Empires S-8 Exhibit 4(u) - 2006 Stock Incentive Plan


    Exhibit
      4(u)

    


    THE
      EMPIRE DISTRICT ELECTRIC COMPANY

    2006
      STOCK INCENTIVE PLAN

    


    1.
      Purpose

    


    
      	
              The
                Empire District Electric Company 2006 Stock
                Incentive Plan is designed to enable qualified executive, managerial,
                supervisory and professional personnel and directors of The Empire
                District Electric Company to acquire or increase their ownership
                of the
                common stock of the Company on reasonable terms. The opportunity
                so
                provided is intended to foster in participants a strong incentive
                to put
                forth maximum effort for the continued success and growth of the
                Company,
                to aid in retaining individuals who put forth such efforts, and to
                assist
                in attracting the best available individuals in the
                future.

            


    

    


    2. Definitions

    


    
      	 	
              When
                used herein, the following terms shall have the meaning set forth
                below: 

            


    

    


    
      	 	
              2.1
                “Award” shall mean an Option or a Restricted Stock
                Award.

            


    

    


    
      	 	
              2.2
                “Board” means the Board of Directors of The Empire District Electric
                Company.

            


    

    


    
      	 	
              2.3
                “Committee” means the members of the Board's Compensation Committee who
                are “Non-Employee Directors” as defined in Rule 16b-3 adopted
                pursuant to the Securities Exchange Act of 1934 and “outside directors”
                within the meaning of Section 162(m) of the
                Code.

            


    

    


    
      	 	
              2.4
                “Code” means the Internal Revenue Code of 1986, as
                amended.

            


    

    


    
      	 	
              2.5
                “Company” means The Empire District Electric Company, a Kansas
                corporation.

            


    

    


    
      	 	
              2.6
                “Fair Market Value” means with respect to the Company’s Shares the mean
                between the high and low prices of Shares on the New York Stock Exchange
                Composite Tape on the day on which an Award is granted (or Shares
                are
                delivered in lieu of current cash compensation as permitted by the
                Plan)
                or, if there should be no sale on that date, on the next preceding
                day on
                which there was a sale.

            


    

    


    
      	 	
              2.7
                “Grantee” means a person to whom an Award is
                made.

            


    

    


    
      	 	
              2
                8
                “Incentive Stock Option” or “ISO” means an Option awarded under the Plan
                which meets the terms and conditions established by Section
                422 of
                the Code and applicable
                regulations.

            


    

    


    
      	 	
              2.9
                “Non-Qualified Stock Option” or “NQSO” means an Option awarded under the
                Plan other than an ISO.

            


    

    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      
        

          
            	 	 
	 	
                    2.10
                      “Option” means the right to purchase a number of Shares, at a price,
                      for a
                      term, under conditions, and for cash or other con-
sideration fixed by
                      the Committee and expressed in the written instrument evidencing
                      the
                      Option. An Option may be either an ISO 
or
                      NQSO.

                  


          

        

      

       

    

    
      	 	
              2.11
                “Plan” means the Company's 2006 Stock
                Incentive Plan.

            


    

    


    
      	 	
              2.12
                “Restricted Stock Award” means the grant of a right to receive a number of
                Shares at a time or times fixed by the Committee in accordance with
                the
                Plan and subject to such limitations and restrictions as the Plan
                and the
                Committee (as expressed in the written instrument evidencing the
                Restricted Stock Award) impose.

            


    

    


    
      	 	
              2.13
                “Right of First Refusal” means the right which may be given to the Company
                pursuant to Section 7.4 hereof
                to purchase Shares received pursuant to Awards under the Plan at
                their
                then Fair Market Value, in the event the holder of such Shares desires
                to
                sell the Shares to any other person. This right, if so given, shall
                apply
                under terms and conditions established by the Committee at the time
                of the
                Award and included in the written instrument evidencing the Award,
                and
                shall apply to sales by the Grantee or the Grantee's guardian, legal
                representative, joint tenant, tenant in common, heirs or
                Successors.

            


    

    


    
      	 	
              2.14
                “Shares” means shares of the Company's common stock, par value
                $1.00 per
                share, or, if by reason of the adjustment provisions hereof any rights
                under an Award under the Plan pertain to any other security, such
                other
                security.

            


    

    


    
      	 	
              2.15
                “Subsidiary” means any business, whether or not incorporated, in which the
                Company, at the time an Award is granted to an employee thereof,
                or in
                other cases, at the time of reference, owns directly or indirectly
                not
                less than 50% of
                the equity interest except that with respect to an ISO the term
                “Subsidiary” shall have the meaning set forth in Section 424(f) of the
                Code.

            


    

    


    
      	 	
              2.16
                “Successor” means the legal representative of the estate of a deceased
                Grantee or the person or persons who shall acquire the right to exercise
                an Option, or to receive Shares issuable in satisfaction of a Restricted
                Stock Award, by bequest or inheritance or by reason of the death
                of the
                Grantee, as provided in accordance with Section 9 hereof, or by reason
                of
                a transfer permitted pursuant to Section 8
                hereof.

            


    

    


    
      	 	
               2.17
                “Term” means the period during which a particular Option may be exercised
                or the period during which the restrictions placed on a Restricted
                Stock
                Award are in effect. 

            


    

    


    3.
      Administration of the Plan

    


    
      	 	
              3.1
                The Plan (other than the portion thereof described in Section 3.7)
                shall
                be administered by the Committee.

            


    

    


    
      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

    

    


    


    
      	 	
              3.2
                Subject to the provisions of the Plan, the Committee shall have the
                sole
                authority to determine:

            


    

    (i)
      the
      employees of the Company and its Subsidiaries to whom Awards shall be granted;
      

    


    (ii)
      the
      number of Shares to be covered by each Award;

    


    (iii)
      the
      price to be paid for the Shares upon the exercise of each Option;

    (iv)
      the
      Term within which each Option may be exercised;

     

    
      
        	
                (v)
                  the terms and conditions of each Option, which may include provisions
                  for
                  payment of the option price in 
Shares at the Fair Market Value of such
                  Shares on the day of their delivery for such
                  purpose;

              


      

    

     

    (vi)
      the
      restrictions on transfer and forfeiture conditions with respect to a Restricted
      Stock Award; and

    (vii)
      any
      other terms and conditions of the Award. 

    


    
      	 	
              Awards
                shall be made by the Committee.

            


    

    


    
      	 	
              3.3
                The Committee may construe and interpret the Plan, reconcile
                inconsistencies thereunder and supply omissions therefrom. Any decision
                or
                action taken by the Committee in the exercise of such powers or otherwise,
                arising out of or in connection with the construction, administration,
                interpretation and effect of the Plan and of its rules and regulations,
                shall be conclusive and binding upon all Grantees, and any other
                person
                claiming under or through any Grantee.


            


    

    


    
      	 	
              3.4
                The Committee shall designate one of its members as Chairman. It
                shall
                hold its meetings at such times and places as it may determine. All
                determinations of the Committee shall be made by a majority of its
                members
                at the time in office. Any determination reduced to writing and signed
                by
                a majority of the members of the Committee at the time in office
                shall be
                fully as effective as if it has been made at a meeting duly called
                and
                held. The Committee may appoint a Secretary, who need not be a member
                of
                the Committee, and may establish and amend such rules and regulations
                for
                the conduct of its business and the administration of the Plan as
                it shall
                deem advisable. 

            


    

    


    
      	 	
              3.5
                No member of the Committee shall be liable, in the absence of bad
                faith,
                for any act or omission with respect to his service on the Committee.
                Service on the Committee is hereby specifically declared to constitute
                service as a Director of the Company, to the end that the members
                of the
                Committee shall, in respect of their acts and omissions as such,
                be
                entitled to indemnification and reimbursement as Directors of the
                Company
                pursuant to its Bylaws and to the benefits of any insurance policy
                maintained by the Company providing coverage with respect to acts
                or
                omissions of Directors of the Company.


            


    

    


    
      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

    

    


    


    
      	 	
              3.6
                The Committee shall regularly inform the Board as to its actions
                under the
                Plan in such manner, at such times, and in such form as the Board
                may
                request.

            


    

    


    
      	 	
              3.7
                Anything in the Plan to the contrary notwithstanding, the foregoing
                provisions of this Section 3 shall not apply to the portion of the
                Plan
                relating to Directors who are not employees of the Company or any
                of its
                Subsidiaries and who have the right to elect to receive Shares in
                lieu of
                cash Remuneration pursuant to Section 19.2. Such portion of the Plan
                shall
                instead be administered by the Secretary of the Company. Since the
                receipt
                of Shares by any such non-employee Director of the Company is based
                on
                elections by such Director, this administrative function shall be
                limited
                to matters of interpretation and administrative
                oversight.

            


    

    


    4.
      Eligibility

    


    
      	
              Awards
                may be made under the Plan only to the class of employees of the
                Company
                or of a Subsidiary, including officers, consisting of those employees
                who
                have executive, managerial, supervisory or professional responsibilities.
                A Director who is not an employee shall not be eligible to receive
                an
                Award. Awards may be made to eligible employees whether or not they
                have
                received prior Awards under the Plan or under any other plan, and
                whether
                or not they are participants in other benefit plans of the
                Company.

            


    

    


    


    5.
      Shares Subject to Plan

    


    


    
      	
              The
                maximum number of Shares which may be used in connection with Awards
                or
                Share deliveries under the Plan is 650,000; provided, however, that
                no
                more than 325,000 Shares may be used in connection with Restricted
                Stock
                Awards. The Shares so used may be Shares held in the treasury, however
                acquired, or Shares which are authorized but unissued. Any Shares
                subject
                to Options which lapse unexercised and any Shares forming part of
                a
                Restricted Stock Award which do not vest in the Grantee shall once
                again
                be available for grant of Awards or delivery under Section
                19.

            


    

    


    6.
      Granting of Options

    


    
      	 	
              6.1
                Subject to the terms of the Plan, the Committee may from time to
                time
                grant Options to eligible
                employees.

            


    

    


    
      	 	
              6.2
                No individual may be granted Options intended to qualify as ISOs
                under the
                Plan and all other incentive stock option plans of the Company (and
                its
                parent or subsidiary corporations, if any, within the meaning of
                Section
                424 of the Code) which are exercisable for the first time during
                any
                calendar year with respect to Shares having an aggregate Fair Market
                Value
                (determined as of the time the Option is granted) greater than $100,000.
                To the extent that Options granted to an individual exceed the limitation
                set forth in the preceding sentence, the later-granted of such Options
                shall be treated as NQSOs. No ISO shall be granted to an individual
                who,
                at the time the ISO is granted, owns (within the meaning of Section
                422(b)(6) of the Code) stock possessing more than 10 percent of the
                total
                combined voting power of all classes of stock of the employee's employer
                corporation or of its parent or subsidiary corporation unless, at
                the time
                the ISO is granted, the option price is at least 110 percent of the
                Fair
                Market Value of the stock subject to the ISO, and the ISO by its
                terms is
                not exercisable after the expiration of five years from the date
                the ISO
                is granted. 

            


    

    


    
      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

    

    


    


    
      	 	
              6.3
                The purchase price of each Share subject to an Option shall be fixed
                by
                the Committee, but shall not be less than the greater of the par
                value of
                the Share or 100% of the Fair Market Value of the Share on the date
                the
                Option is granted. Repricing of outstanding Options shall not be
                permitted
                under the Plan.

            


    

    


    
      	 	
              6.4
                Each Option shall expire and all rights to purchase Shares thereunder
                shall terminate on the date fixed by the Committee and expressed
                in the
                written instrument evidencing the Option, which date shall not be
                after
                the expiration of ten years from the date the Option is granted.
                

            


    

    


    
      	 	
              6.5
                Subject to the terms of the Plan, each Option shall become exercisable
                at
                the time, and for the number of Shares, fixed by the Committee and
                expressed in the written instrument evidencing the Option. Except
                to the
                extent otherwise provided in or pursuant to Sections 9 and 10, no
                Option
                shall become exercisable as to any Shares prior to the third anniversary
                of the date on which the Option was granted.


            


    

    


    
      	 	
              6.6
                Subject to the terms of the Plan, the Committee may at the time of
                the
                Award make all or any portion of the Shares issuable upon exercise
                of the
                Option subject to a Right of First Refusal for any period of time
                designated by the Committee in the written instrument evidencing
                the
                Award.

            


    

    


    7.
      Restricted Stock Awards

    


    
      	 	
              7.1
                Subject to the terms of the Plan, the Committee may also grant eligible
                employees Restricted Stock Awards.

            


    

    


    
      	 	
              7.2
                The number of Shares covered thereby and other terms and conditions
                of any
                such Restricted Stock Award, including the period for which and the
                conditions on which the Shares included in the Award will be subject
                to
                forfeiture and restrictions on transfer or on the ability of the
                Grantee
                to make elections with respect to the taxation of the Award without
                the
                consent of the Committee, shall be determined by the Committee and
                expressed in the written instrument evidencing the Award. Except
                as
                provided in or pursuant to Sections 9 and 10, no such restrictions
                shall
                lapse earlier than the third, or later than the tenth, anniversary
                of the
                date on which the Award was granted. The conditions established by
                the
                Committee on which the Shares included in an Award will be subject
                to
                forfeiture may, but need not, include conditions tied to performance
                measures selected by the Committee.

            


    

    


    
      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

    

    


    


    
      	 	
              7.3
                The Committee may establish and express in the written instrument
                evidencing the Award terms and conditions under which the Grantee
                of a
                Restricted Stock Award shall be entitled to receive a payment equivalent
                to any dividend payable with respect to the number of Shares which,
                as of
                the record date for which dividends are payable, has been awarded
                to him
                but not delivered to him. Any such dividend equivalents shall be
                paid to
                the Grantee of the Restricted Stock Award at such time or times during
                the
                period when the Shares are as yet undelivered pursuant to the terms
                of the
                Restricted Stock Award, or at the time the Shares to which the dividend
                equivalents apply are delivered to the Grantee, all as the Committee
                shall
                determine and express in the written instrument evidencing the Award.
                Any
                arrangement for the payment of dividend equivalents shall be terminated
                if, and to the extent that, under the terms and conditions so established
                by the Committee, the right to receive Shares being held pursuant
                to the
                terms of the Restricted Stock Award shall
                lapse.

            


    

    


    
      	 	
              7.4
                Subject to the terms of the Plan, the Committee may at the time of
                the
                Award make all or any portion of the Shares awarded under a Restricted
                Stock Award subject to a Right of First Refusal for any period of
                time
                designated by the Committee and expressed in the written instrument
                evidencing the Award.

            


    

    


    8.
      Non-Transferability of Rights

    


    


    
      	
              Except
                as otherwise provided in the next sentence of this Section 8, no
                Option
                and no rights under any Restricted Stock Award shall be transferable
                by
                the Grantee otherwise than by will or the laws of descent and
                distribution, and each Option may be exercised during the lifetime
                of the
                Grantee only by him; and the written instrument evidencing each Option
                and
                each Restricted Stock Award shall so state. The Committee may in
                its
                discretion, on such terms and conditions as it shall establish, permit
                an
                Option or Restricted Stock Award to be transferred to a member or
                members
                of the Grantee's immediate family, or to a trust for the benefit
                of such
                immediate family members or a partnership in which such immediate
                family
                members are the only partners. For purposes of this provision, a
                Grantee's
                immediate family shall mean the Grantee's spouse, children and
                grandchildren.

            


    

    


    9.
      Death or Termination of Employment

    


    
      	 	
              9.1
                Subject to the provisions of the Plan, the Committee may make and
                include
                in the written instrument evidencing an Option such provisions concerning
                exercise or lapse of the Option on death or termination of employment
                as
                it shall in its discretion determine. No such provision shall permit
                an
                Option to be exercised later than the expiration date of the Option
                determined pursuant to Section 6.4.


            


    

    


    
      	 	
              9.2
                No ISO shall be exercisable after the date which is three months
                following
                the Grantee's termination of employment for any reason other than
                death or
                disability, or after twelve months following the Grantee's termination
                of
                employment by reason of disability.

            


    

    


    
      	 	
              9.3
                The effect of death or termination of employment on Shares issuable
                or
                deliverable pursuant to any Restricted Stock Awards shall be as stated
                in
                the written instrument evidencing the
                Award.

            


    

    


    


    
      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

      

    

    


    


    
      	 	
              9.4
                A transfer
                of employment between the Company and a Subsidiary, or between
                Subsidiaries, shall not constitute a termination of employment for
                purposes of any Award. The Committee may specify in the written instrument
                evidencing the Award whether or not, and if at all to what extent,
                any
                authorized leave of absence or absence for military or governmental
                service or for any other reason shall constitute a termination of
                employment for purposes of the Award and the
                Plan.

            


    

    


    10.
      Provisions Relating to Change in Control

    


    


    
      	
              The
                Committee may provide in the written instrument evidencing an Award
                that
                in the event of a “Change in Control” of the Company (as defined by the
                Committee in such written instrument), the Option so evidenced shall
                be
                immediately exercisable in full and the Restricted Stock Award so
                evidenced shall be immediately payable in full. The Committee may
                also
                include in such written instrument additional conditions for such
                immediate exercisability of an Option or immediate payment in full
                of a
                Restricted Stock Award, including without limitation conditions relating
                to the timing and/or circumstances of the Grantee's termination of
                employment following the “Change in
                Control.”

            


    

    


    11.
      Writing Evidencing Awards

    


    


    
      	
              Each
                Award granted under the Plan shall be evidenced by a writing which
                may,
                but need not, be in the form of an agreement to be signed by the
                Grantee.
                The writing shall set forth the nature and size of the Award, its
                Term,
                the other terms and conditions thereof, and such other matters as
                the
                Committee directs. Acceptance of any benefits of an Award by the
                Grantee
                shall be an assent to the terms and conditions set forth therein,
                whether
                or not the writing is in the form of an agreement signed by the
                Grantee.

            


    

    


    12.
      Exercise of Rights Under Awards

    


    
      	 	
              12.1
                A person entitled to exercise an Option may do so only by delivery
                of a
                written notice to that effect specifying the number of Shares with
                respect
                to which the Option is being exercised and any other information
                which the
                Committee has previously prescribed and of which such person has
                been
                notified.

            


    

    


    
      	 	
              12.2
                Such a notice shall be accompanied by payment in full for the purchase
                price of any Shares to be purchased thereunder, with such payment
                being
                made in cash or Shares having a Fair Market Value on the date of
                exercise
                of the Option equal to the purchase price payable under the Option
                or a
                combination of cash and Shares, and (subject to the next sentence)
                no
                Shares shall be issued upon exercise of an Option until full payment
                has
                been made therefor. To the extent permitted by the Committee, an
                Option
                may also be exercised by delivery of a properly executed exercise
                notice
                together with irrevocable instructions to a broker to promptly deliver
                to
                the Company the amount of sale or loan proceeds to pay the purchase
                price
                of shares purchased under the
                Option.

            


    

    


    


    
      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

      

    

    


    


    
      	 	
              12.3
                Upon exercise of an Option, or after grant of a Restricted Stock
                Award but
                before delivery of Shares in satisfaction thereof, the Grantee may
                request
                in writing that the Shares to be issued or delivered be in the name
                of the
                Grantee and another person as joint tenants with right of survivorship
                or,
                in the case of a Restricted Stock Award or NQSO, as tenants in
                common.

            


    

    


    
      	 	
              12.4
                Upon exercise of an Option or after grant of a Restricted Stock Award
                under which a Right of First Refusal has been required with respect
                to
                some or all of the Shares subject to such Option, or included in
                the
                Restricted Stock Award, the Grantee shall be required to acknowledge,
                in
                writing, his or her understanding of such Right of First Refusal
                and the
                legend which shall be placed on the certificates for such Shares
                in
                respect thereof.

            


    

    


    
      	 	
              12.5
                All notices or requests by a Grantee provided for herein shall be
                delivered to the Secretary of the
                Company.

            


    

    


    13.
      Effective Date of the Plan and Duration

    


    
      	 	
              13.1
                The Plan shall become effective on January 1, 2006, subject to approval
                within twelve months before or after that date by the shareholders
                of the
                Company at a meeting duly held in accordance with applicable law;
                and
                subject to approval within applicable time limits by any governmental
                body, the approval of the Plan by which body is required under applicable
                law. No Option shall be exercisable nor shall any Shares be deliverable
                under a Restricted Stock Award prior to receipt of all required
                approvals.

            


    

    


    
      	 	
              13.2
                No Awards may be granted under the Plan after December 31, 2015,
                although
                the terms of any Award may be amended at any time prior to the expiration
                of the Award in accordance with the
                Plan.

            


    

    


    14.
      Date of Award

    


    


    
      	
              The
                date of an Award shall be the date on which the Committee's determination
                to grant the same is final, or such later date as shall be specified
                by
                the Committee in connection with such
                determination.

            


    

    


    15.
      Stockholder Status

    


    


    
      	
              No
                person shall have any rights as a stockholder by virtue of the grant
                of an
                Award under the Plan except with respect to Shares actually issued
                to that
                person.

            


    

    


    


    
      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

    

    


    


    16. Postponement
      of Exercise

    


    


    
      	
              The
                Committee may postpone any exercise of an Option or the delivery
                of any
                Shares pursuant to a Restricted Stock Award for such period as the
                Committee in its discretion may deem necessary in order to permit
                the
                Company (i) to effect or maintain registration of the Plan or the
                Shares
                issuable upon the exercise of an Option or distributable in satisfaction
                of a Restricted Stock Award or both under the Securities Act of 1933,
                as
                amended, or the securities laws of any applicable jurisdiction, (ii)
                to
                permit any action to be taken in order to comply with restrictions
                or
                regulations incident to the maintenance of a public market for its
                Shares
                or to list the Shares thereon, or (iii) to determine that such Shares
                and
                the Plan are exempt from such registration or that no action of the
                kind
                referred to in (ii) above shall or need be taken; and the Company
                shall
                not be obligated by virtue of any terms and conditions of any Award
                or any
                provision of the Plan to permit the exercise of an Option or to sell
                or
                deliver Shares in violation of the Securities Act of 1933 or other
                applicable law. Any such postponement shall not extend the Term of
                an
                Option nor shorten the Term of any restriction applicable under any
                Restricted Stock Award; and neither the Company nor its directors
                or
                officers or any of them shall have any obligation or liability to
                the
                Grantee of an Award, to any Successor of a Grantee or to any other
                person
                with respect to any Shares as to which an Option shall lapse because
                of
                such postponement or as to which issuance under a Restricted Stock
                Award
                was thereby delayed.

            


    

    


    17.
      Termination, Suspension or Modification of Plan

    


    17.1 Subject
      to Section 17.2, the Board may at any time terminate, suspend or modify the
      Plan
      in any respect. No termination, suspension or modification of the Plan shall
      adversely affect any right acquired by any Grantee or any Successor of a Grantee
      under an Award granted before the date of such termination, suspension or
      modification unless such Grantee or Successor shall consent thereto. Adjustments
      for changes in capitalization or corporate transactions as provided for herein
      shall not, however, be deemed to adversely affect any such right. To the extent
      required by applicable law, no member of the Board who is an officer or employee
      of the Company or a Subsidiary shall vote (in his or her capacity as such a
      Board member) on any proposed amendment to the Plan, or on any other matter
      or
      question arising under the Plan, relating to his or her own individual interest
      thereunder. 

     

    


    17.2 Any
      increase in the aggregate number of Shares for which Awards may be granted
      and
      which may be the subject of Share deliveries under Section 19 (except as
      contemplated by Section 18) and any other amendment or modification of the
      Plan
      for which stockholder approval is required by applicable rule or regulation
      of
      any governmental regulatory body or under the rules of any stock exchange in
      which the Shares are listed shall be subject to the approval of the Company’s
      stockholders. In addition, any increase in the number of Shares available under
      the Plan for grant as ISOs and any change in the designation of the group of
      employees eligible to receive ISOs under the Plan shall be subject to
      stockholder approval in accordance with Section 422 of the Code.

     

    


    
      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

    

    


    


     

    18.
      Adjustment for Changes in Capitalization and Corporate
      Transactions

    


    
      	
              Any
                change in the number of outstanding shares of the Company occurring
                through stock splits, combination of shares, recapitalization, or
                stock
                dividends after the adoption of the Plan shall be appropriately reflected
                by the Committee through an increase or decrease in the aggregate
                number
                of Shares then available for the grant of Awards or Share deliveries
                under
                the Plan, or to become available through the termination, surrender
                or
                lapse of Awards previously granted and in the number of Shares subject
                to
                Restricted Stock Awards then outstanding; and appropriate adjustments
                shall be made by the Committee in the per Share option price and/or
                number
                of Shares subject to the Option as to any outstanding Options. No
                fractional shares shall result from such adjustments. Similar adjustments
                shall be made in the event of distribution of other securities in
                respect
                of outstanding shares or in the event of a reorganization, merger,
                consolidation or any other change in the corporate structure or shares
                of
                the Company, if and to the extent that the Committee deems such
                adjustments appropriate.

            


    

    


    19.
      Delivery of Shares in Lieu of Cash

    Incentive
      Awards or Directors Fees

     

    
      	 	
              19.1
                Any employee otherwise eligible for an Award under the Plan who is
                eligible to receive a cash bonus or incentive payment from the Company
                under any management bonus or incentive plan of the Company (any
                such
                bonus or payment, a “Cash Payment”) may make application to the Committee
                in such manner as may be prescribed from time to time by the Committee
                to
                receive Shares available under the Plan in lieu of all or any portion
                of
                such Cash Payment. 

            


    

    


    
      	 	
              The
                Committee may in its discretion honor an employee's application made
                pursuant to this Section 19.1 by delivering Shares available under
                the
                Plan to such employee equal in Fair Market Value at the delivery
                date to
                that portion of the Cash Payment for which a Share delivery is to
                be made
                in lieu of cash payment. 

            


    

    


    
      	 	
              19.2
                Any non-employee Director who is entitled to a cash payment for services
                rendered as a non-employee Director (“Remuneration”) may elect to receive
                Shares available under the Plan in lieu of all or any portion of
                his or
                her Remuneration or to change or terminate any such election previously
                made. Any such election shall be in writing and delivered to the
                Secretary
                of the Company. 

            


    

    


    
      	 	
              Shares
                which are available under the Plan shall be delivered to a Director
                who
                makes an election in compliance with this Section 19.2 equal in Fair
                Market Value at the delivery date to that portion of the Remuneration
                for
                which a Share delivery is to be made in lieu of cash payment.
                

            


    

    


    
      	 	
              19.3
                Any Shares delivered to an employee under Section 19.1 or to a Director
                under Section 19.2 shall reduce the aggregate number of Shares available
                for Awards or Share deliveries under the
                Plan.

            


    

    


    


    
      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

    

    


    


    
      	 	
              19.4
                Delivery of Shares pursuant to this Section 19 shall not be permitted
                under the Plan after December 31, 2015. Delivery of Shares pursuant
                to
                this Section 19 shall be deemed to occur on the date certificates
                therefor
                are sent by United States mail or hand delivered to the recipient
                or
                transferred to the recipient’s account maintained with the transfer agent
                or a broker.

            


    

    


    
      	 	
              19.5
                The Company shall issue cash in lieu of fractional Shares which would
                otherwise be issuable under this Section
                19.

            


    

    


    20.
      Non-Uniform Determination Permissible

    


    


    
      	
              The
                Committee's determinations under the Plan including, without limitation,
                determinations as to the persons to receive Awards, the form, amount
                and
                type of Awards (i.e., ISOs, NQSOs or Restricted Stock Awards), the
                terms
                and provisions of Awards, the written instruments evidencing such
                Awards,
                and the granting or rejecting of applications for delivery of Shares
                in
                lieu of cash bonus or incentive payments need not be uniform as among
                persons similarly situated and may be made selectively among otherwise
                eligible employees or Directors, whether or not such employees or
                Directors are similarly situated.

            


    

    


    21. Taxes

    


    


    
      	
              The
                Company shall be entitled to withhold the amount of any withholding
                tax
                payable with respect to any Awards and Share deliveries in lieu of
                cash
                payments and to sell such number of Shares as may be necessary to
                produce
                the amount so required to be withheld, unless the recipient supplies
                to
                the Company cash in the amount requested by the Company for the purpose.
                The person entitled to receive Shares pursuant to the Award will
                be given
                notice as far in advance as practicable to permit such cash payment
                to be
                made to the Company. The Company may, in lieu of sale of Shares,
                defer
                making delivery of Shares until indemnified to its satisfaction with
                respect to any such withholding tax. The Committee may adopt rules
                allowing the recipient of any Award payable in Shares, or any person
                electing to receive Shares under Section 19, to satisfy any applicable
                tax
                withholding requirements in whole or in part by delivering to the
                Company
                Shares or by instructing the Company to withhold Shares otherwise
                deliverable to such person as part of such Award, in either case
                with a
                Fair Market Value not in excess of the amount of the applicable
                withholding requirements.

            


    

    


    22. Tenure

    


    


    
      	
              An
                employee's right, if any, to continue in the employ of the Company
                or a
                Subsidiary shall not be affected by the fact that he is a participant
                under the Plan; and the Company or Subsidiary shall retain the right
                to
                terminate his employment without regard to the effect such termination
                may
                have on any rights he may have under the Plan.

            
	 


    

    23.
      Application of Proceeds

    


    


    
      	
              The
                proceeds received by the Company from sale of its Shares pursuant
                to
                Options granted under the Plan shall be used for general corporate
                purposes.

            
	 


    

    


    
      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

      

    

    


    


    24.
      Other Actions

     

    


    
      	
              Nothing
                in the Plan shall be construed to limit the authority of the Company
                to
                exercise all of its corporate rights and powers, including, by way
                of
                illustration and not by way of limitation, the right to grant options
                for
                proper corporate purposes otherwise than under the Plan to any employee
                or
                any other person, firm, corporation, association or other entity,
                or to
                grant options to, or assume options of, any person in connection
                with the
                acquisition by purchase, lease, merger, consolidation or otherwise
                of all
                or any part of the business or assets of any person, firm, corporation,
                association or other entity.

            


    

    
 

    
      
        
        

      

      
        -12-