EXHIBIT 10.9



                PRIME RETAIL, INC. 2002 LONG-TERM INCENTIVE PLAN

Article 1.        Establishment, Objectives and Duration

     1.1 Establishment of the Plan. Prime Retail, Inc., a Maryland  corporation,
has adopted this "Prime Retail, Inc. 2002 Long-Term Incentive Plan." Capitalized
terms will have the  meanings  given to them in Article 2. The Plan  permits the
grant of two types of Milestone Bonuses and a Value Bonus.

     1.2  Objectives  of  the  Plan.  The  Plan's  purpose  is to  optimize  the
profitability  and growth of the Company through  long-term  incentives that are
consistent with the Company's  objectives and that link Participants'  interests
to those of the Company's  shareholders;  to give  Participants an incentive for
excellence in individual  performance;  to promote teamwork among  Participants;
and to give the Company a significant  advantage in attracting and retaining key
employees.

     1.3 Effective Date and Term of the Plan.

                (a)  The Plan will be  effective  August 13,  2002.  In addition
     to  the  Awards  granted herein to the Participants on attached  Appendix A
     under  Sections 5.1 and 5.2  of  the  Plan, the Board may grant, subject to
     Section 7.1 of the Plan, additional Awards under the Plan at any time after
     the   Plan's   Effective   Date   and   on  or  before  December 31,  2005.
     Notwithstanding  the  foregoing,  no  shares of Common Stock will be issued
     under  the  Plan,  until the Company's shareholders approve the issuance of
     shares of Common Stock under the Plan.

                (b)  Unless amended or modified by the Board pursuant to Section
     7.1, the Plan  will  terminate  upon  the  date on which all Awards granted
     under the Plan have been distributed.

Article 2.        Definitions

     Whenever used in the Plan, the following  terms have the meanings set forth
below, and when the meaning is intended,  the initial letter of the word will be
capitalized:

     "Actual Net  Operating  Income"  means,  with  respect to any  wholly-owned
property of the Company or any of its subsidiaries,  the net operating income of
the  property  for the twelve  month  period  ending on December 31, 2005 before
depreciation and debt service and after deducting a 3% management fee and adding
back the Company's  charge back to such property for accounting,  administration
and regional offices.

     "Award" means an award of a share of one or both of the  Milestone  Bonuses
and/or the Value Bonus.

     "Beneficiary"  means the Person or Persons a  Participant  designates  in a
signed  writing,  filed with the Company,  as the beneficiary of any amounts the
Participant is to receive under the Plan. If the  Participant has not designated
a beneficiary hereunder, the Beneficiary shall be the Person or Persons eligible
to receive the proceeds of the  Participant's  life  insurance  policy under the
life insurance policy  maintained by the Company as in effect at the time of the
Participant's  death. If the Participant has not designated a beneficiary  under
the life insurance policy or does not have a life insurance policy maintained by
the Company or if the  Participant's  Beneficiary  is not living on the relevant
date  hereunder,  the  Company  will  treat  the  Participant's  estate  as  the
Beneficiary.

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

     "Change in Control" means the  occurrence of any of the following:  (a) any
"person" or "group" (as such terms are used for  purposes of Sections  13(d) and
14(d) of the  Exchange  Act,  regardless  of whether  applicable),  other than a
trustee or other fiduciary holding  securities under an employee benefit plan of
the Company or a corporation owned directly or indirectly by the shareholders of
the Company in substantially the same proportions as their ownership of stock of
the Company becomes the "beneficial  owner" (as defined in Rule 13d-3 under said
Act), directly or indirectly,  of securities of the Company  representing 50% or
more of the total voting power  represented  by the Company's  then  outstanding
securities that vote generally in the election of directors  (referred to herein
as  "Voting  Securities");  (b)  during  any  period of two  consecutive  years,
individuals who at the beginning of such period constitute the Board and any new
directors  whose  election  by the  Board  or  nomination  for  election  by the
Company's  shareholders  was approved by a vote of at least  two-thirds (2/3) of
the directors then still in office who either were directors at the beginning of
the period or whose  election or  nomination  for  election  was  previously  so
approved,  cease for any reason to  constitute a majority of the Board;  (c) the
individuals who constitute the Board immediately before a proxy contest cease to
constitute  at least a majority of the Board  (excluding  any Board seat that is
vacant or otherwise  unoccupied)  immediately following the proxy contest; (d) a
merger or consolidation of the Company with or into any other entity, other than
a merger or consolidation  (i) that would result in the Voting Securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining  outstanding  or by being  converted  into  Voting  Securities  of the
surviving  entity) at least 50% of the total  voting  power  represented  by the
Voting   Securities  of  the  Company  or  such  surviving  entity   outstanding
immediately  after such merger or  consolidation  or (ii) where more than 50% of
the board of directors of the  surviving  entity is composed of members from the
Board,  with  terms  ending at least 11 months  after the date of the  merger or
consolidation; or (e) the shareholders of the Company approve a plan of complete
liquidation  of the Company or an agreement for the sale or  disposition  by the
Company of (in one transaction or a series of transactions) all or substantially
all of the Company's  assets,  and such transaction is substantially  completed.
However,  in no event will a Change of Control be deemed to have occurred,  with
respect to a Participant if the  Participant is part of a purchasing  group that
consummates the Change of Control  transaction.  A Participant will be deemed to
be "part of the purchasing group" for purposes of the preceding  sentence if the
Participant is an equity  participant in the purchasing company or group (except
for:  (x)  passive  ownership  of less than  three  percent  of the stock of the
purchasing company;  or (y) ownership of equity  participation in the purchasing
company or group that is otherwise not  significant,  as determined prior to the
Change of Control by a majority of the non-employee continuing directors).

     "Code"  means  the  Internal  Revenue  Code of 1986,  as  amended,  and any
successor statute.

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     "Committee"  means the  Compensation  Committee of the Board unless another
committee is designated by the Board to administer the Plan.

     "Common Stock" means the Company's Common Stock, par value $0.01 per share,
or if the  outstanding  Common Stock is hereafter  changed into or exchanged for
different stock or securities of the Company, such other stock or securities.

     "Company"  means  Prime  Retail,  Inc.,  a  Maryland  corporation,  and any
successor thereto as provided in Article 9.

     "Cause" will have the meaning set forth in any employment,  consulting,  or
other  agreement  between  the  Company  and the  Participant.  If  there  is no
employment,   consulting,  or  other  agreement  between  the  Company  and  the
Participant,  or if such  agreement  does not define  "Cause," then "Cause" will
mean (i) that a Participant  has harmed the Company through an act of dishonesty
or  material  conflict  of  interest  that  relates  to the  performance  of the
Participant's  duties,  responsibilities  and  functions  of  the  Participant's
position with the Company, (ii) a Participant's conviction of a felony involving
moral turpitude, fraud or embezzlement, or (iii) a Participant's willful failure
to perform in any material respect the duties, responsibilities and functions of
the  Participant's  position  with the  Company  (other  than a  failure  due to
Disability)  that results in material harm to the Company,  after written notice
specifying the failure and a reasonable opportunity of at least thirty (30) days
to cure (it being understood that if the Participant's failure to perform is not
of a type  requiring a single  action to fully cure,  then the  Participant  may
commence the cure promptly after such written  notice and thereafter  diligently
prosecute  such cure to  completion).  The Company  intends that "Cause" must be
based only on  meaningful  and  significant  matters and not on matters of minor
importance.  For purposes of this  definition  of "Cause," an act, or failure to
act, on a  Participant's  part shall be  considered  "willful"  only if done, or
omitted  to be done,  by him or her not in good  faith  and  without  reasonable
belief  that his or her  action  or  omission  was in the best  interest  of the
Company.

     "Disability" will have the meaning set forth in any employment, consulting,
or other  agreement  between  the Company  and the  Participant.  If there is no
employment,   consulting,  or  other  agreement  between  the  Company  and  the
Participant,   or  if  such  agreement  does  not  define   "Disability,"   then
"Disability"  will mean the inability of a Participant  to perform the essential
duties,  responsibilities  and functions of the Participant's  position with the
Company  for four  consecutive  months  as a result of any  mental  or  physical
disability or incapacity even with reasonable  accommodations of such disability
or incapacity provided by the Company or if providing such accommodations  would
be unreasonable, all as determined in the reasonable judgment of the Board.

     "Effective Date" means August 13, 2002.

     "Exchange Act" means the  Securities  Exchange Act of 1934, as amended from
time to time, or any successor act thereto.

     "Fair  Market  Value"  means,  as it  relates  to Common  Stock,  the value
determined by the Board, in its reasonable discretion, after taking into account
such factors as the Board deems appropriate; provided, however, that in no event
shall the Fair Market  Value be less than the average of the closing sale prices
(or if no sales occurred on such date, the average between the last reported bid
price  and ask  price  on the  applicable  day)  for  the  twenty  trading  days
immediately preceding the date of determination.

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     "Good  Reason"  will  have  the  meaning  set  forth  in  any   employment,
consulting, or other agreement between the Company and the Participant. If there
is no employment,  consulting,  or other  agreement  between the Company and the
Participant,  or if such  agreement  does not define "Good  Reason,"  then "Good
Reason" will mean (A) the Participant's title or scope of  responsibilities  and
duties  are  materially  diminished  from  the  highest  level  attained  by the
Participant  with the Company,  or the Company fails to provide the  Participant
with  adequate   office   facilities  and  support   services  to  perform  such
responsibilities  and  duties;  or (B) the  Company  changes  the  Participant's
principal  place  of  employment  to a  location  more  than 25  miles  from the
Company's  principal  Baltimore  City  office  as of  the  Effective  Date.  The
Participant's delay in providing notice of his termination for Good Reason shall
not be  deemed  to be a waiver  of any such  Good  Reason  unless  and until the
Participant  fails to provide such notice within six months after the occurrence
of the event triggering such Good Reason, nor does the failure to resign for one
Good Reason prevent any later Good Reason resignation for a similar or different
reason.

     "Indebtedness" means, the liabilities other than current liabilities of the
Company and its subsidiaries as reported in the Company's  financial  statements
for the year ended December 31, 2005.

     "Joint Venture Value" means,  with respect to any joint venture property in
which the Company or any of its  subsidiaries  has an  interest on December  31,
2005, the valuation of the joint venture  property based on the present value of
the projected  operating  cash flows  expected from such joint venture  property
(assuming  a sale in 2010 at a  purchase  price  based on the  same  methodology
employed in calculating  Property Value and assuming projected  occupancy levels
and cash flows) discounted at a 16% discount rate.

     "Mega Deal VI Loan" means that  certain loan made as of October 31, 1996 in
the  original  principal  amount  of  $359,000,000  from  Nomura  Asset  Capital
Corporation to Castle Rock Factory Shops  Partnership;  Coral Isle Factory Shops
Limited Partnership; Florida Keys Factory Shops Limited Partnership; Gainesville
Factory Shops Limited  Partnership;  Grove City Factory Shops Partnership;  Gulf
Coast  Factory  Shops  Limited  Partnership;   Gulfport  Factory  Shops  Limited
Partnership;  Huntley  Factory  Shops Limited  Partnership;  Kansas City Factory
Shops Limited Partnership;  Loveland Factory Shops Limited Partnership; Magnolia
Bluff Factory Shops Limited  Partnership;  Ohio Factory Shops  Partnership;  The
Prime Outlets at Lebanon Limited  Partnership;  Triangle  Factory Stores Limited
Partnership and San Marcos Factory Stores, Ltd., as amended.

     "Milestone"  means each of the  performance  targets  set forth in Sections
5.1(a) and (b).

     "Milestone  Bonus" means each of the contributions to the Plan set forth in
Sections 5.1(a) and (b).

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     "Net Asset Value"  means,  as of December 31, 2005,  (a) the sum of (i) the
Property   Value  for  each   wholly-owned   property  of  the  Company  or  its
subsidiaries,  and (ii) the Joint  Venture  Value for each of the joint  venture
properties in which the Company or any of its subsidiaries has an interest; plus
(b) the Third  Party  Agreement  Value for each of the  management,  leasing and
consulting  agreements  to which the  Company  or any of its  subsidiaries  is a
party; plus (c) the result of (i) any current assets (cash,  receivables,  etc.)
of the Company and its subsidiaries,  minus (ii) any current  liabilities (short
term notes, payables,  etc.) of the Company and its subsidiaries;  minus (d) the
Company's outstanding  Indebtedness.  The determination of Net Asset Value shall
be made by the Board  pursuant  to the terms of the Plan as soon as  practicable
following December 31, 2005, but in no event later than March 1, 2006.

     "Participant"  means a Person  whom the Board has  selected  to  receive an
Award under the Plan,  including such Persons set forth on Appendix A hereto, or
who has an outstanding Award granted under the Plan.

     "Person" means any individual, partnership,  corporation, limited liability
company, association, joint stock company, trust, joint venture,  unincorporated
organization and any governmental entity or any department,  agency or political
subdivision thereof.

     "Plan" means the Prime Retail,  Inc. 2002 Long-Term  Incentive Plan, as set
forth in this document, as from time to time amended.

     "Property Value" means,  with respect to each property,  the product of (a)
the Actual Net  Operating  Income of such property for the  twelve-month  period
ended  December  31,  2005,  times  (b) the  applicable  multiple  listed on the
schedule  set forth  below  based on the annual  sales per square  foot for such
property; provided, that, if the annual sales per square foot for a property are
between $100 and $150 for the twelve-month  period ended December 31, 2005, then
the Property  Value of such property shall mean the product of (i) the aggregate
square footage of such property, times (ii) $20; provided,  further, that if the
annual  sales  per  square  foot  for a  property  are  less  than  $100 for the
twelve-month  period ended  December 31, 2005,  then the Property  Value of such
property  shall mean the  product of (i) the  aggregate  square  footage of such
property, times (ii) $10.

     Annual Sales Per Square Foot                  Multiple (Implied Cap Rate)
     ----------------------------                  ---------------------------
              > $350                                         10 (10%)
            $300 - 350                                    9.524 (10.5%)
            $275 - 300                                    9.091 (11.0%)
            $250 - 275                                    8.696 (11.5%)
            $225 - 250                                    8.333 (12.0%)
            $200 - 225                                      8.0 (12.5%)
            $175 - 200                                    7.407 (13.5%)
            $150 - 175                                    6.897 (14.5%)

     "Third  Party  Agreement  Value"  means,  with  respect to any  management,
leasing or consulting  agreement to which the Company or any of its subsidiaries
is a party, the value of the management,  leasing or consulting  agreement based
on the net present  value of the  expected net cash profit to the Company or its
subsidiary  over  the  remaining  term of  such  agreement  discounted  at a 25%
discount rate.

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     "Value Bonus" means the contribution to the Plan set forth in Section 5.2.

Article 3.        Administration

     3.1 Plan Administration.  The Plan will be administered by the Board or, if
so delegated by the Board, by the Committee.  The Board or the Committee (as the
case may be) will act by a  majority  of its  members  at the time in office and
eligible to vote on any  particular  matter,  and the Board or the Committee (as
the case may be) action may be taken either by a vote at a meeting or in writing
without a meeting.

     3.2  Authority  of the Board.  Except as limited by law and  subject to the
provisions of the Plan,  including,  but not limited to,  Section 7.1, the Board
will have full power to: (i) select eligible Persons to participate in the Plan;
(ii) determine the size of Awards;  (iii)  determine the terms and conditions of
Awards in a manner  consistent  with the Plan;  (iv)  construe and interpret the
Plan and any agreement or instrument entered into under the Plan; (v) establish,
amend or waive rules and  regulations  for the Plan's  administration;  and (vi)
subject to the  provisions of the Plan,  including,  but not limited to, Section
7.1, amend the terms and conditions of any  outstanding  Award to the extent the
terms are within the Board's discretion under the Plan. Further,  the Board will
make all other  determinations  that may be necessary or advisable to administer
the Plan.  As  permitted by law and  consistent  with Section 3.1, the Board may
delegate some or all of its authority under the Plan.

     3.3 Decisions  Binding.  All determinations and decisions made by the Board
pursuant to the provisions of the Plan will be final,  conclusive and binding on
all  Persons,  including,  without  limitation,  the  Company,  its  Board,  its
shareholders,  all  affiliates,  employees,  Participants  and their estates and
beneficiaries.

Article 4.        Eligibility and Participation

     4.1 Eligibility. Eligibility to participate in the Plan shall be limited to
executives and key employees of the Company designated by the Board.

     4.2 Actual  Participation.  The executives and key employees of the Company
set forth in attached  Appendix A are hereby granted the right to receive Awards
under the Plan.

Article 5.        Awards

     5.1 Milestone Bonuses. Each Participant set forth in attached Appendix A is
hereby  allocated  a portion of the  following  Milestone  Bonuses  equal to the
percentage set forth next to such Participant's name in attached Appendix A.

                  (a)   Restructuring/Recapitalization    Plan    Milestone.   A
         contribution  of  $2.5  million  will  be  made  to  the  Plan upon the
         completion of  a successful restructuring/recapitalization plan that is
         approved by  the Board  and that includes the redemption or exchange of
         the Company's  Series A and B  Preferred  Stock (the "Preferred Stock")
         for    cash    and/or     a    new    equity    security.     Such    a
         restructuring/recapitalization  may   occur  in  conjunction  with  the
         transfer  of  a  controlling  interest  in the Company to a third-party
         investor,  but  shall  not  include  a  sale  of  the Company where the
         redemption of the preferred shares does not benefit the Company.

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                  (b)  Mega  Deal  VI Loan  Milestone.  A  contribution  of $1.5
         million will  be  made to the  Plan upon the completion of a successful
         refinancing of the Mega Deal VI Loan and/or the sale of assets securing
         the Mega Deal VI Loan resulting  in the retirement of the existing Mega
         Deal VI Loan in a manner approved by the Board.

     5.2 Value  Bonus.  Each  Participant  set forth in  attached  Appendix A is
hereby  allocated a portion of the Value Bonus equal to the percentage set forth
next to such Participant's name in attached Appendix A. The Value Bonus shall be
comprised  of: (i) a  contribution  of $1.5 million to the Plan if the Net Asset
Value is equal to or greater  than $200 million on December 31, 2005 and (ii) an
additional contribution to the Plan equal to 1.5% of the amount by which the Net
Asset Value exceeds $200 million on December 31, 2005.  The $200 million  target
shall be increased by the amount of any equity  contributed to the Company after
the Effective Date and on or before December 31, 2005, and decreased by the cost
to the Company of any stock repurchases or reductions effected by the Company or
distributions to the Company's  shareholders (other than distributions paid from
operating  cash flow) after the  Effective  Date and on or before  December  31,
2005.

     5.3 Vesting.  A Participant's  Awards under the Plan shall become vested as
set forth below.

                  (a) A Participant's entitlement to share in one or both of the
Milestone Bonuses will vest as follows:

                       (i)   50%  will  vest  upon achievement of the applicable
         Milestone, provided the Participant  remains employed by the Company on
         such achievement date; and

                       (ii)   with  respect  to each Milestone that is achieved,
         the  remaining  50%  will  vest  on   December 31, 2005,  provided  the
         Participant remains employed by the Company on such date. Except as set
         forth in clauses (iii) and (iv)  below,  a Participant will forfeit his
         or her unvested entitlement to share in one  or  both  of the Milestone
         Bonuses (or any portion thereof) if his or  her  employment  terminates
         prior to either of the applicable  vesting  dates  set  forth  in  this
         clause (ii) and clause (i) above.

                       (iii)   Notwithstanding  Section 5.3(a)(ii)  above,  with
         respect to each Milestone  that  is  achieved, the remaining 50% of the
         Participant's entitlement to share in  the  applicable  Milestone Bonus
         will become immediately vested if a Participant's employment terminates
         as a result of (A) his or her involuntary  termination  by  the Company
         without Cause, (B) the death  or  Disability of the Participant, or (C)
         the Participant voluntarily terminating his or her  employment with the
         Company for Good Reason.  For purposes  of  this  Section 5.3(iii), the
         failure of the  Company  to  renew a Participant's employment agreement
         will  be  deemed  to  constitute  an  involuntary  termination  of such
         Participant  by the  Company without  Cause unless such Participant has
         been terminated  for  Cause prior to the non-renewal of such employment
         agreement.

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                       (iv)    Notwithstanding  Sections  5.3(a)(ii)  and  (iii)
         above, with respect to each  Milestone  that is achieved, the remaining
         50%  of  the  Participant's  entitlement  to  share  in  the applicable
         Milestone  Bonus  will  become  immediately  vested  upon  a  Change in
         Control,  provided  the  Participant remains employed by the Company on
         the effective date of the Change in Control.

                  (b)  A Participant's  entitlement to  share in the Value Bonus
         shall  vest  on  December 31, 2005,  provided  the  Participant remains
         employed  by  the  Company  on such date. In the event a Participant is
         terminated by the  Company  without  Cause  after  July 1, 2005  or has
         voluntarily terminated his or her employment with the Company with Good
         Reason after July 1, 2005, then such Participant's entitlement to share
         in the Value Bonus  shall vest on December 31, 2005 notwithstanding the
         fact that he or she is not employed by the Company on such date.

                  (c) Any  portion  of  the Milestone Bonuses and/or Value Bonus
         attributable to Awards that are forfeited according to this Section 5.3
         will be returned to the Company.

     5.4  Distribution  of Awards.  Awards will be payable within 60 days of the
applicable  vesting  date;  provided,  however,  if the  vesting  of an Award is
accelerated  because of a Change in Control  then such Award will be paid on the
accelerated  vesting date.  Distributions will be made either in cash, shares of
Common  Stock  equal to the cash value of the Award  divided by the Fair  Market
Value of the Common Stock on the  applicable  vesting date, or a combination  of
cash  and  shares  of  Common  Stock,  as  determined  by the  Board in its sole
discretion.  Notwithstanding  the  foregoing,  any remaining 50% payments of any
Milestone Bonuses to be distributed to a Participant under Section 5.3(a)(ii) of
the Plan will be reduced by $0.50 for each $1.00 due and owing under the "change
in control" provisions of such Participant's employment agreement.

     5.7  Nontransferability  of Awards.  No Award granted under the Plan may be
sold,  transferred,  pledged,  assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. The Board may, in
its discretion,  require a  Participant's  guardian or legal  representative  to
supply it with the evidence the Board deems necessary to establish the authority
of the guardian or legal representative to act on behalf of the Participant.

Article 6.        Rights to Employment

     Nothing  in the Plan will  interfere  with or limit in any way the right of
the  Company or any  affiliate  (as defined in federal  securities  laws) of the
Company to terminate  any  Participant's  employment at any time, or confer upon
any  Participant  any right to continue in the  employment of the Company or any
affiliate;  provided,  however,  that any  termination  of  employment  shall be
subject to the terms and conditions of the applicable  Participant's  employment
agreement, if any.

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Article 7.        Amendment, Modification and Termination

     7.1  Amendment,  Modification  and  Termination.  Subject  to the terms and
conditions  of the Plan  including  the last  sentence of this  Section 7.1, the
Board may at any time and from time to time, alter,  amend,  modify or terminate
the Plan in whole or in part.  Subject to the terms and  conditions  of the Plan
including the last sentence of this Section 7.1, the Board may modify, extend or
renew outstanding  Awards under the Plan, or accept the surrender of outstanding
Awards  (to the  extent  not  already  distributed)  and  grant  new  Awards  in
substitution of them (to the extent not already distributed) or grant additional
Awards pursuant to Section 1.3 of the Plan. Notwithstanding the foregoing or the
authority  granted to the Board pursuant to Sections 1.3 and 3.2 of the Plan, no
alteration,  amendment, modification or termination of the Plan or modification,
extension or renewal of an Award or grant of an additional  Award will adversely
affect any rights or economic benefits under any Awards heretofore granted under
the Plan or change the objectives or other measures of performance applicable to
any  Awards  heretofore  granted  under  the  Plan in a  manner  adverse  to the
Participants granted such Awards.

     7.2  Adjustment  of  Awards  Upon the  Occurrence  of  Certain  Unusual  or
Nonrecurring  Events. In recognition of unusual or nonrecurring events affecting
the  Company  or its  financial  statements,  or in  recognition  of  changes in
applicable laws, regulations,  or accounting principles, and, whenever the Board
determines that  adjustments are appropriate to prevent  dilution or enlargement
of the benefits or potential  benefits  intended to be made available  under the
Plan, the Board may, using reasonable care,  adjust the terms and conditions of,
and the criteria included in, Awards.  Notwithstanding the foregoing and subject
to Section  7.1,  the Board will have the  discretion  to adjust the  Milestones
and/or  criteria  established  with respect to either of the  Milestone  Bonuses
and/or the Value Bonus;  provided,  however, that Awards designed to qualify for
the  performance-based  exception  under Code Section 162(m) may not be adjusted
upward,  except to the extent  permitted under Code Section  162(m),  to reflect
accounting changes or other events.

Article 8.        Withholding

     8.1 Tax  Withholding.  The  Company  will  have the  power and the right to
deduct or withhold,  or require a Participant to remit to the Company, an amount
(either in cash or shares of Common Stock) sufficient to satisfy federal, state,
and local  taxes,  domestic or  foreign,  required  by law or  regulation  to be
withheld with respect to any taxable event arising under the Plan.

     8.2 Share  Withholding.  With  respect  to  withholding  required  upon the
distribution  of shares of Common Stock pursuant to an Award granted  hereunder,
the Company may,  subject to the last sentence in this Section 8.2,  satisfy the
minimum withholding  requirement for supplemental wages, in whole or in part, by
withholding shares of Common Stock having a Fair Market Value (determined on the
date the  Participant  recognizes  taxable  income  on the  Award)  equal to the
minimum amount of withholding  tax required to be collected on the  transaction.
In the event the  Company  intends to  withhold  shares to satisfy  the  minimum
withholding  requirement,  the  Company  shall  notify the  Participant  of such
proposed  withholding  of shares and refrain from making any  withholdings  with
respect to such Participant until the Participant has replied, or deemed to have
replied, to such notice. Following such notice from the Company, the Participant
may elect to deliver the necessary funds to satisfy the  withholding  obligation
to the Company, in which case there will be no reduction in the shares of Common
Stock otherwise  distributable to the  Participant.  If the Participant does not
respond  within  15  days  of  receipt  of the  notice  from  the  Company,  the
Participant will be deemed to have elected not to deliver the necessary funds to
satisfy the withholding obligation.

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Article 9.        Successors

     All  obligations  of the  Company  under  the Plan will be  binding  on any
successor to the Company,  whether the existence of the successor results from a
direct or indirect  purchase of all or substantially  all of the business and/or
assets of the Company, or a merger, consolidation, or otherwise.

Article 10.       Legal Construction

     10.1 Number.  Except where otherwise  indicated by the context,  any plural
term used in the Plan  includes the singular  and a singular  term  includes the
plural.

     10.2 Severability.  If any provision of the Plan is held illegal or invalid
for any reason, the illegality or invalidity will not affect the remaining parts
of the Plan,  and the Plan will be  construed  and enforced as if the illegal or
invalid provision had not been included.

     10.3 Requirements of Law. The granting of Awards and the issuance of shares
of Common  Stock  and/or  cash  payouts  under the Plan will be  subject  to all
applicable laws,  rules,  and regulations,  and to any approvals by governmental
agencies or national securities exchanges as may be required.

     10.4  Securities  Law  Compliance.  As to any  individual  who  is,  on the
relevant date, an officer, director or ten percent beneficial owner of any class
of the Company's equity securities that is registered  pursuant to Section 12 of
the  Exchange  Act,  all  as  defined  under  Section  16 of the  Exchange  Act,
transactions  under  the  Plan  are  intended  to  comply  with  all  applicable
conditions of Rule 16b-3 under the Exchange  Act, or any successor  rule. To the
extent any provision of the Plan or action by the Board fails to so comply, such
provision or action will be deemed null and void, unless otherwise  permitted by
law and deemed advisable by the Board.

     10.5  Unfunded  Status of the Plan.  The Plan is intended to  constitute an
"unfunded"  plan for  incentive and deferred  compensation.  With respect to any
payments  of cash or  deliveries  of shares  of  Common  Stock not yet made to a
Participant by the Company,  the Participant's  rights are no greater than those
of a general creditor of the Company.  The Board may authorize the establishment
of trusts or other arrangements to meet the obligations  created under the Plan,
so long as the  arrangement  does not cause the Plan to lose its legal status as
an unfunded plan.

     10.6  Governing  Law. To the extent not  preempted by federal law, the Plan
and all agreements  hereunder will be construed and enforced in accordance with,
and governed by, the laws of the State of Maryland, without giving effect to its
conflict of laws principles.

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                                   APPENDIX A
                                   ----------


            Key Executives                        Participation Percentage in
            --------------                        ---------------------------
                                                  Long-Term Incentive Plan
                                                  ------------------------
            Glenn D. Reschke                                 24.0%
            Robert A. Brvenik                                24.0%
            David G. Phillips                                17.0%
            R. Kelvin Antill                                 13.0%
            Frederick J. Meno                                10.0%
            William Ellis                                     4.0%
            Nicholas McCoy                                    4.0%
            Mark Hertz                                        4.0%