**Exhibit10.2**

** **

JANUS CAPITAL GROUP INC.

 

2004 Employment Inducement Award Plan

 

(Amended and Restated as of January 22, 2008)

 

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Table of Contents

 
| **Article**                                                                     | ** ** | **Page** |
|---------------------------------------------------------------------------------|------------|----------|
|                                                                            |       |     |
| 1.   History, Effective Date, Objectives and  Duration                |       | 1        |
|                                                                            |       |     |
| 2.   Definitions                                                      |       | 1        |
|                                                                            |       |     |
| 3.   Administration                                                   |       | 9        |
|                                                                            |       |     |
| 4.   Shares Subject to the Plan and Maximum  Awards                   |       | 11       |
|                                                                            |       |     |
| 5.   Eligibility and General Conditions of  Awards                    |       | 12       |
|                                                                            |       |     |
| 6.   Stock Options                                                    |       | 16       |
|                                                                            |       |     |
| 7.   Stock Appreciation Rights and Limited Stock  Appreciation Rights |       | 17       |
|                                                                            |       |     |
| 8.   Restricted Shares                                                |       | 18       |
|                                                                            |       |     |
| 9.   Performance Units and Performance Shares                         |       | 19       |
|                                                                            |       |     |
| 10.  Bonus Shares                                                          |       | 20       |
|                                                                            |       |     |
| 11.  Beneficiary Designation                                               |       | 20       |
|                                                                            |       |     |
| 12.  Deferrals                                                             |       | 21       |
|                                                                            |       |     |
| 13.  Rights of Employees/Directors/Consultants                             |       | 21       |
|                                                                            |       |     |
| 14.  Change of Control                                                     |       | 21       |
|                                                                            |       |     |
| 15.  Amendment, Modification, and Termination                              |       | 22       |
|                                                                            |       |     |
| 16.  Withholding                                                           |       | 23       |
|                                                                            |       |     |
| 17.  Successors                                                            |       | 24       |
|                                                                            |       |     |
| 18.  Additional Provisions                                                 |       | 25       |

 

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**Janus Capital Group Inc.**

**2004 Employment Inducement Award Plan**

 

*(AS ADOPTED EFFECTIVE AS OF APRIL26, 2004 AND SUBSEQUENTLY AMENDED AND RESTATED ON January 22, 2008)*

 

# **Article 1.   History, Effective Date, Objectives andDuration**

#  

## 1.1              History.  Janus CapitalGroup Inc., a Delaware corporation (the “Company”), has established the JanusCapital Group Inc. 2004 Employment Inducement Award Plan, as set forth herein,and as the same may be amended from time to time (the “Plan”).  The Plan was adopted by the CompensationCommittee of the Board of Directors of the Company on May 12, 2004, andwas ratified by the Board of Directors of the Company (the “Board”) on May 13,2004, to be effective on April 26, 2004 (the “Effective Date”).  The first grant made in accordance with theterms of this Plan is the grant made to the Company’s incoming Chief InvestmentOfficer on April 26, 2004.

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## 1.2              Objectives of the Plan. The Plan is intended to assist the Company and its Subsidiaries inattracting new employees, and to allow new employees of the Company and itsSubsidiaries to acquire equity ownership in the Company, thereby strengtheningtheir commitment to the success of the Company and stimulating their efforts onbehalf of the Company.  The Plan also isintended to optimize the profitability and growth of the Company throughincentives which are consistent with the Company’s goals; to provide newemployees with an incentive for excellence in individual performance; and topromote teamwork among employees.  Toachieve these objectives, the Plan is intended to provide only Awards thatconstitute Employment Inducement Awards.

##  

## 1.3              Duration of the Plan. The Plan shall commence on the Effective Date and shall remain ineffect, subject to the right of the Board or the Plan Committee to amend orterminate the Plan at any time pursuant to Article 15 hereof, until allShares subject to it shall have been purchased or acquired according to thePlan’s provisions.

##  

**Article 2.   Definitions**

 

Whenever used inthe Plan, the following terms shall have the meanings set forth below:

 

## 2.1              “Article” means an Article ofthe Plan.

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## 2.2              “Award” means Options, RestrictedShares (awarded as Shares or Share Units), Bonus Shares (awarded as Shares orShare Units), stock appreciation rights (SARs), Performance Units, PerformanceShares or Dividend Equivalents granted under the Plan.

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## 2.3              “Award Agreement” means thewritten agreement by which an Award shall be evidenced.

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## 2.4              “Board” has the meaning set forthin Section 1.1.

 

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## 2.5              “Bonus Shares” means Shares orShare Units that are awarded to a Grantee without cost and without restrictionsas an incentive to become an employee of the Company or a Subsidiary.

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## 2.6              “Cause” means, unless otherwisedefined in an Award Agreement or any other agreement between the Grantee andthe Company or a Subsidiary,

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### (a)        before the occurrence of a Change of Control, any oneor more of the following, as determined by the Committee:

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#### (1)           a Grantee’s commission of a crime which,in the judgment of the Committee, resulted or is likely to result in damage orinjury to the Company or a Subsidiary;

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#### (2)           the material violation by the Grantee ofwritten policies of the Company or a Subsidiary;

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#### (3)           the habitual neglect or failure by theGrantee in the performance of his or her duties to the Company or a Subsidiary(but only if such neglect or failure is not remedied within a reasonable remedialperiod after Grantee’s receipt of written notice from the Company whichdescribes such neglect or failure in reasonable detail and specifies theremedial period); or

####  

#### (4)           action or inaction by the Grantee inconnection with his or her duties to the Company or a Subsidiary resulting, inthe judgment of the Committee, in material injury to the Company or aSubsidiary; and

####  

(b)        from and after the occurrence of a Change of Control,the occurrence of any one or more of the following, as determined in the goodfaith and reasonable judgment of the Committee:

 

(1)           Grantee’s convictionfor committing an act of fraud, embezzlement, theft, or any other actconstituting a felony involving moral turpitude or causing material damage orinjury, financial or otherwise, to the Company;

 

(2)           a demonstrably willfuland deliberate act or failure to act which is committed in bad faith, withoutreasonable belief that such action or inaction is in the best interests of theCompany, which causes material damage or injury, financial or otherwise, to theCompany (but only if such act or inaction is not remedied within 15 businessdays of Grantee’s receipt of written notice from the Company which describesthe act or inaction in reasonable detail); or

 

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(3)           the consistent grossneglect of duties or consistent wanton negligence by the Grantee in theperformance of the Grantee’s duties (but only if such neglect or negligence isnot remedied within a reasonable remedial period after Grantee’s receipt ofwritten notice from the Company which describes such neglect or negligence inreasonable detail and specifies the remedial period).

 

## 2.7     “Changeof Control” means, unless otherwise defined in an Award Agreement, any oneor more of the following:

##  

### (a)                      the acquisition or holding by any person,entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) ofthe 1934 Act), other than by the Company or any Subsidiary or any employeebenefit plan of the Company or a Subsidiary (and other than by KCSI prior tothe Spin-off Distribution), of beneficial ownership (within the meaning of Rule 13d-3under the 1934 Act) of 20% or more of the then-outstanding Common Stock or thethen-outstanding Voting Power of the Company; *provided,however*, that no Change of Control shall occur solely by reason ofany such acquisition by a corporation with respect to which, after suchacquisition, more than 60% of both the then-outstanding common shares and thethen-outstanding Voting Power of such corporation are then beneficially owned,directly or indirectly, by the persons who were the beneficial owners of thethen-outstanding Common Stock and Voting Power of the Company immediatelybefore such acquisition, in substantially the same proportions as their respectiveownership, immediately before such acquisition, of the then-outstanding CommonStock and Voting Power of the Company; or

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### (b)                     individuals who, as of the date of theSpin-off Distribution, constitute the Board (the “Incumbent Board”) cease forany reason to constitute at least 75% of the Board; *provided*that any individual who becomes a director after the Effective Date whoseelection or nomination for election by the Company’s stockholders was approvedby at least 75% of the Incumbent Board (other than an election or nomination ofan individual whose initial assumption of office is in connection with anactual or threatened “election contest” relating to the election of thedirectors of the Company (as such terms are used in Rule 14a-11 under the1934 Act) or “tender offer” (as such term is used in Section 14(d) ofthe 1934 Act) or a proposed Extraordinary Transaction (as defined below)) shallbe deemed to be a member of the Incumbent Board; or

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### (c)                      approval by the stockholders of theCompany of any one or more of the following:

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### (1)           a merger, reorganization, consolidationor similar transaction (any of the foregoing, an “Extraordinary Transaction”)with respect to which persons who were the respective beneficial owners of thethen-outstanding Common Stock and Voting Power of the Company immediatelybefore such Extraordinary Transaction would not, if such ExtraordinaryTransaction were to be consummated immediately after such stockholder approval(but otherwise in accordance with the terms presented in writing to thestockholders of the Company for their approval), beneficially own, directly orindirectly, more than 60% of both the then-outstanding common shares and thethen-outstanding Voting Power of the 

 

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### corporationresulting from such Extraordinary Transaction, in substantially the sameproportions as their respective ownership, immediately before suchExtraordinary Transaction, of the then-outstanding Common Stock and VotingPower of the Company,

###  

(2)           a liquidation or dissolution of theCompany, or

 

(3)           the sale or other disposition of all or substantiallyall of the assets of the Company in one transaction or a series of relatedtransactions.

 

Notwithstandingthe above, that for each Award subject to Section 409A of the Code, aChange of Control shall be deemed to have occurred under this Plan with respectto such Award only if a change in the ownership or effective control of theCompany or a change in the ownership of a substantial portion of the assets ofthe Company shall also be deemed to have occurred under Section 409A ofthe Code.

 

## 2.8              “Change of Control Value” meansthe Fair Market Value of a Share on the date of a Change of Control.

##  

## 2.9              “Code” means the Internal RevenueCode of 1986, as amended from time to time, and regulations and rulingsthereunder.  References to a particularsection of the Code include references to successor provisions of the Code orany successor code

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## 2.10            “Committee,” “Plan Committee”and “Management Committee” have the meanings set forth in Article 3.

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## 2.11            “Common Stock” means the commonstock, $.01 par value, of the Company.

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## 2.12            “Company” has the meaning setforth in Section 1.1.

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## 2.13            “Covered Employee” means a Granteewho, as of the date that the value of an Award is recognizable as taxableincome, is one of the group of “covered employees,” within the meaning of Codesection 162(m).

##  

## 2.14            “Disability” means, unlessotherwise defined in an Award Agreement, total disability as determined forpurposes of the long term disability plan of the Company or any Subsidiary orother employer of the Grantee, and disability shall be deemed to occur forpurposes of the Plan on the date such determination of disability is made.

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## 2.15            [Reserved.]

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## 2.16            “Dividend Equivalents” has themeaning set forth in Section 13.3.

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## 2.17            “Effective Date” has the meaningset forth in Section 1.1.

 

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## 2.18-A        “EligiblePerson” means any employee (including any officer) of the Company or anySubsidiary who is determined by the Committee to be eligible for an EmploymentInducement Award, including any such employee who is on an approved leave ofabsence, layoff, or has been subject to a disability which does not qualify asa Disability.

##  

## 2.18-B        “EmploymentInducement Award” means an Award to a Grantee that is determined by theCommittee to qualify as an employment inducement award within the meaning ofNew York Stock Exchange Rule 303A.08 (or any successor rule relatingto shareholder approval of equity compensation plans that includes an exemptionfor such awards and that is applicable to the Company).

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## 2.19            “Exchange Act” means theSecurities Exchange Act of 1934, as amended from time to time.  References to a particular section of theExchange Act include references to successor provisions.

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## 2.20            “Extraordinary Transaction” hasthe meaning set forth in Section 2.7.

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## 2.21            “Fair Market Value” means (A) withrespect to any property other than Shares, the fair market value of suchproperty determined by such methods or procedures as shall be established fromtime to time by the Committee, and (B) with respect to Shares, unlessotherwise determined by the Committee, as of any date, (i) the average ofthe high and low trading prices on the date of determination on the New YorkStock Exchange (or, if no sale of Shares was reported for such date, on thenext preceding date on which a sale of Shares was reported); (ii) if theShares are not listed on the New York Stock Exchange, the average of the highand low trading prices of the Shares on such other national exchange on whichthe Shares are principally traded or as reported by the National Market System,or similar organization, or if no such quotations are available, the average ofthe high bid and low asked quotations in the over-the-counter market asreported by the National Quotation Bureau Incorporated or similarorganizations; or (iii) in the event that there shall be no public market forthe Shares, the fair market value of the Shares as determined by the Committee.

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## 2.22            “Freestanding SAR” means an SARthat is granted independently of any other Award.

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## 2.23            “Good Reason” means, unlessotherwise defined in an Award Agreement, the occurrence after a Change ofControl, without a Grantee’s prior written consent, of any one or more of thefollowing unless the Company remedies such event within sixty (60) days afterthe Grantee provides a detailed notice to the Company of the acts or omissionsresulting in the Grantee’s belief that “Good Reason” exists (which such noticemust be provided to the Company within 90 days of the event):

 

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## (a)        the assignment to the Grantee of anyduties which result in a material adverse change in the Grantee’s position(including status, offices, titles, and reporting requirements), authority,duties, or other responsibilities with the Company, or any other action of theCompany which results in a material adverse change in such position, authority,duties, or responsibilities, other than an insubstantial and inadvertent actionwhich is remedied by the Company promptly after receipt of notice thereof givenby the Grantee,

##  

## (b)        any relocation of the Grantee of morethan 40 miles from the place where the Grantee was located at the time of theChange of Control provided that such relocation results in a material negativechange to the Grantee’s employment, or

##  

## (c)        a material reduction or elimination ofany component of the Grantee’s rate of compensation, including (x) basesalary, (y) any incentive payment or (z) benefits or prerequisites whichthe Grantee was receiving immediately prior to a Change of Control.

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## 2.24            “Grant Date” has the meaning set forth in Section 5.2.

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## 2.25            “Grantee” means an individual who has beengranted an Award.

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## 2.26            [Reserved.]

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## 2.27            “including” or “includes”means “including, without limitation,” or “includes, without limitation,”respectively.

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## 2.28            “LTI Stock Plan” means the JanusCapital Group Inc. 1998 Long Term Incentive Stock Plan or the Janus CapitalGroup Inc. 2005 Long Term Incentive Stock Plan, as the same may be amended fromtime to time, and any successor thereto.

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## 2.30            “Option” means an option grantedunder Article 6 of the Plan.

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## 2.31            “Option Price” means the price atwhich a Share may be purchased by a Grantee pursuant to an Option.

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## 2.32            “Option Term” means the periodbeginning on the Grant Date of an Option and ending on the expiration date ofsuch Option, as specified in the Award Agreement for such Option and as may,consistent with the provisions of the Plan, be extended from time to time bythe Committee prior to the expiration date of such Option then in effect.

##  

## 2.33            “Outside Director” means a memberof the Board who is not an employee of the Company or any Subsidiary and whomeets the other requirements to be an outside director (as that term is definedfor purposes of the regulations under Code section 162(m)).

 

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## 2.34            “Performance-Based Exception”means the performance-based exception from the tax deductibility limitations ofCode section 162(m).

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## 2.35            “Performance Period” has themeaning set forth in Section 9.2.

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## 2.36            “Performance Share” or “PerformanceUnit” has the meaning set forth in Article 9.

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## 2.37            “Period of Restriction” means theperiod during which the transfer of Restricted Shares is limited in some way(the length of the period being based on the passage of time, the achievementof performance goals, or upon the occurrence of other events as determined bythe Committee), and the Shares are subject to a substantial risk of forfeiture,as provided in Article 8.

##  

## 2.38            “Person” shall have the meaningascribed to such term in Section 3(a)(9) of the Exchange Act and usedin Sections 13(d) and 14(d) thereof, including a “group” as definedin Section 13(d) thereof.

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## 2.39            “Plan” has the meaning set forthin Section 1.1.

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## 2.40            “Required Withholding” has themeaning set forth in Article 16.

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## 2.41            “Restricted Shares” means Sharesor Share Units that are subject to forfeiture if the Grantee does not satisfythe conditions specified in the Award Agreement applicable to such Shares orShare Units.

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## 2.42            “Retirement” means, for anyGrantee who is an employee of the Company or a Subsidiary (or is a director ofthe Company, if the Grantee was an employee at the time he received anEmployment Inducement Award), (A) for any Award other than a Share Unit, aTermination of Affiliation by the Grantee upon having both attained agefifty-five (55) and completed at least ten (10) years of service with theCompany or a Subsidiary or (B) for any Share Unit, having bothattained age fifty-five (55) and completed at least ten (10) years ofservice with the Company or a Subsidiary.

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## 2.43            “Rule 16b-3” means Rule 16b-3promulgated by the SEC under the Exchange Act, as amended from time to time,together with any successor rule, as in effect from time to time.

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## 2.44            “SAR” means a stock appreciationright.

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## 2.45            “SEC” means the United StatesSecurities and Exchange Commission, or any successor thereto.

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## 2.46            “Section” means, unless thecontext otherwise requires, a Section of the Plan.

 

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## 2.47            “Section 16 Person” means aperson who is subject to potential liability under Section 16(b) ofthe 1934 Act with respect to transactions involving equity securities of theCompany.

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## 2.48            “Share” means a share of CommonStock.

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## 2.49            “Share Unit” means a bookkeepingentry representing the equivalent of one share of Common Stock that is payablein the form of Common Stock unless at the time of grant the Plan Committee orthe Board designates it to be paid in cash or any combination of cash andCommon Stock.

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## 2.50            “Spin-off Distribution” means thedistribution by KCSI of at least 80% of the outstanding Shares, as a result ofwhich the Company ceases to be a subsidiary of KCSI.

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## 2.51            “Strike Price” of any SAR shallequal, for any Tandem SAR (whether such Tandem SAR is granted at the same timeas or after the grant of the related Option), the Option Price of such Option,or for any other SAR, 100% of the Fair Market Value of a Share on the GrantDate of such SAR; *provided* that the Committee mayspecify a higher Strike Price in the Award Agreement.

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## 2.52            “Subsidiary” means a United Statesor foreign corporation or limited liability company, partnership or othersimilar entity with respect to which the Company owns, directly or indirectly,50% (or such lesser percentage as the Committee may specify, which percentagemay be changed from time to time and may be different for different entities)or more of the Voting Power of such corporation, limited liability company,partnership or other similar entity and “Consolidated Subsidiary” means aSubsidiary that is consolidated with the Company for financial reportingpurposes.

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## 2.53            “Tandem SAR” means an SAR that isgranted in connection with a related Option, the exercise of which shallrequire cancellation of the right to purchase a Share under the related Option(and when a Share is purchased under the related Option, the Tandem SAR shallsimilarly be canceled).

##  

## 2.54            “Termination of Affiliation”occurs on the first day on which an individual is for any reason no longerproviding services to the Company or any Subsidiary in the capacity of anemployee, director or consultant, or with respect to an individual who is anemployee or director of, or consultant to, a corporation which is a Subsidiary,the first day on which such corporation ceases to be a Subsidiary; provided,however, that for each Award subject to Section 409A of the Code, aTermination of Affiliation shall be deemed to have occurred under this Planwith respect to such Award on the first day on which an individual hasexperienced a “separation from service” within the meaning of Section 409Aof the Code.

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## 2.55            [Reserved.]

 

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## 2.56            “Voting Power” means the combinedvoting power of the then-outstanding securities of a corporation entitled tovote generally in the election of directors.

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## **Article 3.   Administration**

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## 3.1              Committee

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## (a)        Subject to Article 15, and to Section 3.2,the Plan shall be administered by the Board, or a committee appointed by theBoard to administer the Plan (“Plan Committee”).  To the extent the Board considers itdesirable to comply with or qualify under Rule 16b-3 or meet thePerformance-Based Exception, the Plan Committee shall consist of two or moredirectors of the Company, all of whom qualify as Outside Directors and “non-employeedirectors” within the meaning of Rule 16b-3.  The number of members of the Plan Committeeshall from time to time be increased or decreased, and shall be subject to suchconditions, in each case as the Board deems appropriate to permit transactionsin Shares pursuant to the Plan to satisfy such conditions of Rule 16b-3and the Performance-Based Exception as then in effect.

##  

##### (b)        The Board or the Plan Committee mayappoint and delegate to another committee (“Management Committee”) any or allof the authority of the Board or the Plan Committee, as applicable, withrespect to Awards to Grantees other than Grantees who are Section 16Persons at the time any such delegated authority is exercised.  With respect to Awards that are intended tomeet the Performance-Based Exception and that are made to a Grantee who isexpected to be a Covered Employee, such delegation shall not include anyauthority, which if exercised by the Management Committee rather than by thePlan Committee, would cause the Grantee’s Award to fail to meet thePerformance-Based Exception.

#####  

##### (c)        Any references herein to “Committee” arereferences to the Board, or the Plan Committee or the Management Committee, asapplicable.

#####  

## 3.2              Powers of Committee

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## Subject to the express provisions of the Plan, theCommittee has full and final authority and sole discretion as follows:

##  

### (a)        to determine when, to whom and in whattypes and amounts Awards should be granted and the terms and conditionsapplicable to each Award, including the benefit payable under any SAR,Performance Unit or Performance Share, and whether or not specific Awards shallbe granted in connection with other specific Awards, and if so whether theyshall be exercisable cumulatively with, or alternatively to, such otherspecific Awards;

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### (b)        to determine the amount, if any, that aGrantee shall pay for Restricted Shares, whether to permit or require thepayment of cash dividends thereon to be deferred and the terms 

 

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### related thereto,when Restricted Shares (including Restricted Shares acquired upon the exerciseof an Option) shall be forfeited and whether such shares shall be held inescrow;

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### (c)        to construe and interpret the Plan and tomake all determinations necessary or advisable for the administration of thePlan;

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### (d)        to make, amend, and rescind rules relatingto the Plan, including rules with respect to the exercisability andnonforfeitability of Awards upon the Termination of Affiliation of a Grantee;

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### (e)        to determine the terms and conditions ofall Award Agreements (which need not be identical) and, with the consent of theGrantee, to amend any such Award Agreement at any time, among other things, topermit transfers of such Awards to the extent permitted by the Plan; *provided* that the consent of the Grantee shall not berequired for any amendment which (i) does not adversely affect the rightsof the Grantee, or (ii) is necessary or advisable (as determined by theCommittee) to carry out the purpose of the Award as a result of any new orchange in existing applicable law;

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### (f)         to cancel, with the consent of theGrantee, outstanding Awards and to grant new Awards in substitution therefore;

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### (g)        to accelerate the exercisability(including exercisability within a period of less than six months after theGrant Date) of, and to accelerate or waive any or all of the terms andconditions applicable to, any Award or any group of Awards for any reason andat any time, including in connection with a Termination of Affiliation;

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### (h)        subject to Sections 1.3 and 5.3, toextend the time during which any Award or group of Awards may be exercised;

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### (i)         to make such adjustments or modificationsto Awards to Grantees working outside the United States as are advisable tofulfill the purposes of the Plan or to comply with applicable local law;

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### (j)         to impose such additional terms andconditions upon the grant, exercise or retention of Awards as the Committeemay, before or concurrently with the grant thereof, deem appropriate, includinglimiting the percentage of Awards which may from time to time be exercised by aGrantee;

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### (k)        to ensure that any Award granted underthe Plan qualifies as an Employment Inducement Award; and

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### (l)         to take any other action with respect toany matters relating to the Plan for which it is responsible.

 

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All determinationson all matters relating to the Plan or any Award Agreement may be made in thesole and absolute discretion of the Committee, and all such determinations ofthe Committee shall be final, conclusive and binding on all Persons.  No member of the Committee shall be liablefor any action or determination made with respect to the Plan or any Award.

 

**Article 4.   Shares Subject to the Plan and MaximumAwards**

 

4.1              Number of Shares Available for Grants. Subject to adjustment as provided in Section 4.2 and subject to theterms of Section 18.9, the number of Shares hereby reserved for issuanceunder the Plan shall be 4,000,000, and the maximum number of Shares for whichAwards may be granted to any Grantee on any Grant Date, when aggregated withthe number of Shares for which Awards have previously been granted to suchGrantee in the same calendar year shall not exceed one percent (1%) of thetotal Shares outstanding as of such Grant Date; provided, however, that thetotal number of Shares for which Awards may be granted to any Grantee in anycalendar year shall not exceed 2,000,000. For purposes of determining the maximum for a Grantee under thepreceding sentence, any award of Shares that the Grantee receives under the LTIStock Plan shall be treated as if it were an Award of Shares under this Plan.  If any Shares subject to an Award grantedhereunder are forfeited or such Award otherwise terminates without the issuanceof such Shares or of other consideration in lieu of such Shares, the Sharessubject to such Award, to the extent of any such forfeiture or terminationshall again be available for grant under the Plan.  If any Shares (whether subject to or receivedpursuant to an Award granted hereunder, purchased on the open market, orotherwise obtained) are withheld, applied as payment, or sold pursuant toprocedures approved by the Committee and the proceeds thereof applied aspayment in connection with the exercise of an Award or the withholding of taxesrelated thereto, such Shares, to the extent of any such withholding or payment,shall again be available or shall increase the number of Shares available, asapplicable, for grant under the Plan. The Committee may from time to time determine the appropriatemethodology for calculating the number of Shares (i) issued pursuant tothe Plan, and (ii) granted to any Grantee pursuant to the Plan (or the LTIStock Plan).  Shares issued pursuant tothe Plan may be treasury Shares or newly-issued Shares.

 

## 4.2              Adjustments in Authorized Shares. In the event that the Committee determines that any dividend or otherdistribution (whether in the form of cash, Shares, other securities, or otherproperty), recapitalization, stock split, reverse stock split, subdivision,consolidation or reduction of capital, reorganization, merger, scheme ofarrangement, split-up, spin-off or combination involving the Company orrepurchase or exchange of Shares or other rights to purchase Shares or othersecurities of the Company, or other similar corporate transaction or event thatoccurs at any time after the Spin-off Distribution affects the Shares such thatany adjustment is determined by the Committee to be appropriate in order toprevent dilution or enlargement of the benefits or potential benefits intendedto be made available under the Plan, then the Committee shall, in such manneras it may deem equitable, adjust any or all of (i) the number and type ofShares (or other securities or property) with respect to which Awards may begranted, (ii) the 

 

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## number and type ofShares (or other securities or property) subject to outstanding Awards, and (iii) thegrant or exercise price with respect to any Award or, if deemed appropriate,make provision for a cash payment to the holder of an outstanding Award or thesubstitution of other property for Shares subject to an outstanding Award; *provided*, that the number of Shares subject to any Awarddenominated in Shares shall always be a whole number.

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# **Article 5.   Eligibility and General Conditions of Awards**

#  

## 5.1              Eligibility. Subject to Section 18.9, the Committee may grant Awards to anyEligible Person, whether or not he or she has previously received an Award.

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## 5.2              Grant Date.  The GrantDate of an Award shall be the date on which the Committee grants the Award orsuch later date as specified by the Committee.

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## 5.3              Maximum Term. The Option Term or other period during which an Award may be outstandingshall under no circumstances extend more than 10 years after the GrantDate, and shall be subject to earlier termination as herein provided; *provided, however,* that any deferral of a cash payment or ofthe delivery of Shares that is permitted or required by the Committee pursuantto Article 12 may, if so permitted or required by the Committee, extendmore than 10 years after the Grant Date of the Award to which the deferralrelates.

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## 5.4              Award Agreement. To the extent not set forth in the Plan, the terms and conditions ofeach Award (which need not be the same for each grant or for each Grantee)shall be set forth in an Award Agreement.

##  

## 5.5              Restrictions on Share Transferability. The Committee may impose such restrictions on any Shares acquiredpursuant to the exercise or vesting of an Award as it may deem advisable,including restrictions under applicable federal securities laws.

##  

## 5.6              Termination of Affiliation. Except as otherwise provided in an Award Agreement, and subject to theprovisions of Section 14.1, the extent to which the Grantee shall have theright to exercise, vest in, or receive payment in respect of an Award followingTermination of Affiliation shall be determined in accordance with the followingprovisions of this Section 5.6.

##  

##### (a)        For Cause.  If a Granteehas a Termination of Affiliation for Cause, (i) the Grantee’s RestrictedShares that are forfeitable shall thereupon be forfeited, subject to theprovisions of Section 8.4 regarding repayment of certain amounts to theGrantee; and (ii) any unexercised Option, or SAR, and any PerformanceShare or Performance Unit with respect to which the Performance Period has notended as of the date of such Termination of Affiliation, shall terminateeffective immediately upon such Termination of Affiliation.

#####  

##### (b)        On Account of Death or Disability. If a Grantee has a Termination of Affiliation on account of death orDisability, then:

 

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(1)        the Grantee’s Restricted Shares that were forfeitableshall thereupon become nonforfeitable;

 

(2)        any unexercised Option or SAR, whether or notexercisable on the date of such Termination of Affiliation, may be exercised,in whole or in part, within the first 12 months after such Termination ofAffiliation (but only during the Option Term) by the Grantee or, after his orher death, by (i) his or her personal representative or the person to whomthe Option or SAR, as applicable, is transferred by will or the applicable lawsof descent and distribution, or (ii) the Grantee’s beneficiary designatedin accordance with Article 11; and

 

(3)        the benefit payable with respect to any PerformanceShare or Performance Unit with respect to which the Performance Period has notended as of the date of such Termination of Affiliation on account of death orDisability shall be equal to the product of the Fair Market Value of a Share asof the date of such Termination of Affiliation or the value of the PerformanceUnit specified in the Award Agreement (determined as of the date of suchTermination of Affiliation), as applicable, multiplied successively by each ofthe following:

 

(i)            a fraction, the numerator of which is thenumber of months (including as a whole month any partial month) that haveelapsed since the beginning of such Performance Period until the date of suchTermination of Affiliation and the denominator of which is the number of months(including as a whole month any partial month) in the Performance Period; and

 

(ii)           a percentage determined by the Committeethat would be earned under the terms of the applicable Award Agreement assumingthat the rate at which the performance goals have been achieved as of the dateof such Termination of Affiliation would continue until the end of thePerformance Period, or, if the Committee elects to compute the benefit afterthe end of the Performance Period, the Performance Percentage, as determined bythe Committee, attained during the Performance Period.

 

##### (c)     On Account of Retirement. If a Grantee has a Termination of Affiliation on account of Retirement,then:

#####  

(1)        the Grantee’s Restricted Shares that wereforfeitable shall thereupon become nonforfeitable;

 

(2)        any unexercised Option or SAR, whether ornot exercisable on the date of such Termination of Affiliation, may beexercised, in whole or in part, within the first five years after suchTermination of Affiliation (but only during the Option Term) by the Grantee or,after his or her death, by (i) his or her personal representative or theperson to whom the 

 

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Option or SAR, asapplicable, is transferred by will or the applicable laws of descent anddistribution, or (ii) the Grantee’s beneficiary designated in accordancewith Article 11; and

 

(3)        the benefit payable with respect to anyPerformance Share or Performance Unit with respect to which the PerformancePeriod has not ended as of the date of such Termination of Affiliation onaccount of Retirement shall be equal to the product of the Fair Market Value ofa Share as of the date of such Termination of Affiliation or the value of thePerformance Unit specified in the Award Agreement (determined as of the date ofsuch Termination of Affiliation), as applicable, multiplied successively byeach of the following:

 

(i)            a fraction, the numerator of which is the number ofmonths (including as a whole month any partial month) that have elapsed sincethe beginning of such Performance Period until the date of such Termination ofAffiliation and the denominator of which is the number of months (including asa whole month any partial month) in the Performance Period; and

 

(ii)           a percentage determined by the Committee that would beearned under the terms of the applicable Award Agreement assuming that the rateat which the performance goals have been achieved as of the date of suchTermination of Affiliation would continue until the end of the PerformancePeriod, or, if the Committee elects to compute the benefit after the end of thePerformance Period, the Performance Percentage, as determined by the Committee,attained during the Performance Period.

 

##### (d)   Any Other Reason. If a Grantee has a Termination of Affiliation for any reason other thanfor Cause, death, Disability or Retirement, then:

#####  

(1)           the Grantee’s Restricted Shares, to theextent forfeitable on the date of the Grantee’s Termination of Affiliation,shall be forfeited on such date;

 

(2)           any unexercised Option or SAR, to the extentexercisable immediately before the Grantee’s Termination of Affiliation, may beexercised in whole or in part, not later than three months after suchTermination of Affiliation (but only during the Option Term) by the Grantee or,after his or her death, by (i) his or her personal representative or theperson to whom the Option or SAR, as applicable, is transferred by will or theapplicable laws of descent and distribution, or (ii) the Grantee’sbeneficiary designated in accordance with Article 11;

 

(3)           if such Termination of Affiliation is theresult of the Grantee’s termination of employment by the Corporation or aConsolidated Subsidiary (other than for Cause), then, in addition to givingeffect to the immediately preceding clause (2), the portion of any Option thatwas not exercisable immediately before the Grantee’s Termination ofAffiliation, may be exercised in whole or in part, not later than three monthsafter such Termination of Affiliation (but only during the Option Term) by theGrantee or, after his or her death, by (i) his or her 

 

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personalrepresentative or the person to whom the Option is transferred by will or theapplicable laws of descent and distribution, or (ii) the Grantee’sbeneficiary designated in accordance with Article 11; and

 

(4)           any Performance Shares or PerformanceUnits with respect to which the Performance Period has not ended as of the dateof such Termination of Affiliation shall terminate immediately upon suchTermination of Affiliation.

 

## 5.7              Nontransferability of Awards.

##  

(a)        Except as provided in Section 5.7(c) below,each Award, and each right under any Award, shall be exercisable only by theGrantee during the Grantee’s lifetime, or, if permissible under applicable law,by the Grantee’s guardian or legal representative.

 

(b)        Except as provided in Section 5.7(c) below,no Award (prior to the time, if applicable, Shares are issued in respect ofsuch Award), and no right under any Award, may be assigned, alienated, pledged,attached, sold or otherwise transferred or encumbered by a Grantee otherwisethan by will or by the laws of descent and distribution (or in the case ofRestricted Shares, to the Company), and any such purported assignment,alienation, pledge, attachment, sale, transfer or encumbrance shall be void andunenforceable against the Company or any Subsidiary; *provided*,that the designation of a beneficiary shall not constitute an assignment,alienation, pledge, attachment, sale, transfer or encumbrance.

 

(c)        To the extent and in the manner permitted by theCommittee, and subject to such terms, conditions, restrictions or limitationsthat may be prescribed by the Committee, a Grantee may transfer an Award to (i) aspouse, sibling, parent, child (including an adopted child) or grandchild (anyof which, an “Immediate Family Member”) of the Grantee; (ii) a trust, theprimary beneficiaries of which consist exclusively of the Grantee or ImmediateFamily Members of the Grantee; or (iii) a corporation, partnership or similarentity, the owners of which consist exclusively of the Grantee or ImmediateFamily Members of the Grantee.

 

## 5.8              Cancellation and Rescission of Awards. Unless the Award Agreement specifies otherwise, the Committee maycancel, rescind, suspend, withhold, or otherwise limit or restrict anyunexercised Award at any time if the Grantee is not in compliance with allapplicable provisions of the Award Agreement and the Plan or if the Grantee hasa Termination of Affiliation for Cause.

##  

## 5.9              Loans and Guarantees. The Committee may, subject to applicable law, (i) allow a Granteeto defer payment to the Company of all or any portion of the Option Price of anOption or the purchase price of Restricted Shares, or (ii) cause theCompany to loan to the Grantee, or guarantee a loan from a third party to theGrantee for, all or any portion of the Option Price of an Option or thepurchase price of Restricted Shares or all or any portion of any taxesassociated with the exercise of, nonforfeitability of, or payment of benefitsin connection with, an Award.  Any such 

 

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## payment deferral,loan or guarantee by the Company shall be on such terms and conditions as theCommittee may determine.

##  

# **Article 6.  Stock Options**

#  

## 6.1              Grant of Options. Subject to the terms and provisions of the Plan, Options may be grantedto any Eligible Person in such number, and upon such terms, and at any time andfrom time to time as shall be determined by the Committee.  Without in any manner limiting the generalityof the foregoing, and in a manner intended to comply with Section 409A ofthe Code, the Committee may grant to any Eligible Person, or permit anyEligible Person to elect to receive, an Option in lieu of or in substitutionfor any other compensation (whether payable currently or on a deferred basis,and whether payable under this Plan or otherwise) which such Eligible Personmay be eligible to receive from the Company or a Subsidiary.

##  

## 6.2              Award Agreement. Each Option grant shall be evidenced by an Award Agreement that shallspecify the Option Price, the Option Term, the number of shares to which theOption pertains, the time or times at which such Option shall be exercisableand such other provisions as the Committee shall determine.

##  

## 6.3              Option Price. The Option Price of an Option under this Plan shall be determined by theCommittee, and shall be equal to or more than 100% of the Fair Market Value ofa Share on the Grant Date; provided, however, that any Option that is (x) grantedto a Grantee in connection with the acquisition (“Acquisition”), howevereffected, by the Company of another corporation or entity (“Acquired Entity”)or the assets thereof, (y) associated with an option to purchase shares ofstock of the Acquired Entity or an affiliate thereof (“Acquired Entity Option”)held by such Grantee immediately prior to such Acquisition, and (z) intendedto preserve for the Grantee the economic value of all or a portion of suchAcquired Entity Option (“Substitute Option”) may, to the extent necessary toachieve such preservation of economic value, be granted with an Option Pricethat is less than 100% of the Fair Market Value of a Share on the Grant Date.

##  

6.4              Incentive Stock Options.  None of theOptions granted under this Plan shall be treated as “incentive stock options”for purposes of the requirements of Section 422 of the Code.

 

## 6.5              Payment.  Optionsgranted under this Article 6 shall be exercised by the delivery of awritten notice of exercise to the Company, setting forth the number of Shareswith respect to which the Option is to be exercised, accompanied by fullpayment for the Shares made by any one or more of the following means subjectto the approval of the Committee:

##  

(a)        cash, personal check or wire transfer;

 

(b)        Shares, valued at their Fair Market Value on the dateof exercise;

 

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(c)        Restricted Shares, each such Sharevalued at the Fair Market Value of a Share on the date of exercise;

 

(d)        subject to applicable law, pursuantto procedures approved by the Committee, through the sale of the Sharesacquired on exercise of the Option through a broker-dealer to whom the Granteehas submitted an irrevocable notice of exercise and irrevocable instructions todeliver promptly to the Company the amount of sale or loan proceeds sufficientto pay for such Shares, together with, if requested by the Company, the amountof federal, state, local or foreign withholding taxes payable by Grantee byreason of such exercise; or

 

(e)        when permitted by the Committee,payment may also be made in accordance with Section 5.9.

 

If any RestrictedShares (“Tendered Restricted Shares”) are used to pay the Option Price, anumber of Shares acquired on exercise of the Option equal to the number ofTendered Restricted Shares shall be subject to the same restrictions as theTendered Restricted Shares, determined as of the date of exercise of theOption.

 

# **Article 7.   Stock Appreciation Rights and Limited StockAppreciation Rights**

#  

## 7.1              Grant of SARs. Subject to the terms and conditions of the Plan, SARs may be granted toany Eligible Person at any time and from time to time as shall be determined bythe Committee.  The Committee may grantFreestanding SARs, Tandem SARs, or any combination thereof.

##  

The Committeeshall determine the number of SARs granted to each Grantee (subject to Article 4),the Strike Price thereof, and, consistent with Section 7.2 and the otherprovisions of the Plan, the other terms and conditions pertaining to suchSARs.  The Strike Price shall bedetermined by the Committee, and shall be equal to or more than 100% of theFair Market Value of a Share on the Grant Date; provided, however, that anOption that is (x) granted to a Grantee in connection with the acquisition(“Acquisition”), however effected, by the Company of another corporation orentity (“Acquired Entity”) or the assets thereof, (y) associated with anoption to purchase shares of stock of the Acquired Entity” or an affiliatethereof (“Acquired Entity Option”) held by such Grantee immediately prior tosuch Acquisition, and (z) intended to preserve for the Grantee theeconomic value of all or a portion of such Acquired Entity Option (“SubstituteOption”) may, to the extent necessary to achieve such preservation of economicvalue, be granted with an option price that is less than 100% of the FairMarket Value of a Share on the Grant Date, provided that such grant is made ina manner that will not result in the Substitute Option being subject to therequirements of Section 409A of the Code.

 

## 7.2              Exercise of Tandem SARs. Tandem SARs may be exercised for all or part of the Shares subject tothe related Award upon the surrender of the right to exercise the equivalent 

 

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## portion of the relatedAward.  A Tandem SAR may be exercisedonly with respect to the Shares for which its related Award is thenexercisable.

##  

Notwithstandingany other provision of this Plan to the contrary, with respect to a Tandem SAR,(i) the Tandem SAR will expire no later than the expiration of theunderlying Option; (ii) the value of the payout with respect to the TandemSAR may be for no more than 100% of the difference between the Option Price ofthe underlying Option and the Fair Market Value of the Shares subject to theunderlying Option at the time the Tandem SAR is exercised; and (iii) theTandem SAR may be exercised only when the Fair Market Value of the Sharessubject to the Option exceeds the Option Price of the Option.

 

## 7.3              Payment of SAR Amount. Upon exercise of an SAR, the Grantee shall be entitled to receivepayment from the Company in an amount determined by multiplying:

##  

##### (a)        the excess of the Fair Market Value of aShare on the date of exercise over the Strike Price;

#####  

by

 

##### (b)        the number of Shares with respect towhich the SAR is exercised;

#####  

*provided*that theCommittee may provide in the Award Agreement that the benefit payable onexercise of an SAR shall not exceed such percentage of the Fair Market Value ofa Share on the Grant Date as the Committee shall specify.  As provided by the Committee, the paymentupon SAR exercise shall either be in cash or in Shares which have an aggregateFair Market Value (as of the date of exercise of the SAR) equal to the amountof the payment, or in some combination thereof, as set forth in the AwardAgreement.

 

# **Article 8.   Restricted Shares**

#  

## 8.1              Grant of Restricted Shares. Subject to the terms and provisions of the Plan, the Committee, at anytime and from time to time, may grant Restricted Shares to any Eligible Personin such amounts as the Committee shall determine.

##  

## 8.2              Award Agreement. Each grant of Restricted Shares shall be evidenced by an Award Agreementthat shall specify the Period(s) of Restriction, the number of RestrictedShares granted, and such other provisions as the Committee shalldetermine.  The Committee may impose suchconditions and/or restrictions on any Restricted Shares granted pursuant to thePlan as it may deem advisable, including restrictions based upon theachievement of specific performance goals (Company-wide, divisional, Subsidiaryand/or individual), time-based restrictions on vesting, and/or restrictionsunder applicable securities laws.

 

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##  

## 8.3              Consideration. The Committee shall determine the amount, if any, that a Grantee shallpay for Restricted Shares.  Such paymentshall be made in full by the Grantee before the delivery of the shares or shareunits and in any event no later than 10 business days after the Grant Date forsuch shares or share units.

##  

## 8.4              Effect of Forfeiture.  If RestrictedShares are forfeited, and if the Grantee was required to pay for such shares orshare units or acquired such Restricted Shares upon the exercise of an Option,the Grantee shall be deemed to have resold such Restricted Shares to theCompany at a price equal to the lesser of (x) the amount paid by theGrantee for such Restricted Shares, or (y) the Fair Market Value of a Share orShare Unit on the date of such forfeiture. The Company shall pay to the Granteethe required amount as soon as is administratively practical. Such RestrictedShares shall cease to be outstanding, and shall no longer confer on the Granteethereof any rights as a stockholder of the Company, from and after the date ofthe event causing the forfeiture, whether or not the Grantee accepts theCompany’s tender of payment for such Restricted Shares.

##  

## 8.5              Escrow; Legends. The Committee may provide that any certificates for Restricted Shares (x) shallbe held (together with a stock power executed in blank by the Grantee) inescrow by the Secretary of the Company until such Restricted Shares becomenonforfeitable or are forfeited and/or (y) shall bear an appropriatelegend restricting the transfer of such Restricted Shares.  If any Restricted Shares becomenonforfeitable, the Company shall cause any certificates for such shares to beissued without such legend.

##  

# **Article 9.   Performance Units and Performance Shares**

# ** **

## 9.1              Grant of Performance Units andPerformance Shares.  Subject to the terms of the Plan, PerformanceUnits or Performance Shares may be granted to any Eligible Person in suchamounts and upon such terms, and at any time and from time to time, as shall bedetermined by the Committee.

##  

## 9.2              Value/Performance Goals. Each Performance Unit shall have an initial value that is established bythe Committee at the time of grant.  EachPerformance Share shall have an initial value equal to the Fair Market Value ofa Share on the date of grant.  TheCommittee shall set performance goals which, depending on the extent to whichthey are met, will determine the number or value of Performance Units orPerformance Shares that will be paid out to the Grantee.  For purposes of this Article 9, the timeperiod during which the performance goals must be met shall be called a “PerformancePeriod.”

##  

## 9.3              Earning of Performance Units and Performance Shares. Subject to the terms of this Plan, after the applicable PerformancePeriod has ended, the holder of Performance Units or Performance Shares shallbe entitled to receive a payout based on the number and value of PerformanceUnits or Performance Shares earned by the Grantee over the Performance Period,to 

 

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## be determined as afunction of the extent to which the corresponding performance goals have beenachieved.

##  

If a Grantee ispromoted, demoted or transferred to a different business unit of the Companyduring a Performance Period, then, to the extent the Committee determines theperformance goals or Performance Period are no longer appropriate, theCommittee may adjust, change or eliminate the performance goals or theapplicable Performance Period as it deems appropriate in order to make themappropriate and comparable to the initial performance goals or PerformancePeriod.

 

## 9.4              Form and Timing of Payment ofPerformance Units and Performance Shares.  Payment ofearned Performance Units or Performance Shares shall be made in a lump sumfollowing the close of the applicable Performance Period.  The Committee may pay earned PerformanceUnits or Performance Shares in the form of cash or in Shares (or in acombination thereof) which have an aggregate Fair Market Value equal to thevalue of the earned Performance Units or Performance Shares at the close of theapplicable Performance Period.  SuchShares may be granted subject to any restrictions deemed appropriate by theCommittee.  The form of payout of suchAwards shall be set forth in the Award Agreement pertaining to the grant of theAward.

##  

As determined bythe Committee, a Grantee may be entitled to receive any dividends declared withrespect to Shares which have been earned in connection with grants ofPerformance Units or Performance Shares but not yet distributed to theGrantee.  In addition, a Grantee may, asdetermined by the Committee, be entitled to exercise his or her voting rightswith respect to such Shares.

 

**Article 10.   Bonus Shares**

** **

Subject to the terms of the Plan, the Committee maygrant Bonus Shares to any Eligible Person, in such amount and upon such termsand at any time and from time to time as shall be determined by theCommittee.  The terms of such BonusShares shall be set forth in the Award Agreement pertaining to the grant of theAward.

 

**Article 11.   Beneficiary Designation**

** **

Each Grantee under the Plan may, from time to time,name any beneficiary or beneficiaries (who may be named contingently orsuccessively) to whom any benefit under the Plan is to be paid in case of hisor her death before he or she receives any or all of such benefit.  Each such designation shall revoke all priordesignations by the same Grantee, shall be in a form prescribed by the Company,and will be effective only when filed by the Grantee in writing with the Companyduring the Grantee’s lifetime.  In theabsence of any such designation, benefits remaining unpaid at the Grantee’sdeath shall be paid to the Grantee’s estate.

 

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**Article 12.   Deferrals**

 

The Committee maypermit or require a Grantee to defer receipt of the payment of cash or thedelivery of Shares that would otherwise be due by virtue of the exercise of anOption or SAR, the lapse or waiver of restrictions with respect to RestrictedShares, the satisfaction of any requirements or goals with respect toPerformance Units or Performance Shares, or the grant of Bonus Shares.  If any such deferral is required orpermitted, the Committee shall establish rules and procedures for suchdeferrals; provided, however, to the extent that such deferral is subject to Section 409Aof the Code, the rules and procedures established by the Committee shallcomply with Section 409A of the Code. Except as otherwise provided in an Award Agreement, any payment or anyShares that are subject to such deferral shall be made or delivered to theGrantee upon the Grantee’s Termination of Affiliation.

 

**Article 13.   Rights of Employees/Directors/Consultants**

** **

13.1            Employment.  Nothing inthe Plan shall interfere with or limit in any way the right of the Company toterminate any Grantee’s employment, directorship or consultancy at any time,nor confer upon any Grantee the right to continue in the employ or as adirector or consultant of the Company.

 

## 13.2            Participation. No employee shall have the right to be selected to receive an Awardunder the Plan or, having been so selected, to be selected to receive a futureAward.

##  

13.3            Dividend Equivalents. Subject to the provisions of the Plan and any Award, the recipient of anAward (including any Award deferred in accordance with procedures establishedpursuant to Article 12) may, if so determined by the Committee, beentitled to receive, currently or on a deferred basis, cash, stock or otherproperty dividends, or cash payments in amounts equivalent to cash, stock orother property dividends on shares of Common Stock (“Dividend Equivalents”)with respect to the number of shares of Common Stock covered by the Award, asdetermined by the Committee, in its sole discretion, and the Committee may providethat such amounts (if any) shall be deemed to have been reinvested inadditional shares or otherwise reinvested; provided, however, that if suchpayment of dividends or Dividend Equivalents would be subject to Section 409Aof the Code, no such payment may be made if it would fail to comply with therequirements set forth in Section 409A of the Code.

 

# **Article 14.   Change of Control**

# ** **

## 14.1            Change of Control. Except as otherwise provided in an Award Agreement, if a Change ofControl occurs, then:

##  

(a)        the Grantee’s Restricted Shares that wereforfeitable shall thereupon become nonforfeitable;

 

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(b)        any unexercised Option or SAR, whether or notexercisable on the date of such Change of Control, shall thereupon be fullyexercisable and may be exercised, in whole or in part; and

 

(c)        the Company shall immediately pay to theGrantee, with respect to any Performance Share or Performance Unit with respectto which the Performance Period has not ended as of the date of such Change ofControl, a cash payment equal to the product of (i) in the case of aPerformance Share, the Change of Control Value or (ii) in the case of aPerformance Unit, the value of the Performance Unit specified in the AwardAgreement, as applicable, multiplied successively by each of the following:

 

(1)           a fraction, the numerator of which is the number ofwhole and partial months that have elapsed between the beginning of suchPerformance Period and the date of such Change of Control and the denominatorof which is the number of whole and partial months in the Performance Period;and

 

(2)           a percentage equal to a greater of (x) the targetpercentage, if any, specified in the applicable Award Agreement or (y) themaximum percentage, if any, that would be earned under the terms of theapplicable Award Agreement assuming that the rate at which the performancegoals have been achieved as of the date of such Change of Control wouldcontinue until the end of the Performance Period.

 

## 14.2    409A Exception.  With respect to each Award that is subject toSection 409A of the Code, if a Change in Control would have occurred underthe Plan pursuant to the definition in Section 2.8 except that such Changein Control does not constitute a change in the ownership or effective controlof the Company or a change in the ownership of a substantial portion of theassets of the Company under Section 409A, then each such Award shallbecome vested and non-forfeitable; provided, however, that the Grantee shallnot be able to exercise the Award, and the Award shall not become payable,except in accordance with the terms of such Award or until such earlier time asthe exercise and/or payment complies with Section 409A of the Code.

##  

# **Article 15.   Amendment, Modification, and Termination**

# ** **

## 15.1            Amendment, Modification, and Termination. Subject to the terms of the Plan, the Board may at any time and fromtime to time, alter, amend, suspend or terminate the Plan in whole or in partwithout the approval of the Company’s stockholders.  The Board may delegate to the Plan Committeeany or all of the authority of the Board under Section 15.1 to alter,amend, suspend or terminate the Plan.

##  

## 15.2            Adjustment of Awards Upon the Occurrenceof Certain Unusual or Nonrecurring Events.  The Committeemay make adjustments in the terms and conditions of, and the criteria 

 

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## included in,Awards in recognition of unusual or nonrecurring events (including the eventsdescribed in Section 4.2) affecting the Company or the financialstatements of the Company or of changes in applicable laws, regulations, oraccounting principles, whenever the Committee determines that such adjustmentsare appropriate in order to prevent dilution or enlargement of the benefits orpotential benefits intended to be made available under the Plan; provided thatno such adjustment shall be authorized to the extent that such authority wouldbe inconsistent with the Plan’s meeting the requirements of thePerformance-Based Exception.

##  

## 15.3            Awards Previously Granted. Notwithstanding any other provision of the Plan to the contrary, notermination, amendment, or modification of the Plan shall adversely affect inany material way any Award previously granted under the Plan, without thewritten consent of the Grantee of such Award.

##  

# **Article 16.   Withholding**

# ** **

## 16.1            Withholding

##  

##### (a)     Mandatory Tax Withholding.

#####  

(1)           Whenever, under the Plan, Shares are tobe delivered upon exercise or payment of an Award or upon Restricted Sharesbecoming nonforfeitable, or any other event with respect to rights and benefitshereunder, the Company shall be entitled to require (i) that the Granteeremit an amount in cash, or if determined by the Committee, Mature Shares,sufficient to satisfy all federal, state, local and foreign tax withholdingrequirements related thereto (“Required Withholding”), (ii) thewithholding of such Required Withholding from compensation otherwise due to theGrantee or from any Shares or other payment due to the Grantee under the Planor (iii) any combination of the foregoing.

 

(2)           Any Grantee who makes a DisqualifyingDisposition or an election under Section 83(b) of the Code shallremit to the Company an amount sufficient to satisfy all resulting RequiredWithholding; *provided* that, in lieu of or inaddition to the foregoing, the Company shall have the right to withhold suchRequired Withholding from compensation otherwise due to the Grantee or from anyShares or other payment due to the Grantee under the Plan.

 

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(b)        Elective Share Withholding.

 

(1)           Subject to Section 16.1(b)(2), aGrantee may elect the withholding (“Share Withholding”) by the Company of aportion of the Shares subject to an Award upon the exercise of such Award or uponRestricted Shares becoming non-forfeitable or upon making an election under Section 83(b) ofthe Code (each, a “Taxable Event”) having a Fair Market Value equal to (i) theminimum amount necessary to satisfy Required Withholding liability attributableto the Taxable Event; or (ii) with the Committee’s prior approval, a greateramount, not to exceed the estimated total amount of such Grantee’s taxliability with respect to the Taxable Event.

 

(2)           Each Share Withholding election shall be subject tothe following conditions:

 

### (i)            any Grantee’s election shall be subject to theCommittee’s discretion to revoke the Grantee’s right to elect Share Withholdingat any time before the Grantee’s election if the Committee has reserved theright to do so in the Award Agreement;

###  

### (ii)           the Grantee’s election must be made before the date(the “Tax Date”) on which the amount of tax to be withheld is determined; and

###  

### (iii)          the Grantee’s election shall be irrevocable.

###  

## 16.2            Notification under Code Section 83(b). If the Grantee, in connection with the exercise of any Option, or thegrant of Restricted Shares, makes the election permitted under Section 83(b) ofthe Code to include in such Grantee’s gross income in the year of transfer theamounts specified in Section 83(b) of the Code, then such Granteeshall notify the Company of such election within 10 days of filing the noticeof the election with the Internal Revenue Service, in addition to any filingand notification required pursuant to regulations issued under Section 83(b) ofthe Code. The Committee may, in connection with the grant of an Award or at anytime thereafter prior to such an election being made, prohibit a Grantee frommaking the election described above.

##  

# **Article 17.   Successors**

# ** **

All obligations ofthe Company under the Plan with respect to Awards granted hereunder shall bebinding on any successor to the Company, whether the existence of suchsuccessor is the result of a direct or indirect purchase, merger,consolidation, or otherwise of all or substantially all of the business and/orassets of the Company.

 

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# **Article 18.   Additional Provisions**

# ** **

## 18.1            Gender and Number. Except where otherwise indicated by the context, any masculine term usedherein also shall include the feminine, the plural shall include the singularand the singular shall include the plural.

##  

## 18.2            Severability. If any part of the Plan is declared by any court or governmentalauthority to be unlawful or invalid, such unlawfulness or invalidity shall notinvalidate any other part of the Plan. Any Section or part of a Section sodeclared to be unlawful or invalid shall, if possible, be construed in a mannerwhich will give effect to the terms of such Section or part of a Section tothe fullest extent possible while remaining lawful and valid.

##  

## 18.3            Requirements of Law. The granting of Awards and the issuance of Shares under the Plan shallbe subject to all applicable laws, rules, and regulations, and to suchapprovals by any governmental agencies or stock exchanges as may berequired.  Notwithstanding any provisionof the Plan or any Award, Grantees shall not be entitled to exercise, orreceive benefits under, any Award, and the Company shall not be obligated todeliver any Shares or other benefits to a Grantee, if such exercise or deliverywould constitute a violation by the Grantee or the Company of any applicablelaw or regulation.

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## 18.4            Securities Law Compliance.

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(a)     If the Committee deems it necessary to comply with anyapplicable securities law, or the requirements of any stock exchange upon whichShares may be listed, the Committee may impose any restriction on Sharesacquired pursuant to Awards under the Plan as it may deem advisable.  All certificates for Shares delivered underthe Plan pursuant to any Award or the exercise thereof shall be subject to suchstop transfer orders and other restrictions as the Committee may deem advisableunder the rules, regulations and other requirements of the SEC, any stockexchange upon which Shares are then listed, any applicable securities law, andthe Committee may cause a legend or legends to be put on any such certificatesto make appropriate reference to such restrictions.  If so requested by the Company, the Granteeshall make a written representation to the Company that he or she will not sellor offer to sell any Shares unless a registration statement shall be in effectwith respect to such Shares under the Securities Act of 1993, as amended, andany applicable state securities law or unless he or she shall have furnished tothe Company evidence satisfactory to the Company that such registration is notrequired.

 

(b)     If the Committee determines that the exercise ornonforfeitability of, or delivery of benefits pursuant to, any Award wouldviolate any applicable provision of securities laws or the listing requirementsof any stock exchange upon which any of the Company’s equity securities arelisted, then the Committee may postpone any such exercise, nonforfeitability ordelivery, as applicable, but the Company shall use all reasonable efforts tocause such exercise, nonforfeitability or delivery to comply with all suchprovisions at the earliest practicable date.

 

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## 18.5            No Rights as a Stockholder.  A Grantee shall not have any rights as astockholder of the Company with respect to the Shares (other than RestrictedShares) which may be deliverable upon exercise or payment of such Award untilsuch shares have been delivered to him or her. Restricted Shares, whether heldby a Grantee or in escrow by the Secretary of the Company, shall confer on theGrantee all rights of a stockholder of the Company, except as otherwiseprovided in the Plan or Award Agreement. At the time of a grant of RestrictedShares, the Committee may require the payment of cash dividends thereon to bedeferred and, if the Committee so determines, reinvested in additionalRestricted Shares.  Stock dividends anddeferred cash dividends issued with respect to Restricted Shares shall be subjectto the same restrictions and other terms as apply to the Restricted Shares withrespect to which such dividends are issued. The Committee may provide forpayment of interest on deferred cash dividends.

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## 18.6            Nature of Payments. Awards shall be special incentive payments to the Grantee and shall notbe taken into account in computing the amount of salary or compensation of theGrantee for purposes of determining any pension, retirement, death or otherbenefit under (a) any pension, retirement, profit-sharing, bonus,insurance or other employee benefit plan of the Company or any Subsidiary or (b) anyagreement between (i) the Company or any Subsidiary and (ii) theGrantee, except as such plan or agreement shall otherwise expressly provide.

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## 18.7            Performance Measures. Subject to Section 18.9, the performance measure(s) to be usedfor purposes of such Awards shall be chosen from among the following:

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(a)        stock price;

(b)        market share;

(c)        sales (gross or net);

(d)        asset quality;

(e)        non-performing assets;

(f)         earnings per share;

(g)        return on equity;

(h)        costs;

(i)         operating income;

(j)         net income;

(k)        marketing-spending efficiency;

(l)         return on operating assets;

(m)       return on assets;

(n)        core non-interest income;

(o)        fund performance;

(p)        pre-tax margin;

(q)        pre-tax income; and/or

(r)         levels of cost savings.

 

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Any of the foregoing performance measures may beapplied, as determined by the Committee, in respect of the Company or any ofits subsidiaries, affiliates, business units or divisions and/or the Company’sor any of its subsidiary’s, affiliate’s, business unit’s or division’sworldwide, regional or country specific operations (or any combination of theforegoing).  Performance measures shallspecify whether they are to be measured relative to budgeted or other internalgoals, operations, performance or results of the Company and/or any of itssubsidiaries, affiliates, business units or divisions, or relative to theperformance of one or more peer groups of the Company and/or any of itssubsidiaries, affiliates, business units or divisions, with the composition of anysuch peer groups to be determined by the Committee at the time the performancemeasure is established.  Performancemeasures may be stated in the alternative or in combination.  The Committee shall have the right but notthe obligation to make adjustments to a performance measure to take intoaccount any unusual or extraordinary events, to the extent not inconsistentwith the requirements of the Performance-Based Exception.

 

The Committee mayadjust the determinations of the degree of attainment of the preestablishedperformance goals; provided, however, that Awards which are designed to qualifyfor the Performance-Based Exception may not be adjusted upward without theapproval of the Company’s stockholders (the Committee may adjust such Awardsdownward).

 

In the event thatapplicable tax and/or securities laws change to permit Committee discretion toalter the governing performance measures without obtaining stockholder approvalof such changes, and still qualify for the Performance-Based Exception, theCommittee shall have sole discretion to make such changes without obtainingstockholder approval.

 

## 18.8            Governing Law. The Plan, and all agreements hereunder, shall be construed in accordancewith and governed by the laws of the State of Delaware other than its lawsrespecting choice of law.

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## 18.9            Code Section 162(m). While the Performance-Based Exception continues to exist and to apply tothe Company pursuant to the Code, it is intended that the Committee shall beable to grant Awards under this Plan that qualify for the Performance-BasedException.  Therefore, in the event thatthe Company submits to shareholders, after the Effective Date, terms that areintended to satisfy the Performance-Based Exception with respect to the typesof Awards that may be made under this Plan, and those terms are approved by theshareholders (“Approved Terms”), then certain provisions of this Plan shallautomatically be modified as provided in this section effective as of the dateof such approval with respect to Awards that are granted on or after such date.

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## (a)     The provisions of Section 4.1 thatprovide maximum Awards for any Grantee shall be modified to reflect anyApproved Terms that limit the Awards that may be given to any individualGrantee.

 

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## (b)        The provisions of Section 5.1 thatspecify the eligibility of individuals for Awards under this Plan shall bemodified reflect any Approved Terms regarding eligibility, except that suchApproved Terms shall be narrowed (if necessary) so that only those individualswho otherwise satisfy the Approved Terms and who are also employees of theCompany or a Subsidiary shall be eligible.

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## (c)        The provisions of Section 18.7 thatspecify performance measures under this Plan shall be modified to reflect anyApproved Terms regarding performance measures.

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## (d)        In the case of any other provision of thePlan that is necessary for an Award to qualify for the Performance-BasedException, and with respect to which Approved Terms become effective, suchprovision of the Plan shall be modified to reflect such Approved Terms.

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18.10                  Code Section 409A Compliance.  Notwithstanding anyprovision of the Plan, to the extent that any Award would be subject to Section 409Aof the Code, no such Award may be granted if it would fail to comply with therequirements set forth in Section 409A of the Code.  To the extent that the Committee determinesthat the Plan or any Award is subject to Section 409A of the Code andfails to comply with the requirements of Section 409A of the Code,notwithstanding anything to the contrary contained in the Plan or in any AwardAgreement, the Committee, reserves the right to amend or terminate the Planand/or amend, restructure, terminate or replace the Award in order to cause theAward to either not be subject to Section 409A of the Code or to complywith the applicable provisions of such section.

 

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