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                                                             EXHIBIT 10(a)(xxxv)

                         SEVERANCE PROTECTION AGREEMENT

        THIS AGREEMENT made as of the __ day of ____ 2005 by and between the
"Company" (as hereinafter defined) and ___________ (the "Executive").

        WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that the possibility of a Change in Control (as hereinafter defined) exists and
that the threat or the occurrence of a Change in Control can result in
significant distractions of its key management personnel because of the
uncertainties inherent in such a situation;

        WHEREAS, the Board has determined that it is essential and in the best
interest of the Company and its stockholders to retain the services of the
Executive in the event of a threat or occurrence of a Change in Control and to
ensure the Executive's continued dedication and efforts in such event without
undue concern for the Executive's personal financial and employment security;
and

        WHEREAS, in order to induce the Executive to remain in the employ of the
Company, particularly in the event of a threat of the occurrence of a Change in
Control, the Company desires to enter into this Agreement with the Executive to
provide the Executive with certain benefits in the event the Executive's
employment is terminated as a result of, or in connection with, a Change in
Control.

        NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:

        1. Term of Agreement. Subject to the remaining provisions of this
Section 1, this Agreement shall commence as of the date of this Agreement and
shall continue in effect until the first anniversary of such date; provided,
however, that commencing on such anniversary and on each anniversary thereafter,
the term of this Agreement shall automatically be extended for one (1) year
unless either the Company or the Executive shall have given written notice to
the other at least ninety (90) days prior thereto that the term of this
Agreement shall not be so extended; and provided, further, however, that
notwithstanding any such notice by the Company not to extend, if a Change in
Control occurs during the term of this Agreement, the term of this Agreement
shall not expire before the expiration of 24 months after the occurrence of a

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Change in Control. Notwithstanding the foregoing, this Agreement shall expire
and be of no further force and effect in the event of any termination of
employment that occurs prior to a Change in Control; provided, that, in the
event that a Change in Control actually occurs following such termination of
employment, nothing in this Section 1 shall prohibit the Executive from
asserting that his or her termination of employment was for Good Reason,
consistent with the terms of this Agreement.

        2. Definitions.

            2.1. Accrued Compensation. For purposes of this Agreement, "Accrued
Compensation" shall mean an amount which shall include all amounts earned or
accrued through the "Termination Date" (as hereinafter defined) but not paid as
of the Termination Date including (i) base salary, (ii) reimbursement for
reasonable and necessary expenses incurred by the Executive on behalf of the
Company during the period ending on the Termination Date, (iii) vacation pay,
and (iv) bonuses and incentive compensation (other than the "Pro Rata Bonus" (as
hereinafter defined)).

            2.2. Base Amount. For purposes of this Agreement, "Base Amount"
shall mean the greater of the Executive's annual base salary (a) at the rate in
effect on the Termination Date or (b) at the highest rate in effect at any time
during the ninety (90) day period before the Change in Control, and shall
include all amounts of the Executive's base salary that are deferred under the
qualified and non-qualified employee benefit plans of the Company or any other
agreement or arrangement.

            2.3. Bonus Amount. For purposes of this Agreement, "Bonus Amount"
shall mean the average of the annual [cash] bonuses [(including both cash bonus
and any cash bonus foregone by the Executive in exchange for restricted stock
units of the Company)] paid or payable during the three full fiscal years ended
before the Termination Date or, if greater, the three full fiscal years ended
before the Change in Control (or, in each case, such lesser period for which
[cash] annual bonuses [(including both cash bonus and any cash bonus foregone by
the Executive in exchange for restricted stock units of the Company)] were paid
or payable to the

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Executive); provided, that, in the event the Executive has not
been employed by the Company for a full fiscal year, the "Bonus Amount" shall
equal the Executive's target annual [cash] bonus during the year of termination
of employment.

            2.4. Cause. For purposes of this Agreement, a termination of
employment is for "Cause" if (a) the Executive has been convicted of, or has
entered a plea of no lo contendere to, (i) a crime constituting a felony under
the laws of the United States or any state thereof or (ii) a misdemeanor
involving moral turpitude, or (b) the termination is evidenced by a resolution
adopted in good faith by two-thirds of the Board that the Executive (i)
intentionally and continually failed substantially to perform the Executive's
reasonably assigned duties with the Company (other than a failure resulting from
the Executive's incapacity due to physical or mental illness or from the
Executive's assignment of duties that would constitute "Good Reason" as
hereinafter defined) which failure continued for a period of at least thirty
(30) days after a written notice of demand for substantial performance has been
delivered to the Executive by the Company specifying the manner in which the
Executive has failed substantially to perform, or (ii) intentionally engaged in
conduct which is demonstrably and materially injurious to the Company; provided,
however, that no termination of the Executive's employment shall be for Cause as
set forth in clause (ii) above until (x) there shall have been delivered to the
Executive a copy of a written notice setting forth that the Executive was guilty
of the conduct set forth in clause (ii) and specifying the particulars thereof
in detail, and (y) the Executive shall have been provided an opportunity to be
heard in person by the Board (with the assistance of the Executive's counsel if
the Executive so desires). No act, nor failure to act, on the Executive's part,
shall be considered "intentional" unless the Executive has acted, or failed to
act, with a lack of good faith and with a lack of reasonable belief that the
Executive's action or failure to act was in the best interest of the Company.

            2.5. Change in Control. For purposes of this Agreement:

                  (a) A "Change in Control" shall mean any of the following
events:

                  (1) An acquisition (other than directly from the Company) of
            any voting securities of the Company (the "Voting Securities") by
            any "Person" (as the term person is used for purposes of Section
            13(d) or 14(d) of the Securities Exchange Act

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            of 1934, as amended (the "1934 Act")) immediately after which
            such Person has "Beneficial Ownership" (within the meaning of Rule
            13d-3 promulgated under the 1934 Act) of twenty percent (20%) or
            more of the combined voting power of the Company's then outstanding
            Voting Securities; provided, however, that in determining whether a
            Change in Control has occurred, Voting Securities which are acquired
            in a "Non-Control Acquisition" (as hereinafter defined) shall not
            constitute an acquisition which would cause a Change in Control. A
            "Non-Control Acquisition" shall mean an acquisition by (i) an
            employee benefit plan (or a trust forming a part thereof) maintained
            by (x) the Company or (y) any corporation or other Person of which a
            majority of its voting power or its equity securities or equity
            interest is owned directly or indirectly by the Company (a
            "Subsidiary"), (ii) the Company or any Subsidiary, or (iii) any
            Person in connection with a "Non-Control Transaction" (as
            hereinafter defined).

                  (2) The individuals who, as of the date of this Agreement, are
            members of the Board (the "Incumbent Board"), cease for any reason
            to constitute at least two-thirds of the Board; provided, however,
            that if the election, or nomination for election by the Company's
            stockholders, of any new director was approved by a vote of at least
            two-thirds of the Incumbent Board, such new director shall, for
            purposes of this Agreement, be considered as a member of the
            Incumbent Board; provided, further, however, that no individual
            shall be considered a member of the Incumbent Board if such
            individual initially assumed office as a result of either an actual
            or threatened "Election Consent" (as described in Rule 14a-11
            promulgated under the 1934 Act) or other actual or threatened
            solicitation of proxies or consents by or on behalf of a Person
            other than the Board (a "Proxy Contest") including by reason of any
            agreement intended to avoid or settle any Election Contest or Proxy
            Contest;

                  (3) A merger, consolidation or reorganization involving the
            Company or a subsidiary of the Company, unless

                        (i) the Voting Securities of the Company, immediately
                  before such merger, consolidation or reorganization, continue
                  immediately following such merger, consolidation or
                  reorganization to represent, either

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                  by remaining outstanding or by being converted into
                  voting securities of the surviving corporation resulting from
                  such merger, consolidation or reorganization or its parent
                  (the "Surviving Corporation"), at least sixty percent (60%) of
                  the combined voting power of the outstanding voting securities
                  of the Surviving Corporation;

                        (ii) the individuals who were members of the Incumbent
                  Board immediately before the execution of the agreement
                  providing for such merger, consolidation or reorganization
                  constitute more than one-half of the members of the board of
                  directors of the Surviving Corporation; and

                        (iii) no person (other than the Company, any Subsidiary,
                  any employee benefit plan (or any trust forming a part
                  thereof) maintained by the Company, the Surviving Corporation
                  or any Subsidiary, or any Person who, immediately before such
                  merger, consolidation or reorganization had Beneficial
                  Ownership of fifteen percent (15%) or more of the then
                  outstanding Voting Securities) has Beneficial Ownership of
                  fifteen percent (15%) or more of the combined voting power of
                  the Surviving Corporation's then outstanding voting
                  securities.

            (a transaction described in clauses (i) through (iii) shall herein
            be referred to as a "Non-Control Transaction");

                  (4) A complete liquidation or dissolution of the Company; or

                  (5) The consummation of a sale, lease, transfer, conveyance or
            other disposition, in one or a series of related transactions, of
            all or substantially all of the assets of the Company to any Person
            (other than a transfer to a Subsidiary).

                  (b) Notwithstanding the foregoing, a Change in Control shall
            not be deemed to occur solely because any Person (the "Subject
            Person") acquired Beneficial Ownership of more than the permitted
            amount of the outstanding Voting Securities as a result of the
            acquisition of Voting Securities by the Company which, by reducing
            the number of Voting Securities outstanding, increases the
            proportional number of shares Beneficially Owned

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by the Subject Person, provided that if a Change in Control would occur (but for
the operation of this sentence) as a result of the acquisition of Voting
Securities by the Company, and after such share acquisition by the Company, the
Subject Person becomes the Beneficial Owner of any additional voting Securities
which increases the percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a Change in Control shall occur.

                  (c) Notwithstanding anything contained in this Agreement to
the contrary, if the Executive's employment is terminated before a Change in
Control and the Executive reasonably demonstrates that such termination (1) was
at the request of a third party who has indicated an intention or taken steps
reasonably calculated to effect a Change in Control and who effectuates a Change
in Control (a "Third Party") or (2) otherwise occurred in connection with, or in
anticipation of, a Change in Control which actually occurs, then for all
purposes of this Agreement, the date of a Change in Control with respect to the
Executive shall mean the date immediately before the date of such termination of
the Executive's employment.

            2.6. Company. For purposes of this Agreement, the "Company" shall
mean H. J. Heinz Company, a Pennsylvania corporation with its principal offices
at Pittsburgh, Pennsylvania, and shall include its "Successors and Assigns" (as
hereinafter defined).

            2.7. Disability. For purposes of this Agreement, "Disability" shall
mean a physical or mental infirmity which impairs the Executive's ability to
substantially perform the Executive's duties with the Company for a period of
one hundred eighty (180) consecutive days and the Executive has not returned to
the Executive's full time employment before the Termination Date as stated in
the "Notice of Termination" (as hereinafter defined).

            2.8. Good Reason. For purposes of this Agreement:

                  (a) "Good Reason" shall mean the occurrence after a Change in
            Control of any of the events or conditions described in subsections
            (l) through (7) hereof:

                  (1) a change in the Executive's title, position, duties or
            responsibilities (including reporting responsibilities) which
            represents an adverse change from the Executive's title, position,
            duties or responsibilities as in effect at any time within ninety
            (90)

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            days preceding the date of a Change in Control or at any time
            thereafter; or any removal of the Executive from or failure to
            reappoint or reelect him to any one of such offices or positions,
            except in connection with the termination of the Executive's
            employment for Disability, Cause, as a result of the Executive's
            death or by the Executive other than for Good Reason;

                  (2) a reduction in the Executive's base salary or any failure
            to pay the Executive any compensation or benefits to which the
            Executive is entitled within five (5) days of the date due;

                  (3) the Executive being required by the Company to perform the
            Executive's regular duties at any place outside a 30-mile radius
            from the place where the Executive's regular duties were performed
            immediately before the Change in Control, except for reasonably
            required travel on the Company's business which is not materially
            greater than such travel requirements in effect immediately before
            the Change in Control;

                  (4) the failure by the Company to provide the Executive with
            compensation and benefits, in the aggregate, at least equal (in
            opportunities) to those provided for under the compensation and
            employee benefit plans, programs and practices in which the
            Executive was participating at any time within ninety (90) days
            preceding the date of a Change in Control or at any time thereafter,
            which may include, but not be limited to, the plans listed on
            Appendix A;

                  (5) any material breach by the Company of any provision of
            this Agreement;

                  (6) any purported termination of the Executive's employment
            for Cause by the Company which does not comply with the terms of
            Section 2.4; or

                  (7) the failure of the Company to obtain an agreement,
            satisfactory to the Executive, from any Successors and Assigns to
            assume and agree to perform this Agreement, as contemplated in
            Section 7 hereof.

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                  (b) Any event or condition described in this Section 2.8(a)(1)
            through (7) which occurs before a Change in Control but which the
            Executive reasonably demonstrates (1) was at the request of a Third
            Party, or (2) otherwise arose in connection with, or in anticipation
            of, a Change in Control which actually occurs, shall constitute Good
            Reason for purposes of this Agreement notwithstanding that it
            occurred before the Change in Control.

                  (c) The Executive's right to terminate the Executive's
            employment pursuant to this Section 2.8 shall not be affected by the
            Executive's incapacity due to physical or mental illness.

                  2.9. Notice of Termination. For purposes of this Agreement,
            following a Change in Control, "Notice of Termination" shall mean a
            written notice of termination from the Company of the Executive's
            employment which indicates the specific termination provision in
            this Agreement relied upon and which sets forth in reasonable detail
            the facts and circumstances claimed to provide a basis for
            termination of the Executive's employment under the provision so
            indicated.

                  2.10. Pro Rata Bonus. For purposes of this Agreement, "Pro
            Rata Bonus" shall mean an amount equal to the Bonus Amount
            multiplied by a fraction, the numerator of which is the number of
            days in the fiscal year through the Termination Date and the
            denominator of which is 365.

                  2.11. Successors and Assigns. For purposes of this Agreement,
            "Successor and Assigns" shall mean a corporation or other entity
            which has acquired or succeeded to all or substantially all or the
            assets and business of the Company (including this Agreement)
            whether by operation of law or otherwise.

                  2.12. Termination Date. For purposes of this Agreement,
            "Termination Date" shall mean in the case of the Executive's death,
            the Executive's date of death, in the case of Good Reason, the last
            day of the Executive's employment, and in all other cases, the date
            specified in the Notice of Termination; provided, however, that if
            the Executive's employment is terminated by the Company for Cause or
            due to Disability, the date specified in the Notice of Termination
            shall be at least 30 days from the date the Notice of Termination is
            given to the Executive, provided that in the case of Disability the
            Executive shall not have returned to the full-time performance of
            the Executive's duties during such period of at least 30 days.

        3.  Termination of Employment.

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      3.1. Amount of Compensation and Benefits. If, during the term of this
Agreement, the Executive's employment with the Company shall be terminated
within twenty-four (24) months following a Change in Control, the Executive
shall be entitled to the following compensation and benefits:

            (a) If the Executive's employment with the Company shall be
terminated (1) by the Company for Cause or Disability, (2) by reason of the
Executive's death, or (3) by the Executive for other than Good Reason, the
Company shall pay to the Executive the Accrued Compensation and, if such
termination is by the Company due to the Executive's Disability or by reason of
the Executive's death, a Pro Rata Bonus.

            (b) If the Executive's employment with the Company shall be
terminated for any reason other than as specified in Section 3.1(a), the
Executive shall be entitled to the following:

                  (i) the Company shall pay the Executive all Accrued
            Compensation and a Pro-Rata Bonus; and

                  (ii) the Company shall pay the Executive as severance pay in
            lieu of any further compensation for periods subsequent to the
            Termination Date, in a single payment an amount in cash equal to
            [three (3)/two (2)] times the sum of (A) the Base Amount and (B) the
            Bonus Amount; and

                  (iii) for a number of months equal to [thirty-six (36)/twenty
            four (24)] (the "Continuation Period"), the Company shall at its
            expense continue on behalf of the Executive and the Executive's
            dependents and beneficiaries the life insurance, short-term
            disability, medical, dental and hospitalization benefits provided
            (x) to the Executive immediately prior to the Change in Control or
            at any time thereafter or (y) to other similarly situated executives
            who continue in the employ of the Company during the Continuation
            Period. The coverage and benefits (including deductibles and costs)
            provided in this Section 3.1(b)(iii) during the Continuation Period
            shall be no less favorable to the Executive and the Executive's
            dependents and beneficiaries, than the most favorable of such
            coverages and

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            benefits during any of the periods referred to in clauses (x) and
            (y) above. The Company's obligation hereunder with respect to the
            foregoing benefits shall be limited to the extent that the Executive
            becomes eligible for any such benefits pursuant to a subsequent
            employer's benefit plans (whether or not the Executive actually
            elects coverage), in which case the Company may reduce the coverage
            of any benefits it is required to provide the Executive hereunder as
            long as the aggregate coverages and benefits of the combined benefit
            plans (computed assuming that the Executive elected to participate
            in the subsequent employer's benefit plans to the maximum extent
            allowable) is no less favorable to the Executive than the coverages
            and benefits required to be provided hereunder. This subsection
            (iii) shall not be interpreted so as to limit any benefits to which
            the Executive, the Executive's dependents or beneficiaries may be
            entitled under any of the Company's employee benefit plans, programs
            or practices following the Executive's termination of employment,
            including without limitation, retiree medical and life insurance
            benefits; and

                  (iv) the Company shall pay in a single payment an amount in
            cash equal to the excess of (A) the lump sum actuarial equivalent of
            the aggregate retirement benefit the Executive would have been
            entitled to receive under the Company's supplemental and other
            retirement plans including, but not limited to, the retirement plans
            listed in Appendix A, had (w) the Executive remained employed by the
            Company for an additional [two/three] complete years of credited
            service, (x) the Executive's annual compensation during such period
            been equal to the Executive's Base Salary and the Bonus Amount, (y)
            the Company made employer contributions to each defined contribution
            plan in which the Executive was a participant at the Termination
            Date (in the amount that would have been contributed based on the
            assumptions in (w) and (x) above) and (z) the Executive been fully
            (100%) vested in the Executive's benefit under each retirement plan
            in which the Executive was a participant, over (B) the lump sum
            actuarial equivalent of the aggregate retirement benefit the
            Executive is actually entitled to receive under such retirement
            plans.

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                  For purposes of this subsection (iv), the "lump sum actuarial
                  equivalent" shall be determined in accordance with the "Lump
                  Sum Factors" as prescribed under the terms of the Employees'
                  Retirement System of H. J. Heinz Company Plan "A" - For
                  Salaried Employees immediately before the Executive's
                  termination of employment.

                  (c) The amounts provided for in Sections 3.1(a) and 3.1(b)(i),
(ii) and (iv) shall be paid in a single lump sum cash payment as soon as
reasonably practicable following the Executive's Termination Date (or earlier,
if required by applicable law).

                  (d) The Executive shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment or
otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Executive in any subsequent employment
except as provided in Section 3.1(b)(iii).

                  (e) Notwithstanding the foregoing, the payments otherwise due
hereunder may be limited to the extent provided in Section 5 and Section 12(b)
hereof.

            3.2. Coordination with other Compensation and Benefits.

                  (a) The severance pay and benefits provided for in this
Section 3 shall be in lieu of any other severance or termination pay to which
the Executive may be entitled under any other Company plan, program, practice or
arrangement providing severance benefits.

                  (b) The Executive's entitlement to any other compensation or
benefits shall be determined in accordance with the Company's employee benefit
plans (including, the plans listed on Appendix A) and other applicable programs,
policies and practices then in effect.

      4. Notice of Termination. Following a Change in Control, any purported
termination of the Executive's employment by the Company and/or the Employer
shall be communicated by Notice of Termination to the Executive. For purposes of
this Agreement, no such purported termination shall be effective without such
Notice of Termination.

      5. Excise Tax Limitation.

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            (a) Notwithstanding anything contained in this Agreement to the
contrary, to the extent that the payments and benefits provided under this
Agreement and benefits provided to, or for the benefit of, the Executive under
any other Company plan or agreement (such payments or benefits are collectively
referred to as the "Payments") would be subject to the excise tax (the "Excise
Tax") imposed under Section 4999 of the Internal Revenue Code of l986, as
amended (the "Code"), the Payments shall be reduced (but not below zero) if and
to the extent necessary so that no Payment to be made or benefit to be provided
to the Executive shall be subject to the Excise Tax (such reduced amount is
hereinafter referred to as the "Limited Payment Amount"). The reduction provided
for in the preceding sentence shall not apply, and Section 6 below shall apply,
if the Payments, prior to any reduction in accordance with the preceding
sentence, exceed one hundred and ten percent (110%) of the maximum amount which
could be received without incurring the Excise Tax.

            (b) If a reduction is required pursuant to Section 5(a), unless the
Executive shall have given prior written notice specifying a different order to
the Company to effectuate the Limited Payment Amount, the Company shall reduce
or eliminate the Payments by first reducing or eliminating those payments or
benefits which are not payable in cash and then by reducing or eliminating cash
payments, in each case in reverse order beginning with payments or benefits
which are to be paid the farthest in time for the Determination (as hereinafter
defined). Any notice given by the Executive pursuant to the preceding sentence
shall take precedence over the provisions of any other plan, arrangement or
agreement governing the Executive's rights and entitlements to any benefits or
compensation.

            (c) An initial determination as to whether the Payments shall be
reduced to the Limited Payment Amount pursuant to the Plan and the calculation
of such Limited Payment Amount shall be made at the Company's expense by an
accounting firm selected by the Company which is designated as one of the five
largest accounting firms in the United States (the "Accounting Firm"). The
Accounting Firm shall provide its determination (the "Determination") together
with detailed supporting calculations and documentation to the Company and the
Executive within five (5) days of the Termination Date if applicable, or such
other time as requested by the Company or by the Executive (provided the
Executive reasonably believes that any of the Payments may be subject to the
Excise Tax) and, if the Accounting Firm determines that no Excise Tax is payable
by the Executive with respect to

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a Payment or Payments, it shall furnish to the Executive an opinion reasonably
acceptable to the Executive that no Excise Tax will be imposed with respect to
any such Payment or Payments. Within ten (10) days of the delivery of the
Determination to the Executive, the Executive shall have the right to dispute
the Determination (the "Dispute"). If there is no Dispute, the Determination
shall be binding, final and conclusive upon the Company and the Executive
subject to the application of Section 5(d) below.

            (d) As a result of the uncertainty in the application of Sections
4999 and 280G of the Code, it is possible that the Payments to be made to, or
provided for the benefit of, the Executive either have been made or will not be
made by the Company which, in either case, will be inconsistent with the
limitations provided in Section 5(a) (hereinafter referred to as an "Excess
Payment" or "Underpayment" respectively). If it is established, pursuant to a
final determination of a court or an Internal Revenue Service (the "IRS")
proceeding which has been finally and conclusively resolved, that an Excess
Payment has been made, such Excess Payment shall be deemed for all purposes to
be a loan to the Executive made on the date the Executive received the Excess
Payment and the Executive shall repay the Excess Payment to the Company on
demand (but not less than ten (10) days after written notice is received by the
Executive) together with interest on the Excess Payment at the applicable
"federal short term rate" prescribed pursuant to Code section 1274(d)(1)(C)(i)
(hereinafter the "Applicable Federal Rate") from the date of the Executive's
receipt of such Excess Payment until the date of such repayment. In the event
that it is determined (i) by the Accounting Firm, the Company (which shall
include the position taken by the Company, or together with its consolidated
group, on its federal income tax return) or the IRS, (ii) pursuant to a
determination by a court, or (iii) upon the resolution to the Executive's
satisfaction of the Dispute, that an Underpayment has occurred, the Company
shall pay an amount equal to the Underpayment to the Executive within ten (10)
days of such determination or resolution together with interest on such amount
at the Applicable Federal Rate from the date such amount would have been paid to
the Executive until the date of payment.

      6. Excise Tax Indemnification. If the payments and benefits provided under
this Agreement and benefits provided to, or for the benefit of, the Executive
under any other Company plan or agreement are subject to the excise tax imposed
under Section 4999 of the Internal Revenue Code of l986, as amended (the
"Code"), or under any other similar provision of the laws of any state or local
jurisdiction within the United States (the "Excise Tax"), the Company shall
indemnify and hold harmless the Executive and the Executive's

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heirs, executors, administrators and permitted assigns (all such aforesaid
parties shall be referred to as "Indemnified Parties") from and against any loss
("the Loss") incurred by imposition on the Executive of the Excise Tax, such
indemnification to be implemented by paying to the Indemnified Parties an amount
("Indemnification Payment") as hereinafter provided. The intent of this Section
6 is to provide for payments or reimbursements on a grossed-up basis which are
sufficient, but not more than sufficient, to make the Indemnified Parties
economically whole with respect to any Excise Tax imposed on the Executive's
Share, any costs of contesting any such Excise Tax and any other taxes imposed
by reason of a loan to the Indemnified Parties pending resolution of any such
contest, and the foregoing provisions are to be interpreted accordingly.

            6.1. Amount of Indemnification Payment. The Indemnification Payment
shall be the amount which, after deduction of all income taxes and additional
federal, state and local taxes (including, without limitation, any additional
Excise Tax) required to be paid by the Executive in respect of receipt of the
Indemnification Payment (assuming, for this purpose, that the Executive is
subject to the highest marginal rate of federal income taxation in effect during
the calendar year in which the Indemnification Payment is to be made and that
state and local income taxes are due for such year at the highest marginal rates
of taxation in effect in the state and locality of the Executive's residence on
the date of payment, and applying the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes, but
assuming that the Executive has no other deductions or credits available to
reduce such taxes), shall be equal to the sum of (i) the Excise Tax resulting in
the Loss and (ii) the net amount of any interest, penalties or additions to tax
payable to any taxing authority (after allowing for the deduction of such
amounts, to the extent properly deductible, for federal, state or local income
tax purposes) as a result of the Loss. The amount determined above shall be
adjusted to take into account on a grossed-up basis any expenses described in
Section 6.3(a) and any additional taxes incurred by reason of the inclusion in
income of, or imputation of, interest on any advance pursuant to Section 6.3(b).

            6.2. Time of Indemnification Payment. The Indemnification Payment
(or each applicable portion thereof) shall be made within thirty (30) days after
the compensation or benefits (or each applicable portion thereof) to which the
Excise Tax (as determined by the Company) relates is received by the Executive.
Additional Indemnification Payments shall be made within thirty (30) days after
receipt by the Company of written notice from the

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<PAGE>

Executive of any claim by a taxing authority that any additional Excise Tax is
due, which notice by the Executive shall include a copy of the written statement
from the taxing authority setting forth the amount of additional tax, interest,
penalties or additions to tax claimed to be due in respect thereof; provided
that, if a contest is being conducted pursuant to Section 6.3 below, any
additional Indemnification Payments (or applicable portion thereof) shall not be
required to be made shall until 30 days after the completion or termination of
such contest except as provided in Section 6.3(b) below. Any Indemnification
Payment required hereunder and not timely made shall accrue interest until paid
at the Applicable Federal Rate.

            6.3. Management of Tax Contests. The Company shall have the sole and
exclusive right to initiate and to conduct on behalf of the Indemnified Parties
all aspects of any contest or appeal of any tax controversy relating to the
Excise Tax. The Indemnified Parties shall cooperate with the Company in the
conduct of any such contest or appeal (at the expense of the Company). The
indemnifications provided for in this Section 6 are conditional on the Company
receiving from the Indemnified Parties timely notice of any actual or threatened
tax controversy relating to the Excise Tax (including, without limitation, an
inquiry or notice of audit by a taxing authority with respect to the years
involved or any request for extension of the period for assessment or collection
of taxes for such years) and upon the continuing cooperation of the Indemnified
Parties during the course of any such contest or appeal.

            (a) During the course of any such contest or appeal the Company
shall promptly defray any and all expenses that the Indemnified Parties may
incur as a result of contesting such proposed Excise Tax, including, without
limitation, indemnification and prompt payment of all costs, legal and
accounting fees and disbursements, bonding fees, or other litigation related
expenses so incurred.

            (b) If the Company shall elect to contest a proposed Excise Tax by
causing the Indemnified Parties to make payment and then seek a refund, then the
Company shall advance to the Indemnified Parties, on an interest-free basis, the
aggregate amount of the required payment. If as a result of such contest a
refund becomes payable to the Indemnified Parties, upon receipt of such refund
the Indemnified Parties shall promptly pay over to the Company the amount of
such refund (and included interest) received by the Indemnified Parties (which
amount shall be deemed to be in repayment of the loan advanced by the Company to
the extent fairly attributable thereto), subject to offset of any
Indemnification Payment then due and owing by the Company to the

                                       15

<PAGE>

Indemnified Parties pursuant to this Section 6. Upon final denial of any such
refund or a portion thereof, the Company shall forgive the amount of such
advance fairly attributable to the amount not refunded (which forgiveness shall
be applied against the Indemnification Payment determined under Section 6.1.

      7. Successors; Nonalienation.

            7.1. Successors.

            (a) This Agreement shall be binding upon and shall inure to the
benefit of the Company, its Successors and Assigns and the Company shall require
any Successor and Assigns to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken place.

            (b) This Agreement shall inure to the benefit of and be enforceable
by the Executive's legal personal representative.

      7.2. Nonalienation. Neither this Agreement nor any right or interest
hereunder shall be assignable or transferable by the Executive, the Executive's
beneficiaries or legal representatives, except by will or by the laws of descent
and distribution.

      8. Settlement of Claims and Resolution of Disputes. The Company's
obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Executive or others. Any
disputes arising under or in connection with this Agreement shall, at the
discretion of the Executive or the Company, be resolved by binding arbitration,
to be held in Pittsburgh, Pennsylvania, in accordance with the rules and
procedures of the American Arbitration Association. Judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. If arbitration is not requested by either party, any action brought by
any party to this Agreement shall be brought and maintained in a court of
competent jurisdiction in Pittsburgh, Pennsylvania.

                                       16

<PAGE>

      9. Fees and Expenses.

            (a) Subject to Section 9(b) below, the Company shall pay all
reasonable legal fees and related expenses (including the costs of experts,
evidence and counsel) incurred by the Executive as they become due as a result
of (1) the Executive's termination of employment (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination of
employment), (2) the Executive seeking to obtain or enforce any right or benefit
provided by this Agreement or by any other plan or arrangement maintained by the
Company under which the Executive is or may be entitled to receive benefits, and
(3) the Executive's hearing before the Board as contemplated in Section 2.4 of
this Agreement; provided, however, that the circumstances set forth in clauses
(1) and (2) (other than as a result of the Executive's termination of employment
under circumstances described in Sections 2.5(c) and 2.8(b)) occurred on or
after a Change in Control.

            (b) Section 9(a) shall not apply, and all legal fees and related
expenses incurred by the Executive shall remain the responsibility of the
Executive, if the Executive does not prevail on at least one material issue in
dispute in such contest or dispute.

      10. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, addressed to the respective addresses last given by each party
to the other, provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company. All notices
and communications shall be deemed to have been received on the date of delivery
thereof or on the third business day after the mailing thereof, except that
notice of change of address shall be effective only upon receipt.

      11. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company (except for any
severance or termination policies, plans, programs or practices) and for which
the Executive may qualify, nor shall anything herein limit or reduce such rights
as the Executive may have under any other agreements with the Company (except
for any severance or termination agreement). Amounts which are vested benefits
or which the Executive is otherwise entitled to receive under any plan or
program of the Company shall be payable in

                                       17

<PAGE>

accordance with such plan or program, except as explicitly modified by this
Agreement.

      12. Miscellaneous.

            (a) No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by the Executive and the Company. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreement or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not expressly set forth in this
Agreement.

            (b) Notwithstanding Section 12(a) or any other provision of this
Agreement to the contrary, if consummation of a transaction may be contingent on
the parties' ability to use pooling of interests accounting and the Company
reasonably determines (after consultation with its independent auditors) that a
provision of this Agreement would preclude the use of pooling of interests
accounting with respect to such transaction, the Company may, with or without
the acquiescence of the Executive, eliminate or modify that provision to the
extent required to allow pooling of interests accounting.

      13. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the Commonwealth of Pennsylvania without
giving effect to the conflict of laws principles thereof.

      14. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.

      15. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof.

     [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE TO FOLLOW.]

                                       18

<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its duly authorized officer and the Executive has executed this Agreement as
of the day and year first above written.

                                        H. J. HEINZ COMPANY

ATTEST:                                 By:
                                            ---------------------------------
                                            Name:  D.E.I. Smyth
                                            Title: Senior Vice President -
------------------------------
Name:  Rene Biedzinski                             Corporate and Government
Title: Secretary                                   Affairs and Chief
                                                   Administrative Officer

                                        By:
                                            ---------------------------------
                                             [Insert Name of the Executive]

                                       19

<PAGE>

                                   APPENDIX A

                         COMPENSATION AND BENEFIT PLANS

Retirement Plans

H. J. Heinz Company Employees Retirement and Savings Plan
Employees' Retirement System of H. J. Heinz Company Plan "A" - For Salaried
  Employees
H. J. Heinz Company Supplemental Executive Retirement Plan
H. J. Heinz Company Employees Retirement and Savings Excess Plan

Welfare Plans

H. J. Heinz Company Non-bargaining Employees Welfare Benefit Program

      Components of Welfare Benefits Program
      -     Medical and Prescription Drug Coverage
      -     Dental Coverage
      -     Vision Coverage
      -     Short-Term Disability Plan
      -     Medical and Dependent Care Flexible Spending Accounts
      -     Tuition Reimbursement Plan

H. J. Heinz Company Voluntary Employees' Beneficiary Association Long
   Term Disability Plan*

H. J. Heinz Company Severance Pay Plan

Executive Life Insurance Plan

Executive Group Umbrella Liability Plan

Long Term Care Plan

*     Executives are eligible for Supplemental Disability coverage on preferred
      terms with UNUM Provident. This is a voluntary program, at the executive's
      own expense.

                                       20
<PAGE>

                               APPENDIX A (CONT'D)

                         COMPENSATION AND BENEFIT PLANS

Other Compensation and Benefit Plans

H. J. Heinz Company Incentive Compensation Plan ("SSP")

H. J. Heinz Company Senior Executive Incentive Compensation Plan

Global Stock Purchase Plan

1986 Deferred Compensation Program for Executives of H. J. Heinz Company and
Affiliated Companies

H. J. Heinz Company Executive Deferred Compensation Plan

Stock Option Plans

      -     H. J. Heinz Company 1990 Stock Option Plan
      -     H. J. Heinz Company 1994 Stock Option Plan
      -     H. J. Heinz Company 1996 Stock Option Plan
      -     H. J. Heinz Company 2000 Stock Option Plan
      -     H. J. Heinz Company FY2003 Stock Incentive Plan

Plus any employee benefit plans, programs and practices that would be specific
to an Executive who does not participate in U.S. benefit plans, programs and
practices.

                                       21EX-10.1

 

Exhibit 10.1

ABERCROMBIE & FITCH CO.

2005 LONG-TERM INCENTIVE PLAN

 

ABERCROMBIE & FITCH CO.

2005 LONG-TERM INCENTIVE PLAN

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Page	
	 	 	 	 	 	
	 	1.	 	 	
    Purpose	 	 	1	 
	
	
	
	

	 	2.	 	 	
    Definitions	 	 	1	 
	
	
	
	

	 	3.	 	 	
    Administration	 	 	2	 
	
	
	
	

	 	4.	 	 	
    Stock Subject to Plan	 	 	4	 
	
	
	
	

	 	5.	 	 	
    Eligibility; Per-Person Award Limitations	 	 	4	 
	
	
	
	

	 	6.	 	 	
    Specific Terms of Awards	 	 	5	 
	
	
	
	

	 	7.	 	 	
    Performance-Based Compensation	 	 	9	 
	
	
	
	

	 	8.	 	 	
    Certain Provisions Applicable to Awards	 	 	10	 
	
	
	
	

	 	9.	 	 	
    Change of Control	 	 	11	 
	
	
	
	

	 	10.	 	 	
    Additional Award Forfeiture Provisions	 	 	13	 
	
	
	
	

	 	11.	 	 	
    General Provisions	 	 	14	 

-i-

 

ABERCROMBIE & FITCH CO.

2005 LONG-TERM INCENTIVE PLAN

     
1. Purpose. The purpose of this 2005 Long-Term
Incentive Plan (the “Plan”) is to aid
Abercrombie & Fitch Co., a Delaware corporation
(together with its successors and assigns, the
“Company”), in attracting, retaining, motivating and
rewarding certain employees and non-employee directors of the
Company or its subsidiaries or affiliates, to provide for
equitable and competitive compensation opportunities, to
recognize individual contributions and reward achievement of
Company goals, and promote the creation of long-term value for
stockholders by closely aligning the interests of Participants
with those of stockholders. The Plan authorizes stock based
incentives for Participants.

     
2. Definitions. In addition to the terms defined in
Section 1 above and elsewhere in the Plan, the following
capitalized terms used in the Plan have the respective meanings
set forth in this Section:

		
	 	     
    (a) “Annual Limit” shall have the meaning
    specified in Section 5(b).
	 
	 	     
    (b) “Award” means any Option, SAR,
    Restricted Stock, Restricted Stock Unit, or Deferred Stock Award
    together with any related right or interest, granted to a
    Participant under the Plan.
	 
	 	     
    (c) “Beneficiary” means the legal
    representatives of the Participant’s estate entitled by
    will or the laws of descent and distribution to receive the
    benefits under a Participant’s Award upon a
    Participant’s death, provided that, if and to the extent
    authorized by the Committee, a Participant may be permitted to
    designate a Beneficiary, in which case the
    “Beneficiary” instead will be the person, persons,
    trust or trusts (if any are then surviving) which have been
    designated by the Participant in his or her most recent written
    and duly filed beneficiary designation to receive the benefits
    specified under the Participant’s Award upon such
    Participant’s death.
	 
	 	     
    (d) “Board” means the Company’s Board
    of Directors.
	 
	 	     
    (e) “Change of Control” has the meanings
    specified in Section 9.
	 
	 	     
    (f) “Code” means the Internal Revenue Code
    of 1986, as amended. References to any provision of the Code or
    regulation thereunder shall include any successor provisions and
    regulations, and reference to regulations includes any
    applicable guidance or pronouncement of the Department of the
    Treasury and Internal Revenue Service.
	 
	 	     
    (g) “Committee” means the Compensation
    Committee of the Board, the composition and governance of which
    is established in the Committee’s Charter as approved from
    time to time by the Board and subject to Section 303A.05 of
    the Listed Company Manual of the New York Stock Exchange, and
    other corporate governance documents of the Company. No action
    of the Committee shall be void or deemed to be without authority
    due to the failure of any member, at the time the action was
    taken, to meet any qualification standard set forth in the
    Committee Charter or the Plan. The full Board may perform any
    function of the Committee hereunder except to the extent limited
    under Section 303A.05 of the Listed Company Manual, in
    which case the term “Committee” shall refer to the
    Board.
	 
	 	     
    (h) “Covered Employee” means an Eligible
    Person who is a Covered Employee as specified in
    Section 11(j).
	 
	 	     
    (i) “Deferred Stock Award” means a right,
    granted to non-employee directors under the Plan, to receive
    Stock in accordance with the terms and conditions of the
    1998 Directors’ Deferred

 

		
	 	
    Compensation Plan, as amended in 2003, or any successor plan
    providing for the deferral of compensation by non-employee
    directors.
	 
	 	     
    (j) “Effective Date” means the effective
    date specified in Section 11(q).
	 
	 	     
    (k) “Eligible Person” has the meaning
    specified in Section 5, provided that Michael S. Jeffries
    is specifically excluded from participating in Awards made
    pursuant to the Plan.
	 
	 	     
    (l) “Exchange Act” means the Securities
    Exchange Act of 1934, as amended. References to any provision of
    the Exchange Act or rule (including a proposed rule) thereunder
    shall include any successor provisions and rules.
	 
	 	     
    (m) “Fair Market Value” means the fair
    market value of Stock, Awards or other property as determined in
    good faith by the Committee or under procedures established by
    the Committee. Unless otherwise determined by the Committee, the
    Fair Market Value of Stock shall be the opening price per share
    of Stock reported on a consolidated basis for securities listed
    on the principal stock exchange or market on which Stock is
    traded on the day as of which such value is being determined or,
    if there is no opening price on that day, then the closing price
    on the last previous day on which a closing price was reported.
	 
	 	     
    (n) “Incentive Stock Option” or
    “ISO” means any Option designated as an
    incentive stock option within the meaning of Code
    Section 422 and qualifying thereunder.
	 
	 	     
    (o) “Option” means a right, granted under
    the Plan, to purchase Stock.
	 
	 	     
    (p) “Participant” means a person who has
    been granted an Award under the Plan which remains outstanding,
    including a person who is no longer an Eligible Person.
	 
	 	     
    (q) “Restricted Stock” means Stock granted
    under the Plan which is subject to certain restrictions and to a
    risk of forfeiture.
	 
	 	     
    (r) “Restricted Stock Unit” or
    “RSU” means a right, granted under the Plan, to
    receive Stock, cash or other Awards or a combination thereof at
    the end of a specified deferral period.
	 
	 	     
    (s) “Retirement” means, unless otherwise
    stated by the Committee (or the Board) in an applicable Award
    agreement, Participant’s voluntary termination of
    employment (with the approval of the Board) after achieving
    65 years of age.
	 
	 	     
    (t) “Rule 16b-3” means
    Rule 16b-3, as from time to time in effect and applicable
    to Participants, promulgated by the Securities and Exchange
    Commission under Section 16 of the Exchange Act.
	 
	 	     
    (u) “Stock” means the Company’s
    Common Stock, par value $0.01 per share, and any other
    equity securities of the Company or other issuer that may be
    substituted or resubstituted for Stock pursuant to
    Section 11(c).
	 
	 	     
    (v) “Stock Appreciation Rights” or
    “SAR” means a right granted to a Participant
    under Section 6(c).

     
3. Administration.

     
(a) Authority of the Committee. The Plan
shall be administered by the Committee, which shall have full
and final authority, in each case subject to and consistent with
the provisions of the Plan, to select Eligible Persons to become
Participants; to grant Awards; to determine the type and number
of Awards, the

2

 

dates on which Awards may be exercised and on which the risk of
forfeiture or deferral period relating to Awards shall lapse or
terminate, the acceleration of any such dates, the expiration
date of any Award, whether, to what extent, and under what
circumstances an Award may be settled, or the exercise price of
an Award may be paid, in cash, Stock, other Awards, or other
property, and other terms and conditions of, and all other
matters relating to, Awards; to prescribe documents evidencing
or setting terms of Awards (such Award documents need not be
identical for each Participant), amendments thereto, and rules
and regulations for the administration of the Plan and
amendments thereto (including outstanding Awards); to
construe and interpret the Plan and Award documents and correct
defects, supply omissions or reconcile inconsistencies therein;
and to make all other decisions and determinations as the
Committee may deem necessary or advisable for the administration
of the Plan. Decisions of the Committee with respect to the
administration and interpretation of the Plan shall be final,
conclusive, and binding upon all persons interested in the Plan,
including Participants, Beneficiaries, transferees under
Section 11(b) and other persons claiming rights from or
through a Participant, and stockholders.

     
(b) Manner of Exercise of Committee
Authority. The express grant of any specific power to
the Committee, and the taking of any action by the Committee,
shall not be construed as limiting any power or authority of the
Committee. The Committee may act through subcommittees,
including for purposes of perfecting exemptions under
Rule 16b-3 or qualifying Awards under Code
Section 162(m) as performance-based compensation, in which
case the subcommittee shall be subject to and have authority
under the charter applicable to the Committee, and the acts of
the subcommittee shall be deemed to be acts of the Committee
hereunder. The Committee may delegate the administration of the
Plan to one or more officers or employees of the Company, and
such administrator(s) may have the authority to execute and
distribute Award agreements or other documents evidencing or
relating to Awards granted by the Committee under this Plan, to
maintain records relating to Awards, to process or oversee the
issuance of Stock under Awards, to interpret and administer the
terms of Awards and to take such other actions as may be
necessary or appropriate for the administration of the Plan and
of Awards under the Plan, provided that in no case shall any
such administrator be authorized (i) to grant Awards under
the Plan, (ii) to take any action that would result in the
loss of an exemption under Rule 16b-3 for Awards granted to
or held by Participants who at the time are subject to
Section 16 of the Exchange Act in respect of the Company or
that would cause Awards intended to qualify as
“performance-based compensation” under Code
Section 162(m) to fail to so qualify, (iii) to take
any action inconsistent with Section 157 and other
applicable provisions of the Delaware General Corporation Law,
or (iv) to make any determination required to be made by
the Committee under the New York Stock Exchange corporate
governance standards applicable to listed company compensation
committees (currently, Rule 303A.05). Any action by any
such administrator within the scope of its delegation shall be
deemed for all purposes to have been taken by the Committee and,
except as otherwise specifically provided, references in this
Plan to the Committee shall include any such administrator. The
Committee established pursuant to Section 1.3(a) and, to
the extent it so provides, any subcommittee, shall have sole
authority to determine whether to review any actions and/or
interpretations of any such administrator, and if the Committee
shall decide to conduct such a review, any such actions and/or
interpretations of any such administrator shall be subject to
approval, disapproval or modification by the Committee.

     
(c) Limitation of Liability. The Committee
and each member thereof, and any person acting pursuant to
authority delegated by the Committee, shall be entitled, in good
faith, to rely or act upon any report or other information
furnished by any executive officer, other officer or employee of
the Company or a subsidiary or affiliate, the Company’s
independent auditors, consultants or any other agents assisting
in the administration of the Plan. Members of the Committee, any
person acting pursuant to authority

3

 

delegated by the Committee, and any officer or employee of the
Company or a subsidiary or affiliate acting at the direction or
on behalf of the Committee or a delegee shall not be personally
liable for any action or determination taken or made in good
faith with respect to the Plan, and shall, to the extent
permitted by law, be fully indemnified and protected by the
Company with respect to any such action or determination.

     
4. Stock Subject to Plan.

     
(a) Overall Number of Shares Available for
Delivery. The total number of shares of Stock reserved
and available for delivery in connection with Awards under the
Plan shall be two percent of the sum of (i) the total
common shares outstanding and (ii) the unexercised options
and restricted stock units held by employees and non-employee
directors as of April 6, 2005, or 1,982,710 shares. Subject
to limitations provided in Section 6(b)(iv), any of the
1,982,710 authorized shares may be granted as ISOs. The total
number of shares available is subject to adjustment as provided
in Section 11(c). Any shares of Stock delivered under the
Plan shall consist of authorized and unissued shares or treasury
shares.

     
(b) Share Counting Rules. The Committee may
adopt reasonable counting procedures to ensure appropriate
counting, avoid double counting (as, for example, in the case of
tandem or substitute awards) and make adjustments in accordance
with this Section 4(b). To the extent that an Award under
the Plan is canceled, expired, forfeited, settled in cash,
settled by issuance of fewer shares than the number underlying
the Award, or otherwise terminated without delivery of shares to
the Participant, the shares retained by or returned to the
Company will be available under the Plan; and shares that are
withheld from such an Award or separately surrendered by the
Participant in payment of any exercise price or taxes relating
to such an Award shall be deemed to constitute shares not
delivered to the Participant and will be available under the
Plan. In addition, in the case of any Award granted in
assumption of or in substitution for an award of a company or
business acquired by the Company or a subsidiary or affiliate or
with which the Company or a subsidiary or affiliate combines,
shares issued or issuable in connection with such substitute
Award shall not be counted against the number of shares reserved
under the Plan.

     
5. Eligibility; Per-Person Award Limitations.

     
(a) Eligibility. Awards may be granted under
the Plan only to Eligible Persons. For purposes of the Plan, an
“Eligible Person” means (i) an employee of the
Company or any subsidiary or affiliate who is subject to
Section 16 of the Exchange Act at the time of grant,
including any person who has been offered employment by the
Company or a subsidiary or affiliate, provided that such
prospective employee may not receive any payment or exercise any
right relating to an Award until such person has commenced
employment with the Company or a subsidiary or affiliate, and
(ii) any non-employee directors of the Company or any
subsidiary or affiliate. An employee on leave of absence may be
considered as still in the employ of the Company or a subsidiary
or affiliate for purposes of eligibility for participation in
the Plan, if so determined by the Committee. For purposes of the
Plan, a joint venture in which the Company or a subsidiary has a
substantial direct or indirect equity investment shall be deemed
an affiliate, if so determined by the Committee. Holders of
awards granted by a company or business acquired by the Company
or a subsidiary or affiliate, or with which the Company or a
subsidiary or affiliate combines, who will become Eligible
Persons are eligible for grants of substitute awards granted in
assumption of or in substitution for such outstanding awards
previously granted under the Plan in connection with such
acquisition or combination transaction, if so determined by the
Committee.

     
(b) Per-Person Award Limitations. In each
calendar year during any part of which the Plan is in effect, an
Eligible Person may be granted Awards under each of
Section 6(b), 6(c), 6(d), or 6(e) relating to up to his or
her Annual Limit (such Annual Limit to apply separately to the
type of Award authorized under

4

 

each specified subsection). A Participant’s Annual Limit,
in any year during any part of which the Participant is then
eligible under the Plan, shall equal two hundred and fifty
thousand (250,000) shares plus the amount of the
Participant’s unused Annual Limit relating to the same type
of Award as of the close of the previous year, subject to
adjustment as provided in Section 11(c).

     
(c) Limits on Non-Employee Director Awards.
Non-employee directors may be granted any type of Award under
the Plan, but a non-employee director may be granted Awards
relating to no more than 10,000 shares annually, subject to
adjustment as provided in Section 11(c). Such annual limit
shall not include any Deferred Stock Awards granted in lieu of
other forms of compensation.

     
6. Specific Terms of Awards.

     
(a) General. Awards may be granted on the
terms and conditions set forth in this Section 6. In
addition, the Committee may impose on any Award or the exercise
thereof, at the date of grant or thereafter (subject to
Sections 11(e) and 11(k)), such additional terms and
conditions, not inconsistent with the provisions of the Plan, as
the Committee shall determine, including terms requiring
forfeiture of Awards in the event of termination of employment
or service by the Participant and terms permitting a Participant
to make elections relating to his or her Award. The Committee
shall retain full power and discretion with respect to any term
or condition of an Award that is not mandatory under the Plan,
subject to Section 11(k). The Committee shall require the
payment of lawful consideration for an Award to the extent
necessary to satisfy the requirements of the Delaware General
Corporation Law, and may otherwise require payment of
consideration for an Award except as limited by the Plan.

     
(b) Options. The Committee is authorized to
grant Options to Participants on the following terms and
conditions:

		
	 	     
    (i) Exercise Price. The exercise price per share of
    Stock purchasable under an Option (including both ISOs and
    non-qualified Options) shall be determined by the Committee,
    provided that, notwithstanding anything contained herein to the
    contrary such exercise price shall be (A) fixed as of the
    grant date, and (B) not less than the Fair Market Value of
    a share of Stock on the grant date. Notwithstanding the
    foregoing, any substitute award granted in assumption of or in
    substitution for an outstanding award granted by a company or
    business acquired by the Company or a subsidiary or affiliate,
    or with which the Company or a subsidiary or affiliate combines,
    may be granted with an exercise price per share of Stock other
    than as required above.
	 
	 	     
    (ii) No Repricing. Without the approval of
    stockholders, the Committee will not amend or replace previously
    granted Options in a transaction that constitutes a
    “repricing,” as such term is used in
    Section 303A.08 of the Listed Company Manual of the New
    York Stock Exchange.
	 
	 	     
    (iii) Option Term; Time and Method of Exercise. The
    Committee shall determine the term of each Option, provided that
    in no event shall the term of any Option exceed a period of ten
    years from the date of grant. The Committee shall determine the
    time or times at which or the circumstances under which an
    Option may be exercised in whole or in part, provided that,
    notwithstanding anything contained herein to the contrary, the
    sole and exclusive basis for determining both the vesting and
    exercisability of an option will be the passage of a specific
    period of time or the occurrence or non-occurrence of certain
    specific non-performance related events (e.g. death, disability,
    termination of employment and Change of Control). In addition,
    the Committee shall determine the methods by which such exercise
    price may be paid or deemed to be paid and the form of such
    payment (subject to Sections 11(k) and 11(l)), including,
    without limitation, cash, Stock (including by withholding Stock

5

 

		
	 	
    deliverable upon exercise), other Awards or awards granted under
    other plans of the Company or any subsidiary or affiliate, or
    other property (including through broker-assisted “cashless
    exercise” arrangements, to the extent permitted by
    applicable law), and the methods by or forms in which Stock will
    be delivered or deemed to be delivered in satisfaction of
    Options to Participants.
	 
	 	     
    (iv) ISOs. Notwithstanding anything to the contrary
    in this Section 6, in the case of the grant of an Option
    intending to qualify as an ISO: (i) if the Participant owns
    stock possessing more than 10 percent of the combined
    voting power of all classes of stock of the Company (a “10%
    Shareholder”), the purchase price of such Option must be at
    least 110 percent of the fair market value of the Common
    Stock on the date of grant and the Option must expire within a
    period of not more than five (5) years from the date of
    grant, and (ii) termination of employment will occur when
    the person to whom an Award was granted ceases to be an employee
    (as determined in accordance with Section 3401(c) of the
    Code and the regulations promulgated thereunder) of the Company
    and its subsidiaries. Notwithstanding anything in this
    Section 6 to the contrary, Options designated as ISOs shall
    not be eligible for treatment under the Code as ISOs to the
    extent that either (iii) the aggregate fair market value of
    shares of Common Stock (determined as of the time of grant) with
    respect to which such Options are exercisable for the first time
    by the Participant during any calendar year (under all plans of
    the Company and any Subsidiary) exceeds $100,000, taking Options
    into account in the order in which they were granted, and
    (iv) such Options otherwise remain exercisable but are not
    exercised within three (3) months of termination of
    employment (or such other period of time provided in
    Section 422 of the Code).

     
(c) Stock Appreciation Rights. The Committee
is authorized to grant SARs to Participants on the following
terms and conditions:

		
	 	     
    (i) Right to Payment. An SAR shall confer on the
    Participant to whom it is granted a right to receive, upon
    exercise thereof, shares of Stock having a value equal to the
    excess of (A) the Fair Market Value of one share of Stock
    on the date of exercise (or, in the case of a “Limited
    SAR,” the Fair Market Value determined by reference to the
    Change of Control Price, as defined under the applicable award
    agreement) over (B) the exercise or settlement price of the
    SAR as determined by the Committee. Stock Appreciation Rights
    may be granted to Participants from time to time either in
    tandem with or as a component of other Awards granted under the
    Plan (“tandem SARs”) or not in conjunction with other
    Awards (“freestanding SARs”) and may, but need not,
    relate to a specific Option granted under Section 6(b). The
    per share price for exercise or settlement of SARs (including
    both tandem SARs and freestanding SARs) shall be determined by
    the Committee, but in the case of SARs that are granted in
    tandem to an Option shall not be less than the exercise price of
    the Option and in the case of freestanding SARs shall be
    (A) fixed as of the grant date, and (B) not less than
    the Fair Market Value of a share of Stock on the grant date.
	 
	 	     
    (ii) No Repricing. Without the approval of
    stockholders, the Committee will not amend or replace previously
    granted SARs in a transaction that constitutes a
    “repricing,” as such term is used in
    Section 303A.08 of the Listed Company Manual of the New
    York Stock Exchange.
	 
	 	     
    (iii) Other Terms. The Committee shall determine the
    term of each SAR, provided that in no event shall the term of an
    SAR exceed a period of ten years from the date of grant. The
    Committee shall determine at the date of grant or thereafter,
    the time or times at which and the circumstances under which a
    SAR may be exercised in whole or in part (including based on
    future service requirements), the method of exercise, method of
    settlement, method by or forms in which Stock will

6

 

		
	 	
    be delivered or deemed to be delivered to Participants, and
    whether or not a SAR shall be free-standing or in tandem or
    combination with any other Award. Limited SARs that may only be
    exercised in connection with a Change of Control or termination
    of service following a Change of Control as specified by the
    Committee may be granted on such terms, not inconsistent with
    this Section 6(c), as the Committee may determine. The
    Committee may require that an outstanding Option be exchanged
    for an SAR exercisable for Stock having vesting, expiration, and
    other terms substantially the same as the Option, so long as
    such exchange will not result in additional accounting expense
    to the Company.

     
(d) Restricted Stock. The Committee is
authorized to grant Restricted Stock to Participants on the
following terms and conditions:

		
	 	     
    (i) Grant and Restrictions. Subject to
    Section 6(d)(ii), Restricted Stock shall be subject to such
    restrictions on transferability, risk of forfeiture and other
    restrictions, if any, as the Committee may impose, which
    restrictions may lapse separately or in combination at such
    times, under such circumstances (including based on achievement
    of performance conditions and/or future service requirements),
    in such installments or otherwise and under such other
    circumstances as the Committee may determine at the date of
    grant or thereafter. Except to the extent restricted under the
    terms of the Plan and any Award document relating to the
    Restricted Stock, a Participant granted Restricted Stock shall
    have all of the rights of a stockholder, including the right to
    vote the Restricted Stock and the right to receive dividends
    thereon (subject to any mandatory reinvestment or other
    requirement imposed by the Committee). Upon any forfeiture of
    Restricted Stock a Participant shall cease to have any rights of
    a stockholder and shall return any certificates representing
    such Restricted Stock to the Company.
	 
	 	     
    (ii) Limitation on Vesting. The grant, issuance,
    retention, vesting and/or settlement of Restricted Stock shall
    occur at such time and in such installments as determined by the
    Committee or under criteria established by the Committee.
    Subject to Section 10, the Committee shall have the right
    to make the timing of the grant and/or the issuance, ability to
    retain, vesting and/or settlement of Restricted Stock subject to
    continued employment, passage of time and/or such performance
    conditions as deemed appropriate by the Committee; provided that
    the grant, issuance, retention, vesting and/or settlement of a
    Restricted Stock Award that is based in whole or in part on
    performance conditions and/or the level of achievement versus
    such performance conditions shall be subject to a performance
    period of not less than one year, and any Award based solely
    upon continued employment or the passage of time shall vest over
    a period not less than three years from the date the Award is
    made, provided that such vesting may occur ratably over the
    three-year period. The foregoing minimum vesting conditions need
    not apply (A) in the case of the death, disability or
    Retirement of the Participant or termination in connection with
    a Change of Control, and (B) with respect to up to an
    aggregate of 5% of the shares of Stock authorized under the
    Plan, which may be granted (or regranted upon forfeiture) as
    Restricted Stock or RSUs without regard to such minimum vesting
    requirements.
	 
	 	     
    (iii) Certificates for Stock. Restricted Stock
    granted under the Plan may be evidenced in such manner as the
    Committee shall determine. If certificates representing
    Restricted Stock are registered in the name of the Participant,
    the Committee may require that such certificates bear an
    appropriate legend referring to the terms, conditions and
    restrictions applicable to such Restricted Stock, that the
    Company retain physical possession of the certificates, and that
    the Participant deliver a stock power to the Company, endorsed
    in blank, relating to the Restricted Stock.

7

 

		
	 	     
    (iv) Dividends and Splits. As a condition to the
    grant of an Award of Restricted Stock, the Committee may require
    that any dividends paid on a share of Restricted Stock shall be
    either (A) paid with respect to such Restricted Stock at the
    dividend payment date in cash, in kind, or in a number of shares
    of unrestricted Stock having a Fair Market Value equal to the
    amount of such dividends, or (B) automatically reinvested
    in additional Restricted Stock or held in kind, which shall be
    subject to the same terms as applied to the original Restricted
    Stock to which it relates. Unless otherwise determined by the
    Committee, Stock distributed in connection with a Stock split or
    Stock dividend, and other property distributed as a dividend,
    shall be subject to restrictions and a risk of forfeiture to the
    same extent as the Restricted Stock with respect to which such
    Stock or other property has been distributed.

     
(e) Restricted Stock Units. The Committee is
authorized to grant RSUs to Participants, subject to the
following terms and conditions:

		
	 	     
    (i) Award and Restrictions. Subject to
    Section 6(e)(ii), RSUs shall be subject to such
    restrictions on transferability, risk of forfeiture and other
    restrictions, if any, as the Committee may impose, which
    restrictions may lapse separately or in combination at such
    times, under such circumstances (including based on achievement
    of performance conditions and/or future service requirements),
    in such installments or otherwise and under such other
    circumstances as the Committee may determine at the date of
    grant or thereafter. A Participant granted RSUs shall not have
    any of the rights of a stockholder, including the right to vote,
    until Stock shall have been issued in the Participant’s
    name pursuant to the RSUs, except that the Committee may provide
    for dividend equivalents pursuant to Section 6(e)(iii)
    below).
	 
	 	     
    (ii) Limitation on Vesting. The grant, issuance,
    retention, vesting and/or settlement of RSUs shall occur at such
    time and in such installments as determined by the Committee or
    under criteria established by the Committee. Subject to
    Section 10, the Committee shall have the right to make the
    timing of the grant and/or the issuance, ability to retain,
    vesting and/or settlement of RSUs subject to continued
    employment, passage of time and/or such performance conditions
    as deemed appropriate by the Committee; provided that the grant,
    issuance, retention, vesting and/or settlement of an RSU that is
    based in whole or in part on performance conditions and/or the
    level of achievement versus such performance conditions shall be
    subject to a performance period of not less than one year, and
    any Award based solely upon continued employment or the passage
    of time shall vest over a period not less than three years from
    the date the Award is made, provided that such vesting may occur
    ratably over the three-year period. The foregoing minimum
    vesting conditions need not apply (A) in the case of the
    death, disability or Retirement of the Participant or
    termination in connection with a Change of Control, and
    (B) with respect to up to an aggregate of 5% of the shares
    of Stock authorized under the Plan, which may be granted (or
    regranted upon forfeiture) as Restricted Stock or RSUs without
    regard to such minimum vesting requirements.
	 
	 	     
    (iii) Dividend Equivalents. Unless otherwise
    determined by the Committee, dividend equivalents on the
    specified number of shares of Stock covered by an Award of RSUs
    shall be either (A) paid with respect to such RSUs at the
    dividend payment date in cash or in shares of unrestricted Stock
    having a Fair Market Value equal to the amount of such
    dividends, or (B) deferred with respect to such RSUs,
    either as a cash deferral or with the amount or value thereof
    automatically deemed reinvested in additional RSUs, other Awards
    or other investment vehicles having a Fair Market Value equal to
    the amount of such dividends, as the Committee shall determine
    or permit a Participant to elect.

8

 

     
(f) Deferred Stock Awards. Non-employee
directors may voluntarily defer all or a part of their
retainers, meeting fees, and Stock-based Awards under the
provisions of the 1998 Directors’ Deferred
Compensation Plan, as amended in 2003, or any successor plan
providing for deferral of compensation by non-employee
directors. The dollar value of such deferrals is credited to a
notional account in the form of Deferred Stock Awards. The
deferred account balances will be settled in the form of Stock
issued under the Plan, based on each non-employee
director’s election.

     
7. Performance-Based Compensation.

     
(a) Performance Goals Generally. If the
Committee specifies that any Restricted Stock or RSU Award is
intended to qualify as “performance-based
compensation” for purposes of Code Section 162(m), the
grant, issuance, vesting and/or settlement of such Award shall
be contingent upon achievement of preestablished performance
goals and other terms set forth in this Section 7. The
performance goal for such Awards shall consist of one or more
business criteria and the level or levels of performance with
respect to each of such criteria, as specified by the Committee
consistent with this Section 7. The performance goal shall
be an objective business criteria enumerated under
Section 7(c) and shall otherwise meet the requirements of
Code Section 162(m) and regulations thereunder, including
the requirement that the level or levels of performance targeted
by the Committee result in the achievement of performance goals
being “substantially uncertain”. Performance goals may
differ for Awards granted to any one Participant or to different
Participants.

     
(b) Timing for Establishing Performance
Conditions. A performance goal shall be established not
later than the earlier of (A) 90 days after the
beginning of any performance period applicable to such
performance-based Award or (B) the time 25% of such
performance period has elapsed.

     
(c) Business Criteria. For purposes of this
Plan, a “performance goal” shall mean any one or more
of the following business criteria, either individually,
alternatively or in any combination, applied to either the
Company as a whole or to a business unit or subsidiary, either
individually, alternatively or in any combination, and measured
either annually or cumulatively over a period of years, on an
absolute basis or relative to a pre-established target, to
previous years’ results or to a designated comparison
group, in each case as specified by the Committee:

		
	 	     
    (1) gross sales, net sales, or comparable store sales;
	 
	 	     
    (2) gross margin, cost of goods sold, mark-ups or
    mark-downs;
	 
	 	     
    (3) selling, general and administrative expenses;
	 
	 	     
    (4) operating income, earnings from operations, earnings
    before or after taxes, earnings before or after interest,
    depreciation, amortization, or extraordinary or special items;
	 
	 	     
    (5) net income or net income per common share (basic or
    diluted);
	 
	 	     
    (6) inventory turnover or inventory shrinkage;
	 
	 	     
    (7) return on assets, return on investment, return on
    capital, or return on equity;
	 
	 	     
    (8) cash flow, free cash flow, cash flow return on
    investment, or net cash provided by operations;
	 
	 	     
    (9) economic profit or economic value created;
	 
	 	     
    (10) stock price or total stockholder return; and

9

 

		
	 	     
    (11) market penetration, geographic expansion or new
    concept development; customer satisfaction; staffing; diversity;
    training and development; succession planning; employee
    satisfaction; acquisitions or divestitures of subsidiaries,
    affiliates or joint ventures.

     
(d) Written Determinations. Determinations by
the Committee as to the establishment of performance conditions,
the amount potentially payable in respect of performance-based
Awards, the level of actual achievement of the specified
performance conditions relating to such Awards, and the amount
of any final Award shall be recorded in writing in the case of
Awards intended to qualify under Section 162(m).
Specifically, the Committee shall certify in writing, in a
manner conforming to applicable regulations under
Section 162(m), prior to settlement of each such Award
granted to a Covered Employee, that the performance objective
relating to the performance-based Award and other material terms
of the Award upon which settlement of the Award was conditioned
have been satisfied.

     
(e) Settlement of performance-based Awards; Other
Terms. Settlement of performance-based Awards shall be
in cash or Stock, in the Committee’s discretion. The
Committee may, in its discretion, reduce the amount of a
settlement otherwise to be made in connection with such Awards.
Any settlement which changes the form of payment from that
originally specified shall be implemented in a manner such that
the Award and other related Awards do not, solely for that
reason, fail to qualify as “performance-based
compensation” for purposes of Code Section 162(m). The
Committee shall specify the circumstances in which such Awards
shall be paid or forfeited in the event of a Participant’s
death, disability or Retirement, in connection with a Change of
Control or, subject to the one-year performance condition set
forth in Sections 6(d)(ii) and (e)(ii), in connection with
any other termination of employment prior to the end of a
performance period or settlement of such Awards.

     
(f) Right of Recapture. If at any time after
the date on which a Participant has been granted or becomes
vested in an Award pursuant to the achievement of a performance
goal under Section 7(c), the Committee determines that the
earlier determination as to the achievement of the performance
goal was based on incorrect data and that in fact the
performance goal had not been achieved or had been achieved to a
lesser extent than originally determined and a portion of an
Award would not have been granted, vested or paid, given the
correct data, then (i) such portion of the Award that was
granted shall be forfeited and any related shares (or if such
shares were disposed of the cash equivalent) shall be returned
to the Company as provided by the Committee, (ii) such
portion of the Award that became vested shall be deemed to be
not vested and any related shares (or if such shares were
disposed of the cash equivalent) shall be returned to the
Company as provided by the Committee, and (iii) such
portion of the Award paid to the Participant shall be paid by
the Participant to the Company upon notice from the Company as
provided by the Committee.

     
8. Certain Provisions Applicable to Awards.

     
(a) Stand-Alone, Additional, and Tandem
Awards. Awards granted under the Plan may, in the
Committee’s discretion, be granted either alone or in
addition to, in tandem with, or in substitution or exchange for,
any other Award or any award granted under another plan of the
Company, any subsidiary or affiliate, or any business entity to
be acquired by the Company or a subsidiary or affiliate, or any
other right of a Participant to receive payment from the Company
or any subsidiary or affiliate. Awards granted in addition to or
in tandem with other Awards or awards may be granted either as
of the same time as or a different time from the grant of such
other Awards or awards.

     
(b) Term of Awards. The term of each Award
shall be for such period as may be determined by the Committee,
subject to the express limitations set forth in
Sections 6(b)(iii) and 6(c)(iii) or elsewhere in the Plan.

10

 

     
(c) Form and Timing of Payment under Awards.
Subject to the terms of the Plan (including Sections 11(k)
and (l)) and any applicable Award document, payments to be made
by the Company or a subsidiary or affiliate upon the exercise of
an Option or other Award or settlement of an Award may be made
in such forms as the Committee shall determine, including,
without limitation, cash, Stock, other Awards or other property,
and may be made in a single payment or transfer, in
installments, or on a deferred basis. The settlement of any
Award may be accelerated, and cash paid in lieu of Stock in
connection with such settlement, in the Committee’s
discretion or upon occurrence of one or more specified events,
subject to Sections 6(b)(iv), 11(k) and 11(l).

     
9. Change of Control.

     
(a) Impact of Event. Unless the Board or
Committee provides otherwise (either at the time of grant of an
Award or thereafter) prior to a Change of Control, this
Section 9(a) shall govern the treatment of any Option, SAR,
Restricted Stock or RSU, the exercisability, vesting and/or
settlement of which is based solely upon continued employment or
passage of time. In the case of an Award subject to this
Section 9(a) that the acquiring or surviving company in the
Change of Control assumes upon and maintains following the
Change of Control (which Award shall be adjusted as to the
number and kind of shares as may be determined appropriate by
the Committee prior to the Change of Control), if there occurs
an involuntary termination without cause of the Participant
holding such Award (excluding voluntary resignation, death,
disability or Retirement) within three months prior to or
eighteen months following the Change of Control such Award shall
be treated as provided in clause (i) or (ii) of this
Section 9(a), as applicable. In the case of an Award
subject to this Section 9(a) that the acquiring or
surviving company in the Change of Control does not assume upon
the Change of Control, immediately prior to the Change of
Control such Award shall be treated as provided in
clause (i) or (ii) of this Section 9(a), as
applicable. The treatment provided for under this
Section 9(a) is as follows:

		
	 	     
    (i) in the case of an Option or SAR, the Participant shall
    have the ability to exercise such Option or SAR, including any
    portion of the Option or SAR not previously exercisable, until
    the earlier of the expiration of the Option or SAR under its
    original term and a date that is two years (or such longer
    post-termination exercisability term as may be specified in the
    Option or SAR) following such date of termination of
    employment; and
	 
	 	     
    (ii) in the case of Restricted Stock or RSUs, the Award
    shall become fully vested and shall be settled in full. The
    Committee may also, through the terms of an Award or otherwise,
    provide for an absolute or conditional exercise, payment or
    lapse of conditions or restrictions on an Award which shall only
    be effective if, upon the announcement of a transaction intended
    to result in a Change of Control, no provision is made in such
    transaction for the assumption and continuation of outstanding
    Awards.

     
(b) Effect of Change of Control upon
performance-based Awards. Unless the Committee specifies
otherwise in the terms of an Award prior to a Change of Control,
this Section 9(b) shall control the treatment of any
Restricted Stock or RSU if at the time of the Change of Control
the grant, issuance, retention, vesting and/or settlement of
such Award is based in whole or in part on performance criteria
and level of achievement versus such criteria. In the case of an
Award subject to this Section 9(b) in which fifty percent
(50%) or more of the performance period applicable to the Award
has elapsed as of the date of the Change of Control, the
Participant shall be entitled to payment, vesting or settlement
of such Award based upon performance through a date occurring
within three months prior to the date of the Change of Control,
as determined by the Committee prior to the Change of Control,
and pro-rated based upon the percentage of

11

 

the performance period that has elapsed between the date such
Award was granted and the date of the Change of Control. In the
case of an Award subject to this Section 9(b) in which less
than fifty percent (50%) of the performance period applicable to
the Award has elapsed as of the date of the Change of Control,
the Participant shall be entitled to payment, vesting or
settlement of the target amount of such Award, as determined by
the Committee prior to the Change of Control, pro-rated based
upon the percentage of the performance period that has elapsed
between the date such Award was granted and the date of the
Change of Control. The Committee may determine either in advance
or at the time of the Change of Control the treatment of the
pro-rata portion of an Award attributable to the portion of the
performance period occurring after the date of the Change of
Control.

     
Notwithstanding the foregoing, in no event shall the treatment
specified in Sections 9(a) and (b) apply with respect
to an Award prior to the earliest to occur of (A) the date
such amounts would have been distributed in the absence of the
Change of Control, (B) a Participant’s
“separation from service” (as defined under
Section 409A of the Code) with the Company (or six months
thereafter for “specified employees”), (C) the
Participant’s death or “disability” (as defined
in Section 409A(a)(2)(C) of the Code), or (D) a
“change in the ownership or effective control” of the
Company or in the “ownership of a substantial portion of
the assets” of the Company within the meanings ascribed to
such terms in Treasury Department regulations issued under
Section 409A of the Code, if and to the extent that the
Committee determines, in its sole discretion, that the effect of
such treatment prior to the time specified in this
Section 9(b)(A), (B), (C) or (D) would be the
imposition of the additional tax under
Section 409A(a)(1)(B) of the Code on a Participant holding
such Award.

     
(c) Definition of Change of Control. For
purposes of the Plan, the term “Change of Control”
shall mean, unless otherwise defined in an Award agreement, an
occurrence of a nature that would be required to be reported by
the Company in response to Item 6(e) of Schedule 14A
of Regulation 14A issued under the Exchange Act. Without
limiting the inclusiveness of the definition in the preceding
sentence, a Change of Control of the Company shall be deemed to
have occurred as of the first day that any one or more of the
following conditions is satisfied:

		
	 	     
    (i) any person is or becomes the “beneficial
    owner” (as that term is defined in Rule 13d-3 under
    the Exchange Act), directly or indirectly, of securities of the
    Company representing 20% or more of the combined voting power of
    the Company’s then outstanding securities and such person
    would be deemed an “Acquiring Person” for purposes of
    the Rights Agreement dated as of July 16, 1998, as amended,
    between the Company and National City Bank, as successor Rights
    Agent (the “Rights Agreement”); or
	 
	 	     
    (ii) any of the following occur: (A) any merger or
    consolidation of the Company, other than a merger or
    consolidation in which the voting securities of the Company
    immediately prior to the merger or consolidation continue to
    represent (either by remaining outstanding or being converted
    into securities of the surviving entity) 80% or more of the
    combined voting power of the Company or surviving entity
    immediately after the merger or consolidation with another
    entity; (B) any sale, exchange, lease, mortgage, pledge,
    transfer, or other disposition (in a single transaction or a
    series of related transactions) of assets or earning power
    aggregating more than 50% of the assets or earning power of the
    Company on a consolidated basis; (C) any complete
    liquidation or dissolution of the Company; (D) any
    reorganization, reverse stock split or recapitalization of the
    Company that would result in a Change of Control as otherwise
    defined herein; or (E) any transaction or series of related
    transactions having, directly or indirectly, the same effect as
    any of the foregoing.

12

 

     
10. Additional Award Forfeiture Provisions.

     
(a) Forfeiture of Options and Other Awards and Gains
Realized Upon Prior Option Exercises or Award
Settlements. Unless otherwise determined by the
Committee, each Award granted hereunder, other than Awards
granted to non-employee directors, shall be subject to the
following additional forfeiture conditions, to which the
Participant, by accepting an Award hereunder, agrees. If any of
the events specified in Section 10(b)(i), (ii), or
(iii) occurs (a “Forfeiture Event”), all of the
following forfeitures will result:

		
	 	     
    (i) The unexercised portion of each Option held by the
    Participant, whether or not vested, and any other Award not then
    settled will be immediately forfeited and canceled upon the
    occurrence of the Forfeiture Event; and
	 
	 	     
    (ii) The Participant will be obligated to repay to the
    Company, in cash, within five business days after demand is made
    therefor by the Company, the total amount of Award Gain (as
    defined herein) realized by the Participant upon each exercise
    of an Option or settlement of an Award that occurred on or after
    (A) the date that is six months prior to the occurrence of
    the Forfeiture Event, if the Forfeiture Event occurred while the
    Participant was employed by the Company or a subsidiary or
    affiliate, or (B) the date that is six months prior to the
    date the Participant’s employment by the Company or a
    subsidiary or affiliate terminated, if the Forfeiture Event
    occurred after the Participant ceased to be so employed. For
    purposes of this Section, the term “Award Gain” shall
    mean (i), in respect of a given Option exercise, the product of
    (X) the Fair Market Value per share of Stock at the date of
    such exercise (without regard to any subsequent change in the
    market price of shares) minus the exercise price times
    (Y) the number of shares as to which the Option was
    exercised at that date, and (ii), in respect of any other
    settlement of an Award granted to the Participant, the Fair
    Market Value of the cash or Stock paid or payable to Participant
    (regardless of any elective deferral) less any cash or the Fair
    Market Value of any Stock or property (other than an Award or
    award which would have itself then been forfeitable hereunder
    and excluding any payment of tax withholding) paid by the
    Participant to the Company as a condition of or in connection
    such settlement.

     
(b) Events Triggering Forfeiture. The
forfeitures specified in Section 10(a) will be triggered
upon the occurrence of any one of the following Forfeiture
Events at any time during Participant’s employment by the
Company or a subsidiary or affiliate, or during the one-year
period following termination of such employment:

		
	 	     
    (i) Participant, acting alone or with others, directly or
    indirectly, (A) engages, either as employee, employer,
    consultant, advisor, or director, or as an owner, investor,
    partner, or stockholder unless Participant’s interest is
    insubstantial, in any business in an area or region in which the
    Company conducts business at the date the event occurs, which is
    directly in competition with a business then conducted by the
    Company or a subsidiary or affiliate; (B) induces any
    customer or supplier of the Company or a subsidiary or
    affiliate, with which the Company or a subsidiary or affiliate
    has a business relationship, to curtail, cancel, not renew, or
    not continue his or her or its business with the Company or any
    subsidiary or affiliate; or (C) induces, or attempts to
    influence, any employee of or service provider to the Company or
    a subsidiary or affiliate to terminate such employment or
    service. The Committee shall, in its discretion, determine which
    lines of business the Company conducts on any particular date
    and which third parties may reasonably be deemed to be in
    competition with the Company. For purposes of this
    Section 10(b)(i), a Participant’s interest as a
    stockholder is insubstantial if it represents beneficial
    ownership of less than five percent of the outstanding class of
    stock, and a Participant’s interest as an owner, investor,
    or partner is insubstantial if it represents ownership, as

13

 

		
	 	
    determined by the Committee in its discretion, of less than five
    percent of the outstanding equity of the entity;
	 
	 	     
    (ii) Participant discloses, uses, sells, or otherwise
    transfers, except in the course of employment with or other
    service to the Company or any subsidiary or affiliate, any
    confidential or proprietary information of the Company or any
    subsidiary or affiliate, including but not limited to
    information regarding the Company’s current and potential
    customers, organization, employees, finances, and methods of
    operations and investments, so long as such information has not
    otherwise been disclosed to the public or is not otherwise in
    the public domain (other than by Participant’s breach of
    this provision), except as required by law or pursuant to legal
    process, or Participant makes statements or representations, or
    otherwise communicates, directly or indirectly, in writing,
    orally, or otherwise, or takes any other action which may,
    directly or indirectly, disparage or be damaging to the Company
    or any of its subsidiaries or affiliates or their respective
    officers, directors, employees, advisors, businesses or
    reputations, except as required by law or pursuant to legal
    process; or
	 
	 	     
    (iii) Participant fails to cooperate with the Company or
    any subsidiary or affiliate in any way, including, without
    limitation, by making himself or herself available to testify on
    behalf of the Company or such subsidiary or affiliate in any
    action, suit, or proceeding, whether civil, criminal,
    administrative, or investigative, or otherwise fails to assist
    the Company or any subsidiary or affiliate in any way,
    including, without limitation, in connection with any such
    action, suit, or proceeding by providing information and meeting
    and consulting with members of management of, other
    representatives of, or counsel to, the Company or such
    subsidiary or affiliate, as reasonably requested.

     
(c) Agreement Does Not Prohibit Competition or Other
Participant Activities. Although the conditions set
forth in this Section 10 shall be deemed to be incorporated
into an Award, a Participant is not thereby prohibited from
engaging in any activity, including but not limited to
competition with the Company and its subsidiaries and
affiliates. Rather, the non-occurrence of the Forfeiture Events
set forth in Section 10(b) is a condition to the
Participant’s right to realize and retain value from his or
her compensatory Options and Awards, and the consequence under
the Plan if the Participant engages in an activity giving rise
to any such Forfeiture Event are the forfeitures specified
herein. The Company and Participant shall not be precluded by
this provision or otherwise from entering into other agreements
concerning the subject matter of Sections 10(a) and 10(b).

     
(d) Committee Discretion. The Committee may,
in its discretion, waive in whole or in part the Company’s
right to forfeiture under this Section, but no such waiver shall
be effective unless evidenced by a writing signed by a duly
authorized officer of the Company. In addition, the Committee
may impose additional conditions on Awards, by inclusion of
appropriate provisions in the document evidencing or governing
any such Award.

     
11. General Provisions.

     
(a) Compliance with Legal and Other
Requirements. The Company may, to the extent deemed
necessary or advisable by the Committee and subject to
Section 11(k), postpone the issuance or delivery of Stock
or payment of other benefits under any Award until completion of
such registration or qualification of such Stock or other
required action under any federal or state law, rule or
regulation, listing or other required action with respect to any
stock exchange or automated quotation system upon which the
Stock or other securities of the Company are listed or quoted,
or compliance with any other obligation of the Company, as the
Committee may consider appropriate, and may require any
Participant to make such representations, furnish such
information and comply with or be subject to such other
conditions as it may

14

 

consider appropriate in connection with the issuance or delivery
of Stock or payment of other benefits in compliance with
applicable laws, rules, and regulations, listing requirements,
or other obligations. The foregoing notwithstanding, in
connection with a Change of Control, the Company shall take or
cause to be taken no action, and shall undertake or permit to
arise no legal or contractual obligation, that results or would
result in any postponement of the issuance or delivery of Stock
or payment of benefits under any Award or the imposition of any
other conditions on such issuance, delivery or payment, to the
extent that such postponement or other condition would represent
a greater burden on a Participant than existed on the 90th day
preceding the Change of Control.

     
(b) Limits on Transferability; Beneficiaries.
No Award or other right or interest of a Participant under the
Plan shall be pledged, hypothecated or otherwise encumbered or
subject to any lien, obligation or liability of such Participant
to any party (other than the Company or a subsidiary or
affiliate thereof), or assigned or transferred by such
Participant otherwise than by will or the laws of descent and
distribution or to a Beneficiary upon the death of a
Participant, and such Awards or rights that may be exercisable
shall be exercised during the lifetime of the Participant only
by the Participant or his or her guardian or legal
representative, except that Awards and other rights (other than
ISOs and SARs in tandem therewith) may be transferred to one or
more transferees during the lifetime of the Participant, and may
be exercised by such transferees in accordance with the terms of
such Award, but only if and to the extent such transfers are
permitted by the Committee, subject to any terms and conditions
which the Committee may impose thereon (which may include
limitations the Committee may deem appropriate in order that
offers and sales under the Plan will meet applicable
requirements of registration forms under the Securities Act of
1933 specified by the Securities and Exchange Commission). A
Beneficiary, transferee, or other person claiming any rights
under the Plan from or through any Participant shall be subject
to all terms and conditions of the Plan and any Award document
applicable to such Participant, except as otherwise determined
by the Committee, and to any additional terms and conditions
deemed necessary or appropriate by the Committee.

     
(c) Adjustments. In the event that any large,
special and non-recurring dividend or other distribution
(whether in the form of cash or property other than Stock),
recapitalization, forward or reverse split, Stock dividend,
reorganization, merger, consolidation, spin-off, combination,
repurchase, share exchange, liquidation, dissolution or other
similar corporate transaction or event affects the Stock such
that an adjustment is determined by the Committee to be
appropriate, then the Committee shall, in an equitable manner as
determined by the Committee, adjust any or all of (i) the
number and kind of shares of Stock or other securities of the
Company or other issuer which are subject to the Plan,
(ii) the number and kind of shares of Stock or other
securities of the Company or other issuer by which annual
per-person Award limitations are measured under Section 5,
including the share limits applicable to non-employee director
Awards under Section 5(c), (iii) the number and kind
of shares of Stock or other securities of the Company or other
issuer subject to or deliverable in respect of outstanding
Awards and (iv) the exercise price, settlement price or
purchase price relating to any Award or, if deemed appropriate,
the Committee may make provision for a payment of cash or
property to the holder of an outstanding Option (subject to
Sections 11(k) and 11(l)) or other Award. In addition, the
Committee is authorized to make adjustments in the terms and
conditions of, and the criteria included in, Awards (including
performance-based Awards and performance goals and any
hypothetical funding pool relating thereto) in recognition of
unusual or nonrecurring events (including, without limitation,
events described in the preceding sentence, as well as
acquisitions and dispositions of businesses and assets affecting
any performance conditions), or in response to changes in
applicable laws, regulations, or accounting principles; provided
that no such adjustment shall be authorized or made if and to
the extent that the existence of such authority (i) would
cause Options, SARs, Restricted Stock or RSUs granted under the
Plan to Participants designated by the Committee as Covered
Employees and intended to

15

 

qualify as “performance-based compensation” under Code
Section 162(m) and regulations thereunder to otherwise fail
to qualify as “performance-based compensation” under
Code Section 162(m) and regulations thereunder, or
(ii) would cause the Committee to be deemed to have
authority to change the targets, within the meaning of Treasury
Regulation 1.162-27(e)(4)(vi), under the performance goals
relating to Options or SARs granted to Covered Employees and
intended to qualify as “performance-based
compensation” under Code Section 162(m) and
regulations thereunder.

     
(d) Tax Provisions.

		
	 	     
    (i) Withholding. The Company and any subsidiary or
    affiliate is authorized to withhold from any Award granted, any
    payment relating to an Award under the Plan, including from a
    distribution of Stock, or any payroll or other payment to a
    Participant, amounts of withholding and other taxes due or
    potentially payable in connection with any transaction or event
    involving an Award, or to require a Participant to remit to the
    Company an amount in cash or other property (including Stock) to
    satisfy such withholding before taking any action with respect
    to an Award, and to take such other action as the Committee may
    deem advisable to enable the Company and Participants to satisfy
    obligations for the payment of withholding taxes and other tax
    obligations relating to any Award. This authority shall include
    authority to withhold or receive Stock or other property and to
    make cash payments in respect thereof in satisfaction of a
    Participant’s withholding obligations, either on a
    mandatory or elective basis in the discretion of the Committee,
    or in satisfaction of other tax obligations. The Company can
    delay the delivery to a Participant of Stock under any Award to
    the extent necessary to allow the Company to determine the
    amount of withholding to be collected and to collect and process
    such withholding.
	 
	 	     
    (ii) Required Consent to and Notification of Code
    Section 83(b) Election. No election under
    Section 83(b) of the Code (to include in gross income in
    the year of transfer the amounts specified in Code
    Section 83(b)) or under a similar provision of the laws of
    a jurisdiction outside the United States may be made unless
    expressly permitted by the terms of the Award document or by
    action of the Committee in writing prior to the making of such
    election. In any case in which a Participant is permitted to
    make such an election in connection with an Award, the
    Participant shall notify the Company of such election within ten
    days of filing notice of the election with the Internal Revenue
    Service or other governmental authority, in addition to any
    filing and notification required pursuant to regulations issued
    under Code Section 83(b) or other applicable provision.
	 
	 	     
    (iii) Requirement of Notification Upon Disqualifying
    Disposition Under Code Section 421(b). If any
    Participant shall make any disposition of shares of Stock
    delivered pursuant to the exercise of an ISO under the
    circumstances described in Code Section 421(b) (i.e., a
    disqualifying disposition), such Participant shall notify the
    Company of such disposition within ten days thereof.

     
(e) Changes to the Plan. The Board may amend,
suspend or terminate the Plan or the Committee’s authority
to grant Awards under the Plan without the consent of
stockholders or Participants; provided, however, that any
amendment to the Plan shall be submitted to the Company’s
stockholders for approval not later than the earliest annual
meeting for which the record date is at or after the date of
such Board action:

		
	 	     
    (i) if such stockholder approval is required by any federal
    or state law or regulation or the rules of the New York Stock
    Exchange or any other stock exchange or automated quotation
    system on which the Stock may then be listed or quoted; or

16

 

		
	 	     
    (ii) if such amendment would materially increase the number
    of shares reserved for issuance and delivery under the
    Plan; or
	 
	 	     
    (iii) if such amendment would alter the provisions of the
    Plan restricting the Company’s ability to grant Options or
    SARs with an exercise price that is not less than the Fair
    Market Value of Stock; or
	 
	 	     
    (iv) in connection with any action to amend or replace
    previously granted Options or SARs in a transaction that
    constitutes a “repricing,” as such term is used in
    Section 303A.08 of the Listed Company Manual of the New
    York Stock Exchange.

The Board may otherwise, in its discretion, determine to submit
other amendments to the Plan to stockholders for approval; and
provided further, that, without the consent of an affected
Participant, no such Board (or any Committee) action may
materially and adversely affect the rights of such Participant
under any outstanding Award (for this purpose, actions that
alter the timing of federal income taxation of a Participant
will not be deemed material unless such action results in an
income tax penalty on the Participant). With regard to other
terms of Awards, the Committee shall have no authority to waive
or modify any such Award term after the Award has been granted
to the extent the waived or modified term would be mandatory
under the Plan for any Award newly granted at the date of the
waiver or modification.

     
(f) Right of Setoff. The Company or any
subsidiary or affiliate may, to the extent permitted by
applicable law, deduct from and set off against any amounts the
Company or a subsidiary or affiliate may owe to the Participant
from time to time (including amounts payable in connection with
any Award, owed as wages, fringe benefits, or other compensation
owed to the Participant), such amounts as may be owed by the
Participant to the Company, including but not limited to amounts
owed under Section 10(a), although the Participant shall
remain liable for any part of the Participant’s payment
obligation not satisfied through such deduction and setoff. By
accepting any Award granted hereunder, the Participant agrees to
any deduction or setoff under this Section 11(f).

     
(g) Unfunded Status of Awards; Creation of
Trusts. To the extent that any Award is deferred
compensation, the Plan is intended to constitute an
“unfunded” plan for deferred compensation with respect
to such Award. With respect to any payments not yet made to a
Participant or obligation to deliver Stock pursuant to an Award,
nothing contained in the Plan or any Award shall give any such
Participant any rights that are greater than those of a general
creditor of the Company; provided that the Committee may
authorize the creation of trusts and deposit therein cash,
Stock, other Awards or other property, or make other
arrangements to meet the Company’s obligations under the
Plan. Such trusts or other arrangements shall be consistent with
the “unfunded” status of the Plan unless the Committee
otherwise determines with the consent of each affected
Participant.

     
(h) Nonexclusivity of the Plan. Neither the
adoption of the Plan by the Board nor its submission to the
stockholders of the Company for approval shall be construed as
creating any limitations on the power of the Board or a
committee thereof to adopt such other incentive arrangements,
apart from the Plan, as it may deem desirable, including
incentive arrangements and awards which do not qualify under
Code Section 162(m), and such other arrangements may be
either applicable generally or only in specific cases.

     
(i) Payments in the Event of Forfeitures; Fractional
Shares. Unless otherwise determined by the Committee, in
the event of a forfeiture of an Award with respect to which a
Participant paid cash consideration, the Participant shall be
repaid the amount of such cash consideration. In addition,
nothing herein shall prevent the Committee from authorizing the
payment in cash of any amounts with respect to forfeited Awards.
No fractional shares of Stock shall be issued or delivered
pursuant to the Plan or any

17

 

Award. The Committee shall determine whether cash, other Awards
or other property shall be issued or paid in lieu of such
fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.

     
(j) Compliance with Code Section 162(m).
It is the intent of the Company that Options and SARs granted to
Covered Employees and other Awards designated as Awards to
Covered Employees subject to Section 7 shall constitute
qualified “performance-based compensation” within the
meaning of Code Section 162(m) and regulations thereunder,
unless otherwise determined by the Committee at the time of
allocation of an Award. Accordingly, the terms of
Section 7, including the definitions of Covered Employee
and other terms used therein, shall be interpreted in a manner
consistent with Code Section 162(m) and regulations
thereunder. The foregoing notwithstanding, because the Committee
cannot determine with certainty whether a given Participant will
be a Covered Employee with respect to a fiscal year that has not
yet been completed, the term Covered Employee as used herein
shall mean only a person designated by the Committee as likely
to be a Covered Employee with respect to a specified fiscal
year. If any provision of the Plan or any Award document
relating to an Award that is designated as intended to comply
with Code Section 162(m) does not comply or is inconsistent
with the requirements of Code Section 162(m) or regulations
thereunder, such provision shall be construed or deemed amended
to the extent necessary to conform to such requirements, and no
provision shall be deemed to confer upon the Committee or any
other person discretion to increase the amount of compensation
otherwise payable in connection with any such Award upon
attainment of the applicable performance objectives.

     
(k) Certain Limitations on Awards to Ensure
Compliance with Code Section 409A. Notwithstanding
anything herein to the contrary, any Award that is deferred
compensation within the meaning of Code Section 409A shall
be automatically modified and limited to the extent that the
Committee determines necessary to avoid the imposition of the
additional tax under Section 409A(a)(1)(B) of the Code on a
Participant holding such Award.

     
(l) Certain Limitations Relating to Accounting
Treatment of Awards. Other provisions of the Plan
notwithstanding, the Committee’s authority under the Plan
(including under Sections 8(c), 11(c) and 11(d)) is limited
to the extent necessary to ensure that any Option or other Award
of a type that the Committee has intended to be subject to fixed
accounting with a measurement date at the date of grant or the
date performance conditions are satisfied under APB 25
shall not become subject to “variable” accounting
solely due to the existence of such authority, unless the
Committee specifically determines that the Award shall remain
outstanding despite such “variable” accounting.

     
(m) Governing Law. The validity,
construction, and effect of the Plan, any rules and regulations
relating to the Plan and any Award document shall be determined
in accordance with the laws of the State of Delaware, without
giving effect to principles of conflicts of laws, and applicable
provisions of federal law.

     
(n) Awards to Participants Outside the United
States. The Committee may modify the terms of any Award
under the Plan made to or held by a Participant who is then
resident or primarily employed outside of the United States in
any manner deemed by the Committee to be necessary or
appropriate in order that such Award shall conform to laws,
regulations, and customs of the country in which the Participant
is then resident or primarily employed, or so that the value and
other benefits of the Award to the Participant, as affected by
foreign tax laws and other restrictions applicable as a result
of the Participant’s residence or employment abroad shall
be comparable to the value of such an Award to a Participant who
is resident or primarily employed in the United States. An Award
may be modified under this Section 11(n) in a manner

18

 

that is inconsistent with the express terms of the Plan, so long
as such modifications will not contravene any applicable law or
regulation or result in actual liability under
Section 16(b) for the Participant whose Award is modified.

     
(o) Limitation on Rights Conferred under
Plan. Neither the Plan nor any action taken hereunder
shall be construed as (i) giving any Eligible Person or
Participant the right to continue as an Eligible Person or
Participant or in the employ or service of the Company or a
subsidiary or affiliate, (ii) interfering in any way with
the right of the Company or a subsidiary or affiliate to
terminate any Eligible Person’s or Participant’s
employment or service at any time (subject to the terms and
provisions of any separate written agreements),
(iii) giving an Eligible Person or Participant any claim to
be granted any Award under the Plan or to be treated uniformly
with other Participants and employees, or (iv) conferring
on a Participant any of the rights of a stockholder of the
Company unless and until the Participant is duly issued or
transferred shares of Stock in accordance with the terms of an
Award or an Option is duly exercised. Except as expressly
provided in the Plan and an Award document, neither the Plan nor
any Award document shall confer on any person other than the
Company and the Participant any rights or remedies thereunder.

     
(p) Severability; Entire Agreement. If any of
the provisions of the Plan or any Award document is finally held
to be invalid, illegal or unenforceable (whether in whole or in
part), such provision shall be deemed modified to the extent,
but only to the extent, of such invalidity, illegality or
unenforceability, and the remaining provisions shall not be
affected thereby; provided, that, if any of such provisions is
finally held to be invalid, illegal, or unenforceable because it
exceeds the maximum scope determined to be acceptable to permit
such provision to be enforceable, such provision shall be deemed
to be modified to the minimum extent necessary to modify such
scope in order to make such provision enforceable hereunder. The
Plan and any agreements or documents designated by the Committee
as setting forth the terms of an Award contain the entire
agreement of the parties with respect to the subject matter
thereof and supersede all prior agreements, promises, covenants,
arrangements, communications, representations and warranties
between them, whether written or oral with respect to the
subject matter thereof.

     
(q) Plan Effective Date and Termination. The
Plan shall become effective if, and at such time as, the
stockholders of the Company have approved it in accordance with
applicable law and stock exchange requirements. Unless earlier
terminated by action of the Board of Directors, the authority of
the Committee to make grants under the Plan shall terminate on
the date that is ten years after the latest date upon which
stockholders of the Company have approved the Plan, and the Plan
will remain in effect until such time as no Stock remains
available for delivery under the Plan or as set forth above and
the Company has no further rights or obligations under the Plan
with respect to outstanding Awards under the Plan.

19

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