Document:

exv10w127

 

Exhibit 10.127

AMERICAN AIRLINES

2007 ANNUAL INCENTIVE PLAN

Background

As part of the restructuring process that took place in April 2003, three new broad-based variable
compensation plans were created: the Broad Based Employee Stock Option Plan, a new Profit Sharing
Plan and the Annual Incentive Plan (the “Plan” or “AIP”).

The framework for the Plan was developed during the restructuring, but the specific plan metrics
were left to the discretion of the Board of Directors (sometimes referred to as the “Board”).

The Board has determined that for 2007 there will be two components to the Plan — customer service
and financial. While related, the two components will be treated separately. The financial
component will provide an award if the company meets annual financial goals. The customer service
component will provide an award if the company meets customer satisfaction and dependability goals,
regardless of its financial performance. Providing the opportunity for a customer service payout
without meeting financial hurdles recognizes that the company’s performance in the two areas most
important to our customers — dependability and customer satisfaction — will contribute to
improved profitability.

These broad-based compensation plans have been designed to allow all employees throughout the
American Airlines team to share in the company’s success. The Plan provides the opportunity to
share immediately in that success by taking concrete steps in each employee’s everyday work that
will move the company towards profitability.

With input from our employees, the unions and the Board, these broad-based variable compensation
programs will continue to evolve. Today, they form the building blocks necessary to ensure that
everyone is able to share in the company’s success.

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Definitions

Capitalized terms not otherwise defined in the Plan will have the meanings set forth in the 2003
Employee Stock Incentive Plan (the “2003 Stock Plan”).

“AMR” is defined as AMR Corporation.

“Affiliate” is defined as a subsidiary of AMR or any entity that is designated by the Committee as
a participating employer under the Plan, provided that AMR directly or indirectly owns at least 20%
of the combined voting power of all classes of stock of such entity.

“American” is defined as AMR less AMR subsidiaries other than American Airlines, Inc. and its
subsidiaries.

“American Airlines” is defined as American Airlines, Inc.

“American’s Pre-Tax Earnings Margin” is a percentage and is defined as American’s earnings,
relative to its revenues, before any applicable income tax expense and is exclusive of any profit
sharing payments, payments under the Plan and any special, extraordinary or one-time items as may
be determined by the Committee in its discretion, after consultation with AMR’s independent
auditors.

“Committee” is defined as the Compensation Committee of the AMR Board of Directors.

“Competitor” is defined as one of AirTran Airways, Alaska Airlines, Continental Airlines, Delta Air
Lines, Frontier Airlines, JetBlue Airways, Northwest Airlines, Southwest Airlines, United Air Lines
and US Airways. During the Plan year, the Committee delegates to the Incentive Compensation
Committee the authority to modify the universe of companies that comprise the definition of
“Competitor”.

“Disabled”, “Disability” or variants thereof will have the meaning as defined in section
409(a)(2)(C) of the Internal Revenue Code of 1986, as amended (the “Code”).

“DOT Rank” is defined as American’s relative rank with respect to the Competitors in the category
of “arrivals+14 (A+14)” as determined by the U.S. Department of Transportation (DOT). This monthly
ranking is based on DOT’s aggregated A+14 data for the period January 1, 2007 through December 31,
2007 inclusive. To the extent that at any point during the year a Competitor ceases to report A+14
data, it will be excluded from the calculation for the month in which it ceases to report A+14
data, and for future months, until it begins to report A+14 data for a full month.

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“Eligible Earnings” is defined by the nature of the work group. For employees who are represented
by a union, the definition of Eligible Earnings will be the definition contained in the Letter of
Agreement between the union and the company. For employees who are not represented by a union the
definition of Eligible Earnings will be identical to the term “Qualified Earnings” under the 2003
American Airlines Employee Profit Sharing Plan.

“Fund” is defined as the fund, if any, accumulated in accordance with this Plan.

“Letters of Agreement” is defined as the agreements reached with the Allied Pilots Association,
Association of Professional Flight Attendants and the Transport Workers Union during the April 2003
restructuring process that define the framework of the Plan.

“Measure” is defined, as appropriate, as American’s Pre-Tax Earnings Margin, DOT Rank or Survey
America Rank.

“Named Executive Officers” is defined as the officers of American who are named in the AMR proxy
statement that reports income for the year in which awards under the Plan are earned.

“Other Cash Compensation Programs” is defined as cash payments to management employees that are not
predicated upon the criteria and thresholds contained in the Plan. Per discussions and as specified
in the Letters of Agreement, this term does not include salary, stock-based compensation,
severance, retirement benefits or deferred payments of base compensation, or eligible cash bonuses
from prior years.

“Profit Sharing Plan” is defined as the 2007 Employee Profit Sharing Plan.

“Survey America Rank” is defined as American’s relative rank with respect to its Competitors in the
category of “Overall Travel Experience”, using a blended ranking of first class and coach cabin,
as reported in Plog Inc.’s Survey America. The Survey America ranking is based on monthly data for
American and the Competitors for the period January 1, 2007 through December 31, 2007, inclusive.
To the extent that at any point during such year a Competitor ceases to participate, it will be
excluded from the calculation for the month in which it ceased to participate, and for future
months, until it begins to participate again for a full month period.

“Target Award” is defined as the award (stated as a percentage of Eligible Earnings) for an
eligible participant when target level is achieved on the financial measure. The Target Award is
determined by the employee’s job level.

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Plan Measures

As outlined earlier, the Plan is comprised of two components: customer service and financial.

Customer Service Component

The customer service component of the Plan will include two performance metrics — customer
satisfaction and dependability. The Plan will reward employees if American achieves at least one
of the two metrics.

The customer satisfaction metric will be based on American’s Survey America Rank. The
dependability metric will be based on American’s DOT Rank.

Monthly awards will be based on the higher of the monthly rankings for DOT Rank or for Survey
America Rank, as per the payout schedule below. These award levels are the same for all employees
regardless of full-time or part-time status or job level.

	 	 	 	 	 	 
	 	 	Payout	 
	 	 	Per Person	 
	Monthly Rank	 	Per Month	 
	First
	 	$	100	 	 
	Second — Third
	 	$	50	 	 
	Fourth — Sixth
	 	$	25	 	 

If both metrics are achieved in any single month, the awards will not be additive. Awards will be
based solely on the higher ranking of the two metrics.

Awards under the customer service component will be paid regardless of performance under the
financial component. The awards under the customer service component will be paid, net of
applicable taxes, within 75 days after DOT Rank and Survey America Rank are available and employee
eligibility is established...

For example:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Monthly Ranking	 	Higher	 	 	 
	 	 	Survey	 	 	 	Rank	 	 	 
	 	 	America	 	DOT	 	Achieved	 	Payout	 
	January
	 	2	 	7	 	2	 	2nd place	 	=	 	$	50	 
	February
	 	4	 	5	 	4	 	4th place	 	=	 	$	25	 
	March
	 	3	 	1	 	1	 	1st place	 	=	 	$	100	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	Quarterly Payout	 	 	 	$	175	 

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Financial Component

The financial component of the Plan will be based upon American’s Pre-Tax Earnings Margin for the
full-year 2007. The measure has a threshold (performance below this level earns no award), a
target and a maximum as reflected below:

	 	 	 	 	 
	 	 	American’s Pre-Tax
	 	 	Earnings Margin
	Threshold
	 	 	5	%
	Target
	 	 	10	%
	Maximum
	 	 	15	%

For non-management, support staff and management levels 1-4, awards under the financial component,
in combination with the customer service awards, will provide total annual Plan payouts ranging
from 2.5% of Eligible Earnings at threshold, 5% of Eligible Earnings at target and 10% of Eligible
Earnings at Maximum. Award levels have a linear progression as American’s Pre-Tax Earnings Margin
increases between the threshold and target levels, and between the target and maximum levels.

	 	 	 	 	 	 	 	 	 
	 	 	American’s Pre-Tax	 	Award as a % of
	 	 	Earnings Margin	 	Eligible Earnings
	Threshold
	 	 	5	%	 	 	2.5	%
	Target
	 	 	10	%	 	 	5.0	%
	Maximum
	 	 	15	%	 	 	10.0	%

For management Levels 5 and above, none of whom participate in the Profit Sharing Plan; the Plan is
the successor to the traditional Incentive Compensation Plan. As in the past, the awards for
employees at Level 5 and above will be determined by the senior management of AMR or, in certain
instances, by the Board; will vary by level; and will be based on an assessment of individual
performance.

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If the company does not achieve the threshold level of American’s Pre-Tax Earnings Margin, there
will be no financial performance payout. However, a participant retains any awards earned in 2007
for customer service performance. When the threshold level of American’s Pre-Tax Earnings Margin
is met, participants may be entitled to a payment under the Plan (refer to the example below). In
this case, any customer service awards earned during 2007 act as a “deposit” against the amount to
be awarded pursuant to the financial component. The amount of the financial performance payout a
participant receives will be the difference, if any, between what is earned under the financial
performance formula and what has already been earned through the customer service awards (net of
applicable taxes).

For example (an individual employee’s sample annual payout):

Customer Service

	 	 	 	 	 	 	 
	1 month ~ 1st Place
	 	1 x $100	 	=	 	$100
	3 months ~ 2nd - 3rd Place
	 	3 x $50	 	=	 	$150
	8 months ~ 4th - 5th Place
	 	8 x $25	 	=	 	$200
	 
	 	 	 	 	 
	Customer Service Payout
	 	 	 	 	 	$450 

Financial ~ achieve 5% American’s pre-tax earnings threshold and have $40,000 in Eligible
Earnings

	 	 	 	 	 
	2.5% x $40,000
	 	=	 	$1,000
	less Customer Service payout
	 	 	 	  ($450)
	 
	 	 	 
	Financial Payout
	 	 	 	$   550 

Total Annual payout is $1,000 ($450 + $550), or 2.5% of Eligible Earnings (net of applicable
taxes).

The AIP Letters of Agreement provide that Other Cash Compensation Programs for management employees
may be no more than 20% of the maximum possible award that was or could have been earned by the
individual management employee under the Plan formula (the “20% Limitation”). Any payment under
the 20% Limitation shall be made by March 15, 2008.

The Board has established a program that, based on an individual’s performance, anticipates payouts
to Level 5 and above management employees up to the 20% Limitation. (Level 5 and above employees
are not eligible for the Profit Sharing Plan) This program is designed to commence payments at
$500 million in American’s pre-tax earnings, the same financial threshold as exists in the Profit
Sharing Plan. This is consistent with the company’s past practice of restricting payouts under any
management incentive compensation program until payouts occur under the corresponding employee
Profit Sharing Plan. Payouts under this program will cease when the financial threshold under the
Plan (a 5% Pre-Tax Earnings Margin for American) is achieved. Any payment under the program
described in this paragraph shall be made by March 15, 2008.

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Although the Board has determined that a program to use the flexibility provided for in the Letters
of Agreement will not commence until reaching a threshold of $500 million in American’s pre-tax
earnings and will be discontinued when the financial threshold of the Plan is achieved, the company
also retains the ability to make a payment to an individual under the 20% Limitation as provided
for in the Letters of Agreement.

The Letters of Agreement and related discussions specify that for purposes of the 20% Limitation,
Other Cash Compensation Programs does not include salary, stock-based compensation, severance,
retirement benefits or deferred payments of base compensation, or eligible cash bonuses from prior
years.

Eligibility for Participation

Customer Service Component:

To earn an award under the customer service component of the Plan, an individual must have been
employed as a regular full-time or part-time employee at American, in a participating workgroup
(employees in the United States, Puerto Rico and the U.S. Virgin Islands) during the applicable
month to be eligible to participate in the Plan.

The Committee, at its discretion, may permit participation by employees of Affiliates who have been
so employed by the Affiliate since the first day in the applicable month, if they become employed
by American during the applicable month during 2007.

In addition to the terms listed above, in order for full-time and part-time employees to earn a
payout under the customer service measure, an individual cannot be on any type of leave during the
applicable month, except approved FMLA, injury on duty, military, overage or time-card leave, as
provided for under the company’s policies, collective bargaining agreement or state law as
applicable.

Moreover, an individual will not be eligible to earn a customer service award if such individual
is, at the same time, eligible to participate in:

	 	i)	 	any incentive compensation, profit sharing, commission or other bonus plan
sponsored by an Affiliate of American
	 
	 	ii)	 	any commission or bonus plan, with the exception of American’s Profit Sharing
Plan or provisions of the Annual Incentive Plan, sponsored by American, any division
of American or any Affiliate of American

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In order to earn a customer service award under the Plan, an individual must satisfy the
aforementioned eligibility requirements and must be an employee of American or an Affiliate at the
time an award under the Plan is paid. If at the time awards are paid under the Plan, an individual
has retired from American or an Affiliate, has been laid off, is on leave of absence with
reinstatement rights, is Disabled, or has died, the award which the individual otherwise would have
received under the Plan but for such retirement, lay-off, leave, Disability, or death will be paid
(on a pro rata basis) to the individual, or his/her estate in the event of death.

The percentage of the payout that an individual receives for any given month will be determined
based upon the percentage of his/her schedule that the individual fulfills in that month. For Plan
purposes, an individual will be considered to have fulfilled his/her schedule if he/she actually
works at least 50% of his/her scheduled time (50% of monthly guarantee hours for flight crew) or
takes a scheduled vacation or time-card leave, which, together with his/her actual work time,
amounts to at least 50% of his/her scheduled time for the month. If an individual does not fulfill
his scheduled time due to one of the aforementioned leaves, his award will be pro rated based on
actual hours worked in that month (vis-a-vis hours scheduled in that month); otherwise, no payment
will be made.

Financial Component

To earn an award under the financial component of the Plan, an individual must have been employed
as a regular full-time or part-time employee at American, in a participating workgroup (employees
in the United States, Puerto Rico and the U.S. Virgin Islands) during 2007 to be eligible to
participate in the Plan.

The Committee, at its discretion, may permit participation by employees of Affiliates who have been
so employed by the Affiliate during the Plan year, if they become employed by American during the
Plan year. In such instances, only eligible earnings at American will be included in the payout
calculation.

Notwithstanding the forgoing, however, an individual will not be eligible to participate in the
Plan if such individual is, at the same time, eligible to participate in:

	 	i)	 	any incentive compensation, profit sharing, commission or other bonus plan
sponsored by an Affiliate of American
	 
	 	ii)	 	any commission or bonus plan, with the exception of American’s Employee
Profit Sharing Plan or provisions of the Annual Incentive Plan, sponsored by American,
any division of American or any Affiliate of American

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In order to earn an award under the financial component of the Plan, an individual must satisfy the
aforementioned eligibility requirements and must be an employee of American or an Affiliate at the
time such financial award under the Plan is paid. If at the time such awards are paid under the
Plan, an individual has retired from American or an Affiliate, has been laid off, is on leave of
absence with reinstatement rights, is Disabled, or has died, the award which the individual
otherwise would have received under the Plan but for such retirement, lay-off, leave, Disability,
or death may be paid (on a pro rata basis) to the individual, or his/her estate in the event of
death, at the discretion of the Committee.

Allocation of Individual Awards

The Committee, in consultation with the Chairman, President and CEO of American, will approve
awards for officers of American, including the Named Executive Officers. The award for an officer
will be equal to an amount calculated in accordance with this Plan, as adjusted for individual
performance. Provided, however, that the sum of all awards made to officers may not exceed the sum
of officer awards as calculated in accordance with this Plan. Awards for the Named Executive
Officers will be equal to the award earned under the financial component of the Plan. An award
under the Plan to an officer may not exceed the amount set forth in Section 11 of the 1998 Long
Term Incentive Plan, as amended.

The Chairman, President and CEO of American, in consultation with the executive and senior vice
presidents of American, will approve awards for non-officer eligible employees (Level 5 and above).
An award for a non-officer will be equal to an amount calculated in accordance with this Plan, as
adjusted for individual performance. Provided, however, that the sum of all awards made to
non-officers may not exceed the sum of non-officer awards calculated in accordance with this Plan.

Administration

The Committee shall have authority to administer and interpret the Plan, establish administrative
rules, approve eligible participants, and take any other action necessary for the proper and
efficient operation of the Plan, consistent with the Letters of Agreement reached with each of the
unions. The amount, if any, of the Fund shall be audited by the General Auditor of American based
on a certification of American’s Pre-Tax Earnings Margin by AMR’s independent auditors. For the
Financial Measure, a summary of awards under the Plan shall be provided to the Committee at the
first regular meeting following determination of the awards. To the extent a Measure is no longer
compiled by the DOT or Survey America as applicable, during a Plan year, the Committee will
substitute a comparable performance measure for the remainder of the Plan year.

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Method of Payment

The Committee will determine the method of payment of awards. The financial awards shall be paid
(net of applicable taxes) as soon as practicable after audited financial statements for the year
2007 are available, but no later than March 15, 2008. The customer service measure is paid
independently of the financial measure. The customer service award will be paid (net applicable
taxes) quarterly within 75 days after the DOT Rank and Survey America Rank are available and
employee eligibility is established.

General

Neither this Plan nor any action taken hereunder shall be construed as giving any employee or
participant the right to be retained in the employ of American or an Affiliate.

Nothing in the Plan shall be deemed to give any employee any right, contractually or otherwise, to
participate in the Plan or in any benefits hereunder, other than the right to receive payment of
such incentive compensation as may have been expressly awarded by the Committee.

In consideration of the employee’s privilege to participate in the Plan, the employee agrees (i)
not to disclose any trade secrets of, or other confidential/restricted information of, American or
its Affiliates to any unauthorized party and (ii) not to make any unauthorized use of such trade
secrets or confidential or restricted information during his or her employment with American or its
Affiliates or after such employment is terminated, and (iii) not to solicit any then current
employees of American or any other subsidiaries of AMR to join the employee at his or her new place
of employment after his or her employment with American or its Affiliates is terminated.

The employee shall not have the right to defer any payment under the Plan. The Committee and
American Airlines shall not accelerate any payment under the plan.

Notwithstanding any provision to the contrary, if an employee is a person subject to section
409(a)(2)(B)(i) of the Code, any payment under the Plan due to Retirement or termination of
employment for reasons other than Death or Disability shall be delayed until the sixth month
anniversary of the date of the separation from employment due to Retirement or termination for
Cause.

10exv10w131

 

Exhibit 10.131

AMR CORPORATION

1998 LONG TERM INCENTIVE PLAN, AS AMENDED

     SECTION 1. Purpose, Definitions.

     The purpose of the AMR Corporation 1998 Long Term Incentive Plan, as amended (the “Plan”) is
to enable AMR Corporation (the “Company”) to attract, retain and reward key employees of the
Company and its Subsidiaries and Affiliates, and strengthen the mutuality of interests between such
key employees and the Company’s shareholders, by offering such key employees 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.

     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 twenty percent (20%) of the combined voting power of all
classes of stock of such entity or at least twenty percent (20%) of the ownership interests in such
entity.

     (b) “Board” means the Board of Directors of the Company.

     (c) “Book Value” means, as of any given date, on a per share basis (i) the Stockholders’
Equity in the Company as of the end of the immediately preceding fiscal year as reflected in the
Company’s audited consolidated balance sheet, subject to such adjustments as the Committee shall
specify, divided by (ii) the number of then outstanding shares of Stock as of such year-end date
(as adjusted by the Committee for subsequent events).

     (d) “Cause” means a felony conviction of a participant or the failure of a participant to
contest prosecution for a felony, or a participant’s willful misconduct or dishonesty, any of which
is directly and materially harmful to the business or reputation of the Company or any Subsidiary
or Affiliate.

     (e) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any
successor thereto.

     (f) “Committee” means the Committee referred to in Section 2 of the Plan. If at any time no
Committee shall be in office, then the functions of the Committee specified in the Plan shall be
exercised by the Board.

     (g) “Company” means AMR Corporation, a corporation organized under the laws of the State of
Delaware, or any successor corporation.

     (h) “Deferred Stock” means the right to receive Stock at the end of a specified deferral
period pursuant to Section 8.

 

 

     (i) “Disability” means disability as determined under procedures established by the Committee
for purposes of this Plan.

     (j) “Early Retirement” means retirement, with the express consent for purposes of this Plan of
the Company at or before the time of such retirement, from active employment with the Company and
any Subsidiary or Affiliate.

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

     (l) “Fair Market Value” means, as of any given date, unless otherwise determined by the
Committee in good faith, the mean between the highest and lowest quoted selling price, regular way,
of the Stock on the New York Stock Exchange or, if no such sale of Stock occurs on the New York
Stock Exchange on such date, the fair market value of the Stock as determined by the Committee in
good faith; provided, that, for Stock Options, Stock Appreciations Rights, Deferred Stock,
Restricted Stock, Stock Purchase Rights, Performance Related Awards and Other Stock Based Awards
granted or exercised on or after November 16, 2006, fair market value means, unless otherwise
determined by the Committee in good faith, the last sale price of the Stock on the New York Stock
Exchange at the time of such grant or exercise, as applicable or, if no such sale of Stock occurs
on the New York Stock Exchange on such date or the prior business day, the fair market value of the
Stock as determined by the Committee in good faith.

     (m) “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.

     (n) “Non-Qualified Stock Option” means any Stock Option that is not an Incentive Stock Option.

     (o) “Normal Retirement” means retirement from active employment with the Company and any
Subsidiary or Affiliate pursuant to the applicable retirement provisions of the applicable pension
plan of such entity.

     (p) “Other Stock Based Award” means an award under Section 10 below that is valued in whole or
in part by reference to, or is otherwise based on, Stock.

     (q) “Performance Related Awards” means an award made pursuant to Section 11 of Restricted
Stock or Deferred Stock or Other Stock Based Awards upon the determination by the Committee that
performance objectives established by the Committee have been attained, in whole or in part.

     (r) “Plan” means this AMR Corporation 1998 Long Term Incentive Plan, as it may be amended from
time to time.

     (s) “Restricted Stock” means shares of Stock that are subject to restrictions under Section 7
below.

Amended and Restated 1998 LTIP (as of November 15, 2006)

2

 

     (t) “Retirement” means Normal or Early Retirement.

     (u) “Stock” means the Common Stock, $1.00 par value per share, of the Company.

     (v) “Stock Appreciation Right” means the right pursuant to an award granted under Section 6
below which entitles the grantee to receive, upon the exercise thereof in whole or in part, an
amount in shares of Stock equal in value to the excess of the Fair Market Value (at the time of
exercise) of one share of Stock over the base price per share specified with respect to the Stock
Appreciation Right, multiplied by the number of shares in respect of which the Stock Appreciation
Right shall have been exercised. The number of shares to be issued shall be calculated on the
basis of the Fair Market Value of the shares at the time of exercise, with any fractional share
being payable in cash based on the Fair Market Value at the time of exercise. Notwithstanding the
foregoing, the Committee may elect, at any time and from time to time, in lieu of issuing all or
any portion of the shares of Stock otherwise issuable upon any exercise of any such Stock
Appreciation Right, to pay the grantee an amount in cash or other marketable property of a value
equivalent to the aggregate Fair Market Value at the time of exercise of the number of shares of
Stock that the Committee is electing to settle in cash or other marketable property.

     (w) “Stock Option” or “Option” means any option to purchase shares of Stock (including
Restricted Stock and Deferred Stock, if the Committee so determines) granted pursuant to Section 5
below.

     (x) “Stock Purchase Right” means the right to purchase Stock pursuant to Section 9.

     (y) “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 fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations in the chain.

     In addition, the terms “LTIP Awards,” “Performance Criteria”, “Change in Control,” “Potential
Change in Control” and “Change in Control Price” shall have the meanings set forth, respectively,
in Sections 2, 11(a), 12(b), (c) and (d) below.

     SECTION 2. Administration.

     The Plan shall be administered by a committee of not less than two members of the Board, who
shall be appointed by, and serve at the pleasure of, the Board. In selecting the members of the
Committee, the Board shall take into account the requirements for the members of the Committee to
be treated as “Outside Directors” within the meaning of Section 162(m) of the Code and
“Non-Employee Directors” for purposes of Rule 16b-3, as promulgated under Section 16 of the Exchange Act. The functions of the Committee specified in the Plan shall be
exercised by the Board, if and to the extent that no Committee exists which has the authority to so
administer the Plan, or to the extent that the Committee is not comprised solely of

Amended and Restated 1998 LTIP (as of November 15, 2006)

3

 

Non-Employee Directors for purposes of Rule 16b-3, as promulgated under Section 16 of the Exchange Act.

     The Committee shall have full authority to grant, pursuant to the terms of the Plan, to
officers and other key employees eligible under Section 4: (i) Stock Options and Incentive Stock
Options; (ii) Stock Appreciation Rights; (iii) Restricted Stock; (iv) Deferred Stock; (v) Stock
Purchase Rights; (vi) Other Stock Based Awards; and/or (vii) Performance Related Awards
(collectively, the “LTIP Awards”).

     In particular the Committee shall have the authority:

     (a) to select the officers and other key employees of the Company and its Subsidiaries
and Affiliates to whom LTIP Awards may from time to time be granted hereunder;

     (b) to determine whether and to what extent LTIP Awards, or any combination thereof,
are to be granted hereunder to one or more eligible employees;

     (c) subject to the provisions of Sections 3, 5 and 11, 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 Stock relating thereto, based
in each case on such factors as the Committee shall determine in its sole discretion);

     (e) to determine whether, to what extent and under what circumstances a Stock Option
may be settled in cash, Restricted Stock and/or Deferred Stock under Section 5(k) or 5(1),
as applicable, instead of Stock;

     (f) to determine whether, to what extent and under what circumstances an award of
Restricted Stock or Deferred Stock may be settled in cash;

     (g) to determine whether, to what extent and under what circumstances Option grants
and/or other awards under the Plan and/or other cash awards made by the Company 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, or on an additive basis;

     (h) to determine whether, to what extent and under what circumstances 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);

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     (i) to determine the terms and restrictions applicable to Stock Purchase Rights and the
Stock purchased by exercising such Rights;

     (j) with respect to an award of Restricted Stock, to determine whether the right to
vote will be granted with such award and/or whether any dividends declared with respect to
such award will be paid in cash, additional Restricted Stock, Deferred Stock, Other Stock
Based Awards, or not at all;

     (k) with respect to an award of Deferred Stock, to determine whether any dividends
declared with respect to such award will be paid in cash, Restricted Stock, additional
Deferred Stock, Other Stock Based Awards, or not at all; and

     (l) to determine the terms and conditions pursuant to which an LTIP Award may vest on a
pro rata basis or be terminated.

     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.

     The Committee may appoint in writing such person or persons as it may deem necessary or
desirable to carry out any of the duties and responsibilities of the Committee hereunder and may
delegate to such person or persons in writing such duties, and confer upon such person or persons
in writing, such powers, discretionary or otherwise, as the Committee may deem appropriate.
Without limiting the generality of the foregoing, the Committee may authorize from time to time the
Chief Executive Officer and/or another officer or officers of the Company or its Subsidiaries or
Affiliates or a subcommittee of members of the Committee to grant awards under this Plan to
officers and other key employees of the Company or its Subsidiaries or Affiliates authorized or
approved by the Committee (including grants of individual awards to officers and other key
employees authorized or approved by the Committee in a pool of awards for a group of officers
and/or other key employees), subject to any conditions or limitations as the Committee may
establish; provided that all awards to executive officers of the Company shall be approved by the
Committee, or a subcommittee thereof.

     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. Stock Subject to Plan.

     The total number of shares of Stock reserved and available for distribution under the Plan
shall be 5,000,000 shares, plus any shares remaining available for issuance under the 1988 Long
Term Incentive Plan, as amended, as of the Effective Date hereof. Such shares may consist, in
whole or in part, of authorized and unissued shares or treasury shares.

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5

 

     Subject to Section 6(b)(iv) below, if any shares of Stock that have been optioned cease to be
subject to a Stock Option, or if any such shares of Stock that are subject to any Restricted Stock
or Deferred Stock award, Stock Purchase Right, Other Stock Based Award or Performance Related Award
granted hereunder or granted under the 1988 Long Term Incentive Plan, as amended, are forfeited or
any such award otherwise terminates without a payment being made to the participant in the form of
Stock or cash equivalent value, such shares shall again be available for distribution in connection
with future awards under the Plan.

     In the event of any merger, reorganization, consolidation, recapitalization, stock dividend,
stock split or other change in corporate structure affecting the Stock, such substitution or
adjustment shall be made in the aggregate number of shares reserved for issuance under the Plan, in
the number and option price of shares subject to outstanding Options granted under the Plan, in the
number and purchase price of shares subject to outstanding Stock Purchase Rights under the Plan,
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. Such 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 and other key employees of the Company and its Subsidiaries and Affiliates (but
excluding members of the Committee and any person who serves only as a director) 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 for awards under the Plan.

     SECTION 5. Stock Options.

     Stock Options may be granted alone, in addition to, or in tandem with, other awards granted
under 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.

     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); provided that, in no event shall the number of shares of Stock subject to any
Stock Options granted to any employee during any calendar year exceed 250,000 shares, as such
number may be adjusted pursuant to Section 3.

     Options granted 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:

Amended and Restated 1998 LTIP (as of November 15, 2006)

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     (a) Option Price. The option price per share of Stock purchasable under a Stock Option shall
be determined by the Committee at the time of grant; provided, that such option price may not be
less than the Fair Market Value of the Stock at the time the Stock Option is granted.

     (b) Option Term. The term of each Stock Option shall be fixed by the Committee, but no Stock
Option shall be exercisable more than ten (10) 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; provided, however, that except
as determined by the Committee, no Stock Option shall be exercisable prior to the first anniversary
date of the granting of the Option. 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 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 provisions apply under
Section 5(c) and subject to whatever restrictions may be imposed by the Company, 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. Without limiting
the generality of the foregoing, payment of the option price may be made: (i) in cash or its
equivalent; (ii) by exchanging shares of Stock owned by the optionee (which are not the subject of
any pledge or other security interest), including in the case of a Non-Qualified Stock Option,
Restricted Stock or Deferred Stock subject to an award hereunder (or an award under the terms of
the 1988 Long Term Incentive Plan, as amended); (iii) through an arrangement with a broker approved
by the Company whereby payment of the exercise price is accomplished with the proceeds of the sale
of Stock; or (iv) by any combination of the foregoing, provided that the combined value of all cash
and cash equivalents paid and the Fair Market Value of any such Stock so tendered to the Company,
valued as of the time of such tender, is at least equal to such option price.

     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 or Deferred Stock, such Restricted Stock or Deferred Stock
(and any replacement shares relating thereto) shall remain (or be) restricted or deferred, as the
case may be, in accordance with the original terms of the Restricted Stock award or Deferred Stock
award in question, and any additional Stock received upon the exercise shall be subject to the same
forfeiture restrictions or deferral limitations, unless otherwise determined by the Committee, in
its sole discretion.

     No shares of Stock shall be issued upon exercise of a stock option 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 15(a).

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     (e) Transferability of Options. Unless the Committee shall permit (on such terms and
conditions as it shall establish) an Option to be transferred to a member of the participant’s
immediate family or to a trust or similar vehicle for the benefit of such immediate family members,
no Option shall be assignable or transferable except by will or the laws of descent and
distribution, and except to the extent required by law, no right or interest of any participant
shall be subject to any lien, obligation or liability of the participant.

     (f) Termination by Death. Subject to Section 5(j), if an optionee’s employment by the
Company and any Subsidiary or Affiliate terminates by reason of death, any Stock Option held by
such optionee may thereafter be exercised in accordance with the terms and conditions established
by the Committee.

     (g) Termination by Reason of Disability. Subject to Section 5(j), if an optionee’s
employment by the Company and any Subsidiary or Affiliate terminates by reason of Disability, any
Stock Option held by such optionee may thereafter be exercised by the optionee in accordance with
the terms and conditions established by the Committee. In the event of termination of employment
by reason of Disability, if an Incentive Stock Option is exercised after the expiration of the
exercise periods that apply for purposes of Section 422 of the Code, such Stock Option will
thereafter be treated as a Non-Qualified Stock Option.

     (h) Termination by Reason of Retirement. Subject to Section 5(j), if an optionee’s
employment by the Company and any Subsidiary or Affiliate terminates by reason of Normal or Early
Retirement, any Stock Option held by such optionee may thereafter be exercised by the optionee in
accordance with the terms and conditions established by the Committee. In the event of termination
of employment by reason of Retirement, if an Incentive Stock Option is exercised after the
expiration of the exercise periods that apply for purposes of Section 422 of the Code, such Stock
Option will thereafter be treated as a Non-Qualified Stock Option.

     (i) Other Termination. Unless otherwise determined by the Committee, if an optionee’s
employment by the Company or any Subsidiary or Affiliate terminates for any reason other than
death, Disability or Normal or Early Retirement, the Stock Option shall thereupon terminate.

     (j) 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.

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

     (l) Settlement Provisions. If the option agreement so provides at grant or is amended after
grant, and prior to the exercise, to so provide (with the optionee’s consent), the Committee

Amended and Restated 1998 LTIP (as of November 15, 2006)

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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 Deferred or Restricted Stock, which shall be valued at the time
of exercise on the basis of the Fair Market Value (as determined by the Committee) of such Deferred
or Restricted Stock determined without regard to the deferral limitations and/or the forfeiture
restrictions involved.

     SECTION 6. Stock Appreciation Rights.

     (a) Stock Appreciation Rights may be granted alone, in addition to, or in tandem with, other
awards granted under the Plan. Any Stock Appreciation Right granted under the Plan shall be in
such form as the Committee may from time to time approve. 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 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 a grantee, subject to Section 6(b), in
accordance with the procedures established by the Committee from time to time for such purposes.
Upon such exercise, the grantee shall be entitled to receive an amount determined in the manner
prescribed in Section 6(b). Stock Options relating to exercised Stock Appreciation Rights, and
Stock Appreciation Rights related to any exercised Stock Option, shall no longer be exercisable to
the extent that the related Stock Appreciation Rights or Stock Option, as the case may be, 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 at such time and subject to such
conditions as the Committee shall specify, except that any Stock Appreciation Right granted
in tandem with a Stock Option (or portion thereof) 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, a grantee shall be entitled to
receive an amount in shares of Stock (or, solely to the extent determined by the Committee,
cash) equal in value to the excess of the Fair Market Value (at the time of exercise) of one
share of Stock over the base price per share specified with respect to the Stock
Appreciation Right, multiplied by the number of shares in respect of which the Stock
Appreciation Right shall have been exercised. When payment is to be made in

Amended and Restated 1998 LTIP (as of November 15, 2006)

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shares, the number of shares to be paid shall be calculated on the basis of the Fair Market Value of the shares at the time of exercise, with any fractional share being payable in cash based on the
Fair Market Value at the time of exercise. Notwithstanding anything in this Section
6(b)(ii) to the contrary, the base price in respect of any Stock Appreciation Right shall
not be less than the Fair Market Value of the Stock at the time the Stock Appreciation Right
is granted, or in the case of a Stock Appreciation Right granted in tandem with a Stock
Option, the Fair Market Value at the time the related Stock Option was granted.

     (iii) Stock Appreciation Rights shall be transferable only to the extent that Stock
Options may be transferable under Section 5(e) of the Plan.

     (iv) Upon the exercise of a Stock Appreciation Right, regardless of whether granted on
a stand-alone basis or in tandem with any Stock Option, only the number of shares of Stock
actually issued in connection with the exercise of such Stock Appreciation Right (and not
the corresponding number of shares of Stock related to the Stock Appreciation Right (or
portion thereof) being exercised) shall be treated as issued under the Plan and, for the
purpose of the limitation set forth in Section 3 of the Plan on the number of shares of
Stock issuable under the Plan, the remaining number of shares of Stock related to such
exercised Stock Appreciation Right (or portion thereof), including the corresponding number
of shares related to any tandem Stock Option cancelled upon such exercise, shall again be
available for issuance under the Plan.

     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 awards made outside of 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 to be awarded, 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 all other terms and conditions of the awards.

     The Committee may condition the grant of Restricted Stock upon the attainment of specified
Performance Criteria 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 the Company and such recipient have
executed an agreement evidencing the award and the recipient has delivered a fully executed copy
thereof to the Company, and has otherwise complied with the applicable terms and conditions of such
award.

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     (i) The purchase price for shares of Restricted Stock shall be equal to or less
than their par value and may be zero.

     (ii) Awards of Restricted Stock must be accepted within a reasonable period (or such
specific 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 Stock covered by such award.

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

     (i) Subject to 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 or assign shares of Restricted
Stock awarded under the Plan. Within these limits and subject to Sections 7(c)(iv) and/or
7(c)(v), 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 Criteria and/or such other factors as the Committee may
determine, in its sole discretion.

     (ii) 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 of Stock shall be delivered to the participant promptly (unless the
Committee decides pursuant to Section 2(f) to settle the award in cash).

     (iii) The voting rights and/or dividend rights, if any, of the Restricted Stock award
shall be established by the Committee pursuant to Section 2(j).

     (iv) An award of Restricted Stock, where the Restriction Period is based on Performance
Criteria, shall have a Restriction Period of at least one (1) year.

     (v) An award of Restricted Stock, where the Restriction Period is based on service,
shall have a Restriction Period of at least three (3) years.

     (vi) In determining the Restriction Period for any award of Restricted Stock granted in
replacement of a non-Plan award of Stock or non-Plan award valued by

Amended and Restated 1998 LTIP (as of November 15, 2006)

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reference to the Stock,
the Restriction Period shall be deemed to have commenced on the date such non-Plan award was
originally granted.

     (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 Stock to the recipient of a Restricted Stock award, subject to such
Performance Criteria, future service, deferral and other terms and conditions as may be specified
by the Committee.

     SECTION 8. Deferred Stock.

     (a) Administration. Deferred Stock may be awarded either alone, in addition to, or in tandem
with, other awards granted under the Plan and/or awards made outside of the Plan. The Committee
shall determine the eligible persons to whom and the time or times at which Deferred Stock shall be
awarded, the number of shares of Deferred Stock to be awarded to any person, the duration of the
period (the “Deferral Period”) during which, and the conditions under which, receipt of the Stock
will be deferred, and the other terms and conditions of the award in addition to those set forth in
Section 8(b).

     The Committee may condition the grant of Deferred Stock upon the attainment of specified
Performance Criteria or such other factors or criteria as the Committee shall determine, in its
sole discretion.

     The provisions of Deferred Stock awards need not be the same with respect to each recipient.

     (b) Terms and Conditions. The shares of Deferred Stock awarded 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 referred to in
Section 8(b)(iv) below, Deferred Stock awards may not be sold, assigned, transferred,
pledged or otherwise encumbered during the Deferral Period. At the expiration of the
Deferral Period (or the Elective Deferral Period referred to in Section 8(b)(iii), where
applicable), stock certificates shall be delivered to the participant, or his legal
representative, in a number equal to the shares covered by the Deferred Stock award (unless
the Committee decides pursuant to Section 2(f) to settle the award in cash).

     (ii) Subject to Sections 8(b)(vi) and/or 8(b)(vii), the Committee may accelerate the
vesting of all or any part of any Deferred Stock award and/or waive the deferral limitations
in whole or in part, based on service, Performance Criteria and/or such other factors as the
Committee may determine, in its sole discretion.

     (iii) A participant may elect to further defer receipt of an award (or an installment
of an award) for a specified period or until a specified event (the “Elective Deferral
Period”), subject in each case to such terms as are determined by the Committee,

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all in its
sole discretion. Subject to any exceptions adopted by the Committee, such election must
generally be made at least twelve (12) months prior to completion of the Deferral Period for
such Deferred Stock award (or such installment).

     (iv) Each award shall be confirmed by, and subject to the terms of, a Deferred Stock
agreement executed by the Company and the participant.

     (v) The dividend rights, if any, of the Deferred Stock award established by the
Committee pursuant to Section 2(k).

     (vi) An award of Deferred Stock, where the Deferral Period is based on Performance
Criteria, shall have a Deferral Period of at least one (1) year.

     (vii) An award of Deferred Stock, where the Deferral Period is based on service, shall
have a Deferral Period of at least three (3) years.

     (viii) In determining the Deferral Period for any award of Deferred Stock granted in
replacement of a non-Plan award of Stock or non-Plan award valued by reference to the Stock,
the Deferral Period shall be deemed to have commenced on the date such non-Plan award was
originally granted.

     (c) 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 Stock to the recipient of a Deferred Stock award, subject to such
Performance Criteria, future service, deferral and other terms and conditions as may be specified
by the Committee.

     SECTION 9. Stock Purchase Rights.

     (a) Awards and Administration. The Committee may grant eligible participants Stock Purchase
Rights which shall enable such participants to purchase Stock (including Deferred Stock and
Restricted Stock) at price(s) determined by the Committee at or after grant, in its sole
discretion.

     The Committee shall also impose such deferral, forfeiture and/or other terms and conditions as
it shall determine, in its sole discretion, on such Stock Purchase Rights or the exercise thereof.

     The terms of Stock Purchase Rights awards need not be the same with respect to each
participant.

     Each Stock Purchase Right award shall be confirmed by, and be subject to the terms of, a Stock
Purchase Rights agreement.

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     (b) Exercisability. Stock Purchase Rights shall be exercisable for such period after grant as
is determined by the Committee.

     SECTION 10. Other Stock Based Awards.

     (a) Administration. Other awards of Stock and other awards that are valued in whole or in
part by reference to, or are otherwise based on, Stock (“Other Stock Based Awards”), including,
without limitation, stock purchase rights, performance shares, convertible preferred stock,
convertible debentures, exchangeable securities and Stock awards or options valued by reference to
Book Value or subsidiary performance, may be granted either alone, in addition to, or in tandem
with, Stock Options, Stock Appreciation Rights, Restricted Stock, Deferred Stock, Stock Purchase
Rights or Performance Related Awards granted under the Plan and/or cash awards made outside of the
Plan.

     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 amount of such
awards, and all other conditions of the awards including any dividend and/or voting rights.
Subject to Sections 10(b)(iv) and 10(b)(v), the Committee may also provide for the grant of Stock
upon the attainment of specified Performance Criteria or such other factors as the Committee may
determine, in its sole discretion.

     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 10 shall be
subject to the following terms and conditions:

     (i) Subject to the provisions of this Plan and the award agreement referred to in
Section 10(b)(ii) below, awards made under this Section 10 may not be sold, assigned,
transferred, pledged or otherwise encumbered prior to the date on which any shares are
issued or amounts are paid, or, if later, the date on which any applicable restriction,
performance or deferral period lapses. Subject to Sections 10(b)(iv) and/or 10(b)(v), the
Committee, in its sole discretion, may accelerate the vesting of all or any part of any
Other Stock Based Award, and/or waive any restrictions or deferral limitations in whole or
in part, based on service, Performance Criteria and/or other factors as the Committee may
determine, in its sole discretion.

     (ii) Each award under this Section 10 shall be confirmed by, and subject to the terms
of, an agreement or other instrument by the Company and by the participant.

     (iii) Stock (including securities convertible into Stock) issued on a bonus basis under
this Section 10 may be issued for no cash consideration. Stock (including securities
convertible into Stock) purchased pursuant to a purchase right awarded under this Section 10
shall be purchased at price(s) determined by the Committee, in its sole discretion.

Amended and Restated 1998 LTIP (as of November 15, 2006)

14

 

     (iv) Any Other Stock Based Award that has a Restriction Period or Deferral Period that
is based on Performance Criteria shall have a Restriction Period or Deferral Period, as the
case may be, of at least one (1) year.

     (v) Any Other Stock Based Award that has a Restriction Period or Deferral Period that
is based on service shall have a Restriction Period or Deferral Period, as the case may be,
of at least three (3) years.

     (vi) In determining the Restriction Period or Deferral Period for any Other Stock Based
Award granted in replacement of a non-Plan award of Stock or non-Plan award valued by
reference to the Stock, the Restriction Period or Deferral Period, as applicable, shall be
deemed to have commenced on the date such non-Plan award was originally granted.

     SECTION 11. Performance Related Awards.

     (a) Performance Objectives. Notwithstanding anything else contained in the Plan to the
contrary, unless the Committee otherwise determines at the time of grant, any award of Restricted
Stock or Deferred Stock or Other Stock Based Awards to an officer who is subject to the reporting
requirements of Section 16(a) of the Exchange Act other than an award which will vest solely on the
basis of the passage of time, shall become vested, if at all, upon the determination by the
Committee that performance objectives established by the Committee have been attained, in whole or
in part (a “Performance Award”). Such performance objectives shall be determined over a
measurement period or periods established by the Committee (which period or periods shall not be
less than one (1) year) and related to at least one of the following criteria, which may be
determined solely by reference to the performance of: (i) the Company; (ii) a Subsidiary; (iii) an
Affiliate; (iv) a division or unit of any of the foregoing or based on comparative performance of
any of the foregoing relative to past performance or to other companies: (A) return on equity; (B)
total shareholder return; (C) revenues; (D) cash flows, revenues and/or earnings relative to other
parameters (e.g., net or gross assets); (E) operating income; (F) return on investment; (G) changes
in the value of the Stock; and (H) return on assets (the “Performance Criteria”). Excluding Stock
Options and/or Stock Appreciation Rights granted hereunder, the maximum number of shares of Stock
that may be subject to any such Performance Award granted to any key employee in any calendar year
shall not exceed 100,000 shares, as such number may be adjusted pursuant to Section 3.

     (b) Annual Incentive Compensation. The Committee may, in addition to the Performance Awards
described above, pay cash amounts under the Plan or any other plan or arrangement approved by the
Committee, provided such other plan or arrangement is in conformity with the provisions of this
Section 11(b), to any officer of the Company or any Subsidiary who is subject to the reporting
requirements of Section 16(a) of the Exchange Act upon the achievement, in whole or in part, of
performance goals or objectives established in
writing by the Committee with respect to such performance periods as the Committee shall determine.
Any such goals or objectives shall be based on one or more of the Performance Criteria.
Notwithstanding anything else contained herein to the contrary, the maximum amount of any such cash
payment to any single officer with respect to any calendar year shall not exceed

Amended and Restated 1998 LTIP (as of November 15, 2006)

15

 

the lesser of (i)
$2,000,000; or (ii) twice the officer’s annual base salary as in effect on the last day of the
preceding fiscal year.

     (c) Interpretation. Notwithstanding anything else contained in the Plan to the contrary, to
the extent required to so qualify any Performance Award as other performance based compensation
within the meaning of Section 162(m)(4)(C) of the Code, the Committee shall not be entitled to
exercise any discretion otherwise authorized under the Plan (such as the right to accelerate
vesting without regard to the achievement of the relevant performance objectives) with respect to
such Performance Award if the ability to exercise such discretion (as opposed to the exercise of
such discretion) would cause such award to fail to qualify as other performance based compensation.

     SECTION 12. Change in Control Provisions.

     (a) Impact of Event. Notwithstanding the provisions of Sections 7(c)(iv), 7(c)(v), 8(b)(vi),
8(b)(vii), 10(b)(iv), and10(b)(v), in the event of:

     (i) a “Change in Control” as defined in Section 12(b), or

     (ii) a “Potential Change in Control” as defined in Section 12(c), but only if and to
the extent so determined by the Committee or the Board (subject to any right of approval
expressly reserved by the Committee or the Board at the time of such determination):

     (A) Any Stock Options awarded under the Plan not previously exercisable and vested
shall become fully exercisable and vested;

     (B) The restrictions and deferral limitations applicable to any Restricted Stock,
Deferred Stock, Stock Purchase Rights, Other Stock Based Awards and Performance Related
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 and any Performance Criteria shall be deemed
met at target; and

     (C) The value of all outstanding LTIP Awards to the extent vested may at the sole
discretion of the Committee at or after grant but prior to any Change in Control, be cashed
out on the basis of the “Change in Control Price” as defined in Section 12(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 Committee may determine prior to the Change in Control.

     (b) Definition of “Change in Control”. For purposes of Section 12(a), a “Change in Control”
means the happening of any of the following:

     (i) When any “person” as defined in Section 3(a)(9) of the Exchange Act and as used in
Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) of the
Exchange Act but excluding the Company, any Subsidiary or any

Amended and Restated 1998 LTIP (as of November 15, 2006)

16

 

employee benefit plan
sponsored or maintained by the Company or any Subsidiary (including any trustee of such plan
acting as trustee), directly or indirectly, becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act, as amended from time to time), of securities of the
Company representing fifteen percent (15%) or more of the combined voting power of the
Company’s then outstanding securities;

     (ii) The individuals who, as of the Effective Date of this Plan, constitute the Board
(the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the Effective Date
of the Plan whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a person other than the Board; or

     (iii) Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company or the acquisition of
assets of another corporation (a “Business Combination”), in each case, unless, following
such Business Combination: (A) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the then outstanding shares of Stock of the
Company and the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors immediately prior to such
Business Combination beneficially own, directly or indirectly, more than sixty percent (60%)
of, respectively, the then outstanding shares of common stock and the combined voting power
of the then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company’s assets either directly or through one
or more subsidiaries); (B) no person (excluding any employee benefit plan (or related trust)
of the Company or such corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, fifteen percent (15%) or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the Business
Combination; and (C) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the
initial agreement, or of the action of the Board, providing for such Business Combination;
or

     (iv) Approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.

Amended and Restated 1998 LTIP (as of November 15, 2006)

17

 

     (c) Definition of Potential Change in Control. For purposes of Section 12(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 12(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 five percent (5%) or more of the combined voting power of the Company’s
outstanding securities and the adoption by the Board 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 the purposes of this Section 12, “Change in Control Price”
means the highest price per share paid in any transaction reported on the New York Stock Exchange
Composite Index, 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 sixty (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 cashout occurs under
Section 12(a)(ii)(C).

     SECTION 13. Amendments and Termination.

     The Board may amend, alter, or discontinue the Plan, but no amendment, alteration, or
discontinuation shall be made which would impair the rights of an optionee or participant under an
LTIP Award theretofore granted, without the optionee’s or 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.

     Subject to the above provisions, the Board shall have broad authority to amend the Plan to
take into account changes in applicable securities and tax laws and accounting rules, as well as
other developments.

     SECTION 14. 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

Amended and Restated 1998 LTIP (as of November 15, 2006)

18

 

may authorize the
creation of trusts or other arrangements to meet the obligations created under the Plan to deliver
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 15. 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 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 Securities and Exchange Commission, any
stock exchange upon which the 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 stockholder 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) Except as the participant and the Company may otherwise agree, 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.
Unless otherwise determined by the Committee, withholding obligations may be settled with Stock,
including 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 in Deferred Stock or other types of Plan awards) at the time of any dividend
payment shall only be permissible if sufficient shares of Stock are available under

Amended and Restated 1998 LTIP (as of November 15, 2006)

19

 

Section 3 for
such reinvestment (taking into account then outstanding Stock Options, Stock Purchase Rights and
other Plan awards).

     (f) The Committee may permit a participant to postpone the delivery of Stock under any award,
including a Stock Option, under the Plan upon such terms and conditions as the Committee shall
determine.

     (g) 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.

     SECTION 16. Effective Date of Plan.

     As amended, the Plan shall be effective as of May 21, 1998.

     SECTION 17. Term of Plan.

     No LTIP Award shall be granted pursuant to the Plan on or after the tenth anniversary of the
date of shareholder approval, but awards granted prior to such tenth anniversary may extend beyond
that date, in accordance with the terms of such awards.

     SECTION 18. Applicability to Grants under 1988 Plan.

     The provisions of the Plan relating to stock options, stock appreciation rights, restricted
stock awards, deferred stock awards, stock purchase rights, other stock-based awards or performance
related awards shall apply to, and govern existing and subsequent stock options, stock appreciation
rights, restricted stock awards, deferred stock awards, stock purchase rights, other stock-based
awards or performance related awards granted under the 1988 Long Term Incentive Plan, as amended.

Amended and Restated 1998 LTIP (as of November 15, 2006)

20

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