Document:

ex10-6.htm

    Exhibit
10.6

    
      
 

      THE
BLACK & DECKER 1996 STOCK OPTION PLAN

       

       

      The
proper execution of the duties and responsibilities of the executive and other
key employees of The Black & Decker Corporation and its subsidiaries is a
vital factor in the continued growth and success of the Corporation. Toward this
end, it is necessary to attract and retain effective and capable employees to
assume positions that contribute materially to the successful operation of the
business of the Corporation. It will benefit the Corporation, therefore, to bind
the interests of these persons more closely to its own interests by offering
them an attractive opportunity to acquire a proprietary interest in the
Corporation and thereby provide them with added incentive to remain in its
employ and to increase the prosperity, growth, and earnings of the Corporation.
This stock option plan will serve these purposes.

      

      ARTICLE
1:00

       

      Definitions

      

      The following terms whenever used
herein shall have the meanings set forth below.

      

      
        	
                1:01

              	
                The
      term “Board of Directors” shall mean the Board of Directors of the
      Corporation.

              
	
                1:02

              	
                The
      term “Change in Control” shall have the meaning provided in Section 10:02
      of the Plan.

              
	
                1:03

              	
                The
      term “Code” shall mean the Internal Revenue Code of 1986, as amended, and
      any regulations promulgated thereunder.

              
	
                1:04

              	
                The
      term “Committee” shall mean a committee to be appointed by the Board of
      Directors to consist of three or more of those members of the Board of
      Directors who are disinterested persons within the meaning of Rule 16b-3
      promulgated under the Exchange Act and are outside directors within the
      meaning of the Section 162(m) Regulations, as each may be amended from
      time to time.

              
	
                1:05

              	
                The
      term “Common Stock” shall mean the shares of common stock, par value $.50
      per share, of the Corporation.

              
	
                1:06

              	
                The
      term “Corporation” shall mean The Black & Decker
      Corporation.

              
	
                1:07

              	
                The
      term “Exchange Act” shall mean the Securities Exchange Act of 1934, as
      amended.

              
	
                1:08

              	
                The
      term “Fair Market Value of a share of Common Stock” shall mean the average
      of the high and low sale price per share of Common Stock as finally
      reported in the New York Stock Exchange Composite Transactions for the New
      York Stock Exchange, or if shares of Common Stock are not sold on such
      date, the average of the high and low sale price per share of Common Stock
      as finally reported in the New York Stock Exchange Composite Transactions
      for the New York Stock Exchange for the most recent prior date on which
      shares of Common Stock were sold.

              
	
                1:09

              	
                The
      term “Incentive Stock Option” shall mean any Option granted pursuant to
      the Plan that is designated as an Incentive Stock Option and which
      satisfies the requirements of Section 422(b) of the
  Code.

              
	
                1:10

              	
                The
      term “Limited Stock Appreciation Right” shall mean a limited tandem stock
      appreciation right that entitles the holder to receive cash upon a Change
      in Control pursuant to Article 10:00 of the Plan.

              
	
                1:11

              	
                The
      term “Nonqualified Stock Option” shall mean any Option granted pursuant to
      the Plan that is not an Incentive Stock Option.

              
	
                1:12

              	
                The
      term “Option” or “Stock Option” shall mean a right granted pursuant to the
      Plan to purchase shares of Common Stock, and shall include the terms
      Incentive Stock Option and Nonqualified Stock Option.

              
	
                1:13

              	
                The
      term “Option Agreement” shall mean the written agreement representing
      Options granted pursuant to the Plan as contemplated by Article 6:00 of
      the Plan.

              

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

         

        	
                1:14

              	
                The
      term “Plan” shall mean The Black & Decker 1996 Stock Option Plan as
      approved by the Board of Directors on February 14, 1996, and adopted by
      the stockholders of the Corporation at the 1996 Annual Meeting of
      Stockholders, as the same may be amended from time to
  time.

              
	
                1:15

              	
                The
      term “Rights” shall include Stock Appreciation Rights and Limited Stock
      Appreciation Rights.

              
	
                1:16

              	
                The
      term “Section 162(m) Regulations” shall mean the regulations adopted
      pursuant to Section 162(m) of the Code.

              
	
                1:17

              	
                The
      term “Stock Appreciation Right” shall mean a right to receive cash or
      shares of Common Stock pursuant to Article 8:00 of the
    Plan.

              
	
                1:18

              	
                The
      term “Stock Appreciation Right Agreement” shall mean the written agreement
      representing Stock Appreciation Rights granted pursuant to the Plan as
      contemplated by Article 8:00 of the Plan.

              
	
                1:19

              	
                The
      term “Stock Appreciation Right Base Price” shall mean the base price for
      determining the value of a Stock Appreciation Right under Section 8:02,
      which Stock Appreciation Right Base Price shall be established by the
      Committee at the time of the grant of Stock Appreciation Rights pursuant
      to the Plan and shall not be less than the Fair Market Value of a share of
      Common Stock on the date of grant. If the Committee does not establish a
      specific Stock Appreciation Right Base Price at the time of grant, the
      Stock Appreciation Right Base Price shall be equal to the Fair Market
      Value of a share of Common Stock on the date of grant of the Stock
      Appreciation Right.

              
	
                1:20

              	
                The
      term “subsidiary” or “subsidiaries” shall mean a corporation of which
      capital stock possessing 50% or more of the total combined voting power of
      all classes of its capital stock entitled to vote generally in the
      election of directors is owned in the aggregate by the Corporation
      directly or indirectly through one or more
  subsidiaries.

              

      

      

      ARTICLE
2:00

       

      Effective
Date of the Plan

      

      
        	
                2:01

              	
                The
      Plan shall become effective upon stockholder approval, provided that such
      approval is received on or before May 31, 1996, and provided further that
      the Committee may grant Options or Rights pursuant to the Plan prior to
      stockholder approval if such Options or Rights by their terms are
      contingent upon subsequent stockholder approval of the
    Plan.

              

      

      

      ARTICLE
3:00

       

      Administration

      

      
        	
                3:01

              	
                The
      Plan shall be administered by the Committee.

              
	
                3:02

              	
                The
      Committee may establish, from time to time and at any time, subject to the
      limitations of the Plan as set forth herein, such rules and regulations
      and amendments and supplements thereto, as it deems necessary to comply
      with applicable law and regulation and for the proper administration of
      the Plan. A majority of the members of the Committee shall constitute a
      quorum. The vote of a majority of a quorum shall constitute action by the
      Committee.

              
	
                3:03

              	
                The
      Committee shall from time to time determine the names of those executives
      and other key employees who, in its opinion, should receive Options or
      Rights, and shall determine the numbers of shares on which Options should
      be granted or upon which Rights should be based to each such person and
      the nature of the Options or Rights to be granted.

              
	
                3:04

              	
                Options
      and Rights shall be granted by the Corporation only upon the prior
      approval of the Committee and upon the execution of an Option Agreement or
      Stock Appreciation Right Agreement between the Corporation and the Option
      holder or the Stock Appreciation Right holder.

              
	
                3:05

              	
                The
      Committee’s interpretation and construction of the provisions of the Plan
      and the rules and regulations adopted by the Committee shall be final. No
      member of the Committee or the Board of Directors shall be liable for any
      action taken or determination made, in respect of the Plan, in good
      faith.

              

      

     

     

    
      
        
        

      

      
        - 2
-

        
          

        

      

      
        
        

      

    

    
      

      ARTICLE
4:00

       

      Participation
in the Plan

      

      
        	
                4:01

              	
                Participation
      in the Plan shall be limited to such executives and other key employees of
      the Corporation and its subsidiaries who at the date of grant of an Option
      or Right are regular, full-time employees of the Corporation or any of its
      subsidiaries and who shall be designated by the
  Committee.

              
	
                4:02

              	
                No
      member of the Board of Directors who is not also an employee shall be
      eligible to participate in the Plan. No employee who owns beneficially
      more than 10% of the total combined voting power of all classes of stock
      of the Corporation shall be eligible to participate in the
      Plan.

              
	
                4:03

              	
                No
      employee may be granted, in any calendar year, Options or Stock
      Appreciation Rights exceeding 100,000 in the
  aggregate.

              

      

      

      ARTICLE
5:00

       

      Stock
Subject to the Plan

      

      
        	
                5:01

              	
                There
      shall be reserved for the granting of Options or Stock Appreciation Rights
      pursuant to the Plan and for issuance and sale pursuant to such Options or
      Stock Appreciation Rights 2,400,000 shares of Common Stock. To determine
      the number of shares of Common Stock available at any time for the
      granting of Options or Stock Appreciation Rights, there shall be deducted
      from the total number of reserved shares of Common Stock, the number of
      shares of Common Stock in respect of which Options have been granted
      pursuant to the Plan that are still outstanding or have been exercised.
      The shares of Common Stock to be issued upon the exercise of Options or
      Stock Appreciation Rights granted pursuant to the Plan shall be made
      available from the authorized and unissued shares of Common Stock. If for
      any reason shares of Common Stock as to which an Option has been granted
      cease to be subject to purchase thereunder, then such shares of Common
      Stock again shall be available for issuance pursuant to the exercise of
      Options or Stock Appreciation Rights pursuant to the Plan. Except as
      provided in Section 5:03, however, the aggregate number of shares of
      Common Stock that may be issued upon the exercise of Options and Stock
      Appreciation Rights pursuant to the Plan shall not exceed 2,400,000 shares
      and no more than 2,400,000 Stock Appreciation Rights shall be granted
      pursuant to the Plan.

              
	
                5:02

              	
                Proceeds
      from the purchase of shares of Common Stock upon the exercise of Options
      granted pursuant to the Plan shall be used for the general business
      purposes of the Corporation.

              
	
                5:03

              	
                Subject
      to the provisions of Section 10:02, in the event of reorganization,
      recapitalization, stock split, stock dividend, combination of shares of
      Common Stock, merger, consolidation, share exchange, acquisition of
      property or stock, or any change in the capital structure of the
      Corporation, the Committee shall make such adjustments as may be
      appropriate in the number and kind of shares reserved for purchase by
      executives or other key employees, in the number, kind and price of shares
      covered by Options and Stock Appreciation Rights granted pursuant to the
      Plan but not then exercised, and in the number of Rights, if any, granted
      pursuant to the Plan but not then
exercised.

              

      

      

      ARTICLE
6:00

       

      Terms
and Conditions of Options

      

      
        	
                6:01

              	
                Each
      Option granted pursuant to the Plan shall be evidenced by an Option
      Agreement in such form and with such terms and conditions (including,
      without limitation, noncompete, confidentiality or other similar
      provisions) as the Committee from time to time may determine. The right of
      an Option holder to exercise his or her Option shall at all times be
      subject to the terms and conditions set forth in the respective Option
      Agreement.

              
	
                6:02

              	
                The
      exercise price per share for Options shall be established by the Committee
      at the time of the grant of Options pursuant to the Plan and shall not be
      less than the Fair Market Value of a share of Common Stock on the date on
      which the Option is granted. If the Committee does not establish a
      specific exercise price per share at the time of grant, the exercise price
      per share shall be equal to the Fair Market Value of a share of Common
      Stock on the date of grant of the
Options.

              

         

         

        
          
            
            

          

          
            - 3
-

            
              

            

          

          
            
            

          

        

         

         

        	
                6:03

              	
                Each
      Option, subject to the other limitations set forth in the Plan, may extend
      for a period of up to 10 years from the date on which it is granted. The
      term of each Option shall be determined by the Committee at the time of
      grant of the Option, provided that if no term is established by the
      Committee the term of the Option shall be 10 years from the date on which
      it is granted.

              
	
                6:04

              	
                Unless
      otherwise provided by the Committee, the number of shares of Common Stock
      subject to each Option shall be divided into four installments of 25%
      each. The first installment shall be exercisable 12 months after the date
      the Option was granted, and each succeeding installment shall be
      exercisable 12 months after the date the immediately preceding installment
      became exercisable. If an Option holder does not purchase the full number
      of shares of Common Stock that he or she at any time has become entitled
      to purchase, he or she may purchase all or any part of those shares of
      Common Stock at any subsequent time during the term of the
      Option.

              
	
                6:05

              	
                Options
      shall be nontransferable and nonassignable, except that Options may be
      transferred by testamentary instrument or by the laws of descent and
      distribution.

              
	
                6:06

              	
                Upon
      voluntary or involuntary termination of an Option holder’s employment, his
      or her Option and all rights thereunder shall terminate effective at the
      close of business on the date the Option holder ceases to be a regular,
      full-time employee of the Corporation or any of its subsidiaries, except
      (i) to the extent previously exercised, (ii) as provided in Sections 6:07,
      6:08, and 6:09, and (iii) in the case of involuntary termination of
      employment, for a period of 30 days thereafter the Option holder shall be
      entitled to exercise that portion of the Option which was exercisable at
      the close of business on the date the Option holder ceased to be a
      regular, full-time employee of the Corporation or any of its
      subsidiaries.

              
	
                6:07

              	
                In
      the event an Option holder (i) ceases to be an executive or other key
      employee of the Corporation or any of its subsidiaries due to involuntary
      termination, (ii) takes a leave of absence from the Corporation or any of
      its subsidiaries for personal reasons or as a result of entry into the
      armed forces of the United States, or any of the departments or agencies
      of the United States government, or (iii) terminates employment by reason
      of illness, disability, or other special circumstance, the Committee may
      consider his or her case and may take such action in respect of the
      related Option Agreement as it may deem appropriate under the
      circumstances, including accelerating the time previously granted Options
      may be exercised and extending the time following the Option holder’s
      termination of employment during which the Option holder is entitled to
      purchase the shares of Common Stock subject to such Options, provided that
      in no event may any Option be exercised after the expiration of the term
      of the Option.

              
	
                6:08

              	
                If
      an Option holder dies during the term of his or her Option without having
      fully exercised the Option, the executor or administrator of his or her
      estate or the person who inherits the right to exercise the Option by
      bequest or inheritance shall have the right within three years of the
      Option holder’s death to purchase the number of shares of Common Stock
      that the deceased Option holder was entitled to purchase at the date of
      death, after which the Option shall lapse, provided that in no event may
      any Option be exercised after the expiration of the term of the
      Option.

              
	
                6:09

              	
                If
      an Option holder’s employment is terminated without having fully exercised
      his or her Option and (i) the Option holder is 62 years of age or older,
      or (ii) the Option holder has been employed by the Corporation or any of
      its subsidiaries for at least 10 years and the Option holder’s age plus
      years of such employment total not less than 55 years, then such Option
      holder shall have the right within three years of the Option holder’s
      termination of employment to purchase the number of shares of Common Stock
      that the Option holder was entitled to purchase at the date of
      termination, after which the Option shall lapse, provided that in no event
      may any Option be exercised after the expiration of the term of the
      Option.

              

         

         

        
          
            
            

          

          
            - 4
-

            
              

            

          

          
            
            

          

        

         

         

        	
                
6:10

              	
                The
      granting of an Option pursuant to the Plan shall not constitute or be
      evidence of any agreement or understanding, express or implied, on the
      part of the Corporation or any of its subsidiaries to employ the Option
      holder for any specified period.

              
	
                6:11

              	
                In
      addition to the general terms and conditions set forth in this Article
      6:00 in respect of Options granted pursuant to the Plan, Incentive Stock
      Options granted pursuant to the Plan shall be subject to the following
      additional terms and conditions:

              
	 
      	
                (a)

              	
                The
      aggregate fair market value (determined at the time the Incentive Stock
      Option is granted) of the shares of Common Stock in respect of which
      “incentive stock options” are exercisable for the first time by the Option
      holder during any calendar year (under all such plans of the Corporation
      and its subsidiaries) shall not exceed $100,000; and

              
	 
      	
                (b)

              	
                The
      Option Agreement in respect of an Incentive Stock Option may contain any
      other terms and conditions specified by the Board of Directors that are
      not inconsistent with the Plan, except that such terms and conditions must
      be consistent with the requirements for “incentive stock options” under
      Section 422 of the Code.

              

      

      

      ARTICLE
7:00

       

      Methods
of Exercise of Options

      

      
        	
                7:01

              	
                An
      Option holder (or other person or persons, if any, entitled to exercise an
      Option hereunder) desiring to exercise an Option granted pursuant to the
      Plan as to all or part of the shares of Common Stock covered by the Option
      shall (i) notify the Corporation in writing at its principal office at 701
      East Joppa Road, Towson, Maryland 21286, to that effect, specifying the
      number of shares of Common Stock to be purchased and the method of payment
      therefor, and (ii) make payment or provision for payment for the shares of
      Common Stock so purchased in accordance with this Article 7:00. Such
      written notice may be given by means of a facsimile transmission. If a
      facsimile transmission is used, the Option holder should mail the original
      executed copy of the written notice to the Corporation promptly
      thereafter.

              
	
                7:02

              	
                Payment
      or provision for payment shall be made as follows:

              
	 
      	
                (a)

              	
                The
      Option holder shall deliver to the Corporation at the address set forth in
      Section 7:01 United States currency in an amount equal to the aggregate
      purchase price of the shares of Common Stock as to which such exercise
      relates; or

              
	 
      	
                (b)

              	
                The
      Option holder shall tender to the Corporation shares of Common Stock
      already owned by the Option holder that, together with any cash tendered
      therewith, have an aggregate fair market value (determined based on the
      Fair Market Value of a share of Common Stock on the date the notice set
      forth in Section 7:01 is received by the Corporation) equal to the
      aggregate purchase price of the shares of Common Stock as to which such
      exercise relates; or

              
	 
      	
                (c)

              	
                The
      Option holder shall deliver to the Corporation an exercise notice together
      with irrevocable instructions to a broker to deliver promptly to the
      Corporation the amount of sale or loan proceeds necessary to pay the
      aggregate purchase price of the shares of Common Stock as to which such
      exercise relates and to sell the shares of Common Stock to be issued upon
      exercise of the Option and deliver the cash proceeds less commissions and
      brokerage fees to the Option holder or to deliver the remaining shares of
      Common Stock to the Option holder.

              
	 
      	
                Notwithstanding
      the foregoing provisions, the Committee, in granting Options pursuant to
      the Plan, may limit the methods in which an Option may be exercised by any
      person and, in processing any purported exercise of an Option granted
      pursuant to the Plan, may refuse to recognize the method of exercise
      selected by the Option holder (other than the method of exercise set forth
      in Section 7:02(a)) if, (A) in the opinion of counsel to the Corporation,
      (i) the Option holder is or within the six months preceding such exercise
      was subject to reporting under Section 16(a) of the Exchange Act and (ii)
      there is a substantial likelihood that the method of exercise selected by
      the Option holder would subject the Option holder to a substantial risk of
      liability under Section 16 of the Exchange Act, or (B) in the opinion of
      the Committee, the method of exercise could have an adverse tax or
      accounting effect to the Corporation.

              

         

         

        
          
            
            

          

          
            - 5
-

            
              

            

          

          
            
            

          

        

         

         

        	
                7:03

              	
                In
      addition to the alternative methods of exercise set forth in Section 7:02,
      holders of Nonqualified Stock Options shall be entitled, at or prior to
      the time the written notice provided for in Section 7:01 is delivered to
      the Corporation, to elect to have the Corporation withhold from the shares
      of Common Stock to be delivered upon exercise of the Nonqualified Stock
      Option that number of shares of Common Stock (determined based on the Fair
      Market Value of a share of Common Stock on the date the notice set forth
      in Section 7:01 is received by the Corporation) necessary to satisfy any
      withholding taxes attributable to the exercise of the Nonqualified Stock
      Option. Alternatively, such holder of a Nonqualified Stock Option may
      elect to deliver previously owned shares of Common Stock upon exercise of
      the Nonqualified Stock Option to satisfy any withholding taxes
      attributable to the exercise of the Nonqualified Stock Option. The maximum
      amount that an Option holder may elect to have withheld from the shares of
      Common Stock otherwise deliverable upon exercise or the maximum number of
      previously owned shares an Option holder may deliver shall be based on the
      maximum federal, state and local taxes payable by the Option holder.
      Notwithstanding the foregoing provisions, the Committee may include in the
      Option Agreement relating to any such Nonqualified Stock Option provisions
      limiting or eliminating the Option holder’s ability to pay his or her
      withholding tax obligation with shares of Common Stock or, if no such
      provisions are included in the Option Agreement but in the opinion of the
      Committee such withholding could have an adverse tax or accounting effect
      to the Corporation, at or prior to exercise of the Nonqualified Stock
      Option the Committee may so limit or eliminate the Option holder’s ability
      to pay his or her withholding tax obligation with shares of Common Stock.
      Notwithstanding the foregoing provisions, a holder of a Nonqualified Stock
      Option may not elect any of the methods of satisfying his or her
      withholding tax obligation in respect of any exercise if, in the opinion
      of counsel to the Corporation, (i) the holder of the Nonqualified Stock
      Option is or within the six months preceding such exercise was subject to
      reporting under Section 16(a) of the Exchange Act and (ii) there is a
      substantial likelihood that the election or timing of the election would
      subject the holder to a substantial risk of liability under Section 16 of
      the Exchange Act.

              
	
                7:04

              	
                An
      Option holder at any time may elect in writing to abandon an Option in
      respect of all or part of the number of shares of Common Stock as to which
      the Option shall not have been exercised.

              
	
                7:05

              	
                An
      Option holder shall have none of the rights of a stockholder of the
      Corporation until the shares of Common Stock covered by the Option are
      issued to him upon exercise of the
Option.

              

      

      

      ARTICLE
8:00

       

      Terms
and Conditions of Stock Appreciation Rights

      

      
        	
                8:01

              	
                Each
      Stock Appreciation Right granted pursuant to the Plan shall be evidenced
      by a Stock Appreciation Right Agreement in such form and with such terms
      and conditions (including, without limitation, noncompete, confidentiality
      or other similar provisions) as the Committee from time to time may
      determine. Notwithstanding the foregoing provision, Stock Appreciation
      Rights granted in tandem with a related Option shall be evidenced by the
      Option Agreement in respect of the related Option. The right of a Stock
      Appreciation Right holder to exercise his or her Stock Appreciation Rights
      shall at all times be subject to the terms and conditions set forth in the
      respective Stock Appreciation Right Agreement.

              
	
                8:02

              	
                Except
      as provided in Section 9:03, each Stock Appreciation Right shall entitle
      the holder, subject to the terms and conditions of the Plan, to receive
      upon exercise of the Stock Appreciation Right an amount, payable in cash
      or shares of Common Stock (determined based on the Fair Market Value of a
      share of Common Stock on the date the notice set forth in Section 9:01 is
      received by the Corporation), equal to the Fair Market Value of a share of
      Common Stock on the date of receipt by the Corporation of the notice
      required by Section 9:01 less the Stock Appreciation Right Base Price.
      Notwithstanding the foregoing provision, each Stock Appreciation Right
      that is granted in tandem with a related Option shall entitle the holder,
      subject to the terms and conditions of the Plan, to surrender to the
      Corporation for cancellation all or a portion of the related Option, but
      only to the extent such Stock Appreciation Right and related Option then
      are exercisable, and to be paid therefor an amount, payable in cash or
      shares of Common Stock (determined based on the Fair Market Value of a
      share of Common Stock on the date the notice set forth in Section 9:01 is
      received by the Corporation), equal to the Fair Market Value of a share of
      Common Stock on the date of receipt by the Corporation of the notice
      required by Section 9:01 less the Stock Appreciation Right Base
      Price.

              

         

         

        
          
            
            

          

          
            - 6
-

            
              

            

          

          
            
            

          

        

         

         

        	
                8:03

              	
                Each
      Stock Appreciation Right, subject to the other limitations set forth in
      the Plan, may extend for a period of up to 10 years from the date on which
      it is granted. The term of each Stock Appreciation Right shall be
      determined by the Committee at the time of grant of the Stock Appreciation
      Right, provided that if no term is established by the Committee the term
      of the Stock Appreciation Right shall be 10 years from the date on which
      it is granted.

              
	
                8:04

              	
                Unless
      otherwise provided by the Committee, the number of Stock Appreciation
      Rights granted pursuant to each Stock Appreciation Right Agreement shall
      be divided into four installments of 25% each. The first installment shall
      be exercisable 12 months after the date the Stock Appreciation Right was
      granted, and each succeeding installment shall be exercisable 12 months
      after the date the immediately preceding installment became exercisable.
      If a Stock Appreciation Right holder does not exercise the Stock
      Appreciation Right to the extent that he or she at any time has become
      entitled to exercise, the Stock Appreciation Right holder may exercise all
      or any part of the Stock Appreciation Right at any subsequent time during
      the term of the Stock Appreciation Right.

              
	
                8:05

              	
                Stock
      Appreciation Rights shall be nontransferable and nonassignable, except
      that Stock Appreciation Rights may be transferred by testamentary
      instrument or by the laws of descent.

              
	
                8:06

              	
                Upon
      voluntary or involuntary termination of a Stock Appreciation Right
      holder’s employment, his or her Stock Appreciation Right and all rights
      thereunder shall terminate effective as of the close of business on the
      date the Stock Appreciation Right holder ceases to be a regular, full-time
      employee of the Corporation or any of its subsidiaries, except (i) to the
      extent previously exercised, (ii) except as provided in Sections 8:07,
      8:08, and 8:09, and (iii) in the case of involuntary termination of
      employment, for a period of 30 days thereafter the Stock Appreciation
      Right holder shall be entitled to exercise that portion of the Stock
      Appreciation Right which was exercisable at the close of business on the
      date the Stock Appreciation Right holder ceased to be a regular, full-time
      employee of the Corporation or any of its subsidiaries.

              
	
                8:07

              	
                In
      the event a Stock Appreciation Right holder (i) ceases to be an executive
      or other key employee of the Corporation or any of its subsidiaries due to
      involuntary termination, (ii) takes a leave of absence from the
      Corporation or any of its subsidiaries for personal reasons or as a result
      of entry into the armed forces of the United States, or any of the
      departments or agencies of the United States government, or (iii)
      terminates employment by reason of illness, disability, or other special
      circumstance, the Committee may consider his or her case and may take such
      action in respect of the related Stock Appreciation Right Agreement as it
      may deem appropriate under the circumstances, including accelerating the
      time previously granted Stock Appreciation Rights may be exercised and
      extending the time following the Stock Appreciation Right holder’s
      termination of employment during which the Stock Appreciation Right holder
      is entitled to exercise his or her Stock Appreciation Rights, provided
      that in no event may any Stock Appreciation Right be exercised after the
      expiration of the term of the Stock Appreciation Right.

              
	
                8:08

              	
                If
      a Stock Appreciation Right holder dies during the term of his or her Stock
      Appreciation Right without having fully exercised the Stock Appreciation
      Right, the executor or administrator of his or her estate or the person
      who inherits the right to exercise the Stock Appreciation Right by bequest
      or inheritance shall have the right within three years of the Stock
      Appreciation Right holder’s death to exercise the Stock Appreciation
      Rights that the deceased Stock Appreciation Right holder was entitled to
      purchase at the date of death, after which the Stock Appreciation Right
      shall lapse, provided that in no event may any Stock Appreciation Right be
      exercised after the expiration of the term of the Stock Appreciation
      Right.

              

         

         

        
          
            
            

          

          
            - 7
-

            
              

            

          

          
            
            

          

        

         

        	
                8:09

              	
                If
      a Stock Appreciation Right holder’s employment is terminated without
      having fully exercised his or her Stock Appreciation Right and (i) the
      Stock Appreciation Right holder is 62 years of age or older, or (ii) the
      Stock Appreciation Right holder has been employed by the Corporation or
      any of its subsidiaries for at least 10 years and the Stock Appreciation
      Right holder’s age plus years of such employment total not less than 55
      years, then such Stock Appreciation Right holder shall have the right
      within three years of the Stock Appreciation Right holder’s termination of
      employment to exercise the Stock Appreciation Rights that the Stock
      Appreciation Right holder was entitled to exercise at the date of
      termination, after which the Stock Appreciation Right shall lapse,
      provided that in no event may any Stock Appreciation Right be exercised
      after the expiration of the term of the Stock Appreciation
      Right.

              
	
                8:10

              	
                The
      granting of a Stock Appreciation Right pursuant to the Plan shall not
      constitute or be evidence of any agreement or understanding, expressed or
      implied, on the part of the Corporation or any of its subsidiaries to
      employ the Stock Appreciation Right holder for any specified
      period.

              

      

      

      ARTICLE
9:00

       

      Methods
of Exercise of Stock Appreciation Rights

      

      
        	
                9:01

              	
                A
      Stock Appreciation Right holder (or other person or persons, if any,
      entitled to exercise a Stock Appreciation Right hereunder) desiring to
      exercise a Stock Appreciation Right granted pursuant to the Plan shall
      notify the Corporation in writing at its principal office at 701 East
      Joppa Road, Towson, Maryland 21286, to that effect, specifying the number
      of Stock Appreciation Rights to be exercised. Such written notice may be
      given by means of a facsimile transmission. If a facsimile transmission is
      used, the Stock Appreciation Right holder should mail the original
      executed copy of the written notice to the Corporation promptly
      thereafter.

              
	
                9:02

              	
                The
      Committee in its sole and absolute discretion shall determine whether a
      Stock Appreciation Right shall be settled upon exercise in cash or in
      shares of Common Stock. The Committee, in making such a determination, may
      from time to time adopt general guidelines or determinations as to whether
      Stock Appreciation Rights shall be settled in cash or in shares of Common
      Stock.

              
	
                9:03

              	
                In
      the event that a Stock Appreciation Right holder delivers the notice
      required by Section 9:01 and, in the opinion of counsel to the
      Corporation, (i) the Stock Appreciation Right holder is or within the six
      months preceding such notice was subject to reporting under Section 16(a)
      of the Exchange Act and (ii) there is a substantial likelihood that the
      exercise of the Stock Appreciation Right would subject the Stock
      Appreciation Right holder to a substantial risk of liability under Section
      16 of the Exchange Act, the Corporation may refuse to recognize the Stock
      Appreciation Right holder’s exercise notice. In the event that a Stock
      Appreciation Right is exercised by a person who, in the opinion of counsel
      to the Corporation, is subject to reporting under Section 16(a) of the
      Exchange Act, the notice required by Section 9:01 is received by the
      Corporation within the “window periods” specified in Rule 16b-3(e) of the
      Exchange Act (or any successor thereto), and the Stock Appreciation Right
      is to be settled in cash, the Stock Appreciation Right holder shall be
      entitled to receive, in lieu of the amount provided for in Section 8:02 of
      the Plan, an amount equal to the highest Fair Market Value of a share of
      Common Stock during the applicable “window period” specified in Rule
      16b-3(e) of the Exchange Act (or any successor thereto) less the Stock
      Appreciation Right Base Price.

              

      

      
 

      ARTICLE
10:00

       

      Limited
Stock Appreciation Rights

      

      
        	
                10:01

              	
                Notwithstanding
      any other provision of the Plan, the Committee, in its sole and absolute
      discretion, may grant Limited Stock Appreciation Rights entitling Option
      holders to receive, in connection with a Change in Control (as defined in
      Section 10:02), a cash payment in cancellation of all of their Options
      which are outstanding on the date the Change in Control occurs (whether or
      not such Options are then presently exercisable; provided, however, that
      in the case of officers subject to Section 16 of the Exchange Act the
      Options to which the Limited Stock Appreciation Rights relate have been
      held for a period of at least six months from the date of acquisition to
      the date of cash settlement), which payment shall be equal to the number
      of shares covered by the cancelled Options multiplied by the excess over
      the exercise price of the Options of the higher of the (i) Fair Market
      Value of a share of Common Stock on the date of the Change in Control or
      (ii) the highest per share price paid for the shares of Common Stock in
      connection with the Change in Control (with the value of any noncash
      consideration paid in connection with the Change in Control to be
      determined by the Committee in its sole and absolute discretion). For
      purposes of this Section 10:01 as well as the other provisions of this
      Plan, once an Option or portion of an Option has terminated, lapsed or
      expired, or has been abandoned, in accordance with the provisions of the
      Plan, the Option (or the portion of the Option) that has terminated,
      lapsed or expired, or has been abandoned, shall cease to be outstanding.
      Limited Stock Appreciation Rights shall not be exercisable at the
      discretion of the holder but shall automatically be exercised upon a
      Change in Control.

              

         

         

        
          
            
            

          

          
            - 8
-

            
              

            

          

          
            
            

          

        

         

         

        	
                10:02

              	
                For
      purposes of Section 10:01 of the Plan, a “Change in Control” shall mean a
      change in control of the Corporation of a nature that would be required to
      be reported in response to Item 6(e) of Schedule 14A of Regulation 14A
      promulgated under the Exchange Act, whether or not the Corporation is in
      fact required to comply therewith, provided that, without limitation, such
      a Change in Control shall be deemed to have occurred if (A) any “person”
      (as such term is used in Sections 13(d) and 14(d) of the Exchange Act),
      other than a trustee or other fiduciary holding securities under an
      employee benefit plan of the Corporation or any of its subsidiaries, or a
      corporation owned, directly or indirectly, by the stockholders of the
      Corporation in substantially the same proportions as their ownership of
      stock of the Corporation, is or becomes the “beneficial owner” (as defined
      in Rule 13d-3 under the Exchange Act), directly or indirectly, of
      securities of the Corporation representing 20% or more of the combined
      voting power of the Corporation’s then outstanding securities; or (B)
      during any period of two consecutive years, individuals who at the
      beginning of such period constitute the Board of Directors and any new
      director (other than a director designated by a person who has entered
      into an agreement with the Corporation to effect a transaction described
      in clauses (A) or (C) of this Section 10.02) whose election by the Board
      of Directors or nomination for election by the Corporation’s stockholders
      was approved by a vote of at least two-thirds of the directors then still
      in office who either were directors at the beginning of the period or
      whose election or nomination for election was previously so approved,
      cease for any reason to constitute a majority thereof; or (C) the
      stockholders of the Corporation approve a merger, share exchange or
      consolidation of the Corporation with any other corporation, other than a
      merger, share exchange or consolidation which would result in the voting
      securities of the Corporation outstanding immediately prior thereto
      continuing to represent (either by remaining outstanding or by being
      converted into voting securities of the surviving entity) at least 60% of
      the combined voting power of the voting securities of the Corporation or
      such surviving entity outstanding immediately after such merger, share
      exchange or consolidation, or the stockholders of the Corporation approve
      a plan of complete liquidation of the Corporation or an agreement for the
      sale or disposition by the Corporation of all or substantially all the
      Corporation’s assets.

              

      

      

      ARTICLE
11:00

       

      Amendments
and Discontinuance of the Plan

      
        	
                11:01

              	
                The
      Board of Directors shall have the right at any time and from time to time
      to amend, modify, or discontinue the Plan provided that, except as
      provided in Section 5:03, no such amendment, modification, or
      discontinuance of the Plan shall (i) revoke or alter the terms of any
      valid Option, Stock Appreciation Right, or Limited Stock Appreciation
      Right previously granted pursuant to the Plan, (ii) increase the number of
      shares of Common Stock to be reserved for issuance and sale pursuant to
      Options or Stock Appreciation Rights granted pursuant to the Plan, (iii)
      decrease the price determined pursuant to the provisions of Section 6:02
      or increase the amount of cash or shares of Common Stock that a Stock
      Appreciation Right holder is entitled to receive upon exercise of a Stock
      Appreciation Right, (iv) change the class of employee to whom Options or
      Stock Appreciation Rights may be granted pursuant to the Plan, or (v)
      provide for Options or Stock Appreciation Rights exercisable more than 10
      years after the date granted.

              

      

       

       

      
        
          
          

        

        
          - 9
-

          
            

          

        

        
          
          

        

      

       

      ARTICLE
12:00

       

      Plan
Subject to Governmental Laws and Regulations

      

      
        	
                12:01

              	
                The
      Plan and the grant and exercise of Options, Stock Appreciation Rights, and
      Limited Stock Appreciation Rights pursuant to the Plan shall be subject to
      all applicable governmental laws and regulations. Notwithstanding any
      other provision of the Plan to the contrary, the Board of Directors may in
      its sole and absolute discretion make such changes in the Plan as may be
      required to conform the Plan to such laws and
  regulations.

              

      

      

      ARTICLE
13:00

       

      Duration
of the Plan

      

      
        	
                13:01

              	
                No
      Option or Stock Appreciation Right shall be granted pursuant to the Plan
      after the close of business on February 13,
  2006.

              

      

      
 

       

       

      - 10 -ex10-7.htm

    Exhibit
10.7

     

     

    
      THE
BLACK & DECKER 2003 STOCK OPTION PLAN

      

      

      The
proper execution of the duties and responsibilities of the executives and other
key employees of The Black & Decker Corporation and its subsidiaries is
a vital factor in the continued growth and success of the
Corporation.  Toward this end, it is necessary to attract and retain
effective and capable employees to assume positions that contribute materially
to the successful operation of the business of the Corporation.  It
will benefit the Corporation, therefore, to bind the interests of these persons
more closely to its own interests by offering them an attractive opportunity to
acquire a proprietary interest in the Corporation and thereby provide them with
added incentive to remain in its employ and to increase the prosperity, growth,
and earnings of the Corporation.  This stock option plan will serve
these purposes.

      

      

      ARTICLE 1:00

      

      Definitions

      

      The
following terms wherever used herein shall have the meanings set forth
below.

      

      
        	
                1:01

              	
                The
      term “Board of Directors” shall mean the Board of Directors of the
      Corporation.

              

      

      

      
        	
                1:02

              	
                The
      term “Change in Control” shall have the meaning provided in Section 10:02
      of the Plan.

              

      

      

      
        	
                1:03

              	
                The
      term “Code” shall mean the Internal Revenue Code of 1986, as amended, and
      any regulations promulgated
thereunder.

              

      

      

      
        	
                1:04

              	
                The
      term “Committee” shall mean the Compensation Committee of the Board of
      Directors.

              

      

      

      
        	
                1:05

              	
                The
      term “Common Stock” shall mean the shares of common stock, par value $.50
      per share, of the Corporation.

              

      

      

      
        	
                1:06

              	
                The
      term “Corporation” shall mean The Black & Decker
      Corporation.

              

      

      

      
        	
                1:07

              	
                The
      term “Exchange Act” shall mean the Securities Exchange Act of 1934, as
      amended.

              

      

      

      
        	
                1:08

              	
                The
      term “Fair Market Value of a share of Common Stock” shall mean the closing
      sale price per share of Common Stock as finally reported in the New York
      Stock Exchange Composite Transactions for the New York Stock Exchange, or
      if shares of Common Stock are not sold on such date, the closing sale
      price per share of Common Stock as finally reported in the New York Stock
      Exchange Composite Transactions for the New York Stock Exchange for the
      most recent prior date on which shares of Common Stock were
      sold.

              

      

      

      
        	
                1:09

              	
                The
      term “Immediate Family Member” shall mean each of (i) the children,
      step children or grandchildren of the Initial Holder, (ii) the spouse or
      any parent of the Initial Holder, (iii) any trust solely for the benefit
      of any such family members, and (iv) any partnership or other entity in
      which such family members are the only partners or other equity
      holders.

              

      

      

      
        	
                1:10

              	
                The
      term “Incentive Stock Option” shall mean any Option granted pursuant to
      the Plan that is designated as an Incentive Stock Option and that
      satisfies the require­ments of Section 422(b) of the
    Code.

              

      

      

      
        	
                1:11

              	
                The
      term “Initial Holder,” with respect to an Option or Right granted under
      the Plan, shall mean the executive or other key employee of the
      Corporation granted the Option or
Right.

              

      

      

      
        	
                1:12

              	
                The
      term “Limited Stock Appreciation Right” shall mean a limited tandem stock
      appreciation right that entitles the holder to receive cash upon a Change
      in Control pursuant to Article 10:00 of the
  Plan.

              

      

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
 

      
        	
                1:13

              	
                The
      term “Non-Qualified Stock Option” shall mean any Option granted pursuant
      to the Plan that is not an Incentive Stock
  Option.

              

      

      

      
        	
                1:14

              	
                The
      term “Option” or “Stock Option” shall mean a right granted pursuant to the
      Plan to purchase shares of Common Stock, and shall include the terms
      Incentive Stock Option and Non-Qualified Stock
  Option.

              

      

      

      
        	
                1:15

              	
                The
      term “Option Agreement” shall mean the written agreement representing
      Options granted pursuant to the Plan as contemplated by Article 6:00
      of the Plan.

              

      

      

      
        	
                1:16

              	
                The
      term “Option Holder” shall mean the Initial Holder so long as he or she
      holds an Option initially granted to the Initial Holder, and thereafter
      shall mean the beneficiary or the Immediate Family Member to whom the
      Option has been transferred in accordance with Section 6:05 of the
      Plan.

              

      

      

      
        	
                1:17

              	
                The
      term “Plan” shall mean The Black & Decker 2003 Stock Option Plan
      as approved by the Board of Directors on February 13, 2003, and adopted by
      the stockholders of the Corporation at the 2003 Annual Meeting of
      Stockholders, as the same may be amended from time to
  time.

              

      

      

      
        	
                1:18

              	
                The
      term “Rights” shall include Stock Appreciation Rights and Limited Stock
      Appreciation Rights.

              

      

      

      
        	
                1:19

              	
                The
      term “Section 162(m) Regulations” shall mean the regulations adopted
      pursuant to Section 162(m) of the
Code.

              

      

      

      
        	
                1:20

              	
                The
      term “Stock Appreciation Right” shall mean a right to receive cash or
      shares of Common Stock pursuant to Article 8:00 of the
    Plan.

              

      

      

      
        	
                1:21

              	
                The
      term “Stock Appreciation Right Agreement” shall mean the written agreement
      representing Stock Appreciation Rights granted pursuant to the Plan as
      contemplated by Article 8:00 of the
Plan.

              

      

      

      
        	
                1:22

              	
                The
      term “Stock Appreciation Right Base Price” shall mean the base price for
      determining the value of a Stock Appreciation Right under Section 8:02 of
      the Plan, which Stock Appreciation Right Base Price shall be established
      by the Committee at the time of the grant of Stock Appreciation Rights
      pursuant to the Plan and shall not be less than the Fair Market Value of a
      share of Common Stock on the date of grant.  If the Committee
      does not establish a specific Stock Appreciation Right Base Price at the
      time of grant, the Stock Appreciation Right Base Price shall be equal to
      the Fair Market Value of a share of Common Stock on the date of grant of
      the Stock Appreciation Right.

              

      

      

      
        	
                1:23

              	
                The
      term “Stock Appreciation Right Holder” shall mean the Initial Holder so
      long as he or she holds a Stock Appreciation Right initially granted to
      the Initial Holder, and thereafter shall mean the beneficiary or the
      Immediate Family Member to whom the Stock Appreciation Right has been
      transferred in accordance with Section 8:05 of the
    Plan.

              

      

      

      
        	
                1:24

              	
                The
      term “subsidiary” or “subsidiaries” shall mean a corporation, partnership,
      limited liability company, joint venture, or other legal entity of which
      the Corporation, either directly or together with any other subsidiary of
      the Corporation, owns more than 50% of the voting power in the election of
      directors or their equivalents.

              

      

      

      

      ARTICLE 2:00

      

      Effective Date of the Plan

      

      
        	
                2:01

              	
                The
      Plan shall become effective upon stockholder approval, provided that such
      approval is received on or before May 31, 2003, and provided further that
      the Committee may grant Options or Rights pursuant to the Plan prior to
      stockholder approval if such Options or Rights by their terms are
      contingent upon subsequent stock­holder approval of the
      Plan.

              

      

       

       

      
 

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      
 

      ARTICLE 3:00

      

      Administration

      

      
        	
                3:01

              	
                The
      Plan shall be administered by the
Committee.

              

      

      

      
        	
                3:02

              	
                The
      Committee may establish, from time to time and at any time, subject to the
      limitations of the Plan as set forth herein, such rules and regulations
      and amendments and supplements thereto as it deems neces­sary to
      comply with applicable law and regulation and for the proper
      administration of the Plan.

              

      

      

      
        	
                3:03

              	
                The
      Committee shall from time to time determine the names of those executives
      and other key employees who, in its opinion, should receive Options or
      Rights, and shall determine the numbers of shares on which Options should
      be granted or upon which Rights should be based to each such person and
      the nature of the Options or Rights to be granted, including without
      limitation whether the Options or Rights shall be transferable in
      accordance with the terms and conditions provided in Section 6:12 or
      Section 8:11 of the Plan.

              

      

      

      
        	
                3:04

              	
                Options
      and Rights shall be granted by the Corporation only upon the prior
      approval of the Committee and upon the execution of an Option Agreement or
      Stock Appreciation Right Agreement between the Corporation and the Initial
      Holder.

              

      

      

      
        	
                3:05

              	
                The
      Committee’s interpretation and construction of the provisions of the Plan
      and the rules and regulations adopted by the Committee shall be
      final.  No member of the Committee or the Board of Directors
      shall be liable for any action taken or determination made, in respect of
      the Plan, in good faith.

              

      

      

      

      ARTICLE 4:00

      

      Participation in the Plan

      

      
        	
                4:01

              	
                Participation
      in the Plan shall be limited to such executives and other key employees of
      the Corporation and its subsidiaries who at the date of grant of an Option
      or Right are regular, full-time employees of the Corporation or any of its
      subsidi­aries and who shall be designated by the Committee together
      with any permitted transferees in accordance with the terms and conditions
      of the Plan.

              

      

      

      
        	
                4:02

              	
                No
      member of the Board of Directors who is not also an employee shall be
      eligible to participate in the Plan.  No employee who owns
      beneficially more than 10% of the total combined voting power of all
      classes of stock of the Corporation shall be eligible to participate in
      the Plan.

              

      

      

      
        	
                4:03

              	
                No
      employee may be granted, in any calendar year, Options or Stock
      Appreciation Rights exceeding 1,000,000 in the aggregate under the
      Plan.

              

      

      

      

      ARTICLE 5:00

      

      Stock Subject to the Plan

      

      
        	
                5:01

              	
                There
      shall be reserved for the granting of Options or Stock Appreciation Rights
      pursuant to the Plan and for issuance and sale pursuant to such Options or
      Stock Appreciation Rights 5,000,000 shares of Common Stock.  To
      determine the number of shares of Common Stock available at any time for
      the granting of Options or Stock Appreciation Rights, there shall be
      deducted from the total number of reserved shares of Common Stock the
      number of shares of Common Stock in respect of which Options have been
      granted pursuant to the Plan that are still outstanding or have been
      exer­cised.  The shares of Common Stock to be issued upon
      the exercise of Options or Stock Appreciation Rights granted pursuant to
      the Plan shall be made available from the authorized and unissued shares
      of Common Stock.  If for any reason shares of Common Stock as to
      which an Option has been granted cease to be subject to purchase
      thereunder, then such shares of Common Stock again shall be available for
      issuance pursuant to the exercise of Options or Stock Appreciation Rights
      pursuant to the Plan.  Except as provided in Section 5:03 of the
      Plan, however, the aggregate number of shares of Common Stock that may be
      issued upon the exercise of Options and Stock Appreciation Rights pursuant
      to the Plan shall not exceed 5,000,000 shares and no more than 5,000,000
      Stock Appreciation Rights shall be granted pursuant to the
      Plan.

              

      

       

       

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      
 

       

      
        	
                5:02

              	
                Proceeds
      from the purchase of shares of Common Stock upon the exercise of Options
      granted pursuant to the Plan shall be used for the general business
      purposes of the Corporation.

              

      

      

      
        	
                5:03

              	
                Subject
      to the provisions of Section 10:01 of the Plan, in the event of
      reorganization, recapitalization, stock split, stock dividend, combination
      of shares of Common Stock, merger, consolidation, share exchange,
      acquisi­tion of property or stock, or any change in the capital
      structure of the Corporation, the Committee shall make such adjustments as
      may be appro­priate in the number of Options or Stock Appreciation
      Rights that may be granted to an employee in any calendar year, in the
      number and kind of shares reserved for purchase by executives or other key
      employees, in the number, kind and price of shares covered by Options and
      Stock Appreciation Rights granted pursuant to the Plan but not then
      exercised, and in the number of Rights, if any, granted pursuant to the
      Plan but not then exercised.

              

      

      

      

      ARTICLE 6:00

      

      Terms and Conditions of
Options

      

      
        	
                6:01

              	
                Each
      Option granted pursuant to the Plan shall be evidenced by an Option
      Agreement in such form and with such terms and conditions (including,
      without limitation, non-compete, confidentiality or other similar
      provisions or provisions relating to transfer) as the Committee from time
      to time may determine.  The right of an Option Holder to
      exercise his, her or its Option shall at all times be subject to the terms
      and conditions set forth in the respective Option
    Agreement.

              

      

      

      
        	
                6:02

              	
                The
      exercise price per share for Options shall be established by the Committee
      at the time of the grant of Options pursuant to the Plan and shall not be
      less than the Fair Market Value of a share of Common Stock on the date on
      which the Option is granted.  If the Committee does not
      establish a specific exercise price per share at the time of grant, the
      exercise price per share shall be equal to the Fair Market Value of a
      share of Common Stock on the date of grant of the
  Options.

              

      

      

      
        	
                6:03

              	
                Each
      Option, subject to the other limitations set forth in the Plan, may extend
      for a period of up to 10 years from the date on which it is
      granted.  The term of each Option shall be determined by the
      Committee at the time of grant of the Option, provided that if no term is
      established by the Committee the term of the Option shall be 10 years from
      the date on which it is granted.

              

      

      

      
        	
                6:04

              	
                Unless
      otherwise provided by the Committee, the number of shares of Common Stock
      subject to each Option shall be divided into four installments of 25%
      each.  The first install­ment shall be exercisable 12 months
      after the date the Option was granted, and each succeeding installment
      shall be exercisable 12 months after the date the immediately preceding
      installment became exercisable.  If an Option Holder does not
      purchase the full number of shares of Common Stock that he, she or it at
      any time has become entitled to purchase, the Option Holder may purchase
      all or any part of those shares of Common Stock at any subsequent time
      during the term of the Option.

              

      

      

      
        	
                6:05

              	
                Options
      shall be non-transferable and non-assignable, except that (i) Options may
      be transferred by testamentary instrument or by the laws of descent and
      distribution, and (ii) subject to the terms and conditions of the Option
      Agreement or any other terms and conditions imposed by the Committee from
      time to time, Options may be transferred in accordance with the terms and
      conditions provided in Section 6:12 of the Plan if the applicable Option
      Agreement or other action of the Committee expressly provides that the
      Options are transferable.

              

      

       

       

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      
 

      
        	
                6:06

              	
                Upon
      voluntary or involuntary termination of an Initial Holder’s employment,
      his or her Option (including any Option transferred in accordance with the
      terms and conditions provided in Section 6:12 of the Plan) and all rights
      there­under shall terminate effective at the close of business on the
      date the Initial Holder ceases to be a regular, full-time employee of the
      Corporation or any of its subsidiaries, except (i) to the extent
      previously exercised, (ii) as provided in Sections 6:07, 6:08, and 6:09 of
      the Plan, and (iii) in the case of involuntary termination of employment,
      for a period of 30 days thereafter the Option Holder shall be entitled to
      exercise that portion of the Option that was exercisable at the close of
      business on the date the Initial Holder ceased to be a regular, full-time
      employee of the Corporation or any of its subsidiaries, provided that in
      no event may any Option be exercised after the expiration of the term of
      the Option.

              

      

      

      
        	
                6:07

              	
                In
      the event an Initial Holder (i) ceases to be an executive or other key
      employee of the Corporation or any of its subsidiaries due to involuntary
      termina­tion, (ii) takes a leave of absence from the
      Corpora­tion or any of its subsidiaries for personal reasons or as a
      result of entry into the armed forces of the United States, or any of the
      departments or agencies of the United States government, or (iii)
      terminates employment by reason of illness, disability, or other special
      circum­stance, the Committee may consider his or her case and may take
      such action in respect of the related Option Agreement as it may deem
      appro­priate under the circumstances, including accelerating the time
      previously granted Options may be exercised and extend­ing the time
      follow­ing the Initial Holder’s termination of employment during which
      the Option Holder is entitled to purchase the shares of Common Stock
      subject to such Options, provided that in no event may any Option be
      exercised after the expiration of the term of the
  Option.

              

      

      

      
        	
                6:08

              	
                If
      an Initial Holder dies during the term of his or her Option without the
      Option having been exercised in full, (i) the executor or
      adminis­trator of his or her estate or the person who inherits the
      right to exercise the Option by bequest or inheritance in the event the
      Initial Holder was the Option Holder at the date of death or (ii) the
      Option Holder in the event the Option had been transferred in accordance
      with the terms and conditions provided in Section 6:12 of the Plan, shall
      have the right within three years of the Initial Holder’s death to
      purchase the number of shares of Common Stock that the deceased Initial
      Holder (or Option Holder, as the case may be) was entitled to purchase at
      the date of death, after which the Option shall lapse, provided that in no
      event may any Option be exercised after the expiration of the term of the
      Option.

              

      

      

      
        	
                6:09

              	
                If
      an Initial Holder’s employment is terminated without his or her Option
      having been exercised in full and (i) the Initial Holder is 62 years
      of age or older, or (ii) the Initial Holder has been employed by the
      Corporation or any of its subsidi­aries for at least 10 years and the
      Initial Holder’s age plus years of such employ­ment total not less
      than 55 years, then such Initial Holder (or the Option Holder in the event
      the Option had been transferred in accordance with the terms and
      conditions provided in Section 6:12 of the Plan) shall have the right
      within three years of the Initial Holder’s termination of employment to
      purchase the number of shares of Common Stock that the Initial Holder (or
      Option Holder, as the case may be) was entitled to purchase at the date of
      termina­tion, after which the Option shall lapse, provided that in no
      event may any Option be exercised after the expira­tion of the term of
      the Option.  Notwithstanding the foregoing and only with respect
      to Options granted in April 2009 or afterwards, if an Initial Holder’s
      employment is terminated without his or her Option having been exercised
      in full and the Initial Holder is 60 years of age or older, then such
      Initial Holder (or the Option Holder in the event the Option had been
      transferred in accordance with Section 6:12 of the Plan) shall have the
      right during the remaining term of the Option to purchase the number of
      shares of Common Stock that the Initial Holder (or Option Holder, as the
      case may be) was entitled to purchase at the date of the Initial Holder’s
      termination of employment, after which the Option shall
    lapse.

              

      

      

      
        	
                6:10

              	
                The
      granting of an Option pursuant to the Plan shall not constitute or be
      evidence of any agreement or understanding, express or implied, on the
      part of the Corporation or any of its subsidi­aries to employ the
      Initial Holder for any specified
period.

              

      

      

      
        	
                6:11

              	
                In
      addition to the general terms and conditions set forth in this Article
      6:00 in respect of Options granted pursuant to the Plan, Incentive Stock
      Options granted pursuant to the Plan shall be subject to the following
      additional terms and conditions:

              

      

       

       

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      
 

      
        	
                 
      

              	
                (a)

              	
                The
      aggregate fair market value (determined at the time the Incentive Stock
      Option is granted) of the shares of Common Stock in respect of which
      “incentive stock options” under Section 422 of the Code are exercisable
      for the first time by the Option Holder during any calendar year (under
      all such plans of the Corporation and its subsidiaries) shall not exceed
      $100,000;

              

      

      

      
        	
                 
      

              	
                (b)

              	
                The
      Option Agreement in respect of an Incentive Stock Option may contain any
      other terms and conditions specified by the Board of Directors that are
      not inconsistent with the Plan, except that such terms and conditions must
      be consistent with the requirements for “incentive stock options” under
      Section 422 of the Code; and

              

      

      

      
        	
                 
      

              	
                (c)

              	
                Incentive
      Stock Options shall not be transferable in accordance with the terms and
      conditions provided in Section 6:12 of the
Plan.

              

      

      

      
        	
                6:12

              	
                The
      Committee may provide, in the original grant of a Non-Qualified Stock
      Option or in an amendment or supplement to a previous grant, that some or
      all of the Non-Qualified Stock Options granted under the Plan are
      transferable by the Initial Holder to an Immediate Family Member of the
      Initial Holder, provided that (i) the Option Agreement, as it may be
      amended from time to time, expressly so provides or the Committee
      otherwise designates the Option as transferable, (ii) the transfer by the
      Initial Holder is a bona fide gift without consideration, (iii) the
      transfer is irrevocable, (iv) the Initial Holder and any such transferee
      provides such documentation or other information concerning the transfer
      or the transferee as the Committee or any employee of the Corporation
      acting on behalf of the Committee may from time to time request, and (v)
      the Initial Holder or the Option Holder complies with all of the terms and
      conditions (including, without limitation, any further restrictions or
      limitations) included in the Option Agreement.  Any
      Non-Qualified Stock Option transferred in accordance with the terms and
      conditions provided in this Section 6:12 shall continue to be subject to
      the same terms and conditions that were applicable to such Non-Qualified
      Stock Option prior to the transfer.  Notwithstanding any other
      provisions of the Plan, the Corporation shall not be required to honor any
      exercise of an Option by an Immediate Family Member of an Option
      transferred in accordance with the terms and conditions provided in this
      Section 6:12 unless and until payment or provision for payment of any
      applicable withholding taxes has been
made.

              

      

      

      

      ARTICLE 7:00

      

      Methods of Exercise of
Options

      

      
        	
                7:01

              	
                An
      Option Holder (or other person or persons, if any, entitled to exercise an
      Option here­under) desiring to exercise an Option granted pursuant to
      the Plan as to all or part of the shares of Common Stock covered by the
      Option shall (i) notify either the Corporation at its principal office at
      701 East Joppa Road, Towson, Maryland 21286, or the third party retained
      by the Corporation to administer the Plan to that effect, specifying the
      number of shares of Common Stock to be purchased and the method of payment
      therefor, and (ii) make payment or provision for payment for the shares of
      Common Stock so purchased in accordance with this Article
      7:00.

              

      

      

      
        	
                7:02

              	
                Payment
      or provision for payment shall be made as
  follows:

              

      

      

      
        	
                 
      

              	
                (a)

              	
                The
      Option Holder shall deliver to the Corpora­tion at the address set
      forth in Section 7:01 of the Plan United States currency in an amount
      equal to the aggregate purchase price of the shares of Common Stock as to
      which such exercise relates; or

              

      

      

      
        	
                 
      

              	
                (b)

              	
                The
      Option Holder shall tender to the Corpora­tion shares of Common Stock
      already owned by the Option Holder that, together with any cash tendered
      therewith, have an aggre­gate fair market value (deter­mined based
      on the Fair Market Value of a share of Common Stock on the date the notice
      set forth in Section 7:01 of the Plan is received by the Corporation)
      equal to the aggregate purchase price of the shares of Common Stock as to
      which such exercise relates; or

              

      

       

       

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      
 

      
        	
                 
      

              	
                (c)

              	
                The
      Option Holder shall deliver irrevocable instructions to a broker to
      deliver promptly to the Corporation the amount of sale or loan proceeds
      neces­sary to pay the aggregate purchase price of the shares of Common
      Stock as to which such exercise relates and to sell the shares of Common
      Stock to be issued upon exercise of the Option and deliver the cash
      proceeds less commissions and brokerage fees to the Option Holder or to
      deliver the remaining shares of Common Stock to the Option
      Holder.

              

      

      

      
        	
                 
      

              	
                Notwithstanding
      the foregoing provisions, the Committee, in granting Options pursuant to
      the Plan, may limit the methods in which an Option may be exercised by any
      person and, in process­ing any purported exercise of an Option granted
      pursuant to the Plan, may refuse to recognize the method of exercise
      selected by the Option Holder (other than the method of exercise set forth
      in Section 7:02(a) of the Plan) if, (A) in the opinion of counsel to the
      Corpora­tion, (i) the Initial Holder or the Option Holder is or
      within the six months preceding such exercise was subject to reporting
      under Section 16(a) of the Exchange Act and (ii) there is a substantial
      likelihood that the method of exercise selected by the Option Holder would
      subject the Initial Holder or the Option Holder to a substantial risk of
      liability under Section 16 of the Exchange Act, (B) in the
      opinion of the Committee, the method of exercise could have an adverse tax
      or accounting effect to the Corporation, or (C) in the opinion of counsel
      to the Corporation, the method of exercise selected by the Option Holder
      would subject the Corporation to a risk of liability under the Exchange
      Act.

              

      

      

      
        	
                7:03

              	
                In
      addition to the alternative methods of exercise set forth in Section 7:02
      of the Plan, holders of Non-Qualified Stock Options shall be entitled, at
      or prior to the time the notice provided for in Section 7:01 of the Plan
      is provided to the Corporation, to elect to have the Corporation withhold
      from the shares of Common Stock to be delivered upon exercise of the
      Non-Qualified Stock Option that number of shares of Common Stock
      (deter­mined based on the Fair Market Value of a share of Common Stock
      on the date the notice set forth in Section 7:01 of the Plan is received
      by the Corporation) necessary to satisfy any withholding taxes
      attributable to the exercise of the Non-Qualified Stock
      Option.  The maximum number of shares that an Option Holder may
      elect to have withheld from the shares of Common Stock otherwise
      deliverable upon exercise shall be the number of shares that have an
      aggregate fair market value (based on the Fair Market Value of a share of
      Common Stock on the date of exercise) equal to the dollar amount of the
      minimum statutory withholding for federal, state, and local taxes,
      including payroll taxes, payable by the Option
      Holder.  Alternatively, such holder of a Non-Qualified Stock
      Option may elect to deliver previously owned shares of Common Stock (which
      shares have been held for at least six months) upon exercise of the
      Non-Qualified Stock Option to satisfy any withholding taxes attributable
      to the exercise of the Non-Qualified Stock
      Option.  Notwith­standing the foregoing provisions, the
      Committee may include in the Option Agreement relating to any such
      Non-Qualified Stock Option pro­visions limiting or eliminating the
      Option Holder’s ability to pay his or her withholding tax obligation by
      withholding or delivering shares of Common Stock or, if no such provisions
      are included in the Option Agreement but in the opinion of the Committee
      such with­holding or delivery of shares could have an adverse tax or
      accounting effect to the Corporation, at or prior to exercise of the
      Non-Quali­fied Stock Option the Committee may so limit or eliminate
      the Option Holder’s ability to pay his or her withholding tax obligation
      with shares of Common Stock.  Notwithstanding the foregoing
      provisions, a holder of a Non-Qualified Stock Option may not elect any of
      the methods of satisfying his or her with­holding tax obligation in
      respect of any exercise if, in the opinion of counsel to the Corporation,
      (i) the Initial Holder or the holder of the Non-Qualified Stock Option is
      or within the six months preceding such exercise was subject to reporting
      under Section 16(a) of the Exchange Act and (ii) there is a substantial
      likelihood that the election or timing of the election would subject the
      Initial Holder or the holder of the Non-Qualified Stock Option to a
      substan­tial risk of liability under Section 16 of the Exchange
      Act.

              

      

      

      
        	
                7:04

              	
                An
      Option Holder at any time may elect in writing to abandon an Option in
      respect of all or part of the number of shares of Common Stock as to which
      the Option shall not have been
exercised.

              

      

      

      
        	
                7:05

              	
                An
      Option Holder shall have none of the rights of a stockholder of the
      Corporation until the shares of Common Stock covered by the Option are
      issued upon exercise of the Option.

              

      

       

       

      
 

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      

      ARTICLE 8:00

      

      Terms and Conditions of Stock
Appreciation Rights

      

      
        	
                8:01

              	
                Each
      Stock Appreciation Right granted pursuant to the Plan shall be evidenced
      by a Stock Appreciation Right Agreement in such form and with such terms
      and conditions (including, without limitation, non-compete,
      confidentiality or other similar provisions or provisions relating to
      transfer) as the Committee from time to time may
      determine.  Notwithstanding the foregoing provision, Stock
      Appreciation Rights granted in tandem with a related Option shall be
      evidenced by the Option Agreement in respect of the related
      Option.  The right of a Stock Appreciation Right Holder to
      exercise his, her or its Stock Appreciation Right shall at all times be
      subject to the terms and conditions set forth in the respective Stock
      Appreciation Right Agreement.

              

      

      

      
        	
                8:02

              	
                Each
      Stock Appreciation Right shall entitle the holder, subject to the terms
      and conditions of the Plan, to receive upon exercise of the Stock
      Appreciation Right an amount, payable in cash or shares of Common Stock
      (determined based on the Fair Market Value of a share of Common Stock on
      the date the notice set forth in Section 9:01 of the Plan is received
      by the Corporation), equal to the Fair Market Value of a share of Common
      Stock on the date of receipt by the Corporation of the notice required by
      Section 9:01 of the Plan less the Stock Appreciation Right Base
      Price.  Notwithstanding the foregoing provision, each Stock
      Appreciation Right that is granted in tandem with a related Option shall
      entitle the holder, subject to the terms and conditions of the Plan, to
      surrender to the Corporation for cancellation all or a portion of the
      related Option, but only to the extent such Stock Appreciation Right and
      related Option then are exercisable, and to be paid therefor an amount,
      payable in cash or shares of Common Stock (determined based on the Fair
      Market Value of a share of Common Stock on the date the notice set forth
      in Section 9:01 of the Plan is received by the Corporation), equal to
      the Fair Market Value of a share of Common Stock on the date of receipt by
      the Corporation of the notice required by Section 9:01 of the Plan
      less the Stock Appreciation Right Base
Price.

              

      

      

      
        	
                8:03

              	
                Each
      Stock Appreciation Right, subject to the other limitations set forth in
      the Plan, may extend for a period of up to 10 years from the date on which
      it is granted.  The term of each Stock Appreciation Right shall
      be determined by the Committee at the time of grant of the Stock
      Appreciation Right, provided that if no term is established by the
      Committee the term of the Stock Appreciation Right shall be 10 years from
      the date on which it is granted.

              

      

      

      
        	
                8:04

              	
                Unless
      otherwise provided by the Committee, the number of Stock Appreciation
      Rights granted pursuant to each Stock Appreciation Right Agreement shall
      be divided into four installments of 25% each.  The first
      install­ment shall be exercisable 12 months after the date the Stock
      Appreciation Right was granted, and each succeed­ing installment shall
      be exercisable 12 months after the date the immediately preceding
      installment became exercisable.  If a Stock Appreciation Right
      Holder does not exercise the Stock Appreciation Right to the extent that
      he, she or it at any time has become entitled to exercise the Stock
      Appreciation Right, the Stock Appreciation Right Holder may exercise all
      or any part of the Stock Appreciation Right at any subsequent time during
      the term of the Stock Appreciation
Right.

              

      

      

      
        	
                8:05

              	
                Stock
      Appreciation Rights shall be non-transferable and non-assignable, except
      that (i) Stock Appreciation Rights may be transferred by testamentary
      instrument or by the laws of descent and distribution, and (ii) subject to
      the terms and conditions of the Stock Appreciation Right Agreement or any
      other terms and conditions imposed by the Committee from time to time,
      Stock Appreciation Rights may be transferred in accordance with the terms
      and conditions provided in Section 8:11 of the Plan if the applicable
      Stock Appreciation Right Agreement or other action of the Committee
      expressly provides that the Stock Appreciation Rights are
      transferable.

              

      

      

      
        	
                8:06

              	
                Upon
      voluntary or involuntary termination of an Initial Holder’s employment,
      his or her Stock Appreciation Rights (including any Stock Appreciation
      Rights transferred in accordance with the terms and conditions provided in
      Section 8:11 of the Plan) and all rights thereunder shall terminate
      effective as of the close of business on the date the Initial Holder
      ceases to be a regular, full-time employee of the Corporation or any of
      its subsidiaries, except (i) to the extent previously exercised, (ii) as
      provided in Sections 8:07, 8:08, and 8:09 of the Plan, and (iii) in the
      case of involuntary termination of employment, for a period of 30 days
      thereafter the Stock Appreciation Right Holder shall be entitled to
      exercise that portion of each Stock Appreciation Right that was
      exercisable at the close of business on the date the Initial Holder ceased
      to be a regular, full-time employee of the Corporation or any of its
      subsidiaries.

              

      

       

       

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      
 

       

      
        	
                8:07

              	
                If
      an Initial Holder (i) ceases to be an executive or other key employee of
      the Corporation or any of its subsidiaries due to involun­tary
      termination, (ii) takes a leave of absence from the Corporation or
      any of its subsidiaries for personal reasons or as a result of entry into
      the armed forces of the United States, or any of the departments or
      agencies of the United States government, or (iii) terminates employment
      by reason of illness, dis­ability, or other special circumstance, the
      Committee may consider his or her case and may take such action in respect
      of the related Stock Appreciation Right Agreement as it may deem
      appropriate under the circumstances, including accelerating the time
      previously granted Stock Appreciation Rights may be exercised and
      extending the time following the Initial Holder’s termination of
      employment during which the Stock Appreciation Right Holder is entitled to
      exercise the Stock Appreciation Rights, provided that in no event may any
      Stock Appreciation Right be exercised after the expiration of the term of
      the Stock Appreciation Right.

              

      

      

      
        	
                8:08

              	
                If
      an Initial Holder dies during the term of his or her Stock Appreciation
      Right without the Stock Appreciation Right having been exercised in full,
      (i) the executor or administrator of his or her estate or the person who
      inherits the right to exercise the Stock Appre­ciation Right by
      bequest or inheritance in the event the Initial Holder was the Stock
      Appreciation Right Holder at the date of death or (ii) the Stock
      Appreciation Right Holder in the event the Stock Appreciation Right had
      been transferred in accordance with the terms and conditions provided in
      Section 8:11 of the Plan, shall have the right within three years of the
      Initial Holder’s death to exercise the Stock Appreciation Rights that the
      Initial Holder (or Stock Appreciation Right Holder, as the case may be)
      was entitled to purchase at the date of death, after which the Stock
      Appreciation Right shall lapse, provided that in no event may any Stock
      Appre­ciation Right be exercised after the expiration of the term of
      the Stock Appreciation Right.

              

      

      

      
        	
                8:09

              	
                If
      an Initial Holder’s employment is terminated without his or her Stock
      Appreciation Right having been exercised in full and (i) the Initial
      Holder is 62 years of age or older, or (ii) the Initial Holder has been
      employed by the Corporation or any of its subsidiaries for at least 10
      years and the Initial Holder’s age plus years of such employment total not
      less than 55 years, then such Initial Holder (or the Stock Appreciation
      Right Holder in the event the Stock Appreciation Right had been
      transferred in accordance with the terms and conditions provided in
      Section 8:11 of the Plan) shall have the right within three years of the
      Initial Holder’s termination of employment to exercise the Stock
      Appreciation Rights that the Initial Holder (or Stock Appreciation Right
      Holder, as the case may be) was entitled to exercise at the date of
      termination, after which the Stock Appreciation Right shall lapse,
      provided that in no event may any Stock Appreciation Right be exercised
      after the expiration of the term of the Stock Appre­ciation
      Right.

              

      

      

      
        	
                8:10

              	
                The
      granting of a Stock Appreciation Right pursuant to the Plan shall not
      constitute or be evidence of any agreement or understanding, expressed or
      implied, on the part of the Corporation or any of its subsidiaries to
      employ the Initial Holder for any specified
  period.

              

      

      

      
        	
                8:11

              	
                The
      Committee may provide, in the original grant of a Stock Appreciation Right
      or in an amendment or supplement to a previous grant, that some or all of
      the Stock Appreciation Rights granted under the Plan are transferable by
      the Initial Holder to an Immediate Family Member of the Initial Holder,
      provided that (i) the Stock Appreciation Right Agreement, as it may be
      amended from time to time, expressly so provides or the Committee
      otherwise designates the Stock Appreciation Right as transferable, (ii)
      the transfer by the Initial Holder is a bona fide gift without
      consideration, (iii) the transfer is irrevocable, (iv) the Initial
      Holder and any such transferee provides such documentation or other
      information concerning the transfer or the transferee as the Committee or
      any employee of the Corporation acting on behalf of the Committee may from
      time to time request, and (v) the Initial Holder or the Stock
      Appreciation Right Holder complies with all of the terms and conditions
      (including, without limitation, any further restrictions or limitations)
      included in the Stock Appreciation Right Agreement.  Any Stock
      Appreciation Right transferred in accordance with the terms and conditions
      provided in this Section 8:11 shall continue to be subject to the same
      terms and conditions that were applicable to such Stock Appreciation Right
      prior to the transfer.  Notwithstanding any other provisions of
      the Plan, the Corporation shall not be required to honor any exercise of a
      Stock Appreciation Right by an Immediate Family Member of a Stock
      Appreciation Right transferred in accordance with the terms and conditions
      provided in this Section 8:11 unless and until payment or provision for
      payment of any applicable withholding taxes has been
  made.

              

      

       

       

      
 

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      
 

      ARTICLE 9:00

      

      Methods of Exercise of Stock
Appreciation Rights

      

      
        	
                9:01

              	
                A
      Stock Appreciation Right Holder (or other person or persons, if any,
      entitled to exercise a Stock Appreciation Right hereunder) desiring to
      exercise a Stock Appreciation Right granted pursuant to the Plan shall
      notify the Corporation in writing at its principal office at 701 East
      Joppa Road, Towson, Maryland 21286, to that effect, specifying the number
      of Stock Appreciation Rights to be exercised.  Such written
      notice may be given by means of a facsimile transmission.  If a
      facsimile transmission is used, the Stock Appreciation Right Holder should
      mail the original executed copy of the written notice to the Corporation
      promptly thereafter.

              

      

      

      
        	
                9:02

              	
                The
      Committee in its sole and absolute discretion shall determine whether a
      Stock Appreciation Right shall be settled upon exercise in cash or in
      shares of Common Stock.  The Committee, in making such a
      determination, may from time to time adopt general guidelines or
      determinations as to whether Stock Appreciation Rights shall be settled in
      cash or in shares of Common Stock.

              

      

      

      ARTICLE 10:00

      

      Limited Stock Appreciation
Rights

      

      
        	
                10:01

              	
                Notwithstanding
      any other provision of the Plan, the Committee, in its sole and absolute
      discretion, may grant Limited Stock Appreciation Rights entitling Option
      Holders to receive, in connection with a Change in Control, a cash payment
      in cancella­tion of all of their Options that are outstanding on the
      date the Change in Control occurs (whether or not such Options are then
      presently exercisable), which payment shall be equal to the number of
      shares covered by the cancelled Options multiplied by the excess over the
      exercise price of the Options of the higher of the (i) Fair Market
      Value of a share of Common Stock on the date of the Change in Control or
      (ii) the highest per share price paid for the shares of Common Stock
      in connection with the Change in Control (with the value of any non-cash
      consideration paid in connection with the Change in Control to be
      deter­mined by the Committee in its sole and absolute discretion and
      if the Committee, in its sole and absolute discretion, determines that
      such valuation will comply with Section 409A of the Code).  For
      purposes of this Section 10:01 as well as the other provisions of this
      Plan, once an Option or portion of an Option has terminated, lapsed or
      expired, or has been abandoned, in accordance with the provisions of the
      Plan, the Option (or the portion of the Option) that has terminated,
      lapsed or expired, or has been abandoned, shall cease to be
      outstanding.  Limited Stock Apprecia­tion Rights shall not
      be exercisable at the discretion of the Option Holder but shall
      automatically be exercised upon a Change in
  Control.

              

      

      

      
        	
                10:02

              	
                A
      “Change in Control” shall mean a change in control of the Corporation of a
      nature that would be required to be reported in response to Item 6(e) of
      Schedule 14A of Regulation 14A promul­gated under the Exchange Act,
      whether or not the Corporation is in fact required to comply therewith,
      provided that, without limitation, such a change in control shall be
      deemed to have occurred if (i) any “person” (as such term is used in
      Sections 13(d) and 14(d) of the Exchange Act), other than a trustee or
      other fiduciary holding securities under an employee benefit plan of the
      Corpora­tion or any of its subsidiaries, or a corporation owned,
      directly or indirectly, by the stockholders of the Corporation in
      substantially the same propor­tions as their ownership of stock of the
      Corporation, is or becomes the “beneficial owner” (as defined in Rule
      13d-3 under the Exchange Act), directly or indirectly, of securities of
      the Corporation representing 20% or more of the combined voting power of
      the Corporation’s then outstanding securities; (ii) during any period
      of two consecutive years, individuals who at the beginning of such period
      constitute the Board of Directors and any new director (other than a
      director designated by a person who has entered into an agreement with the
      Corporation to effect a transaction described in clauses (i) or (iv) of
      this Section 10.02) whose election by the Board of Directors or
      nomina­tion for election by the Corporation’s stockholders was
      approved by a vote of at least two-thirds of the directors then still in
      office who either were directors at the beginning of the period or whose
      election or nomination for election was previously so approved, cease for
      any reason to constitute a majority thereof; (iii) the Corporation enters
      into an agreement, the consummation of which would result in the
      occurrence of a Change in Control; or (iv) the stockholders of the
      Corporation approve a merger, share exchange or consolidation of the
      Corporation with any other corporation or entity, other than a merger,
      share exchange or consoli­dation that would result in the voting
      securities of the Corpora­tion outstanding immediately prior thereto
      continuing to represent (either by remaining outstand­ing or by being
      converted into voting securities of the surviving entity) at least 60% of
      the combined voting power of the voting securities of the Corporation or
      such surviving entity outstanding immediately after the merger, share
      exchange or consolida­tion, or the stockholders of the Corporation
      approve a plan of complete liquidation of the Corporation or an agreement
      for the sale or disposition by the Corporation of all or substantially all
      the Corporation’s assets.

              

      

       

       

       

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      
 

      
        	
                10:03

              	
                Limited
      Stock Appreciation Rights shall be non-transferable and non-assignable,
      except that Limited Stock Appreciation Rights shall automatically be
      transferred and assigned in tandem with a transfer of the related Options
      in accordance with Section 6:05 of the
Plan.

              

      

      

      

      ARTICLE 11:00

      

      Amendments and Discontinuance of the
Plan

      

      
        	
                11:01

              	
                The
      Board of Directors shall have the right at any time and from time to time
      to amend, modify, or discontinue the Plan provided that, except as
      provided in Section 5:03 of the Plan, no such amendment, modification, or
      discon­tinuance of the Plan shall (i) revoke or alter the terms of any
      valid Option, Stock Appreciation Right, or Limited Stock Appreciation
      Right previously granted pursuant to the Plan, (ii) increase the number of
      shares of Common Stock to be reserved for issuance and sale pursuant to
      Options or Stock Appreciation Rights granted pursuant to the Plan, (iii)
      decrease the price determined pursuant to the provisions of Section 6:02
      of the Plan or increase the amount of cash or shares of Common Stock that
      a Stock Appreciation Right Holder is entitled to receive upon exercise of
      a Stock Appreciation Right, (iv) change the class of employee to whom
      Options or Stock Appreciation Rights may be granted pursuant to the Plan,
      (v) provide for Options or Stock Appreciation Rights exercisable more than
      10 years after the date granted or (vi) increase the number of Options or
      Stock Appreciation Rights that may be granted to an employee in any
      calendar year under Section 4.03 of the Plan.  If an amendment
      would (i) materially increase the benefits accruing to participants under
      the Plan, (ii) materially increase the aggregate number of securities that
      may be issued under the Plan, or (iii) materially modify the requirements
      as to eligibility for participation in the Plan, then to the extent
      required by applicable law or deemed necessary or advisable by the
      Committee or the Board of Directors, the amendment shall be subject to
      stockholder approval.

              

      

      

      

      ARTICLE 12:00

      

      Plan Subject to Governmental Laws and
Regulations

      

      
        	
                12:01

              	
                The
      Plan and the grant and exercise of Options, Stock Appreciation Rights, and
      Limited Stock Appreciation Rights pursuant to the Plan shall be subject to
      all applicable governmental laws and
      regulations.  Notwithstanding any other provision of the Plan to
      the contrary, the Board of Directors may in its sole and absolute
      discretion make such changes in the Plan as may be required to conform the
      Plan to such laws and regulations.

              

      

      

       

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      
 

      ARTICLE 13:00

      

      Duration of the Plan

      

      
        	
                13:01

              	
                No
      Option or Stock Appreciation Right shall be granted pursuant to the Plan
      after the close of business on April 29,
2013.

              

      

    

     

     

     

     12

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