Document:

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                                                                  Exhibit 10.7

                                                                EXECUTION COPY

         THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
         AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD,
         TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
         REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
         LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION
         REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

         ALL INDEBTEDNESS EVIDENCED HEREBY AND REFERENCED HEREIN IS SUBORDINATED
         IN RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN FULL OF ALL INDEBTEDNESS
         OWED TO KEYBANK NATIONAL ASSOCIATION.

                               KAHIKI FOODS, INC.

                                 SECOND CLOSING

                           CONVERTIBLE PROMISSORY NOTE

$1,000,000                                                 Wilmington, Delaware
                                                                   June 3, 2005

         FOR VALUE RECEIVED, the undersigned, Kahiki Foods, Inc., an Ohio
corporation ("BORROWER" or the "COMPANY"), hereby promises to pay to the order
of Townsends, Inc. ("TOWNSENDS"), a Delaware corporation, or its assigns (the
"HOLDER"), the principal sum of ONE MILLION DOLLARS ($1,000,000) (the "PRINCIPAL
AMOUNT") plus any other amount necessary to equal the Redemption Price (as
defined below) on December 31, 2009, except as otherwise set forth herein, and
with interest thereon from time to time as provided herein.

         1. PURCHASE AGREEMENT.

                  (a) General. This Convertible Promissory Note (the "NOTE") is
issued by the Borrower, pursuant to the Note Purchase Agreement (the "PURCHASE
AGREEMENT"), dated as of December 21, 2004, between the Borrower and Townsends
and is subject to the terms thereof. As conditions to the closing of the
Purchase Agreement, the Borrower and the Holder have also entered into that
certain Supply Agreement (the "SUPPLY AGREEMENT"), dated as of December 21,
2004, and that certain Copack and Storage Agreement (the "COPACK AGREEMENT"),
dated as of December 21, 2004 (the Purchase Agreement, Supply Agreement, and
Copacking Agreement collectively referred to herein as the "TRANSACTION
DOCUMENTS"). The Holder is entitled to the benefits of this Note and the
Purchase Agreement, and may enforce the agreements of the Borrower contained
herein and therein and exercise the remedies provided for hereby and thereby or
otherwise available in respect hereto and thereto.

                  (b) Capitalized Terms. Capitalized terms used herein and not
defined herein have the meanings ascribed to such terms in the Purchase
Agreement.

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         2. INTEREST AND PRINCIPAL AMORTIZATION.

                  (a) Basic Interest. The Borrower promises to pay interest
("INTEREST") on the Principal Amount of this Note at the rate of five percent
(5%) per annum (the "INTEREST RATE"). Interest on this Note shall accrue from
and including the date of issuance through and until payment of the Redemption
Price (as defined below), and shall be computed on the basis of a 360-day year
of twelve (12) 30-day months. All payments on this Note shall be paid in U.S.
Dollars by wire transfer of immediately available funds to such bank account as
is designated in writing by the Holder from time to time. Interest shall accrue
and be paid at maturity unless an Event of Non-Compliance has occurred in which
case it shall be payable on the first business day of each month. All payments
of Interest and/or portions of the outstanding Principal Amount shall be
reflected by the Holder on the Payment and Accrual Schedule in the form attached
hereto as Exhibit A (the "PAYMENT AND ACCRUAL SCHEDULE") although the Holder's
failure to make such entries shall not relieve the Borrower of any of its
obligations under this Note. All of the Holder's entries upon the Payment and
Accrual Schedule shall be conclusively presumed true and correct absent manifest
error (notwithstanding the expiration of any applicable cure periods).

                  (b) Event of Non-Compliance Rate of Interest. Notwithstanding
the foregoing provisions of Section 2(a), but subject to applicable law, upon
occurrence of an Event of Non-Compliance (as hereafter defined) any unpaid
Principal Amount on this Note shall, for each day from the date of such Event of
Non-Compliance until the earlier to occur of (i) the date such Event of
Non-Compliance is cured or waived (including any cure or waiver after any
applicable cure period) and (ii) the date of repayment in full of the Redemption
Price, bear interest at a rate (the "NON-COMPLIANCE RATE") equal to the sum of
(A) the Interest Rate payable from time to time as provided in Section 2(a)
above and (B) ten percent (10%) per annum, provided, however, that if an Event
of Non-Compliance shall continue for more than one (1) year without being cured
or waived then the Non-Compliance Rate shall increase by an additional five
percent (5%) per annum on the first (1st) anniversary of the Event of
Non-Compliance and on each such anniversary thereafter so long as any Event of
Non-Compliance shall continue without being cured or waived. During any Event of
Non-Compliance, all Interest shall be payable on the first business day of each
month.

                  (c) No Usurious Interest. In the event that any interest
rate(s) provided for in this Section 2, shall be determined to be unlawful, such
Interest Rate(s) shall be computed at the highest rate permitted by applicable
law. Any payment by the Borrower of any Interest in excess of that permitted by
law shall be deemed applied to the Principal Amount of this Note without
prepayment premium or penalty; if no such Principal Amount is outstanding, such
excess shall be returned to the Borrower.

                  (d) Principal Amortization. An amount equal to the Redemption
Price (as defined in Section 2(e) below) shall be due on the Maturity Date, and
there shall be no required amortization of the Principal Amount due hereunder.

                  (e) Redemption Price Generally. As used in this Note,
"REDEMPTION PRICE" means (i) prior to December 21, 2006 the greater of (A) one
hundred and fifty percent (150%) of the original Principal Amount or (B) one
hundred percent (100%) of the then outstanding Principal Amount of this Note
plus Interest accrued and unpaid thereon through such

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date or (ii) after December 21, 2006, the greater of (x) two hundred percent
(200%) of the original Principal Amount or (y) one hundred percent (100%) of the
then outstanding Principal Amount of this Note plus Interest accrued and unpaid
thereon through such date, plus in the case of both (i) and (ii), reasonable
out-of-pocket costs and expenses of Holder (including, without limitation,
reasonable fees, charges and disbursements of counsel), if any, associated with
such payment.

         3. CONVERSION.

                  (a) Optional Conversion. The full amount of the outstanding
Principal Amount and any accrued and unpaid Interest as of any particular date
on this Note shall, at the Holder's option, convert into (i) Preferred Stock (if
authorized) or (ii) Common Stock (as such terms are defined in the Purchase
Agreement) of the Company, in each case at $2.25 per share (as such price may be
adjusted after the date hereof, the "NOTE CONVERSION PRICE"), subject to the
adjustments provided in the anti-dilution provisions of the Certificate of
Designation attached to the Purchase Agreement as Exhibit F, which shall apply
to this Section 3 whether or not the Preferred Stock has been authorized by the
Company (either such conversion defined in this Section 3(a)(i) or Section
3(a)(ii), the "OPTIONAL CONVERSION").

                  (b) Mandatory Conversion. Upon (i) shareholder approval,
adoption and filing of an amendment to the Articles of Incorporation of the
Company containing provisions substantially in the form of Exhibit F to the
Purchase Agreement and (ii) the Company's issuance of duly authorized Preferred
Stock to Townsends, the outstanding Principal Amount and any accrued and unpaid
Interest under this Note shall immediately convert into such Preferred Stock at
the Note Conversion Price then in effect at the date of such conversion (the
"MANDATORY CONVERSION").

                  (c) Conversion Procedure. An Optional Conversion shall be
effected by surrendering this Note to the Borrower, accompanied by written
notice to the Borrower that the Holder elects to convert the Principal Amount
and Interest amounts outstanding under this Note (the "CONVERSION AMOUNT") into
Preferred Stock or Common Stock, as the case may be (the "CONVERSION NOTICE").
Interest accrued or accruing on the Conversion Amount from the date hereof to
the date of the Conversion Notice shall be paid in Preferred Stock or Common
Stock, as the case may be, calculated at the same Note Conversion Price as the
Principal Amount as determined above, and shall constitute payment in full of
any such interest on the same terms as would otherwise apply to the conversion
of the Principal Amount hereof. No fractional shares or scrip representing
fractions of Preferred Stock or Common Stock will be issued on conversion, but
the number of shares of Preferred Stock or Common Stock to be issued on
conversion shall be rounded up to the nearest whole share. The date on which the
Conversion Notice is given shall be deemed to be the date on which the Holder
has delivered this Note, with the accompanying written notice of its Optional
Conversion, duly executed by the Holder.

                  (d) Rights Upon Conversion. Upon either of an Optional
Conversion or Mandatory Conversion, the Holder shall be entitled to receive the
same rights and preferences accorded, contractually or otherwise, to any holder
of the relevant class of the Company's Preferred Stock or Common Stock, as
appropriate. Such rights may include, but not be limited to, any information
rights, voting rights, preemptive rights, tag-along rights, registration rights

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and/or co-sale rights granted to purchasers of any equity of the Company issued
after the date hereof (the "NEW EQUITY"). Furthermore, the Holder, at its
option, shall have the right to execute and become a party to any agreements
entered into by any purchaser of such New Equity, either with the Company or
with any other such purchaser in connection with the purchaser's purchase or
ownership of any such New Equity.

         4. MANDATORY PREPAYMENTS.

                  (a) Change of Control. Upon a Change of Control (as defined in
Section 4(b) herein), the Borrower shall pay the entire Redemption Price to the
Holder.

                  (b) A "CHANGE OF CONTROL" shall occur if the Borrower engages
in any of the following: (a) merger or consolidation into or with any other
corporation or entity, (b) sale, conveyance, transfer, license, lease or other
disposition of all or substantially all of the assets of the Borrower or (c)
acquisition by any person of more than 50% of the voting power of all securities
of the Borrower generally entitled to vote in the election of directors of the
Borrower.

                  (c) Notice. The Borrower shall give written notice to the
Holder of any mandatory prepayment pursuant to this Section 4 at least five (5)
business days prior to the date of such mandatory prepayment in the manner
provided in Section 15 herein.

         5. OPTIONAL PREPAYMENT.

                  (a) General. Upon notice given to the Holder as provided in
Section 4(c), the Borrower, at its option, may prepay all (but not less than
all) of this Note at any time by payment of the Redemption Price.

                  (b) Notice. The Borrower shall give written notice of
prepayment of this Note not less than seven (7) nor more than sixty (60) days
prior to the date fixed for such prepayment. Such notice of prepayment shall be
given in the manner provided in Section 15 herein.

         6. DEFAULTS AND REMEDIES.

                  (a) Events of Default. An "EVENT OF DEFAULT" shall occur if:

                           (i) the Borrower shall default in the payment of the
Redemption Price of this Note, when and as the same shall become due and
payable, whether at maturity or at a date fixed for prepayment or by
acceleration or otherwise; or

                           (ii) the Borrower shall default in the payment of any
Interest when and as the same shall become due and payable and such default
shall continue for a period of three (3) days; or

                           (iii) the Borrower shall default in the due
observance or performance of any covenant, condition, representation or
warranty, certification or agreement on the part of the Borrower to be observed
or performed (after giving effect to any applicable cure periods) pursuant to
the terms hereof or pursuant to the terms of any of the Transaction Documents;
or

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                           (iv) the Borrower shall default in the payment of
principal on any other Funded Indebtedness where the principal amount
outstanding is in excess of $100,000; or

                           (v) an involuntary proceeding shall be commenced or
an involuntary petition shall be filed in a court of competent jurisdiction
against the Borrower seeking (A) relief in respect of the Borrower or of a
substantial part of the property or assets of the Borrower, under Title 11 of
the United States Code, as now constituted or hereafter amended, or any other
Federal or state bankruptcy, insolvency, receivership or similar law, (B) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or for a substantial part of the property or
assets of the Borrower, or (C) the winding up or liquidation of the Borrower;
and such proceeding or petition shall continue undismissed for sixty (60) days,
or an order or decree approving or ordering any of the foregoing shall be
entered; or

                           (vi) if the Borrower shall (A) voluntarily commence
any proceeding or file any petition seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal or
state bankruptcy, insolvency, receivership or similar law, (B) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or the filing of any petition described in this Section 6(a), (C)
apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower, or for a
substantial part of the property or assets of the Borrower, (D) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (E) make a general assignment for the benefit of creditors, (F)
become unable, admit in writing its inability or fail generally to pay its debts
as they become due or (G) take any action for the purpose of effecting any of
the foregoing; or

                           (vii) if the Borrower shall become insolvent or
otherwise become unable to meet its financial obligations as they become due; or

                           (viii) one or more judgments for the payment of money
in an aggregate amount in excess of $100,000 (to the extent not covered by
insurance) shall be rendered against the Borrower and the same shall remain
undischarged for a period of 60 days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to levy upon assets or properties of the Borrower to enforce any such judgment.

                  (b) Acceleration; Forced Sale. If an Event of Default occurs
pursuant to Section 6(a)(vi) or Section 6(a)(vii) then the Redemption Price
shall automatically become immediately due and payable in cash, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived. If any other Event of Default occurs and is continuing the
Holder, by written notice to the Borrower, may declare the Redemption Price to
be immediately due and payable in cash. The Holder may rescind an acceleration
and all or any part of its consequences if all existing Events of Default have
been cured or waived, and if the rescission would not conflict with any judgment
or decree. Any notice or rescission shall be given in the manner specified in
Section 15 herein. If an Event of Default remains uncured for more than two (2)
years, in addition to any other remedies, the Holder may cause the Company to
seek and enter into a Change of Control transaction that generates sufficient
proceeds to pay the Holder the Redemption Price.

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                  (c) Event of Non-Compliance. If an Event of Default occurs
pursuant to Section 6(a) (each an "EVENT OF NON-COMPLIANCE") then the
Noncompliance Rate of Interest shall apply as set forth in Section 2(b).

         7. TSAO SUBORDINATION. Any amount owed to Michael Tsao or Alice Tsao
(or their Affiliates) by the Borrower shall at all times be wholly subordinate
and junior in right of payment to this Note.

         8. SUITS FOR ENFORCEMENT.

                  (a) Upon the occurrence of any one or more Events of Default,
the Holder of this Note may proceed to protect and enforce its rights hereunder
by suit in equity, action at law or by other appropriate proceeding, whether for
the specific performance of any covenant or agreement contained in the Purchase
Agreement or this Note or in aid of the exercise of any power granted in the
Purchase Agreement or this Note, or may proceed to enforce the payment of this
Note, or to enforce any other legal or equitable right of the Holders of this
Note.

                  (b) In case of any default under this Note, the Borrower will
pay to the Holder such amounts as shall be sufficient to cover the costs and
expenses of such Holder due to such default.

         9. REMEDIES CUMULATIVE. No remedy herein conferred upon the Holder is
intended to be exclusive of any other remedy and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.

         10. REMEDIES NOT WAIVED. No course of dealing between the Borrower and
the Holder or any delay on the part of the Holder in exercising any rights
hereunder shall operate as a waiver of any right.

         11. TRANSFER.

                  (a) Permitted Transfers. Subject to the provisions of this
Section 11, this Note may be transferred or assigned, in whole or in part, by
the Holder at any time to any Person.

                  (b) Transferees. The term "HOLDER" as used herein shall also
include any transferee of this Note whose name has been recorded by the Borrower
in the Note Register. No transfers of this Note shall be permitted unless each
transferee of this Note acknowledges that this Note has not been registered
under the Securities Act, and may be transferred (i) only pursuant to an
effective registration under the Securities Act and any applicable state
securities law or (ii) if the Company first shall have been furnished with an
opinion of legal counsel or otherwise reasonably satisfactory to the Company to
the effect that such transfer is exempt from, or in compliance with, the
registration requirements of the Securities Act and such state laws and that
such transferee has represented that it is acquiring this Note for investment
purposes only and not with a view toward resale or distribution thereof.
Notwithstanding the foregoing, this Note may be transferred by Townsends to any
of its Affiliates without the requirement of an opinion of legal counsel, so
long as such transfer is in compliance with federal and state securities laws.

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                  (c) Note Register. The Borrower shall maintain a register (the
"NOTE REGISTER") in its principal offices for the purpose of registering the
Note and any transfer or partial transfer thereof, which register shall reflect
and identify, at all times, the ownership of record of any interest in the Note.
Upon the issuance of this Note, the Borrower shall record the name and address
of the initial purchaser of this Note in the Note Register as the first Holder.
Upon surrender for registration of transfer or exchange of this Note at the
principal offices of the Borrower, the Borrower shall, at its expense, execute
and deliver one or more new Notes of like tenor and of denominations of a like
aggregate Principal Amount, registered in the name of the Holder or a transferee
or transferees. Every Note surrendered for registration of transfer or exchange
shall be duly endorsed, or be accompanied by written instrument of transfer duly
executed by the Holder of such Note or such holder's attorney duly authorized in
writing. The failure of the Borrower to adequately maintain the Note Register in
compliance with this Section 11(c) shall not in any way alter, invalidate or
modify any Holder's interest in the Note.

         12. WAIVER OF NOTICE, PRESENTMENT AND DISHONOR. Each party liable under
this Note in any capacity, whether as maker, endorser, surety, guarantor or
otherwise: (a) waives presentment, demand, protest and notice of presentment,
notice of protest and notice of dishonor of this debt and each and every other
notice of any kind with respect to this Note, and (b) agrees that the holder of
this Note, at any time or times, without notice to it or its consent, may grant
extensions of time, without limit as to the number or the aggregate period of
such extensions, for the payment of any principal, interest or other sums due
hereunder.

         13. REPLACEMENT OF NOTE. On receipt by the Borrower of an affidavit of
an authorized representative of the Holder stating the circumstances of the
loss, theft, destruction or mutilation of this Note in form and substance
reasonably satisfactory to Borrower (and in the case of any such mutilation, on
surrender and cancellation of such Note), the Borrower will promptly execute and
deliver, in lieu thereof, a new Note of like tenor (including, without
limitation, the legend regarding the subordination of certain rights of the
holder hereunder). If required by the Borrower, such Holder must provide
indemnity sufficient in the reasonable judgment of the Borrower to protect the
Borrower from any loss which the Borrower may suffer if a lost, stolen or
destroyed Note is replaced.

         14. COVENANTS BIND SUCCESSORS AND ASSIGNS. All the covenants,
stipulations, promises and agreements in this Note contained by or on behalf of
the Borrower shall bind its successors and assigns, whether so expressed or not.

                15. NOTICES. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first-class mail, return receipt requested, telecopier
(with receipt confirmed telephonically), reputable commercial overnight courier
service or personal delivery at the addresses specified in Section 6.5 of the
Purchase Agreement. All such notices and communications shall be deemed to have
been duly given when: delivered by hand, if personally delivered; when delivered
by courier, if delivered by a reputable commercial overnight courier service; if
mailed, upon receipt thereof; or if telecopied, when receipt is acknowledged.

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         16. AMENDMENT. Amendments and modifications of this Note may be made
only in the manner provided in Section 6.7 of the Purchase Agreement and subject
to the terms of the Purchase Agreement.

         17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED IN
ACCORDANCE WITH, AND ENFORCED UNDER, THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE.

         18. JURISDICTION, JURY TRIAL WAIVER, ETC.

                  (a) THE COMPANY HEREBY IRREVOCABLY AGREES THAT ANY LEGAL
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE SHALL BE BROUGHT
ONLY IN THE COURTS OF THE STATE OF DELAWARE OR OF THE UNITED STATES OF AMERICA
FOR THE DISTRICT OF DELAWARE IN EACH CASE IN THE COUNTY OF NEW CASTLE AND HEREBY
EXPRESSLY SUBMITS TO THE PERSONAL JURISDICTION AND VENUE OF SUCH COURTS FOR THE
PURPOSES THEREOF AND EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE AND ANY CLAIM
THAT SUCH COURTS ARE AN INCONVENIENT FORUM. THE COMPANY HEREBY IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY
SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED
OR CERTIFIED MAIL, POSTAGE PREPAID, PURSUANT TO SECTION 15 ABOVE.

                  (b) THE COMPANY HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF THIS NOTE, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.

                19. SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof. The parties hereto further agree to replace such
invalid, illegal or unenforceable provision with a substitute provision that
will achieve, to the fullest extent possible, the economic, business and other
purposes of such invalid, illegal or unenforceable provision.

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                  20. HEADINGS. The headings in this Note are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

                                           KAHIKI FOODS, INC.

                                           By:  /s/ Michael Tsao
                                                ------------------------
                                                Michael Tsao
                                                Chief Executive Officer

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                                    EXHIBIT A

                          PAYMENT AND ACCRUAL SCHEDULE

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                                                                    EXHIBIT 10.1

                            THE J. M. SMUCKER COMPANY

                   1998 EQUITY AND PERFORMANCE INCENTIVE PLAN
             (AS AMENDED AND RESTATED EFFECTIVE AS OF JUNE 6, 2005)

         1.       PURPOSE. The purpose of the 1998 Equity and Performance
Incentive Plan (As Amended and Restated Effective as of June 6, 2005) is to
attract and retain consultants, officers and other key employees for The J. M.
Smucker Company, an Ohio corporation, and its Subsidiaries and to provide to
such persons incentives and rewards for superior performance.

         2.       DEFINITIONS.  As used in this Plan,

                  "Appreciation Right" means a right granted pursuant to Section
5 of this Plan, and shall include both Tandem Appreciation Rights and
Free-Standing Appreciation Rights.

                  "Base Price" means the price to be used as the basis for
determining the Spread upon the exercise of a Free-Standing Appreciation Right
and a Tandem Appreciation Right.

                  "Board" means the Board of Directors of the Company and, to
the extent of any delegation by the Board to a committee (or subcommittee
thereof) pursuant to Section 15 of this Plan, such committee (or subcommittee).

                  "Change in Control" shall have the meaning provided in Section
11 of this Plan.

                  "Common Shares" means common shares, without par value, of the
Company or any security into which such Common Shares may be changed by reason
of any transaction or event of the type referred to in Section 10 of this Plan.

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

                  "Company" means The J. M. Smucker Company, an Ohio
corporation.

                  "Covered Employee" means a Participant who is, or is
determined by the Board to be likely to become, a "covered employee" within the
meaning of Section 162(m) of the Code (or any successor provision).

                  "Date of Grant" means the date specified by the Board on which
a grant of Option Rights, Appreciation Rights, Performance Shares or Performance
Units or a grant or sale of Restricted Shares or Deferred Shares shall become
effective (which date shall not be earlier than the date on which the Board
takes action with respect thereto).

                  "Deferral Period" means the period of time during which
Deferred Shares are subject to deferral limitations under Section 7 of this
Plan.

<PAGE>

                  "Deferred Shares" means an award made pursuant to Section 7 of
this Plan of the right to receive Common Shares at the end of a specified
Deferral Period.

                  "Director" means a member of the Board of Directors of the
Company.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder, as such law, rules and
regulations may be amended from time to time.

                  "Evidence of Award" means an agreement, certificate,
resolution or other type or form of writing or other evidence approved by the
Committee which sets forth the terms and conditions of Option Rights,
Appreciation Rights, Restricted Shares, Deferred Shares, Performance Shares or
Performance Units. An Evidence of Award may be in any electronic medium, may be
limited to a notation on the books and records of the Company and, with the
approval of the Committee, need not be signed by a representative of the Company
or a Participant.

                  "Free-Standing Appreciation Right" means an Appreciation Right
granted pursuant to Section 5 of this Plan that is not granted in tandem with an
Option Right.

                  "Incentive Stock Options" means Option Rights that are
intended to qualify as "incentive stock options" under Section 422 of the Code
or any successor provision.

                  "Management Objectives" means the measurable performance
objective or objectives established pursuant to this Plan for Participants who
have received grants of Performance Shares or Performance Units or, when so
determined by the Board, Option Rights, Appreciation Rights, Restricted Shares
and dividend credits pursuant to this Plan. Management Objectives may be
described in terms of Company-wide objectives or objectives that are related to
the performance of the individual Participant or of the Subsidiary, division,
department, region or function within the Company or Subsidiary in which the
Participant is employed. The Management Objectives may be made relative to the
performance of other corporations. The Management Objectives applicable to any
award to a Covered Employee that is intended to comply with Section 162(m) of
the Code shall be based on specified levels of or growth in one or more of the
following criteria:

                  1.       cash flow/net assets ratio;
                  2.       debt/capital ratio;
                  3.       return on total capital;
                  4.       return on equity;
                  5.       return on assets;
                  6.       earnings per share;
                  7.       revenue;
                  8.       total return to shareholders;
                  9.       margin performance; and
                 10.       return on invested capital.

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                  If the Committee determines that a change in the business,
operations, corporate structure or capital structure of the Company, or the
manner in which it conducts its business, or other events or circumstances
render the Management Objectives unsuitable, the Committee may in its discretion
modify such Management Objectives or the related minimum acceptable level of
achievement, in whole or in part, as the Committee deems appropriate and
equitable, except in the case of a Covered Employee where such action would
result in the loss of the otherwise available exemption of the award under
Section 162(m) of the Code. In such case, the Committee shall not make any
modification of the Management Objectives or minimum acceptable level of
achievement.

                  "Market Value per Share" means, as of any particular date, (i)
the closing sale price per Common Share as reported on new York Stock Exchange
on the Date of Grant, or if there are no sales on such day, on the next
preceding trading day during which a sale occurred, or (ii) if clause (i) does
not apply, the fair market value of the Common Shares as determined by the
Board.

                  "Optionee" means the optionee named in an Evidence of Award
evidencing an outstanding Option Right.

                  "Option Price" means the purchase price payable on exercise of
an Option Right.

                  "Option Right" means the right to purchase Common Shares upon
exercise of an option granted pursuant to Section 4 of this Plan.

                  "Participant" means a person who is selected by the Board to
receive benefits under this Plan and who is at the time a consultant, an
officer, or other key employee of the Company or any one or more of its
Subsidiaries, or who has agreed to commence serving in any of such capacities
within 90 days of the Date of Grant.

                  "Performance Period" means, in respect of a Performance Share
or Performance Unit, a period of time established pursuant to Section 8 of this
Plan within which the Management Objectives relating to such Performance Share
or Performance Unit are to be achieved.

                  "Performance Share" means a bookkeeping entry that records the
equivalent of one Common Share awarded pursuant to Section 8 of this Plan.

                  "Performance Unit" means a bookkeeping entry that records a
unit equivalent to $1.00 awarded pursuant to Section 8 of this Plan.

                  "Plan" means The J. M. Smucker Company 1998 Equity and
Performance Incentive Plan (As Amended and Restated Effective as of June 6,
2005).

                  "Restricted Shares" means Common Shares granted or sold
pursuant to Section 6 of this Plan as to which neither the substantial risk of
forfeiture nor the prohibition on transfers referred to in such Section 6 has
expired.

                                       3
<PAGE>

                  "Spread" means the excess of the Market Value per Share on the
date when an Appreciation Right is exercised, or on the date when Option Rights
are surrendered in payment of the Option Price of other Option Rights, over the
Option Price or Base Price provided for in the related Option Right or
Free-Standing Appreciation Right, respectively.

                  "Subsidiary" means a corporation, company or other entity (i)
more than 50 percent of whose outstanding shares or securities (representing the
right to vote for the election of directors or other managing authority) are, or
(ii) which does not have outstanding shares or securities (as may be the case in
a partnership, joint venture or unincorporated association), but more than 50
percent of whose ownership interest representing the right generally to make
decisions for such other entity is, now or hereafter, owned or controlled,
directly or indirectly, by the Company except that for purposes of determining
whether any person may be a Participant for purposes of any grant of Incentive
Stock Options, "Subsidiary" means any corporation in which at the time the
Company owns or controls, directly or indirectly, more than 50 percent of the
total combined voting power represented by all classes of stock issued by such
corporation.

                  "Tandem Appreciation Right" means an Appreciation Right
granted pursuant to Section 5 of this Plan that is granted in tandem with an
Option Right.

                  "Voting Power" means at any time, the total votes relating to
the then-outstanding securities entitled to vote generally in the election of
Directors.

         3.       SHARES AVAILABLE UNDER THE PLAN. (a) Subject to adjustment as
provided in Section 3(b) and Section 10 of this Plan, the number of Common
Shares that may be issued or transferred (i) upon the exercise of Option Rights
or Appreciation Rights, (ii) as Restricted Shares and released from substantial
risks of forfeiture thereof, (iii) as Deferred Shares, (iv) in payment of
Performance Shares or Performance Units that have been earned or (v) in payment
of dividend equivalents paid with respect to awards made under the Plan shall
not exceed in the aggregate 3,793,140 Common Shares, plus any shares described
in Section 3(b). Such shares may be shares of original issuance or treasury
shares or a combination of the foregoing. The 3,793,140 maximum number of Common
Shares described above consists of 1,323,140 Common Shares that were approved in
1998 (as adjusted to reflect the combination of the Company's former Class A and
Class B common shares in 2000 and the merger of the Jif/Crisco businesses in
2002), and 2,470,000 Common Shares that were added by the Amendment and
Restatement Effective as of September 1, 2002.

                  (b)      The number of shares available in Section 3(a) above
shall be adjusted to account for shares relating to awards that expire, are
forfeited or are transferred, surrendered or relinquished upon the payment of
any Option Price by the transfer to the Company of Common Shares or upon
satisfaction of any withholding amount. Upon payment in cash of the benefit
provided by any award granted under this Plan, any shares that were covered by
that award shall again be available for issue or transfer hereunder.

                  (c)      Notwithstanding anything in this Section 3, or
elsewhere in this Plan, to the contrary and subject to adjustment as provided in
Section 10 of this Plan, (i) the aggregate number of Common Shares actually
issued or transferred by the Company upon the exercise of

                                       4
<PAGE>

Incentive Stock Options shall not exceed 3,793,140 Common Shares; (ii) no
Participant shall be granted Option Rights and Appreciation Rights, in the
aggregate, for more than 300,000 Common Shares during any calendar year; and
(iii) the number of shares issued as Restricted Shares and Deferred Shares shall
not exceed 925,295 Common Shares in total, consisting of 425,295 Common Shares
provided for in 1998 (as adjusted for the combination and the Jif/Crisco
transaction) and 500,000 Common Shares added by the Amendment and Restatement
Effective as of September 1, 2002, and no more than 50 percent of the total
number of Shares issuable as Restricted Shares and Deferred Shares under this
Section 3(c)(iii) may be issued as Deferred Shares.

                  (d)      Notwithstanding any other provision of this Plan to
the contrary, in no event shall any Participant in any calendar year receive an
award of Performance Shares or Performance Units having an aggregate maximum
value as of their respective Dates of Grant in excess of $1,000,000.

         4.       OPTION RIGHTS. The Board may, from time to time and upon such
terms and conditions as it may determine, authorize the granting to Participants
of options to purchase Common Shares. Each such grant may utilize any or all of
the authorizations, and shall be subject to all of the requirements contained in
the following provisions:

                  (a)      Each grant shall specify the number and class of
Common Shares to which it pertains subject to the limitations set forth in
Section 3 of this plan.

                  (b)      Each grant shall specify an Option Price per share,
which may not be less than the Market Value per Share on the Date of Grant.

                  (c)      Each grant shall specify whether the Option Price
shall be payable (i) in cash or by check acceptable to the Company, (ii) by the
actual or constructive transfer to the Company of Common Shares owned by the
Optionee for at least 6 months (or other consideration authorized pursuant to
Section 4(d) having a value at the time of exercise equal to the total Option
Price, or (iii) by a combination of such methods of payment.

                  (d)      The Board may determine, at or after the Date of
Grant, that payment of the Option Price of any Option Right (other than an
Incentive Stock Option) may also be made in whole or in part in the form of
Restricted Shares or other Common Shares that are forfeitable or subject to
restrictions on transfer, Deferred Shares, Performance Shares (based, in each
case, on the Market Value per Share on the date of exercise), other Option
Rights (based on the Spread on the date of exercise) or Performance Units.
Unless otherwise determined by the Board at or after the Date of Grant, whenever
any Option Price is paid in whole or in part by means of any of the forms of
consideration specified in this Section 4(d), the Common Shares received upon
the exercise of the Option Rights shall be subject to such risks of forfeiture
or restrictions on transfer as may correspond to any that apply to the
consideration surrendered, but only to the extent, determined with respect to
the consideration surrendered, of (i) the number of shares or Performance
Shares, (ii) the Spread of any unexercisable portion of Option Rights, or (iii)
the stated value of Performance Units.

                                       5
<PAGE>

                  (e)      Any grant may provide for deferred payment of the
Option Price from the proceeds of sale through a broker on a date satisfactory
to the Company of some or all of the shares to which such exercise relates.

                  (f)      Successive grants may be made to the same Participant
whether or not any Option Rights previously granted to such Participant remain
unexercised.

                  (g)      Each grant shall specify the period or periods of
continuous service by the Optionee with the Company or any Subsidiary that is
necessary before the Option Rights or installments thereof will become
exercisable and may provide for the earlier exercise of such Option Rights in
the event of a Change in Control.

                  (h)      Any grant of Option Rights may specify Management
Objectives that must be achieved as a condition to the exercise of such rights.

                  (i)      Option Rights granted under this Plan may be (i)
options, including, without limitation, Incentive Stock Options, that are
intended to qualify under particular provisions of the Code, (ii) options that
are not intended so to qualify, or (iii) combinations of the foregoing.

                  (j)      The Board may, at or after the Date of Grant of any
Option Rights (other than Incentive Stock Options), provide for the payment of
dividend equivalents to the Optionee on either a current or deferred or
contingent basis or may provide that such equivalents shall be credited against
the Option Price.

                  (k)      The exercise of an Option Right shall result in the
cancellation on a share-for-share basis of any Tandem Appreciation Right
authorized under Section 5 of this Plan.

                  (l)      No Option Right shall be exercisable more than 10
years from the Date of Grant.

                  (m)      Each grant of Option Rights shall be evidenced by an
Evidence of Award, which shall contain such terms and provisions, consistent
with this Plan, as the Board may approve.

         5.       APPRECIATION RIGHTS. (a) The Board may authorize the granting
(i) to any Optionee, of Tandem Appreciation Rights in respect of Option Rights
granted hereunder, and (ii) to any Participant, of Free-Standing Appreciation
Rights. A Tandem Appreciation Right shall be a right of the Optionee,
exercisable by surrender of the related Option Right, to receive from the
Company an amount determined by the Board, which shall be expressed as a
percentage of the Spread (not exceeding 100 percent) at the time of exercise.
Tandem Appreciation Rights may be granted at any time prior to the exercise or
termination of the related Option Rights; provided, however, that a Tandem
Appreciation Right awarded in relation to an Incentive Stock Option must be
granted concurrently with such Incentive Stock Option. A Free-Standing
Appreciation Right shall be a right of the Participant to receive from the
Company an amount

                                       6
<PAGE>

determined by the Board, which shall be expressed as a percentage of the Spread
(not exceeding 100 percent) at the time of exercise.

                  (b)      Each grant of Appreciation Rights may utilize any or
all of the authorizations, and shall be subject to all of the requirements,
contained in the following provisions:

                           (i)      Any grant may specify that the amount
         payable on exercise of an Appreciation Right may be paid by the Company
         in cash, in Common Shares or in any combination thereof and may either
         grant to the Participant or retain in the Board the right to elect
         among those alternatives.

                           (ii)     Any grant may specify that the amount
         payable on exercise of an Appreciation Right may not exceed a maximum
         specified by the Board at the Date of Grant.

                           (iii)    Any grant may specify waiting periods before
         exercise and permissible exercise dates or periods.

                           (iv)     Any grant may specify that such Appreciation
         Right may be exercised only in the event of, or earlier in the event
         of, a Change in Control.

                           (v)      Any grant may provide for the payment to the
         Participant of dividend equivalents thereon in cash or Common Shares on
         a current, deferred or contingent basis.

                           (vi)     Any grant of Appreciation Rights may specify
         Management Objectives that must be achieved as a condition of the
         exercise of such Rights.

                           (vii)    Each grant of Appreciation Rights shall be
         evidenced by an Evidence of Award, which shall describe such
         Appreciation Rights, identify the related Option Rights (if
         applicable), state that such Appreciation Rights are subject to all the
         terms and conditions of this Plan, and contain such other terms and
         provisions, consistent with this Plan, as the Board may approve.

                  (c)      Any grant of Tandem Appreciation Rights shall provide
that such Rights may be exercised only at a time when the related Option Right
is also exercisable and at a time when the Spread is positive, and by surrender
of the related Option Right for cancellation.

                  (d)      Regarding Free-standing Appreciation Rights only:

                           (i)      Each grant shall specify in respect of each
                  Free-standing Appreciation Right a Base Price, which shall be
                  equal to or greater or less than the Market Value per Share on
                  the Date of Grant;

                                       7
<PAGE>

                           (ii)     Successive grants may be made to the same
                  Participant regardless of whether any Free-standing
                  Appreciation Rights previously granted to the Participant
                  remain unexercised; and

                           (iii)    No Free-standing Appreciation Right granted
                  under this Plan may be exercised more than 10 years from the
                  Date of Grant.

         6.       RESTRICTED SHARES. The Board may also authorize the grant or
sale of Restricted Shares to Participants. Each such grant or sale may utilize
any or all of the authorizations, and shall be subject to all of the
requirements, contained in the following provisions:

                  (a)      Each such grant or sale shall constitute an immediate
transfer of the ownership of Common Shares to the Participant in consideration
of the performance of services, entitling such Participant to voting, dividend
and other ownership rights, but subject to the substantial risk of forfeiture
and restrictions on transfer hereinafter referred to.

                  (b)      Each such grant or sale may be made without
additional consideration or in consideration of a payment by such Participant
that is less than Market Value per Share at the Date of Grant.

                  (c)      Each such grant or sale shall provide that the
Restricted Shares covered by such grant or sale shall be subject to a
"substantial risk of forfeiture" within the meaning of Section 83 of the Code
for a period of not less than 3 years to be determined by the Board at the Date
of Grant and may provide for the earlier lapse of such substantial risk of
forfeiture in the event of a Change in Control.

                  (d)      Each such grant or sale shall provide that during the
period for which such substantial risk of forfeiture is to continue, the
transferability of the Restricted Shares shall be prohibited or restricted in
the manner and to the extent prescribed by the Board at the Date of Grant (which
restrictions may include, without limitation, rights of repurchase or first
refusal in the Company or provisions subjecting the Restricted Shares to a
continuing substantial risk of forfeiture in the hands of any transferee).

                  (e)      Any grant of Restricted Shares may specify Management
Objectives that, if achieved, will result in termination or early termination of
the restrictions applicable to such shares. Each grant may specify in respect of
such Management Objectives a minimum acceptable level of achievement and may set
forth a formula for determining the number of Restricted Shares on which
restrictions will terminate if performance is at or above the minimum level, but
falls short of full achievement of the specified Management Objectives.

                  (f)      Any such grant or sale of Restricted Shares may
require that any or all dividends or other distributions paid thereon during the
period of such restrictions be automatically deferred and reinvested in
additional Restricted Shares, which may be Subject to the same restrictions as
the underlying award.

                                       8
<PAGE>

                  (g)      Each grant or sale of Restricted Shares shall be
evidenced by an Evidence of Award, which shall contain such terms and
provisions, consistent with this Plan, as the Board may approve. The Board may
require that certificates representing Restricted Shares shall be held in
custody by the Company until all restrictions thereon shall have lapsed,
together with a stock power or powers executed by the Participant in whose name
such certificates are registered, endorsed in blank and covering such Shares.
Such Shares shall bear an appropriate legend indicating the nature of the
restrictions provided for in this Section.

         7.       DEFERRED SHARES. The Board may also authorize the granting or
sale of Deferred Shares to Participants. Each such grant or sale may utilize any
or all of the authorizations, and shall be subject to all of the requirements
contained in the following provisions:

                  (a)      Each such grant or sale shall constitute the
agreement by the Company to deliver Common Shares to the Participant in the
future in consideration of the performance of services, but subject to the
fulfillment of such conditions during the Deferral Period as the Board may
specify.

                  (b)      Each such grant or sale may be made without
additional consideration or in consideration of a payment by such Participant
that is less than the Market Value per Share at the Date of Grant.

                  (c)      Each such grant or sale shall be subject to a
Deferral Period of not less than 1 year, as determined by the Board at the Date
of Grant, and may provide for the earlier lapse or other modification of such
Deferral Period in the event of a Change in Control.

                  (d)      During the Deferral Period, the Participant shall
have no right to transfer any rights under his or her award and shall have no
rights of ownership in the Deferred Shares and shall have no right to vote them,
but the Board may, at or after the Date of Grant, authorize the payment of
dividend equivalents on such Shares on either a current or deferred or
contingent basis, either in cash or in additional Common Shares.

                  (e)      Each grant or sale of Deferred Shares shall be
evidenced by an Evidence of Award, which shall contain such terms and
provisions, consistent with this Plan, as the Board may approve.

         8.       PERFORMANCE SHARES AND PERFORMANCE UNITS. The Board may also
authorize the granting of Performance Shares and Performance Units that will
become payable to a Participant upon achievement of specified Management
Objectives. Each such grant may utilize any or all of the authorizations, and
shall be subject to all of the requirements, contained in the following
provisions:

                  (a)      Each grant shall specify the number of Performance
Shares or Performance Units to which it pertains, which number may be subject to
adjustment to reflect changes in compensation or other factors; provided,
however, that no such adjustment shall be made in the case of a Covered Employee
where such action would result in the loss of the otherwise available exemption
of the award under Section 162(m) of the Code.

                                       9
<PAGE>

                  (b)      The Performance Period with respect to each
Performance Share or Performance Unit shall be such period of time (not less
than 3 years), commencing with the Date of Grant as shall be determined by the
Board at the time of grant which may be subject to earlier lapse or other
modification in the event of a Change in Control as set forth in the Evidence of
Award.

                  (c)      Any grant of Performance Shares or Performance Units
shall specify Management Objectives which, if achieved, will result in payment
or early payment of the award, and each grant may specify in respect of such
specified Management Objectives a minimum acceptable level of achievement and
shall set forth a formula for determining the number of Performance Shares or
Performance Units that will be earned if performance is at or above the minimum
level, but falls short of full achievement of the specified Management
Objectives. The grant of Performance Shares or Performance Units shall specify
that, before the Performance Shares or Performance Units shall be earned and
paid, the Board must certify that the Management Objectives have been satisfied.

                  (d)      Each grant shall specify the time and manner of
payment of Performance Shares or Performance Units that have been earned. Any
grant may specify that the amount payable with respect thereto may be paid by
the Company in cash, in Common Shares or in any combination thereof and may
either grant to the Participant or retain in the Board the right to elect among
those alternatives.

                  (e)      Any grant of Performance Shares may specify that the
amount payable with respect thereto may not exceed a maximum specified by the
Board at the Date of Grant. Any grant of Performance Units may specify that the
amount payable or the number of Common Shares issued with respect thereto may
not exceed maximums specified by the Board at the Date of Grant.

                  (f)      The Board may, at or after the Date of Grant of
Performance Shares, provide for the payment of dividend equivalents to the
holder thereof on either a current or deferred or contingent basis, either in
cash or in additional Common Shares.

                  (g)      Each grant of Performance Shares or Performance Units
shall be evidenced by an Evidence of Award, which shall state that such
Performance Shares or Performance Units are subject to all the terms and
conditions of this Plan, and contain such other terms and provisions, consistent
with this Plan, as the Board may approve.

         9.       TRANSFERABILITY. (a) Except as otherwise determined by the
Board, no Option Right, Appreciation Right or other derivative security granted
under the Plan shall be transferable by a Participant other than by will or the
laws of descent and distribution. Except as otherwise determined by the Board,
Option Rights and Appreciation Rights shall be exercisable during the Optionee's
lifetime only by him or her or by his or her guardian or legal representative.

                  (b)      The Board may specify at the Date of Grant that part
or all of the Common Shares that are (i) to be issued or transferred by the
Company upon the exercise of Option Rights

                                       10
<PAGE>

or Appreciation Rights, upon the termination of the Deferral Period applicable
to Deferred Shares or upon payment under any grant of Performance Shares or
Performance Units or (ii) no longer subject to the substantial risk of
forfeiture and restrictions on transfer referred to in Section 6 of this Plan,
shall be subject to further restrictions on transfer.

         10.      ADJUSTMENTS. The Board may make or provide for such
adjustments in the numbers of Common Shares covered by outstanding Option
Rights, Appreciation Rights, Deferred Shares, and Performance Shares granted
hereunder, in the prices per share applicable to such Option Rights and
Appreciation Rights and in the kind of shares covered thereby, as the Board, in
its sole discretion, exercised in good faith, may determine is equitably
required to prevent dilution or enlargement of the rights of Participants or
Optionees that otherwise would result from (a) any stock dividend, stock split,
combination of shares, recapitalization or other change in the capital structure
of the Company, or (b) any merger, consolidation, spin-off, split-off, spin-out,
split-up, reorganization, partial or complete liquidation or other distribution
of assets, issuance of rights or warrants to purchase securities, or (c) any
other corporate transaction or event having an effect similar to any of the
foregoing. Moreover, in the event of any such transaction or event, the Board,
in its discretion, may provide in substitution for any or all outstanding awards
under this Plan such alternative consideration as it, in good faith, may
determine to be equitable in the circumstances and may require in connection
therewith the surrender of all awards so replaced. The Board may also make or
provide for such adjustments in the numbers of shares specified in Section 3 of
this Plan as the Board in its sole discretion, exercised in good faith, may
determine is appropriate to reflect any transaction or event described in this
Section 10; provided, however, that any such adjustment to the number specified
in Section 3(c)(i) shall be made only if and to the extent that such adjustment
would not cause any Option intended to qualify as an Incentive Stock Option to
fail so to qualify.

         11.      CHANGE IN CONTROL. For purposes of this Plan, except as may be
otherwise prescribed by the Board in an Evidence of Award, a "Change in Control"
shall have occurred if at any time any of the following events shall have
occurred:

                  (a)      A filing pursuant to any federal or state law in
connection with any tender offer for shares of the Company (other than a tender
offer by the Company);

                  (b)      The occurrence of or the signing of any agreement for
a merger, consolidation, combination (as defined in Section 1701.01(Q), Ohio
Revised Code), or majority share acquisition (as defined in Section 1701.01(R),
Ohio Revised Code) involving the Company and as a result of which the holders of
shares of the Company prior to the transaction become, or will become, by reason
of the transaction, the holders of such number of shares of the surviving or
acquiring corporation as entitle them to exercise less than one-third of the
voting power of such corporation in the election of directors;

                  (c)      The signing of any agreement for the sale of all or
substantially all of the assets of the Company;

                  (d)      The adoption of any resolution of reorganization or
dissolution of the Company by the shareholders;

                                       11
<PAGE>

                  (e)      The occurrence of any other event or series of
events, which, in the opinion of the Board of Directors, will, or is likely to,
if carried out, result in a change of control of the Company;

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

                  (g)      The acquisition by any person (including a group
within the meaning of Sections 13(d)(3) or 14(d)(2) of the Exchange Act other
than the Company (or any of its Subsidiaries) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
the combined voting power of the Company's then outstanding voting securities,
unless such acquisition is approved by the vote of at least two-thirds of the
Directors of the Company then in office.

         12.      FRACTIONAL SHARES. The Company shall not be required to issue
any fractional Common Shares pursuant to this Plan. The Board may provide for
the elimination of fractions or for the settlement of fractions in cash.

         13.      WITHHOLDING TAXES. To the extent that the Company is required
to withhold federal, state, local or foreign taxes in connection with any
payment made or benefit realized by a Participant or other person under this
Plan, and the amounts available to the Company for such withholding are
insufficient, it shall be a condition to the receipt of such payment or the
realization of such benefit that the Participant or such other person make
arrangements satisfactory to the Company for payment of the balance of such
taxes required to be withheld, which arrangements (in the discretion of the
Board) may include relinquishment of a portion of such benefit. The Company and
a Participant or such other person may also make similar arrangements with
respect to the payment of any taxes with respect to which withholding is not
required. For options issued after June 30, 2000, the Company shall withhold no
more than the minimum tax withholding required by law.

         14.      FOREIGN EMPLOYEES. In order to facilitate the making of any
grant or combination of grants under this Plan, the Board may provide for such
special terms for awards to Participants who are foreign nationals or who are
employed by the Company or any Subsidiary outside of the United States of
America as the Board may consider necessary or appropriate to accommodate
differences in local law, tax policy or custom. Moreover, the Board may approve
such supplements to or amendments, restatements or alternative versions of this
Plan as it may consider necessary or appropriate for such purposes, without
thereby affecting the terms of this Plan as in effect for any other purpose, and
the Secretary or other appropriate officer of the Company may certify any such
document as having been approved and adopted in the same manner as this Plan. No
such special terms, supplements, amendments or restatements, however, shall
include any provisions that are inconsistent with the terms of this Plan as then
in effect

                                       12
<PAGE>

unless this Plan could have been amended to eliminate such inconsistency without
further approval by the shareholders of the Company.

         15       ADMINISTRATION OF THE PLAN. (a) This Plan shall be
administered by the Board, which may from time to time delegate all or any part
of its authority under this Plan to a committee of the Board (or subcommittee
thereof) consisting of not less than three non-employee Directors appointed by
the Board. A majority of the committee (or subcommittee) shall constitute a
quorum, and the action of the members of the committee (or subcommittee) present
at any meeting at which a quorum is present, or acts unanimously approved in
writing, shall be the acts of the committee (or subcommittee). To the extent of
any such delegation, references in this Plan to the Board shall be deemed to be
references to any such committee or subcommittee.

                  (b)      The interpretation and construction by the Board of
any provision of this Plan or of any Evidence of Award and any determination by
the Board pursuant to any provision of this Plan or of any such Evidence of
Award shall be final and conclusive. No member of the Board shall be liable for
any such action or determination made in good faith.

         16       AMENDMENTS, ETC. (a) The Board may at any time and from time
to time amend the Plan in whole or in part; provided, however, that (i) any
amendment which must be approved by the shareholders of the Company in order to
comply with applicable law or a specific rule of the New York Stock Exchange, or
if the Common Shares are not traded on the New York Stock Exchange, the
principal national securities exchange upon which the Common Shares are traded
or quoted, shall not be effective unless and until such approval has been
obtained, and (ii) approval by a majority of the votes cast at a properly and
duly called meeting of the shareholders of the Company shall be required for any
amendment that would empower the Board either (x) to in any way modify the
Option Price of an Option Right other than as provided in Section 10 of this
Plan, or (y) to materially modify or waive any conditions or restrictions on or
Management Objectives relating to any Deferred Shares, Restricted Shares,
Performance Shares, or Performance Units issued under this Plan. Presentation of
this Plan or any amendment hereof for shareholder approval shall not be
construed to limit the Company's authority to offer similar or dissimilar
benefits under other plans without shareholder approval.

                  (b)      The Board shall not, without the further approval of
the shareholders of the Company, authorize the amendment of any outstanding
Option Right to reduce the Option Price. Furthermore, no Option Right shall be
canceled and replaced with awards having a lower Option Price without further
approval of the shareholders of the Company. This Section 16(b) is intended to
prohibit the repricing of "underwater" Option Rights and shall not be construed
to prohibit the adjustments provided for in Section 10 of this Plan.

                  (c)      The Board also may permit Participants to elect to
defer the issuance of Common Shares or the settlement of awards in cash under
the Plan pursuant to such rules, procedures or programs as it may establish for
purposes of this Plan. The Board also may provide that deferred issuances and
settlements include the payment or crediting of dividend equivalents or interest
on the deferral amounts.

                                       13
<PAGE>

                  (d)      The Board may condition the grant of any award or
combination of awards authorized under this Plan on the surrender or deferral by
the Participant of his or her right to receive a cash bonus or other
compensation otherwise payable by the Company or a Subsidiary to the
Participant.

                  (e)      In case of termination of employment by reason of
death, disability or normal or early retirement, or in the case of hardship or
other special circumstances (including reaching reasonable age and service
requirements approved by the Board from time to time), of a Participant who
holds an Option Right or Appreciation Right not immediately exercisable in full,
or any Restricted Shares as to which the substantial risk of forfeiture or the
prohibition or restriction on transfer has not lapsed, or any Deferred Shares as
to which the Deferral Period has not been completed, or any Performance Shares
or Performance Units which have not been fully earned, or who holds Common
Shares subject to any transfer restriction imposed pursuant to Section 9(b) of
this Plan, the Board may, in its sole discretion, provide for special vesting
criteria or accelerate the time at which such Option Right or Appreciation Right
may be exercised or the time at which such substantial risk of forfeiture or
prohibition or restriction on transfer will lapse or the time when such Deferral
Period will end or the time at which such Performance Shares or Performance
Units will be deemed to have been fully earned or the time when such transfer
restriction will terminate or may waive any other limitation or requirement
under any such award.

                  (f)      This Plan shall not confer upon any Participant any
right with respect to continuance of employment or other service with the
Company or any Subsidiary, nor shall it interfere in any way with any right the
Company or any Subsidiary would otherwise have to terminate such Participant's
employment or other service at any time.

                  (g)      To the extent that any provision of this Plan would
prevent any Option Right that was intended to qualify as an Incentive Stock
Option from qualifying as such, that provision shall be null and void with
respect to such Option Right. Such provision, however, shall remain in effect
for other Option Rights and there shall be no further effect on any provision of
this Plan.

Approved by Shareholders 8/13/02 (effective 9/1/02)
Amended and Restated by the Executive Compensation Committee 10/29/02 and
06/06/05

                                       14

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