Document:

AMENDED AND RESTATED 1998 STOCK INCENTIVE PLAN

COVENTRY HEALTH CARE, INC.

AMENDED AND RESTATED 1998 STOCK INCENTIVE PLAN

(February 22, 2001)

SECTION 1.   Purpose; Definitions.

     The
purpose of the 1998 Stock Incentive Plan (the “Plan”) is to enable
Coventry Health Care, Inc., a Delaware corporation (the “Company”), to
attract, retain and reward key employees of and consultants to the Company and
its Subsidiaries and Affiliates, and directors who are not also employees of the
Company, and to strengthen the mutuality of interests between such key
employees, consultants, and directors by awarding such key employees,
consultants, and directors performance-based stock incentives and/or other
equity interests or equity-based incentives in the Company, as well as
performance-based incentives payable in cash. The creation of the Plan shall not
diminish or prejudice other compensation programs approved from time to time by
the Board. 

		For
purposes of the Plan, the following terms shall be defined as set forth below: 

	 	 	 
		A.	“Affiliate” means any entity other than the Company and its
Subsidiaries that is designated by the Board as a participating employer under
the Plan, provided that the Company directly or indirectly owns at least 20% of
the combined voting power of all classes of stock of such entity or at least 20%
of the ownership interests in such entity.
		B.	“Assumed Plans” has the meaning provided in
Section 3(a) of the Plan.
		C.	“Assumption Time” means the time
 that the merger described in the Combination  Agreement becomes effective as provided
 in Section 2.2 of the Combination Agreement.
		D.	“Board” means the Board of Directors
 of the Company.
		E.	“Cause” has the meaning provided
 in Section 5(j) of the Plan.
		F.	“Change in Control” has the meaning
provided in Section 10(b) of the Plan.
		G.	“Change in Control Price” has the meaning
 provided in Section 10(d) of the Plan.
		H.	“Code” means the Internal  Revenue Code
 of 1986, as amended from time to time, and any successor thereto.
		I.	“Combination Agreement” has the meaning provided
 in Section 3(a) of the Plan.
		J.	“Common Stock” means the Company's Common Stock,
 par value $.01 per share.
		K.	“Committee” means the Committee referred to
 in Section 2 of the Plan.
		L.	“Company” means Coventry Health Care, Inc.,
a corporation  organized under the laws of the State of Delaware or any successor
 corporation.
		M.	“Disability”  means  disability as determined
  under the  Company's  Group Long Term  Disability Insurance Plan.
		N.	“Early Retirement” means retirement, for purposes of this Plan with
the express consent of the Company at or before the time of such retirement,
from active employment with the Company and any Subsidiary or Affiliate prior to
age 65, in accordance with any applicable early retirement policy of the Company
then in effect or as may be approved by the Committee.
		O.	“Effective Date” has the meaning provided in
Section 14 of the Plan.
		P.	“Exchange Act” means the Securities Exchange
 Act of 1934, as amended from time to time, and any successor thereto.
		Q.	“Fair Market Value” means with respect to the Common Stock, as of any
given date or dates, unless otherwise determined by the Committee in good faith,
the reported closing price of a share of Common Stock on The Nasdaq National
Market or such other market or exchange as is the principal trading market for
the Common Stock, or, if no such sale of a share of Common Stock is reported on
The Nasdaq National Market or other exchange or principal trading market on such
date, the fair market value of a share of Common Stock as determined by the
Committee in good faith.
		R.	“Incentive  Stock Option” means any Stock Option
intended to be and designated as an “Incentive Stock Option” within the meaning
 of Section 422 of the Code.
		S.	“Immediate Family” means any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include
adoptive relationships.
		T.	“Non-Employee  Director”  means a member of the
Board who is a Non-Employee  Director within the meaning of Rule  16b-3(b)(3) promulgated
  under the Exchange Act and an outside director within the meaning of Treasury Regulation
 Sec. 162-27(e)(3) promulgated under the Code.
		U.	“Non-Qualified Stock Option” means any Stock
Option that is not an Incentive Stock Option.
		V.	“Normal  Retirement” means retirement from active
 employment with the Company and any Subsidiary or Affiliate on or after age 65.
		W.	“Other  Stock-Based  Award” means an award under
Section 8  below that is valued in whole or in part by reference to, or is otherwise
based on, the Common Stock.
		X.	“Outside Director” means a member of the Board who is not then (i) an
officer or employee of the Company or any Subsidiary or Affiliate of the
Company, or (ii) the direct or beneficial owner of five percent (5%) or more of
the Common Stock of the Company.
		Y.	“Outside Director Option” means an award to an
Outside Director under Section 9 below.
		Z.	“Plan” means this 1998 Stock Incentive Plan, as
amended from time to time.
		AA.	“Restricted  Stock”  means an award of shares
of Common  Stock that is  subject to  restrictions under Section 7 of the Plan.
		BB.	“Restriction Period” has the meaning provided in
Section 7 of the Plan.
		CC.	“Retirement” means Normal or Early Retirement.
		DD.	“Section 162(m) Maximum” has the meaning provided in Section 3(a) hereof.

		EE.	“Stock Appreciation Right” means the right pursuant to an award
granted under Section 6 below to surrender to the Company all (or a
portion) of a Stock Option in exchange for an amount equal to the difference
between (i) the Fair Market Value, as of the date such Stock Option (or
such portion thereof) is surrendered, of the shares of Common Stock covered by
such Stock Option (or such portion thereof), subject, where applicable, to the
pricing provisions in Section 6(b)(ii), and (ii) the aggregate
exercise price of such Stock Option (or such portion thereof).
		FF.	
“Stock Option” or “Option” means any option to purchase
shares of Common Stock (including Restricted Stock, if the Committee so
determines) granted pursuant to Section 5 below.
		GG.	
“Subsidiary” means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.

SECTION 2.   Administration.

     The
Plan shall be administered by a Committee of not less than two Non-Employee
Directors, who shall be appointed by the Board and who shall serve at the
pleasure of the Board. The functions of the Committee specified in the Plan may
be exercised by an existing Committee of the Board composed exclusively of
Non-Employee Directors. The initial Committee shall be the Compensation and
Benefits Committee of the Board. In the event there are not at least two
Non-Employee Directors on the Board, the Plan shall be administered by the Board
and all references herein to the Committee shall refer to the Board. 

     The
Committee shall have authority to grant, pursuant to the terms of the Plan, to
officers, other key employees, Outside Directors and consultants eligible under
Section 4: (i) Stock Options, (ii) Stock Appreciation Rights,
(iii) Restricted Stock, and/or (iv) Other Stock-Based Awards;
provided, however, that the power to grant and establish the terms and
conditions of awards to Outside Directors under the Plan other than pursuant to
Section 9 shall be reserved to the Board. 

     In
particular, the Committee, or the Board, as the case may be, shall have the
authority, consistent with the terms of the Plan: 

		(a)	
to select the officers, key employees and Outside Directors of and consultants
to the Company and its Subsidiaries and Affiliates to whom Stock Options, Stock
Appreciation Rights, Restricted Stock, and/or Other Stock-Based Awards may from
time to time be granted hereunder;
		(b)	
to determine whether and to what extent Incentive Stock Options, Non-Qualified
Stock Options, Stock Appreciation Rights, Restricted Stock, and/or Other
Stock-Based Awards, or any combination thereof, are to be granted hereunder to
one or more eligible persons;
		(c)	to determine the number of shares to be covered by each
such award granted hereunder;
		(d)	
to determine the terms and conditions, not inconsistent with the terms of the
Plan, of any award granted hereunder (including, but not limited to, the share
price and any restriction or limitation, or any vesting acceleration or waiver
of forfeiture restrictions regarding any Stock Option or other award and/or the
shares of Common Stock relating thereto, based in each case on such factors as
the Committee shall determine, in its sole discretion); and to amend or waive
any such terms and conditions to the extent permitted by Section 11 hereof;
		(e)	
to determine whether and under what circumstances a Stock Option may be settled
in cash or Restricted Stock under Section 5(m) or (n), as applicable,
instead of Common Stock;
		(f)	
to determine whether, to what extent, and under what circumstances Option grants
and/or other awards under the Plan are to be made, and operate, on a tandem
basis vis-a-vis other awards under the Plan and/or cash awards made outside of
the Plan;
		(g)	
to determine whether, to what extent, and under what circumstances shares of
Common Stock and other amounts payable with respect to an award under this Plan
shall be deferred either automatically or at the election of the participant
(including providing for and determining the amount (if any) of any deemed
earnings on any deferred amount during any deferral period);
		(h)	to determine  whether to require  payment of tax  withholding
requirements  in shares of Common Stock subject to the award; and
		(i)	to impose any holding period required to satisfy Section 16 under the Exchange
Act.

     The
Committee shall have the authority to adopt, alter, and repeal such rules,
guidelines, and practices governing the Plan as it shall, from time to time,
deem advisable; to interpret the terms and provisions of the Plan and any award
issued under the Plan (and any agreements relating thereto); and to otherwise
supervise the administration of the Plan. 

     All
decisions made by the Committee pursuant to the provisions of the Plan shall be
made in the Committee’s sole discretion and shall be final and binding on
all persons, including the Company and Plan participants. 

SECTION 3.   Shares of Common Stock Subject to Plan.

     (a)
As of the Effective Date, an aggregate of 9,000,000 shares of Common Stock may
be issued by the Company under the Plan and the other stock option and incentive
plans assumed by the Company (the “Assumed Plans”) under the Capital
Contribution and Merger Agreement dated as of November 3, 1997 (the
“Combination Agreement”) by and among, inter alia, Coventry
Corporation, the Company, Principal Health Care, Inc. and Principal Mutual Life
Insurance Company. The Assumed Plans are the Principal Health Care, Inc. 1997
Non-Qualified Stock Option Plan, the Coventry Corporation 1997 Stock Incentive
Plan, the Coventry Corporation 1993 Stock Option Plan (as amended), the Southern
Health Management Corporation 1993 Stock Option Plan, the Coventry Corporation
1993 Outside Directors Stock Option Plan (as amended), the Coventry Corporation
Third Amended and Restated 1989 Stock Option Plan, and the Coventry Corporation
Amended and Restated 1987 Statutory-Nonstatutory Stock Option Plan. From and
after the Assumption Time, no additional shares of Common Stock may be made
subject to options or awards under the Assumed Plans. 

     (b)
The shares of Common Stock issuable under the Plan may consist, in whole or in
part, of authorized and unissued shares or treasury shares. No officer of the
Company or other person whose compensation may be subject to the limitations on
deductibility under Section 162(m) of the Code shall be eligible to receive
awards pursuant to this Plan relating to in excess of 400,000 shares of Common
Stock in any fiscal year (the “Section 162(m) Maximum”). 

     (c)
If any shares of Common Stock that have been optioned hereunder or under any of
the Assumed Plans cease to be subject to such option, or if any shares of Common
Stock that are subject to any Restricted Stock or Other Stock-Based Award
granted hereunder or under any of the Assumed Plans are forfeited prior to the
payment of any dividends, if applicable, with respect to such shares of Common
Stock, or any such award otherwise terminates without a payment being made to
the participant in the form of Common Stock, such shares shall again be
available for distribution in connection with future awards under the Plan, so
long as the total does not exceed the number specified in 3(a) above. 

     (d)
In the event of any merger, reorganization, consolidation, recapitalization,
extraordinary cash dividend, stock dividend, stock split or other change in
corporate structure affecting the Common Stock, an appropriate substitution or
adjustment shall be made in the maximum number of shares that may be awarded
under the Plan, in the number and option price of shares subject to outstanding
Options granted under the Plan, in the number of shares underlying Outside
Director Options to be granted under Section 9 hereof, the Section 162(m)
Maximum and in the number of shares subject to other outstanding awards granted
under the Plan as may be determined to be appropriate by the Committee, in its
sole discretion, provided that the number of shares subject to any award shall
always be a whole number. An adjusted option price shall also be used to
determine the amount payable by the Company upon the exercise of any Stock
Appreciation Right associated with any Stock Option. 

SECTION 4.   Eligibility.

     Officers,
other key employees and Outside Directors of and consultants to the Company and
its Subsidiaries and Affiliates who are responsible for or contribute to the
management, growth and/or profitability of the business of the Company and/or
its Subsidiaries and Affiliates are eligible to be granted awards under the
Plan. Outside Directors are eligible to receive awards pursuant to Section 9 and
as otherwise determined by the Board. 

SECTION 5.   Stock Options.

     Stock
Options may be granted alone, in addition to, or in tandem with other awards
granted under the Plan and/or cash awards made outside of the Plan. Any Stock
Option granted under the Plan shall be in such form as the Committee may from
time to time approve. 

     Stock
Options granted under the Plan may be of two types: (i) Incentive Stock
Options and (ii) Non-Qualified Stock Options. Incentive Stock Options may
be granted only to individuals who are employees of the Company or any
Subsidiary of the Company. 

     The
Committee shall have the authority to grant to any optionee Incentive Stock
Options, Non-Qualified Stock Options, or both types of Stock Options (in each
case with or without Stock Appreciation Rights). 

     Options
granted to officers, key employees, Outside Directors and consultants under the
Plan shall be subject to the following terms and conditions and shall contain
such additional terms and conditions, not inconsistent with the terms of the
Plan, as the Committee shall deem desirable. 

     (a)
Option Price. The option price per share of Common Stock
purchasable under a Stock Option shall be determined by the Committee at the
time of grant but shall be not less than 100% (or, in the case of any employee
who owns stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company or of any of its Subsidiaries, not less than
110%) of the Fair Market Value of the Common Stock at grant, in the case of
Incentive Stock Options, and not less than 100% of the Fair Market Value of the
Common Stock at grant, in the case of Non-Qualified Stock Options. 

     (b)
Option Term. The term of each Stock Option shall be fixed
by the Committee, but no Incentive Stock Option shall be exercisable more than
ten years (or, in the case of an employee who owns stock possessing more than
10% of the total combined voting power of all classes of stock of the Company or
any of its Subsidiaries or parent corporations, more than five years) after the
date the Option is granted. 

     (c)
Exercisability. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined by
the Committee at or after grant; provided, however, that except as provided in
Section 5(g) and (h) and Section 10, unless otherwise determined by
the Committee at or after grant, no Stock Option shall be exercisable prior to
the first anniversary date of the granting of the Option. The Committee may
provide that a Stock Option shall vest over a period of future service at a rate
specified at the time of grant, or that the Stock Option is exercisable only in
installments. If the Committee provides, in its sole discretion, that any Stock
Option is exercisable only in installments, the Committee may waive such
installment exercise provisions at any time at or after grant, in whole or in
part, based on such factors as the Committee shall determine in its sole
discretion. 

     (d)
Method of Exercise. Subject to whatever installment
exercise restrictions apply under Section 5(c), Stock Options may be
exercised in whole or in part at any time during the option period, by giving
written notice of exercise to the Company specifying the number of shares to be
purchased. Such notice shall be accompanied by payment in full of the purchase
price, either by check, note, or such other instrument as the Committee may
accept. As determined by the Committee, in its sole discretion, at or (except in
the case of an Incentive Stock Option) after grant, payment in full or in part
may also be made in the form of shares of Common Stock already owned by the
optionee or, in the case of a Non-Qualified Stock Option, shares of Restricted
Stock or shares subject to such Option or another award hereunder (in each case
valued at the Fair Market Value of the Common Stock on the date the Option is
exercised). If payment of the exercise price is made in part or in full with
Common Stock, the Committee may award to the employee a new Stock Option to
replace the Common Stock which was surrendered. If payment of the option
exercise price of a Non-Qualified Stock Option is made in whole or in part in
the form of Restricted Stock, such Restricted Stock (and any replacement shares
relating thereto) shall remain (or be) restricted in accordance with the
original terms of the Restricted Stock award in question, and any additional
Common Stock received upon the exercise shall be subject to the same forfeiture
restrictions, unless otherwise determined by the Committee, in its sole
discretion, at or after grant. No shares of Common Stock shall be issued until
full payment therefor has been made. An optionee shall generally have the rights
to dividends or other rights of a shareholder with respect to shares subject to
the Option when the optionee has given written notice of exercise, has paid in
full for such shares, and, if requested, has given the representation described
in Section 13(a). 

     (e)
Transferability of Options. No Non-Qualified Stock Option
shall be transferable by the optionee without the prior written consent of the
Committee other than (i) transfers by the optionee to a member of his or her
Immediate Family or a trust for the benefit of the optionee or a member of his
or her Immediate Family, or (ii) transfers by will or by the laws of descent and
distribution. No Incentive Stock Option shall be transferable by the optionee
otherwise than by will or by the laws of descent and distribution and all
Incentive Stock Options shall be exercisable, during the optionee’s
lifetime, only by the optionee. 

     (f)
Bonus for Taxes. In the case of a Non-Qualified Stock
Option or an optionee who elects to make a disqualifying disposition (as defined
in Section 422(a)(1) of the Code) of Common Stock acquired pursuant to the
exercise of an Incentive Stock Option, the Committee in its discretion may award
at the time of grant or thereafter the right to receive upon exercise of such
Stock Option a cash bonus calculated to pay part or all of the federal and
state, if any, income tax incurred by the optionee upon such exercise. 

     (g)
Termination by Death. Subject to Section 5(k), if an
optionee’s employment by the Company and any Subsidiary or (except in the
case of an Incentive Stock Option) Affiliate terminates by reason of death, any
Stock Option held by such optionee may thereafter be exercised, to the extent
such option was exercisable at the time of death or (except in the case of an
Incentive Stock Option) on such accelerated basis as the Committee may determine
at or after grant (or except in the case of an Incentive Stock Option, as may be
determined in accordance with procedures established by the Committee) by the
legal representative of the estate or by the legatee of the optionee under the
will of the optionee, for a period of one year (or such other period as the
Committee may specify at or after grant) from the date of such death or until
the expiration of the stated term of such Stock Option, whichever period is the
shorter. 

     (h)
Termination by Reason of Disability. Subject to
Section 5(k), if an optionee’s employment by the Company and any
Subsidiary or (except in the case of an Incentive Stock Option) Affiliate
terminates by reason of Disability, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it was exercisable at the
time of termination or (except in the case of an Incentive Stock Option) on such
accelerated basis as the Committee may determine at or after grant (or, except
in the case of an Incentive Stock Option, as may be determined in accordance
with procedures established by the Committee), for a period of (i) three years
(or such other period as the Committee may specify at or after grant) from the
date of such termination of employment or until the expiration of the stated
term of such Stock Option, whichever period is the shorter, in the case of a
Non-Qualified Stock Option and (ii) one year from the date of termination of
employment or until the expiration of the stated term of such Stock Option,
whichever period is shorter, in the case of an Incentive Stock Option; provided,
however, that, if the optionee dies within the period specified in (i) above (or
other such period as the Committee shall specify at or after grant), any
unexercised Non-Qualified Stock Option held by such optionee shall thereafter be
exercisable to the extent to which it was exercisable at the time of death for a
period of twelve months from the date of such death or until the expiration of
the stated term of such Stock Option, whichever period is shorter. In the event
of termination of employment by reason of Disability, if an Incentive Stock
Option is exercised after the expiration of the exercise period applicable to
Incentive Stock Options, but before the expiration of any period that would
apply if such Stock Option were a Non-Qualified Stock Option, such Stock Option
will thereafter be treated as a Non-Qualified Stock Option. 

     (i)
Termination by Reason of Retirement. Subject to
Section 5(k), if an optionee’s employment by the Company and any
Subsidiary or (except in the case of an Incentive Stock Option) Affiliate
terminates by reason of Normal or Early Retirement, any Stock Option held by
such optionee may thereafter be exercised by the optionee, to the extent it was
exercisable at the time of such Retirement or (except in the case of an
Incentive Stock Option) on such accelerated basis as the Committee may determine
at or after grant (or, except in the case of an Incentive Stock Option, as may
be determined in accordance with procedures established by the Committee), for a
period of (i) three years (or such other period as the Committee may specify at
or after grant) from the date of such termination of employment or the
expiration of the stated term of such Stock Option, whichever period is the
shorter, in the case of a Non-Qualified Stock Option and (ii) ninety (90) days
from the date of such termination of employment or the expiration of the stated
term of such Stock Option, whichever period is the shorter, in the event of an
Incentive Stock Option; provided however, that, if the optionee dies within the
period specified in (i) above (or other such period as the Committee shall
specify at or after grant), any unexercised Non-Qualified Stock Option held by
such optionee shall thereafter be exercisable to the extent to which it was
exercisable at the time of death for a period of twelve months from the date of
such death or until the expiration of the stated term of such Stock Option,
whichever period is shorter. In the event of termination of employment by reason
of Retirement, if an Incentive Stock Option is exercised after the expiration of
the exercise period applicable to Incentive Stock Options, but before the
expiration of the period that would apply if such Stock Option were a
Non-Qualified Stock Option, the option will thereafter be treated as a
Non-Qualified Stock Option. 

     (j)
Other Termination. Subject to Section 5(k), unless
otherwise determined by the Committee (or pursuant to procedures established by
the Committee) at or (except in the case of an Incentive Stock Option) after
grant, if an optionee’s employment by the Company and any Subsidiary or
(except in the case of an Incentive Stock Option) Affiliate is involuntarily
terminated for any reason other than death, Disability or Normal or Early
Retirement, the Stock Option shall thereupon terminate, except that such Stock
Option may be exercised, to the extent otherwise then exercisable, for the
lesser of ninety (90) days or the balance of such Stock Option’s term if
the involuntary termination is without Cause. For purposes of this Plan,
“Cause” means (i) a felony conviction of a participant or the failure
of a participant to contest prosecution for a felony, or (ii) a
participant’s willful misconduct or dishonesty, which is directly and
materially harmful to the business or reputation of the Company or any
Subsidiary or Affiliate. If an optionee voluntarily terminates employment with
the Company and any Subsidiary or (except in the case of an Incentive Stock
Option) Affiliate (except for Disability, Normal or Early Retirement), the Stock
Option shall thereupon terminate; provided, however, that the Committee at grant
or (except in the case of an Incentive Stock Option) thereafter may extend the
exercise period in this situation for the lesser of ninety (90) days or the
balance of such Stock Option’s term. 

     (k)
Incentive Stock Options. Anything in the Plan to the
contrary notwithstanding, no term of this Plan relating to Incentive Stock
Options shall be interpreted, amended, or altered, nor shall any discretion or
authority granted under the Plan be so exercised, so as to disqualify the Plan
under Section 422 of the Code, or, without the consent of the optionee(s)
affected, to disqualify any Incentive Stock Option under such Section 422.
No Incentive Stock Option shall be granted to any participant under the Plan if
such grant would cause the aggregate Fair Market Value (as of the date the
Incentive Stock Option is granted) of the Common Stock with respect to which all
Incentive Stock Options are exercisable for the first time by such participant
during any calendar year (under all such plans of the Company and any
Subsidiary) to exceed $100,000. To the extent permitted under Section 422 of the
Code or the applicable regulations thereunder or any applicable Internal Revenue
Service pronouncement: 

	 	     (i)
if (x) a participant’s employment is terminated by reason of death,
Disability, or Retirement and (y) the portion of any Incentive Stock Option
that is otherwise exercisable during the post-termination period specified under
Section 5(g), (h) or (i), applied without regard to the $100,000 limitation
contained in Section 422(d) of the Code, is greater than the portion of such
Option that is immediately exercisable as an “Incentive Stock Option”
during such post-termination period under Section 422, such excess shall be
treated as a Non-Qualified Stock Option; and 

	 	     (ii)
if the exercise of an Incentive Stock Option is accelerated by reason of a
Change in Control, any portion of such Option that is not exercisable as an
Incentive Stock Option by reason of the $100,000 limitation contained in
Section 422(d) of the Code shall be treated as a Non-Qualified Stock
Option. 

     (l)
Buyout Provisions. The Committee may at any time offer to
buy out for a payment in cash, Common Stock, or Restricted Stock an Option
previously granted, based on such terms and conditions as the Committee shall
establish and communicate to the optionee at the time that such offer is made. 

     (m)
Settlement Provisions. If the option agreement so provides
at grant or (except in the case of an Incentive Stock Option) is amended after
grant and prior to exercise to so provide (with the optionee’s consent),
the Committee may require that all or part of the shares to be issued with
respect to the spread value of an exercised Option take the form of Restricted
Stock, which shall be valued on the date of exercise on the basis of the Fair
Market Value (as determined by the Committee) of such Restricted Stock
determined without regards to the forfeiture restrictions involved. 

     (n)
Performance and Other Conditions. The Committee may
condition the exercise of any Option upon the attainment of specified
performance goals or other factors as the Committee may determine, in its sole
discretion. Unless specifically provided in the option agreement, any such
conditional Option shall vest immediately prior to its expiration if the
conditions to exercise have not theretofore been satisfied. 

SECTION 6.   Stock Appreciation Rights.

     (a)
Grant and Exercise. Stock Appreciation Rights may be
granted in conjunction with all or part of any Stock Option granted under the
Plan. In the case of a Non-Qualified Stock Option, such rights may be granted
either at or after the time of the grant of such Stock Option. In the case of an
Incentive Stock Option, such rights may be granted only at the time of the grant
of such Stock Option. A Stock Appreciation Right or applicable portion thereof
granted with respect to a given Stock Option shall terminate and no longer be
exercisable upon the termination or exercise of the related Stock Option,
subject to such provisions as the Committee may specify at grant where a Stock
Appreciation Right is granted with respect to less than the full number of
shares covered by a related Stock Option. A Stock Appreciation Right may be
exercised by an optionee, subject to Section 6(b), in accordance with the
procedures established by the Committee for such purpose. Upon such exercise,
the optionee shall be entitled to receive an amount determined in the manner
prescribed in Section 6(b). Stock Options relating to exercised Stock
Appreciation Rights shall no longer be exercisable to the extent that the
related Stock Appreciation Rights have been exercised. 

     (b)
Terms and Conditions. Stock Appreciation Rights shall be
subject to such terms and conditions, not inconsistent with the provisions of
the Plan, as shall be determined from time to time by the Committee, including
the following: 

	 	     (i)
Stock Appreciation Rights shall be exercisable only at such time or times and to
the extent that the Stock Options to which they relate shall be exercisable in
accordance with the provisions of Section 5 and this Section 6 of the
Plan. 

	 	 	 
	 	     (ii)
Upon the exercise of a Stock Appreciation Right, an optionee shall be entitled
to receive an amount in cash and/or shares of Common Stock equal in value to the
excess of the Fair Market Value of one share of Common Stock over the option
price per share specified in the related Stock Option multiplied by the number
of shares in respect of which the Stock Appreciation Right shall have been
exercised, with the Committee having the right to determine the form of payment.
When payment is to be made in shares, the number of shares to be paid shall be
calculated on the basis of the Fair Market Value of the shares on the date of
exercise. When payment is to be made in cash, such amount shall be calculated on
the basis of the Fair Market Value of the Common Stock on the date of exercise. 

	 	 	 
	 	     (iii)
Stock Appreciation Rights shall be transferable only when and to the extent that
the underlying Stock Option would be transferable under Section 5(e) of the
Plan. 

	 	 	 
	 	     (iv)
Upon the exercise of a Stock Appreciation Right, the Stock Option or part
thereof to which such Stock Appreciation Right is related shall be deemed to
have been exercised for the purpose of the limitation set forth in
Section 3 of the Plan on the number of shares of Common Stock to be issued
under the Plan. 

	 	 	 
	 	     (v)
The Committee, in its sole discretion, may also provide that, in the event of a
Change in Control and/or a Potential Change in Control, the amount to be paid
upon the exercise of a Stock Appreciation Right shall be based on the Change in
Control Price, subject to such terms and conditions as the Committee may specify
at grant. 

	 	 	 
	 	     (vi)
The Committee may condition the exercise of any Stock Appreciation Right upon
the attainment of specified performance goals or other factors as the Committee
may determine, in its sole discretion. 

SECTION 7.   Restricted Stock.

     (a)
Administration.  Shares of Restricted Stock may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside the Plan. The Committee shall determine the
eligible persons to whom, and the time or times at which, grants of Restricted
Stock will be made, the number of shares of Restricted Stock to be awarded to
any person, the price (if any) to be paid by the recipient of Restricted Stock
(subject to Section 7(b)), the time or times within which such awards may
be subject to forfeiture, and the other terms, restrictions and conditions of
the awards in addition to those set forth in Section 7(c). The Committee may
condition the grant of Restricted Stock upon the attainment of specified
performance goals or such other factors as the Committee may determine, in its
sole discretion. The provisions of Restricted Stock awards need not be the same
with respect to each recipient. 

     (b)
Awards and Certificates. The prospective recipient of a
Restricted Stock award shall not have any rights with respect to such award,
unless and until such recipient has executed an agreement evidencing the award
and has delivered a fully executed copy thereof to the Company, and has
otherwise complied with the applicable terms and conditions of such award. 

	 	        (i)    The purchase
price for shares of Restricted Stock shall be established by the Committee and may be zero.

	 	 	 
	 	     (ii)
Awards of Restricted Stock must be accepted within a period of 60 days (or such
shorter period as the Committee may specify at grant) after the award date, by
executing a Restricted Stock Award Agreement and paying whatever price (if any)
is required under Section 7(b)(i). 

	 	 	 
	 	     (iii)
Each participant receiving a Restricted Stock award shall be issued a stock
certificate in respect of such shares of Restricted Stock. Such certificate
shall be registered in the name of such participant, and shall bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such award. 

	 	 	 
	 	        (iv)
The Committee shall require that the stock certificates evidencing such shares
be held in custody by the Company until the restrictions thereon shall have
lapsed, and that, as a condition of any Restricted Stock award, the participant
shall have delivered a stock power, endorsed in blank, relating to the shares of
Common Stock covered by such award. 

     (c)
Restrictions and Conditions. The shares of Restricted Stock
awarded pursuant to this Section 7 shall be subject to the following
restrictions and conditions: 

	 	     (i)
In accordance with the provisions of this Plan and the award agreement, during a
period set by the Committee commencing with the date of such award (the
“Restriction Period”), the participant shall not be permitted to sell,
transfer, pledge, assign, or otherwise encumber shares of Restricted Stock
awarded under the Plan. Within these limits, the Committee, in its sole
discretion, may provide for the lapse of such restrictions in installments and
may accelerate or waive such restrictions, in whole or in part, based on
service, performance, such other factors or criteria as the Committee may
determine in its sole discretion. 

	 	 	 
	 	     (ii)
Except as provided in this paragraph (ii) and Section 7(c)(i), the
participant shall have, with respect to the shares of Restricted Stock, all of
the rights of a shareholder of the Company, including the right to vote the
shares, and the right to receive any cash dividends. The Committee, in its sole
discretion, as determined at the time of award, may permit or require the
payment of cash dividends to be deferred and, if the Committee so determines,
reinvested, subject to Section 13(e), in additional Restricted Stock to the
extent shares are available under Section 3, or otherwise reinvested.
Pursuant to Section 3 above, stock dividends issued with respect to
Restricted Stock shall be treated as additional shares of Restricted Stock that
are subject to the same restrictions and other terms and conditions that apply
to the shares with respect to which such dividends are issued. If the Committee
so determines, the award agreement may also impose restrictions on the right to
vote and the right to receive dividends. 

	 	 	 
	 	     (iii)
Subject to the applicable provisions of the award agreement and this
Section 7, upon termination of a participant’s employment with the
Company and any Subsidiary or Affiliate for any reason during the Restriction
Period, all shares still subject to restriction will vest, or be forfeited, in
accordance with the terms and conditions established by the Committee at or
after grant. 

	 	 	 
	 	     (iv)
If and when the Restriction Period expires without a prior forfeiture of the
Restricted Stock subject to such Restriction Period, certificates for an
appropriate number of unrestricted shares shall be delivered to the participant
promptly. 

     (d)
Minimum Value Provisions. In order to better ensure that
award payments actually reflect the performance of the Company and service of
the participant, the Committee may provide, in its sole discretion, for a tandem
performance-based or other award designed to guarantee a minimum value, payable
in cash or Common Stock to the recipient of a restricted stock award, subject to
such performance, future service, deferral, and other terms and conditions as
may be specified by the Committee. 

     (e)
Limitation on Number of Shares of Restricted Stock. No more
than three percent (3%) of the total number of shares of Common Stock
outstanding may be issued as Shares of Restricted Stock under this Plan. 

SECTION 8.   Other Stock-Based Awards.

        (a)
Administration. Other Stock-Based Awards, including,
without limitation, performance shares, convertible preferred stock, convertible
debentures, exchangeable securities and Common Stock awards or options valued by
reference to earnings per share or Subsidiary performance, may be granted either
alone, in addition to, or in tandem with Stock Options, Stock Appreciation
Rights, or Restricted Stock granted under the Plan and cash awards made outside
of the Plan; provided that no such Other Stock-Based Awards may be granted in
tandem with Incentive Stock Options if that would cause such Stock Options not
to qualify as Incentive Stock Options pursuant to Section 422 of the Code.
Subject to the provisions of the Plan, the Committee shall have authority to
determine the persons to whom and the time or times at which such awards shall
be made, the number of shares of Common Stock to be awarded pursuant to such
awards, and all other conditions of the awards. The Committee may also provide
for the grant of Common Stock upon the completion of a specified performance
period. The provisions of Other Stock-Based Awards need not be the same with
respect to each recipient. 

        (b)
Terms and Conditions. Other Stock-Based Awards made
pursuant to this Section 8 shall be subject to the following terms
and conditions: 

	 	     (i)
Subject to the provisions of this Plan and the award agreement and unless
otherwise determined by the Committee at grant, the recipient of an award under
this Section 8 shall be entitled to receive, currently or on a deferred basis,
interest or dividends or interest or dividend equivalents with respect to the
number of shares covered by the award, as determined at the time of the award by
the Committee, in its sole discretion, and the Committee may provide that such
amounts (if any) shall be deemed to have been reinvested in additional shares of
Common Stock or otherwise reinvested. 

	 	 	 
	 	     (ii)
Any award under Section 8 and any shares of Common Stock covered by any such
award shall vest or be forfeited to the extent so provided in the award
agreement, as determined by the Committee in its sole discretion. 

	 	 	 
	 	     (iii)
In the event of the participant’s Retirement, Disability, or death, or in
cases of special circumstances, the Committee may, in its sole discretion, waive
in whole or in part any or all of the remaining limitations imposed hereunder
(if any) with respect to any or all of an award under this Section 8. 

	 	 	 
	 	     (iv)
Each award under this Section 8 shall be confirmed by, and subject to the terms
of, an agreement or other instrument by the Company and the participant. 

SECTION 9.   Awards to Outside Directors.

     (a)
Applicability and Administration. The provisions of this Section 9
shall apply only to awards to Outside Directors in accordance with this Section
9. The Committee shall have no authority to determine the timing of or the terms
or conditions of any award under this Section 9. Instead, the Board shall have
the authority to interpret its provisions and supervise its administration,
subject to the provisions provided herein. All decisions made by the Board under
this Section 9 shall be made by the affirmative vote of a majority of its
members then in office. 

     (b)
Current Directors. On the date of each Annual Meeting of
Shareholders of the Company beginning with the year 2001, unless this Plan has
been previously terminated, each person who is an Outside Director following
such meeting will receive an automatic grant of a non-qualified stock option (an
“Outside Director Option”) to purchase 2,000 shares of Common Stock.
An Outside Director who is also the Chairman of the Board at such time will
instead receive an automatic grant of an Outside Director Option to purchase
6,000 shares of Common Stock. The exercise price of each Outside Director Option
granted pursuant to this Section 9(b) shall equal the Fair Market Value of such
Common Stock on such option’s date of grant. No Outside Director Option
granted pursuant to this Section 9 shall qualify as an Incentive Stock Option. 

     (c)
Exercisability and Method of Exercise. Each Outside
Director Option shall become exercisable on the date that is six months after
the date of grant. Outside Director Options may be exercised, in whole or in
part, only by notice in writing to the Company (i) stating the number of shares
as to which such option is to be exercised and the address to which the
certificates for such shares are to be sent, accompanied by cash, certified
check or bank draft payable to the order of the Company, in an amount equal to
such option’s purchase price per share multiplied by the number of shares
of the Common Stock as to which such option is then being exercised or (ii)
instructing the Company to deliver the shares being purchased to a broker,
subject to the broker’s delivery of cash to the Company equal to such
option purchase price per share multiplied by the number of shares as to which
such Option is then being exercised, or (iii) delivering shares of Common Stock
or Restricted Stock already owned by the Outside Director as partial or full
payment of the Option in accordance with the terms and restrictions set forth
under Section 5(d). 

     (d)
Transferability of Options. Outside Director Options shall
not be transferable without the prior written consent of the Board other than
(i) transfers by the optionee to a member of his or her Immediate Family or a
trust for the benefit of optionee or a member of his or her Immediate Family, or
(ii) transfers by will or by the laws of descent and distribution. 

     (e)
Option Agreement. Grantees of Outside Director Options
shall enter into a stock option agreement in a form approved by the Board, which
shall be subject to the terms and conditions of this Plan. Any agreement may
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Board. 

     (f)
Termination. The termination of Outside Director Options
shall be governed by the provisions of Sections 5(g), 5(i) and 5(j) hereof as if
Outside Directors were employees of the Company, except that any determination
to accelerate the vesting of an Outside Director Option will be made by the
Board and not by the Committee. 

     (g)
Certain Changes. Outside Director Options shall be subject
to Section 10. The number of shares and the exercise price per share of each
Outside Director Option shall be adjusted automatically in the same manner as
the number of shares and the exercise price for Stock Options under Section 3
hereof at any time that Stock Options are adjusted as provided in Section 3. 

     (h)
Taxes. The Company may make such provision as it deems
appropriate for the withholding of any taxes which the Company determines are
required in connection with the grant or exercise of any Outside Director
Option. 

SECTION 10.Change in Control Provisions.

     (a)
Impact of Event. In the event of: (1) a “Change in
Control” as defined in Section 10(b); or (2) a “Potential Change in
Control” as defined in Section 10(c), but only if and to the extent so
determined by the Committee or the Board at or after grant (subject to any right
of approval expressly reserved by the Committee or the Board at the time of such
determination), 

	 	     (i)    Subject to the  limitations
set forth below in this Section 10(a),  the following acceleration provisions shall apply:

	 	 

	 	     (a)
Any Stock Appreciation Rights, any Stock Option or Outside Director Option
awarded under the Plan not previously exercisable and vested shall become fully
exercisable and vested. 

	 	 

	 	     (b)
The restrictions applicable to any Restricted Stock and Other Stock-Based
Awards, in each case to the extent not already vested under the Plan, shall
lapse and such shares and awards shall be deemed fully vested. 

	 	     (ii)
Subject to the limitations set forth below in this Section 10(a), the value of
all outstanding Stock Options, Stock Appreciation Rights, Restricted Stock,
Outside Director Options and Other Stock-Based Awards, in each case to the
extent vested, shall, unless otherwise determined by the Board or by the
Committee in its sole discretion prior to any Change in Control, be cashed out
on the basis of the “Change in Control Price” as defined in Section
10(d) as of the date such Change in Control or such Potential Change in Control
is determined to have occurred or such other date as the Board or Committee may
determine prior to the Change in Control. 

	 	 

	 	        (iii)
The Board or the Committee may impose additional conditions on the acceleration
or valuation of any award in the award agreement. 

     (b) Definition  of
Change in Control.  For purposes of Section  10(a),  a “Change in Control”
  means the happening of any of the following:

	 	     (i)
any person or entity, including a “group” as defined in
Section 13(d)(3) of the Exchange Act, other than the Company or a
wholly-owned subsidiary thereof or any employee benefit plan of the Company or
any of its Subsidiaries, becomes the beneficial owner of the Company’s
securities having 35% or more of the combined voting power of the then
outstanding securities of the Company that may be cast for the election of
directors of the Company (other than as a result of an issuance of securities
initiated by the Company in the ordinary course of business or other than
transactions which are approved by a majority of the Board); or 

	 	 

	 	     (ii)
as the result of, or in connection with, any cash tender or exchange offer,
merger or other business combination, sales of assets or contested election, or
any combination of the foregoing transactions, less than a majority of the
combined voting power of the then outstanding securities of the Company or any
successor corporation or entity entitled to vote generally in the election of
the directors of the Company or such other corporation or entity after such
transactions are held in the aggregate by the holders of the Company’s
securities entitled to vote generally in the election of directors of the
Company immediately prior to such transaction; or 

	 	 

	 	     (iii)
during any period of two consecutive years, individuals who at the beginning of
any such period constitute the Board cease for any reason to constitute at least
a majority thereof, unless the election, or the nomination for election by the
Company’s shareholders, of each director of the Company first elected
during such period was approved by a vote of at least two-thirds of the
directors of the Company then still in office who were directors of the Company
at the beginning of any such period. 

     (c)  Definition of
Potential  Change in Control.  For purposes of Section 10(a), a "Potential
Change in Control" means the happening of any one of the following:

	 	        (i)
The approval by shareholders of an agreement by the Company, the consummation of
which would result in a Change in Control of the Company as defined in Section
10(b); or 

	 	 

	 	     (ii)
The acquisition of beneficial ownership, directly or indirectly, by any entity,
person or group (other than the Company or a Subsidiary or any Company employee
benefit plan (including any trustee of such plan acting as such trustee)) of
securities of the Company representing 5% or more of the combined voting power
of the Company’s outstanding securities and the adoption by the Committee
of a resolution to the effect that a Potential Change in Control of the Company
has occurred for purposes of this Plan. 

     (d)
Change in Control Price. For purposes of this Section 10,
“Change in Control Price” means the highest price per share paid in
any transaction reported on The Nasdaq National Market or such other exchange or
market as is the principal trading market for the Common Stock, or paid or
offered in any bona fide transaction related to a Potential or actual Change in
Control of the Company at any time during the 60 day period immediately
preceding the occurrence of the Change in Control (or, where applicable, the
occurrence of the Potential Change in Control event), in each case as determined
by the Committee except that, in the case of Incentive Stock Options and Stock
Appreciation Rights relating to Incentive Stock Options, such price shall be
based only on transactions reported for the date on which the optionee exercises
such Stock Appreciation Rights or, where applicable, the date on which a cash
out occurs under Section 10(a)(ii). 

SECTION 11.   Amendments and Termination.

     The
Board may at any time amend, alter or discontinue the Plan; provided, however,
that, without the approval of the Company’s shareholders, no amendment or
alteration may be made which would (a) except as a result of the provisions of
Section 3 (d) of the Plan, increase the maximum number of shares that may be
issued under the Plan or increase the Section 162(m) Maximum, (b) change the
provisions governing Incentive Stock Options except as required or permitted
under the provisions governing incentive stock options under the Code, or (c)
make any change for which applicable law or regulatory authority (including the
regulatory authority of The Nasdaq National Market or any other market or
exchange on which the Common Stock is traded) would require shareholder approval
or for which shareholder approval would be required to secure full deductibility
of compensation received under the Plan under Section 162(m) of the Code. No
amendment, alteration, or discontinuation shall be made which would impair the
rights of an optionee or participant under a Stock Option, Stock Appreciation
Right, Restricted Stock, Other Stock-Based Award or Outside Director Option
theretofore granted, without the participant’s consent. 

     The
Committee may amend the terms of any Stock Option or other award theretofore
granted, prospectively or retroactively, but, subject to Section 3 above,
no such amendment shall impair the rights of any holder without the
holder’s consent. The Committee may also substitute new Stock Options for
previously granted Stock Options (on a one for one or other basis), including
previously granted Stock Options having higher option exercise prices. Solely
for purposes of computing the Section 162(m) Maximum, if any Stock Options or
other awards previously granted to a participant are canceled and new Stock
Options or other awards having a lower exercise price or other more favorable
terms for the participant are substituted in their place, both the initial Stock
Options or other awards and the replacement Stock Options or other awards will
be deemed to be outstanding (although the canceled Stock Options or other awards
will not be exercisable or deemed outstanding for any other purposes). 

SECTION 12.   Unfunded Status of Plan.

     The
Plan is intended to constitute an “unfunded” plan for incentive and
deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Company, nothing contained herein shall give any
such participant or optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Common Stock or payments in lieu of or with respect to
awards hereunder; provided, however, that, unless the Committee otherwise
determines with the consent of the affected participant, the existence of such
trusts or other arrangements is consistent with the “unfunded” status
of the Plan. 

SECTION 13.   General Provisions.

     (a)
The Committee may require each person purchasing shares pursuant to a Stock
Option or other award under the Plan to represent to and agree with the Company
in writing that the optionee or participant is acquiring the shares without a
view to distribution thereof. The certificates for such shares may include any
legend which the Committee deems appropriate to reflect any restrictions on
transfer. All certificates for shares of Common Stock or other securities
delivered under the Plan shall be subject to such stock-transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of the Commission, any stock exchange upon
which the Common Stock is then listed, and any applicable Federal or state
securities law, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions. 

     (b)
Nothing contained in this Plan shall prevent the Board from adopting other or
additional compensation arrangements, subject to shareholder approval if such
approval is required; and such arrangements may be either generally applicable
or applicable only in specific cases. 

     (c)
The adoption of the Plan shall not confer upon any employee of the Company or
any Subsidiary or Affiliate any right to continued employment with the Company
or a Subsidiary or Affiliate, as the case may be, nor shall it interfere in any
way with the right of the Company or a Subsidiary or Affiliate to terminate the
employment of any of its employees at any time. 

     (d)
No later than the date as of which an amount first becomes includible in the
gross income of the participant for Federal income tax purposes with respect to
any award under the Plan, the participant shall pay to the Company, or make
arrangements satisfactory to the Committee regarding the payment of, any
Federal, state, or local taxes of any kind required by law to be withheld with
respect to such amount. The Committee may require withholding obligations to be
settled with Common Stock, including Common Stock that is part of the award that
gives rise to the withholding requirement. The obligations of the Company under
the Plan shall be conditional on such payment or arrangements and the Company
and its Subsidiaries or Affiliates shall, to the extent permitted by law, have
the right to deduct any such taxes from any payment of any kind otherwise due to
the participant. 

     (e)
The actual or deemed reinvestment of dividends or dividend equivalents in
additional Restricted Stock (or other types of Plan awards) at the time of any
dividend payment shall only be permissible if sufficient shares of Common Stock
are available under Section 3 for such reinvestment (taking into account
then outstanding Stock Options and other Plan awards). 

     (f)
The Plan and all awards made and actions taken thereunder shall be governed by
and construed in accordance with the laws of the State of Delaware. 

     (g)
The members of the Committee and the Board shall not be liable to any employee
or other person with respect to any determination made hereunder in a manner
that is not inconsistent with their legal obligations as members of the Board.
In addition to such other rights of indemnification as they may have as
directors or as members of the Committee, the members of the Committee shall be
indemnified by the Company against the reasonable expenses, including
attorneys’ fees actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any option
granted thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding that such Committee member is liable
for negligence or misconduct in the performance of his duties; provided that
within 60 days after institution of any such action, suit or proceeding, the
Committee member shall in writing offer the Company the opportunity, at its own
expense, to handle and defend the same. 

     (h)
In addition to any other restrictions on transfer that may be applicable under
the terms of this Plan or the applicable award agreement, no Stock Option, Stock
Appreciation Right, Restricted Stock award, or Other Stock-Based Award or other
right issued under this Plan is transferable by the participant without the
prior written consent of the Committee, or, in the case of an Outside Director,
the Board, other than (i) transfers by an optionee to a member of his or her
Immediate Family or a trust for the benefit of the optionee or a member of his
or her Immediate Family or (ii) transfers by will or by the laws of descent and
distribution. The designation of a beneficiary will not constitute a transfer. 

     (i)
The Committee may, at or after grant, condition the receipt of any payment in
respect of any award or the transfer of any shares subject to an award on the
satisfaction of a six-month holding period, if such holding period is required
for compliance with Section 16 under the Exchange Act. 

SECTION 14.   Effective Date of Plan.

     The
Plan shall be effective upon approval by the Board of the Company and by a
majority of the votes cast by the holders of the Company’s Common Stock. 

SECTION 15.   Term of Plan.

     No
Stock Option, Stock Appreciation Right, Restricted Stock award, Other
Stock-Based Award or Outside Director Option award shall be granted pursuant to
the Plan on or after the tenth anniversary of the Effective Date of the Plan,
but awards granted prior to such tenth anniversary may be extended beyond that
date.2000 Deferred Compensation Plan

Coventry Health Care, Inc.

2000 Deferred Compensation Plan

Article I
Establishment and Purpose of the Plan

         1.01  Establishment  of the Plan.  Coventry
Health Care, Inc. (the “Company”)  desires to adopt and establish a three-year  deferred  compensation
plan for a select group of its key management and
highly  compensated  employees  and their  beneficiaries.  Effective  as of  September  1, 2000 (the
“Effective  Date”),  the Company has by  execution  of this  document  created a Plan which shall be
known as the “Coventry Health Care, Inc. 2000 Deferred Compensation Plan.”

         1.02  Purpose.  The  purpose of the Plan is to provide  certain  unsecured  benefits  for a
select group of the Company’s key management personnel and their beneficiaries.

          It is the intention of the Company
that the Plan meet all of the requirements necessary or appropriate to be an
unsecured plan of deferred compensation for a select group of management or
highly compensated employees within the meaning of ERISA Sections 201(2),
301(a)(3) and 401(a)(1), which is not a qualified retirement plan under the
Code. All provisions hereof shall be interpreted accordingly. 

Article II
Definitions

         As used in the Plan:

          2.01    “Accounts” shall
mean the Company Cash Account and Stock Account maintained by the Administrative
Committee under Articles IV and V or any other section of the Plan to reflect a
Participant’s interest (or the undistributed interest of a Beneficiary)
under the Plan to the extent such Account has been created for a Participant or
Beneficiary. 

         2.02    “Administrative  Committee” shall mean the  committee  provided for in Section 14.01
hereof.

          2.03    “Beneficiary” shall
mean any person, persons and/or entity entitled to receive benefits which are
payable pursuant to Article XI hereof upon or after a Participant’s death. 

          2.04    “Bonus” or
“Bonuses” shall mean amounts paid to a Participant under any bonus
plan or arrangement of the Employer during the one year period immediately prior
to the Effective Date and for each Plan Year thereafter but shall not include
amounts paid under the Plan. 

         2.05     “Calendar Year” shall
 mean January 1 through December 31.

         2.06    “Change in Control” means
the happening of any of the following:

          (i)
     any person or entity, including a “group” as defined in
     Section 13(d)(3) of the Exchange Act, other than the Company or a
     wholly-owned subsidiary thereof or any employee benefit plan of the Company or
     any of its Subsidiaries, becomes the beneficial owner of the Company’s
     securities having 35% or more of the combined voting power of the then
     outstanding securities of the Company that may be cast for the election of
     directors of the Company (other than as a result of an issuance of securities
     initiated by the Company in the ordinary course of business or other than
     transactions which are approved by a majority of the Board of Directors of the
     Company); or 

          (ii)
          as the result of, or in connection with, any cash tender or exchange offer,
          merger or other business combination, sales of assets or contested election, or
          any combination of the foregoing transactions, less than a majority of the
          combined voting power of the then outstanding securities of the Company or any
          successor corporation or entity entitled to vote generally in the election of
          the directors of the Company or such other corporation or entity after such
          transactions are held in the aggregate by the holders of the Company’s
          securities entitled to vote generally in the election of directors of the
          Company immediately prior to such transaction; or 

               (iii) during any period of two
consecutive years, individuals who at the beginning of any such period
constitute the Board of Directors of the Company cease for any reason to
constitute at least a majority thereof, unless the election, or the nomination
for election by the Company’s shareholders, of each director of the Company
first elected during such period was approved by a vote of at least two-thirds
of the directors of the Company then still in office who were directors of the
Company at the beginning of any such period. 

          2.07    “Code” shall mean
the Internal Revenue Code of 1986, as amended from time to time. References to
any Section of the Internal Revenue Code shall include any successor provisions
thereto. 

         2.08    “Company”  shall mean Coventry  Health Care,  Inc. or any company that is a successor
thereto  as a  result  of a  merger,  consolidation,  liquidation,  transfer  of  assets,  or  other
reorganization.

          2.09    “Company Cash
Allocation” shall mean the amounts credited to the Participant in the
Company Cash Account by the Company in accordance with Section 4.01 hereof. 

          2.10    “Company Cash
Account” shall mean the Account maintained for each Participant to record
the amounts of the Company Cash Allocation credited to the Participant pursuant
to Section 4.01 hereof, as adjusted in accordance with the provisions of Article
IX of the Plan. 

          2.11    “Compensation”
shall mean the Salary and Bonus paid to the Employee, including amounts that are
not includible in the gross income of the Participant under a salary reduction
agreement by reason of the application of Sections 125, 402(e)(3), 402(h) or
403(b) of the Code. 

Compensation shall not include the following: 

          2.11(1) Amounts credited or paid under the Plan.

               2.11(2) Amounts included in an
Employee’s income for federal income tax purposes upon the exercise of a
non-qualified stock option or upon receipt or vesting of any restricted stock or
other property. 

               2.11(3) Amounts included in an
Employee’s income for federal income tax purposes upon the sale, exchange,
or disposition of stock acquired upon exercise of an incentive stock option. 

               2.11(4) Any expense allowances
(other than auto allowances which shall be included in Salary for purposes of
the Plan), fringe benefits (cash and non-cash), non-cash payments, reimbursed
expenses, group-term life insurance or excess group-term life insurance,
contributions by the Company to any SERP or 401(k) plans or other similar items
which are not included in the Participant’s Salary (other than bonuses),
whether or not such amounts are includible in the Employee’s gross income. 

          2.12    “Date of
Employment” or “Date of Reemployment” shall mean the day on which
an Employee first commences employment, or first commences reemployment
following Termination of Employment with the Employer. 

         2.13   “Disability”
shall mean  disability as determined  by the  Administrative  Committee
pursuant to Section 10.02.

         2.14   “Effective
Date” shall mean September 1, 2000.

          2.15    “Eligible Employee”
shall mean those Employees who are selected for participation in the Plan by the
Administrative Committee of the Plan. 

         2.16    “Employee”  shall mean any person who is
employed by one or more  Employers,  and is on an Employer’s payroll.

     2.17    “Employer” shall mean the Company or any
affiliated company or subsidiary of the Company that adopts the Plan. 

          2.18    “ERISA” shall mean
the Employee Retirement Income Security Act of 1974, as amended from time to
time. References to any Section of ERISA shall include any successor provision
thereto. 

          2.19    “Exchange Act”
means the Securities Exchange Act of 1934, as amended from time to time, and any
successor thereto. 

         2.20    “Fiscal  Year”  shall mean the fiscal  year of an  Employer.  The Fiscal  Year of the
Company ends on December 31.

          2.21    “Model Portfolio”
shall mean the investment vehicles established by the Company for the purpose of
crediting earnings or losses to Company Cash Accounts. 

         2.22   “Participant”  shall  mean an  Eligible  Employee  who  participates  in the  Plan as
provided in Article III hereof.

         2.23   “Plan” shall mean this Coventry  Health Care,  Inc. 2000 Deferred  Compensation  Plan
as set forth in this plan document, and as hereafter amended.

         2.24   “Plan Year” shall mean the twelve (12)
consecutive month period ending on August 31.

          2.25    “Salary” shall mean
the annual base salary paid to a Participant according to the Company’s
normal payroll practices computed immediately prior to the Effective Date and on
each August 31 thereafter. 

          2.26    “Stock Account”
shall mean the Account established for each Participant to record the amounts of
the Company’s common stock credited to the Participant pursuant to Section
5.01 hereof. 

          2.27    “Subsidiary” shall
mean any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if each of the corporations (other than
the last corporation in the unbroken chain) owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one of the other
corporations in the chain. 

          2.28    “Termination
For-Cause” shall mean termination of employment with an Employer resulting
from (i) a felony conviction of a Participant or the failure of a Participant to
contest prosecution for a felony, or (ii) a Participant’s willful
misconduct or dishonesty, which is directly and materially harmful to the
business or reputation of the Company or any Employer. 

          2.29    “Termination
Not-for-Cause” shall mean the termination of employment with an Employer
(where the Employee does not remain employed by another Employer), whether
voluntary or involuntary, other than by reason of the Participant’s Death
or Termination For-Cause as defined herein. 

         2.30   “Valuation Date” shall mean the
last day of the respective month.

         2.31   “Valuation
Period” shall mean a calendar month.

          2.32    “Year of Service”
shall mean a Plan Year during which the Participant remains in the full time
employment of an Employer. 

Article III
Requirements for Eligibility and Participation

          3.01    Eligibility. Each
Eligible Employee in the employ of the Company on the Effective Date shall
become a Participant on the Effective Date, subject to the provisions of Section
3.03. Any Employee who first becomes an Eligible Employee after the Effective
Date will become a Participant on the date he or she becomes an Eligible
Employee, subject to the provisions of Section 3.03. 

          3.02    Cessation of Eligible
Employee Status. If any Participant who does not incur a Termination of
Employment ceases to be an Eligible Employee as defined in Section 2.15 hereof,
then during the period that such Participant is not an Eligible Employee: (i)
such Participant shall not receive any further allocation of any Company
Contributions, if any, under the Plan, and (ii) such Participant’s Account
shall continue to be adjusted as provided in Article IX hereof. 

          3.03    Participation in the
Plan. Each Eligible Employee shall become a Participant only after receiving
an award form which shall define both the initial level of the Company’s
Cash Allocation credited to the Company Cash Account and the number of shares of
Stock credited to the Stock Account for such Participant for the first Plan
Year. 

Article IV
Company Contributions

          4.01    Company Cash
Allocations. The Company will make an initial Company Cash Allocation to the
Plan for a Participant as disclosed in the award form for the initial Plan Year
as of the Effective Date. For the two subsequent Plan Years, beginning September
1, 2001 and September 1, 2002, the Company Cash Allocation for a Participant
will be determined annually by the Administrative Committee prior to the
beginning of the Plan Year, and an award form will be issued evidencing such
allocation. The maximum Company Cash Allocation for the Chief Executive Officer
shall be 25% of Compensation for the initial Plan Year and such amounts as the
Compensation and Benefits Committee of the Board of Directors of the Company
shall determine for each subsequent Plan Year. The maximum Company Cash
Allocation for the Chief Operating Officer and the Chief Financial Officer of
the Company shall be 25% of Compensation for the initial Plan Year and 35% of
Compensation for each subsequent Plan Year. The maximum Company Cash Allocation
for any other Eligible Employee shall be 15% of Compensation for the initial
Plan Year and 20% of Compensation for each subsequent Plan Year. 

         4.02   Timing  of  Company  Cash  Allocations.  Company
Cash  Allocations  will  be made on September 1 of each year.

          4.03    Company Cash Allocations
in the Event of a Change-of-Control. In the event of a Change-of-Control,
and coincident with the effective time of the Change-of-Control, the Company
will make an additional Company Cash Allocation in an amount equal to the
initial Company Cash Allocation multiplied by the number of Plan Years remaining
for which no allocation has yet been made. A zero Company Cash Allocation for a
Participant for any year shall be deemed an allocation for purposes of the
forgoing calculation. 

Article V
Stock

          5.01    Stock Allocation. Each
Participant will be eligible to receive a credit to his or her Stock Account as
of the Plan’s Effective Date in an amount equal to the number of shares
determined by dividing 35% of the Participant’s initial Company Cash
Allocation by 15.836 (the average closing stock price for the Company’s
common stock as indicated on NASDAQ for the ten (10) consecutive trading days
prior to September 1, 2000). On September 1, 2001 and September 1, 2002, each
Participant who has received a Company Cash Allocation on such date will be
eligible to receive additional credits to his or her Stock Account as of such
date in an amount equal to the number of shares initially credited to such
Participant’s Stock Account on the Plan’s Effective Date. 

          The Stock award form will set
forth the number of shares included in the grant. 

          5.02    Stock Allocations in the
Event of a Change-of-Control. In the event of a Change-of-Control, and
coincident with the effective time of the Change-of-Control, an additional
credit to the Stock Account for each Participant will be made in an amount equal
to the initial award for such Participant multiplied by the number of Plan Years
remaining for which no credit has yet been made. A zero credit to a
Participant’s Stock Account for any year shall be deemed a credit for
purposes of the forgoing calculation. 

Article VI
Vesting of Accounts

         6.01   Vesting of  Participant’s  Accounts.  Each Participant will become 100%
vested in his or her  Accounts on  September  1, 2003,  unless  earlier  vesting
results  from one or more of the following circumstances:

               6.01(1)Accelerated Vesting in
the Event of a Change-of-Control. In the event of a Change-of-Control, each
Participant’s Accounts will vest in full as of the date of the
Change-of-Control. 

               6.01(2)Accelerated Vesting in
the Event of a Participant’s Death or Involuntary Termination
Not-for-Cause. In the event of a Participant’s Death or involuntary
Termination Not-for-Cause, as defined herein, each Participant’s Accounts
will vest as of the date of Participant’s Death or involuntary Termination
Not-for-Cause. 

          6.02    Forfeiture of
Participant’s Accounts. In the event of a Participant’s voluntary
Termination Not-for-Cause, or Termination For-Cause, the Participant’s
Accounts will be forfeited in their entirety. Such forfeiture will not be
reallocated among other Plan Participants but may be applied to future Company
Cash Allocations and Stock Allocations. 

Article VII
Account Distributions

          7.01    Account Distribution.
Each Participant’s Accounts will be distributed in full within thirty (30)
days after becoming vested. Any Death Benefit under this Plan shall be payable
to the beneficiary or beneficiaries most recently designated by a Participant in
accordance with Section 11.02 below. 

          7.02    Form of Distribution.
The Participant’s Company Cash Account and Stock Account will be
distributed in cash. The value of a Participant’s Stock Account shall be
determined based on the average closing stock price for the Company’s
common stock as indicated on NASDAQ for the ten (10) consecutive trading days
prior to the valuation date. 

Article VIII
Source of Payments of Deferred Compensation

          The Plan is a non-qualified,
unfunded, unsecured, deferred compensation plan. Therefore, all benefits owing
under the Plan shall be paid out of the Company’s general corporate funds,
which are subject to the claims of creditors. Neither the Participant nor any
Beneficiary shall have any right, title, or interest whatever, or any claim,
preferred or otherwise, in or to any particular asset of the Company as a result
of participation in this Plan. Nothing contained in the Plan, and no action
taken pursuant to its provisions, shall create or be construed to create a trust
or fiduciary relationship of any kind between the Company and a Participant or
any other person. Neither a Participant nor a Beneficiary of a Participant shall
acquire any interest greater than that of an unsecured creditor in any assets of
the Company. 

Article IX
Valuation of Accounts

          9.01    Participants’
Accounts. The Administrative Committee shall establish and maintain a
Company Cash Account and Stock Account for each Participant. Each Account shall
reflect the credits and charges allocable thereto in accordance with the Plan.
The Administrative Committee shall maintain records which will adequately
disclose at all times the state of each separate Account hereunder. The books,
forms and methods of accounting shall be entirely subject to the supervision of
the Administrative Committee. 

         9.02   Periodic
Determination of Participants’ Accounts.

               9.02(1) Allocation of Net
Earnings and Adjustments in Value of the Accounts. The net earnings or
losses of the Accounts under the Plan for a particular Valuation Period shall be
determined on the basis of the earnings for such Valuation Period. Participants
will be credited with earnings or losses on their Company Cash Account in
amounts equal to the earnings or losses on a Model Portfolio as established by
the Company. The value of a Participant’s Stock Account shall be determined
based on the closing stock price for the Company’s common stock as
indicated on NASDAQ for the last trading day on or immediately prior to the
valuation date. 

               9.02(2) Computations. All
of the computations required to be made under the provisions of Article IX, when
made, shall be conclusive with respect thereto and shall be binding upon all the
Participants, Beneficiaries, and all other persons. 

Article X
Disability Benefits

          10.01    Disability Benefits.
If a Participant suffers a Disability, such Participant shall remain an Eligible
Employee and a Participant for all purposes under the Plan, including receipt of
future Company Cash Allocations and Stock Awards. Payments to a Participantnt
who has suffered a Disability shall be made at the time and in the manner
provided in Article VII hereof. 

          10.02    Determination of
Disability. The Administrative Committee shall determine whether a
Participant has suffered a Disability based upon proof thereof which the
Participant must provide to the Administrative Committee, and its determination
in that respect is binding upon the Participant. 

Article XI
Death Benefits

          11.01    Death Benefits. Upon
the death of a Participant while in the employ of an Employer, his or her
Beneficiary, determined in accordance with Section 11.02 hereof, shall receive
the full amount credited to his or her Company Cash Account and Stock Account
valued as of the Valuation Date coinciding with or immediately preceding the
date on which the Participant dies. The Administrative Committee may require
proper proof of death. 

          Payments resulting from the death
of a Participant shall be made at the time and in the manner provided in Article
VII hereof. 

          11.02    Designation of
Beneficiaries. Each Participant may designate a Beneficiary or
Beneficiaries, and contingent Beneficiary or Beneficiaries, if desired, to
receive his or her interest hereunder in the event of his or her death, but the
designation of a Beneficiary shall not be effective for any purpose unless and
until it has been filed with the Administrative Committee on the form provided
therefor. If the deceased Participant failed to name a Beneficiary in the manner
herein prescribed, or the Beneficiary or Beneficiaries so named predecease the
Participant, the amount, if any, which is payable hereunder in respect of such
deceased Participant shall be paid to the legal representative or
representatives of the estate of the deceased Participant. Any payment made to
any person pursuant to the power and discretion conferred upon the
Administrative Committee by the preceding sentence shall operate as a complete
discharge of all obligations under the Plan in respect of such deceased
Participant and shall not be subject to review by anyone, but shall be final,
binding and conclusive on all persons ever interested hereunder. A Participant
may from time to time change any Beneficiary previously designated by him or her
without notice to such Beneficiary, under such rules and regulations as the
Administrative Committee may from time to time promulgate, but the last
Beneficiary designation filed with the Administrative Committee shall control. 

Article XII
Employment Termination Benefits

         12.01     Termination  Benefits.  In the  event a  Participant  voluntarily  terminates  his or her
employment,  or is Terminated For-Cause by an Employer,  no benefits will be paid to the Participant
or any Beneficiary under this Plan.

Article XIII
Miscellaneous Provisions Respecting Participants

         13.01     Participants to Furnish
Required Information.

               13.01(1) Each Participant shall
furnish to the Administrative Committee such information as the Administrative
Committee considers necessary or desirable for purposes of administering the
Plan, and the provisions of the Plan respecting any payments hereunder are
conditional upon the Participant’s furnishing promptly such true, full and
complete information as the Administrative Committee may reasonably request. 

               13.01(2) Any notice or information
which according to the terms of the Plan or the rules of the Administrative
Committee must be filed with the Administrative Committee, shall be deemed so
filed if addressed and either delivered in person or mailed, postage fully
prepaid, to the Administrative Committee. The Administrative Committee may, in
its sole discretion, modify or waive any specified notice requirement; provided,
however, that such modification or waiver must be administratively feasible,
must be in the best interest of the Participant, and must be made on the basis
of rules of the Administrative Committee that are applied uniformly to all
Participants. 

          13.02    Restrictions on
Assignment. The benefits provided hereunder are intended for the personal
security of persons entitled to payment under the Plan, and are not subject in
any manner to the debts or other obligations of the persons to whom they are
payable. The interest of a Participant or such Participant’s Beneficiary or
Beneficiaries may not be sold, transferred, assigned or encumbered in any
manner, either voluntarily or involuntarily, and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, or charge the same shall be
null and void; neither shall any benefits hereunder be liable for or subject to
the debts, contracts, liabilities, engagements or torts of any person to whom
such benefits or funds are payable, nor shall they be subject to garnishment,
attachment, or other legal or equitable process nor shall they be an asset in
bankruptcy. All of the provisions of this Section 13.02, however, are subject to
Article VII, and to withholding of any applicable taxes. 

          13.03    Participants’
Rights. Establishment of the Plan shall not be construed as giving any
Participant the right to be retained in the Employers’ service or employ,
and nothing contained herein shall be construed in any way to limit or restrict
the right of any Employer to discharge any employee regardless of whether such
employee is a Participant or to change such employee’s position or the
basis or amount of such employee’s compensation. Establishment of the Plan
shall not give any Participant the right to receive any benefits not
specifically provided by the Plan. A Participant shall not have any interest in
the amounts credited to his Accounts until such Accounts are vested in
accordance with the Plan. All amounts credited to Accounts for a Participant
under the Plan shall remain the sole property of the Employer, subject to the
claims of its general creditors and available for its use. With respect to
amounts credited to an Account of a Participant, the Participant is merely a
general creditor of the Employer; and the obligation of the Employer hereunder
is purely contractual and shall not be secured in any way. 

          13.04    Address for Mailing of
Benefits. Each Participant entitled to benefits hereunder shall file with
the Administrative Committee from time to time in writing such
Participant’s post office address and each change of address. Any check
representing payment hereunder and any communication addressed to a Participant,
an Employee or Beneficiary, at such person’s last address filed with the
Administrative Committee, or if no such address has been filed, then at such
person’s last address as indicated on the records of an Employer, shall be
deemed to have been delivered to such person on the date on which such check or
communication is deposited, postage prepaid, in the United States mail. 

          13.05    Unclaimed Account
Procedure. The Administrative Committee shall not be obliged to search for,
or ascertain the whereabouts of any Participant or Beneficiary. The
Administrative Committee, by certified or registered mail addressed to such
Participant’s or Beneficiary’s last known address, shall notify the
Participant or Beneficiary that such Participant or Beneficiary is entitled to a
distribution under this Plan. 

Article XIV
Administration of the Plan

          14.01    Appointment of
Administrative Committee. The administration of the Plan will be the
responsibility of the Administrative Committee and shall consist of one (1) or
more members. For the Chief Executive Officer, the Administrative Committee will
be the Compensation and Benefits Committee of the Board of Directors of the
Company; for all other Participants of this Plan, the Administrative Committee
will be the Chief Executive Officer of the Company or such other person(s) as
shall be appointed by the Compensation and Benefits Committee of the Board of
Directors of the Company. The Administrative Committee shall have the sole
power, duty and responsibility for directing the administration of the Plan in
accordance with its provisions. 

          14.02    Compensated Expenses of
the Administrative Committee. The members of the Administrative Committee
shall serve without compensation for their services as such, but the reasonable
and necessary expenses of the Administrative Committee shall be reimbursed by
the Company. 

          14.03    Secretary and Agents of
the Administrative Committee. The Administrative Committee may appoint a
Secretary who may, but need not, be a member of the Administrative Committee,
and may employ such officers and employees of the Company and such agents and
such clerical and other administrative personnel as reasonably may be required
for the purpose of administering the Plan. Such administrative personnel shall
carry out the duties and responsibilities assigned to them by the Administrative
Committee. 

         14.04     Actions of
Administrative Committee.

               14.04(1) A majority of the members
of the Administrative Committee shall constitute a quorum for the transaction of
business, and shall have full power to act hereunder. Action by the
Administrative Committee shall be official if approved by a vote of a majority
of the members present at any official meeting. The Administrative Committee
may, without a meeting, authorize or approve any action by written instrument
signed by a majority of all of the members. Any written memorandum signed by the
Chief Executive Officer of the Company, or any other member of the
Administrative Committee, or by any other person duly authorized by the
Administrative Committee to act, in each case when acting within the authority
granted by the Plan, in respect of the subject matter of the memorandum, shall
have the same force and effect as a formal resolution adopted in open meeting. 

               14.04(2) A member of the
Administrative Committee may not vote, in his or her capacity as an
Administrative Committee member, or decide upon any matter relating solely to
him or her or vote on any case in which his or her individual right or claim to
any benefit under the Plan is specifically involved. 

               14.04(3) The Administrative
Committee shall maintain written records of its actions, and as long as such
written records are maintained, members may participate and hold a meeting of
the Administrative Committee by means of conference telephone or similar
communications equipment which permits all persons participating in the meeting
to hear each other. Participation in such a meeting constitutes presence in
person at such meeting. 

          14.05    Authority of
Administrative Committee. The Administrative Committee is authorized to take
such actions as may be necessary to carry out the provisions and purposes of the
Plan and shall have the authority to control and manage the operation and
administration of the Plan. In order to effectuate the purposes of the Plan, the
Administrative Committee shall have the power and discretion to construe and
interpret the Plan, to supply any omissions therein, to reconcile and correct
any errors or inconsistencies, to decide any questions in the administration and
application of the Plan, and to make equitable adjustments for any mistakes or
errors made in the application of the Plan. All such actions or determinations
made by the Administrative Committee, and the application of rules and
regulations to a particular case or issue by the Administrative Committee shall
not be subject to review by anyone, but shall be final, binding and conclusive
on all persons ever interested hereunder. In construing the Plan and in
exercising its power under provisions requiring Administrative Committee
approval, the Administrative Committee shall attempt to ascertain the purpose of
the provisions in questions and when such purpose is known or reasonably
ascertainable, such purpose shall be given effect to the extent feasible.
Likewise, the Administrative Committee is authorized to determine all questions
with respect to the individual rights of all Participants and their
Beneficiaries under this Plan, including, but not limited to, all issues with
respect to eligibility, valuation of Accounts, and level of Company
contributions subsequent to the first Plan Year. 

         14.06     General  Administrative  Powers.  The  Administrative  Committee  shall have authority to
make, and from time to time revise, rules and regulations for the administration of the Plan.

Article XV
Amendment of the Plan

          The Company reserves the right to
amend the Plan at any time and from time to time provided that a copy of any
such amendment is delivered to all Participants and/or Beneficiaries following
the adoption of the amendment. However, no amendment or modification shall,
without the consent of a Participant or Beneficiary, adversely affect such
Participant or Beneficiary’s rights with respect to amounts previously
credited to his or her Accounts under the Plan at the time of such amendment. 

Article XVI
Termination of Plan

          The Company reserves the right to
terminate the Plan at any time; however, no termination shall, without the
consent of a Participant or Beneficiary, adversely affect such
Participant’s or Beneficiary’s rights with respect to amounts credited
to his or her Accounts under the Plan up to the time of termination. Upon such
termination of the Plan, all Participants, in the discretion of the
Administrative Committee shall be entitled to receive the amount then credited
to their respective Accounts in a lump-sum distribution of their Company Cash
Account and their Stock Account. 

Article XVII
Miscellaneous

          17.01    Withholding. The
Administrative Committee shall determine whether or not federal and state income
tax withholding is required with respect to any distribution hereunder.
Notwithstanding any other provision of this Plan to the contrary, all rights and
benefits of a Participant or Beneficiary are subject to withholding of any tax
required by law to be withheld. 

         17.02     Article and Section  Headings.  The titles or headings  of the  respective  Articles  and
Sections in this Plan are inserted merely for convenience and shall be given no legal effect.

          17.03    Unfunded Status of the
Plan. Any and all payments made to the Participant pursuant to the Plan
shall be made only from the general assets of the Company. All Accounts under
the Plan shall be for bookkeeping purposes only and shall not represent a claim
against specific assets of the Company. 

         18.04     Applicable  Law.  THIS PLAN SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MARYLAND TO THE
EXTENT NOT PREEMPTED BY APPLICABLE FEDERAL LAW.

          IN WITNESS WHEREOF, the Company
has caused this Plan to be executed by its duly authorized officers as of this
first day of September, 2000.

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