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                                                                   Exhibit 10.12

                               Amended by the Board of Directors August 26, 2002

                                 1990 STOCK PLAN
                                       OF
                           PHILLIPS PETROLEUM COMPANY
                          (As Approved April 25, 1989)

1.    PURPOSE

      The purpose of the 1990 Stock Plan of Phillips Petroleum Company is to
      provide incentive earnings opportunities to those key employees whose
      decisions and actions most directly affect the profitability and growth of
      the Company and its subsidiaries. Since the incentive earnings
      opportunities under this Plan are based on the market value of the
      Company's Common Stock, it will have the additional effect of increasing
      these employees' identity of interest with that of the Company's
      stockholders. There are two programs permitted by this Plan; a Stock
      Option Plan and the Strategic Incentive Plan.

2.    DEFINITIONS

      a)    "Board" shall mean the Board of Directors of the Company.

      b)    "Code" shall mean the Internal Revenue Code of 1986, as amended from
            time to time.

      c)    "Company" shall mean ConocoPhillips.

      d)    "Committee" shall mean the Compensation Committee of the Board of
            Directors as appointed from time to time, and consisting of not less
            than three Board members. Each member of the Committee shall be a
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            "disinterested person" as that term is now or hereafter defined in
            Rule 16(b)(3) of the Securities and Exchange Commission.

      e)    "Earned Award" shall mean the award which an SIP Participant is
            entitled to receive under the Strategic Incentive Plan.

      f)    "Employee" shall mean any person employed by the Company or a
            Subsidiary on a full-time salaried basis, including officers and
            employee directors thereof.

      g)    "Fair Market Value" shall mean the average of the highest price and
            the lowest price at which Stock shall have been sold on the date of
            the grant of the Option as reflected on the consolidated tape of New
            York Stock Exchange issues. In the event that any Options shall be
            granted on a date on which there were no such sales of Stock, the
            fair market value of Stock on such date shall be the average of the
            highest price and the lowest price at which Stock shall have been
            sold on the last trading day preceding the date of grant of such
            Option as reflected on the consolidated tape of New York Stock
            Exchange issues.

      h)    "Incentive Stock Option" or "ISO" shall mean an Option which meets
            or complies with the terms and conditions set forth in Section 422A
            of the Code and Treasury regulations promulgated thereunder.

      i)    "Indicators of Performance" shall mean the criteria which the
            Committee will use at the conclusion of the Performance Period to
            evaluate the Company's overall performance as described in Section
            9(b) of this Plan.


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      j)    "Strategic Incentive Plan Participant" or "SIP Participant" shall
            mean any eligible Employee who has been so designated by the
            Committee.

      k)    "Option" or "Stock Option" shall mean a right granted under the Plan
            to an Optionee to purchase a stated number of shares of Stock at a
            stated exercise price.

      l)    "Optionee" shall mean an employee who has received a Stock Option
            granted under the Plan.

      m)    "Performance Period" shall mean a period established by the
            Committee beginning on the first day of a calendar year, of not less
            than three consecutive calendar years, at the conclusion of which
            settlement will be made with a SIP Participant with respect to his
            Earned Award.

      n)    "Plan" shall mean the 1990 Stock Plan of Phillips Petroleum Company.

      o)    "Restricted Stock" shall mean Stock which is not transferable except
            in accordance with the terms established for such transfer at the
            time of its issue in accordance with the plan under which it was
            issued.

      p)    "Stock" shall mean the common stock, including both Restricted and
            unrestricted Stock, of the Company.

      q)    "Stock Appreciation Right" or "SAR" shall mean the right of an
            Optionee to exercise an Option granted in accordance with Section 8
            of this Plan.

      r)    "Subsidiary" shall mean any corporation, a majority of the voting
            stock of which is beneficially owned, directly or indirectly, by the
            Company.

      s)    "Target Award" shall mean the award, expressed in shares of Stock,
            which will be considered an Earned Award, absent any adjustment
            thereto for


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            individual performance, if the Committee determines pursuant to
            Section 9(b) of this Plan that the Company's overall performance was
            "competitive."

      t)    "Total Disability" and "Totally Disabled" shall mean the condition
            in which, by reason of bodily injury or disease, an employee is and
            will at all times thereafter be wholly prevented from engaging in
            any occupation or employment for compensation, profit or gain. All
            determinations of Total Disability shall be made by the insurance
            company carrying the group life insurance plan of the Company on the
            date on which the employee, whether or not eligible for benefits
            under such insurance plan, becomes Totally Disabled.

3.    ADMINISTRATION

      The Committee is authorized, subject to the provisions of the Plan, from
      time to time to establish such rules and regulations and to appoint such
      agents as it deems appropriate for the proper administration of the Plan,
      and to make such determinations under, and such interpretations of, and to
      take such steps in connection with the Plan or the Options or Stock
      Appreciation Rights or the Strategic Incentive Plan as it deems necessary
      or advisable. Each determination, interpretation, or other action made or
      taken pursuant to the provision of the Plan by the Committee shall be
      final and shall be binding and conclusive for all purposes and upon all
      persons. Notwithstanding any provision of the Plan or any Administrative
      Procedure adopted thereunder which may be capable of being construed to
      the contrary, no discretion concerning the administration of the Plan


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      insofar as it relates to persons subject to Section 16 of the Securities
      Exchange Act of 1934 shall be afforded to a person who is not a
      disinterested person in respect of the Plan.

4.    ELIGIBILITY

      Only those Employees who, in the sole judgment of the Committee, may have
      a significant effect on the profitability and growth of the Company, shall
      be eligible to receive Options and Stock Appreciation Rights under this
      Plan. Of such Employees, those who are in positions evaluated at grade 35
      or higher under the Company's salary administration system are eligible
      for participation in the Strategic Incentive Plan; provided, however, the
      Committee may also permit Employees eligible for Participation in the Plan
      evaluated at less than grade 35 to participate in the Strategic Incentive
      Plan if in the opinion of the Committee such Employees have a significant
      effect on the Company's long term growth and profitability.

5.    MAXIMUM SHARES AVAILABLE

      The Stock to be distributed under the Plan may be either authorized and
      unissued shares or issued shares whether held in the treasury of the
      Company or otherwise. The total amount of Stock which, under the
      provisions of this Plan, may be subject to delivery on the exercise of
      Options, issued in satisfaction of exercised Options or SAR's, or issued
      under the Strategic Incentive Plan shall not exceed 8.6 million shares of
      the Company's Stock, which represents approximately 3.5% of the number of
      issued and outstanding shares of Stock as of December 31, 1988. The
      maximum number of shares is subject to adjustment in accordance with the


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      provisions of Section 10 hereof. In determining the number of shares
      subject to delivery under this Plan, those represented by cancelled
      Options, forfeited Options, expired Options and non-earned awards under
      the Strategic Incentive Plan shall be returned upon the occurrence of such
      event to the pool of shares available for distribution under the Plan and
      may be the subject of further Options or SAR's, or may be issued under the
      Strategic Incentive Plan.

6.    STOCK OPTIONS

      a)    Award of Options. (i) The Committee, at any time and from time to
            time prior to December 31, 1994, may grant Options under the Plan to
            eligible Employees, for such numbers of shares and having such terms
            as the Committee shall designate, subject, however, to the
            provisions of the Plan. The Committee will also determine the type
            of Option granted (e.g., ISO, nonstatutory, other statutory Options
            as from time to time may be permitted by the Code) or a combination
            of various types of Options. Options designated as ISO's shall
            comply with all the provisions of Section 422A(b) of the Code and
            applicable Treasury Department regulations. The aggregate Fair
            Market Value (determined at the time the Option is granted) of Stock
            with respect to which ISO's are exercisable for the first time by
            any individual during a calendar year under all plans of the
            Company, and any subsidiary shall not exceed $100,000. All shares
            over the $100,000 first exercisable value shall be granted as a
            non-qualified Option. The date on which an Option shall be granted
            shall be the date of the Committee's authorization of such grant.
            Any individual at


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            any one time and from time to time may hold more than one Option
            granted under the Plan or under any other Stock plan of the Company.
            (ii) Each Option shall be evidenced by a Stock Option Agreement in
            such form and containing such provisions not inconsistent with the
            provisions of the Plan as the Committee from time to time shall
            approve.

      b)    Exercise Price. The price at which shares of Stock may be purchased
            under an Option shall not be less than 100 percent of the Fair
            Market Value of the Stock on the date the Option is granted.

      c)    Term of Options. The period during which an Option may be exercised
            shall be determined by the Committee; provided, that such period
            will not be longer than ten years from the date on which the Option
            is granted for those Options designated as ISO's or 11 years for
            other types of Options. The date or dates on which installment
            portion(s) of an Option may be exercised during the term of an
            Option shall be determined by the Committee and may vary from Option
            to Option. If the Committee makes no such specific arrangement with
            respect to an Option, each such Option granted pursuant to the Plan
            shall become exercisable in four installments. The first such
            installment shall become exercisable on the first anniversary of the
            date of the grant for 25 percent of the number of shares of Stock
            subject to the Option. Thereafter, on each anniversary of the date
            of the grant an installment shall become exercisable for an
            additional 25 percent of the number of shares of Stock subject to
            the Option until the Option shall have become fully exercisable. To
            the extent that an installment is


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            not exercised when it becomes exercisable, it shall not expire but
            shall continue to be exercisable at any time thereafter until the
            Option shall be cancelled, expire or be surrendered. The Committee
            may accelerate the exercise schedule on outstanding Options, if in
            its sole judgment conditions are such to warrant such acceleration.

      d)    Termination of Employment. (i) If, prior to a date one year from the
            date an Option shall have been granted, the Optionee's employment
            with the Company or Subsidiary shall be terminated for any reason,
            such Option shall be cancelled and all rights thereunder shall
            cease; provided that an Option granted in any year to an Optionee
            who terminates employment on January 1 of the following year due to
            retirement pursuant to the terms of a retirement plan of the Company
            or a Subsidiary shall not be cancelled for that reason, and
            provided, further, the Committee may, in its sole discretion
            determine that all or any portion of any other Option shall not be
            cancelled due to termination of employment prior to a date one year
            from the date the Option shall have been granted.

            (ii) If, on or after one year from the date an Option shall have
            been granted, an Optionee's employment with the Company or
            Subsidiary is terminated for any reason except retirement pursuant
            to the terms of a retirement plan of the Company or a Subsidiary,
            Total Disability, or death, any Option so granted under the Plan
            shall be cancelled on such termination; provided, that the Committee
            may, in its sole discretion, determine that all or a portion of any
            such Option shall not be cancelled.


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            (iii) If, on or after a date one year from the date the Option is
            granted, an Optionee shall terminate employment by reason of
            retirement pursuant to a retirement plan of the Company or
            Subsidiary, or by reason of Total Disability, the Optionee shall
            retain all rights provided by the Option at the time of such
            termination of employment. If on or after a date one year from the
            date the Option is granted, or such shorter period as may be
            permitted pursuant to (d)(ii) above, an Optionee shall die while in
            the employ of the Company or Subsidiary or after termination of
            employment by reason of retirement pursuant to a retirement plan of
            the Company or Subsidiary, the executor or administrator of the
            estate of the Optionee or the person or persons to whom the Option
            shall have been validly transferred by the executor or the
            administrator pursuant to will or the laws of descent and
            distribution shall have the right to exercise the Option to the same
            extent the Optionee could have, had the Optionee not died. No
            transfer of an Option by the Optionee by will or by the laws of
            descent and distribution shall be effective to bind the Company
            unless the Company shall have been furnished with written notice
            thereof and a copy of the will and such other evidence as the
            Company may deem necessary to establish the validity of the transfer
            and the acceptance by the transferee or transferees of the terms and
            conditions of such Option.

            (iv) Transfer of employment between the Company and a Subsidiary or
            between Subsidiaries shall not constitute termination of employment
            for the purpose of any Option granted under the Plan. Whether any
            leave of


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            absence shall constitute termination of employment for the purposes
            of any Option granted under the Plan shall be determined in each
            case by the Committee in its sole discretion.

      e)    Payment for Shares. (i) The exercise price for all shares of Stock
            purchased upon the exercise of an Option, or a portion thereof,
            shall be paid in full at the time of such exercise. Such payment may
            be made in cash, by tendering shares of Stock having a value on the
            date of exercise equal to the exercise price, or tendering shares of
            Restricted Stock having a value on the date of exercise equal to the
            exercise price. Such value shall be the Fair Market Value except
            that the applicable date for determination of the highest and lowest
            price on the New York Stock Exchange shall be the date on which the
            Option is exercised, or if not a trading date, then the last trading
            day on such Exchange preceding the date on which the Option is
            exercised. If Restricted Stock is used in such exercise, the
            resulting new shares shall have the same restrictions as the
            tendered shares. The number of shares so restricted shall not be
            less than the number of shares of Restricted Stock tendered. The
            Committee may, in its sole discretion and judgment, limit the extent
            to which shares of Stock or shares of Restricted Stock may be used
            in exercising Options.

            (ii) The Stock delivered to the Optionee upon exercise of an Option,
            whether or not Restricted Stock is used for payment of the purchase
            price of the Option may, at the discretion of the Committee, have
            restrictions


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            placed on it, provided that the Stock Option Agreement with the
            Optionee covering the Option permits such use of Restricted Stock.

      f)    Should a withholding tax obligation arise upon the exercise of an
            Option, the withholding tax may be satisfied by withholding shares
            of Stock or by payment of cash.

7.    DETRIMENTAL ACTIVITIES

      If the Committee determines that, subsequent to the grant of any Option,
      the Optionee has engaged or is engaging in any activity which, in the sole
      judgment of the Committee, is or may be detrimental to the Company or a
      Subsidiary, the Committee may refuse to honor the exercise of such
      Optionee's Options already requested, and cancel the Option or Options
      granted to that Optionee.

8.    STOCK APPRECIATION RIGHTS

      a)    Grant. The Committee may, at its discretion, affix Stock
            Appreciation Rights to any Option, either at the time of its initial
            granting to the Optionee or at a later date. The addition of such
            SAR's must be accomplished prior to the completion of the period
            during which the Option may be exercised and such exercise period
            may not be extended beyond that which was initially established. The
            Committee may establish any SAR terms and conditions that it desires
            at the time such SAR is established, provided that, to the extent
            permitted by applicable law, notwithstanding any provision of this
            Plan to the contrary, the terms and conditions of a SAR related to
            an ISO shall be the same as the terms applicable to the underlying
            ISO.


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      b)    Exercise of Stock Appreciation Right. (i) A Stock Appreciation Right
            shall be exercisable at such time as may be determined by the
            Committee, which shall be not less than six months after its grant,
            and provided further that a Stock Appreciation Right shall be
            exercisable only to the extent that the related Option could be
            exercised. Option shares with respect to which the related Stock
            Appreciation Right shall have been exercised may not again be
            subjected to Options under this Plan. Upon the exercise of a Stock
            Appreciation Right, that portion of the Option underlying the Stock
            Appreciation Right will be considered as having been exercised.

            (ii) The Committee may impose any other conditions upon the exercise
            of a Stock Appreciation Right, which conditions may include a
            condition that the Stock Appreciation Right may only be exercised in
            accordance with rules and regulations adopted by the Committee from
            time to time. Such rules and regulations may govern the right to
            exercise Stock Appreciation Rights granted prior to the adoption or
            amendment of such rules and regulations as well as Stock
            Appreciation Rights granted thereafter. The exercise of a Stock
            Appreciation Right for cash shall be made only during the periods
            specified in Rule 16b-3 of the Securities and Exchange Commission.

            (iii) Upon the exercise of a Stock Appreciation Right, the Company
            shall give to an Optionee an amount (less any applicable withholding
            taxes, which at the Company's discretion may be settled by
            withholding shares of Stock or by payment of cash) equivalent to the
            excess of the value of


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            the shares of Stock for which the right is exercised on the date of
            such exercise over the exercise price of such shares under the
            related Option. The value on the date of exercise shall be the Fair
            Market Value as determined in Section 6(e) of this Plan. Such amount
            shall be either in cash or in shares of Stock or both as the
            Committee shall determine. Such determination may be made at the
            time of the granting of the Stock Appreciation Right and may be
            changed at any time thereafter. The shares may consist either in
            whole or in part of authorized and unissued shares of Stock or
            issued shares of Stock whether held in the treasury of the Company
            or otherwise. No fractional shares of Stock shall be issued and the
            Committee shall determine whether cash shall be given in lieu of
            such fractional share or whether such fractional share shall be
            eliminated.

c)    Expiration or Termination of Stock Appreciation Rights.

            (i) Subject to (c)(ii), each Stock Appreciation Right and all rights
            and obligations thereunder shall expire on a date to be determined
            by the Committee.

            (ii) A Stock Appreciation Right shall terminate and may no longer be
            exercised upon the termination of the related Option

d)    Amendment, Suspension or Termination of Stock Appreciation Rights. The
      Committee may, at any time, amend, suspend, or terminate any Stock
      Appreciation Right theretofore granted under the Plan.


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9.    STRATEGIC INCENTIVE PLAN

      a)    Administrative Procedure. Normally, the Committee shall adopt
            administrative procedures applicable to a Performance Period prior
            to, or within 30 days after, the date designated by the Committee
            for the Commencement of such Performance Period. The Committee may,
            however, adopt such administrative procedures more than 30 days
            after such commencement if in its option such delayed action is
            appropriate. Such procedures shall establish Indicators of
            Performance and the Target Awards applicable to the Performance
            Period. Indicators of Performance may vary from Performance Period
            to Performance Period.

      b)    Indicators of Performance. Indicators of Performance may include,
            but shall not be limited to, increased shareholder value, earnings
            per share, return on shareholder's equity, return on assets and/or
            other similar criteria. Such indicators may be based on the
            Company's performance compared to the performance of one or more
            selected companies in the petroleum industry during the same
            Performance Period or may relate solely to the Company's performance
            during the Performance Period or a combination of such indicators.
            At the completion of the Performance Period, the Committee will
            review the Company's actual performance with respect to the
            Indicators of Performance, and, in its sole judgment, rank the
            Company's overall performance. Such ranking may range from
            "noncompetitive" through "competitive" to "outstanding." In arriving
            at such ranking, the Committee may take into consideration, and make


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            appropriate adjustments for, events occurring during the Performance
            Period, which the Committee, in its sole judgment, concludes have
            affected the performance of the Company or any selected company with
            respect to any of the Indicators of Performance. No Earned Awards
            will be granted if the Company's overall performance is ranked
            "non-competitive." Subject to individual performance adjustments
            therein, if any, pursuant to paragraph 9(c) of this Plan, if the
            Company's overall performance is ranked "competitive," Target Awards
            will result; higher or lower ranking will result in greater or
            lesser awards provided that in no event, including individual
            performance adjustments, shall the Earned Award of a SIP Participant
            exceed 150% of the SIP Participant's Target Award.

      c)    Award Adjustments. The Committee in its sole discretion may make
            adjustments in awards determined under paragraph (b) of this Section
            based on the SIP Participant's individual performance during the
            Performance Period. The administrative procedures for each
            Performance Period shall establish the method to be used by the
            Committee in determining which, if any, SIP Participants may receive
            such performance adjustments and, subject to the maximum set out in
            paragraph (b) of this Section, the size of such adjustments.

      d)    Partial Performance Period Participation. The administrative
            procedures adopted for each Performance Period shall also include
            procedures to be used in determining the extent to which an Employee
            shall participate in a


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            partial Performance Period due to either assignment to a position
            which makes the Employee eligible to be a SIP Participant after the
            beginning of such Performance Period or termination of employment
            prior to the completion of such a Performance Period in which the
            Employee was a SIP Participant.

      e)    Award Settlement. With respect to each Performance Period,
            settlement of all Earned Awards shall be made in Stock as soon as
            practicable following the date on which the Committee determines the
            size of Earned Awards; provided that the Committee may decide to
            settle such awards over a period or periods of time as the Committee
            shall deem appropriate.

10.   ADJUSTMENT UPON CHANGES IN CAPITALIZATION

      In the event of a reorganization, recapitalization, Stock split, Stock
      dividend, exchange of Stock, combination of Stock, merger, consolidation
      or any other change in corporate structure of the Company affecting the
      Stock, or in the event of a sale by the Company of all or a significant
      part of its assets, or any distribution to its shareholders other than a
      normal cash dividend, the Committee may make appropriate adjustment in the
      number, kind, price and value of Stock authorized by this Plan and any
      adjustment to outstanding Awards as it determines appropriate so as to
      prevent dilution or enlargement of rights.

11.   MISCELLANEOUS

      a)    Except as otherwise required by law, no action taken under the Plan
            shall be taken into account in determining any benefits under any
            pension, retirement, thrift, profit sharing, group insurance, or
            other benefit plan


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            maintained by the Company or any Subsidiary, unless such other plan
            specifically provides for such inclusion.

      b)    No Option or Stock Appreciation Right or right under the Strategic
            Incentive Plan shall be transferable other than by will or the laws
            of descent and distribution. During the lifetime of an Optionee, any
            Option or Stock Appreciation Right shall be exercisable only by the
            Optionee or the Optionee's duly appointed guardian or legal
            representative.

      c)    The Company shall have the right to withhold from any settlement
            hereunder any Federal, state, or local taxes required by law to be
            withheld. Such withholding may be satisfied by the withholding of
            shares of Stock by the Company if the Optionee so requests in a
            manner prescribed by the Committee, if the Committee so approves,
            and such withholding of shares does not violate any applicable laws,
            rules or regulations of Federal, state or local authorities.

      d)    All administrative expenses associated with the administration of
            the Plan shall be borne by the Company.

      e)    Masculine pronouns and other words of masculine gender used herein
            shall refer to both men and women.

      f)    The titles and headings of the sections in this Plan are for
            convenience of reference only and in the event of any conflict, the
            text of the Plan, rather than such titles or headings, shall
            control.

12.   AMENDMENT AND TERMINATION

      The Board may, at any time, terminate or amend this Plan in such respect
      as it


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      shall deem advisable, provided, the Board may not, without further
      approval of the stockholders of the Company if such approval is required
      in order that transactions in Company securities under the Plan be exempt
      from the operation of Section 16(b) of the Securities Exchange Act of
      1934, amend the Plan so as to (i) increase the number of shares of Stock
      which may be issued under the Plan, except as provided for in Section 10;
      (ii) materially modify the requirements as to eligibility for
      participation; (iii) materially increase the benefits accruing to
      Participants under the Plan; (iv) extend the duration of the Plan beyond
      the date approved by the stockholders; or (v) increase the maximum dollar
      amount of ISO's which an individual Optionee may first exercise during any
      calendar year beyond that permitted in the Code and applicable regulations
      of the Treasury Department. Notwithstanding the foregoing, no such
      termination or amendment may adversely affect the rights of any
      Participant under any Award that is outstanding at the time of such
      termination or amendment without the Participant's consent.

13.   DURATION OF THE PLAN

      The Plan shall become effective on January 1, 1990, provided that it has
      been approved by the stockholders at the annual meeting of the
      stockholders in April of 1989, and shall terminate on December 31, 1994.

14.   CHANGE OF CONTROL

      a)    In the event of a Change of Control:

            i)    Any Stock Options and Stock Appreciation Rights outstanding as
                  of the date of the Change of Control that are not then fully


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                  exercisable and vested, shall become fully exercisable and
                  vested to the full extent of the original grant;

            ii)   All restrictions and other limitations applicable to any
                  Restricted Stock shall lapse, and such Restricted Stock shall
                  become free of all restrictions and become fully vested and
                  transferable to the full extent of the original grant;

            iii)  All Performance Awards and other Awards outstanding as of the
                  date of the Change of Control shall be considered to be earned
                  and payable in full, and any deferral or other restriction
                  shall lapse and except as provided in subsection (c) of this
                  Section 14, such Performance Units shall be settled in cash as
                  promptly as is practicable; and

            iv)   All noncompetition covenants and other similar restrictive
                  covenants applicable to any outstanding Awards shall lapse and
                  become null and void and of no further effect.

      b)    A "Change of Control" shall mean:

            i)    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 (a "Person")) of beneficial
                  ownership (within the meaning of Rule 13d-3 promulgated under
                  the Securities Exchange Act of 1934) of 20% or more of either
                  (a) the then outstanding shares of common stock of the Company
                  (the "Outstanding Company Common Stock") or (b) the combined


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                  voting power of the then outstanding voting securities of the
                  Company entitled to vote generally in the election of
                  directors (the "Outstanding Company Voting Securities");
                  provided, however, that for the purposes of this subsection
                  (i), the following acquisitions shall not constitute a Change
                  of Control: (A) any acquisition directly from the Company, (B)
                  any acquisition by the Company, (C) any acquisition by any
                  employee benefit plan (or related trust) sponsored or
                  maintained by the Company or any corporation controlled by the
                  Company or (D) any acquisition pursuant to a transaction which
                  complies with clauses (A), (B) and (C) of subsection (iii) of
                  this Section 14(b); or

            ii)   Individuals who, as of August 26, 2002, constitute the Board
                  (the "Incumbent Board") cease for any reason to constitute at
                  least a majority of the Board; provided, however, that any
                  individual becoming a director subsequent to August 26, 2002,
                  whose election, or nomination for election by the Company's
                  shareholders, was approved by a vote of at least a majority of
                  the directors then comprising the Incumbent Board 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 with
                  respect to the election or removal of directors


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                  or other actual or threatened solicitation of proxies or
                  consents by or on behalf of a Person other than the Board; or

            iii)  Approval by the shareholders of the Company of a
                  reorganization, merger or consolidation or sale or other
                  disposition of all or substantially all of the assets of the
                  Company or the acquisition of assets of another entity (a
                  "Corporate Transaction"), in each case, unless, following such
                  Corporate Transaction, (A) all or substantially all of the
                  individuals and entities who were the beneficial owners,
                  respectively, of the Outstanding Company Common Stock and
                  Outstanding Company Voting Securities immediately prior to
                  such Corporate Transaction beneficially own, directly or
                  indirectly, more than 60% 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 the election of directors, as the case may
                  be, of the corporation resulting from such Corporate
                  Transaction (including, without limitation, a corporation
                  which as a result of such transaction owns the Company or all
                  or substantially all of the Company's assets either directly
                  or through one or more subsidiaries) in substantially the same
                  proportions as their ownership, immediately prior to such
                  Corporate Transaction of the Outstanding Company Common Stock
                  and Outstanding Company Voting Securities, as the case may be,
                  (B) no Person (excluding


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                  any employee benefit plan (or related trust) of the Company or
                  such corporation resulting from such Corporate Transaction)
                  beneficially own, directly or indirectly, 20% or more of,
                  respectively, the then outstanding shares of common stock of
                  the corporation resulting from such Corporate Transaction 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 Corporate Transaction and (C)
                  at least a majority of the members of the board of directors
                  of the corporation resulting from such Corporate Transaction
                  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 Corporate Transaction; or

            iv)   Approval by the shareholders of the Company of a complete
                  liquidation or dissolution of the Company.

      c)    Notwithstanding the foregoing, if any right to receive cash granted
            pursuant to this Section 14 would make a Change of Control
            transaction ineligible for pooling-of-interests accounting under APB
            No. 16 that but for the nature of such right would be eligible for
            such accounting treatment, the Committee shall have the ability to
            substitute for the cash payable pursuant to such right Stock or
            other securities with a fair market value equal to the cash that
            would otherwise be payable hereunder.


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