Document:

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                                                                     EXHIBIT 4.7

                               PACTIV CORPORATION
                        2002 INCENTIVE COMPENSATION PLAN

ARTICLE 1.  ESTABLISHMENT, PURPOSE, AND DURATION

     1.1  ESTABLISHMENT. Pactiv Corporation, a Delaware corporation (hereinafter
referred to as the "Company"), hereby establishes an incentive compensation plan
to be known as the Pactiv Corporation 2002 Incentive Compensation Plan
(hereinafter referred to as the "Plan"), as set forth in this document.

     The Plan permits the grant of Annual Incentive Awards, Nonqualified Stock
Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock,
Restricted Stock Units, Performance Units, Performance Shares, Stock Awards, and
Cash-Based Awards.

     Subject to approval by the Company's shareholders, the Plan shall become
effective as of May 17, 2002 (the "Effective Date") and shall remain in effect
as provided in Section 1.3 hereof.

     1.2  PURPOSE OF THE PLAN. The purpose of the Plan is to promote the
long-term success of the Company for the benefit of shareholders by encouraging
its Directors, officers, and Employees to have investments in the Company so
that, as shareholders themselves, those individuals will be more likely to
represent the views and interests of other shareholders and by providing
incentives to such Directors, officers, and Employees for continued service. The
Company believes that the possibility of participation under the Plan will
provide its Directors, officers, and Employees an incentive to perform more
effectively and will assist the Company in attracting and retaining people of
outstanding training, experience, and ability.

     1.3  DURATION OF THE PLAN. The Plan shall commence as of the Effective
Date, as described in Section 1.1 hereof, and shall remain in effect, subject to
the right of the Committee to amend or terminate the Plan at any time pursuant
to Article 16 hereof, until all Shares subject to it shall have been purchased
or acquired according to the Plan's provisions.

     1.4  SUCCESSOR PLAN. This Plan shall serve as the successor to the Pactiv
Corporation "Stock Ownership Plan" (the "Predecessor Plan"), and no further
grants shall be made under the Predecessor Plan from and after the Effective
Date of this Plan. All outstanding Options, Stock Appreciation Rights, and Share
issuances under the Predecessor Plan immediately prior to the Effective Date of
this Plan are hereby incorporated into this Plan and shall accordingly be
treated as Options, Stock Appreciation Rights, or Share issuances under this
Plan. However, each such Option, Stock Appreciation Right, and Share issuance
shall continue to be governed solely by the terms and conditions of the
instrument evidencing such grant or issuance, and, except as otherwise expressly
provided herein, no provision of this Plan shall affect or otherwise modify the
rights or obligations of holders of such incorporated Options, Stock
Appreciation Rights, or Shares. Any Shares of common stock reserved for issuance
under the Predecessor Plan in excess of the number of Shares as to which
Options, Stock Appreciation Rights, or other Awards have been awarded thereunder
shall no longer be available for grant after the Effective Date. Any Shares as
to which Options, Stock Appreciation Rights, and Shares granted or issued under
the Predecessor Plan may lapse, expire, terminate, or be cancelled, are settled
in cash in lieu of common stock, are tendered (either by actual delivery or
attestation) to pay the Option Price, or satisfy any tax withholding
requirements shall be deemed available for issuance or reissuance under Section
4.1 of the Plan.
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ARTICLE 2. DEFINITIONS

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

     2.1   "AFFILIATE" shall have the meaning ascribed to such term in Rule
           12b-2 of the General Rules and Regulations of the Exchange Act.

     2.2   "ANNUAL INCENTIVE AWARD" means an Award granted to a Participant as
           described in Article 12 herein.

     2.3   "AWARD" means, individually or collectively, a grant under this Plan
           of Annual Incentive Awards, Nonqualified Stock Options, Incentive
           Stock Options, Stock Appreciation Rights, Restricted Stock,
           Restricted Stock Units, Performance Units, Performance Shares, Cash-
           Based Awards, or Stock Awards.

     2.4   "AWARD AGREEMENT" means either (i) an agreement entered into by the
           Company and each Participant setting forth the terms and provisions
           applicable to Awards granted under this Plan, or (ii) a statement
           issued by the Company to a Participant describing the terms and
           provisions of such Award.

     2.5   "BENEFICIAL OWNER" or "BENEFICIAL OWNERSHIP" shall have the meaning
           ascribed to such term in Rule 13d-3 of the General Rules and
           Regulations under the Exchange Act.

     2.6   "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the
           Company.

     2.7   "CASH-BASED AWARD" means an Award granted to a Participant as
           described in Article 10 herein.

     2.8   "CODE" means the Internal Revenue Code of 1986, as amended from time
           to time.

     2.9   "COMMITTEE" means any Committee appointed by the Board to administer
           Awards under the Plan, as specified in Article 3 herein.

     2.10  "COMPANY" means Pactiv Corporation, a Delaware corporation, and any
           successor thereto as provided in Article 19 herein.

     2.11  "COVERED EMPLOYEE" means a Participant who, as of the date of vesting
           and/or payout of an Award, as applicable, is a "covered employee," as
           defined in Code Section 162(m), or any successor statute, and the
           regulations promulgated under Code Section 162(m).

     2.12  "DIRECTOR" means any individual who is a member of the Board of
           Directors of the Company; provided, however, that such Director is
           not an Employee of the Company.

     2.13  "DISABILITY" means the permanent inability of the Participant, which
           is a result of accident or sickness, to perform such Participant's
           occupation or employment for which the Participant is suited by
           reason of the Participant's previous training, education and
           experience and which results in the termination of the Participant's
           employment or directorship with the Company, its Affiliates, and/or
           its Subsidiaries.

     2.14  "EMPLOYEE" means any employee of the Company or any of its Affiliates
           and/or Subsidiaries.

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

     2.16  "FAIR MARKET VALUE" means the average of the highest and the lowest
           sales prices of a Share on the composite tape for such date, as
           reported by the National Quotation Bureau Incorporated, provided that
           if (i) no sales are included on the composite tape for such date, or
           (ii) in the opinion of the Committee, the sales on such date are
           insufficient to constitute a representative market, then the Fair
           Market Value of a Share on such date shall be deemed to be the
           average of the highest and the lowest sales prices of a Share as
           reported on said
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          composite tape for the next preceding day on which (x) sales are
          included and (y) the circumstances described in this clause (ii) do
          not exist.

     2.17 "FISCAL YEAR" means, unless the Committee designates otherwise, the
          year commencing on January 1 and ending December 31.

     2.18 "FREESTANDING SAR" means an SAR that is granted independently of any
          Options, as described in Article 7 herein.

     2.19 "INCENTIVE STOCK OPTION" or "ISO" means an Option to purchase Shares
          granted under Article 6 herein and that is designated as an Incentive
          Stock Option and that is intended to meet the requirements of Code
          Section 422, or any successor provision.

     2.20 "INSIDER" shall mean an individual who is, on the relevant date, an
          officer, Director, or more than ten percent (10%) Beneficial Owner of
          any class of the Company's equity securities that is registered
          pursuant to Section 12 of the Exchange Act, all as defined under
          Section 16 of the Exchange Act.

     2.21 "NONQUALIFIED STOCK OPTION" or "NQSO" means an Option that is not
          intended to meet the requirements of Code Section 422, or that
          otherwise does not meet such requirements.

     2.22 "OPTION" means an Incentive Stock Option or a Nonqualified Stock
          Option, as described in Article 6 herein.

     2.23 "OPTION PRICE" means the price at which a Share may be purchased by a
          Participant pursuant to an Option.

     2.24 "PARTICIPANT" means an Employee, officer, or Director who has been
          selected to receive an Award or who has an outstanding Award granted
          under the Plan.

     2.25 "PERFORMANCE-BASED AWARD" means an Award that qualifies as
          Performance-Based Compensation.

     2.26 "PERFORMANCE-BASED COMPENSATION" means the Award is qualified as
          Performance-Based Compensation under Code Section 162(m).

     2.27 "PERFORMANCE MEASURES" means measures as described in Article 11, the
          attainment of which may determine the degree of payout and/or vesting
          with respect to Awards to Covered Employees that are designated to
          qualify as Performance-Based Compensation.

     2.28 "PERFORMANCE PERIOD" means the period of time during which the
          performance goals must be met in order to determine the degree of
          payout and/or vesting with respect to an Award.

     2.29 "PERFORMANCE SHARE" means an Award granted to a Participant, as
          described in Article 9 herein.

     2.30 "PERFORMANCE UNIT" means an Award granted to a Participant, as
          described in Article 9 herein.

     2.31 "PERIOD OF RESTRICTION" means the period when the Restricted Stock or
          Restricted Stock Units are subject to a substantial risk of forfeiture
          (based on the passage of time, the achievement of performance goals,
          or upon the occurrence of other events as determined by the Committee,
          at its discretion), as provided in Article 8 herein.

     2.32 "RESTRICTED STOCK" means an Award granted to a Participant pursuant to
          Article 8 herein.

     2.33 "RESTRICTED STOCK UNIT" means an Award granted to a Participant, as
          described in Article 8 herein.

     2.34 "RETIREMENT" means the Participant's termination of employment or
          directorship with the Company, its Affiliates, and/or its Subsidiaries
          at a time that is determined by the Committee to be retirement and is
          specified in the Award Agreement.
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     2.35 "SHARES" means the common stock of the Company, $.01 par value per
          share.

     2.36 "STOCK APPRECIATION RIGHT" or "SAR" means an Award, granted alone or
          in connection with a related Option, designated as an SAR, pursuant to
          the terms of Article 7 herein.

     2.37 "STOCK AWARD" means an Award granted pursuant to the terms of Section
          10.7 herein.

     2.38 "SUBSIDIARY" means any corporation, partnership, joint venture,
          limited liability company, or other entity (other than the Company) in
          an unbroken chain of entities beginning with the Company if, at the
          time of the granting of an Award, each of the entities other than the
          last entity in the unbroken chain owns at least fifty percent (50%) of
          the total combined voting power in one of the other entities in such
          chain.

     2.39 "TANDEM SAR" means an SAR that is granted in connection with a related
          Option pursuant to Article 7 herein, the exercise of which shall
          require forfeiture of the right to purchase a Share under the related
          Option (and when a Share is purchased under the Option, the Tandem SAR
          shall similarly be canceled).

ARTICLE 3.  ADMINISTRATION

     3.1  GENERAL. The Committee shall be responsible for administering the
Plan. The Committee may employ attorneys, consultants, accountants, and other
persons, and the Committee, the Company, and its officers and Directors shall be
entitled to rely upon the advice, opinions, or valuations of any such persons.
All actions taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon the Participants, the
Company, and all other interested persons.

     3.2  AUTHORITY OF THE COMMITTEE. The Committee shall have full and
exclusive discretionary power to interpret the Plan and to determine eligibility
for Awards and to adopt such rules, regulations, and guidelines for
administering the Plan as the Committee may deem necessary or proper. Such
authority shall include, but not be limited to, selecting Award recipients,
establishing all Award terms and conditions and, subject to Article 16, adopting
modifications and amendments to the Plan or any Award Agreement, including
without limitation, any that are necessary to comply with the laws of the
countries in which the Company, its Affiliates, and/or its Subsidiaries operate.

     3.3  DELEGATION. The Committee may delegate to one or more of its members
or to one or more agents or advisors such nondiscretionary administrative duties
as it may deem advisable, and the Committee or any person to whom it has
delegated duties as aforesaid may employ one or more persons to render advice
with respect to any responsibility the Committee or such person may have under
the Plan. The Committee may, by resolution, authorize one or more officers of
the Company to do one or both of the following: (a) designate officers and
Employees of the Company, its Affiliates, and/or its Subsidiaries to be
recipients of Awards; and (b) determine the size of the Award; provided,
however, that the resolution providing such authorization sets forth the total
number of Awards such officer or officers may award.

ARTICLE 4.  SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS

     4.1  NUMBER OF SHARES AVAILABLE FOR AWARDS. Subject to adjustment as
provided in Section 4.2 herein, the number of Shares hereby reserved for
issuance to Participants under the Plan shall be thirteen million five hundred
thousand (13,500,000) Shares, and the number of Shares that may be issued under
the Plan for Awards other than Options or Stock Appreciation Rights shall not
exceed ten million (10,000,000) Shares. The number of Shares that may be issued
under the Plan for Awards to a Director shall be no more than fifteen thousand
(15,000) Shares annually. Any Shares related to Awards which terminate by
expiration, forfeiture, cancellation, or otherwise without the issuance of such
Shares, are settled in cash in lieu of common stock, or are exchanged with the
Committee's permission for Awards not involving common stock, shall be available
again for grant under the Plan. Moreover, if the Option Price of any Option
granted under the Plan or the tax withholding requirements with respect to any
Award granted under the Plan are satisfied by tendering Shares to the Company
(by either actual delivery or by
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attestation), only the number of Shares issued net of the Shares tendered will
be deemed delivered for purposes of determining the maximum number of Shares
available for delivery under the Plan. The maximum number of Shares available
for issuance under the Plan shall not be reduced to reflect any dividends or
dividend equivalents that are reinvested into additional Shares or credited as
additional Restricted Stock, Restricted Stock Units, Performance Shares, or
Stock Awards. In addition, the Committee, in its discretion, may establish any
other appropriate methodology for calculating the number of Shares issued
pursuant to the Plan. The Shares available for issuance under the Plan may be
authorized and unissued Shares or treasury Shares.

     Unless and until the Committee determines that an Award to a Covered
Employee shall not be designed to qualify as Performance-Based Compensation, the
following limits ("Award Limits") shall apply to grants of such Awards under the
Plan:

        (a) OPTIONS: The maximum aggregate number of Shares that may be granted
            in the form of Options, pursuant to any Award granted in any one
            Fiscal Year to any one Participant shall be one million (1,000,000).

        (b) SARS: The maximum aggregate number of Shares that may be granted in
            the form of Stock Appreciation Rights, pursuant to any Award granted
            in any one Fiscal Year to any one Participant shall be one million
            (1,000,000).

        (c) RESTRICTED STOCK/UNITS: The maximum aggregate grant with respect to
            Awards of Restricted Stock/Units granted in any one Fiscal Year to
            any one single Participant shall be five hundred thousand (500,000).

        (d) PERFORMANCE UNITS/PERFORMANCE SHARES: The maximum aggregate Award of
            Performance Units or Performance Shares that a Participant may
            receive in any one Fiscal Year shall be five hundred thousand
            (500,000) Shares, or equal to the value of five hundred thousand
            (500,000) Shares determined as of the date of vesting or payout, as
            applicable.

        (e) CASH-BASED AWARDS: The maximum aggregate amount awarded or credited
            with respect to Cash-Based Awards to any one Participant in any one
            Fiscal Year may not exceed in value two million dollars ($2,000,000)
            determined as of the date of vesting or payout, as applicable.

        (f) STOCK AWARDS. The maximum aggregate grant with respect to Awards of
            Stock Awards in any one Fiscal Year to any one Participant shall be
            five hundred thousand (500,000) Shares.

        (g) ANNUAL INCENTIVE AWARD. The maximum aggregate amount awarded or
            credited in any one Fiscal Year with respect to an Annual Incentive
            Award to a Participant who is a Covered Employee shall not exceed in
            value the amount set forth in Article 12. The maximum aggregate
            amount awarded or credited in any one Fiscal Year with respect to an
            Annual Incentive Award to a Participant who is not a Covered
            Employee shall be determined by the Committee in its discretion.

     4.2   ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any corporate event
or transaction (including, but not limited to, a change in the Shares of the
Company or the capitalization of the Company) such as a merger, consolidation,
reorganization, recapitalization, separation, stock dividend, stock split,
reverse stock split, split up, spin-off, or other distribution of stock or
property of the Company, combination of shares, exchange of shares, dividend in
kind, or other like change in capital structure or distribution (other than
normal cash dividends) to shareholders of the Company, the Committee, in its
sole discretion, in order to prevent dilution or enlargement of Participants'
rights under the Plan, shall substitute or adjust, in an equitable manner, as
applicable, the number and kind of Shares that may be issued under the Plan, the
number and kind of Shares subject to outstanding Awards, the Option Price
applicable to outstanding Awards, the Award Limits, the Fair Market Value of the
Shares, and other value determinations applicable to outstanding Awards.
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     Appropriate adjustments may also be made by the Committee in the terms of
any Awards under the Plan to reflect such changes or distributions and to modify
any other terms of outstanding Awards on an equitable basis, including
modifications of performance goals and changes in the length of Performance
Periods. The determination of the Committee as to the foregoing adjustments, if
any, shall be conclusive and binding on Participants under the Plan.

ARTICLE 5. ELIGIBILITY AND PARTICIPATION

     5.1  ELIGIBILITY. Persons eligible to participate in this Plan include
Directors, officers, and Employees. Directors are only eligible to receive
Awards pursuant to Articles 6, 7, 8, and 10.

     5.2  ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees, officers,
and Directors, those to whom Awards shall be granted and shall determine the
nature and amount of each Award.

ARTICLE 6. STOCK OPTIONS

     6.1  GRANT OF OPTIONS. Subject to the terms and provisions of the Plan, and
except as provided in Section 6.11, Options may be granted to Participants in
such number, and upon such terms, and at any time and from time to time as shall
be determined by the Committee, provided that ISOs shall not be granted to
Directors. In addition, ISOs may not be granted following the ten-year
anniversary of the Committee's adoption of the Plan, which is March 20, 2002.

     6.2  AWARD AGREEMENT. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, the conditions upon which an
Option shall become vested and exercisable, and such other provisions as the
Committee shall determine which are not inconsistent with the terms of the Plan.
The Award Agreement also shall specify whether the Option is intended to be an
ISO or an NQSO.

     6.3  OPTION PRICE. The Option Price for each grant of an Option under this
Plan shall be as determined by the Committee; provided, however, the Option
Price shall not be less than one hundred percent (100%) of the Fair Market Value
of the Shares on the date the Option is granted.

     6.4  DURATION OF OPTIONS. Each Option granted to a Participant shall expire
at such time as the Committee shall determine at the time of grant; provided,
however, no Option shall be exercisable later than the tenth (10th) anniversary
date of its grant.

     6.5  EXERCISE OF OPTIONS. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant.

     6.6  PAYMENT. Options granted under this Article 6 shall be exercised by
the delivery of a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.

     The Option Price upon exercise of any Option shall be payable to the
Company in full either: (a) in cash or its equivalent, (b) by tendering (either
by actual delivery or attestation) previously acquired Shares having an
aggregate Fair Market Value at the time of exercise equal to the total Option
Price (provided that the Shares that are tendered must have been held by the
Participant for at least six [6] months prior to their tender to satisfy the
Option Price or have been purchased on the open market), (c) by a combination of
(a) and (b), or (d) by any other method approved by the Committee in its sole
discretion at the time of grant and as set forth in the Award Agreement.

     The Committee also may allow cashless exercise as permitted under the
Federal Reserve Board's Regulation U, subject to applicable securities law
restrictions, or by any other means which the Committee determines to be
consistent with the Plan's purpose and applicable law.
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     Subject to any governing rules or regulations, as soon as practicable after
receipt of a written notification of exercise and full payment, the Company
shall deliver to the Participant, in the Participant's name, Share certificates
in an appropriate amount based upon the number of Shares purchased under the
Option(s).

     Unless otherwise determined by the Committee, all payments under all of the
methods indicated above shall be paid in United States dollars.

     6.7  RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article 6 as it may deem advisable, including, without
limitation, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws applicable
to such Shares.

     6.8  TERMINATION OF EMPLOYMENT/DIRECTORSHIP. Each Participant's Award
Agreement shall set forth the extent to which the Participant shall have the
right to exercise the Option following termination of the Participant's
employment or directorship with the Company, its Affiliates, and/or its
Subsidiaries, as the case may be. Such provisions shall be determined in the
sole discretion of the Committee, shall be included in the Award Agreement
entered into with each Participant, need not be uniform among all Options issued
pursuant to this Article 6, and may reflect distinctions based on the reasons
for termination.

     6.9  TRANSFERABILITY OF OPTIONS.

        (a)INCENTIVE STOCK OPTIONS. No ISO granted under the Plan may be sold,
           transferred, pledged, assigned, or otherwise alienated or
           hypothecated, other than by will or by the laws of descent and
           distribution. Further, all ISOs granted to a Participant under this
           Article 6 shall be exercisable during his or her lifetime only by
           such Participant.

        (b)NONQUALIFIED STOCK OPTIONS. Except as otherwise provided in a
           Participant's Award Agreement, no NQSO granted under this Article 6
           may be sold, transferred, pledged, assigned, or otherwise alienated
           or hypothecated, other than by will or by the laws of descent and
           distribution. Further, except as otherwise provided in a
           Participant's Award Agreement, all NQSOs granted to a Participant
           under this Article 6 shall be exercisable during his or her lifetime
           only by such Participant.

     6.10  NOTIFICATION OF DISQUALIFYING DISPOSITION. If any Participant shall
make any disposition of Shares issued pursuant to the exercise of an Incentive
Stock Option under the circumstances described in Section 421(b) of the Code
(relating to certain disqualifying dispositions), such Participant shall notify
the Company of such disposition within ten (10) days thereof.

     6.11  DIRECTOR OPTIONS. Each Director who is elected or reelected to the
Board at an annual meeting of the Company's shareholders shall be granted on an
annual basis, on a date that is determined by the Committee, a Nonqualified
Stock Option to acquire six thousand (6,000) Shares. Notwithstanding Section
16.1, the Committee, in its sole discretion, can modify the number of Shares
that can be granted as Nonqualified Stock Options to Directors, however, in no
event can this amount exceed nine thousand (9,000) Shares per Director per
Fiscal Year.

ARTICLE 7. STOCK APPRECIATION RIGHTS

     7.1  GRANT OF SARS. Subject to the terms and conditions of the Plan, and
except as provided in Section 7.9, SARs may be granted to Participants at any
time and from time to time as shall be determined by the Committee. The
Committee may grant Freestanding SARs, Tandem SARs, or any combination of these
forms of SARs.

     Subject to the terms and conditions of the Plan, the Committee shall have
complete discretion in determining the number of SARs granted to each
Participant and, consistent with the provisions of the Plan, in determining the
terms and conditions pertaining to such SARs.
<PAGE>

     The grant price of a Freestanding SAR shall be no less than the Fair Market
Value of a Share on the date of grant of the SAR. The grant price of Tandem SARs
shall equal the Option Price of the related Option.

     7.2  SAR AGREEMENT. Each SAR Award shall be evidenced by an Award Agreement
that shall specify the grant price, the term of the SAR, and such other
provisions as the Committee shall determine.

     7.3  TERM OF SARS. The term of an SAR granted under the Plan shall be
determined by the Committee, in its sole discretion; provided, however, that no
SAR shall be exercisable later than the tenth (10th) anniversary date of its
grant.

     7.4  EXERCISE OF FREESTANDING SARS. Freestanding SARs may be exercised upon
whatever terms and conditions the Committee, in its sole discretion, imposes
upon them.

     7.5  EXERCISE OF TANDEM SARS. Tandem SARs may be exercised for all or part
of the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.

     7.6  PAYMENT OF SAR AMOUNT. Upon the exercise of a SAR, a Participant shall
be entitled to receive payment from the Company in an amount determined by
multiplying:

     (a) The difference between the Fair Market Value of a Share on the date of
         exercise over the grant price; by

     (b) The number of Shares with respect to which the SAR is exercised.

     At the discretion of the Committee, the payment upon SAR exercise may be in
cash, in Shares of equivalent value, in some combination thereof, or in any
other manner approved by the Committee at its sole discretion. The Committee's
determination regarding the form of SAR payout shall be set forth in the Award
Agreement pertaining to the grant of the SAR.

     7.7  TERMINATION OF EMPLOYMENT/DIRECTORSHIP. Each Award Agreement shall set
forth the extent to which the Participant shall have the right to exercise the
SAR following termination of the Participant's employment or directorship with
the Company, its Affiliates, and/or its Subsidiaries, as the case may be. Such
provisions shall be determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with Participants, need not be
uniform among all SARs issued pursuant to the Plan, and may reflect distinctions
based on the reasons for termination.

     7.8  NONTRANSFERABILITY OF SARS. Except as otherwise provided in a
Participant's Award Agreement, no SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
otherwise provided in a Participant's Award Agreement, all SARs granted to a
Participant under the Plan shall be exercisable during his or her lifetime only
by such Participant.

     7.9  DIRECTOR SARS. In lieu of a grant of Nonqualified Stock Options
pursuant to Section 6.11, the Committee in its discretion, may grant SARs to
Directors. If SARs are granted to a Director pursuant to this Section 7.9, the
number of SARs shall be equal to the number of Nonqualified Stock Options that
would have been granted to each Director pursuant to Section 6.11.

ARTICLE 8. RESTRICTED STOCK AND RESTRICTED STOCK UNITS

     8.1  GRANT OF RESTRICTED STOCK/UNITS. Subject to the terms and provisions
of the Plan, the Committee, at any time and from time to time, may grant Shares
of Restricted Stock and/or Restricted Stock Units to Participants in such
amounts as the Committee shall determine. Restricted Stock Units shall be
similar to Restricted Stock except that no Shares are actually awarded to the
Participant on the date of grant.
<PAGE>

     8.2  RESTRICTED STOCK/UNIT AGREEMENT. Each Restricted Stock and/or
Restricted Stock Unit grant shall be evidenced by an Award Agreement that shall
specify the Period(s) of Restriction, the number of Shares of Restricted Stock
(or the number of Restricted Stock Units) granted, and such other provisions as
the Committee shall determine.

     8.3  TRANSFERABILITY. Except as provided in this Article 8, the Shares of
Restricted Stock and/or Restricted Stock Units granted herein may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated until the
end of the applicable Period of Restriction established by the Committee and
specified in the Award Agreement, or upon earlier satisfaction of any other
conditions, as specified by the Committee in its sole discretion and set forth
in the Award Agreement. All rights with respect to the Restricted Stock and/or
Restricted Stock Units granted to a Participant under the Plan shall be
available during his or her lifetime only to such Participant.

     8.4  OTHER RESTRICTIONS. The Committee shall impose such other conditions
and/or restrictions on any Shares of Restricted Stock or Restricted Stock Units
granted pursuant to the Plan as it may deem advisable including, without
limitation, a requirement that Participants pay a stipulated purchase price for
each Share of Restricted Stock or each Restricted Stock Unit, restrictions based
upon the achievement of specific performance goals, time-based restrictions on
vesting following the attainment of the performance goals, time-based
restrictions, and/or restrictions under applicable federal or state securities
laws.

     To the extent deemed appropriate by the Committee, the Company may retain
the certificates representing Shares of Restricted Stock in the Company's
possession until such time as all conditions and/or restrictions applicable to
such Shares have been satisfied or lapse.

     Except as otherwise provided in this Article 8, Shares of Restricted Stock
covered by each Restricted Stock Award shall become freely transferable by the
Participant after all conditions and restrictions applicable to such Shares have
been satisfied or lapse, and Restricted Stock Units shall be paid in cash,
Shares, or a combination of cash and Shares as the Committee, in its sole
discretion, shall determine.

     8.5  VOTING RIGHTS. To the extent permitted, or required by law, as
determined by the Committee, Participants holding Shares of Restricted Stock
granted hereunder may be granted the right to exercise full voting rights with
respect to those Shares during the Period of Restriction. A Participant shall
have no voting rights with respect to any Restricted Stock Units granted
hereunder.

     8.6  DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of Restriction,
Participants holding Shares of Restricted Stock or Restricted Stock Units
granted hereunder may, if the Committee so determines, be credited with
dividends paid with respect to the underlying Shares or dividend equivalents
while they are so held in a manner determined by the Committee in its sole
discretion. The Committee may apply any restrictions to the dividends or
dividend equivalents that the Committee deems appropriate. The Committee, in its
sole discretion, may determine the form of payment of dividends or dividend
equivalents, including cash, Shares, Restricted Stock, or Restricted Stock
Units.

     8.7  TERMINATION OF EMPLOYMENT/DIRECTORSHIP. Each Award Agreement shall set
forth the extent to which the Participant shall have the right to receive
unvested Restricted Stock and/or Restricted Stock Units following termination of
the Participant's employment or directorship with the Company, its Affiliates,
and/or its Subsidiaries, as the case may be. Such provisions shall be determined
in the sole discretion of the Committee, shall be included in the Award
Agreement entered into with each Participant, need not be uniform among all
Shares of Restricted Stock or Restricted Stock Units issued pursuant to the
Plan, and may reflect distinctions based on the reasons for termination.

     8.8  SECTION 83(b) ELECTION. The Committee may provide in an Award
Agreement that the Award of Restricted Stock is conditioned upon the Participant
making or refraining from making an election with respect to the Award under
Section 83(b) of the Code. If a Participant makes an election pursuant to
Section 83(b) of the Code concerning a Restricted Stock Award, the Participant
shall be required to promptly file a copy of such election with the Company.
<PAGE>

ARTICLE 9.  PERFORMANCE UNITS/PERFORMANCE SHARES

     9.1  GRANT OF PERFORMANCE UNITS/PERFORMANCE SHARES. Subject to the terms of
the Plan, Performance Units and/or Performance Shares may be granted to
Participants in such amounts and upon such terms, and at any time and from time
to time, as shall be determined by the Committee.

     9.2  VALUE OF PERFORMANCE UNITS/PERFORMANCE SHARES. Each Performance Unit
shall have an initial value that is established by the Committee at the time of
grant. Each Performance Share shall have an initial value equal to the Fair
Market Value of a Share on the date of grant. The Committee shall set
performance goals in its discretion which, depending on the extent to which they
are met, will determine the value and/or number of Performance Units/Performance
Shares that will be paid out to the Participant.

     9.3  EARNING OF PERFORMANCE UNITS/PERFORMANCE SHARES. Subject to the terms
of this Plan, after the applicable Performance Period has ended, the holder of
Performance Units/Performance Shares shall be entitled to receive payout on the
value and number of Performance Units/Performance Shares earned by the
Participant over the Performance Period, to be determined as a function of the
extent to which the corresponding performance goals have been achieved.

     9.4  FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS/PERFORMANCE SHARES.
Payment of earned Performance Units/Performance Shares shall be as determined by
the Committee and as evidenced in the Award Agreement. Subject to the terms of
the Plan, the Committee, in its sole discretion, may pay earned Performance
Units/Performance Shares in the form of cash or in Shares (or in a combination
thereof) equal to the value of the earned Performance Units/Performance Shares
at the close of the applicable Performance Period. Any Shares may be granted
subject to any restrictions deemed appropriate by the Committee. The
determination of the Committee with respect to the form of payout of such Awards
shall be set forth in the Award Agreement pertaining to the grant of the Award.

     9.5  DIVIDENDS AND OTHER DISTRIBUTIONS. At the discretion of the Committee,
Participants holding Performance Units/Performance Shares may be entitled to
receive dividend equivalents with respect to dividends declared with respect to
the Shares. Such dividends may be subject to the accrual, forfeiture, or payout
restrictions as determined by the Committee in its sole discretion.

     9.6  TERMINATION OF EMPLOYMENT. Each Award Agreement shall set forth the
extent to which the Participant shall have the right to receive unvested
Performance Units and/or Performance Shares following termination of the
Participant's employment with the Company, its Affiliates, and/or its
Subsidiaries, as the case may be. Such provisions shall be determined in the
sole discretion of the Committee, shall be included in the Award Agreement
entered into with each Participant, need not be uniform among all Awards of
Performance Units or Performance Shares issued pursuant to the Plan, and may
reflect distinctions based on the reasons for termination.

     9.7  NONTRANSFERABILITY. Except as otherwise provided in a Participant's
Award Agreement, Performance Units/Performance Shares may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
otherwise provided in a Participant's Award Agreement, a Participant's rights
under the Plan shall be exercisable during the Participant's lifetime only by
the Participant.

ARTICLE 10.  CASH-BASED AWARDS AND STOCK AWARDS

     10.1  GRANT OF CASH-BASED AWARDS. Subject to the terms of the Plan,
Cash-Based Awards may be granted to Participants in such amounts and upon such
terms, and at any time and from time to time, as shall be determined by the
Committee.

     10.2  VALUE OF CASH-BASED AWARDS. Each Cash-Based Award shall have a value
as may be determined by the Committee. The Committee may establish performance
goals in its discretion which, depending on the extent to which they are met,
will determine the number and/or value of Cash-Based Awards that will be paid
out to the Participant.
<PAGE>

     10.3  EARNING OF CASH-BASED AWARDS. Subject to the terms of this Plan, the
holder of Cash-Based Awards shall be entitled to receive payout on the number
and value of Cash-Based Awards earned by the Participant, to be determined as a
function of the extent to which any applicable performance goals have been
achieved.

     10.4  FORM AND TIMING OF PAYMENT OF CASH-BASED AWARDS. Payment of earned
Cash-Based Awards shall be as determined by the Committee and as evidenced in
the Award Agreement. Subject to the terms of the Plan, the Committee, in its
sole discretion, may pay earned Cash-Based Awards in the form of cash or in
Shares (or in a combination thereof) that have an aggregate Fair Market Value
equal to the value of the earned Cash-Based Awards. Such Shares may be granted
subject to any restrictions deemed appropriate by the Committee. The
determination of the Committee with respect to the form of payout of such Awards
shall be set forth in the Award Agreement pertaining to the grant of the Award.

     10.5  TERMINATION OF EMPLOYMENT/DIRECTORSHIP. Each Award Agreement shall
set forth the extent to which the Participant shall have the right to receive
Cash-Based Awards and Stock Awards following termination of the Participant's
employment or directorship with the Company, its Affiliates, and/or its
Subsidiaries, as the case may be. Such provisions shall be determined in the
sole discretion of the Committee, shall be included in the Award Agreement
entered into with each Participant, need not be uniform among all Awards of
Cash-Based Awards or Stock Awards issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination.

     10.6  NONTRANSFERABILITY. Except as otherwise provided in a Participant's
Award Agreement, Cash-Based Awards and Stock Awards may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
otherwise provided in a Participant's Award Agreement, a Participant's rights
under the Plan shall be exercisable during the Participant's lifetime only by
the Participant.

     10.7  STOCK AWARDS. The Committee may grant other types of equity-based or
equity-related Awards (including the grant or offer for sale of unrestricted
Shares) in such amounts and subject to such terms and conditions, as the
Committee shall determine. Such Awards may entail the transfer of actual Shares
to Participants, or payment in cash or otherwise of amounts based on the value
of Shares and may include, without limitation, Awards designed to comply with or
take advantage of the applicable local laws of jurisdictions other than the
United States.

     10.8  DIRECTOR STOCK AWARDS. Each Director shall be granted, on a date that
is determined by the Committee, annual Stock Awards as payment for sixty percent
(60%) of the value of the retainer that is paid to each Director for service on
the Board. These Stock Awards are based on the value of the common stock and are
called "Common Stock Equivalents" or "CSEs." The number of CSEs awarded shall
equal sixty percent (60%) of the retainer divided by the Fair Market Value of
the Shares on the date the CSEs are granted. CSEs are payable in Shares of the
Company's common stock after a Director ceases to serve as a Director of the
Company. Final distribution of such Shares may be made either in a lump sum or
in installments over a period of years.

ARTICLE 11.  PERFORMANCE MEASURES

     Unless and until the Committee proposes for shareholder vote and the
shareholders approve a change in the general Performance Measures set forth in
this Article 11, the performance goals upon which the payment or vesting of an
Award to a Covered Employee (other than an Annual Incentive Award awarded or
credited pursuant to Article 12) that is intended to qualify as
Performance-Based Compensation shall be limited to the following Performance
Measures:

        (a)  Net earnings;

        (b)  Earnings per share;

        (c)  Net sales growth;

        (d)  Net income or net profits (before or after taxes);
<PAGE>

        (e)  Net operating profit;

        (f)  Return measures (including, but not limited to, return on assets or
             net assets, capital, equity, or sales);

        (g)  Cash flow (including, but not limited to, operating cash flow and
             free cash flow);

        (h)  Cash flow return on investments, which equals net cash flows
             divided by owner's equity;

        (i)  Earnings before or after taxes, interest, depreciation, and/or
             amortization;

        (j)  Internal rate of return or increase in net present value;

        (k)  Gross margins;

        (l)  Gross margins minus expenses;

        (m) Operating margin;

        (n)  Share price (including, but not limited to, growth measures and
             total shareholder return);

        (o)  Expense targets;

        (p)  Working capital targets relating to inventory and/or accounts
             receivable;

        (q)  Planning accuracy (as measured by comparing planned results to
             actual results);

        (r)  EVA(R);

        (s)  Performance Measure (n) above as compared to various stock market
             indices; and

        (t)  Any Performance Measures in (a) through (s) above as compared to
             the performance of other companies.

     For purposes of this Plan, EVA(R) means the positive or negative value
determined by net operating profits after taxes over a charge for capital, or
any other financial measure, as determined by the Committee in its sole
discretion. (EVA(R) is a registered trademark of Stern Stewart & Co.).

     Any Performance Measures may be used to measure the performance of the
Company as a whole or any business unit of the Company.

     The Committee may provide in any such Award that any evaluation of
performance may include or exclude any of the following events that occurs
during a Performance Period: (a) asset write-downs; (b) litigation or claim
judgments or settlements; (c) the effect of changes in tax laws, accounting
principles, or other laws or provisions affecting reported results; (d) accruals
for reorganization and restructuring programs; (e) extraordinary nonrecurring
items as described in Accounting Principles Board Opinion No. 30 and/or in
management's discussion and analysis of financial condition and results of
operations appearing in the Company's annual report to shareholders for the
applicable year; (f) acquisitions or divestitures; and (g) foreign exchange
gains and losses. To the extent such inclusions or exclusions affect Awards to
Covered Employees, they shall be prescribed in a form that meets the
requirements of Code Section 162(m) for deductibility.

     Awards that are designed to qualify as Performance-Based Compensation, and
that are held by Covered Employees, may not be adjusted upward (the Board shall
retain the discretion to adjust such Awards downward).

     In the event that applicable tax and/or securities laws change to permit
Committee discretion to alter the governing Performance Measures without
obtaining shareholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining shareholder approval. In
addition, in the event that the Committee determines that it is advisable to
grant Awards that shall not qualify as Performance-Based Compensation, the
Committee may make such grants without satisfying the requirements of Code
Section 162(m).
<PAGE>

ARTICLE 12.  ANNUAL INCENTIVE AWARDS

     The Committee may designate Company executive officers who are eligible to
receive a monetary payment in any Fiscal Year based on a percentage of an
incentive pool that is no greater than two and one-half percent (2 1/2%) of the
Company's consolidated operating earnings for the Fiscal Year. The Committee
shall allocate an incentive pool percentage to each designated Participant for
each Fiscal Year. In no event may the incentive pool percentage for any one
Participant exceed forty percent (40%) of the total pool. The Committee has the
ability to use negative discretion to adjust the Award paid to an executive
officer downward, but cannot adjust the Award upward. Consolidated operating
earnings shall mean the consolidated earnings before income taxes of the
Company, computed in accordance with generally accepted accounting principles,
but shall exclude the effects of Extraordinary Items.

     For purposes of this Article 12, "Extraordinary Items" shall mean (i)
extraordinary, unusual, and/or nonrecurring items of gain or loss; (ii) gains or
losses on the disposition of a business; (iii) changes in tax or accounting
regulations or laws; or (iv) the effect of a merger or acquisition, all of which
must be identified in the audited financial statements, including footnotes, or
Management Discussion and Analysis section of the Company's annual report.

     As soon as possible after the determination of the incentive pool for a
Fiscal Year, the Committee shall calculate the Participant's allocated portion
of the incentive pool based upon the percentage established at the beginning of
the Fiscal Year. The Participant's Annual Incentive Award then shall be
determined by the Committee based on the Participant's allocated portion of the
incentive pool subject to adjustment in the sole discretion of the Committee. In
no event may the portion of the incentive pool allocated to a Participant who is
a Covered Employee be increased in any way, including as a result of the
reduction of any other Participant's allocated portion.

ARTICLE 13.  BENEFICIARY DESIGNATION

     Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his or her death before
he or she receives any or all of such benefit. Each such designation shall
revoke all prior designations by the same Participant, shall be in a form
prescribed by the Company, and will be effective only when filed by the
Participant in writing with the Company during the Participant's lifetime. In
the absence of any such designation, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate.

ARTICLE 14.  DEFERRALS

     The Committee may permit or require a Participant to defer such
Participant's receipt of the payment of cash or the delivery of Shares that
would otherwise be due to such Participant by virtue of the exercise of an
Option or SAR, the lapse or waiver of restrictions with respect to Restricted
Stock/Units, or the satisfaction of any requirements or performance goals with
respect to Annual Incentive Awards, Performance Units/Performance Shares,
Cash-Based Awards, and Stock Awards. If any such deferral election is required
or permitted, the Committee shall, in its sole discretion, establish rules and
procedures for such payment deferrals.

ARTICLE 15.  RIGHTS OF EMPLOYEES/DIRECTORS

     15.1  EMPLOYMENT/DIRECTORSHIP. Nothing in the Plan shall interfere with or
limit in any way the right of the Company to terminate any Participant's
employment or directorship at any time, nor confer upon any Participant any
right to continue in the employ or directorship of the Company.

     Neither an Award nor any benefits arising under this Plan shall constitute
part of an employment contract with the Company, its Affiliates, and/or its
Subsidiaries, and, accordingly, subject to Article 3 and Section 16.1, this Plan
and the benefits hereunder may be terminated at any time in the sole and
<PAGE>

exclusive discretion of the Committee without giving rise to liability on the
part of the Company, its Affiliates, and/or its Subsidiaries for severance
payments.

     15.2  PARTICIPATION. No Employee or Director shall have the right to be
selected to receive an Award under this Plan, or, having been so selected, to be
selected to receive a future Award.

     15.3  RIGHTS AS A STOCKHOLDER. A Participant shall have none of the rights
of a shareholder with respect to Shares covered by any Award until the
Participant becomes the record holder of such Shares.

ARTICLE 16.  AMENDMENT, MODIFICATION, SUSPENSION, AND TERMINATION

     16.1  AMENDMENT, MODIFICATION, SUSPENSION, AND TERMINATION. Subject to the
terms of the Plan, the Committee may, at any time and from time to time, alter,
amend, modify, suspend, or terminate the Plan in whole or in part.
Notwithstanding anything herein to the contrary, without the prior approval of
the Company's shareholders, Options issued under the Plan will not be repriced,
replaced, or regranted through cancellation, or by lowering the exercise price
of a previously granted Option. No amendment of the Plan shall be made without
shareholder approval if shareholder approval is required by law, regulation, or
stock exchange rule.

     16.2  ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4.2 hereof) affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are appropriate in order
to prevent unintended dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan. The determination of the
Committee as to the foregoing adjustments, if any, shall be conclusive and
binding on Participants under the Plan.

     16.3  AWARDS PREVIOUSLY GRANTED. Notwithstanding any other provision of the
Plan to the contrary, no termination, amendment, suspension, or modification of
the Plan shall adversely affect in any material way any Award previously granted
under the Plan, without the written consent of the Participant holding such
Award.

ARTICLE 17.  WITHHOLDING

     17.1  TAX WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, the
minimum statutory amount to satisfy federal, state, and local taxes, domestic or
foreign, required by law or regulation to be withheld with respect to any
taxable event arising as a result of this Plan.

     17.2  SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock
and Restricted Stock Units, or upon any other taxable event arising as a result
of Awards granted hereunder, Participants may elect, except to the extent
provided by the Committee, to satisfy the withholding requirement, in whole or
in part, by having the Company withhold Shares having a Fair Market Value on the
date the tax is to be determined equal to the minimum statutory total tax that
could be imposed on the transaction. All such elections shall be irrevocable,
made in writing, and signed by the Participant, and shall be subject to any
restrictions or limitations that the Committee, in its sole discretion, deems
appropriate.

ARTICLE 18.  INDEMNIFICATION

     Each person who is or shall have been a member of the Committee, or of the
Board, or an officer of the Company to whom authority was delegated in
accordance with Article 3 shall be indemnified and held harmless by the Company
against and from any loss, cost, liability, or expense that may be imposed upon
or reasonably incurred by him or her in connection with or resulting from any
claim, action, suit, or proceeding to which he or she may be a party or in which
he or she may be involved by reason of any
<PAGE>

action taken or failure to act under the Plan and against and from any and all
amounts paid by him or her in settlement thereof, with the Company's approval,
or paid by him or her in satisfaction of any judgment in any such action, suit,
or proceeding against him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf, unless such loss,
cost, liability, or expense is a result of his or her own willful misconduct or
except as expressly provided by statute.

     The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the
Company's Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.

ARTICLE 19.  SUCCESSORS

     All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.

ARTICLE 20.  GENERAL PROVISIONS

     20.1  FORFEITURE EVENTS. The Committee may specify in an Award Agreement
that the Participant's rights, payments, and benefits with respect to an Award
shall be subject to reduction, cancellation, forfeiture, or recoupment upon the
occurrence of certain specified events, in addition to any otherwise applicable
vesting or performance conditions of an Award. Such events shall include, but
shall not be limited to, termination of employment for Cause, violation of
material Company, Subsidiary, or Affiliate policies, breach of noncompetition,
confidentiality, or other restrictive covenants that may apply to the
Participant, or other conduct by the Participant that is detrimental to the
business or reputation of the Company, its Affiliates, and/or its Subsidiaries.

     20.2  LEGEND. The Committee may require each person receiving Shares
pursuant to an Award under this Plan to represent to and agree with the Company
in writing that the Participant is acquiring the Shares without a view to
distribution thereof. In addition to any legend required by this Plan, the
certificates for such Shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer of such Shares.

     20.3  GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.

     20.4  SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.

     20.5  REQUIREMENTS OF LAW. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required. The Company shall receive the
consideration required by law for the issuance of Awards under the Plan.

     20.6  SECURITIES LAW COMPLIANCE. With respect to Insiders, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successor under the Exchange Act. To the extent any provision of
the Plan or action by the Committee fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Committee.

     20.7  LISTING. The Company may use reasonable endeavors to register Shares
allotted pursuant to the exercise of an Award with the United States Securities
and Exchange Commission or to effect
<PAGE>

compliance with the registration, qualification, and listing requirements of any
national securities laws, stock exchange, or automated quotation system.

     20.8  DELIVERY OF TITLE. The Company shall have no obligation to issue or
deliver evidence of title for Shares issued under the Plan prior to:

        (a) Obtaining any approvals from governmental agencies that the Company
            determines are necessary or advisable; and

        (b) Completion of any registration or other qualification of the Shares
            under any applicable national or foreign law or ruling of any
            governmental body that the Company determines to be necessary or
            advisable.

     20.9  INABILITY TO OBTAIN AUTHORITY. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

     20.10  INVESTMENT REPRESENTATIONS. As a condition to the exercise of an
Award, the Company may require the person exercising such Award to represent and
warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required.

     20.11  EMPLOYEES BASED OUTSIDE OF THE UNITED STATES. Notwithstanding any
provision of the Plan to the contrary, in order to comply with the laws in other
countries in which the Company, its Affiliates, and/or its Subsidiaries operate
or have Employees or Directors, the Committee, in their sole discretion, shall
have the power and authority to:

        (a) Determine which Affiliates and Subsidiaries shall be covered by the
            Plan;

        (b) Determine which Employees or Directors outside the United States are
            eligible to participate in the Plan;

        (c) Modify the terms and conditions of any Award granted to Employees or
            Directors outside the United States to comply with applicable
            foreign laws;

        (d) Establish subplans and modify exercise procedures and other terms
            and procedures to the extent such actions may be necessary or
            advisable. Any subplans and modifications to Plan terms and
            procedures established under this Section 20.11 by the Committee
            shall be attached to this Plan document as appendices; and

        (e) Take any action, before or after an Award is made, that it deems
            advisable to obtain approval or comply with any necessary local
            government regulatory exemptions or approvals.

     20.12  UNCERTIFICATED SHARES. To the extent that the Plan provides for
issuance of certificates to reflect the transfer of Shares, the transfer of such
Shares may be effected on a noncertificated basis, to the extent not prohibited
by applicable law or the rules of any stock exchange.

     20.13  UNFUNDED PLAN. Participants shall have no right, title, or interest
whatsoever in or to any investments that the Company may make to aid it in
meeting its obligations under the Plan. Nothing contained in the Plan, and no
action taken pursuant to its provisions, shall create or be construed to create
a trust of any kind, or a fiduciary relationship between the Company and any
Participant, beneficiary, legal representative, or any other person. To the
extent that any person acquires a right to receive payments from the Company
under the Plan, such right shall be no greater than the right of an unsecured
general creditor of the Company. All payments to be made hereunder shall be paid
from the general funds of the Company and no special or separate fund shall be
established and no segregation of assets shall be made to assure payment of such
amounts except as expressly set forth in the Plan.
<PAGE>

     The Plan is not intended to be subject to ERISA.

     20.14  NO FRACTIONAL SHARES. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, or Awards, or other property shall be issued or paid in lieu of
fractional Shares or whether such fractional Shares or any rights thereto shall
be forfeited or otherwise eliminated.

     20.15  GOVERNING LAW. The Plan and each Award Agreement shall be governed
by the laws of the state of Illinois, excluding any conflicts or choice of law
rule or principle that might otherwise refer construction or interpretation of
the Plan to the substantive law of another jurisdiction. Unless otherwise
provided in the Award Agreement, recipients of an Award under the Plan are
deemed to submit to the exclusive jurisdiction and venue of the federal or state
courts of Illinois to resolve any and all issues that may arise out of or relate
to the Plan or any related Award Agreement.Amendment to Credit Agreement

 

Exhibit 10.1

FIRST AMENDMENT TO CREDIT AGREEMENT

     THIS FIRST AMENDMENT
TO CREDIT AGREEMENT (this “First Amendment”) dated as
of April 26, 2002, is by and among Applica Incorporated, a Florida corporation
(the “Borrower “), the Guarantors, the Lenders identified on the signature
pages hereof and Bank of America, N.A., as agent for the Lenders (in such
capacity, the “Agent”). Terms used herein but not otherwise defined herein
shall have the meanings provided to such terms in the Credit Agreement (as
hereinafter defined).

W I T N E S S E T H

     WHEREAS, the Borrower, the Guarantors, the Lenders and Bank of America,
N.A., in its capacity as Agent, are parties to that certain Credit Agreement,
dated as of December 28, 2001 (as amended, modified, supplemented, extended or
restated from time to time, the “Credit Agreement”); and

     WHEREAS, the Borrower has requested and the Lenders have agreed to amend
certain terms of the Credit Agreement as set forth herein;

     NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     1.     Annex A to the Credit Agreement is hereby amended as follows:

		
	 	     (a) The definition of “Consolidated EBITDA” in Annex A to the Credit
Agreement is hereby deleted and restated as follows:

		
	 	     “Consolidated EBITDA” means, with respect to any fiscal period of
the Borrower, the Adjusted Net Earnings from Operations of the Borrower
and the other Consolidated Members, plus, to the extent deducted in the
determination of Adjusted Net Earnings from Operations for that fiscal
period, interest expenses, federal, state, local and foreign income
taxes, depreciation, amortization, non-cash charges arising by reason of
“goodwill impairment losses” under FASB Statement 142, and, solely for
purposes of calculating Consolidated EBITDA for any period during the
Borrower’s 2002 Fiscal Year, those costs associated with the Borrower’s
consolidation of its Shelton, Connecticut facility into its Miami Lake,
Florida facility that were not previously accrued, as determined in
accordance with GAAP.

		
	 	     (b) The definition of “North American EBITDA” in Annex A to the Credit
Agreement is hereby deleted and restated as follows:

		
	 	     “North American EBITDA” means, with respect to any fiscal period of
the Borrower, the Adjusted Net Earnings from Operations of the Borrower,
the Domestic Subsidiaries and Applica Canada, plus, to the extent
deducted in the determination of Adjusted Net Earnings from Operations
for that fiscal period, interest expenses, federal, state, local and
foreign income taxes, depreciation, amortization, non-cash charges
arising by reason of “goodwill impairment losses” under FASB Statement
142, and, solely for purposes of calculating North American EBITDA for
any period during the Borrower’s 2002 Fiscal Year, those costs associated
with the Borrower’s consolidation of its Shelton, Connecticut facility
into its Miami Lake, Florida facility that were not previously accrued,
as determined in accordance with GAAP.

     2.     The Borrower has indicated to the Agent and the Lenders that it is
contemplating acquiring all of the capital stock of Weitech, Inc., an Oregon
corporation (“Target”), for a Cost of Acquisition of not more than $25,000,000
(the “Contemplated Acquisition”). The Borrower has requested the Agent’s and
the Lenders’ consent to the Contemplated Acquisition and further requests that
the Contemplated Acquisition not count against $20,000,000 limitation on the
aggregate Cost of Acquisitions during the Borrower’s 2002 Fiscal Year for
purposes of clause (iv) of the definition of “Permitted Acquisition.” The
Agent and the Lenders are willing to grant such consent and agree to exclude
the Contemplated Acquisition from the limitations of such clause (iv), if and
only if (a) on or before the

 

 

date of the consummation of the Contemplated Acquisition, the Borrower shall
have timely satisfied all conditions applicable to a Permitted Acquisition
(other than the $20,000,000 limitation on the Cost of Acquisition set forth in
clause (iv) thereof), including the delivery to the Agent of appropriate
environmental reports and the Target’s execution and delivery to the Agent of
such agreements and other documents as may be required under clauses (ix) and
(x) of such definition; (b) upon the consummation of the Contemplated
Acquisition, all Debt of the Target for money borrowed shall be paid in full
and all Liens on the assets of the Target securing such indebtedness shall be
terminated or released; (c) the Borrower shall have provided to the Agent and
its counsel (i) no later than 15 days prior to the date of the consummation of
the Contemplated Acquisition, copies of the then current drafts of the material
acquisition documents to be executed or delivered in connection with the
Contemplated Acquisition and (ii) no later than one (1) Business Day prior to
the date of the consummation of the Contemplated Acquisition, copies of the
final, execution versions of such documents; (d) any deferred payments of the
Cost of Acquisition shall be subordinated to the payment of the Obligations on
terms acceptable to the Agent; and (e) as of the date of the consummation of
the Contemplated Acquisition no Default or Event of Default shall exist.

     3.     The effectiveness of this First Amendment is subject to the
satisfaction of each of the following conditions (in form and substance
satisfactory to the Agent):

		
	 	     (a) The Agent shall have received executed counterparts of this First
Amendment duly executed by the Loan Parties, the Agent and the Lenders;
and

		
	 	     (b) The Agent shall have received such additional agreements,
certificates or documents as it may reasonably request in connection with
this First Amendment.

     4.     The Borrower and the Guarantors represent and warrant to the Agent and
the Lenders that (i) the representations and warranties of the Loan Parties set
out in Article 6 of the Credit Agreement are true and correct as of the date
hereof (except those which expressly relate to an earlier period), (ii) no
event has occurred and is continuing which constitutes a Default or Event of
Default and (iii) no Loan Party has any counterclaims, offsets, credits or
defenses to the Loan Documents and the performance of its obligations
thereunder, or if any Loan Party has any such claims, counterclaims, offsets,
credits or defenses to the Loan Documents or any transaction related to the
Loan Documents, same are hereby waived, relinquished and released in
consideration of the Lenders’ execution and delivery of this First Amendment.

     5.     The Guarantors (i) acknowledge and consent to all of the terms and
conditions of this First Amendment, (ii) affirm all of their obligations under
the Loan Documents and (iii) agree that this First Amendment and all documents
executed in connection herewith do not operate to reduce or discharge the
Guarantors’ obligations under the agreement of Guaranty in respect of the
Obligations to which they are a party.

     6.     The Borrower and the Guarantors hereby represent and warrant to the
Agent and the Lenders as follows:

		
	 	     (i) Each Loan Party has taken all necessary action to authorize the
execution, delivery and performance of this First Amendment.

		
	 	     (ii) This First Amendment has been duly executed and delivered by
the Loan Parties and constitutes each of the Loan Parties’ legal, valid
and binding obligations, enforceable in accordance with its terms, except
as such enforceability may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar
laws affecting creditors’ rights generally and (ii) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity).

		
	 	     (iii) No consent, approval, authorization or order of, or filing,
registration or qualification with, any court or governmental authority
or third party is required in connection with the execution, delivery or
performance by any Loan Party of this First Amendment.

     7.     Except as modified hereby, all of the terms and provisions of the
Credit Agreement (including Schedules and Exhibits) and the other Loan
Documents, and the obligations of the Loan Parties under the Credit

2

 

Agreement and the other Loan Documents, are hereby ratified and confirmed and
shall remain in full force and effect.

     8.     This First Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original and it
shall not be necessary in making proof of this First Amendment to produce or
account for more than one such counterpart.

     9.     This First Amendment shall be deemed to be a contract made under, and
for all purposes shall be construed in accordance with, the laws of the State
of Georgia.

     IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this First Amendment to be duly executed and delivered as of the date first
above written.

	 	 	 
	 	 	
“BORROWER”
	 
	 
	 	 	
APPLICA INCORPORATED, a Florida corporation
	 
	 	 	
By: /s/ Adam L. Kaplan
	 	 	

	 	 	
Name: Adam L. Kaplan

Title: Treasurer
	 
	 
	 	 	
“GUARANTORS”
	 
	 
	 	 	
APPLICA CONSUMER PRODUCTS, INC., a Florida
corporation
	 
	 	 	
By: /s/ Adam L. Kaplan
	 	 	

	 	 	
Name: Adam L. Kaplan

Title: Treasurer
	 
	 
	 	 	
APPLICA CANADA CORPORATION, a Nova Scotia

corporation
	 
	 	 	
By: /s/ Adam L. Kaplan
	 	 	

	 	 	
Name: Adam L. Kaplan

Title: Treasurer
	 
	 
	 	 	
WD DELAWARE, INC., a Delaware corporation
	 
	 	 	
By: /s/ Adam L. Kaplan
	 	 	

	 	 	
Name: Adam L. Kaplan

Title: Treasurer
	 
	 
	 	 	
HP INTELLECTUAL CORP., a Delaware
corporation
	 
	 	 	
By: /s/ Adam L. Kaplan
	 	 	

	 	 	
Name: Adam L. Kaplan

Title: Treasurer
	 
	 
	 	 	
WINDMERE HOLDINGS CORPORATION, a Delaware

corporation
	 
	 	 	
By: /s/ Adam L. Kaplan
	 	 	

	 	 	
Name: Adam L. Kaplan

Title: Treasurer

3

 

	 	 	 
	 	 	
HP DELAWARE, INC., a Delaware corporation
	 
	 	 	
By: /s/ Adam L. Kaplan
	 	 	

	 	 	
Name: Adam L. Kaplan

Title: Treasurer
	 
	 
	 	 	
HPG LLC, a Delaware limited liability

company
	 
	 	 	
By: /s/ Adam L. Kaplan
	 	 	

	 	 	
Name: Adam L. Kaplan

Title: Treasurer
	 
	 
	 	 	
HP AMERICAS, INC., a Delaware corporation
	 
	 	 	
By: /s/ Adam L. Kaplan
	 	 	

	 	 	
Name: Adam L. Kaplan

Title: Treasurer
	 
	 
	 	 	
“AGENT”
	 
	 
	 	 	
BANK OF AMERICA, N.A., as the Agent
	 
	 	 	
By: /s/ Stuart A. Hall
	 	 	

	 	 	
Name: Stuart A. Hall

Title: Vice President
	 
	 
	 	 	
“LENDERS”
	 
	 
	 	 	
BANK OF AMERICA, N.A., as a Lender
	 
	 	 	
By: /s/ Stuart A. Hall
	 	 	

	 	 	
Name: Stuart A. Hall

Title: Vice President
	 
	 
	 	 	
FLEET CAPITAL CORPORATION, as a Lender
	 
	 	 	
By: /s/ Patrick McConnell
	 	 	

	 	 	
Name: Patrick McConnell

Title: Vice President
	 
	 
	 	 	
CONGRESS FINANCIAL CORPORATION (FLORIDA),

as a Lender
	 
	 	 	
By: /s/ Gary Dixon
	 	 	

	 	 	
Name: Gary Dixon

Title: First Vice President

4

 

	 	 	 
	 	 	
LASALLE BUSINESS CREDIT, INC., as agent for
Standard Federal Bank National Association,
as a Lender
	 
	 	 	
By: /s/ Patrick Aarons
	 	 	

	 	 	
Name: Patrick Aarons

Title: Vice President
	 
	 
	 	 	
GENERAL ELECTRIC CAPITIAL CORPORATION, as a

Lender
	 
	 	 	
By: /s/ Glenn P. Bartley
	 	 	

	 	 	
Name: Glenn P. Bartley

Title: Duly Authorized Signatory
	 
	 
	 	 	
HSBC BUSINESS CREDIT (USA), INC., as a
Lender
	 
	 	 	
By: /s/ Jimmy Schwartz
	 	 	

	 	 	
Name: Jimmy Schwartz

Title: Vice President
	 
	 
	 	 	
PNC BANK, NATIONAL ASSOCIATION, as a Lender
	 
	 	 	
By: /s/ Jundie Cadiena
	 	 	

	 	 	
Name: Jundie Cadiena

Title: Vice President

5

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