) affecting the Company, any subsidiary or
affiliate or other business unit, or the financial statements of the Company or
any subsidiary or affiliate, or in response to changes in applicable laws.
regulations, accounting principles, tax rates and regulations or business
conditions or in view of the Committee’s assessment of the business strategy of
the Company, any subsidiary or affiliate or business unit thereof, performance
of comparable organiza­tions, economic and business conditions, personal
performance of a Participant, and any other circumstances deemed relevant;
provided that no such adjustment shall be authorized or made if and to the
extent that the existence of such authority or the making of a particular
adjustment would cause Options, SARs, or Performance Awards granted under
Section 8 to Participants designated by the Committee as Covered Employees
and intended to qualify as "performance-based compensation" under Code
Section 162(m) and regulations thereunder to otherwise fail to so
qualify.

    


     (d)           Tax Provisions.

     

    (i)           Withholding.  The
Company and any subsidiary or affiliate is authorized to withhold from any Award
granted, any payment relating to an Award under the Plan, including from a
distribution of Stock, or any payroll or other payment to a Participant, amounts
of withholding and other taxes due or potentially payable in connection with any
transaction involving an Award, and to take such other action as the Committee
may deem advisable to enable the Company and Participants to satisfy obligations
for the payment of withholding taxes and other tax obligations relating to any
Award.  This authority shall include authority to withhold or receive
Stock or other property and to make cash payments in respect thereof in
satisfaction of a Participant’s withholding obligations, either on a mandatory
or elective basis in the discretion of the Committee.  Other
provisions of the Plan notwithstanding, only the minimum amount of Stock
deliverable in connection with an Award necessary to satisfy statutory
withholding requirements will be withheld, except a greater amount of Stock may
be withheld provided that any such withholding transaction that will result in
additional accounting expense to the Company must be expressly authorized by the
Committee.

     

    (ii)           Required Consent to and Notification
of Code Section 83(b) Election.  No election under
Section 83(b) of the Code (to include in gross income in the year of
transfer the amounts specified in Code Section 83(b)) or under a similar
provision of the laws of a jurisdiction outside the United States may be made
unless expressly permitted by the terms of the Award document or by action of
the Committee in writing prior to the making of such election.  In any
case in which a Participant is permitted to make such an election in connection
with an Award, the Participant shall notify the Company of such election within
ten days of

     


    
      
         


      

      
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    filing
notice of the election with the Internal Revenue Service or other governmental
authority, in addition to any filing and notification required pursuant to
regulations issued under Code Section 83(b) or other applicable
provision.

     

    (iii)           Requirement
of  Notification Upon Disqualifying Disposition Under Code
Section 421(b).  If any Participant shall make any
disposition of shares of Stock delivered pursuant to the exercise of Incentive
Stock Options under the circumstances described in Code Section 421(b)
(relating to certain disqualifying dispositions), such Participant shall notify
the Company of such disposition within ten days thereof.

     

     

    (e)           Changes to the
Plan.  The Board may amend, suspend or terminate the Plan or
the Committee’s authority to grant Awards under the Plan without the consent of
shareholders or Participants; provided, however, that any amendment to the Plan
shall be submitted to the Company’s shareholders for approval not later than the
earliest annual meeting for which the record date is after the date of such
Board action if such shareholder approval is required by any federal or state
law or regulation or the rules of any stock exchange or automated quotation
system on which the Stock may then be listed or quoted, and the Board may
otherwise, in its discretion, determine to submit other amendments to the Plan
to shareholders for approval; and provided further, that, without the consent of
an affected Participant, no such Board action may materially and adversely
affect the rights of such Participant under any outstanding Award. Without the
approval of shareholders, the Committee will not amend or replace previously
granted Options in a transaction that constitutes it "repricing."  For
this purpose, a “repricing” means: (1) amending the terms of an Option or SAR
after it is granted to lower its exercise price or base price; (2) any other
action that is treated as a repricing under generally accepted accounting
principles; and (3) canceling an Option or SAR at a time when its strike price
is equal to or greater than the fair market value of the underlying Stock, in
exchange for another Option, SAR, Restricted Stock, or other equity, unless the
cancellation and exchange occurs in connection with a merger, acquisition,
spin-off or other similar corporate transaction. A cancellation and exchange
described in clause (3) of the preceding sentence will be considered a repricing
regardless of whether the Option, Restricted Stock or other equity is delivered
simultaneously with the cancellation, regardless of whether it is treated as a
repricing under generally accepted accounting principles, and regardless of
whether it is voluntary on the part of the Option holder.  Adjustments
to awards under Section 10(c) will not be deemed "repricings,"
however.

     

    (f)           Right of
Setoff.  The Company or any subsidiary or affiliate may, to the
extent permitted by applicable law, deduct from and set off against any amounts
the Company or it subsidiary or affiliate may owe to the Participant from time
to time, including amounts payable in connection with any Award, owed as wages,
fringe benefits, or other compensation owed to the Participant.  Such
amounts as may be owed by the Participant to the Company, although the
Participant shall remain liable for any part of the Participant’s payment
obligation not satisfied through such deduction and setoff. By accepting any
Award granted hereunder, the Participant agrees to any deduction or setoff under
this Section 10(f).

     

    (g)           Unfunded Status of Awards; Creation
of Trusts.  The Plan is intended to constitute an "unfunded"
plan for incentive and deferred compensation (excluding awards of Restricted
Stock).  With respect to any payments not yet made to a Participant or
obligation to deliver Stock pursuant to an Award, nothing contained in the Plan
or any Award shall give any such Participant any rights that are greater than
those of a general creditor of the Company; provided that the Committee may
authorize the creation of trusts and deposit therein cash, Stock, other Awards
or other property, or make other arrangements to meet the Company’s obligations
under the Plan.  Such trusts or other arrangements shall

     


    
      
         


      

      
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    be
consistent with the "unfunded" status of the Plan unless the Committee otherwise
determines with the consent of each affected Participant.

     

    (h)           Nonexclusivity of the
Plan.  Neither the adoption of the Plan by the Board nor its
submission to the shareholders of the Company for approval shall be construed as
creating any limitations on the power of the Board or a committee thereof to
adopt such other incentive arrangements, apart from the Plan, as it may deem
desirable, including incentive arrangements and awards which do not qualify
under Code Section 162(m), and such other arrangements may be either
applicable generally or only in specific cases.

     

    (i)           Payments in the Event of
Forfeitures; Fractional Shares.  Unless otherwise determined by
the Committee, in the event of a forfeiture of an Award with respect to which a
Participant paid cash consideration, the Participant shall be repaid the amount
of such cash consideration.  No fractional shares of Stock shall be
issued or delivered pursuant to the Plan or any Award.  The Committee
shall determine whether and when cash, other Awards or other property shall be
issued or paid in lieu of such fractional shares, or whether such fractional
shares or any rights thereto shall be forfeited or otherwise
eliminated.

     

    (j)           Compliance with Code
Section 162(m).  It is the intent of the Company that
Options and SARs granted to Covered Employees and other Awards designated as
Awards to Covered Employees subject to Section 7 shall constitute qualified
"performance-based compensation" within the meaning of Code Section 162(m)
and regulations thereunder, unless otherwise determined by the Committee at the
time of authorization or grant of an Award.  Accordingly, the terms of
Sections 7(b), (c), and (d), including the definitions of Covered Employee and
other terms used therein, shall be interpreted in a manner consistent with Code
Section 162(m) and regulations thereunder.  The foregoing
notwithstanding, because the Committee cannot determine with certainty whether a
given Participant will be a Covered Employee with respect to a fiscal year that
has not yet been completed, the term Covered Employee as used herein shall mean
only a person designated by the Committee as likely to be a Covered Employee
with respect to a specified fiscal year.  If any provision of the Plan
or any Award document relating to a Performance Award that is designated as
intended to comply with Code Section 162(m) does not comply or is
inconsistent with the requirements of Code Section 162(m) or regulations
thereunder, such provision shall be construed or deemed amended to the extent
necessary to conform to such requirements, and no provision shall be deemed to
confer upon the Committee or any other person discretion to increase the amount
of compensation otherwise payable in connection with any such Award upon
attainment of the applicable performance objectives.

     

    (k)           Certain Limitations Relating to
Accounting Treatment of Awards.  At any time that the Company
is accounting for stock-denominated Awards under Accounting Principles Board
Opinion 25 ("APB 25"), the Company intends that, with respect to such Awards,
the compensation measurement date for accounting purposes shall occur at the
date of grant or the date performance conditions are met if an Award is fully
contingent on achievement of performance goals, unless the Committee
specifically determines otherwise.  Therefore, other provisions of the
Plan notwithstanding, in order to preserve this fundamental objective of the
Plan, if any authority granted to the Committee hereunder or any provision of
the Plan or an Award agreement would result, under APB 25, in "variable"
accounting or a measurement date other than the date of grant or the date such
performance conditions are met with respect to such Awards, if the Committee was
not specifically aware of such accounting conse­quence at the time such
Award was granted or provision otherwise became effective, such authority shall
be limited and such provision shall be automatically modified and reformed to
the extent necessary to preserve the accounting treatment of the award intended
by the Committee.  This provision shall cease to be effective if and
at such time as the Company no longer accounts for equity compensation under APB
25.

     


    
      
         


      

      
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    (l)           Governing Law.  The
validity, construction, and effect of the Plan, any rules and regulations under
the Plan, and any agreement under the Plan shall be determined in accordance
with the Pennsylvania Business Corporation Law, to the extent applicable, other
laws (including those governing contracts) of the Commonwealth of Pennsylvania,
without giving effect to principles of conflicts of laws, and applicable federal
law.

     

    (m)           Awards to Participants Outside the
United States.  The Committee may modify the terms of any Award
under the Plan made to or held by a Participant who is then resident or
primarily employed outside of the United States in any manner deemed by the
Committee to be necessary or appropriate in order that such Award shall conform
to laws, regulations, and customs of the country in which the Participant is
then resident or primarily employed, or so that the value and other benefits of
the Award to the Participant, as affected by foreign tax laws and other
restrictions applicable as a result of the Participant’s residence or employment
abroad shall be comparable to the value of such an Award to a Participant who is
resident or primarily employed in the United States. An Award may be modified
under this Section 10(m) in a manner that is inconsistent with the express terms
of the Plan, so long as such modifications will not contravene any applicable
law or regulation or result in actual liability under Section 16(b) for the
Participant whose Award is modified.

     

    (n)           Limitation on Rights Conferred under
Plan.  No Participant shall have any of the rights or
privileges of a shareholder of the Company under the Plan, including as a result
of the grant of an Award or the creation of any trust and deposit of shares
therein, except at such time as an Option or SAR may have been duly exercised or
shares may be actually delivered in settlement of an Award; provided, however,
that a Participant granted Restricted Stock shall have rights of a shareholder
except to the extent that those rights are limited by the terms of the Plan and
the agreement relating to the Restricted Stock.  Neither the Plan nor
any action taken hereunder shall be construed as (i) giving any Eligible
Person or Participant the right to continue as an Eligible Person or Participant
or in the employ or service of the Company or a subsidiary or affiliate,
(ii) interfering in any way with the right of the Company or a subsidiary
or affiliate to terminate any Eligible Person’s or Participant’s employment or
service at any time, or (iii) giving an Eligible Person or Participant any
claim to be granted any Award under the Plan or to be treated uniformly with
other Participants and employees.  Except as expressly provided in the
Plan and an Award document, neither the Plan nor any Award document shall confer
on any person other than the Company and the Participant any rights or remedies
thereunder.

     

    (o)           Severability; Entire
Agreement.  If any of the provisions of this Plan or any Award
document is finally held to be invalid, illegal or unenforceable (whether in
whole or in part), such provision shall be deemed modified to the extent, but
only to the extent, of such invalidity, illegality or unenforceability, and the
remaining provisions shall not be affected thereby; provided, that, if any of
such provisions is finally held to be invalid, illegal, or unenforceable because
it exceeds the maximum scope determined to be acceptable to permit such
provision to be enforceable, such provision shall be deemed to be modified to
the minimum extent necessary to modify such scope in order to make such
provision enforceable hereunder.  The Plan and any Award documents
contain the entire agreement of the parties with respect to the subject matter
thereof and supersede all prior agreements, promises, covenants, arrangements,
communications, representations and warranties between them, whether written or
oral with respect to the subject matter thereof.

     

    (p)           Plan Effective Date and
Termination.  The Plan shall become effective if, and at such
time as, the shareholders of the Company have approved it by a majority of the
votes cast at a duly held meeting of shareholders at which a quorum is
present.  Unless earlier terminated by action of the Board of
Directors, the Plan will remain in effect until such time as no Stock remains
available for delivery

     


    
      
         


      

      
        17

        
          

        

      

      
         


      

    


    under the
Plan and the Company has no further rights or obligations under the Plan with
respect to outstanding Awards under the Plan.

     

     

    11.   Compliance
with Code Section 409A

     

     

    (a)           409A Awards and
Deferrals.  Other provisions of the Plan notwithstanding, the
terms of any 409A Award (which for this purpose excludes any Award that was both
granted and vested before 2005 and therefore is deemed to be “grandfathered”
under applicable IRS regulations and guidance unless such award is materially
modified to become a 409A Award, and excludes any Award granted to a person not
subject to U.S. Federal income taxation in the year of grant), including any
authority of the Company and rights of the Participant with respect to the 409A
Award, shall be limited to those terms permitted under Section 409A, and any
terms not permitted under Section 409A shall be automatically modified and
limited to the extent necessary to conform with Section 409A but only to the
extent that such modification or limitation is permitted under Code Section 409A
and the regulations and guidance issued thereunder.  The following
rules will apply to 409A Awards:

     

    
      	
               
      

            	
              (i)

            	
              Elections.  If
      a Participant is permitted to elect to defer compensation and in lieu
      thereof receive an Award, or is permitted to elect to defer any payment
      under an Award, such election will be permitted only at times in
      compliance with Section 409A (including transition rules
      thereunder).  Such election shall be made in accordance with
      Exhibit A hereto;

            


    

    


    
      	
               
      

            	
              (ii)

            	
              Changes
      in Distribution Terms.  The Committee may, in its discretion,
      require or permit on an elective basis a change in the distribution terms
      applicable to 409A Awards (and Non-409A Awards that qualify for the
      short-term deferral exemption under Section 409A) in accordance with, and
      to the fullest extent permitted by, applicable guidance of the Internal
      Revenue Service (including Proposed Treasury Regulation § 1.409A, Preamble
      § XI.C and IRS Notice 2005-1), and otherwise in accordance with Section
      409A and regulations thereunder.  The Senior Vice President --
      Human Resources and General Counsel of the Company are authorized to
      modify any such outstanding Awards to permit election of different
      deferral periods provided that any such modifications may not otherwise
      increase the benefits to Participants or the costs of such Awards to the
      Company.  Other provisions of this Plan notwithstanding, changes
      to distribution timing resulting from amendments to this Plan or changes
      in Participant elections in 2008 shall not have the affect of accelerating
      distributions into 2008 or causing distributions that otherwise would have
      occurred in 2008 to be deferred until a year after
  2008;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              Exercise
      and Distribution.  Except as provided in Section 11(a)(iv)
      hereof, no 409A Award shall be exercisable (if the exercise would result
      in a distribution) or otherwise distributable to a Participant (or his or
      her beneficiary) except upon the occurrence of one of the following (or a
      date related to the occurrence of one of the following), which must be
      specified in a written document governing such 409A Award and otherwise
      meet the requirements of Treasury Regulation
    § 1.409A-3:

            


    

     

     

    
      	
               
      

            	
              (A)

            	
              Specified
      Time.  A specified time or a fixed
  schedule;

            


    

     


    
      
         


      

      
        18

        
          

        

      

      
         


      

    


     

    
      	
               
      

            	
              (B)

            	
              Separation
      from Service.  The Participant’s separation from service (within
      the meaning of Treasury Regulation § 1.409A-1(h) and other applicable
      rules under Code Section 409A); provided, however, that if the Participant
      is a “specified employee” under Treasury Regulation § 1.409A-1(i),
      settlement under this Section 11(a)(iii)(B) shall instead occur at the
      expiration of the six-month period following separation from service under
      Section 409A(a)(2)(B)(i).  During such six-month delay period,
      no acceleration of settlement may occur, except (1) acceleration shall
      occur in the event of death of the Participant, (2), if the distribution
      date was specified as the earlier of separation from service or a fixed
      date and the fixed date falls within the delay period, the distribution
      shall be triggered by the fixed date, and (3) acceleration may be
      permitted otherwise if and to the extent permitted under Section
      409A.  In the case of installments, this delay shall not affect
      the timing of any installment otherwise payable after the six-month delay
      period.  With respect to any 409A Award, a reference in any
      agreement or other governing document to a "termination of employment"
      which triggers a distribution shall be deemed to mean a "separation from
      service" within the meaning of Treasury Regulation
      § 1.409A-1(h);

            


    

     

     

    
      	
               
      

            	
              (C)

            	
              Death.  The
      death of the Participant.  Unless a specific time otherwise is
      stated for payment of a 409A Award upon death, such payment shall occur in
      the calendar year in which falls the 30th
      day after death;

            


    

     

     

    
      	
               
      

            	
              (D)

            	
              Disability.  The
      date the Participant has experienced a 409A Disability (as defined below);
      and

            


    

     

     

    
      	
               
      

            	
              (E)

            	
              409A
      Change in Control.  The occurrence of a 409A Change in Control
      (as defined below).

            


    

     

     

    
      	
               
      

            	
              (iv)

            	
              No
      Acceleration.  The exercise or distribution of a 409A Award may
      not be accelerated prior to the time specified in accordance with Section
      11(a)(iii) hereof, except in the case of one of the following
      events:

            


    

     

     

    
      	
               
      

            	
              (A)

            	
              Unforeseeable
      Emergency.  The occurrence of an Unforeseeable Emergency, as
      defined below, but only if the net amount payable upon such settlement
      does not exceed the amounts necessary to relieve such emergency plus
      amounts necessary to pay taxes reasonably anticipated as a result of the
      settlement, after taking into account the extent to which the emergency is
      or may be relieved through reimbursement or compensation from insurance or
      otherwise or by liquidation of the Participant’s other assets (to the
      extent such liquidation would not itself cause severe financial hardship),
      or by cessation of deferrals under the Plan. Upon a finding that an
      Unforeseeable Emergency has occurred with respect to a Participant, any
      election of the Participant to defer compensation that will be earned in
      whole or part by services in the year in which the emergency occurred or
      is found to continue will be immediately
  cancelled.

            


    

     


    
      
         


      

      
        19

        
          

        

      

      
         


      

    


     

    
      	
               
      

            	
              (B)

            	
              Domestic
      Relations Order.  The 409A Award may permit the acceleration of
      the exercise or distribution time or schedule to an individual other than
      the Participant as may be necessary to comply with the terms of a domestic
      relations order (as defined in Section 414(p)(1)(B) of the
      Code).

            


    

     

     

    
      	
               
      

            	
              (C)

            	
              Conflicts
      of Interest.  Such 409A Award may permit the accelera­tion
      of the settlement time or schedule as may be necessary to comply with an
      ethics agreement with the Federal government or to comply with a Federal,
      state, local or foreign ethics law or conflict of interest law in
      compliance with Treasury Regulation
      § 1.409A-3(j)(4)(iii).

            


    

     

     

    
      	
               
      

            	
              (D)

            	
              Change.  The
      Committee may exercise the discretionary right to accelerate the lapse of
      the substantial risk of forfeiture of any unvested compensation deemed to
      be a 409A Award upon a 409A Change in Control or to terminate the Plan
      upon or within 12 months after a 409A Change in Control, or otherwise to
      the extent permitted under Treasury Regulation § 1.409A-3(j)(4)(ix),
      or accelerate settlement of such 409A Award in any other circum­stance
      permitted under Treasury Regulation
  § 1.409A-3(j)(4).

            


    

     

     

    
      	
               
      

            	
              (v)

            	
              Definitions.  For
      purposes of this Section 11, the following terms shall be defined as set
      forth below:

            


    

     

     

    
      	
               
      

            	
              (A)

            	
              “409A
      Change in Control” shall be deemed to have occurred if, in connection with
      a Change in Control (or any other event defined as a change in control
      relating to a 409A Award under any applicable Company document), there
      occurs a change in the ownership of the Company, a change in effective
      control of the Company, or a change in the ownership of a substantial
      portion of the assets of the Company, as defined in Treasury Regulation
      § 1.409A-3(i)(5).

            


    

     

     

    
      	
               
      

            	
              (B)

            	
              “409A
      Disability” means an event which results in the Participant being (i)
      unable to engage in any substantial gainful activity by reason of any
      medically determinable physical or mental impairment that can be expected
      to result in death or can be expected to last for a continuous period of
      not less than 12 months, or (ii), by reason of any medically determinable
      physical or mental impairment that can be expected to result in death or
      can be expected to last for a continuous period of not less than 12
      months, receiving income replacement benefits for a period of not less
      than three months under an accident and health plan covering employees of
      the Company or its subsidiaries.

            


    

     

    
      	
               
      

            	
              (C)

            	
              “Unforeseeable
      Emergency” means a severe financial hardship to the Participant resulting
      from an illness or accident of the Participant, the Participant’s spouse,
      or a dependent (as defined in Code Section 152, without regard to Code
      Sections 152(b)(1), (b)(2), and (d)(1)(B)) of the Participant, loss of the
      Participant’s property due to casualty, or
  similar

            


    


    
      
         


      

      
        20

        
          

        

      

      
         


      

    


    extraordinary
and unforeseeable circumstances arising as a result of events beyond the control
of the Participant, and otherwise meeting the definition set forth in Treasury
Regulation § 1.409A-3(i)(3).

     

    
      	
               
      

            	
              (vi)

            	
              Time
      of Distribution.  In the case of any distribution of a 409A
      Award, if the timing of such distribution is not otherwise specified in
      the Plan or an Award agreement or other governing document, the
      distribution shall be made within 60 days after the date at which the
      settlement of the Award is specified to occur.  In the case of
      any distribution of a 409A Award during a specified period following a
      settlement date, the maximum period shall be 90 days, and the Participant
      shall have no influence (other than permitted deferral elections) on any
      determination as to the tax year in which the distribution will be made
      during any period in which a distribution may be
  made;

            


    

     

     

    
      	
               
      

            	
               (vii)

            	
              Determination
      of “Specified Employee.” For purposes of a
      distributions under Section 11(a)(iii)(B), status of a Participant as a
      “specified employee” shall be determined annually under the Company’s
      administrative procedure for such determination for purposes of all plans
      subject to Code Section 409A.

            


    

     

    
      	
               
      

            	
               (viii)

            	
              Non-Transferability.  The
      provisions of Section 10(b) notwithstanding, no 409A Award or right
      relating thereto shall be subject to anticipation, alienation, sale,
      transfer, assignment, pledge, encumbrance, attachment, or garnishment by
      creditors of the Participant or the Participant's
    Beneficiary.

            


    

    


    
      	
               
      

            	
              (ix)

            	
              Limitation
      on Setoffs.  If the Company has a right of setoff that could
      apply to a 409A Award, such right may only be exercised at the time the
      409A Award would have been distributed to the Participant or his or her
      Beneficiary.

            


    

    


    
      	
               
      

            	
              (x)

            	
              409A
      Rules Do Not Constitute Waiver of Other Restrictions.  The rules
      applicable to 409A Awards under this Section 11(a) constitute further
      restrictions on terms of Awards set forth elsewhere in this
      Plan.

            


    

     

    (b)           Separate
Payments.  Unless otherwise specified in the applicable Award
agreement, each vesting tranche of an Award shall be deemed to be a separate
payment for purposes of Code Section 409A, and any portion of a vesting tranche
that would vest on a pro rata basis in the event of a separation from service on
December 31 of a given year and the portion that would or would not vest pro
rata for the period from the beginning of a calendar year to the end of the
Company's fiscal year, and the remaining portion of such vesting tranche that
would not so vest, each shall be deemed to be a separate payment for purposes of
Code Section 409A.

     

     

    (c)           Distributions Upon
Vesting.  In the case of any Non-409A Award providing for a
distribution upon the lapse of a substantial risk of forfeiture, if the timing
of such distribution is not otherwise specified in the Plan or an Award
agreement or other governing document, the distribution shall be made not later
than the 15th day of
the third month after the end of the fiscal year in which the substantial risk
of forfeiture lapsed, and if a determination is to be made promptly following
the end of a performance year (as in the case of performance shares) then the
determination of the level of achievement of performance and the distribution
shall be made between the start of the subsequent fiscal year and the 15th day of
the thrid month of such

     


    
      
         


      

      
        21

        
          

        

      

      
         


      

    


     

    subsequent
fiscal year.  In all cases, the Participant shall have no influence
(aside from any permitted deferral election) on any determination as to the tax
year in which the distribution will be made.

     

    (d)           Grandfathered
Awards.  Any award that was both granted and vested before 2005
and which otherwise might constitute a deferral of compensation under Section
409A is intended to be “grandfathered” under Section 409A, unless it has been
materially modified since October 3, 2004.  No amendment or change to
the Plan or other change (including an exercise of discretion) with respect to
such a grandfathered award after October 3, 2004, shall be effective if such
change would constitute a “material modification” within the meaning of
applicable guidance or regulations under Section 409A, except in the case of an
award that is, following such modification, compliant as a 409A Award or
compliant with an exemption under Section 409A.

    


    (e)           Limitation on
Adjustments.  Any adjustment under Section 10(c) shall be
implemented in a way that complies with applicable requirements under Section
409A so that Non- 409A Option/SARs do not, due to the adjustment, become 409A
Awards, and otherwise so that no adverse consequences under Section 409A result
to Participants.

    


    (f)           Release or Other Termination
Agreement.  If the Company requires a Participant to execute a
release, non-competition, or other agreement as a condition to receipt of a
payment upon or following a termination of employment, the Company will supply
to the Participant a form of such release or other document not later than the
date of the Participant's termination of employment, which must be returned
within the minimum time period required by law and must not be revoked by the
Participant within the applicable time period for revocation in order for the
Participant to satisfy any such condition.  If any amount payable
during a fixed period following termination of employment is subject to such a
requirement and the fixed period would begin in one tax year and end in the next
tax year, the Company, in determining the time of payment of any such amount,
will not be influenced by the timing of any action of the Participant including
execution of such a release or other document and expiration of any revocation
period.  In particular, the Company will be entitled in its discretion
to deposit any such payment in escrow during either year comprising such fixed
period, so that such deposited amount is constructively received and taxable
income to the Participant upon deposit but with distribution from such escrow
remaining subject to the Participant's execution and non-revocation of such
release or other document.

    


    (g)           Special Disability
Provision.  Unless otherwise provided in an applicable Award
agreement or other governing document, in case of a disability of a Participant,
(i) for any Award or portion thereof that constitutes a short-term deferral for
purposes of Section 409A, the Company shall determine whether the Participant's
circumstances are such that the Participant will not return to service, in which
case such disability will be treated as a termination of employment for purposes
of determining the time of payment of such Award or portion thereof then subject
only to service-based vesting, and (ii) for any Award or portion thereof that
constitutes a 409A Award, the Company shall determine whether there has occurred
a "separation from service" as defined under Treasury Regulation § 1.409A-1(h)
based on Participant's circumstances, in which case such disability will be
treated as a separation from service for purposes of determining the time of
payment of such Award or portion thereof then subject only to service-based
vesting.  In each case, the Participant shall be accorded the benefit
of vesting that would result in the case of disability in the absence of this
provision, so that the operation of this provision, intended to comply with
Section 409A, will not disadvantage the


    
      
         


      

      
        22

        
          

        

      

      
         


      

    


    Participant.  The
Company's determinations hereunder will be made within 30 days after the
disability arises or there occurs a material change in the Participant's
condition that constitutes the disability.  In the case of any
short-term deferral, if (i) circumstances arise constituting a disability but
not constituting a termination of employment, (ii) the Award would provide for
vesting upon a termination due to disability, and (iii) the Award would not
qualify as a short-term deferral if the Participant were then permitted to elect
the time at which to terminate employment due to the disability, then only the
Company will be entitled to act to terminate Participant's employment due to
disability.

    


    (h)           Limit on Authority to
Amend.  The authority to adopt amendments under Section 10(e)
does not include authority to take action by amendment that would have the
effect of causing Awards to fail to meet applicable requirements of Section
409A.

     

    (i)           Scope and Application of this
Provision.  For purposes of this Section 11, references to a
term or event (including any authority or right of the Company or a Participant)
being “permitted” under Section 409A mean that the term or event will not cause
the Participant to be deemed to be in constructive receipt of compensation
relating to the 409A Award prior to the distribution of cash, Shares or other
property or to be liable for payment of interest or a tax penalty under Section
409A.

     

    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    



    
      
         


      

      
        23

        
          

        

      

      
         


      

    


    Exhibit
A

    


    


    Deferral
Election Rules

    


    If a participant in a plan, program or
other compensatory arrangement (a "plan") of Charming Shoppes, Inc. (the
"Company") is permitted to elect to defer awards or other compensation, any such
election relating to compensation deferred under the applicable plan must be
received by the Company prior to the date specified by or at the direction of
the administrator of such plan (the "Administrator," which in most instances
will be the Human Resources Department).  For purposes of compliance
with Section 409A of the Internal Revenue Code (the "Code"), any such election
to defer shall be subject to the rules set forth below, subject to any
additional restrictions as may be specified by the
Administrator.  Under no circumstances may a participant elect to
defer compensation to which he or she has attained, at the time of deferral, a
legally enforceable right to current receipt of such compensation.

    


    
      	
               
      

            	
              (1)

            	
              Initial Deferral
      Elections.  Any initial election to defer compensation
      (including the election as to the type and amount of compensation to be
      deferred and the time and manner of settlement of the deferral) must be
      made (and shall be irrevocable) no later than December 31 of the year
      before the participant’s services are performed which will result in the
      earning of the compensation, except as
follows:

            


    

    


    
      	
              •  

            	
              Initial
      deferral elections with respect to compensation that, absent the election,
      constitutes a short-term deferral may be made in accordance with Treasury
      Regulation § 1.409A-2(a)(4) and
(b);

            


    

    
      	
              •  

            	
              Initial
      deferral elections with respect to compensation that remains subject to a
      requirement that the participant provide services for at least 12 months
      (a “forfeitable right” under Treasury Regulation § 1.409A-2(a)(5))
      may be made on or before the 30th
      day after the participant obtains the legally binding right to the
      compensation, provided that the election is made at least 12 months before
      the earliest date at which the forfeiture condition could lapse and
      otherwise in compliance with Treasury Regulation
      § 1.409A-2(a)(5);

            


    

    
      	
              •  

            	
              Initial
      deferral elections by a participant in his or her first year of
      eligibility may be made within 30 days after the date the participant
      becomes eligible to participate in the applicable plan, with respect to
      compensation paid for services to be performed after the election and in
      compliance with Treasury Regulation
  § 1.409A-2(a)((7);

            


    

    
      	
              •  

            	
              Initial
      deferral elections by a participant with respect to performance-based
      compensation (as defined under Treasury Regulation § 1.409A-1(e)) may
      be made on or before the date that is six months before the end of the
      performance period, provided that (i) the participant was employed
      continuously from either the beginning of the performance period or the
      later date on which the performance goal was established, (ii) the
      election to defer is made before such compensation has become readily
      ascertainable (i.e., substantially certain to be paid), (iii) the
      performance period is at least 12 months in length and the performance
      goal was established no later than 90 days after the commencement of the
      service period to which the performance goal relates, (iv) the
      performance-based compensation is not payable in the absence
      of  performance except due to death, disability, a 409A Change
      in Control (as defined in Section 11(a)(v)(A) of the 2004 Stock Award and
      Incentive Plan) or as otherwise permitted under Treasury Regulation
      § 1.409A-1(e), and (v) this initial deferral election must in any
      event comply with Treasury Regulation
    § 1.409A-2(a)(8);

            


    


    
      
         


      

      
        24

        
          

        

      

      
         


      

    


    
      	
              •  

            	
              Initial
      deferral elections resulting in Company matching contributions may be made
      in compliance with Treasury Regulation
    § 1.409A-2(a)(9);

            


    

    
      	
              •  

            	
              Initial
      deferral elections may be made to the fullest permitted under other
      applicable provisions of Treasury Regulation § 1.409A-2(a);
      and

            


    

    


    
      	
               
      

            	
              (2)

            	
              Further
      Deferral Elections.  The foregoing notwithstanding, for any
      election to further defer an amount that is deemed to be a deferral of
      compensation subject to Code Section 409A (to the extent permitted under
      Company plans, programs and arrangements), any further deferral election
      made under the Plan shall be subject to the following, provided that
      deferral elections in 2005 - 2008 may be made under applicable transition
      rules under Section 409A:

            


    

    


    
      	
              •  

            	
              The
      further deferral election will not take effect until at least 12 months
      after the date on which the election is
made;

            


    

    
      	
              •  

            	
              If
      the election relates to a distribution event other than a Disability (as
      defined in Treasury Regulation § 1.409A-3(i)(4)), death, or
      Unforeseeable Emergency (as defined in Treasury Regulation
      § 1.409A-3(i)(3)), the payment with respect to which such election is
      made must be deferred for a period of not less than five years from the
      date such payment would otherwise have been paid (or in the case of a life
      annuity or installment payments treated as a single payment, five years
      from the date the first amount was scheduled to be paid), to the extent
      required under Treasury Regulation
  § 1.409A-2(b);

            


    

    
      	
              •  

            	
              The
      requirement that the further deferral election be made at least 12 months
      before the original deferral amount would be first payable may not be
      waived by the Administrator, and shall apply to a payment at a specified
      time or pursuant to a fixed schedule (and in the case of a life annuity or
      installment payments treated as a single payment, 12 months before the
      date that the first amount was scheduled to be
  paid);

            


    

    
      	
              •  

            	
              The
      further deferral election shall be irrevocable when filed with the
      Company; and

            


    

    
      	
              •  

            	
              The
      further deferral election otherwise shall comply with the applicable
      requirements of Treasury Regulation
  § 1.409A-2(b).

            


    

    


    
      	
              (3)  

            	
              Transition
      Rules.  Initial deferral elections and elections to change any
      existing deferred date for distribution of compensation in any transition
      period designated under Department of the Treasury and IRS regulations may
      be permitted by the Company to the fullest extent authorized under
      transition rules and other applicable guidance under Code Section 409A
      (including transition rules in effect in the period 2005 –
      2008).

            


    

    


    


    


    


    


    


    


    


    


    



    
      
         


      

      
        25