EXHIBIT
10.1


 





 


 


2004
EQUITY INCENTIVE PLAN


 


 


Adopted May 7, 2004


 

















 


TABLE
OF CONTENTS


 


	
  1.

  	
  Purpose

  	
   

  
	
   

  	
   

  	
   

  
	
  2

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Annual Meeting

  	
   

  
	
   

  	
  Appreciation
  Right

  	
   

  
	
   

  	
  Board

  	
   

  
	
   

  	
  Change in
  Control

  	
   

  
	
   

  	
  Code

  	
   

  
	
   

  	
  Common Shares

  	
   

  
	
   

  	
  Covered
  Employee

  	
   

  
	
   

  	
  Date of Grant

  	
   

  
	
   

  	
  Deferral
  Period

  	
   

  
	
   

  	
  Deferred
  Shares

  	
   

  
	
   

  	
  Designated
  Subsidiary

  	
   

  
	
   

  	
  Effective Date

  	
   

  
	
   

  	
  Evidence
  of Award

  	
   

  
	
   

  	
  Exchange Act

  	
   

  
	
   

  	
  Incentive
  Stock Options

  	
   

  
	
   

  	
  Management
  Objectives

  	
   

  
	
   

  	
  Market
  Value per Share

  	
   

  
	
   

  	
  Non-Employee
  Director

  	
   

  
	
   

  	
  Optionee

  	
   

  
	
   

  	
  Option Price

  	
   

  
	
   

  	
  Option Right

  	
   

  
	
   

  	
  Participant

  	
   

  
	
   

  	
  Restricted
  Shares

  	
   

  
	
   

  	
  Retirement

  	
   

  
	
   

  	
  Rule 16b-3

  	
   

  
	
   

  	
  Securities Act

  	
   

  
	
   

  	
  Spread

  	
   

  
	
   

  	
  Subsidiary

  	
   

  
	
   

  	
  Termination
  for Cause

  	
   

  
	
   

  	
  Voting Shares

  	
   

  
	
   

  	
  Year of
  Service

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Shares Available Under
  the Plan

  	
   

  
	
   

  	
   

  	
   

  
	
  4

  	
  Option Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Appreciation
  Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Restricted
  Shares

  	
   

  



 

















 


	
  7.

  	
  Deferred
  Shares

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Awards to Non-Employee
  Directors

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Transferability

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Adjustments

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Change in
  Control

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Fractional
  Shares

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Withholding
  Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Participation
  by Employees of Designated Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  Foreign
  Employees

  	
   

  
	
   

  	
   

  	
   

  
	
  16.

  	
  Administration of the Plan

  	
   

  
	
   

  	
   

  	
   

  
	
  17.

  	
  Governing Law

  	
   

  
	
   

  	
   

  	
   

  
	
  18.

  	
  Amendments,
  Etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  19.

  	
  Termination

  	
   

  



 


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WASHINGTON
GROUP INTERNATIONAL, INC.


 


2004
EQUITY INCENTIVE PLAN


 


1.                                       Purpose.  The
purpose of the 2004 Equity Incentive Plan (this “Plan”) is to attract and retain
directors, officers and key employees for Washington Group International, Inc.
(the “Corporation”) and its Subsidiaries and to provide to such persons
incentives and rewards for superior performance.


 


2.                                       Definitions.  As used in this Plan:


 


“Annual
Meeting”  means the annual meeting
of stockholders of the Corporation.


 


“Appreciation Right” means a right granted pursuant
to Section 5 of this Plan.


 


“Board”
means the Board of Directors of the Corporation and, to the extent of any
delegation by the Board to a committee (or subcommittee thereof) pursuant to
Section 16 of this Plan, such committee (or subcommittee thereof).


 


“Change in Control” shall have the meaning provided
in Section 11 of this Plan.


 


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


 


“Common
Shares” means shares of common stock, par value $.01 per share, of the
Corporation or any security into which such shares of common stock may be
changed by reason of any transaction or event of the type referred to in Section 10
of this Plan.


 


“Covered Employee” means a Participant who is, or
who the Board determines may eventually become, a “covered employee” within the
meaning of Section 162(m) of the Code (or any successor provision).


 


“Date
of Grant” means the date specified by the Board on which a grant of Option
Rights, Appreciation Rights or a grant or sale of Restricted Shares or Deferred
Shares shall become effective (which date shall not be earlier than the date on
which the Board takes action with respect thereto) and shall also include the
date on which a grant of Option Rights to a Non-Employee Director becomes
effective pursuant to Section 8 of this Plan.


 


“Deferral Period” means the period of time during
which Deferred Shares are subject to deferral limitations under Section 7
of this Plan.


 


“Deferred Shares” means an award made pursuant to
Section 7 or Section 8 of this Plan of the right to receive Common
Shares at the end of a specified Deferral Period.


 


“Designated Subsidiary” means a Subsidiary that
is (a) not a corporation or (b) a corporation in which at the time
the Corporation owns or controls, directly or indirectly, less than 80% of the
total combined voting power represented by all classes of stock issued by such
corporation.


 


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“Effective Date” means the date this Plan is approved
by the Corporation’s shareholders.


 


“Evidence of Award” means an agreement, certificate,
resolution or other type of writing or other evidence approved by the Board
which sets forth the terms and conditions of the Option Rights, Appreciation
Rights, Restricted Shares, Deferred Shares or other awards.  An Evidence of Award may be in an electronic
medium, may be limited to a notation on the books and records of the
Corporation and, with the approval of the Board (or committee or subcommittee
thereof delegated pursuant to Section 16 of this Plan), need not be signed
by a representative of the Corporation or a Participant.


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder, as such law, rules and regulations may be amended
from time to time.


 


“Incentive Stock Options” means Option Rights
that are intended to qualify as “incentive stock options” under
Section 422 of the Code or any successor provision.


 


“Management Objectives” means the measurable
performance objective or objectives established pursuant to this Plan, when
determined by the Board to be applicable for Participants who have received
grants of Option Rights, Appreciation Rights, Restricted Shares and dividend
credits pursuant to this Plan. 
Management Objectives may be described in terms of Corporation-wide
objectives or objectives that are related to the performance of the individual
Participant or of the Subsidiary, division, department, region or function
within the Corporation or Subsidiary in which the Participant is employed.  The Management Objectives may be made
relative to the performance of other corporations.  The Management Objectives applicable to any award to a Covered
Employee shall be based on specified levels of or growth in one or more of the
following criteria:


 


1.                                       earnings;


 


2.                                       earnings
per share (earnings per share will be calculated without regard to any change
in accounting standards that may be required by the Financial Accounting
Standards Board after the goal is established);


 


3.                                       share
price;


 


4.                                       total
shareholder return;


 


5.                                       return
on invested capital, equity, or assets;


 


6.                                       operating
earnings;


 


7.                                       sales
growth;


 


8.                                       productivity
improvement;


 


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If the Board determines
that a change in the business, operations, corporate structure or capital
structure of the Corporation, or the manner in which it conducts its business,
or other events or circumstances render the Management Objectives unsuitable,
the Board may in its discretion modify such Management Objectives or the
related minimum acceptable level of achievement, in whole or in part, as the
Board deems appropriate and equitable, except in the case of a Covered Employee
where such action would result in the loss of the otherwise available exemption
under Section 162(m) of the Code. 
In such case, the Board shall not make any modification of the Management
Objectives or minimum acceptable level of achievement.


 


“Market Value per Share” means, as of any
particular date, the closing sale price per Common Share on the national
securities exchange on which the Common Shares are then listed, the final
reported bid sale price per Common Share on the principal national automated
system which the Common Shares are then quoted or, if the Common Shares are not
then listed or quoted, the fair market value of the Common Shares as determined
by the Board.


 


“Non-Employee Director” means a Director of the
Corporation who is not an employee of the Corporation or any Subsidiary.


 


“Optionee”
means the optionee named in an Evidence of Award evidencing an outstanding
Option Right.


 


“Option
Price” means the purchase price payable on exercise of an Option Right.


 


“Option
Right” means the right to purchase Common Shares upon exercise of an option
granted pursuant to Section 4 or Section 8 of this Plan.


 


“Participant”
means a person who is selected by the Board to receive benefits under this Plan
and who is at the time an officer or other key employee of the Corporation or
any one or more of its Subsidiaries, or who has agreed to commence serving in
any of such capacities within 90 days of the Date of Grant, and shall also
include each Non-Employee Director who receives an award of Appreciation Rights
pursuant to Section 5 of this Plan, an award of Restricted Shares pursuant
to Section 6 of this Plan, an award of Deferred Shares pursuant to
Section 7 of this Plan, or an award of Option Rights pursuant to Section 8
of this Plan; provided, however, that for purposes of Section 4 of this
Plan, Participant shall not include such Non-Employee Director.


 


“Restricted Shares” means Common Shares granted or
sold pursuant to Section 6 or Section 8 of this Plan as to which
neither the substantial risk of forfeiture nor the prohibition on transfers
referred to in such Section 6 has expired.


 


“Retirement”
means a termination of employment with the Corporation and its Subsidiaries at
or after the attainment of (a) age 65, (b) age 55 with at least ten Years of
Service, or (c) 30 Years of Service.


 


“Rule
l6b-3” means Rule 16b-3 of the Securities and Exchange Commission (or any
successor rule to the same effect) as in effect from time to time.


 


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“Securities Act” means the Securities Act of 1933, as
amended, and the rules and regulations thereunder, as such law, rules and
regulations may be amended from time to time.


 


“Spread”
means the excess of the Market Value per Share of the Common Shares on the date
when an Appreciation Right is exercised, or on the date when Option Rights are
surrendered in payment of the Option Price of other Option Rights, over the
Option Price provided for in the related Option Right.


 


“Subsidiary”
means a corporation, company or other entity (a) more than 50% of whose
outstanding shares or securities (representing the right to vote for the
election of directors or other managing authority) are, or (b) that does
not have outstanding shares or securities (as may be the case in a partnership,
joint venture or unincorporated association), but more than 50% of whose
ownership interest representing the right generally to make decisions for such
other entity is, now or hereafter, owned or controlled, directly or indirectly,
by the Corporation except that for purposes of determining whether any person
may be a Participant for purposes of any grant of Incentive Stock Options,
“Subsidiary” means any corporation in which at the time the Corporation owns or
controls, directly or indirectly, more than 50% of the total combined voting
power represented by all classes of stock issued by such corporation.


 


“Termination for Cause” means a termination of a
Participant’s employment following:


 


(a)                                  the
determination by the Corporation or the Board that the Participant has ceased
to perform his duties to the Corporation (other than as a result of his
incapacity due to physical or mental illness or injury), which failure amounts
to an intentional or extended neglect of his duties to the Corporation, or


(b)                                 the
Corporation’s or Board’s determination that the Participant has engaged in or
is about to engage in conduct materially injurious to the Corporation, or


(c)                                  the
Participant having been convicted of, or plead guilty or no contest to, a felony
or the failure of the Participant to follow instruction of the Board or his
direct superiors.


 


“Voting Shares” means at any time, the
then-outstanding securities entitled to vote generally in the election of
directors of the Corporation.


 


“Year of Service” means a year of service as defined
pursuant to the Washington Group International, Inc. 401(k) Retirement Savings
Plan (or any successor plan thereto) for vesting purposes.


 


3.                                      Shares Available Under the Plan.


 


(a)                                  Subject
to adjustment as provided in Section 10 of this Plan, the number of Common
Shares that may be issued or transferred (i) upon the exercise of Option
Rights or Appreciation Rights, (ii) as Restricted Shares and released from
substantial risks of forfeiture thereof, (iii) as Deferred Shares,
(iv) as awards to Non-Employee Directors or (v) in payment of dividend
equivalents paid with respect to awards made under the Plan shall not exceed in
the aggregate 2,400,000


 


4

















 


shares plus any shares relating to awards that expire or are forfeited
or cancelled.  Such shares may be shares
of original issuance or treasury shares or a combination of the foregoing.  Upon the payment of any Option Price by the
transfer to the Corporation of Common Shares or upon satisfaction of any
withholding amount by means of transfer or relinquishment of Common Shares,
there shall be deemed to have been issued or transferred under this Plan only
the net number of Common Shares actually issued or transferred by the Corporation.


 


(b)                                 Notwithstanding
anything in this Section 3, or elsewhere in this Plan, to the contrary,
the aggregate number of Common Shares actually issued or transferred by the
Corporation under this Plan in connection with any awards other than Option
Rights and Appreciation Rights shall not exceed 400,000 shares.  Further, no Participant shall be granted
Option Rights for more than 300,000 Common Shares during any calendar year,
subject to adjustments as provided in Section 10 of this Plan.


 


(c)                                  Upon
payment in cash of the benefit provided by any award granted under this Plan,
any shares that were covered by that award shall again be available for issue
or transfer hereunder.


 


(d)                                 Notwithstanding
any other provision of this Plan to the contrary, in no event shall any
Participant in any calendar year receive more than 300,000 Appreciation Rights,
subject to adjustments as provided in Section 10 of this Plan.


 


(e)                            Notwithstanding
any other provision of this Plan to the contrary, in no event shall any
Participant in any calendar year receive more than 200,000 Restricted Shares or
200,000 Deferred Shares, subject to adjustments as provided in Section 10
of this Plan.


 


4.                                      Option Rights.  The Board may, from time to time and upon
such terms and conditions as it may determine, authorize the granting to
Participants of options to purchase Common Shares.  Each such grant may utilize any or all of the authorizations, and
shall be subject to all of the requirements, contained in the following
provisions:


 


(a)                                  Each
grant shall specify the number of Common Shares to which it pertains, subject
to the limitations set forth in Section 3 of this Plan.


 


(b)                                 Each
grant shall specify an Option Price per share, which shall be set by the Board;
provided, however, that such price shall be no less than the Market Value of a
share of Common Stock on the Date of Grant. 
In addition, except as provided in Section 10, no changes shall be
made to any Option Price after the Date of Grant without shareholder approval.


 


(c)                                  Each
such Option Right shall become exercisable as determined by the Board and set
forth in the applicable Option Rights Agreement.  Such Option rights shall become exercisable in full immediately
in the event of a  Change in
Control.  Each such Option Right granted
under this Plan shall expire no later than ten years


 


5

















 


from the Date of Grant and shall be subject to earlier termination as
hereinafter provided and as set forth in the applicable Option Rights
Agreement.


 


(d)                                 Each
such Incentive Stock Option shall terminate automatically and without further
notice after the employee ceases to be an employee of the Company and its
Subsidiaries for any reason other than as described in Section 4(e) of
this Plan; provided, however, that the employee shall have until the first to
occur of (i) the stated expiration date of such Option Right or
(ii) the 90th calendar day following the effective date of any
such termination of employment to exercise Option Rights that had vested and
become exercisable as of such effective date of termination of employment to
exercise Incentive Stock Options that had vested and become exercisable as of
such effective date of termination of employment.


 


(e)                                  In
the event of the Optionee’s disability, each of the then outstanding Incentive
Stock Options of such holder may be exercised at any time within one year after
such disability, but in no event after the expiration date of the term of such
Incentive Stock Option.  In the event
of  the Optionee’s (i) death or (ii)
Retirement under a retirement plan of the company or one of its Subsidiaries at
or after the earliest voluntary retirement age provided for in such retirement
plan or retirement at any earlier age with consent of the Board, each of the
then outstanding Incentive Stock Options of such holder may be exercised at any
time within three years after such death or retirement, but in no event after
the expiration date of the term of such Incentive Stock Options.


 


(f)                                    Each
grant shall specify whether the Option Price shall be payable (i) in cash or by
check acceptable to the Corporation, (ii) by the actual or constructive
transfer to the Corporation of nonforfeitable, unrestricted Common Shares owned
for more than six months by the Optionee (or other consideration authorized
pursuant to subsection (g) below) having a value at the time of exercise
equal to the total Option Price or (iii) by a combination of such methods of
payment.


 


(g)                                 The
Board may determine, at or after the Date of Grant, that payment of the Option
Price of any option (other than an Incentive Stock Option) may also be made in
whole or in part in the form of Restricted Shares or other Common Shares that
are forfeitable or subject to restrictions on transfer, Deferred Shares or
other Option Rights (based on the Spread on the date of exercise).  Unless otherwise determined by the Board at
or after the Date of Grant, whenever any Option Price is paid in whole or in
part by means of any of the forms of consideration specified in this paragraph,
the Common Shares received upon the exercise of the Option Rights shall be
subject to such risks of forfeiture or restrictions on transfer as may
correspond to any that apply to the consideration surrendered, but only to the
extent of (i) the number of shares or (ii) the Spread of any
unexercisable portion of Option Rights surrendered.


 


(h)                                 Any
grant may provide for deferred payment of the Option Price from the proceeds of
sale through a bank or broker on a date satisfactory to the Corporation of some
or all of the shares to which such exercise relates.


 


6

















 


(i)                                     Successive
grants may be made to the same Participant whether or not any Option Rights
previously granted to such Participant remain unexercised.


 


(j)                                     Any
grant of Option Rights may specify Management Objectives that must be achieved
as a condition to the exercise of such rights.


 


(k)                                  Option
Rights granted under this Plan may be (i) options, including, without
limitation, Incentive Stock Options, that are intended to qualify under
particular provisions of the Code, (ii) options that are not intended so
to qualify or (iii) combinations of the foregoing.


 


(l)                                     The
Board may, at or after the Date of Grant of any Option Rights (other than
Incentive Stock Options), provide for the payment of dividend equivalents to
the Optionee on either a current or deferred or contingent basis or may provide
that such equivalents shall be credited against the Option Price.


 


(m)                               The
exercise of an Option Right shall result in the cancellation on a
share-for-share basis of any related Appreciation Right authorized under
Section 5 of this Plan.


 


(n)                                 Each
grant of Option Rights shall be evidenced by an Option Rights Agreement, which
shall contain such terms and provisions, consistent with this Plan, as the
Board may approve.


 


(o)                                 Each
grant of Option  Rights shall be subject
to the provisions of Section 18(g) of this Plan.


 


5.                                      Appreciation Rights.  The
Board may also authorize the granting to any Optionee of Appreciation Rights in
respect of Option Rights granted hereunder at any time prior to the exercise or
termination of such related Option Rights; provided, however, that an
Appreciation Right awarded in relation to an Incentive Stock Option must be
granted concurrently with such Incentive Stock Option.  An Appreciation Right shall be a right of
the Optionee, exercisable by surrender of the related Option Right, to receive
from the Corporation an amount determined by the Board, which shall be
expressed as a percentage of the Spread (not exceeding 100%) at the time of
exercise. Each such grant may utilize any or all of the authorizations, and
shall be subject to all of the requirements, contained in the following
provisions:


 


(a)                                  Any
grant may specify that the amount payable on exercise of an Appreciation Right
may be paid by the Corporation in cash, in Common Shares or in any combination
thereof and may either grant to the Participant or retain in the Board the
right to elect among those alternatives.


 


(b)                                 Any
grant may specify that the amount payable on exercise of an Appreciation Right
may not exceed a maximum specified by the Board at the Date of Grant.


 


7

















 


(c)                                  Any
grant may specify waiting periods before exercise and permissible exercise
dates or periods and shall provide that no Appreciation Right may be exercised
except at a time when the related Option Right is also exercisable and at a
time when the Spread is positive.


 


(d)                                 Any
grant may specify that such Appreciation Right may be exercised only in the
event of a Change in Control or other similar transaction or event.


 


(e)                                  Each
grant of Appreciation Rights shall be evidenced by an Evidence of Award that
shall describe such Appreciation Rights, identify the related Option Rights, state
that such Appreciation Rights are subject to all the terms and conditions of
this Plan, and contain such other terms and provisions, consistent with this
Plan, as the Board may approve.


 


(f)                                    Any
grant of Appreciation Rights may specify Management Objectives that must be
achieved as a condition of the exercise of such rights.


 


(g)                                 Each
grant of Appreciation Rights shall be subject to the provisions of
Section 18(g) of this Plan.


 


6.                                      Restricted Shares.  The Board
may also authorize the grant or sale to Participants of Restricted Shares. Each
such grant or sale may utilize any or all of the authorizations, and shall be
subject to all of the requirements, contained in the following provisions:


 


(a)                                  Each
such grant or sale shall constitute an immediate transfer of the ownership of
Common Shares to the Participant in consideration of the performance of
services, entitling such Participant to voting, dividend and other ownership
rights, but subject to the substantial risk of forfeiture and restrictions on
transfer hereinafter referred to.


 


(b)                                 Each
such grant or sale may be made without additional consideration or in
consideration of a payment by such Participant that is less than Market Value
per Share at the Date of Grant.


 


(c)                                  Each
such grant or sale shall provide that the Restricted Shares covered by such
grant or sale shall be subject, except (if the Board shall so determine) in the
event of a Change in Control or other similar transaction or event, for a
period of not less than three years to be determined by the Board at the Date
of Grant, to a “substantial risk of forfeiture” within the meaning of
Section 83 of the Code.


 


(d)                                 Each
such grant or sale shall provide that during the period for which such
substantial risk of forfeiture is to continue, the transferability of the
Restricted Shares shall be prohibited or restricted in the manner and to the
extent prescribed by the Board at the Date of Grant (which restrictions may
include, without limitation, rights of repurchase or first refusal in the
Corporation or provisions subjecting the Restricted Shares to a continuing
substantial risk of forfeiture in the hands of any transferee).


 


8

















 


(e)                                  Any
grant of Restricted Shares may specify Management Objectives that, if achieved,
will result in termination or early termination of the restrictions applicable
to such shares and each grant may specify with respect to such specified
Management Objectives, a minimum acceptable level of achievement and shall set
forth a formula for determining the number of Restricted Shares on which
restrictions will terminate if performance is at or above the minimum level,
but falls short of full achievement of the specified Management Objectives.


 


(f)                                    Any
such grant or sale of Restricted Shares may require that any or all dividends
or other distributions paid thereon during the period of such restrictions be
automatically deferred and reinvested in additional Restricted Shares, which
may be subject to the same restrictions as the underlying award.


 


(g)                                 Each
grant or sale of Restricted Shares shall be evidenced by an Evidence of Award
that shall contain such terms and provisions, consistent with this Plan, as the
Board may approve.  Unless otherwise
directed by the Board, all certificates representing Restricted Shares shall be
held in custody by the Corporation until all restrictions thereon shall have
lapsed, together with a stock power or powers executed by the Participant in
whose name such certificates are registered, endorsed in blank and covering
such Shares.


 


(h)                                 Each
grant or sale of Restricted Shares shall be subject to the provisions of
Section 18(g) of this Plan.


 


7.                                      Deferred Shares.  The Board may also authorize the granting or
sale of Deferred Shares to Participants. 
Each such grant or sale may utilize any or all of the authorizations,
and shall be subject to all of the requirements contained in the following
provisions:


 


(a)                                  Each
such grant or sale shall constitute the agreement by the Corporation to deliver
Common Shares to the Participant in the future in consideration of the
performance of services, but subject to the fulfillment of such conditions
during the Deferral Period as the Board may specify.


 


(b)                                 Each
such grant or sale may be made without additional consideration or in
consideration of a payment by such Participant that is less than the Market
Value per Share at the Date of Grant.


 


(c)                                  Each
such grant or sale shall be subject, except (if the Board shall so determine)
in the event of a Change in Control or other similar transaction or event, to a
Deferral Period as determined by the Board at the Date of Grant.


 


(d)                                 During
the Deferral Period, the Participant shall have no right to transfer any rights
under his or her award and shall have no rights of ownership in the Deferred
Shares and shall have no right to vote them, but the Board may, at or after the
Date of Grant, authorize the payment of dividend equivalents on such Shares on
either a current or deferred or contingent basis, either in cash or in
additional Common Shares.


 


9

















 


(e)                                  Each
grant or sale of Deferred Shares shall be evidenced by an Evidence of Award
containing such terms and provisions, consistent with this Plan, as the Board
may approve.


 


(f)                                    Each
grant or sale of Deferred Shares shall be subject to the provisions of
Section 18(g) of this Plan.


 


8.                                      Awards to Non-Employee Directors.  The Board may, from time to time and upon
such terms and conditions as it may determine, authorize the granting to
Non-Employee Directors of Option Rights and Appreciation Rights and may also
authorize the grant or sale of Restricted Shares and Deferred Shares to
Non-Employee Directors.


 


(a)                                  Each
grant of Option Rights awarded pursuant to this Section 8 shall be
evidenced by an Evidence of Award, and shall be subject to the following
additional terms and conditions:


 


(i)                                     Each
grant shall specify the number of Common Shares to which it pertains subject to
the limitations set forth in Section 3 of this Plan.


 


(ii)                                  Each
grant shall specify an Option Price per share, which shall be set by the Board;
provided, however, that such price shall be no less than the Market Value of a
share of Common stock on the Date of Grant. 
In addition, except as provided in Section 10, no change shall be made
to any Option Price after the Date of Grant without shareholder approval.


 


(iii)                               Each such Option Right
shall become exercisable as determined by the Board and set forth in the
applicable Option Rights Agreement. 
Such Option Rights shall become exercisable in full immediately in the
event of a Change in Control. Each such Option Right granted under this Plan
shall expire no later than ten years from the Date of Grant and shall be
subject to earlier termination as hereinafter provided and as set forth in the
applicable Option Rights Agreement.


 


(iv)                              Any
Option rights may provide that a Director who has completed a specified period
of service on the Board or attained a specified age will be entitled to
exercise any such Option Rights immediately in full at any time after any such
termination until their stated expiration date.


 


(v)                                 If
a Non-Employee Director subsequently becomes an employee of the Corporation or
a Subsidiary while remaining a member of the Board, any Option Rights held
under the Plan by such individual at the time of such commencement of
employment shall not be affected thereby.


 


(vi)                              Option
Rights may be exercised by a Non-Employee Director only upon payment to the
Corporation in full of the Option Price of the Common Shares to be delivered.  Such payment shall be made in cash or in 


 


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Common Shares previously
owned by the optionee for more than six months, or in a combination of cash and
such Common Shares.


 


(vii)                           The exercise of an Option
Right shall result in the cancellation on a share-for-share basis of any
related Appreciation Right authorized under this Plan.


 


(b)                                 Each
grant of Appreciation Rights pursuant to this Section 8 shall be upon
terms and conditions consistent with Section 5 of this Plan.


 


(c)                                  Each
grant or sale of Restricted Shares pursuant to this Section 8 shall be
upon terms and conditions consistent with Section 6 of this Plan.


 


(d)                                 Each
grant or sale of Deferred Shares pursuant to this Section 8 shall be upon
terms and conditions consistent with Section 7 of this Plan.


 


9.                                      Transferability.


 


(a)                                  Except
as otherwise determined by the Board, no Option Right, Appreciation Right or
other derivative security granted under the Plan shall be transferable by an
Optionee other than by will or the laws of descent and distribution, except (in
the case of a Participant who is not a Director or officer of the Corporation)
to a fully revocable trust of which the Optionee is treated as the owner for
federal income tax purposes.  Except as
otherwise determined by the Board, Option Rights and Appreciation Rights shall
be exercisable during the Optionee’s lifetime only by him or her or by his or
her guardian or legal representative. 
Notwithstanding the foregoing, the Board in its sole discretion, may
provide for transferability of particular awards under this Plan so long as
such provisions will not disqualify the exemption for other awards under Rule
16b-3.


 


(b)                                 The
Board may specify at the Date of Grant that part or all of the Common Shares
that are (i) to be issued or transferred by the Corporation upon the exercise
of Option Rights or Appreciation Rights or upon the termination of the Deferral
Period applicable to Deferred Shares or (ii) no longer subject to the
substantial risk of forfeiture and restrictions on transfer referred to in
Section 6 of this Plan, shall be subject to further restrictions on
transfer.


 


10.                               Adjustments.  The Board may make or provide for such
adjustments in the numbers of Common Shares covered by outstanding Option
Rights, Appreciation Rights and Deferred Shares granted hereunder, in the
prices per share applicable to such Option Rights and Appreciation Rights and
in the kind of shares covered thereby, as the Board, in its sole discretion,
exercised in good faith, may determine is equitably required to prevent
dilution or enlargement of the rights of Participants or Optionees that
otherwise would result from (a) any stock dividend, stock split, combination of
shares, recapitalization or other change in the capital structure of the
Corporation or (b) any merger, consolidation, spin-off, split-off,
spin-out, split-up, reorganization, partial or complete liquidation or other
distribution of assets or issuance of rights or warrants to purchase securities
or (c) any other corporate transaction or event having an effect


 


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similar to any of the
foregoing.  Moreover, in the event of
any such transaction or event, the Board, in its discretion, may provide in
substitution for any or all outstanding awards under this Plan such alternative
consideration as it, in good faith, may determine to be equitable in the
circumstances and may require in connection therewith the surrender of all
awards so replaced.  The Board may also
make or provide for such adjustments in the numbers of shares specified in
Section 3 of this Plan and in the number of Option Rights to be granted
automatically pursuant to Section 8 of this Plan as the Board in its sole
discretion, exercised in good faith, may determine is appropriate to reflect
any transaction or event described in this Section 10.


 


11.                               Change in Control.  For purposes of this Plan, a “Change in
Control” shall mean if at any time any of the following events shall have
occurred:


 


(a)                                  The
acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of
either: (i) the then-outstanding Common Shares or (ii) the Voting
Shares; provided, however, that the following acquisitions shall not constitute
a Change in Control: (A) any acquisition directly from the Corporation, (B) any
acquisition by the Corporation, (C) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Corporation or
any Subsidiary of the Corporation or (D) any acquisition by any Person
pursuant to a transaction that complies with clauses (i), (ii) and (iii) of
Section 11(c) of this Plan; or


 


(b)                                 Individuals
who, as of the Effective Date, constitute the Board (the “Incumbent Board”)
cease for any reason (other than death or disability) to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the Effective Date, whose election, or nomination for
election by the Corporation’s stockholders, was approved by a vote of at least
a majority of the directors then comprising the Incumbent Board (either by a
specific vote or by approval of the proxy statement of the Corporation in which
such person is named as a nominee for director, without objection to such
nomination) shall be considered as though such individual were a member of the
Incumbent Board, but excluding for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest (within the meaning of Rule 14a-11 of the Exchange Act) with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or


 


(c)                                  Consummation
of a reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Corporation (a “Business
Combination”), in each case, unless, following such Business Combination,
(i) all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Common Shares and Voting Shares
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then-outstanding shares of
common stock and the combined voting power of the then-outstanding voting securities
entitled to vote generally in


 


12

















 


the election of
directors, as the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity that as a result of such
transaction owns the Corporation or all or substantially all of the
Corporation’s assets either directly or through one or more subsidiaries) in
substantially the same proportions relative to each other as their ownership,
immediately prior to such Business Combination, of the Common Shares and Voting
Shares, as the case may be, (ii) no Person (excluding any entity resulting
from such Business Combination or any employee benefit plan (or related trust)
sponsored or maintained by the Corporation or such entity resulting from such
Business Combination) beneficially owns, directly or indirectly, 15% or more
of, respectively, the then-outstanding shares of common stock of the entity
resulting from such Business Combination, or the combined voting power of the
then-outstanding voting securities of such corporation except to the extent
that such ownership existed prior to the Business Combination and (iii) at
least a majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board providing for such Business Combination; or


 


(d)                                 Approval
by the stockholders of the Corporation of a complete liquidation or dissolution
of the Corporation.


 


12.                               Fractional Shares.  The
Corporation shall not be required to issue any fractional Common Shares
pursuant to this Plan.  The Board may
provide for the elimination of fractions or for the settlement of fractions in
cash.


 


13.                               Withholding Taxes.  To the
extent that the Corporation is required to withhold federal, state, local or
foreign taxes in connection with any payment made or benefit realized by a
Participant or other person under this Plan, and the amounts available to the
Corporation for such withholding are insufficient, it shall be a condition to
the receipt of such payment or the realization of such benefit that the
Participant or such other person make arrangements satisfactory to the
Corporation for payment of the balance of such taxes required to be withheld,
which arrangements (in the discretion of the Board) may include relinquishment
of a portion of such benefit. 
Participants shall also make such arrangements as the Corporation may
require for the payment of any withholding tax obligations that may arise in
connection with the disposition of shares acquired upon the execution of Option
Rights.  In no event, however, shall the
Corporation accept Common Shares for payment of taxes in excess of required tax
withholding rates, except that, in the discretion of the Committee, a
Participant or such other person may surrender Common Shares owned for more
than six months to satisfy any tax obligations resulting from any such
transaction.


 


14.                               Participation by Employees of
Designated Subsidiaries.  As a
condition to the effectiveness of any grant or award to be made hereunder to a
Participant who is an employee of a Designated Subsidiary, whether or not such
Participant is also employed by the Corporation or another Subsidiary, the
Board may require such Designated Subsidiary to agree to transfer to such
employee (when, as and if provided for under this Plan and any applicable
agreement entered into with any such employee pursuant to this Plan) the Common
Shares that would


 


13

















 


otherwise be delivered by
the Corporation, upon receipt by such Designated Subsidiary of any
consideration then otherwise payable by such Participant to the
Corporation.  Any such award shall be
evidenced by an agreement between the Participant and the Designated
Subsidiary, in lieu of the Corporation, on terms consistent with this Plan and
approved by the Board and such Designated Subsidiary.  All such Common Shares so delivered by or to a Designated
Subsidiary shall be treated as if they had been delivered by or to the
Corporation for purposes of Section 3 of this Plan, and all references to
the Corporation in this Plan shall be deemed to refer to such Designated
Subsidiary, except for purposes of the definition of “Board” and except in
other cases where the context otherwise requires.


 


15.                               Foreign Employees.  In order
to facilitate the making of any grant or combination of grants under this Plan,
the Board may provide for such special terms for awards to Participants who are
foreign nationals or who are employed by the Corporation or any Subsidiary
outside of the United States of America as the Board may consider necessary or
appropriate to accommodate differences in local law, tax policy or custom.
Moreover, the Board may approve such supplements to or amendments, restatements
or alternative versions of this Plan as it may consider necessary or
appropriate for such purposes, without thereby affecting the terms of this Plan
as in effect for any other purpose, and the Secretary or other appropriate
officer of the Corporation may certify any such document as having been
approved and adopted in the same manner as this Plan.  No such special terms, supplements, amendments or restatements,
however, shall include any provisions that are inconsistent with the terms of
this Plan as then in effect unless this Plan could have been amended to
eliminate such inconsistency without further approval by the shareholders of
the Corporation.


 


16.                               Administration of the Plan.


 


(a)                                  This
Plan shall be administered by the Board, which may from time to time delegate
all or any part of its authority under this Plan to a committee of the Board
(or subcommittee thereof), consisting of not less than three Non-Employee Directors
appointed by the Board of Directors, each of whom shall be a “Non-Employee
Director” within the meaning of Rule 16b-3 and an “outside director” within the
meaning of Section 162(m) of the Code. 
A majority of the committee (or subcommittee thereof) shall constitute a
quorum, and the action of the members of the committee (or subcommittee
thereof) present at any meeting at which a quorum is present, or acts
unanimously approved in writing, shall be the acts of the committee (or
subcommittee thereof).


 


(b)                                 The
interpretation and construction by the Board of any provision of this Plan or
of any agreement, notification or document evidencing the grant of Option
Rights, Appreciation Rights, Restricted Shares or Deferred Shares and any
determination by the Board pursuant to any provision of this Plan or of any
such agreement, notification or document shall be final and conclusive.  No member of the Board shall be liable for
any such action or determination made in good faith.


 


17.                               Governing Law.  The Plan and all awards granted and actions
taken thereunder shall be governed by and construed in accordance with the
internal substantive laws of the State of Delaware.


 


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18.                               Amendments, Etc.


 


(a)                                  The
Board may at any time and from time to time amend the Plan in whole or in part;
provided, however, that any amendment that must be approved by the shareholders
of the Corporation in order to comply with applicable law or the rules of any
national securities exchange upon which the Common Shares are traded or quoted
shall not be effective unless and until such approval has been obtained.  Presentation of this Plan or any amendment
hereof for shareholder approval shall not be construed to limit the
Corporation’s authority to offer similar or dissimilar benefits in plans that
do not require shareholder approval.


 


(b)                                 The
Board also may permit Participants to elect to defer the issuance of Common
Shares or the settlement of awards in cash under the Plan pursuant to such
rules, procedures or programs as it may establish for purposes of this
Plan.  The Board also may provide that
deferred issuances or settlements include the payment or crediting of dividend
equivalents or interest on the deferral amounts.


 


(c)                                  The
Board may condition the grant of any award or combination of awards authorized
under this Plan on the surrender or deferral by the Participant of his or her
right to receive a cash bonus or other compensation otherwise payable by the
Corporation or a Subsidiary to the Participant.


 


(d)                                 In
case of termination of employment by reason of death, disability or normal or
early retirement, or in the case of hardship or other special circumstances, of
a Participant who holds an Option Right or Appreciation Right not immediately exercisable
in full, or any Restricted Shares as to which the substantial risk of
forfeiture or the prohibition or restriction on transfer has not lapsed, or any
Deferred Shares as to which the Deferral Period has not been completed, or who
holds Common Shares subject to any transfer restriction imposed pursuant to
Section 9(b) of this Plan, the Board may, in its sole discretion,
accelerate the time at which such Option Right or Appreciation Right may be
exercised or the time at which such substantial risk of forfeiture or
prohibition or restriction on transfer will lapse or the time when such
Deferral Period will end or the time when such transfer restriction will
terminate or may waive any other limitation or requirement under any such
award.


 


(e)                                  This
Plan shall not confer upon any Participant any right with respect to
continuance of employment or other service with the Corporation or any
Subsidiary, nor shall it interfere in any way with any right the Corporation or
any Subsidiary would otherwise have to terminate such Participant’s employment
or other service at any time.


 


(f)                                    To
the extent that any provision of this Plan would prevent any Option Right that
was intended to qualify as an Incentive Stock Option from qualifying as such,
that provision shall be null and void with respect to such Option Right.  Such


 


15

















 


provision, however, shall
remain in effect for other Option Rights and there shall be no further effect
on any provision of this Plan.


 


(g)                                 This
Plan, the awarding and vesting of Appreciation Rights, Deferred Shares, Option
Rights or Restricted Shares under this Plan and the issuance and delivery of
Common Shares and the payment of money under this Plan or under Appreciation
Rights, Deferred Shares, Option Rights or Restricted Shares awarded hereunder
are subject to compliance with all applicable federal and state laws, rules and
regulations, including (without limitation) state and federal securities law
and federal margin requirements and to such approvals by any listing,
regulatory or governmental authority as may, in the opinion of counsel for the
Corporation, be necessary or advisable in connection therewith.  Any securities delivered under this Plan shall
be subject to such restrictions, and the person acquiring such securities
shall, if requested by the Corporation, provide such assurances and
presentations to the Corporation as the Corporation may deem necessary or
desirable to assure compliance with all applicable legal requirements. To the extent
permitted by applicable law, the Plan, Appreciation Rights, Deferred Shares,
Option Rights and Restricted Shares awarded hereunder shall be deemed amended
to the extent necessary to conform to such laws, rules and regulations.


 


19.                               Termination.  No grant shall be made under this Plan more
than ten years after the Effective Date, but all grants made on or prior to
such date shall continue in effect thereafter subject to the terms thereof and
of this Plan.


 


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