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AMERITRADE HOLDING CORPORATION




1996 DIRECTORS INCENTIVE PLAN




As Amended and Restated Effective May 10, 2006




     1. History and Purpose. Ameritrade Online Holdings Corp. (“Old Ameritrade”)
established the Ameritrade Holding Corporation 1996 Directors Incentive Plan (the “Plan”) to
attract and retain as non-employee directors persons whose abilities, experience and judgment can
contribute to the continued progress of the company and its subsidiaries and to facilitate the
directors’ ability to acquire a proprietary interest in the company. Old Ameritrade was formerly
known as Ameritrade Holding Corporation prior to the closing of the merger involving Old Ameritrade
and Datek Online Holdings Corp. on September 9, 2002 (the “Merger”). As a result of the Merger, Old
Ameritrade became a subsidiary of a newly formed corporation, Ameritrade Holding Corporation
(“Ameritrade” or the “Company”) effective as of September 9, 2002 (the “Merger Closing Date”) and
as of the Merger Closing Date Ameritrade assumed the Plan, and all outstanding obligations under
the Plan. The Board of Directors of Ameritrade (the “Board”) approved an amendment and
restatement, subject to stockholder approval, as of September 9, 2005 (the “Restatement Date”), and
stockholders approved the Plan on January 4, 2006. The Board subsequently approved this amendment
and restatement, which did not require stockholder approval, as of May 10, 2006 (the “New Effective
Date”). The following provisions constitute an amendment, restatement and continuation of the Plan
as of the New Effective Date.



     2. Administration.



          2.1 Administration By Committee. The Plan shall be administered by the Compensation
Committee (the “Committee”) of the Board. Notwithstanding the foregoing, no member of the
Committee shall act with respect to the administration of the Plan except to the extent consistent
with the exempt status of the Plan under Rule 16b-3 promulgated under the Securities Exchange Act
of 1934, as amended (“Rule 16b-3”).




          2.2 Authority. Subject to the provisions of the Plan, the Committee shall have the
authority to (a) interpret the Plan and to adopt, amend and rescind administrative guidelines and
other rules and regulations relating to the Plan, (b) correct any defect or omission and to
reconcile any inconsistency in the Plan or in any payment made hereunder, and (c) make all other
determinations and to take all other actions necessary or advisable for the implementation and
administration of the Plan. The determination of the Committee on matters within its authority
shall be conclusive and binding on the Company and all other persons.




     3. Participation. Only Non-Employee Directors shall be eligible to participate in the
Plan. As of any applicable date, a “Non-Employee Director” is a person who is serving as a
director of the Company and who is not an employee of the Company or any subsidiary of the Company
as of that date.



     4. Definition of Fair Market Value. For purposes of the Plan, the “Fair Market Value”
of a share of common stock of the Company (“Stock”) as of any date shall be the closing market



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composite price for such Stock as reported on NASDAQ on that date or, if Stock is not traded
on that date, on the next preceding date on which Stock was traded.



     5. Shares Subject to the Plan.



          5.1 Number of Shares Reserved. The shares of Stock with respect to which awards may
be made under the Plan or which may be distributed pursuant to elections under Sections 9 or 10 of
the Plan shall be shares currently authorized but unissued or currently held or subsequently
acquired by the Company as treasury shares, including shares purchased in the open market or in
private transactions. Subject to the provisions of subsection 5.3, the number of shares of Stock
which may be issued with respect to awards under the Plan or distributed pursuant to elections made
in accordance with Section 9 or 10 of the Plan shall not exceed 2,531,393 shares in the aggregate
(which includes the 71,393 shares necessary to reflect the adjustment of outstanding awards
pursuant to the Plan in order to take into account the special cash dividend paid by Ameritrade
Holding Corporation on January 24, 2006).




          5.2 Reusage of Shares.





	 	(a)	 	In the event of the exercise or termination (by reason of forfeiture,
expiration, cancellation, surrender or otherwise) of any award under the Plan, that
number of shares of Stock that was subject to the award but not delivered shall again
be available for awards under the Plan.
	 
	 	(b)	 	In the event that shares of Stock are delivered under the Plan as a Stock Award
(as defined in Section 7) and are thereafter forfeited or reacquired by the Company
pursuant to rights reserved upon the award thereof, such forfeited or reacquired shares
shall again be available for awards under the Plan.
	 
	 	(c)	 	Notwithstanding the provisions of paragraphs (a) or (b), the following shares
shall not be available for reissuance under the Plan: (i) shares with respect to which
the Non-Employee Director has received the benefits of ownership (other than voting
rights), either in the form of dividends or otherwise, and (ii) shares which are
surrendered in payment of the Option Price (as defined in subsection 6.3) upon the
exercise of an Option.





          5.3 Adjustments to Shares Reserved. In the event of any merger, consolidation,
reorganization, recapitalization, spinoff, stock dividend, stock split, reverse stock split,
exchange or other distribution with respect to shares of Stock or other change in the corporate
structure or capitalization affecting the Stock, the type and number of shares of stock which are
or may be subject to awards under the Plan and the terms of any outstanding awards (including the
price at which shares of stock may be issued pursuant to an outstanding award) shall be equitably
adjusted by the Committee, in its sole discretion, to preserve the value of benefits awarded or to
be awarded to Non-Employee Directors under the Plan. In determining what adjustment, if any, is
appropriate pursuant to the preceding sentence, the Committee may rely on the advice of such
experts as they deem appropriate, including counsel, investment bankers and the accountants of the
Company.




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     6. Options.



          6.1 Definitions. The grant of an “Option” under this Section 6 entitles the
Non-Employee Director to purchase shares of Stock at the Option Price, subject to the terms of this
Section 6. Options granted under this Section 6 shall be non-qualified stock options which are not
intended to be “incentive stock options” as that term is described in section 422(b) of the
Internal Revenue Code of 1986, as amended (the “Code”).




          6.2 Awards of Options. Each Non-Employee Director shall be awarded Options under this
Section 6 in accordance with the following:





	 	(a)	 	Upon his election to the Board for his first term, each Non-Employee Director
shall be awarded an Option to purchase such number of shares of Stock as determined by
the Chairman of the Board; provided, however, that such award shall be approved by the
Board.
	 
	 	(b)	 	At such times as the Board shall determine, each Non-Employee Director shall be
awarded an Option to purchase that number of shares of Stock determined by the Board
and approved by the members of the Board other than those receiving the grant of an
Option pursuant to this paragraph (b). In determining the number of shares of Stock
subject to an Option under this paragraph (b), the Board may take into account such
objective or subjective factors as it determines appropriate.





          6.3 Option Price. The price at which shares of Stock may be purchased upon the
exercise of an Option (the “Option Price”) shall be not less than the greater of (i) the Fair
Market Value of a share of Stock as of the date on which the Option is granted, or (ii) the par
value of a share of Stock on such date.




          6.4 Exercise. Except as otherwise provided in the Plan, each Option granted to a
Non-Employee Director under this Section 6 shall become exercisable in substantially equal annual
installments over a period of three years, beginning with the first anniversary of the date of
grant and no Option shall be exercisable after the Expiration Date (as defined in Section 8).
Notwithstanding a Non-Employee Director’s termination of service as a director, Options shall
continue to vest over a period of three years unless the Non-Employee Director terminates for
cause. If a Non-Employee Director’s service as a director terminates for Cause, Options shall
continue to vest over a period of one year following such termination of service. The full Option
Price of each share of Stock purchased upon the exercise of any Option shall be paid at the time of
such exercise and, as soon as practicable thereafter, a certificate representing the shares so
purchased shall be delivered to the person entitled thereto. The Option Price shall be payable in
cash or in shares of Stock (valued at Fair Market Value as of the day of exercise), or in any
combination thereof.




     7. Stock Awards.



          7.1 Definition. Subject to the terms of this Section 7, a “Stock Award” under the
Plan is either: (i) a grant of shares of Stock to a Non-Employee Director, or (ii) the grant of

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restricted stock units representing the right to receive a share of Stock in the future; the
vesting of which is subject to the conditions described in subsection 7.3. The period beginning on
the date of the grant of a Stock Award and ending on the vesting or forfeiture of such Stock (as
applicable) underlying any Stock Award is referred to as the “Restricted Period”.




          7.2 Non-Discretionary Awards. Upon his election to the Board for his first term, each
Non-Employee Director shall be awarded a Stock Award in such number pursuant to this Section 7 as
determined by the Chairman of the Board; provided, however, that such Stock Award shall be approved
by the Board; and provided further that, the Fair Market Value of the Stock Award to a Non-Employee
Director pursuant to this subsection 7.2 shall be approximately $20,000 or such other amount
determined by the Board from time to time.




          7.3 Vesting. Except as otherwise provided in the Plan, the shares of Stock subject to
a Stock Award under this Section 7 shall become vested in substantially equal annual installments
over a period of three years, beginning with the first anniversary of the date of grant and all
shares of Stock subject to a Stock Award pursuant to this Section 7 which are not vested on the
Expiration Date shall be forfeited.




          7.4 Rights with Respect to Stock. If a Stock Award is made in the form of shares of
Stock, and not in the form of restricted stock units, then beginning on the date of the grant of
shares of Stock comprising such Stock Award, and including any applicable Restricted Period, the
Non-Employee Director, as owner of such shares, shall have the right to vote such shares; provided,
however, that payment of dividends with respect to Stock Awards shall be subject to the following:





	 	(a)	 	On and after date that a Non-Employee Director has a fully earned and vested
right to the shares comprising a Stock Award, and the shares have been distributed to
the Non-Employee Director, the Non-Employee Director shall have all dividend rights
(and other rights) of a stockholder with respect to such shares.
	 
	 	(b)	 	Prior to the date that a Non-Employee Director has a fully earned and vested
right to the shares comprising a Stock Award, the Committee, in its sole discretion,
may award Dividend Rights (as defined below) with respect to such shares.
	 
	 	(c)	 	On and after the date that a Non-Employee Director has a fully earned and
vested right to the shares comprising a Stock Award, but before the shares have been
distributed to the Non-Employee Director, the Non-Employee Director shall be entitled
to Dividend Rights with respect to such shares, at the time and in the form determined
by the Committee.




Unless otherwise provided in the form of award agreement for any Stock Award in the form of
restricted stock units, no rights of a stockholder (including specifically Dividend Rights) will
apply with respect to shares of Stock under such a Stock Award until the actual shares of Stock are
issued with respect to the restricted stock unit.




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If applicable, a “Dividend Right” with respect to shares comprising a Stock Award shall entitle the
Non-Employee Director, as of each dividend payment date, to an amount equal to the dividends
payable with respect to a share of Stock multiplied by the number of such shares. Dividend Rights
shall be settled in the same form (either cash or in shares of Stock) as dividends paid to
shareholders of the Company.




     8. Expiration of Awards. The “Expiration Date” with respect to an award under the
Plan means the earlier of the following dates:




	 	(a)	 	the ten-year anniversary of the date on which the award is granted; or
	 
	 	(b)	 	the one-year anniversary of the date on which the Non-Employee Director’s
service as a director of the Company terminates for cause.





     9. Payment of Retainers; Elections.



          9.1 Payment of Retainer. Subject to the terms and conditions of the Plan, for each
fiscal year of the Company (the “Award Year”), each individual who is a Non-Employee Director shall
be paid a retainer in an amount determined from time to time by the Board (the “Retainer”) in
accordance with and subject to the following:





	 	(a)	 	For each Award Year, a “Cash Retainer” shall be payable to each individual who
is a Non-Employee Director as of the first day of the Award Year in an amount equal to
one-half of the Retainer for the Award Year; and
	 
	 	(b)	 	For each Award Year, a “Stock Retainer” shall be payable to each individual who
is a Non-Employee Director as of the first day of the Award Year in an amount equal to
one-half of the Retainer for the Award Year, which Stock Retainer shall be payable
either in (i) shares of Stock or (ii) restricted stock units representing a right to
receive shares of Stock in the future, both having a Fair Market Value equal to the
Stock Retainer on the date of grant, with the Fair Market Value of any fractional share
payable in cash.
	 
	 	(c)	 	Notwithstanding the foregoing, if a Non-Employee Director has met the specified
requirements of the Ameritrade Holding Corporation Equity Ownership and Disposition
Guidelines, the Non-Employee Director may elect to receive all or any portion of the
Stock Retainer in cash. The portion of a Non-Employee Director’s retainer which is
paid in cash pursuant to this paragraph (c) shall be treated as part of the Cash
Retainer.




Notwithstanding the foregoing, (i) the Board, in its sole discretion, may determine that an Award
Year of less than 12 months is appropriate, in which case, the amount of the Retainer and any other
amounts payable to a Non-Employee Director for such Award Year to which any provision of the Plan
applies shall be calculated and shall be payable as determined by the Board in its sole discretion,
and (ii) in no event shall the Retainer for the Award Year commencing on September 28, 2002 (the
“2003 Award Year”) be payable prior to October 11, 2002.




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          9.2 Elections to Receive Stock. Subject to the terms and conditions of the Plan, each
Non-Employee Director may elect to forego receipt of all or any portion of the Eligible Cash
Payments (as defined below) payable to him in any Award Year beginning after the date of his
election and instead to receive whole shares of Stock of equivalent value to the Eligible Cash
Payments so foregone (determined in accordance with subsection 9.4). An election under this
subsection 9.2 to have Eligible Cash Payments paid in shares of Stock shall be valid only if it is
in writing, signed by the Non-Employee Director, and filed with the Committee in accordance with
uniform and nondiscriminatory rules adopted by the Committee, including, but not limited to, rules
required to cause the receipt of Stock pursuant to any such election to be exempt under Rule 16b-3.
For purposes of the Plan, the term “Eligible Cash Payments” means the Cash Retainer and meeting
fees and committee fees that would otherwise be payable to the Non-Employee Director by the Company
in cash as established, from time to time, by the Board or any committee thereof.
Notwithstanding the foregoing, in no event shall any Eligible Cash Payments for the 2003 Award Year
be payable prior to October 11, 2002




          9.3 Revocation of Election to Receive Stock. Once effective, an election pursuant to
subsection 9.2 to receive Stock shall remain in effect for successive Award Years until it is
revised or revoked. Any such revision or revocation shall be in writing, signed by the
Non-Employee Director, shall be effective for the Award Year next following the date on which it is
received by the Committee, or such later date specified in such notice, and shall be filed with the
Committee in accordance with uniform and nondiscriminatory rules established by the Committee,
including, but not limited to, rules required to cause the receipt of Stock (or the receipt of cash
in lieu of Stock as previously elected) to be exempt under Rule 16b-3.




          9.4 Equivalent Amount of Stock. The number of whole shares of Stock to be distributed
to any Non-Employee Director by reason of his election pursuant to subsection 9.2 to receive Stock
in lieu of Eligible Cash Payments shall be equal to (rounded to the nearest whole number of
shares):





	 	(a)	 	the amount of the Eligible Cash Payments which the Non-Employee Director has
elected to have paid to him in shares of Stock;
	 
	 	 	 	DIVIDED BY
	 
	 	(b)	 	the Fair Market Value of a share of Stock as of the date on which such Eligible
Cash Payments would otherwise have been payable to the Non-Employee Director; provided,
however, that in the case of Eligible Cash Payments which were payable (i) for the 2003
Award Year to individuals who were Non-Employee Directors as of the first day of the
2003 Award Year and (ii) on or prior to October 11, 2002, Fair Market Value under this
paragraph (b) shall be determined as of October 1, 2002.





          9.5 Discretionary Vesting of Stock Retainer. The Committee may impose any vesting
conditions on Stock Awards intended to be Stock Retainers pursuant to this Section 9 as it deems
appropriate from time to time.




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     10. Deferred Compensation.



          10.1 Deferral of Compensation. Subject to the terms and conditions of the Plan, each
Non-Employee Director, by filing a written ‘Deferral Election’ with the Committee in accordance
with uniform and nondiscriminatory rules adopted by the Committee, may elect to defer the receipt
of all or any portion of the Eligible Deferral Amounts (as defined below) otherwise payable to him
on or after the Effective Date until a future date (the ‘Distribution Date’) specified by the
Non-Employee Director in his Deferral Election as of which payment of his Deferred Compensation
Account (as defined in subsection 10.2) shall commence in accordance with subsection 10.3. If no
Distribution Date is specified in a Non-Employee Director’s Deferral Election, the Distribution
Date shall be deemed to be the first business day in January of the year following the date on
which the Non-Employee Director ceases to be a director of the Company for any reason. A
Non-Employee Director’s Deferral Election shall be effective with respect to Eligible Deferral
Amounts otherwise payable to him for services rendered after the last day of the fiscal year in
which such election is filed with the Committee; provided, however, that:





	 	(a)	 	a Deferral Election which is filed within 30 days of the date on which a
director first becomes a Non-Employee Director shall be effective with respect to all
Eligible Deferral Amounts otherwise payable to him for periods after the date on which
the Deferral Election is filed; and
	 
	 	(b)	 	by notice filed with the Committee in accordance with uniform and
nondiscriminatory rules established by it, a director may terminate or modify any
Deferral Election as to Eligible Deferral Amounts payable for services rendered after
the last day of the fiscal year in which such notice is filed with the Committee;
provided, however, that no modification may be made to the Distribution Date unless the
Non-Employee Director shall file such notice with the Committee at least six months
prior thereto.




Notwithstanding the provisions of paragraph (b) next above, the Committee may, in its sole
discretion, after considering all of the pertinent facts and circumstances, approve a change to the
Distribution Date which is requested by a Non-Employee Director less than six months prior thereto.
For purposes of the Plan, the term ‘Eligible Deferral Amounts’ shall mean the Retainer (including
both the Cash Retainer and the Stock Retainer) and meeting fees and committee fees that would
otherwise be payable to the Non-Employee Director by the Company, all as established from time to
time by the Board or any committee thereof.




          10.2 Crediting and Adjustment of Deferred Amounts. The amount of any Eligible
Deferral Amounts deferred pursuant to a Non-Employee Director’s Deferral Election in accordance
with subsection 10.1 (“Deferred Compensation”) shall be credited to a bookkeeping account
maintained by the Company in the name of the Non-Employee Director (the “Deferred Compensation
Account”), which account shall consist of two subaccounts, one known as the “Cash Subaccount” and
the other as the “Company Stock Subaccount.” Any portion of the Stock Retainer and any Eligible
Cash Payments that the Non-Employee Director has elected to receive in Stock pursuant to subsection
9.2 and, in each case, with respect to which the Non-Employee

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Director has made a Deferral Election pursuant to subsection 10.1 shall be credited to his
Company Stock Subaccount. Any other Deferred Compensation shall be credited to his Cash
Subaccount. A Non-Employee Director’s Deferred Compensation Account shall be adjusted as follows:





	 	(a)	 	As of the first day of each fiscal quarter occurring after the Effective Date
(which dates are referred to herein as “Accounting Dates”), the Non-Employee Director’s
Cash Subaccount shall be adjusted as follows:






	 	(i)	 	first, the amount of any distributions from the Cash
Subaccount made since the last preceding Accounting Date shall be charged to
the Cash Subaccount;
	 
	 	(ii)	 	next, the balance of the Cash Subaccount after
adjustment in accordance with subparagraph (i) above shall be credited with
interest since the last preceding Accounting Date computed at the prime rate as
reported by The Wall Street Journal for such date, or if such date is not a
business day, for the next preceding business day; and
	 
	 	(iii)	 	finally, after adjustment in accordance with the
foregoing provisions of this subsection 10.2, the Cash Subaccount shall be
credited with the Deferred Compensation otherwise payable to the Non-Employee
Director since the last preceding Accounting Date which is to be credited to
the Cash Subaccount.






	 	(b)	 	The Non-Employee Director’s Company Stock Subaccount shall be adjusted as
follows:






	 	(i)	 	as of any date on or after the Effective Date on which Eligible
Deferral Amounts would have been payable to the Non-Employee Director in Stock
but for his or her Deferral Election, the Non-Employee Director’s Company Stock
Subaccount shall be credited with that number of stock units (“Stock Units”)
equal to the number of shares of Stock to which he would have been entitled as
of the applicable date;
	 
	 	(ii)	 	as of the date on which shares of Stock are distributed to the
Non-Employee Director in accordance with subsection 10.3 below, the Company
Stock Subaccount shall be charged with an equal number of Stock Units; and
	 
	 	(iii)	 	as of the record date for any dividend paid on Stock, the
Company Stock Subaccount shall be credited with that number of additional Stock
Units which is equal to the number obtained by multiplying the number of Stock
Units then credited to the Company Stock Subaccount by the amount of the cash
dividend or the fair market value (as determined by the Board of




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	 	 	 	Directors) of any dividend in kind payable on a share of Stock, and dividing
that product by the then Fair Market Value of a share of Stock.






	 	 	 	In the event of any merger, consolidation, reorganization, recapitalization,
spinoff, stock split, reverse stock split, rights offering, exchange or other change
in the corporate structure or capitalization of the Company affecting the Stock,
each Non-Employee Director’s Company Stock Subaccount shall be equitably adjusted in
such manner consistent with subsection 5.3





          10.3 Payment of Deferred Compensation Account. Except as otherwise provided in this
subsection 10.3 or subsection 10.4, the balances credited to a Non-Employee Director’s Deferred
Compensation Account shall each be payable to the Non-Employee Director in 10 annual installments
commencing as of the Distribution Date and continuing on each annual anniversary thereof.
Notwithstanding the foregoing, a Non-Employee Director may elect, by filing a notice with the
Committee at least six months prior to the Distribution Date, to change the number of payments to a
single payment or to any number of annual payments not in excess of ten. Each such payment shall
include a cash portion, if applicable, and a Stock portion, if applicable, as follows:





	 	(a)	The cash portion to be paid as of the Distribution Date or any anniversary
thereof and charged to the Cash Subaccount shall be equal to the balance of the Cash
Subaccount multiplied by a fraction, the numerator of which is one and the denominator
of which is the number of remaining payments to be made, including such payment.
	 
	 	(b)	The Stock portion to be paid as of the Distribution Date or any anniversary
thereof and charged to the Company Stock Subaccount shall be distributed in whole shares of Stock, the number of shares of which shall be determined by rounding to the
next highest integer the product obtained by multiplying the number of Stock Units then
credited to the Non-Employee Director’s Company Stock Subaccount by a fraction, the
numerator of which is one and the denominator of which is the number of remaining
payments to be made, including such payment.




Notwithstanding the foregoing, the Committee, in its sole discretion, may distribute all balances
in any Deferred Compensation Account to a Non-Employee Director (or former Non-Employee Director)
in a lump sum as of any date.




          10.4 Payments in the Event of Death. If a Non-Employee Director dies before payment
of his Deferred Compensation Account commences, all amounts then credited to his Deferred
Compensation Account shall be distributed to his Beneficiary (as described below), as soon as
practicable after his death, in a lump sum. If a Non-Employee Director dies after payment of his
Deferred Compensation Account has commenced but before the entire balance of such account has been
distributed, the remaining balance thereof shall be distributed to his Beneficiary, as soon as
practicable after his death, in a lump sum. Any amounts in the Cash Subaccount shall be
distributed in cash and any amounts in the Stock Subaccount shall be distributed in whole shares of
Stock determined in accordance with paragraph 10.3(b). For


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purposes of the Plan, the Non-Employee Director’s “Beneficiary” is the person or persons the
Non-Employee Director designates, which designation shall be in writing, signed by the Non-Employee
Director and filed with the Committee prior to the Non-Employee Director’s death. A Beneficiary
designation shall be effective when filed with the Committee in accordance with the preceding
sentence. If more than one Beneficiary has been designated, the balance in the Non-Employee
Director’s Deferred Compensation Account shall be distributed to each such Beneficiary per capita.
In the absence of a Beneficiary designation or if no Beneficiary survives the Non-Employee
Director, the Beneficiary shall be the Non-Employee Director’s estate.




     11. Replacement Awards. Each holder of an award related to the common stock of Old
Ameritrade which was granted pursuant to the Plan prior to the Merger Closing Date and which was
outstanding as of the Merger Closing Date after giving effect to the transactions contemplated by
the Merger (the “Existing Awards”), will, as of the Merger Closing Date, be automatically granted a
“Replacement Award” under the Plan and the Existing Awards shall be cancelled in exchange for the
Replacement Awards. The number of shares of Stock and, if applicable, the Option Price per share
of Stock, subject to a Replacement Award shall be equal to the same number of shares of common
stock of Old Ameritrade and, if applicable, the same Option Price per share, subject to
corresponding Existing Award. Except as provided in the preceding sentence, the Replacement Awards
granted pursuant to this Section 11 shall be subject to the same terms and conditions as the
corresponding Existing Awards.



     12. Miscellaneous.



          12.1 Duration. The Plan shall be unlimited in duration and, in the event of Plan
termination, shall remain in effect as long as any awards under it are outstanding.




          12.2 Withholding Payments. To the extent that any Non-Employee Director would incur
an obligation for Nebraska state income taxes on account of an award or payment to him under the
Plan or the exercise of any award under the Plan (referred to as the “Withholding Obligation”), the
Company, in its sole discretion, may make a cash payment to such Non-Employee Director in an amount
such that, after payment of all federal, state or local taxes on such cash payment, the
Non-Employee Director retains a cash payment equal to the Withholding Obligation.




          12.3 Limit on Distribution. Distribution of shares of Stock or other amounts under
the Plan shall be subject to the following:





	 	(a)	 	Notwithstanding any other provision of the Plan, the Company shall have no
liability to deliver any shares of Stock under the Plan or make any other distribution
of benefits under the Plan unless such delivery or distribution would comply with all
applicable laws and the applicable requirements of any securities exchange or similar
entity.
	 
	 	(b)	 	To the extent that the Plan provides for issuance of certificates to reflect
the transfer of shares of Stock, the transfer of such shares may be effected on a non-




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	 	 	 	certificated basis, to the extent not prohibited by applicable law or the rules of
any stock exchange.





          12.4 Transferability. Awards under the Plan are not transferable except as designated
by a Non-Employee Director by will or by the laws of descent and distribution. To the extent that
the Non-Employee Director who receives an award under the Plan has the right to exercise such
award, the award may be exercised during the lifetime of the Non-Employee Director only by the
Non-Employee Director.




          12.5 Notices. Any notice or document required to be filed with the Committee under
the Plan will be properly filed if delivered or mailed by registered mail, postage prepaid, to the
Committee, in care of the Company, at its principal executive offices. The Committee may, by
advance written notice to affected persons, revise such notice procedure from time to time. Any
notice required under the Plan (other than a notice of election) may be waived by the person
entitled to notice.




          12.6 Form and Time of Elections. Unless otherwise specified herein, each election
required or permitted to be made by any Non-Employee Director or other person entitled to benefits
under the Plan, and any permitted modification or revocation thereof, shall be in writing filed
with the Committee at such times, in such form, and subject to such restrictions and limitations,
not inconsistent with the terms of the Plan, as the Committee shall require. Any notice required
under the Plan may be waived by the person entitled thereto.




          12.7 Agreement With the Company. At the time of an award to a Non-Employee Director
under the Plan, the Committee may require a Non-Employee Director to enter into an agreement with
the Company in a form specified by the Committee, agreeing to the terms and conditions of the Plan
and to such additional terms and conditions, not inconsistent with the Plan, as the Committee may,
in its sole discretion, prescribe.




          12.8 Limitation of Implied Rights.





	 	(a)	 	Neither a Non-Employee Director nor any other person shall, by reason of the
Plan, acquire any right in or title to any assets, funds or property of the Company
whatsoever, including, without limitation, any specific funds, assets, or other
property which the Company, in its sole discretion, may set aside in anticipation of a
liability under the Plan. A Non-Employee Director shall have only a contractual right
to the amounts, if any, payable under the Plan, unsecured by any assets of the Company.
Nothing contained in the Plan shall constitute a guarantee by the Company that the
assets of such companies shall be sufficient to pay any benefits to any person.
	 
	 	(b)	 	The Plan does not constitute a contract of continued service, and participation
in the Plan shall not give any Non-Employee Director the right to be retained as a
director of the Company, nor any right or claim to any benefit under the Plan, unless
such right or claim has specifically accrued under the terms of the Plan. Except as
otherwise provided in the Plan, no award under the Plan shall confer




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	 	 	 	upon the holder thereof any right as a shareholder of the Company prior to the date
on which he fulfills all service requirements and other conditions for receipt of
such rights.





          12.9 Evidence. Evidence required of anyone under the Plan may be by certificate,
affidavit, document or other information which the person acting on it considers pertinent and
reliable, and signed, made or presented by the proper party or parties.




          12.10 Gender and Number. Where the context admits, words in one gender shall include
the other gender, words in the singular shall include the plural and the plural shall include the
singular.




          12.11 Source of Payments. The provisions of Sections 9 and 10 constitute only
unfunded, unsecured promises of the Company to make payments to directors (or other persons) in the
future in accordance with the terms of the Plan.




          12.12 Nonassignment. Neither a director’s nor any other person’s rights to payments
under the Plan are subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment or garnishment by creditors of the director.




          12.13 Code Section 409A. Notwithstanding Section 13, the Committee reserves the right
to revise the Plan and any Stock Awards granted hereunder as it deems necessary or advisable, in
its sole discretion and without the consent of the Non-Employee Director, to comply with Section
409A of the Code or to otherwise avoid the imposition of any additional tax or income recognition
under Section 409A of the Code prior to the actual receipt of shares of Stock pursuant to any Stock
Award.




     13. Amendment and Termination. The Board may, at any time, amend or terminate the
Plan, provided that, subject to subsection 5.3 (relating to certain adjustments to shares) and
subsection 10.3 (relating to lump sum payments of amounts held in a Non-Employee Director’s
Deferred Compensation Account), no amendment or termination may, without the consent of the
Non-Employee Director or beneficiary, if applicable, materially adversely affect the rights of any
Non-Employee Director or beneficiary under any award made under the Plan or rights already accrued
hereunder prior to the date such amendment is adopted by the Board.



     14. Change in Control. Notwithstanding any provision in the Plan to the contrary,
upon a Change in Control, all outstanding Options will become fully exercisable and all outstanding
Stock Awards shall become fully vested. For purposes of the Plan, the term “Change in Control”
means a change the beneficial ownership of the Company’s voting stock or a change in the
composition of the Board which occurs as follows:




	 	(a)	 	Any “person” (as such term is used in Section 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) is or becomes a
beneficial owner, directly or indirectly, of stock of the Company representing 30
percent or more of the total voting power of the Company’s then outstanding stock.




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	 	(b)	 	A tender offer (for which a filing has been made with the Securities Exchange
Commission (“SEC”) which purports to comply with the requirements of Section 14(d) of
the Exchange Act and the corresponding SEC rules) is made for the stock of the Company,
which has not been negotiated and approved by the Board. In case of a tender offer
described in this paragraph (b), the Change in Control will be deemed to have occurred
upon the first to occur of (i) any time during the offer when the person (using the
definition in (a) above) making the offer owns or has accepted for payment stock of the
Company with 25 percent or more of the total voting power of the Company’s stock, or
(ii) three business days before the offer is to terminate unless the offer is withdrawn
first, if the person making the offer could own, by the terms of the offer plus any shares owned by this person, stock with 50 percent or more of the total voting power of
the Company’s stock when the offer terminates.
	 
	 	(c)	 	Individuals who were the Board’s nominees for election as directors of the
Company immediately prior to a meeting of the shareholders of the Company involving a
contest for the election of directors shall not constitute a majority of the Board
following the election.”






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