Document:

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                                                                   EXHIBIT 10.40

                                    AGREEMENT

        Agreement dated May 28, 2003 between George Foreman ("Foreman")
                          and Salton, Inc. ("Salton").

Whereas:

A.   Foreman is well known celebrity in the United States and other parts of the
     world, possesses a demonstrated ability to interest consumers in the
     purchase of goods and services and is an independent contractor in the
     business of acting as a spokesperson for various businesses and their
     products and services and appearing as a TV commentator for sporting
     events.

B.   Salton is in the business of marketing products, including, particularly,
     products that are used and useful in the preparation of food and
     nonalcoholic beverages, personal care products, and other products intended
     to be attractive to consumers.

C.   Salton desires to have the benefit of Foreman's services as a consultant
     and spokesperson for Salton, including participating in the making of and
     appearing in TV infomercials and TV commercials, as well as other types of
     personal appearances in order to promote products marketed by Salton; and

D.   Foreman and Salton have agreed on compensation to be paid to Foreman for
     his services and appearances.

Therefore, Foreman and Salton agree as set forth below.

1.   Term. The term of this Agreement begins on the date that it is executed by
     Foreman and is delivered to Salton and it ends on November 30, 2006 (the
     "Term"). The Term is divided into three (3) separate service periods
     ("Service Periods"); the first ends November 30, 2004, the second ends
     November 30, 2005 and the third and final Service Period ends November 30,
     2006.

2.   Fees for Services.

     2.1 For the three separate services described in Section 3, during each
     Service Period, Foreman shall be paid total of $3,000,000 divided into 4
     installments in each period. The following amounts for each installment of
     service rendered by Foreman:

     Promotional Appearances                              $300,000
     Attendance at Conferences, shows and meetings        $100,000
     TV Appearances, Infomercials and Commercials         $350,000
                                                          --------
     Total Per Quarter                                    $750,000

     2.2 The amounts owed to Foreman for each installment shall be paid with the
     first installment due September 30th, 2003.

     2.3 Salton shall have the option to pay Foreman up to fifty percent (50%)
     of the full amount owed to Foreman for each quarterly period by delivering,
     in lieu of cash, shares of Salton common stock (the "Shares") to Foreman
     provided that: (i) Salton gives notice to Foreman on or before the forty
     fifth (45th) day following the end of each quarter and (ii) the Shares, at
     the time they are issued and delivered to Foreman, have been registered
     with the United States Securities and Exchange Commission (the "SEC"), so
     that the Shares will not contain only restrictive legend and can, at
     Foreman's election, be freely sold by Foreman immediately upon delivery to
     Foreman or at such

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     later time as Foreman elects so long as the registration statement covering
     the Shares remains in effect as set forth in Exhibit A to this Agreement.

     2.4 The terms and conditions on which the Shares are issued to Foreman,
     including the valuation of the Shares for payment purposes, Foreman's right
     to additional payments if the Shares fall in value, Foreman's obligation to
     share with Salton any increase in the value of the Shares and other terms
     and conditions relating to the registration of the Shares for sale by
     Foreman are set forth in Exhibit A.

3.   Services Defined.

     3.1 General. Generally, Foreman shall assist Salton in developing sales of
     Foreman trademarked products for Salton and in maintaining good business
     relations with Salton's customers and suppliers. Throughout each of the
     three Service Periods under the Agreement, Foreman's specific assignments
     shall be determined by Leon Dreimann, the Chief Executive Officer of Salton
     and, in the absence of Dreimann, by another officer of Salton designated by
     the Board of Directors of Salton.

     3.2 Initial Services. Initially, Foreman's assignment shall be the
     following:

              (i)   attend conferences, shows and meetings on behalf of Salton
                    and meet with executives of retailing companies and other
                    types of companies and meet with marketing personnel and
                    store managers of retailers;

              (ii)  make public appearances for promotional purposes in stores
                    of retail customers of Salton and appearances at other
                    private and public events to promote sales of products for
                    Salton;

              (iii) act in TV commercials and TV informercials promoting
                    products of the Company, particularly Foreman trademarked
                    products, including initial shoots and any additional shoots
                    or remakes required or desirable in order to complete the
                    commercials and infomercials, make appearances on television
                    shopping channels, such as QVC and to promote such products.

     The assignment shall be performed both in the United States and other areas
     of the world where Salton products are marketed to consumers; such areas
     include, at the present time, Canada, the United Kingdom and portions of
     Western Europe, including Germany and France, Australia, New Zealand and
     South Africa.

     3.3 Foreman Availability and Condition. During the Service Periods, and
     excluding any periods of vacation, temporary illness or temporary
     disability, Foreman agrees to keep himself available and ready in order to
     perform the services designated and assigned under this Agreement and to
     use his best efforts to perform faithfully and efficiently, and to give all
     of the time reasonably required in order to perform each of the services
     and tasks that Salton requests of him, as set forth in this Agreement. It
     is a condition to continued payment under this Agreement that Foreman
     maintain a healthy condition and appearance (other than in cases of
     temporary illness or temporary disability) that permits Foreman, to the
     extent that he has demonstrated over the past three years, to continue to
     travel, appear and speak on behalf of Salton and its products.

     3.4 Other Activities. While Salton shall have the right to call on Foreman
     to perform services at any time during each of the Service Periods, Salton
     agrees to make reasonable accommodations to Foreman's own schedule of
     activities in order to allow Foreman to (a) serve on civic or charitable
     boards or committees; (b) continue his work for his church; (c) supervise
     the Foreman sports facility which he now operates for the benefit of
     children near his Texas home; (d) act in infomercials promoting products
     and services which he has promoted in the past; (e) deliver lectures and
     fulfill engagements or appearances related to the sport of boxing and the
     published autobiography of his

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     life that he is now promoting and (f) manage his personal investments, so
     long as such activities do not interfere in a material way with Foreman
     performing his services as an independent agent performing services for
     Salton under this Agreement.

     3.5 Foreman shall refrain from commenting or taking actions which might
     reasonably be determined to be derogatory to Salton.

4.   Travel Cost Reimbursement. In connection with all appearances by Foreman
     under this Agreement, Salton shall reimburse Foreman for his documented
     travel and travel related out of pocket expenses, including first class
     airfare, first class hotel, limousine travel and a bodyguard to accompany
     Foreman during his travel and appearance time.

5.   Products on which Foreman Receives a Profit Sharing, Royalty or other
     Payment. Sections 2, 3 and 4 do not apply to appearances for products where
     Foreman receives separate compensation in profits, royalties, or other
     payments which are covered by separate agreements with Salton which are
     described in this Section 5. In any instance where, based on a separate
     agreement between Foreman and Salton, Foreman receives a share of the
     profits, a royalty or other compensation or payments based on the sale of
     the product or service for which Foreman makes an appearance, Foreman's
     efforts shall not be considered part of the work that can be required of
     Foreman as an independent contractor rendering services to Salton under
     this Agreement and his appearances on behalf of such products are not part
     of this Agreement. Foreman shall receive only his share of the profits,
     royalty or other payments related to the sale of such products or services
     based on his separate agreements with Salton. As an example, Foreman and
     Salton have agreed to share profits in connection with a promotion on the
     QVC television network of a steakburger made by the Kansas City Steak
     Company which Foreman has endorsed and which may be advertised by under
     Foreman's name or picture. In the case of such an appearance, Foreman will
     be compensated in accordance with his separate agreement with Salton.
     However, Foreman will be compensated in any event for his travel expenses
     in connection with appearances as detailed in Section 4.

6.   Independent Agent. Foreman is acting as an independent agent under this
     Agreement and not as an employee or agent of Salton.

Salton, Inc.

By:      /s/ Leon Dreimann                           /s/ George Foreman
         ---------------------------                 ---------------------------
         Leon Dreimann                               George Foreman
         Chief Executive Officer

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                 EXHIBIT A TO AGREEMENT DATED AS OF MAY 28, 2003

                                     BETWEEN

          SALTON, INC. (the "Company") AND GEORGE FOREMAN ("Foreman").

WHEREAS:

A.   the Company and Foreman are parties to an agreement (the "Service
     Agreement") dated as of May 28, 2003 pursuant to which Foreman, as an
     independent contractor/consultant/spokesperson agrees to perform certain
     services for the Company over three consecutive periods ending on November
     30, 2004. November 30, 2005 and November 30, 2006 (each referred to in the
     Service Agreement as a "Service Period") and

B.   under the Service Agreement, Foreman has the right to receive quarterly
     payments during each Service Period;

C.   under the Service Agreement, the Company has a continuing option (the
     "Option") to pay to Foreman on or before the date when each quarterly
     payment is due and owing under the Service Agreement one half of the
     quarterly installment in shares of common stock, $.01 par value per share,
     of the Company (the "Shares") in lieu of one half of the quarterly cash
     payment owing pursuant to Section 2 of the Service Agreement, provided
     that: (i) a registration statement on Form 8 covering the Shares has been
     filed with the United States Securities and Exchange Commission ("SEC");
     and (ii) such registration statement has become effective so that the
     Shares can be sold by Foreman at any time after his receipt of the Shares;
     and

D.   the purpose of this Exhibit A is to set forth the terms and conditions on
     which the Shares shall be issued to Foreman, if and whenever Salton
     exercises its Option;

THEREFORE, the Company and Foreman agree as follows:

     1.   Representations, Warranties and Agreements of the Company. The Company
          hereby represents and warrants to and agrees with Foreman that:

          (a)  Organization and Standing of the Company. The Company is a
               corporation duly incorporated, validly existing and in good
               standing under the laws of the State of Delaware.

          (b)  Authority. The Company has the requisite corporate power and
               authority to enter into this Agreement and to carry out its
               obligations hereunder. The execution, delivery and performance of
               this Agreement by the Company have been duly and validly
               authorized by all requisite corporate proceedings on the part of
               the Company and do not require the approval or consent of any
               stockholders of the Company. This Agreement has been duly
               executed and delivered by the Company and is (assuming the due
               authorization, execution and delivery by Foreman) a valid and
               binding agreement of the Company, enforceable against it in
               accordance with its terms, except as such enforceability may be
               limited by bankruptcy and insolvency laws and by other laws
               affecting the rights of creditors generally or by the
               availability of equitable remedies and except as rights of
               indemnity or contribution may be limited by federal or state
               securities or other laws or the public policy underlying such
               laws.

          (c)  Status of Shares. The Shares have been (or will be) duly
               authorized by all necessary corporate action on the part of the
               Company (no consent or approval of stockholders being required by
               law, the Certificate of Incorporation of the Company, as amended

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               and restated, or its By-laws). The Shares, when delivered
               pursuant to this Agreement, will be validly issued and
               outstanding, fully paid and nonassessable and free and clear of
               any liens (other than those imposed by the securities laws), and
               the issuance of such Shares is not and will not be subject to
               preemptive or similar rights of any other stockholder of the
               Company. For purposes of this Exhibit A, Shares shall mean both
               the shares of Common Stock issued to Foreman pursuant to this
               Agreement, and any additional shares of Common Stock issued to
               Foreman in accordance with Section 3(f) of this Exhibit A.

          (d)  Shares issued to Foreman shall be delivered to Foreman not later
               that the tenth business day next following the date on which the
               Company gives notice to Foreman that it is exercising its option
               to pay Foreman up to fifty percent (50%) of the amount owed to
               Foreman for his services under the Service Agreement for the
               preceding quarter. The Shares delivered to Foreman shall be
               valued at the average closing price of the NYSE Corporate
               Reporting System as published in The Wall Street Journal or, if
               not published therein, in another alternative source during the
               ninety (90) trading days ending on the fifth (5th) trading day
               preceding the date of payment (the "Issuing Value")

2.   Representations and Warranties of Foreman. Foreman hereby represents and
     warrants to the Company that this Agreement has been duly executed and
     delivered by Foreman and is (assuming the due authorization, execution and
     delivery by the Company) a valid and binding agreement of Foreman,
     enforceable against Foreman in accordance with its terms except as may be
     limited by bankruptcy and insolvency laws and by other laws affecting the
     rights of creditors generally and except as may be limited by the
     availability of equitable remedies and except as rights of indemnity or
     contribution may be limited by federal or state securities or other laws or
     the public policy underlying such laws.

3.   Registration.

     (a)  The Company agrees that prior to any time that the Company exercises
          its option to pay Foreman in Shares of the Company, the Company shall,
          at its sole expense, have prepared and filed with the United States
          Securities and Exchange Commission (the "Commission") a registration
          statement under the Securities Act of 1933, as amended, on Form S-8
          (including a prospectus therein) (or amend and continue the
          effectiveness of any other then appropriate and existing registration
          statement) with respect to the Shares to be issued to Foreman and to
          have caused the registration to become effective prior to the delivery
          of such Shares to Foreman and shall cause the registration to remain
          effective for such period as may be necessary to permit the successful
          marketing by Foreman of such Shares. The date on which Foreman is
          entitled to use such prospectus for the sale of the Shares is
          sometimes referred to herein as the "Effective Date".

     (b)  Notwithstanding the foregoing, the Company shall be entitled to
          prohibit any offers or sales of the Shares pursuant to the prospectus
          after the Effective Date for a reasonable period of time (but not
          exceeding an aggregate of ninety (90) days during any 12 month period)
          if the Company determines, in its sole discretion, that (i) the
          Company is in possession of material information that has not been
          disclosed to the public and the Company reasonably determines in its
          sole discretion that it would be significantly detrimental to the
          Company and its stockholders to disclose such information at such time
          in a registration statement or (ii) such registration and sale by
          Foreman would interfere with any financing, acquisition, corporate
          reorganization or other material transaction involving the Company or
          any of its affiliates and, in any such case, the Company promptly
          gives Foreman written notice

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          of such determination, containing a general statement of the reasons
          for such postponement and an approximation of the anticipated delay.
          Foreman agrees that, upon receipt of any such written notice, he will
          forthwith discontinue disposition of any Shares until he receives
          notice in writing from the Company that the use of the prospectus may
          be resumed. The Company shall furnish to Foreman promptly after the
          date when the registration statement becomes effective a number of
          prospectuses as may be reasonably required in order to facilitate the
          public sale of the Shares. Foreman shall furnish to the Company such
          information regarding Foreman and the sale of the Shares as the
          Company may from time to time reasonably request in order to comply
          with the Securities Act.

     (c)  If Shares are issued to Foreman in payment for amounts owing to
          Foreman with respect to a Service Period and the sum (the "Realized
          Value") of:

          (i)     the aggregate proceeds (after reasonable and customary
                  brokerage commissions) from the sale by Foreman to the public
                  of Shares issued to Foreman as pay with respect to that
                  Service Period during the period ("Measuring Period") that (x)
                  begins on the date of issuance of such Shares with respect to
                  that Service Period and (y) ends on the first anniversary of
                  such date plus

          (ii)    the market value (based on the average closing price of the
                  Common Stock of Salton (as reported on the NYSE Composite
                  Transactions Reporting System as published in The Wall Street
                  Journal or, if not published therein, in another alternative
                  source) during the ninety (90) trading days ending on the last
                  day of the Measuring Period of the Shares issued to Foreman as
                  pay with respect to that Service Period and which Foreman
                  continued to hold on the last day of the Measuring Period is
                  less than

          (iii)   a sum equal to the product of (x) the number of such Shares
                  issued to Foreman as pay with respect to that Service Period
                  multiplied by (y) the Issuing Value as that term is defined in
                  Section 1(d) above

          then, the Company shall pay to Foreman an amount in cash (or, at the
          election of the Company in accordance with Section 3(f) hereof, in
          additional Shares equal to the difference between (a) the Issuing
          Value and (b) the Realized Value").

     (d)  If the Realized Value of the Shares issued with respect to a Service
          Period and valued in accordance with Section 3(d) above exceeds the
          Issuing Value of those Shares, then Foreman shall pay to the Company
          an amount in cash equal to fifty percent (50%) of the excess following
          the notice from Salton to Foreman of determination of the Realized
          Value and the amount of the excess of the Realized Value over the
          Issuing Value. Payment shall be made as required by Section 3(f).

     (e)  Foreman agrees that he will not sell in the aggregate more than 50,000
          Shares during any trading day and that he will use his reasonable best
          efforts to obtain the best available sales price for any Shares
          received in pay for a Service Period.

     (f)  Payments required to be made by any party to any other party pursuant
          to Section 3(d) or 3(e) shall be made promptly after the amount of the
          payment is determined (and in any event not later than sixty (60) days
          after the one year anniversary of the end of the Service Period). The
          Company shall have the right to make any payment required by Section
          3(d) hereof with respect to any Service Period by issuing additional
          shares of Common Stock to Foreman, and if the

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          Company makes such election, then the Company shall issue to Foreman
          that number of shares of Common Stock that is equal to (1) the dollar
          amount of the payment required, divided by (2) the average closing
          price of the Common Stock (as reported on the NYSE Corporate Reporting
          System as published in The Wall Street Journal or, if not published
          therein, in another alternative source) during the ninety (90) trading
          days ending on the fifth (5th) trading day preceding the date of
          payment. Each of the parties will cooperate with each other and
          furnish each other information (including, without limitation,
          documented information concerning any sales of the Shares) to
          determine the amount of payments due pursuant to Sections 3(d) and (e)
          above. For purposes of this Section 3, in the event that Foreman sells
          any of the Shares pursuant to a merger, tender offer or similar
          transaction involving the Company, he shall be deemed to have sold
          such Shares to the public for an amount equal to the aggregate
          consideration he receives for the sale or transfer of such Shares in
          such transaction.

     (g)  The Company shall indemnify and hold harmless Foreman any expenses,
          losses, claims, damages or liabilities, joint or several, to which
          Foreman may become subject under the Securities Act or the Securities
          Exchange Act of 1934, as amended, including any of the foregoing
          incurred in settlement of any litigation, commenced or threatened,
          insofar as such expenses, losses, claims, damages or liabilities (or
          actions in respect thereof) arise out of or are based upon (i) any
          untrue statement or alleged untrue statement of any material fact
          contained in the registration statement or final prospectus contained
          therein, or any amendment or supplement thereto; or (ii) any omission
          or alleged omission to state therein a material fact required to be
          stated therein or necessary to make the statements therein, in light
          of the circumstances under which they were made, not misleading; and
          shall reimburse each Foreman for any legal or any other expenses
          reasonably incurred by him in connection with investigating or
          defending any such loss, claim, damage, liability or action; provided,
          however, that the Company shall not be liable in any such case to the
          extent that any such expense, loss, claim, damage or liability arises
          out of or is based upon an untrue statement or alleged untrue
          statement or omission or alleged omission made in the registration
          statement or said prospectus or said amendment or supplement in
          reliance upon and in conformity with written information furnished to
          the Company by Foreman specifically for use in the preparation
          thereof.

     (h)  Foreman shall indemnify and hold harmless the Company and each person,
          if any, who controls the Company within the meaning of the Securities
          Act, each officer of the Company who signs the registration statement
          and each director of the Company, against any and all such expenses,
          losses, claims, damages or liabilities referred to in Section 3(h)
          above if the statement, alleged statement, omission or alleged
          omission in respect of which such expense, loss, claim, damage or
          liability was made in reliance upon and in conformity with information
          furnished in writing to the Company by Foreman specifically for use in
          connection with the preparation of the registration statement,
          prospectus, amendment or supplement.

     (i)  Promptly after receipt by an indemnified party of notice of the
          commencement of any action, such indemnified party shall, if a claim
          in respect thereof is to be made against the indemnifying party,
          notify the indemnifying party in writing of the commencement thereof;
          but the omission so to notify the indemnifying party shall not relieve
          it from any liability which it may have to any indemnified party
          otherwise than under this Section 3 or to the extent that it has not
          been prejudiced as a proximate result of such failure. In case any
          such action shall be brought against any indemnified party, and it
          shall notify the indemnifying party of the

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          commencement thereof, the indemnifying party shall be entitled to
          participate therein and, to the extent that it shall wish, to assume
          the defense thereof, with counsel reasonably satisfactory to such
          indemnified party; provided, however, that if the defendants in any
          such action include both the indemnified party and the indemnifying
          party and the indemnified party shall have reasonably concluded that
          there may be legal defenses available to it and/or other indemnified
          parties which are different from or additional to those available to
          the indemnifying party, the indemnified party or parties shall have
          the right to select one separate counsel to assert such legal defenses
          (in which case the indemnifying party shall not have the right to
          direct the defense of such action on behalf of the indemnified party
          or parties). Upon the permitted assumption by the indemnifying party
          of the defense of such action, and approval by the indemnified party
          of counsel, the indemnifying party shall not be liable to such
          indemnified party under this Section 3 for any legal or other expenses
          subsequently incurred by such indemnified party in connection with the
          defense thereof (other than reasonable costs or investigation) unless
          (i) the indemnified party shall have employed one separate counsel in
          connection with the assertion of legal defenses in accordance with the
          proviso to the next preceding sentence, (ii) the indemnifying party
          shall not have employed counsel reasonably satisfactory to the
          indemnified party to represent the indemnified party within a
          reasonable time, (iii) the indemnifying party and its counsel do not
          actively and vigorously pursue the defense of such action or (iv) the
          indemnifying party has authorized the employment of counsel for the
          indemnified party at the expense of the indemnifying party.

     (j)  If the Company issues Shares to Foreman with respect to any Service
          Period, then, from the end of such Service Period until eighteen (18)
          months next following the end of such Service Period under the Service
          Agreement, the Company also agrees to use its reasonable best efforts
          to file with the Commission such information as is required under the
          Securities Exchange Act of 1934, as amended, and to take all actions
          as may be required as a condition to the availability of Rule 144
          under the Securities Act.

4.   Miscellaneous.

     (a)  Specific Performance. The parties hereto agree that irreparable damage
          would occur in the event that any of the provisions of this Agreement
          were not performed by the applicable party hereto in accordance with
          the specific terms of this Agreement or were otherwise breached. Each
          of the parties hereto shall be entitled to an injunction or
          injunctions to prevent breaches of this Agreement by the other and to
          enforce specifically the terms and provisions hereof in addition to
          any other remedy to which such party is entitled at law or in equity,
          and each party waives the posting of any bond or security in
          connection with any proceeding related thereto.

     (b)  Expenses. Except for the Company's payment of the costs and expenses
          of filing a registration statement (including a prospectus therein)
          with respect to the sale of the Shares, no party hereto shall be
          responsible for the payment of any other party's expenses incurred in
          connection with this Agreement.

     (c)  Third Party Beneficiaries. The terms and provisions of this Agreement
          are intended solely for the benefit of each party hereto and his or
          its respective successors and permitted assigns, and it is not the
          intention of the parties to confer third party beneficiary rights upon
          any other person or entity.

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<PAGE>

     (d)  Amendments. This Agreement may not be modified, amended, altered or
          supplemented except upon the execution and delivery of a written
          agreement executed by each of Foreman and the Company.

     (e)  Assignment. Neither this Agreement nor any of the rights, interests or
          obligations hereunder shall be assigned, in whole or in part, by
          Foreman without the prior written consent of the Company. Subject to
          the preceding sentence, this Agreement will be binding upon, inure to
          the benefit of, and be enforceable by, the parties and their
          respective successors and assigns.

     (f)  Notices. All notices, requests, claims, demands and other
          communications hereunder shall be in writing and shall be deemed given
          only when delivered and if delivered by one of the following methods:
          (i) delivered personally; (ii) sent by a nationally recognized
          overnight courier (providing proof of delivery) or (iii) mailed by
          U.S. registered or certified mail, return receipt requested to the
          parties at the following addresses (or at such other address for a
          party as shall be specified by like notice).

          (i)  if to Foreman, to George Foreman

               with a copy to:

               Mann Frankfort, Stein & Lipp
               12 Greenway Plaza, 8th Floor
               Houston, Texas 77046-1291

               Attention:  William J. Hickl III

          (ii) if to the Company, to
               Salton, Inc.
               1955 Field Court
               Lake Forest, Illinois 60045

               Attention: Leon Dreimann, Chief Executive Officer

               with a copy to:

               Salton, Inc.
               1955 Field Court
               Lake Forest, Illinois 60045

               Attention: General Counsel

(g)  Governing Law. This Agreement shall be governed by, and interpreted in
     accordance with, the laws of the State of Delaware, without regard to the
     conflict of law principles thereof. All actions and proceedings arising out
     of or relating to this Agreement shall be heard and determined in any state
     or Federal court sitting in Delaware. Each of the parties hereto (i)
     consents to submit such party to the personal jurisdiction of any Federal
     court located in the State of Delaware or any Delaware state court in the
     event any dispute arises out of this Agreement or any of the transactions
     contemplated hereby, (ii) agrees that such party will not attempt to deny
     or defeat such personal jurisdiction by motion or other request for leave
     from any such court, (iii) agrees that such party will not bring any action
     relating to this

                                      -9-
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     Agreement or the transactions contemplated hereby in any court other than a
     Federal court sitting in the State of Delaware or a Delaware state court
     and (iv) waives any right to trial by jury with respect to any claim or
     proceeding related to or arising out of this Agreement or any of the
     transactions contemplated hereby.

(h)  Counterparts. This Agreement may be executed in one or more counterparts,
     each of which shall be deemed to constitute an original. This Agreement
     shall become effective when one counterpart signature page has been signed
     by each party hereto and delivered to each of the other parties.

(i)  Effect of Headings. The descriptive headings contained herein are for
     convenience of reference only and shall not affect in any way the meaning
     or interpretation of this Agreement.

(j)  Further Assurances. Each of the parties hereto agrees to execute and
     deliver all such further documents, certificates and instruments, and take
     all such further reasonable action as may be necessary or reasonably
     appropriate, in order to consummate the transactions contemplated hereby.

                                      -10-<PAGE>
                                                                    EXHIBIT 4(d)

                        CORN PRODUCTS INTERNATIONAL, INC.
                            1998 STOCK INCENTIVE PLAN

                   (AS AMENDED AND RESTATED FEBRUARY 12, 2003)

                                 I. INTRODUCTION

1.1 PURPOSE. The purpose of the Corn Products International, Inc. 1998 Stock
Incentive Plan (the "Plan") of Corn Products International, Inc. (the "Company")
is to promote the long-term financial success of the Company by (i) attracting
and retaining executive personnel of outstanding ability; (ii) strengthening the
Company's capability to develop, maintain and direct a competent management
team; (iii) motivating executive personnel by means of performance-related
incentives to achieve longer-range performance goals; (iv) providing incentive
compensation opportunities which are competitive with those of other major
corporations and (v) enabling such executive personnel to participate in the
long-term growth and financial success of the Company through increased stock
ownership.

1.2 CERTAIN DEFINITIONS. In addition to the defined terms set forth elsewhere in
this Plan, the terms set forth below, shall, when capitalized, have the
following respective meanings.

         "BOARD" shall mean the Board of Directors of the Company.

         "BONUS STOCK" shall mean shares of Common Stock that are not subject to
a Restriction Period or Performance Measures.

         "CAUSE" shall mean the willful and continued failure to substantially
perform the duties assigned by the Company (other than a failure resulting from
the optionee's Disability), the willful engaging in conduct which is
demonstrably injurious to the Company or any Subsidiary, monetarily or
otherwise, including conduct that, in the reasonable judgment of the Committee,
no longer conforms to the standard of the Company's executives, any act of
dishonesty, commission of a felony, or a significant violation of any statutory
or common law duty of loyalty to the Company.

         "CHANGE IN CONTROL" shall have the meaning set forth in Section 5.8(b).

         "CODE" shall mean the Internal Revenue Code of 1986, as amended.

         "COMMITTEE" shall mean the Compensation and Nominating Committee
designated by the Board, consisting of two or more members of the Board, each of
whom shall be (i) a "Non-Employee Director" within the meaning of Rule 16b-3
under the Exchange Act and (ii) an "outside director" within the meaning of
Section 162(m) of the Code.

         "COMMON STOCK" shall mean the common stock, $.01 par value, of the
Company.

<PAGE>

         "DISABILITY DATE" shall mean the date on which a Participant becomes a
"Disabled Participant" under the Corn Products International, Inc. Retirement
Savings Plan for Salaried Employees (the "Corn Products Savings Plan") or a
successor to such plan or any such similar plan containing a disability
provision applicable to the Participant. If a Participant is not covered by the
Corn Products Savings Plan or a similar plan containing a disability provision,
the determination of whether the Participant has a "Disability Date" shall be
made by the Committee by applying the provisions of the Corn Products Savings
Plan as if the Participant were a participant of such plan or any similar plan
that the Committee determines to be appropriate.

         "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.

         "FAIR MARKET VALUE" shall mean the average of the high and low
transaction prices of a share of Common Stock as reported in the New York Stock
Exchange Composite Transactions on the date as of which such value is being
determined or, if there shall be no reported transactions for such date, on the
next preceding date for which transactions were reported; provided, however,
that, in the case of the exercise of an Incentive Stock Option or Non-Statutory
Stock Option through a broker, Fair Market Value shall mean the sales price
received for a share of Common Stock and, provided further, that Fair Market
Value may be determined by the Committee by whatever other means or method as
the Committee, in the good faith exercise of its discretion, shall at such time
deem appropriate.

         "INCENTIVE STOCK OPTION" shall mean an option to purchase shares of
Common Stock which meets the requirements of Section 422 of the Code, or any
successor provision, and which is intended by the Committee to constitute an
Incentive Stock Option.

         "MATURE SHARES" shall mean previously-acquired shares of Common Stock
for which the holder thereof has good title, free and clear of all liens and
encumbrances and which such holder either (i) has held for at least six months
or (ii) has purchased on the open market.

         "NON-STATUTORY STOCK OPTION" shall mean a stock option that is not an
Incentive Stock Option.

         "PARTICIPANT" shall mean an individual who has been granted an
Incentive Stock Option, a Non-Statutory Stock Option, a Bonus Stock Award,
Performance Share Award or Restricted Stock Award.

         "PERFORMANCE MEASURES" shall mean the criteria and objectives,
established by the Committee, which shall be satisfied or met (i) as a condition
to the exercisability of all or a portion of an option, (ii) as a condition to
the grant of a Stock Award or (iii) during the applicable Restriction Period or
Performance Period as a condition to the holder's receipt of Common Stock
subject to a Restricted Stock Award or a Performance Share Award and/or of
payment with respect to such award. The Committee may amend or adjust the
Performance Measures or other terms and conditions of an outstanding award in
recognition of unusual or nonrecurring events affecting the Company or its
financial statements or changes in law or accounting, but only to the extent
such adjustment would not cause any portion of the award, upon payment, or the
option, upon exercise, to be nondeductible pursuant to section 162(m) of

<PAGE>

the Code. Such criteria and objectives may include one or more of the following:
total stockholder return (based on the change in the price of a share of the
Company's Common Stock and dividends paid) earnings per share; operating income;
net income; return on stockholder's equity; return on assets; economic value
added; and cash flows. If the Committee desires that compensation payable
pursuant to any award subject to Performance Measures be "qualified
performance-based compensation" within the meaning of Section 162(m) of the
Code, the Performance Measures (i) shall be established by the Committee no
later than the end of the first quarter of the Performance Period or Restriction
Period, as applicable (or such other time designated by the Internal Revenue
Service) and (ii) shall satisfy all other applicable requirements imposed under
Treasury Regulations promulgated under Section 162(m) of the Code, including the
requirement that such Performance Measures be stated in terms of an objective
formula or standard.

         "PERFORMANCE PERIOD" shall mean any period designated by the Committee
during which the Performance Measures applicable to a Performance Share Award
shall be measured.

         "PERFORMANCE SHARE" shall mean a right, contingent upon the attainment
of specified Performance Measures within a specified Performance Period, to
receive one share of Common Stock, which may be Restricted Stock, or in lieu of
all or a portion thereof, at the Committee's discretion, the Fair Market Value
of such Performance Share in cash.

         "PERFORMANCE SHARE AWARD" shall mean an award of Performance Shares
under this Plan.

         "PERMANENT AND TOTAL DISABILITY" shall have the meaning set forth in
Section 22(e)(3) of the Code or any successor thereto.

         "RESTRICTED STOCK" shall mean shares of Common Stock that are subject
to a Restriction Period.

         "RESTRICTION PERIOD" shall mean any period designated by the Committee
during which the Common Stock subject to a Restricted Stock Award may not be
sold, transferred, assigned, pledged, hypothecated or otherwise encumbered or
disposed of, except as provided in this Plan or the Agreement relating to such
award.

         "STOCK AWARD" shall mean a Restricted Stock Award or a Bonus Stock
Award.

1.3 ADMINISTRATION. This Plan shall be administered by the Committee. The
Committee shall have the authority to determine eligibility for awards hereunder
and to determine the form, amount and timing of each award to such persons and,
if applicable, the number of shares of Common Stock, and the number of
Performance Shares subject to such an award, the exercise price associated with
the award, the time and conditions of exercise or settlement of the award and
all other terms and conditions of the award, including, without limitation, the
form of the Agreement evidencing the award. The Committee may, in its sole
discretion and for any reason at any time, subject to the requirements imposed
under Section 162(m) of the Code and regulations promulgated thereunder in the
case of an award intended to be qualified performance-based compensation, take
action such that (i) any or all outstanding options shall

<PAGE>

become exercisable in part or in full, (ii) all or a portion of the Restriction
Period applicable to any outstanding Restricted Stock Award shall lapse, (iii)
all or a portion of the Performance Period applicable to any outstanding
Performance Share Award shall lapse, (iv) the Performance Measures applicable to
any outstanding Restricted Stock Award (if any) and to any outstanding
Performance Share Award shall be deemed to be satisfied at the maximum or any
other level.

         The Committee shall, subject to the terms of this Plan, interpret this
Plan and the application thereof, establish rules and regulations it deems
necessary or desirable for the administration of this Plan and may impose,
incidental to the grant of an award, conditions with respect to the award, such
as limiting competitive employment or other activities. All such
interpretations, rules, regulations and conditions shall be final, binding and
conclusive.

         The Committee shall keep minutes of its meetings and of action taken by
it without a meeting. A majority of the Committee shall constitute a quorum. The
acts of the Committee shall be either (i) acts of a majority of the members of
the Committee present at any meeting at which a quorum is present or (ii) acts
approved in writing by all of the members of the Committee without a meeting.

         Notwithstanding anything in the Plan to the contrary, in accordance
with Section 157 of the Delaware General Corporation Law, the Committee may, by
resolution, authorize one or more executive officers of the Company to do one or
both of the following: (i) designate non-director and non-executive officer
employees of the Company or any of its Subsidiaries to be recipients of rights
or options entitling the holder thereof to purchase from the Company shares of
its capital stock of any class or other awards hereunder; and (ii) determine the
number of such rights, options, or awards to be received by such non-director
and non-executive officer employees; provided, however, that the resolution so
authorizing such executive officer or officers shall specify the total number of
rights, options, or awards such executive officer or officers may so award. The
Committee may not authorize an executive officer to designate himself or herself
or any director or other executive officer of the Company to be a recipient of
any such rights, options, or awards.

1.4 ELIGIBILITY. Participants in this Plan shall consist of such directors,
officers, and other employees of the Company and its Subsidiaries from time to
time, and any other entity designated by the Board or the Committee
(individually a "Subsidiary" and collectively the "Subsidiaries") as the
Committee, in its sole discretion, may select from time to time. For purposes of
this Plan, reference to employment by the Company shall also mean employment by
a Subsidiary.

1.5 SHARES AVAILABLE. Subject to adjustment as provided in Section 5.7,
5,700,000 shares of Common Stock shall be available under this Plan, reduced by
the sum of the aggregate number of shares of Common Stock (i) that are issued
upon the grant of a Stock Award and (ii) which become subject to outstanding
options and outstanding Performance Shares. To the extent that shares of Common
Stock subject to an outstanding option, Stock Award or Performance Shares are
not issued or delivered by reason of the expiration, termination, cancellation
or forfeiture of such award or by reason of the delivery or withholding of
shares of Common Stock to pay all or a portion of the exercise price of an
award, if any, or to satisfy all or a portion of the tax

<PAGE>

withholding obligations relating to an award, then such shares of Common Stock
shall again be available under this Plan. If an award is made in the form of an
option coupled with a Performance Share Award such that the Participant can
receive the designated number of shares either upon exercise of the option or
upon earning of the Performance Share, but not both, such coupled award shall be
treated as a single award of the designated number of shares for purposes of
this Section 1.5.

         Shares of Common Stock shall be made available from authorized and
unissued shares of Common Stock, or authorized and issued shares of Common Stock
reacquired and held as treasury shares or otherwise or a combination thereof.

         To the extent required by Section 162(m) of the Code and the rules and
regulations thereunder, the maximum number of shares of Common Stock with
respect to which options or Stock Awards or Performance Share Awards or a
combination thereof may be granted during any calendar year to any person shall
be 250,000, subject to adjustment as provided in Section 5.7.

                                II. STOCK OPTIONS

2.1 STOCK OPTIONS. Except as is otherwise provided for in Section 1.3, only the
Committee may, in its discretion, grant Incentive Stock Options or Non-Statutory
Stock Options to purchase shares of Common Stock to such eligible persons under
Section 1.4 as may be selected by the Committee.

         The Committee may in its sole discretion, either at the time of grant
of an option or thereafter, determine that a Participant who exercises an option
(the "Original Option") shall receive a new option (a "Replacement Option") for
up to the number of shares acquired upon exercise of the Original Option and
with an option price and other terms determined pursuant to Section 2.2 hereof
(treating the date of exercise of the Original Option as the date of the grant
of the Replacement Option) and with the same expiration date as the expiration
date of the Original Option; and the Committee may in its sole discretion impose
conditions in connection with such issuance of Replacement Options consistent
with the goal of encouraging stock ownership by employees, including without
limitation, holding period requirements for shares received upon exercise of the
Original Option or restrictions delaying the exercisability of the Replacement
Option. In no event shall any such Replacement Option include a provision for an
automatic grant of another Replacement Option of the type described in the
preceding sentence.

         Options shall be subject to the following terms and conditions and
shall contain such additional terms and conditions, not inconsistent with the
terms of this Plan, as the Committee shall deem advisable:

         (a) Number of Shares and Purchase Price. The number of shares and the
purchase price per share of Common Stock subject to an option shall be
determined by the Committee, provided, however, that the purchase price per
share of Common Stock shall not be less than 100% of the Fair Market Value of a
share of Common Stock on the date of grant of such option and provided further,
that if an Incentive Stock Option shall be granted to any person who, at the

<PAGE>

time such option is granted, owns capital stock possessing more than ten percent
of the total combined voting power of all classes of capital stock of the
Company (or of any parent or subsidiary as defined in Section 424 of the Code)
(a "Ten Percent Holder"), the purchase price per share of Common Stock shall be
the price (currently 110% of Fair Market Value) required by the Code in order to
constitute an Incentive Stock Option.

         (b) Option Period and Exercisability. Each option, by its terms, shall
require the Participant to remain in the continuous employ of the Company for at
least one year following the date of grant of the option before any part of the
option shall be exercisable, except in the case of a Change in Control. The
period during which an option may be exercised shall be determined by the
Committee; provided, however, that no Incentive Stock Option shall be exercised
later than ten years after its date of grant; provided further, that if an
Incentive Stock Option shall be granted to a Ten Percent Holder, such option
shall not be exercised later than five years after its date of grant. Once
determined and stated in an Agreement with respect to an option, the period
during which an option can be exercised shall not be further extended. The
Committee may, in its discretion, establish Performance Measures which shall be
satisfied or met as a condition to the grant of an option or to the
exercisability of all or a portion of an option. The Committee shall determine
whether an option shall become exercisable in cumulative or non-cumulative
installments and in part or in full at any time. An exercisable option, or
portion thereof, may be exercised only for whole shares of Common Stock.

         (c) Method of Exercise. An option may be exercised (i) by giving
written notice to the Company specifying the number of whole shares of Common
Stock to be purchased and accompanied by payment therefor in full (or
arrangement made for such payment to the Company's satisfaction) either (A) by
the delivery of cash in the amount of the aggregate purchase price payable by
reason of such exercise, (B) by delivery (either actual delivery or by
attestation procedures established by the Company) of Mature Shares having an
aggregate Fair Market Value, determined as of the date of exercise, equal to the
aggregate purchase price payable by reason of such exercise, (C) by the delivery
of cash in the amount of the aggregate purchase price payable by reason of such
exercise by a broker-dealer acceptable to the Company to whom the optionee has
submitted an irrevocable notice of exercise or (D) a combination of (A) and (B),
in each case to the extent set forth in the Agreement relating to the option and
(ii) by executing such documents as the Company may reasonably request. Any
fraction of a share of Common Stock which would be required to pay such purchase
price shall be disregarded and the remaining amount due shall be paid in cash by
the optionee. No certificate representing Common Stock shall be delivered until
the full purchase price therefor has been paid (or arrangement made for such
payment to the Company's satisfaction).

2.2 TERMINATION OF EMPLOYMENT OR SERVICE. (a) Non-Statutory Stock Options.
Unless otherwise specified in the Agreement evidencing an option, but subject to
Section 2.1(b) if the employment with the Company of a holder of an option
(other than an Incentive Stock Option) terminates by reason of (i) death, or
(ii) retirement on or after age 55 with a minimum of 10 years of employment with
or service to the company, or (iii) the occurrence of such individual's
Disability Date, such option shall be exercisable for the remainder of the
option period as stated under the terms of the option, but only to the extent
that such option was exercisable at the date of such termination of employment.

<PAGE>

                  If an optionee's employment is terminated for any other
reason, his option shall remain exercisable to the extent that such option was
exercisable at the date of such termination of employment, for a period of 90
days following such termination of employment. Notwithstanding anything to the
contrary contained in the preceding sentence, if an optionee's employment is
terminated by the Company for Cause, his rights under all options shall
terminate on the effective date of such optionee's termination of employment.

         (b) Termination of Employment - Incentive Stock Options. Unless
otherwise specified in the Agreement evidencing an option, but subject to
Section 2.1(b), if the employment with the Company of a holder of an Incentive
Stock Option terminates by reason of permanent and total disability (as defined
in Section 22(e) (3) of the Code), each Incentive Stock Option held by such
optionee shall be exercisable only to the extent that such option was
exercisable on the effective date of such optionee's termination of employment
by reason of permanent and total disability and may thereafter be exercised by
such optionee (or such optionee's legal representative or similar person) until
the date which is one year after the effective date of such optionee's
termination of employment by reason of permanent and total disability.

         Unless otherwise specified in the Agreement evidencing an option but
subject to Section 2.1(b), if the employment with the Company of a holder of an
Incentive Stock Option terminates by reason of death, each Incentive Stock
Option held by such optionee shall be exercisable only to the extent that such
option was exercisable on the date of such optionee's death and may thereafter
be exercised by such optionee's executor, administrator, legal representative,
beneficiary or similar person until the date which is three years after the date
of death.

         If the employment of a holder of an Incentive Stock Option is
terminated by the Company for Cause, each Incentive Stock Option held by such
optionee shall terminate automatically on the effective date of such optionee's
termination of employment. Unless otherwise specified in the Agreement
evidencing an option, but subject to Section 2.1(b), if the employment with the
Company of a holder of an Incentive Stock Option terminates for any reason other
than permanent and total disability or death or Cause, each Incentive Stock
Option held by such optionee shall be excisable only to the extent such option
was exercisable on the effective date of such optionee's termination of
employment, and may thereafter be exercised by such holder (or such holder's
legal representative or similar person) until the date which is 90 days after
the effective date of such optionee's termination of employment.

         If the holder of an Incentive Stock Option dies during the period set
forth in the first paragraph of this Subsection (b) following termination of
employment by reason of Permanent and Total Disability, or if the holder of an
Incentive Stock Option dies during the period set forth in the third paragraph
of this Subsection (b) following termination of employment for any reason other
than Permanent and Total Disability for death or Cause, each Incentive Stock
Option held by such optionee shall be exercisable only to the extent such option
was exercisable on the date of the optionee's death and may thereafter be
exercised by the optionee's executor, administrator, legal representative,
beneficiary or similar person until the date which is three years after the date
of death.

<PAGE>

                                III. STOCK AWARDS

3.1 STOCK AWARDS. Except as is otherwise provided for in Section 1.3, only the
Committee may, in its discretion, grant Stock Awards to such eligible persons
under Section 1.4 as may be selected by the Committee. The Agreement relating to
a Stock Award shall specify whether the Stock Award is a Restricted Stock Award
or Bonus Stock Award.

3.2 TERMS OF STOCK AWARDS. Stock Awards shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall deem advisable.

         (a) Number of Shares and Other Terms. The number of shares of Common
Stock subject to a Restricted Stock Award or Bonus Stock Award and the
Performance Measures (if any) and Restriction Period applicable to a Restricted
Stock Award shall be determined by the Committee.

         (b) Vesting and Forfeiture. The Agreement relating to a Restricted
Stock Award shall provide, in the manner determined by the Committee, in its
discretion, and subject to the provisions of this Plan, for the vesting of the
shares of Common Stock subject to such award (i) if specified Performance
Measures are satisfied or met during the specified Restriction Period or (ii) if
the holder of such award remains continuously in the employment of or service to
the Company during the specified Restriction Period and for the forfeiture of
the shares of Common Stock subject to such award (x) if specified Performance
Measures are not satisfied or met during the specified Restriction Period or (y)
if the holder of such award does not remain continuously in the employment of or
service to the Company during the specified Restriction Period.

         Bonus Stock Awards shall not be subject to any Performance Measures or
Restriction Periods.

         (c) Share Certificates. During the Restriction Period, a certificate or
certificates representing a Restricted Stock Award may be registered in the
holder's name and may bear a legend, in addition to any legend which may be
required pursuant to Section 5.6, indicating that the ownership of the shares of
Common Stock represented by such certificate is subject to the restrictions,
terms and conditions of this Plan and the Agreement relating to the Restricted
Stock Award. All such certificates shall be deposited with the Company, together
with stock powers or other instruments of assignment (including a power of
attorney), each endorsed in blank with a guarantee of signature if deemed
necessary or appropriate by the Company, which would permit transfer to the
Company of all or a portion of the shares of Common Stock subject to the
Restricted Stock Award in the event such award is forfeited in whole or in part.
Upon termination of any applicable Restriction Period (and the satisfaction or
attainment of applicable Performance Measures), or upon the grant of a Bonus
Stock Award, in each case subject to the Company's right to require payment of
any taxes in accordance with Section 5.5, a certificate or certificates
evidencing ownership of the requisite number of shares of Common Stock shall be
delivered to the holder of such award.

<PAGE>

         (d) Rights with Respect to Restricted Stock Awards. Unless otherwise
set forth in the Agreement relating to a Restricted Stock Award, and subject to
the terms and conditions of a Restricted Stock Award, the holder of such award
shall have all rights as a stockholder of the Company, including, but not
limited to, voting rights, the right to receive dividends and the right to
participate in any capital adjustment applicable to all holders of Common Stock;
provided, however, that a distribution with respect to shares of Common Stock,
other than a regular cash dividend, shall be deposited with the Company and
shall be subject to the same restrictions as the shares of Common Stock with
respect to which such distribution was made.

3.3 TERMINATION OF EMPLOYMENT OR SERVICE. (a) Disability, Retirement and Death.
Unless otherwise set forth in the Agreement relating to a Restricted Stock
Award, if the employment with or service to the Company of the holder of such
award terminates by reason of (i) death, or (ii) retirement on or after age 55
(with a minimum of 10 years of employment with or service to the Company), or
(iii) the occurrence of such Participant's Disability Date, or (iv) termination
of employment under any other circumstances that the Committee may determine
shall warrant the application of this provision, the restrictions imposed
hereunder shall lapse with respect to such number of shares of Restricted Stock,
if any, as shall be determined by the Committee, and the balance of such shares
of Restricted Stock shall be forfeited to the Company.

         (b) Other Termination. Unless otherwise set forth in the Agreement
relating to a Restricted Stock Award, if the employment with or service to the
Company of the holder of a Restricted Stock Award terminates for any other
reason during the Restriction Period, then the portion of such award which is
subject to a Restriction Period on the effective date of such holder's
termination of employment or service shall be forfeited by such holder and such
portion shall be canceled by the Company.

                          IV. PERFORMANCE SHARE AWARDS

4.1 PERFORMANCE SHARE AWARDS. The Committee may, in its discretion, grant
Performance Share Awards to such eligible persons under Section 1.4 as may be
selected by the Committee.

4.2 TERMS OF PERFORMANCE SHARE AWARDS. Performance Share Awards shall be subject
to the following terms and conditions and shall contain such additional terms
and conditions, not inconsistent with the terms of this Plan, as the Committee
shall deem advisable.

         (a) Number of Performance Shares and Performance Measures. The number
of Performance Shares subject to any award and the Performance Measures and
Performance Period applicable to such award shall be determined by the
Committee.

         (b) Vesting and Forfeiture. The Agreement relating to a Performance
Share Award shall provide, in the manner determined by the Committee, in its
discretion, and subject to the provisions of this Plan, for the vesting of such
award, if specified Performance Measures are satisfied or met during the
specified Performance Period, and for the forfeiture of such award, if specified
Performance Measures are not satisfied or met during the specified Performance
Period.

<PAGE>

         (c) Settlement of Vested Performance Share Awards. The Agreement
relating to a Performance Share Award (i) shall specify whether such award may
be settled in shares of Common Stock (including shares of Restricted Stock) or
cash or a combination thereof and (ii) may specify whether the holder thereof
shall be entitled to receive, on a current or deferred basis, dividend
equivalents, and, if determined by the Committee, interest on or the deemed
reinvestment of any deferred dividend equivalents, with respect to the number of
shares of Common Stock subject to such award. If a Performance Share Award is
settled in shares of Restricted Stock, a certificate or certificates
representing such Restricted Stock shall be issued in accordance with Section
3.2(c) and the holder of such Restricted Stock shall have such rights of a
stockholder of the Company as determined pursuant to Section 3.2(d). Prior to
the settlement of a Performance Share Award in shares of Common Stock, including
Restricted Stock, the holder of such award shall have no rights as a stockholder
of the Company with respect to the shares of Common Stock subject to such award
and shall have rights as a stockholder of the Company in accordance with Section
5.10. Notwithstanding any other provision of the Plan to the contrary, payments
of cash, shares of Common Stock, or any combination thereof to any Participant
in respect of the settlement of a Performance Share Award for any Performance
Period shall not exceed $5,000,000, with respect to the cash payment for such
award, and shall not exceed 250,000 shares of Common Stock, with respect to the
Common Stock payment for such award.

4.3 TERMINATION OF EMPLOYMENT. (a) Disability, Retirement and Death. Unless
otherwise set forth in the Agreement relating to a Performance Share Award, if
the employment with the Company of the holder of such award terminates prior to
the end of the Performance Period applicable to such award by reason of (i)
death, or (ii) retirement on or after age 55 (with a minimum of 10 years of
employment or service with the Company), (iii) the occurrence of such
Participant's Disability Date or (iv) termination of employment under any other
circumstances that the Committee may determine shall warrant the application of
this provision, the Committee, in its sole discretion and taking into
consideration the performance of such Participant and the performance of the
Company during the Performance Period, may authorize the payment to such
Participant (or his legal representative) at the end of the Performance Period
of all or any portion of the Performance Award which would have been paid to
such Participant for such Performance Period.

         (b) Other Termination. Unless otherwise set forth in the Agreement
relating to a Performance Share Award, if the employment with the Company of the
holder of a Performance Share Award terminates for any other reason prior to the
end of a Performance Period, then the portion of such award which is subject to
such Performance Period on the effective date of such holder's termination of
employment shall be forfeited and such portion shall be canceled by the Company.

                                   V. GENERAL

5.1 EFFECTIVE DATE AND TERM OF PLAN. This Plan has been approved by the
stockholders of the Company and became effective as of January 1, 1998. This
Plan shall terminate ten years after its effective date, unless terminated
earlier by the Board. Termination of this Plan shall not affect the terms or
conditions of any award granted prior to termination.

<PAGE>

5.2 AMENDMENTS. The Board may amend this Plan as it shall deem advisable,
subject to any requirement of stockholder approval required by applicable law,
rule or regulation, including Section 162(m) and Section 422 of the Code;
provided, however, that no amendment shall be made without stockholder approval
if such amendment would (a) increase the maximum number of shares of Common
Stock available under this Plan (subject to Section 5.7), (b) effect any change
inconsistent with Section 422 of the Code, (c) extend the term of this Plan or
(d) reduce the minimum purchase price of a share of Common Stock subject to an
option. No amendment may impair the rights of a holder of an outstanding award
without the consent of such holder.

5.3 AGREEMENT. Each award under this Plan shall be evidenced by an Agreement
setting forth the terms and conditions applicable to such award. No award shall
be valid until an Agreement is executed by the Company and the recipient of such
award and, upon execution by each party and delivery of the Agreement to the
Company, such award shall be effective as of the effective date set forth in the
Agreement.

5.4 NON-TRANSFERABILITY OF AWARDS. Unless otherwise specified in the Agreement
relating to an award, no award shall be transferable other than by will, the
laws of descent and distribution or pursuant to beneficiary designation
procedures approved by the Company. Except to the extent permitted by the
foregoing sentence or the Agreement relating to an award, each award may be
exercised or settled during the holder's lifetime only by the holder or the
holder's legal representative or similar person. Except to the extent permitted
by the second preceding sentence or the Agreement relating to an award, no award
may be sold, transferred, assigned, pledged, hypothecated, encumbered or
otherwise disposed of (whether by operation of law or otherwise) or be subject
to execution, attachment or similar process. Upon any attempt to so sell,
transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any such
award, such award and all rights thereunder shall immediately become null and
void.

5.5 TAX WITHHOLDING. The Company shall have the right to require, prior to the
issuance or delivery of any shares of Common Stock or the payment of any cash
pursuant to an award made hereunder, payment by the holder of such award of any
Federal, state, local or other taxes which may be required to be withheld or
paid in connection with such award. An Agreement may provide that (i) the
Company shall withhold whole shares of Common Stock which would otherwise be
delivered to a holder, having an aggregate Fair Market Value determined as of
the date the obligation to withhold or pay taxes arises in connection with an
award (the "Tax Date"), or withhold an amount of cash which would otherwise be
payable to a holder, in the amount necessary to satisfy any such obligation or
(ii) the holder may satisfy any such obligation by any of the following means:
(A) a cash payment to the Company in the amount necessary to satisfy any such
obligation, (B) delivery (either actual delivery or by attestation procedures
established by the Company) to the Company of shares of Common Stock having an
aggregate Fair Market Value, determined as of the Tax Date, equal to the amount
necessary to satisfy any such obligation, (C) authorizing the Company to
withhold whole shares of Common Stock which would otherwise be delivered having
an aggregate Fair Market Value, determined as of the Tax Date, or withhold an
amount of cash which would otherwise be payable to a holder, equal to the amount
necessary to satisfy any such obligation, (D) in the case of the exercise of an
Incentive Stock Option or Non-Statutory Stock Option, a cash payment in the
amount necessary to satisfy any such obligation by a broker-dealer acceptable to
the Company to whom the optionee has

<PAGE>

submitted an irrevocable notice of exercise or (E) any combination of (A), (B)
and (C), in each case to the extent set forth in the Agreement relating to the
award; provided, however, that the Company shall have sole discretion to
disapprove of an election pursuant to any of clauses (B)-(E). Any fraction of a
share of Common Stock which would be required to satisfy such an obligation
shall be disregarded and the remaining amount due shall be paid in cash by the
holder.

5.6 RESTRICTIONS ON SHARES. Each award made hereunder shall be subject to the
requirement that if at any time the Company determines that the listing,
registration or qualification of the shares of Common Stock subject to such
award upon any securities exchange or under any law, or the consent or approval
of any governmental body, or the taking of any other action is necessary or
desirable as a condition of, or in connection with, the exercise or settlement
of such award or the delivery of shares thereunder, such award shall not be
exercised or settled and such shares shall not be delivered unless such listing,
registration, qualification, consent, approval or other action shall have been
effected or obtained, free of any conditions not acceptable to the Company. The
Company may require that certificates evidencing shares of Common Stock
delivered pursuant to any award made hereunder bear a legend indicating that the
sale, transfer or other disposition thereof by the holder is prohibited except
in compliance with the Securities Act of 1933, as amended, and the rules and
regulations thereunder.

5.7 ADJUSTMENT. In the event of any stock split, stock dividend,
recapitalization, reorganization, merger, consolidation, combination, exchange
of shares, liquidation, spin-off or other similar change in capitalization or
event, or any distribution to holders of Common Stock other than a regular cash
dividend, the number and class of securities available under this Plan, the
number and class of securities subject to each outstanding option and the
purchase price per security, the number and class of securities subject to each
outstanding Stock Award, and the terms of each outstanding Performance Share
shall be appropriately adjusted by the Committee, such adjustments to be made in
the case of outstanding options without an increase in the aggregate purchase
price. The decision of the Committee regarding any such adjustment shall be
final, binding and conclusive. If any such adjustment would result in a
fractional security being (a) available under this Plan, such fractional
security shall be disregarded, or (b) subject to an award under this Plan, the
Company shall pay the holder of such award, in connection with the first
vesting, exercise or settlement of such award in whole or in part occurring
after such adjustment, an amount in cash determined by multiplying (i) the
fraction of such security (rounded to the nearest hundredth) by (ii) the excess,
if any, of (A) the Fair Market Value on the vesting, exercise or settlement date
over (B) the exercise price, if any, of such award.

5.8 CHANGE IN CONTROL.

         (a) (1) Notwithstanding any provision in this Plan or any Agreement, in
the event of a Change in Control pursuant to Section (b)(3) or (4) below in
connection with which the holders of Common Stock receive shares of common stock
that are registered under Section 12 of the Exchange Act, (i) all outstanding
options shall immediately become exercisable in full, (ii) the Restriction
Period applicable to any outstanding Restricted Stock Award shall lapse, (iii)
the Performance Period applicable to any outstanding Performance Share shall
lapse, (iv) the Performance Measures applicable to any outstanding Restricted
Stock Award (if any) and to any outstanding Performance Share shall be deemed to
be satisfied at the maximum level and (v)

<PAGE>

there shall be substituted for each share of Common Stock available under this
Plan, whether or not then subject to an outstanding award, the number and class
of shares into which each outstanding share of Common Stock shall be converted
pursuant to such Change in Control. In the event of any such substitution, the
purchase price per share of an option shall be appropriately adjusted by the
Committee, such adjustments to be made in the case of outstanding options
without an increase in the aggregate purchase price.

                  (2) Notwithstanding any provision in this Plan or any
Agreement, in the event of a Change in Control pursuant to Section (b)(1) or (2)
below, or in the event of a Change in Control pursuant to Section (b)(3) or (4)
below in connection with which the holders of Common Stock receive consideration
other than shares of common stock that are registered under Section 12 of the
Exchange Act, each outstanding award shall be surrendered to the Company by the
holder thereof, and each such award shall immediately be canceled by the
Company, and the holder shall receive, within ten days of the occurrence of a
Change in Control pursuant to Section (b)(1) or (2) below or within ten days of
the approval of the stockholders of the Company contemplated by Section (b)(3)
or (4) below, a cash payment from the Company in an amount equal to (i) in the
case of an option, the number of shares of Common Stock then subject to such
option, multiplied by the excess, if any, of the greater of (A) the highest per
share price offered to stockholders of the Company in any transaction whereby
the Change in Control takes place and (B) the Fair Market Value of a share of
Common Stock on the date of occurrence of the Change in Control, over the
purchase price per share of Common Stock subject to the option, (ii) in the case
of a Restricted Stock Award, the number of shares of Common Stock then subject
to such award, multiplied by the greater of (A) the highest per share price
offered to stockholders of the Company in any transaction whereby the Change in
Control takes place and (B) the Fair Market Value of a share of Common Stock on
the date of occurrence of the Change in Control or (iii) in the case of a
Performance Share Award, the number of Performance Shares then subject to such
award, multiplied by the greater of (A) the highest per share price offered to
stockholders of the Company in any transaction whereby the Change in Control
takes place and (B) the highest Fair Market Value of a share of Common Stock
during the 90-day period immediately preceding the date of the Change in
Control. The Company may, but is not required to, cooperate with any person who
is subject to Section 16 of the Exchange Act to assure that any cash payment in
accordance with the foregoing to such person is made in compliance with Section
16 and the rules and regulations thereunder.

         (b) "Change in Control" shall mean:

                  (1) the acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act, of beneficial ownership within the meaning of Rule
13d-3 promulgated under the Exchange Act, of 15% or more of either (i) the then
outstanding shares of common stock of the Company (the "Outstanding Common
Stock") or (ii) the combined voting power of the then outstanding securities of
the Company entitled to vote generally in the election of directors (the
"Outstanding Voting Securities"); excluding, however, the following: (A) any
acquisition directly from the Company (excluding any acquisition resulting from
the exercise of an exercise, conversion or exchange privilege unless the
security being so exercised, converted or exchanged was acquired directly from
the Company), (B) any acquisition by the Company, (C) any acquisition by an

<PAGE>

employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company or (D) any acquisition by any
corporation pursuant to a transaction which complies with clauses (i), (ii) and
(iii) of subsection (3) of this Section 5.8(b); provided further, that for
purposes of clause (B), if any Person (other than the Company or any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company) shall become the beneficial owner of 15%
or more of the Outstanding Common Stock or 15% or more of the Outstanding Voting
Securities by reason of an acquisition by the Company, and such Person shall,
after such acquisition by the Company, become the beneficial owner of any
additional shares of the Outstanding Common Stock or any additional Outstanding
Voting Securities and such beneficial ownership is publicly announced, such
additional beneficial ownership shall constitute a Change in Control;

                  (2) individuals who, as of the beginning of any consecutive
two-year period constitute the Board of Directors (the "Incumbent Board") cease
for any reason to constitute at least a majority of such Board; provided that
any individual who subsequently becomes a director of the Company and whose
election, or nomination for election by the Company's stockholders, was approved
by the vote of at least a majority of the directors then comprising the
Incumbent Board shall be deemed a member of the Incumbent Board; and provided
further, that any individual who was initially elected as a director of the
Company as a result of an actual or threatened election contest, as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, or
any other actual or threatened solicitation of proxies or consents by or on
behalf of any Person other than the Board shall not be deemed a member of the
Incumbent Board;

                  (3) the consummation of a reorganization, merger or
consolidation of the Company or sale or other disposition of all or
substantially all of the assets of the Company (a "Corporate Transaction");
excluding, however, a Corporate Transaction pursuant to which (i) all or
substantially all of the individuals or entities who are the beneficial owners,
respectively, of the Outstanding Common Stock and the Outstanding Voting
Securities immediately prior to such Corporate Transaction will beneficially
own, directly or indirectly, more than 60% of, respectively, the outstanding
shares of common stock, and the combined voting power of the outstanding
securities of such corporation entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Corporate
Transaction (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company's
assets either directly or indirectly) in substantially the same proportions
relative to each other as their ownership, immediately prior to such Corporate
Transaction, of the Outstanding Common Stock and the Outstanding Voting
Securities, as the case may be, (ii) no Person (other than: the Company; any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company; the corporation resulting from
such Corporate Transaction; and any Person which beneficially owned, immediately
prior to such Corporate Transaction, directly or indirectly, 15% or more of the
Outstanding Common Stock or the Outstanding Voting Securities, as the case may
be) will beneficially own, directly or indirectly, 25% or more of, respectively,
the outstanding shares of common stock of the corporation resulting from such
Corporate Transaction or the combined voting power of the outstanding securities
of such corporation entitled to vote generally in the election of directors and
(iii) individuals who were members of the Incumbent Board will

<PAGE>

constitute at least a majority of the members of the board of directors of the
corporation resulting from such Corporate Transaction; or

                  (4) the consummation of a plan of complete liquidation or
dissolution of the Company.

5.9 NO RIGHT OF PARTICIPATION OR EMPLOYMENT. No person shall have any right to
participate in this Plan. The Committee's selection of a person to participate
in this Plan at any time shall not require the Committee to select such person
to participate in this Plan at any other time. Neither this Plan nor any award
made hereunder shall confer upon any person any right to continued employment by
the Company, any Subsidiary or any affiliate of the Company or affect in any
manner the right of the Company, any Subsidiary or any affiliate of the Company
to terminate the employment of any person at any time without liability
hereunder.

5.10 RIGHTS AS STOCKHOLDER. No person shall have any right as a stockholder of
the Company with respect to any shares of Common Stock or other equity security
of the Company which is subject to an award hereunder unless and until such
person becomes a stockholder of record with respect to such shares of Common
Stock or equity security.

5.11 GOVERNING LAW. This Plan, each award hereunder and the related Agreement,
and all determinations made and actions taken pursuant thereto, to the extent
not otherwise governed by the Code or the laws of the United States, shall be
governed by the laws of the State of Delaware and construed in accordance
therewith without giving effect to principles of conflicts of laws.

5.12 FOREIGN EMPLOYEES. Without amending this Plan, the Committee may grant
awards to eligible persons who are foreign nationals on such terms and
conditions different from those specified in this Plan as may in the judgment of
the Committee be necessary or desirable to foster and promote achievement of the
purpose of this Plan and, in furtherance of such purpose, the Committee may make
such modifications, amendments, procedures, subplans and the like as may be
necessary or advisable to comply with provisions of laws in other countries or
jurisdictions in which the Company or any of its Subsidiaries operates or has
employees.

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