Document:

Exhibit 10.53 

April 28, 2004

Ms. Anne P. Bowen

[address intentionally omitted]

Dear Anne,

First Marblehead Corporation is pleased to confirm our
offer to you for the position of Executive Vice President—Corporate Planning
reporting to Dan Meyers, Chairman and CEO. We understand you will be able to
start with us on May 10, 2004. In this newly created position, you will be
responsible for working directly with our senior executive team to bring our
short and long range strategic vision forward.

Your direct annual cash
compensation will be $400,000 paid on a semi-monthly basis at a rate of $16,666.67
(gross) per pay period. First Marblehead has an annual employee performance
review and bonus consideration cycle consistent with the business fiscal year
ending June 30. You will participate in the management bonus program with
a target award up to 30% of earned salary for the performance year. Your first
review under this program will be June 2005. All bonus awards are based on
both corporate performance and your individual contribution to it as determined
by the senior management of the firm. You will also participate in the First
Marblehead long term incentive program which consists of stock option and
restricted stock awards. You will join the firm with an initial award of 15,000
restricted stock units subject to the terms and conditions of the First
Marblehead 2003 Restricted Stock Plan. This award is subject to Board Approval.
Instruments of grant and plan documents will follow shortly.

Ms.  Jo-Ann
Burnham, our Vice President Administration will discuss the details of our
benefits programs including the Group Medical Insurance Plan, the Group Dental
Plan, the Group Life Plan and the Long Term Disability Plan. For each of these
benefits, all costs are borne by the firm and you are eligible for coverage on
the first day of employment. Other benefits include a non-contributory 401K
plan and the Firm’s employee stock purchase program subject to the eligibility
requirements of these plans. We offer accrual of vacation up to fifteen days
and eight paid holidays per year. As a condition of hire, First Marblehead
requires that you sign a confidentiality agreement which includes
non-disclosure and non-compete provisions. Due to the nature of our business,
this offer is contingent on satisfactory results of a credit check the company
runs on all prospective employees to make sure they are not in default of any
student loans. Please note that this letter does not constitute an employment
contract or a contract for a specific term of employment and that the
employment relationship is at will.

This is an exciting and
challenging time for First Marblehead and your addition to our executive team
is most welcome. We look forward to seeing you.

Sincerely,

/s/ Ralph M. James

Ralph M. James

President

First Marblehead
Corporation

/s/ Anne P. BowenExhibit 10.58

Each non-employee director
of The First Marblehead Corporation (the “Corporation”)(1)  shall receive:

·       an
annual fee of $40,000;

·       on
the date of his or her initial election to the board of directors, 2,000 stock
units under the Corporation’s 2003 stock incentive plan (the “2003 Plan”);

·       on
September 20 of each year (if on such date the non-employee director has
served on the Corporation’s board of directors for at least 180 days), 2,000 stock
units under the Corporation’s 2003 stock incentive plan; and

·       reimbursement
of expenses incurred in connection with their service to the Corporation.

Each stock unit represents the right to receive one
share of common stock of the Corporation. A director may elect to defer delivery
of such shares until the date 30 days after the date the director has ceased to
serve as a director of the Corporation. Directors who defer delivery will also
receive, at the time of delivery of such shares, a payment equal to: (i) the
number of shares delivered multiplied by (ii) the aggregate amount of cash
dividends paid in respect of one share of the Corporation’s common stock to stockholders
of record following each respective date of grant of the deferred stock units.

In addition:

·       non-employee
directors shall be eligible for grants of stock options and equity awards under
the Corporation’s other equity plans

·       the
Lead Director shall receive an additional annual fee of $50,000

·       the
Chairman of the Audit Committee of the Board of Directors shall receive an
additional annual fee of $50,000

·       the
Chair of the Advisory Board of the Corporation shall receive an additional
annual fee of $50,000

·       each
member of the Audit Committee of the Board of Directors shall receive a fee of
$1,000 for each meeting attended in person or by telephone

·       each member of the
Compensation Committee of the Board of Directors shall receive a fee of $1,000
for each meeting attended in person or by telephone

(1)        Stephen E. Anbinder retired as an employee of the Corporation on
June 30, 2006. Mr. Anbinder remains a consultant to, and a director of, the
Corporation and will not be entitled to receive compensation for his service as
a director until such time as he qualifies as an “independent director” under
the rules of the New York Stock Exchange.

 D-1EXHIBIT 10.1

OLD SECOND BANCORP, INC.

2002 LONG-TERM INCENTIVE PLAN

Section 1.              Purpose
of the Plan.

The OLD SECOND BANCORP, INC.
2002 LONG-TERM INCENTIVE PLAN (the “Plan”)
is intended to provide a means whereby directors (including senior and emeriti
directors), officers, and employees of OLD SECOND BANCORP, INC.,
a Delaware corporation (the “Company”), and
the Related Corporations may sustain a sense of proprietorship and personal
involvement in the continued development and financial success of the Company
and the Related Corporations, and to encourage them to remain with and devote
their best efforts to the business of the Company and the Related Corporations,
thereby advancing the interests of the Company and its stockholders.  Accordingly, the Company may permit certain
directors, officers, and employees to acquire Shares or otherwise participate
in the financial success of the Company, on the terms and conditions
established herein.

Section 2.              Definitions.

The following terms, when used herein and unless the
context clearly requires otherwise, shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):

(a)           “Board” means
the board of directors of the Company.

(b)           “Cause” means in
the case of a Participant with a then-current written Compensation and Benefit
Assurance Agreement (“Change in Control
Agreement”), the definition of Cause set forth in the Change in
Control Agreement.  For all other
Participants, Cause means the (i) willful misconduct on the part of a
Participant that is materially detrimental to the Company; or (ii) the
conviction of a Participant for the commission of a felony or crime involving
turpitude.  “Cause” under either (i) or
(ii) shall be determined in good faith by the Company.

(c)           “Change in Control”
means in the case of a Participant with a then-current written Change in
Control Agreement, the definition of Change in Control set forth in the Change
in Control Agreement.  For all other
Participants, Change in Control shall be deemed to have occurred if:

(i)            Any Person other than a trustee or
other fiduciary holding securities under an employee benefit plan of the
Company or a corporation owned directly or indirectly by the stockholders of
the Company in substantially the same proportions as their ownership of stock
of the Company, is or becomes the beneficial owner (within the meaning of Rule
13d-3 of the Exchange Act), directly or indirectly, of securities of the
Company or The Old Second National Bank of Aurora’s (the “Bank”) representing
twenty percent (20%) or more of the total voting power represented by the
Company’s or the Bank’s then outstanding voting securities; or

(ii)           During
any period of two (2) consecutive years, individuals who at the beginning of
such period constitute the Board of Directors of the Company and any new
Director whose election by the Board of Directors or nomination for election by
the Company’s stockholders was approved by a vote of at least two-thirds (2/3)
of the Directors then still in office who either were Directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof;
or

(iii)          The
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least eighty
percent (80%) of the total voting power represented by the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation, or the stockholders of the Company approve a plan of complete
liquidation of the Company or the Bank or an agreement for the sale or
disposition by the Company of all or substantially all the Company’s or the
Bank’s assets.

However, in no event shall a Change in Control be
deemed to have occurred, with respect to the Participant if the Participant is
part of a purchasing group which consummates the Change-in-Control
transaction.  The Participant shall be
deemed “part of a purchasing group” for purposes of the preceding sentence if
the Participant is a equity participant in the purchase company or group
(except for (i) passive ownership of less than two percent (2%) of the stock of
the purchasing company; or (ii) ownership of equity participation in the
purchasing company or group which is otherwise not significant, as determined
prior to the Change in Control by a majority of the nonemployee continuing
Directors).

(d)           “Code” means the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations promulgated thereunder.

(e)           “Committee” means a committee appointed by the Board to
administer the Plan, or if no Committee is appointed, the Board.  Each member of the Committee shall be
(i) a “non-employee director” for purposes of Section 16 and Rule 16b-3 of
the Exchange Act, and (ii) an “outside director” for purposes of Section
162(m) of the Code, unless the Board has fewer than two (2) such outside
directors.

(f)            “Disability” shall have the meaning ascribed to such term under
the Old Second Bancorp, Inc. Long-Term Disability Plan.

(g)           “Effective Date” means January 1, 2002.

(h)           “Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations promulgated
thereunder.

(i)            “Fair Market Value” means the average of the highest and
lowest quoted selling prices for Shares on the relevant date, or (if there were
no sales on such date) the weighted average of the means between the highest
and lowest quoted selling prices on the nearest day before and the nearest day
after the relevant date, as determined by the Committee.

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(j)            “Incentive Stock Option” means an award under the Plan that
satisfies the general requirements of Section 422 of the Code,
namely:  (i) grantees must be employees;
(ii) the exercise price may not be less than the fair market value of the
underlying Shares at the date of grant; (iii) no more than $100,000 worth
of Shares may become exercisable in any year; (iv) the maximum duration of
an award may be ten (10) years; (v) awards must be exercised within three
(3) months after termination of employment, except in the event of Disability
or death; and (vi) Shares received upon exercise must be retained for the
greater of two (2) years from the date of grant or one (1) year from the date
of exercise.

(k)           “Nonqualified Option” means an option award under the Plan
that is not an Incentive Stock Option.

(l)            “Participant” means an individual who has an
outstanding award granted under the Plan.

(m)          “Related Corporation” means any corporation, bank or other
entity which would be a parent or subsidiary corporation with respect to the
Company as defined in Section 424(e) or (f), respectively, of the Code.

(n)           “Retirement” means Termination of Service, other than for
Cause, either (a) after attainment of age sixty-five (65) for directors,
or (b) as Retirement is defined under the Old Second Bancorp Pension Plan
and Trust for officers and employees.

(o)           “Restricted Stock” means an award of Shares under the Plan
that are restricted as to transfer and subject to forfeiture.

(p)           “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange
Act, as amended from time to time.

(q)           “Shares” means shares of the common stock, $.01 par value per
share, of the Company.

(r)            “Stock Appreciation Rights” means rights entitling the
grantee to receive the appreciation in the market value of a stated number of
Shares.

(s)           “Securities Act” means the Securities Act of 1933, as amended
from time to time, and the rules and regulations promulgated thereunder.

(t)            “Termination of Service” means the termination of a person’s
status as a director, officer or employee of the Company or a Related
Corporation.

Section 3.              Administration
of the Plan.

The Plan shall be administered by the Board, or a committee
appointed by the Board.  The Board, or
the Committee, as the case may be, shall have sole authority to:

(a)           select
the directors, officers and employees to whom awards shall be granted under the
Plan;

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(b)           establish
the amount, terms and conditions of each such award;

(c)           prescribe
any legend to be affixed to certificates representing such awards;

(d)           interpret
the Plan;

(e)           correct
any defect, supply any omission, or reconcile any inconsistency in the Plan,
any award or any agreement related thereto; and

(f)            adopt
such rules, regulations, forms and agreements, not inconsistent with the
provisions of the Plan, as it may deem advisable to carry out the Plan.

All
decisions made by the Board, or the Committee, as the case may be, in
administering the Plan shall be final.

Section 4.              Shares
Subject to the Plan.

The aggregate number of Shares that may be obtained by
directors, officers and employees under the Plan shall be 250,000 Shares.  Each person is eligible to receive awards
with respect to an aggregate maximum of 125,000 Shares over the term of the
Plan.  Any Shares that remain unissued at
the termination of the Plan shall cease to be subject to the Plan, but until
termination of the Plan, the Company shall at all times make available
sufficient Shares to meet the requirements of the Plan.  Any Shares subject to distribution or payment
upon exercise of an award or lapse of restrictions on Restricted Stock but
which are not issued because of a surrender, forfeiture, expiration,
termination or cancellation shall once again be available for issuance pursuant
to a subsequent award.

Section 5.              Stock
Options.

(a)           Type
of Options.  The Board may issue
options that constitute Incentive Stock Options to officers and employees and
Nonqualified Options to directors, officers and employees of the Company and
the Related Corporations; provided that Nonqualified Options may be granted to
a senior director or an emeritus director only if he or she renders bona fide
services not in connection with the offer and sale of securities in a capital-raising
transaction.  The grant of each option
shall be confirmed by a stock option agreement that shall be executed by the
Company and the optionee as soon as practicable after such grant.  The stock option agreement shall expressly
state or incorporate by reference the provisions of the Plan and state whether
the option is an Incentive Stock Option or a Nonqualified Option.

(b)           Terms
of Options.  Except as provided in
paragraphs (c) and (d) of this Section, each option granted under the Plan
shall be subject to the terms and conditions set forth by the Committee in the
stock option agreement including, without limitation, option price, vesting
schedule and option term.

(c)           Additional
Terms Applicable to All Options. 
Each option shall be subject to the following terms and conditions:

(i)            Written
Notice.  An option may be exercised
only by giving written notice to the Company specifying the number of Shares to
be purchased.  The Committee may specify
a 

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reasonable
minimum number of Shares that may be purchased on any exercise of an option;
provided that the minimum number will not prevent the option holder from
exercising an option for the full number of Shares for which it is then
exercisable.

(ii)           Method
of Exercise. Except as otherwise provided in any written option agreement,
the exercise price of an option shall be paid in full (i) in cash; (ii) in
Common Stock valued at its Fair Market Value on the date of exercise, provided
it has been owned by the optionee for at least six (6) months prior to the
exercise; (iii) in cash by an unaffiliated broker-dealer to whom the holder of
the option has submitted an exercise notice consisting of a fully endorsed
option; (iv) by agreeing to surrender SARs then exercisable by him valued at
their Fair Market Value on the date of exercise; (v) by such other medium of
payment as the Committee, in its discretion, shall authorize; or (vi) by any
combination of clauses (i) through (v) above, as the optionee shall elect.  In the case of payment pursuant to clauses
(ii) through (v) above, the optionee’s election must be made on or prior to the
date of exercise of the option and must be irrevocable.  In lieu of a separate election governing each
exercise of an option, an optionee may file a blanket election that shall
govern all future exercises of options until revoked by the optionee.

(iii)          Term
of Option.  An option shall be
exercisable as provided under the Plan or by the Board.

(iv)          Retirement.  If an optionee’s Termination of Service occurs
due to Retirement, his or her options shall become fully vested and exercisable
and he or she shall have the right to exercise any Nonqualified Options within
a period of three (3) years after the date of Retirement, or as may otherwise
be provided by the Committee, and shall have the right to exercise any
Incentive Options within the period set forth in subparagraph (d)(ii) of this
Section.

(v)           Disability
or Death of Optionee.  If an optionee’s
Termination of Service occurs due to Disability or death his or her options
shall become fully vested and exercisable and he or she, or his or her
beneficiary, executor, administrator or personal representative, shall have the
right to exercise the options within a period of twelve (12) months after the
date of such termination, or as may otherwise be provided by the Committee.

(vi)          Termination
for Cause.  If an optionee’s
Termination of Service occurs due to Cause, his or her options, whether vested
or unvested, shall be immediately forfeited, provided, however, that
following a Change in Control, vested options shall not be forfeited under this
provision.

(vii)         Death
Following Termination of Service.  If
an optionee dies following his or her Termination of Service, any vested
options may be exercised until the later of (y) one (1) year from the date of
death, or (z) the date the exercise period would have otherwise expired due to
the reason for the Termination of Service (e.g.
Disability or Retirement).

(viii)        Transferability.  No option may be transferred, assigned or
encumbered by an optionee, except:  (A) by
will or the laws of descent and distribution; (B) by gifting for the
benefit of descendants for estate planning purposes; or (C) pursuant to a
certified domestic relations order.

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(d)           Additional
Terms Applicable to Incentive Options. 
Each Incentive Option shall be subject to the following terms and
conditions:

(i)            Option
Price.  The Incentive Option price
per Share shall be 100% of the fair market value of a Share on the date the
Incentive Option is granted. 
Notwithstanding the preceding sentence, the Incentive Option price per
Share granted to an individual who, at the time such option is granted, owns
stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company (a “10% Stockholder”)
shall not be less than 110% of the fair market value of a Share on the date the
option is granted.

(ii)           Term
of Option.  Notwithstanding any other
provision of the Plan, no Incentive Option may be exercised more than ten (10)
years after the date of grant.  No
Incentive Option granted to a 10% Stockholder may be exercised more than five
(5) years after the date of grant. 
Notwithstanding any other provisions hereof, no Incentive Option may be
exercised more than three (3) months after the optionee terminates employment
with the Company, except in the event of death or Disability, in which case the
option may be exercised as provided in subparagraph (c)(v) of this
Section.

(iii)          Annual
Exercise Limit.  The aggregate fair
market value of Shares which first become exercisable with respect to an
Incentive Option during any calendar year shall not exceed $100,000.  For purposes of the preceding sentence, the
fair market value of each Share shall be determined on the date the option with
respect to such Share is granted.  To the
extent all or any portion of an Option is intended to be an Incentive Option
but does not satisfy the limitations of this subsection, that portion which
fails to satisfy this subsection shall be deemed a Nonqualified Option for all
purposes under the Plan, including any post termination of employment exercise
period applicable to the termination of employment.

(iv)          Transferability.  No Incentive Option may be transferred,
assigned or encumbered by an optionee, except by will or the laws of descent
and distribution, and during the optionee’s lifetime an option may only be
exercised by him or her.

(v)           Notice
of Disqualifying Dispositions.  If an
optionee sells or otherwise disposes of any Shares acquired pursuant to the
exercise of an Incentive Option on or before the later of (1) the date two
(2) years after the date of grant, and (2) the date one year after the exercise
of the Incentive Option (in either case, a “Disqualifying Disposition”), the
optionee must immediately notify the Company in writing of such
disposition.  The optionee may be subject
to income tax withholding by the Company on the compensation income recognized
by the optionee from the Disqualifying Disposition.

Section 6.              Restricted
Stock Awards.

(a)           Grants.  An award of Restricted Stock under the Plan (“RSAs”) shall be evidenced by a written agreement in such
form and consistent with the Plan as the Committee shall approve from time to
time.  A grantee can accept an RSA only
by signing and delivering to the Company a purchase agreement in such form as
the Committee shall establish, and full payment of the purchase price, within
thirty (30) days from the date the RSA agreement was delivered to the
grantee.  If the grantee does not accept
the RSA in this manner within thirty (30) days, then the offer of the RSA will
terminate, unless the Committee determines otherwise.

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(b)           Restriction
Period.  RSAs awarded under the Plan
shall be subject to such terms, conditions and restrictions as shall be
determined by the Committee at the time of grant, including, without
limitation:  (i) prohibitions
against transfer; (ii) substantial risks of forfeiture;
(iii) attainment of performance objectives; and (iv) repurchase by
the Company or right of first refusal for such period or periods as shall be
determined by the Committee.  The
Committee shall have the power to permit, in its discretion, an acceleration of
the expiration of the applicable restriction period with respect to any part or
all of the RSAs awarded to a grantee.

(c)           Restrictions
Upon Transfer.  RSAs awarded, and the
right to vote underlying Shares and to receive dividends thereon, may not be
sold, assigned, transferred, exchanged, pledged, hypothecated or otherwise
encumbered during the restriction period applicable to such Shares,
except:  (i) by will or the laws of
descent and distribution; (ii) by gifting for the benefit of descendants
for estate planning purposes; or (iii) pursuant to a certified domestic
relations order.  Subject to the
foregoing, and except as otherwise provided in the Plan, the grantee shall have
all the other rights of a stockholder including, without limitation, the right
to receive dividends and the right to vote such Shares.

(d)           Lapse
of Restrictions.  Each restricted
stock agreement shall specify the terms and conditions upon which any
restrictions upon Shares awarded under the Plan shall lapse, as determined by
the Board.  Upon the lapse of such
restrictions, Shares, free of the foregoing restrictive legend, shall be issued
to the grantee or his or her legal representative.

(e)           Termination
Prior to Lapse of Restrictions.  In
the event of a grantee’s Termination of Service prior to the lapse of
restrictions applicable to any RSAs awarded to such grantee, all Shares as to
which there still remain restrictions shall be forfeited by such grantee
without payment of any consideration to the grantee, and neither the grantee
nor any successors, heirs, assigns, or personal representatives of such grantee
shall thereafter have any further rights or interest in such Shares or
certificates.

(f)            Legends.  Each certificate issued by the Company that
represents any Plan Shares pursuant to this Section 6 shall bear the following
legend:

“This certificate and the
shares represented hereby are subject to the terms and conditions (including
forfeiture and restrictions against transfer) contained in the Old Second
Bancorp, Inc. 2002 Long-Term Incentive Plan and related agreements.  Release from such terms and conditions shall
be obtained only in accordance with the provisions of such Plan and agreements,
copies of which are on file in the office of the Secretary of said Company.”

Section 7.              Stock
Appreciation Rights.

(a)           Grants.  An award of Stock Appreciation Rights under
the Plan (“SARs”) may be granted separately
or in tandem with or by reference to an option granted prior to or
simultaneously with the grant of such rights, to such eligible directors,
officers and employees, as may be selected by the Committee, and shall be
evidenced by a written agreement in such form and consistent with the Plan as
the Committee shall approve from time to time.

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(b)           Terms
of Grant.  SARs may be granted in
tandem with or with reference to a related option, in which event the grantee
may elect to exercise either the option or the SAR, but not both, as to the
same Share subject to the option and the SAR, or the SAR may be granted
independently of a related option.  SARs
shall not be transferable, except: 
(i) by will or the laws of descent and distribution; (ii) by
gifting for the benefit of descendants for estate planning purposes; or
(iii) pursuant to a certified domestic relations order.

(c)           Termination
for Cause.  If an optionee’s
Termination of Service occurs due to Cause, his or her SARs, whether vested or
unvested, shall be immediately forfeited, provided, however, that
following a Change in Control, vested SARs shall not be forfeited under this
provision.

(d)           Payment
on Exercise.  Upon exercise of a SAR,
the grantee shall be paid the excess of the then fair market value of the
number of Shares to which the SAR relates over the fair market value of such
number of Shares at the date of grant of the SAR or of the related option, as
the case may be.  Such excess shall be paid
in cash or in such other form as the Committee shall determine.

Section 8.              Amendment
or Termination of the Plan

The Board may amend, suspend or terminate the Plan or
any portion thereof at any time, but (except as provided in Section 12 below) no amendment shall be made without
approval of the stockholders of the Company which shall:  (a) materially increase the aggregate
number of Shares with respect to which Incentive Stock Option awards may be
made under the Plan; or (b) change the class of persons eligible to
receive Incentive Stock Option awards under the Plan; provided,
however, that no amendment, suspension or termination shall impair
the rights of any individual, without his or her consent, in any award
theretofore made pursuant to the Plan.

Section 9.              Term
of Plan.

The Plan shall be effective upon the date of its
adoption by the Board; provided that Incentive Stock Options may be granted
only if the Plan is approved by the stockholders within twelve (12) months
before or after the date of adoption by the Board.  Unless sooner terminated under the provisions
of Section 8 above, options, RSAs and
SARs shall not be granted under the Plan after the expiration of ten (10) years
from the Effective Date.  However, awards
may be exercisable after the end of the term of the Plan.

Section 10.            Rights
as Stockholder.

Upon delivery of any Share to a director, officer or
employee, such person shall have all of the rights of a stockholder of the
Company with respect to such Share, including the right to vote such Share and
to receive all dividends or other distributions paid with respect to such
Share.

Section 11.            Merger
or Consolidation.

In the event the Company is merged or consolidated
with another corporation and the Company is not the surviving corporation, the
surviving corporation may agree to exchange

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options
and SARs issued under this Plan for options and SARs (with the same aggregate
option price) to acquire and participate in that number of shares in the
surviving corporation that have a fair market value equal to the fair market
value (determined on the date of such merger or consolidation) of Shares that
the grantee is entitled to acquire and participate in under this Plan on the
date of such merger or consolidation.  In
the event of a Change in Control, options and SARs shall become immediately and
fully exercisable.

Section 12.            Changes
in Capital and Corporate Structure.

The aggregate number of Shares and interests awarded
and which may be awarded under the Plan shall be adjusted to reflect a change
in the outstanding Shares of the Company by reason of a recapitalization,
reclassification, reorganization, stock split, reverse stock split, combination
of shares, stock dividend or similar transaction.  The adjustment shall be made in an equitable
manner which will cause the awards and the economic benefits thereof to remain
unchanged as a result of the applicable transaction.

Section 13.            Assumption
of Awards by the Company.

The Company, from time to time, may substitute or
assume outstanding awards granted by it or another company, whether in connection
with an acquisition of another company or otherwise, by either
(a) granting an Award under the Plan in substitution of such other company’s
award, or (b) assuming such award as if it had been granted under the Plan
if the terms of such assumed award could be applied to an Award granted under
the Plan.  Such substitution or
assumption shall be permissible if the holder of the substituted or assumed
award would have been eligible to be granted an Award under the Plan if the
other company had applied the rules of the Plan to such grant.  In the event the Company assumes an award
granted by another company, the terms and conditions of such award shall remain
unchanged (except that the exercise price and the number and nature of Shares
issuable upon exercise of any such option will be adjusted appropriately
pursuant to Section 424(a) of the Code). 
In the event the Company elects to grant a new option rather than
assuming an existing option, such new option may be granted with a similarly
adjusted exercise price.

Section 14.            Service.

An individual shall be considered to be in the service
of the Company or a Related Corporation as long as he or she remains a
director, officer or employee of the Company or such Related Corporation.  Nothing herein shall confer on any individual
the right to continued service with the Company or a Related Corporation or
affect the right of the Company or such Related Corporation to terminate such
service.

Section 15.            Withholding
of Tax.

(a)           Generally.  To the extent the award, issuance, vesting or
exercise of option, RSAs or SARs results in the receipt of compensation by a
director, officer or employee, the Company may require the director, officer or
employee to pay to the Company or the grantee may authorize the Company to
withhold a portion of any cash compensation then or thereafter payable to such
person, an amount, sufficient to satisfy federal, state and local withholding
tax requirements prior 

 A-9
 

 

to the
delivery of any certificate for the Shares. 
If an award is to be paid in cash, the payment will be net of an amount
sufficient to satisfy such tax withholding obligations

(b)           Stock
Withholding.  To the extent a grantee
incurs tax liability in connection with the exercise or vesting of any Award
that is subject to tax withholding and the grantee is obligated to pay the
Company the amount required to be withheld, the Committee may, in its sole
discretion, allow the grantee to satisfy the minimum withholding tax obligation
by electing to have the Company withhold from the Shares to be issued that
number of Shares having a Fair Market Value equal to the minimum amount
required to be withheld, determined on the date that the amount of tax to be
withheld is to be determined.  All
elections by a grantee to have Shares withheld for this purpose shall be made
in writing in a form acceptable to the Committee.

Section 16.            Delivery
and Registration of Stock.

The Company’s obligation to deliver Shares with
respect to an award shall, if the Committee so requests, be conditioned upon the
receipt of a representation as to the investment intention of the individual to
whom such Shares are to be delivered, in such form as the Board shall determine
to be necessary or advisable to comply with the provisions of the Securities
Act or any other federal, state or local securities legislation or
regulation.  It may be provided that any
representation requirement shall become inoperative upon a registration of the
Shares or other action eliminating the necessity of such representation under
securities legislation.  The Company
shall not be required to deliver any Shares under the Plan prior to:  (a) the admission of such Shares to
listing on any stock exchange on which Shares may then be listed, and
(b) the completion of such registration or other qualification of such
Shares under any state or federal law, rule or regulation, as the Board shall
determine to be necessary or advisable. 
The Plan is intended to comply with Rule 16b-3, if applicable.  Any provision of the Plan which is
inconsistent with said rule shall, to the extent of such inconsistency, be
inoperative and shall not affect the validity of the remaining provisions of
the Plan.

Section 17.            Indemnification.

Each person who is or shall have been a member of the
Committee, or of the Board, shall be indemnified and held harmless by the
Company against and from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan and against and from any and all amounts paid by
him or her in settlement thereof, with the Company’s approval, or paid by him
or her in satisfaction of any judgment in any such action, suit, or proceeding
against him or her, provided he or she shall give the Company an opportunity,
at its own expense, to handle and defend the same before he or she undertakes
to handle and defend it on his or her own behalf.  The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such persons
may be entitled under the Company’s Articles of Incorporation or Bylaws, as a
matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.

 A-10
 

 

Section 18.            Legal
Construction.

(a)           Gender
and Number.  Except where otherwise
indicated by the context, any masculine term used herein also shall include the
feminine; the plural shall include the singular and the singular shall include
the plural.

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

(c)           Requirements
of Law.  The granting of Awards and
the issuance of Shares under the Plan shall be subject to all applicable laws,
rules, and regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required.

(d)           Governing
Law.  To the extent not preempted by
Federal law, the Plan, and all agreements hereunder, shall be construed in
accordance with and governed by the laws of the State of Illinois.

 A-11

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