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Gateway Financial Holdings, Inc.
 2005 OMNIBUS STOCK OWNERSHIP AND
LONG TERM INCENTIVE PLAN
  ARTICLE I
 DEFINITIONS
  Annual Vesting Amount.
 Base Value.
 Board.
 Change in Control Transaction.
 Code.
 Committee.
 Common Stock.
 Death.
 Director.
 Disability.




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Distribution Date.
 Dividend Equivalent Credit.
 Dividend Equivalent Unit.
 Effective Date.
 Eligible Employees.
 (i)
    
    Such individual must be a full time employee of the Corporation or a Subsidiary. For this
purpose, an individual shall be considered to be an employee only if there exists between
the Corporation or a Subsidiary and the individual the legal and bona fide relationship of
employer and employee. In determining whether such relationship exists, the regulations of
the United States Treasury Department relating to the determination of such relationship for
the purpose of collection of income tax at the source on wages shall be applied.
 (ii)
    
    Such individual is identified by the Committee as a key employee who is in a position
to significantly influence the long-term success of the Corporation.(iii)
    
    If the Registration shall not have occurred, such individual must have such
knowledge and experience in financial and business matters that he or she is capable of
evaluating the merits and risks of the investment involved in the receipt and/or exercise
of a Right.
 (iv) Such individual, being otherwise an Eligible Employee under the foregoing items, shall
have been selected by the Committee as a person to whom a Right or Rights shall be granted under
the Plan.
 Exercise Price.
 Fair Market Value.
 (i)
    
    if the Common Stock was traded on a stock exchange on the date as of which such
determination is made, then the Fair Market Value will be equal to the closing price
reported by the applicable composite-transactions report for such date;(ii)
    
    if on the date as of which such determination is made, quotations for the Common
Stock are regularly listed on the NASDAQ system or another comparable system, the fair
market value of a share of Common Stock shall be deemed to be equal to the closing price
for the Common Stock quoted on such system for the trading date as of the date as of which
such determination is made; and if a closing price is not available for such date, then
the fair market value shall be equal to the closing price on the most recent trading day
for which such a price is available;
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(iii) if no such quotations are available, the fair market value of a share of Common Stock
shall be deemed to be the average of the closing bid and asked prices furnished by a professional
securities dealer making a market in such shares, as selected by the Committee, for the trading
date first preceding the date as of which such determination is made; and
 (iv)
    
    if the Committee determines that the price as determined above does not represent
the fair market value of a share of Common Stock, the Committee may then consider such
other factors as it deems appropriate and then fix the fair market value for the purposes
of this Plan. In such case, the Committee shall maintain a written record of its method
of determining Fair Market Value.
 Holder.
 ISO.
 Just Cause Termination
 (i)
    
    with respect to the Company or any subsidiary which employs the recipient of any rights
under the Plan (the recipient) or for which such recipient primarily performs services,
the commission by the recipient of an act of fraud, embezzlement, theft or proven
dishonesty, or any other illegal act or practice (whether or not resulting in criminal
prosecution or conviction), or any act or practice which the Committee shall, in good
faith, deem to have resulted in the recipients becoming unbondable under the Companys or
the subsidiarys fidelity bond;(ii)
    
    the willful engaging by the recipient in misconduct which is deemed by the Committee,
in good faith, to be materially injurious to the Company or any subsidiary, monetarily or
otherwise, including, but not limited, improperly disclosing trade secrets or other
confidential or sensitive business information and data about the Company or any
subsidiaries and competing with the Company or its subsidiaries, or soliciting employees,
consultants or customers of the Company in violation of law or any employment or other
agreement to which the recipient is a party; or(iii)
    
    the willful and continued failure or habitual neglect by the recipient to perform his
or her duties with the Company or the subsidiary substantially in accordance with the
operating and personnel policies and procedures of the Company or the subsidiary generally
applicable to all their employees. For purposes of this Plan, no act or failure to act by
the recipient shall be deemed be willful unless done or omitted to be done by recipient
not in good faith and without reasonable belief that the recipients action or omission was
in the best interest of the Company and/or the subsidiary. Notwithstanding the foregoing,
if the recipient has entered into an employment agreement that is binding as of the date of
employment termination, and if such employment agreement defines Cause, then the
definition of Cause in such agreement shall apply to the recipient in this Plan. Cause
under either (i), (ii) or (iii) shall be determined by the Committee.
 NASDAQ.
 Non-Qualified Option.
 Option Agreement.
 Optionee.
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Option Period.
 Options.
 Performance Period.
 Plan Pool.
 Registration.
 Retained Units.
 Restricted Stock.
 Restricted Stock Grant Agreement.
 Retirement.
 (i)
    
    the termination of an Eligible Employees employment under conditions which would
constitute normal retirement or early retirement under any tax qualified retirement
plan maintained by the Corporation or a Subsidiary, or(ii)
    
    termination of employment after attaining age 65 (except in the case of a Just
Cause Termination).
 Rights.
 Rights Agreement.
 SAR.
 SAR Agreement.
 SAR Exercise Date.
 SAR Period.
 SAR Recipient.
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SAR Vesting Period.
 SEC.
 Stock.
 Tax Withholding Liability.
 Transfer.
 Units.
 Unit Agreement.
 Unit Recipient.
 Vesting Period . The period or periods of time within which each Option or portion thereof
will first become exercisable.
 1933 Act.
 1934 Act.
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ARTICLE
II
 GENERAL
 Section 2.1. Purpose.
  Section 2.2. Administration.
 (a)
    
    The Plan shall be administered by the Committee. The Committee may designate any
officers or employees of the Corporation or any Subsidiary to assist in the administration
of the Plan, to execute documents on behalf of the Committee and to perform such other
ministerial duties as may be delegated to them by the Committee.(b)
    
    Subject to the provisions of the Plan, the determinations and the interpretation
and construction of any provision of the Plan by the Committee shall be final and
conclusive upon persons affected thereby. By way of illustration and not of limitation,
the Committee shall have the discretion:
 (i)
    
    to construe and interpret the Plan and all Rights granted hereunder and to
determine the terms and provisions (and amendments thereof) of the Rights granted
under the Plan (which need not be identical);(ii)
    
    to define the terms used in the Plan and in the Rights granted hereunder;(iii)
    
    to prescribe, amend and rescind the rules and regulations relating to the
Plan;(iv)
    
    to determine the Eligible Employees and Directors to whom and the time or
times at which such Rights shall be granted, the number of shares of Stock, as and
when applicable, to be subject to each Right, the exercise price or, other relevant
purchase price or value pertaining to a Right, and the determination of leaves of
absence which may be granted to Eligible Employees without constituting a termination
of their employment for the purposes of the Plan; and(v)
    
    to make all other determinations and interpretations necessary or advisable
for the administration of the Plan.
 (c)
    
    It shall be in the discretion of the Committee to grant Options to purchase shares of
Stock to Eligible Employees which qualify as ISOs under the Code. Any Options granted
which fail to satisfy the requirements for ISOs shall become Non-Qualified Options.(d)
    
    The intent of the Corporation is to effect the Registration. In such event, the
Corporation shall make available to Eligible Employees and Directors receiving Rights
and/or shares of Stock in connection therewith all disclosure documents required under
applicable federal and state laws. If such Registration shall not occur, the Committee
shall be responsible for supplying the recipient of a Right and/or shares of Stock in
connection therewith with such information
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about the Corporation as is contemplated by the federal and state securities laws in connection
with exemptions from the registration requirements of such laws, as well as providing the
recipient of a Right with the opportunity to ask questions and receive answers concerning
the Corporation and the terms and conditions of the Rights granted under this Plan. In
addition, if such Registration shall not occur, the Committee shall be responsible for
determining the maximum number of Eligible Employees and the suitability of particular
persons to be Eligible Employees in order to comply with applicable federal and state
securities statutes and regulations governing such exemptions.
 (e)
    
    In determining the Eligible Employees to whom Rights may be
granted and the number of shares of Stock to be covered by each Right, the Committee shall take into account the
nature of the services rendered by such Eligible Employees and Directors, their present
and potential contributions to the success of the Corporation and/or a Subsidiary and such
other factors as the Committee shall deem relevant. An Eligible Employee or Director who
has been granted a Right under this Plan may be granted an additional Right or Rights
under this Plan if the Committee shall so determine. If pursuant to the terms of this
Plan, or otherwise in connection with this Plan, it is necessary that the percentage of
stock ownership of an Eligible Employee be determined, the ownership attribution
provisions set forth in Section 424(d) of the Code shall be controlling.(f)
    
    The granting of Rights pursuant to this Plan is in the exclusive discretion of the
Committee, and until the Committee acts, no individual shall have any rights under this
Plan. The terms of this Plan shall be interpreted in accordance with this intent.
 Section 2.3. Stock Available For Rights.
 (a)
    
    Shares of the Stock shall be subject to, or underlying, grants of Options, Restricted
Stock, SARs and Units under this Plan. The total number of shares of Stock for which, or
with respect to which, Rights may be granted (including the number of shares of Stock in
respect of which SARs and Units may be granted) under this Plan shall be those designated
in the Plan Pool. In the event that a Right granted under this Plan to any Eligible
Employee or Director expires or is terminated unexercised as to any shares of Stock
covered thereby, such shares thereafter shall be deemed available in the Plan Pool for the
granting of Rights under this Plan; provided, however, if the expiration or termination
date of a Right is beyond the term of existence of this Plan as described in Section 7.3,
then any shares of Stock covered by unexercised or terminated Rights shall not reactivate
the existence of this Plan and therefore shall not be available for additional grants of
Rights under this Plan.(b)
    
    In the event the outstanding shares of Common Stock are increased, decreased, changed
into or exchanged for a different number or kind of securities as a result of a stock
split, reverse stock split, stock dividend, recapitalization, merger, share exchange
acquisition, combination or reclassification, appropriate proportionate adjustments will
be made in: (i) the aggregate number and/or kind of shares of Stock in the Plan Pool that
may be issued pursuant to the exercise of, or that are underlying, Rights granted
hereunder; (ii) the exercise or other purchase price or value pertaining to, and the
number and/or kind of shares of Stock called for with respect to, or underlying, each
outstanding Right granted hereunder; and (iii) other rights and matters determined on a
per share basis under this Plan or any Rights Agreement. Any such adjustments will be
made only by the Committee and when so approved will be effective, conclusive and binding
for all purposes with respect to this Plan and all Rights then outstanding. No such
adjustments will be required by reason of (i) the issuance or sale by the Corporation for
cash of additional shares of its Common Stock or securities convertible into or
exchangeable for shares of its Common Stock, or (ii) the issuance of shares of Common
Stock in exchange for shares of the capital stock of any corporation, financial
institution or other organization acquired by the Corporation or any Subsidiary in
connection therewith.
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(c)
    
    The grant of a Right pursuant to this Plan shall not affect in any way the right or
power of the Corporation to make adjustments, reclassification, reorganizations or changes
of its capital or business structure or to merge or to consolidate or to dissolve, liquidate or sell, or
transfer all or any part of its business or assets.(d)
    
    No fractional shares of Stock shall be issued under this Plan for any adjustment
under Section 2.3(b).
 Section 2.4. Severable Provisions.
  Article III
 OPTIONS
 Section 3.1. Grant of Options.
 (a) The Company may grant Options to Eligible Employees as provided in this Article III.
Options will be deemed granted pursuant to this Article III only upon (i) authorization by the
Committee, and (ii) the execution and delivery of an Option Agreement by the Optionee and a duly
authorized officer of the Company. The aggregate number of shares of Stock potentially acquirable
under all Options granted shall not exceed the total number of shares of Stock remaining in the
Plan Pool, less all shares of Stock potentially acquired under, or underlying, all other Rights
outstanding under this Plan, except that Options for not more than 150,000 shares of Stock may be
granted as ISOs.
 (b) The Committee shall designate Options at the time a grant is authorized as either ISOs or
Non-Qualified Options. ISOs may only be granted to Eligible Employees. In accordance with Section
422 (d) of the Code, the aggregate Fair Market Value (determined as of the date an ISO is granted)
of the shares of Stock as to which an ISO may first become exercisable by an Optionee in a
particular calendar year may not exceed the Annual Vesting Amount. If an Optionee is granted
Options in excess of the Annual Vesting Amount, or if such Options otherwise become exercisable
with respect to a number of shares of Stock which would exceed the Annual Vesting Amount, such
excess Options shall be Non-Qualified Options.
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Section 3.2. Exercise Price.
  Section 3.3. Terms and Conditions of Options.
 (a)
    
    All Options must be granted within ten (10) years of the Effective Date.(b)
    
    The Committee may grant ISOs and Non-Qualifed Options, either separately or jointly,
to an Eligible Employee. Directors are only eligible to be granted Non-Qualified Options
by the Committee.(c)
    
    Each grant of Options shall be evidenced by an Option Agreement in form and substance
satisfactory to the Committee in its discretion, consistent with the provisions of this
Article III.
 (d) Nothing contained in Article III, any Option Agreement or in any other agreement executed
in connection with the granting of an Option to an Eligible Employee under this Article III will
confer upon any Optionee any right with respect to the continuation of his or her status as an
employee of the Company or any of its Subsidiaries.
 (e)
    
    Except as otherwise provided herein, each Option Agreement may specify the Vesting
Period with respect to the total number of shares of Stock acquirable thereunder. Such
Vesting Periods will be fixed by the Committee in its discretion, and may be accelerated
or shortened by the Committee in its discretion.(f)
    
    Not less than one hundred (100) shares of Stock may be purchased at any one time
through the exercise of an Option unless the number purchased is the total number at that
time purchasable under all Options granted to the Optionee.(g)
    
    An Optionee shall have no rights as a shareholder of the
Company with respect to any shares of Stock covered by Options granted to the Optionee until payment in full of the
Exercise Price by such Optionee for the shares being purchased. No adjustment shall be
made for dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record date is prior to the date
such Stock is fully paid for, except as provided in Section 2.3(b).
 Section 3.4. Exercise of Options.
 (a)
    
    An Optionee must be an Eligible Employee or Director at all times from the date of
grant until the exercise of the Options granted, except as provided in Section 3.5.(b)
    
    An Option may be exercised to the extent exercisable (i) by giving written notice of
exercise to the Company, specifying the number of full shares of Stock to be purchased
and, if applicable, accompanied by full payment of the Exercise Price thereof and the
amount of the Tax Withholding Liability pursuant to Section 3.4(c) below; and (ii) by
giving assurances satisfactory to the Company that the shares of Stock to be purchased
upon such exercise are being purchased for investment and not with a view to resale in
connection with any distribution of such shares in violation of the 1933 Act; provided,
however, that in the event
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the prior occurrence of the Registration or in the event resale
of such Stock without such Registration would otherwise be permissible, this second condition will be inoperative
if, in the opinion of counsel for the Company, such condition is not required under the
1933 Act or any other applicable law, regulation or rule of any governmental agency.
 (c)
    
    As a condition to the issuance of the shares of Stock upon full or partial exercise
of a Non-Qualified Option, the Optionee will pay to the Company in cash, or in such other
form as the Committee may determine in its discretion, the amount of the Companys Tax
Withholding Liability required in connection with such exercise.(d)
    
    The Exercise Price of an Option shall be payable to the Company either (i) in United
States dollars, in cash or by check, or money order payable to the order of the Company,
or (ii) at the discretion of the Committee, through the delivery of shares of the Stock
owned by the Optionee (including, if the Committee so permits, a portion of the shares of
Stock as to which the Option is then being exercised) with a Fair Market Value as of the
date of delivery equal to the Exercise Price, or (iii) at the discretion of the Committee,
by a combination of (i) and (ii) above. No shares of Stock shall be delivered until full
payment has been made.
 Section 3.5. Term and Termination of Option.
 (a)
    
    The Committee shall determine, and each Option Agreement shall state, the expiration
date or dates of each Option, but such expiration date shall be not later than ten (10)
years after the date such Option was granted. In the event an ISO is granted to a 10%
Shareholder, the expiration date or dates of each Option Period shall be not later than
five (5) years after the date such Option is granted. The Committee may extend the
expiration date or dates of an Option Period of any Non-Qualified Option after such date
was originally set; provided, however such expiration date may not exceed the maximum
expiration date described in this Section 3.5(a).(b)
    
    In the event of the termination of employment of an Optionee either by reason of (i)
Just Cause Termination, or (ii) voluntary separation on the part of such Optionee for a
reason other than Retirement or Disability, any Option or Options granted to the Optionee
under this Plan, to the extent not previously exercised or surrendered by the Optionee, or
expired by their terms, shall immediately terminate.(c)
    
    In the event of the termination of employment of an Optionee as a result of such
Optionees Retirement, such Optionee shall have the right to exercise any Option or
Options granted to the Optionee under this Plan, to the extent that they have not
previously been exercised or surrendered by the Optionee, or expired by their terms, for a
period of three (3) months after the date of retirement, but in no event may any Option be
exercised later than the end of the Option Period. Notwithstanding any other provision
contained herein, or in any Option Agreement, upon Retirement, any Option then held by an
Optionee shall be exercisable immediately in full.(d)
    
    In the event of the termination of employment of an Optionee by reason of such
Optionees Disability, such Optionee shall have the right to exercise any Option or
Options held by the Optionee, to the extent that they previously have not been exercised
or surrendered by the Optionee, or expired by their terms, notwithstanding any limitations
placed on the exercise of such Options by this Plan or an Option Agreement, immediately in
full and at any time within twelve (12) months after the last date on which such Optionee
provides services as an officer or an employee of the Corporation before being disabled,
but in no event may any Option be exercised later than the end of the Option Period.(e)
    
    In the event that an Optionee should die while employed by the Corporation, or within
three (3) months after Retirement, any Option or Options granted to the Optionee under
this Plan
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and not previously exercised or surrendered by the Optionee, or expired by their
terms, shall vest and shall be exercisable, according to their respective terms, by the
personal representative of such Optionee or by any person or persons who acquired such Options by
bequest or inheritance from such Optionee, notwithstanding any limitations placed on the
exercise of such Options by this Plan or any Option Agreement, immediately in full and at
any time within twelve (12) months after the date of death of such Optionee, but in no
event may any Option be exercised later than the end of the Option Period. Any
references herein to an Optionee shall be deemed to include any person entitled to
exercise an Option under the terms of this Plan after the death of such Optionee.
 Section 3.6. Change in Control Transaction.
  Section 3.7. Restrictions On Transfer.
  Section 3.8. Stock Certificates.
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Section 3.9. Amendment and Discontinuance.
  (a)
    
    Increase the total number of shares of Stock issuable pursuant to all Rights under the
Plan, except as contemplated in Section 2.3(b) hereof; or(b)
    
    Change the class of employees eligible to receive Incentive Stock Options that may
participate in the Plan.
  Article IV
 RESTRICTED STOCK GRANTS
 Section 4.1 Grants of Restricted Stock.
 (a)
    
    The Company may issue Restricted Stock to Eligible Employees and Directors as provided
in this Article IV. Restricted Stock will be deemed issued only upon (i) authorization by
the Committee, and (ii) the execution and delivery of a Restricted Stock Grant Agreement by
the person to whom such Restricted Stock is to be issued and a duly authorized officer of
the Company.(b)
    
    Each issuance of Restricted Stock pursuant to this Article IV will be evidenced by a
Restricted Stock Grant Agreement between the Company and the Holder in form and substance
satisfactory to the Committee in its sole discretion, consistent with this Article IV.
Each Restricted Stock Grant Agreement will specify the purchase price per share, if any,
paid by the Holder for the Restricted Stock, such amount to be fixed by the Committee.(c)
    
    Without limiting the foregoing, each Restricted Stock Grant Agreement shall set forth
the terms and conditions of any forfeiture provisions regarding the Restricted Stock,
(including any provisions for accelerated vesting in the event of a Change in Control
Transaction) as determined by the Committee.(d)
    
    At the discretion of the Committee, the Holder, as a condition to such issuance, may be
required to pay to the Corporation in cash, or in such other form as the Committee may
determine in its discretion, the amount of the Corporations Tax Withholding Liability
required in connection with such issuance.(e)
    
    Nothing contained in this Article IV, any Restricted Stock Grant Agreement, or any
other agreement executed in connection with the issuance of Restricted Stock under this
Article IV will confer upon any Holder any right with respect to the continuation of his or
her status as an employee of the Company or any of its Subsidiaries.




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Section 4.2. Restrictions on Transfer of Restricted Stock.
 (a)
    
    Shares of Restricted Stock acquired by a Holder may be Transferred only in accordance
with the specific limitations on the Transfer of Restricted Stock imposed by applicable
state or federal securities laws or set forth below, and subject to certain undertakings of
the transferee set forth in Section 4.2(c). All Transfers of Restricted Stock not meeting
the conditions set forth in this Section 4.2 are expressly prohibited.(b)
    
    Any prohibited Transfer of Restricted Stock is void and of no effect. Should such a
Transfer purport to occur, the Company may refuse to carry out the Transfer on its books,
attempt to set aside the Transfer, enforce any undertaking or right under this Section 4.2,
and/or exercise any other legal or equitable remedy.(c)
    
    Any Transfer of Restricted Stock that would otherwise be permitted under the terms of
this Plan is prohibited unless the transferee executes such documents as the Company may
reasonably require to ensure the Companys rights under a Restricted Stock Grant Agreement
and this Article IV are adequately protected with respect to the Restricted Stock so
Transferred. Such documents may include, without limitation, an agreement by the
transferee to be bound by all of the terms of this Plan applicable to Restricted Stock and
of the applicable Restricted Stock Grant Agreement, as if the transferee were the original
Holder of such Restricted Stock.(d)
    
    To facilitate the enforcement of the restrictions on Transfer set forth in this Article
IV, the Committee may, at its discretion, require the Holder of shares of Restricted Stock
to deliver the certificate(s) for such shares with a stock power executed in blank by the
Holder and the Holders spouse, to the Secretary of the Company or his or her designee, and
the Company may hold said certificate(s) and stock power(s) in escrow and take all such
actions as are necessary to insure that all Transfers and/or releases are made in
accordance with the terms of this Plan. The certificates may be held in escrow so long as
the shares of Restricted Stock whose ownership they evidence are subject to any restriction
on Transfer under this Article IV or under a Restricted Stock Grant Agreement. Each Holder
acknowledges that the Secretary of the Company (or his or her designee) is so appointed as
the escrow agent with the foregoing authorities as a material
inducement to the issuance of shares of Restricted Stock under this Article IV, that the appointment is coupled with an
interest, and that it accordingly will be irrevocable. The escrow agent will not be liable
to any party to a Restricted Stock Grant Agreement (or to any other party) for any actions
or omissions unless the escrow agent is grossly negligent relative thereto. The escrow
agent may rely upon any letter, notice or other document executed by any signature
purported to be genuine.
 Section 4.3. Compliance with Law.
  Section 4.4. Stock Certificates.




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Section 4.5. Market Standoff.
   Section 4.6. Amendment and Discontinuance.
  (a)
    
    Increase the total number of shares of Stock issuable pursuant to all Rights under the
Plan, except as contemplated in Section 2.3(b) hereof; or(b)
    
    modify the requirements as to eligibility for participation under this Article IV.
  Article V
 LONG-TERM INCENTIVE COMPENSATION UNITS
 Section 5.1. Awards of Units.
 (a)
    
    The Company may grant awards of Units to Eligible Employees as provided in this Article
V. Units will be deemed granted only upon (i) authorization by the Committee, and (ii) the
execution and delivery of a Unit Agreement by the Eligible Employee to whom Units are to be
granted and an authorized officer of the Company. Units may be granted in each of the
years 2004 through 2014 in such amounts and to such Unit Recipients as the Committee may
determine, subject to the limitations in Section 5.2 below.(b)
    
    Each grant of Units pursuant to this Article V will be evidenced by a Unit Award
Agreement between the Company and the Unit Recipient in form and substance satisfactory to
the Committee in its sole discretion, consistent with this Article V.(c)
    
    Except as otherwise provided herein, Units will be distributed only after the end of
the Performance Period. The Performance Period shall be set by the Committee for each
years awards.(d)
    
    The percentage of the Units awarded under this Section 5.1 or credited pursuant to
Section 5.5 that will be distributed to Unit Recipients shall depend on the levels of
financial performance and other performance objectives achieved during each year of the
Performance Period; provided, however, that the Committee may adopt one or more performance
categories or eliminate all performance categories other than financial performance.
Financial performance shall be based on the consolidated results of the Company and its
Subsidiaries prepared on the same basis as the financial statements published for financial
reporting purposes and determined in accordance with Section 5.1(e) below. Other
performance categories adopted




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(e)
    
    Distributions of Units awarded will be based on the Companys financial performance
with results from other performance categories applied as a factor, not exceeding one (1),
against financial results. The annual financial and other performance results will be
averaged over the Performance Period and translated into percentage factors according to
graduated criteria established by the Committee for the entire Performance Period. The
resulting percentage factors shall determine the percentage of Units that will be converted
to Retained Units. No conversion to Retained Units shall be made if a minimum average
percentage of the applicable measurement of performance, financial and other, to be
established by the Committee is not achieved for the Performance Period. The performance
levels achieved for each Performance Period and percentage of Units converted to Retained
Units shall be conclusively determined by the Committee.(f)
    
    The percentage of Units awarded which are converted to Retained Units based on the
levels of performance (including any Units credited under Section 5.5) will be determined
as soon as practicable after each Performance Period.(g)
    
    As soon as practical after determination of the number of Retained Units, such Retained
Units shall be distributed in the form of a combination of shares and cash in the relative
percentages as between the two as determined by the Committee. Units that have been
awarded, but which do not become Retained Units, shall be canceled.(h)
    
    Notwithstanding any provision in this Article V other than Section 5.2, if the
Committee determines that it is appropriate under the circumstances, the Committee may
award to any Eligible Employee by virtue of hire, promotion or upgrade to a higher job
grade classification, or special individual circumstances, an award of Units, with respect
to one or more Performance Periods that began in prior years and at the time of the award
have not yet been completed.(i)
    
    Notwithstanding any other provision of this Plan, the Committee may reduce or eliminate
awards to a Unit Recipient who has been demoted to a lower job grade classification, and
where circumstances warrant, may permit continued participation, proration or early
distribution, or a combination thereof, of awards which would otherwise be canceled.
 Section 5.2. Limitations.
  Section 5.3. Terms and Conditions.
 (a)
    
    All awards of Units must be made within ten (10) years of the Effective Date.
 (b) The award of Units shall be evidenced by a Unit Award Agreement in form and substance
satisfactory to the Committee in its discretion, consistent with the provisions of this Article V.
 (c)
    
    Nothing contained in this Article V, any Unit Award Agreement or in any other agreement
executed in connection with the award of Units under this Article V will confer upon any
Unit Recipient any right with respect to the continuation of his or her status as an
employee of the




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(d)
    
    A Unit Recipient shall have no rights as a shareholder of the Company with respect to
any Units until the Retained Unit has been converted into shares of Stock. No adjustment
shall be made in the number of Units for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights for which the record
date is prior to the date such Stock is fully paid for, except as provided in Sections
2.3(b) and 5.6(a).
 Section 5.4. Special Distribution Rules.
 (a)
    
    Except as otherwise provided in this Section 5.4, a Unit Recipient must be an Eligible
Employee from the date a Unit is awarded to him or her continuously through and including
the date of conversion to a Retained Unit.(b)
    
    In case of the Death or Disability of a Unit Recipient prior to the end of any
Performance Period, the number of Retained Units converted for the Unit Recipient for such
Performance Period shall be reduced pro rata based on the number of months remaining in the
Performance Period after the month of Death or Disability. The Retained Units, reduced in
the discretion of the Committee to the percentage indicated by the levels of performance
achieved prior to the date of Death or Disability, if any, shall be distributed in cash or
Stock within a reasonable time after Death or Disability. All other Units awarded to the
Unit Recipient for such Performance Period shall be canceled.(c)
    
    If a Unit Recipient enters into Retirement prior to the end of any Performance Period,
the Units converted to Retained Units for such Unit Recipient shall be prorated to the end
of the year in which such Retirement occurs and distributed in cash or Stock at the end of
the Performance Period based upon the Companys performance for such period.(d)
    
    In the event of the termination of the Unit Recipients status as an Eligible Employee
prior to the end of any Performance Period for any reason other than Death, Disability or
Retirement, all Units awarded to the Unit Recipient with respect to any such Performance
Period shall be immediately forfeited and canceled.(e)
    
    Upon a Unit Recipients promotion to a higher job grade classification, the Committee
may award to the Unit Recipient the total Units, or any portion thereof, which are
associated with the higher job grade classification for the then current Performance
Period.
 Section 5.5. Dividend Equivalent Units.
  Section 5.6. Adjustments.
 (a)
    
    In addition to the provisions of Section 2.3(b), if an extraordinary change occurs
during a Performance Period which significantly alters the basis upon which the performance
levels were established under Section 5.1 for that Performance Period, to avoid distortion
in the operation of this Article V, but subject to Section 5.2, the Committee may make
adjustments in such performance levels to preserve the incentive features of this Article
V, whether before




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(b)
    
    At any time prior to the date of consummation of a Change in Control Transaction, the
Committee may determine that all or any part of the Units theretofore awarded under this
Article V shall become immediately Retained Units (reduced pro rata based on the number of
months remaining in the Performance Period after the consummation of the Change in Control
Transaction) and may thereafter be distributed in cash or Stock at any time before the date
of consummation of the Change in Control Transaction (except as otherwise provided in
Article II hereof, and except to the extent that such acceleration of distribution would
result in an excess parachute payment within the meaning of Section 280G of the Code).
 Section 5.7. Other Conditions.
 (a)
    
    No person shall have any claim to be granted an award of Units under this Article V and
there is no obligation for uniformity of treatment of Eligible Employees or Unit Recipients
under this Article IV.(b)
    
    The Company shall have the right to deduct from any distribution or payment in cash
under this Article V, and the Unit Recipient or other person receiving shares of Stock
under this Article V shall be required to pay to the Company any Tax Withholding Liability.
The number of shares of Stock to be distributed to any individual Unit Recipient may be
reduced by the number of shares of Stock, the Fair Market Value of which on the
Distribution Date is equivalent to the cash necessary to pay any Tax Withholding Liability,
where the cash to be distributed is not sufficient to pay such Tax Withholding Liability,
or the Unit Recipient may deliver to the Company cash sufficient to pay such Tax
Withholding Liability.(c)
    
    Any distribution of shares of Stock under this Article V may be delayed until the
requirements of any applicable laws or regulations, and any stock exchange or applicable
NASDAQ requirements, are satisfied. The shares of Stock distributed under this Article V
shall be subject to such restrictions and conditions on disposition as counsel for the
Company shall determine to be desirable or necessary under applicable law.(d)
    
    For the purpose of distribution of Units in cash, the value of a Unit shall be the Fair
Market Value on the Distribution Date.(e)
    
    Notwithstanding any other provision of this Article V, no Dividend Equivalent Credits
shall be made and no conversion of Dividend Equivalent Units to Retained Units shall be
made if at the time a Dividend Equivalent Credit or conversion of Dividend Equivalent Units
to Retained Units would otherwise have been made:
 (i)
    
    The regular dividend on the Common Stock has been omitted and not
subsequently paid or there exists any default in payment of dividends on any such
outstanding shares of capital stock of the Corporation:(ii)
    
    The rate of dividends on the Common Stock is lower than at the time the
Dividend Equivalent Units were awarded, adjusted for any change of the type referred
to in Section 2.3(b).(iii)
    
    Estimated consolidated net income of the Corporation for the twelve-month
period preceding the month the Dividend Equivalent Credit or conversion of Dividend
Equivalent Units to Retained Units would otherwise have been made is less than the sum
of the amount of the Dividend




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(iv)
    
    The Dividend Equivalent Credit or conversion of Dividend Equivalent Units to
Retained Units would result in a default in any agreement by which the Corporation is
bound.
 (f)
    
    In the event net income available under Section 5.7(e) above for Dividend Equivalent
Credits and conversion of Dividend Equivalent Units to Retained Units is sufficient to
cover part but not all of such amounts, the following order shall be applied in making
payments: (i) Dividend Equivalent Credits, and then (ii) conversion of Dividend Equivalent
Units to Retained Units.
 Section 5.8. Designation of Beneficiaries.
  Section 5.9. Restrictions On Transfer.
  Section 5.10. Amendment and Discontinuance.
  (a)
    
    Increase the total number of shares of Stock issuable pursuant to all Rights under the
Plan, except as contemplated in Section 2.3(b) hereof; or(b)
    
    modify the requirements as to eligibility for participation under this Article V.




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Article VI
 STOCK APPRECIATION RIGHTS
 Section 6.1. Grants of SARs.
 (a)
    
    The Corporation may grant SARs under this Article VI. SARs will be deemed granted only
upon (i) authorization by the Committee, and (ii) the execution and delivery of a SAR
Agreement by the Eligible Employee to whom the SARs are to be granted and a duly authorized
officer of the Corporation. The aggregate number of shares of Stock which shall underlie
SARs granted hereunder shall not exceed the total number of shares of Stock remaining in
the Plan Pool, less all shares of Stock potentially acquirable under or underlying all
other Rights outstanding under this Plan.(b)
    
    Each grant of SARs pursuant to this Article VI shall be evidenced by a SAR Agreement
between the Corporation and the SAR Recipient, in form and substance satisfactory to the
Committee in its sole discretion, consistent with this Article VI.
 Section 6.2. Terms and Conditions of SARs.
 (a)
    
    All SARs must be granted within ten (10) years of the Effective Date.(b)
    
    Each SAR issued pursuant to this Article VI shall have an initial Base Value.(c)
    
    Nothing contained in this Article VI, any SAR Agreement or in any other agreement
executed in connection with the granting of a SAR under this Article VI will confer upon
any SAR Recipient any right with respect to the continuation of his or her status as an
employee of the Corporation or any of its Subsidiaries.(d)
    
    Except as otherwise provided herein, each SAR Agreement may specify the SAR Vesting
Period. Such SAR Vesting Periods will be fixed by the Committee and may be accelerated or
shortened by the Committee.(e)
    
    SARs relating to less than one hundred (100) shares of Stock may not be exercised at
any one time unless the number exercised is the total number at that time exercisable under
all SARs granted to the SAR Recipient.(f)
    
    A SAR Recipient shall have no rights as a shareholder of the Corporation with respect
to any shares of Stock underlying such SAR. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property) or distributions
or other rights for which the record date is prior to the date such Stock is fully paid
for, except as provided in Sections 2.3(b) and 6.2(c).
 Section 6.3. Restrictions On Transfer of SARs.
  Section 6.4. Exercise of SARs.
 (a)
    
    A SAR Recipient (or his or her executors or administrators, or heirs or legatees) shall
exercise a SAR by giving written notice of such exercise to the Corporation. SARs may be
exercised only upon the completion of the SAR Vesting Period, if any, applicable to such
SAR.(b)
    
    Within ten (10) business days of the SAR Exercise Date applicable to a SAR exercised in
accordance with Section 6.4(a), the SAR Recipient shall be paid in cash the difference




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Section 6.5. Termination of SARs.




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Section 6.6. Change in Control Transaction.
  Section 6.7. Designation of Beneficiaries.
  Section 6.8. Amendment and Discontinuance.
  (a)
    
    Increase the total number of shares of Stock issuable pursuant to all Rights under the
Plan, except as contemplated in Section 2.3(b) hereof; or(b)
    
    modify the requirements as to eligibility for participation under this Article VI.




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Article VII
 MISCELLANEOUS
 Section 7.1. Application of Funds.
  Section 7.2. No Obligation to Exercise Right.
  Section 7.3. Term of Plan.
  Section 7.4. Captions and Headings; Gender and Number.
  Section 7.5. Expenses of Administration of Plan.
  Section 7.6. Exculpation and Indemnification.
  Section 7.7. Governing Law.
  Section 7.8. Inspection of Plan.