Document:

Exhibit 10.19

                          RACING CHAMPIONS CORPORATION

                              STOCK INCENTIVE PLAN

                      Article 1.  Establishment and Purpose
                      -------------------------------------

     1.1     Establishment.  Racing  Champions  Corporation,  a  Delaware
             -------------
corporation  (the  "Company"),  hereby  establishes  a  stock  option  plan  for
employees  and  others  providing  services to the Company, as described herein,
which  shall  be  known as the Racing Champions Corporation Stock Incentive Plan
(the "Plan").  It is intended that certain of the options issued pursuant to the
Plan  to  employees of the Company may constitute incentive stock options within
the  meaning of section 422 of the Internal Revenue Code, and that other options
issued  pursuant  to  the Plan shall constitute nonstatutory options.  The Board
shall determine which options are to be incentive stock options and which are to
be  nonstatutory  options and shall enter into option agreements with recipients
accordingly.

     1.2     Purpose.  The  purpose  of  the  Plan is to provide a means for the
             -------
Company  to  attract  and  retain  competent  personnel  and  to  provide  to
participating  directors,  officers and other key employees long term incentives
for  high  levels  of  performance  by  providing them with a means to acquire a
proprietary  interest  in  the  Company's  success.

                            Article II.  Definitions
                            ------------------------

     2.1     Definitions.  For  purposes of this Plan, the following terms shall
             -----------
be  defined  as  follows:

     (a)     "Board"  means  the  Board  of  Directors  of  the  Company.

     (b)     "Cause"  means  the  definition  of  Cause in Optionee's employment
agreement,  if  any,  with  the  Company.  If  no  such  employment agreement or
definition  in  such agreement exists, Cause means (i) breach by Optionee of any
covenant  not  to  compete  or  confidentiality agreement with the Company, (ii)
failure  by  Optionee  to  substantially  perform  his  duties to the reasonable
satisfaction  of  the  Board,  (iii)  serious  misconduct  by  Optionee which is
demonstrably  and  substantially  injurious  to  the  Company,  (iv)  fraud

<PAGE>
or  dishonesty  by  Optionee  with  respect  to  the  Company,  (v)  material
misrepresentation  by  Optionee  to  a stockholder or director of the Company or
(vi) acts of negligence by Optionee in performance of Optionee's duties that are
substantially injurious to the Company.  The Board, by majority vote, shall make
the  determination  of  whether  Cause  exists.

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

     (d)     "Commission"  means  the  Securities and Exchange Commission or any
successor  agency.

     (e)     "Committee"  means the Committee provided for by Article IV hereof,
which  may  be  created  at  the  discretion  of  the  Board.

     (f)     "Company"  means  Racing  Champions  Corporation,  a  Delaware
corporation.

     (g)     "Consultant"  means  any  person or entity, including an officer or
director of the Company who provides services (other than as an Employee) to the
Company  and  includes  a  Qualified  Director,  as  defined  below.

     (h)     "Date  of  Exercise" means the date the Company receives notice, by
an  Optionee, of the exercise of an Option pursuant to section 9.1 of this Plan.
Such notice shall indicate the number of shares of Stock the Optionee intends to
purchase  upon  exercise  of  an  Option.

     (i)     "Employee"  means  any  person, including an officer or director of
the  Company,  who  is  employed  by  the  Company.

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

     (k)     "Fair Market Value" means the fair market value of Stock upon which
an  Option is granted under this Plan, as determined by the Board.  If the Stock
is  traded  on  an  over-the-counter  securities  market  or national securities
exchange,  "Fair  Market Value" shall mean an amount equal to the average of the
highest  and  lowest  reported  sales  prices  of  the  Stock  reported  on such
over-the-counter

                                        2

<PAGE>
market  or  such  national  securities exchange on the applicable date or, if no
sales  of Stock have been reported for that date, on the next preceding date for
which  sales  where  reported.

     (l)     "Incentive  Stock  Option"  means an Option granted under this Plan
which  is  intended to qualify as an "incentive stock option" within the meaning
of  section  422  of  the  Code.

     (m)     "IRS"  means the Internal Revenue Service, or any successor agency.

     (n)     "Nonstatutory Option" means an Option granted under this Plan which
is  not  intended  to qualify as an incentive stock option within the meaning of
section  422 of the Code.  Nonstatutory Options may be granted at such times and
subject  to such restrictions as the Board shall determine without conforming to
the  statutory  rules  of  section 422 of the Code applicable to incentive stock
options.

     (o)     "Option"  means  the  right,  granted  under this Plan, to purchase
Stock  of  the  Company at the option price for a specified period of time.  For
purposes  of  this  Plan,  an  Option  may  be  an  Incentive  Stock  Option,  a
Nonstatutory  Option  or  a  Reload  Option.

     (p)     "Optionee"  means an Employee or Consultant holding an Option under
the  Plan.

     (q)     "Parent  Corporation"  shall  have the meaning set forth in section
424(e)  of  the  Code with the Company being treated as the employer corporation
for  purposes  of  this  definition.

     (r)     "Qualified  Director"  means  a  director  who  is  both  (a)  a
"Non-Employee Director" as defined in Rule 16b-3(b)(3)(i), as promulgated by the
Commission  under  the  Exchange Act, or any successor definition adopted by the
Commission,  and  (b)  an "Outside Director" as defined by section 162(m) of the
Code  and  the  regulations  promulgated thereunder, or any successor definition
adopted  by  the  IRS.

     (s)     "Reload  Option" means an Option granted pursuant to section 8.1 of
this  Plan.

                                        3

<PAGE>
     (t)     "Rule  16b-3"  means  Rule  16b-3, as promulgated by the Commission
under  Section  16(b)  of  the  Exchange  Act,  as  amended  from  time to time.

     (u)     "Significant  Stockholder"  means  an  individual  who,  within the
meaning  of  section  422(b)(6) of the Code, owns stock possessing more than ten
percent  of  the  total  combined  voting  power  of all classes of stock of the
Company.  In  determining whether an individual is a Significant Stockholder, an
individual  shall  be  treated as owning stock owned by certain relatives of the
individual  and certain stock owned by corporations in which the individual is a
partner,  and estates or trusts of which the individual is a beneficiary, all as
provided  in  section  424(d)  of  the  Code.

     (v)     "Stock"  means  the  Common Stock, par value $.01 per share, of the
Company.

     2.2     Gender and Number.  Except when otherwise indicated by the context,
             -----------------
any masculine terminology when used in this Plan also shall include the feminine
gender  and the definition of any term herein in the singular shall also include
the  plural.

                  Article III.  Eligibility and Participation.
                  --------------------------------------------

     3.1     Eligibility  and  Participation.  All  Employees  are  eligible  to
             -------------------------------
participate in this Plan and receive Incentive Stock Options and/or Nonstatutory
Options.  All  Consultants  are eligible to participate in this Plan and receive
Nonstatutory  Options hereunder.  Optionees in the Plan shall be selected by the
Board  from  among  those  Employees  and Consultants who, in the opinion of the
Board,  are  in  a  position to contribute materially to the Company's continued
growth  and  development  and  to  its  long-term  financial  success.

                          Article IV.  Administration.
                          ----------------------------

     4.1     Administration.  The  Board  shall be responsible for administering
             --------------
the  Plan.

     The  Board  is  authorized  to interpret the Plan, to prescribe, amend, and
rescind  rules  and  regulations relating to the Plan, to provide for conditions
and  assurances  deemed  necessary  or advisable to protect the interests of the
Company,  and  to  make  all other determinations necessary or advisable for the
administration

                                        4

<PAGE>
of  the  Plan,  but only to the extent not contrary to the express provisions of
the Plan.  Determinations, interpretations or other actions made or taken by the
Board  pursuant  to  the  provisions of this Plan shall be final and binding and
conclusive  for  all  purposes  and  upon  all  persons.

     At  the  discretion  of  the  Board,  this  Plan  may  be administered by a
Committee  which  shall  be  a  compensation  committee of the Board, consisting
solely of two or more Qualified Directors.  The members of such Committee may be
directors  who  are eligible to receive Options under this Plan, but Options may
be granted to such persons only by action of the full Board and not by action of
the  Committee.  Such  Committee shall have full power and authority, subject to
the  limitations  of  the  Plan  and  any  limitations  imposed by the Board, to
construe,  interpret  and  administer this Plan and to make determinations which
shall  be  final,  conclusive  and  binding upon all persons, including, without
limitation,  the Company, the stockholders, the directors and any persons having
any  interests  in  any  Options  which  may  be granted under this Plan and, by
resolution  providing  for  the creation and issuance of any such Option, to fix
the  terms  upon  which,  the time or times at or within which, and the price or
prices  at  which  any  such  shares  may be purchased from the Company upon the
exercise  of  such Option, which terms, time or times and price or prices shall,
in  every  case,  be set forth or incorporated by reference in the instrument or
instruments  evidencing such Option, and shall be consistent with the provisions
of  the  Plan.

     The Board may from time to time remove members from, or add members to, the
Committee.  The Board may terminate the Committee at any time.  Vacancies on the
Committee,  howsoever caused, shall be filled by the Board.  The Committee shall
select one of its members as Chairman, and shall hold meetings at such times and
places  as  the  Chairman may determine.  A majority of the Committee at which a
quorum  is  present,  or  acts  reduced  to or approved in writing by all of the
members  of  the  Committee, shall be the valid acts of the Committee.  A quorum
shall  consist  of  two-thirds  of  the  members  of  the  Committee.

     Where  the  Committee  has  been created by the Board, references herein to
actions  to  be  taken by the Board shall be deemed to refer to the Committee as
well,  except  where  limited  by  this  Plan  or  by  the  Board.

     The  Board  shall  have  all  of the enumerated powers of the Committee but
shall  not  be  limited to such powers.  No member of the Board or the Committee
shall  be liable for any action or determination made in good faith with respect
to  the  Plan  or  any  Option  granted  under  it.

                                        5

<PAGE>
     4.2     Special Provisions for Grants to Officers or Directors.  Rule 16b-3
             ------------------------------------------------------
provides  that the grant of a stock option to a director or officer of a company
subject  to the Exchange Act will be exempt from the provisions of Section 16(b)
of  the  Exchange  Act  if the conditions set forth in Rule 16b-3 are satisfied.
Unless  otherwise  specified  by  the  Board,  grants  of  Options  hereunder to
individuals who are officers or directors of the Company for purposes of Section
16(b)  of  the  Exchange  Act  shall  be  made  in  a  manner that satisfies the
conditions  of  Rule  16b-3.

                     Article V.  Stock Subject to the Plan.
                     --------------------------------------

     5.1     Number.  The  total number of shares of Stock hereby made available
             ------
and  reserved  for  issuance  under  the Plan shall be 1,500,000.  The aggregate
number  of  shares  of  Stock  available  under  this  Plan  shall be subject to
adjustment  as provided in section 5.3.  The total number of shares of Stock may
be  authorized  but  unissued shares of Stock, or shares acquired by purchase as
directed  by  the  Board  from  time  to  time in its discretion, to be used for
issuance  upon  exercise  of  Options  granted  hereunder.

     5.2     Unused  Stock;  Payment  with  Stock.  If an Option shall expire or
             ------------------------------------
terminate  for any reason without having been exercised in full, the unpurchased
shares  of  Stock  subject thereto shall (unless the Plan shall have terminated)
become  available  for other Options under the Plan.  In addition, upon the full
or  partial payment of any option price by the transfer to the Company of shares
of  Stock  pursuant  to  section  7.7,  upon  satisfaction  of  tax  withholding
obligations  with  shares of Stock pursuant to section 15.1 or any other payment
made  or  benefit  realized under this Plan by the transfer or relinquishment of
shares  of  Stock,  only  the  net  number of shares of Stock actually issued or
transferred  by  the Company, after subtracting the number of shares of Stock so
transferred  or  relinquished,  will  be  charged  against  the  maximum  share
limitation  set  forth  in  section  5.1  above.

     5.3     Adjustment  in  Capitalization.  In  the event of any change in the
             ------------------------------
outstanding  shares  of  Stock  by  reason  of  a  stock  dividend  or  split,
recapitalization,  reclassification  or  other  similar  corporate  change,  the
aggregate  number  of  shares  of  Stock  set  forth  in  section  5.1  shall be
appropriately  adjusted  by  the Board, whose determination shall be conclusive;
provided,  however, that fractional shares shall be rounded to the nearest whole
share.  In  any such case, the number and kind of shares that are subject to any
Option  (including  any  Option outstanding after termination of employment) and
the  Option  price per share shall be proportionately and appropriately adjusted
without  any  change  in  the  aggregate  Option  price to be paid therefor upon
exercise  of  the  Option.

                                        6

<PAGE>
                       Article VI.  Duration of the Plan.
                       ----------------------------------

     6.1     Duration  of  the  Plan.  The Plan shall be in effect for ten years
             -----------------------
from  the  date  of  its  approval  by  the Company's stockholders.  Any Options
outstanding  at the end of such period shall remain in effect in accordance with
their  terms.  The  Plan  shall  terminate  before the end of such period if all
Stock subject to the Plan has been purchased pursuant to the exercise of Options
granted  under  the  Plan.

                      Article VII.  Terms of Stock Options.
                      -------------------------------------

     7.1     Grant  of  Options.  Subject to section 5.1, Options may be granted
             ------------------
to  Employees  or Consultants at any time and from time to time as determined by
the  Board;  provided,  however,  that Consultants may receive only Nonstatutory
Options  and  may  not  receive  Incentive  Stock Options.  The Board shall have
complete  discretion  in  determining  the  number  of  Options  granted to each
Optionee.  In  making  such  determinations, the Board may take into account the
nature  of  services  rendered by such Employee or Consultant, their present and
potential  contributions  to the Company, and such other factors as the Board in
its  discretion  shall deem relevant.  The Board shall also determine whether an
Option  is  to  be  an  Incentive  Stock  Option  or  a  Nonstatutory  Option.

     In  the  cases  of  Incentive  Stock  Options,  the total Fair Market Value
(determined  at  the  date  of  grant)  of shares of Stock with respect to which
Incentive  Stock  Options  are  exercisable  for  the first time by the Optionee
during  any  calendar  year under all plans of the Company under which incentive
stock  options  may be granted (and all such plans of any Parent Corporation and
any  subsidiary  corporations  of  the  Company)  shall  not  exceed  $100,000.
(Hereinafter,  this  requirement  is  sometimes  referred  to  as  the "$100,000
Limitation.")

     Nothing  in  this  Article  VII  of the Plan shall be deemed to prevent the
grant  of  Options  permitting exercise in excess of the maximums established by
the  preceding  paragraph  where such excess amount is treated as a Nonstatutory
Option.

     7.2     No  Tandem  Options.  Where  an  Option  granted under this Plan is
             -------------------
intended  to  be  an  Incentive Stock Option, the Option shall not contain terms
pursuant  to  which the exercise of the Option would affect the Optionee's right
to  exercise  another Option, or vice versa, such that the Option intended to be
an  Incentive  Stock  Option  would  be  deemed a tandem stock option within the
meaning  of  the  regulations  under  section  422  of  the  Code.

                                        7

<PAGE>
     7.3     Option  Agreement;  Terms  and Conditions to Apply Unless Otherwise
             -------------------------------------------------------------------
Specified.  As  determined  by the Board on the date of grant, each Option shall
  -------
be  evidenced  by an Option agreement (the "Option Agreement") that includes the
nontransferability  provisions  required  by  section 11.2 hereof and specifies:
whether  the  Option  is an Incentive Stock Option or a Nonstatutory Option; the
Option price; the duration of the Option; the number of shares of Stock to which
the  Option  applies; any vesting or exercisability restrictions which the Board
may  impose;  in the case of an Incentive Stock Option, a provision implementing
the  $100,000  Limitation;  and  any  other  terms  and  conditions  as shall be
determined  by  the  Board  at  the  time  of  grant  of  the  Option.

     All  Option  Agreements  shall  incorporate  the provisions of this Plan by
reference,  with  certain  provisions to apply depending upon whether the Option
Agreement  applies  to  an  Incentive  Stock Option or to a Nonstatutory Option.

     7.4     Option  Price.  No  Incentive Stock Option granted pursuant to this
             -------------
Plan shall have an Option price that is less than the Fair Market Value of Stock
on  the  date  the  Option  is  granted.  Incentive  Stock  Options  granted  to
Significant Stockholders shall have an Option price of not less than 110 percent
of  the  Fair  Market Value of Stock on the date of grant.  The Option price for
Nonstatutory  Options  shall  be  established  by  the  Board.

     7.5     Term  of  Options.  Each  Option  shall  expire at such time as the
             -----------------
Board  shall  determine  when  it  is granted, provided, however, that no Option
shall  be  exerciseable  later  than  the  tenth  anniversary date of its grant.

     7.6     Exercise  of  Options.  Options  granted  under  this Plan shall be
             ---------------------
exercisable  at such times and be subject to such restrictions and conditions as
the  Board  shall  in  each instance approve, which need not be the same for all
Optionees.

     7.7     Payment.  Payment for all shares of Stock shall be made at the time
             -------
that an Option, or any part thereof, is exercised, and no shares shall be issued
until  full  payment  therefor has been made.  Such payment may be made in cash,
outstanding  shares  of  Stock,  in combinations thereof, or any other method of
payment  approved  by  the Board; provided, however, that (i) the deposit of any
withholding  tax  shall  be made in accordance with applicable law and (ii) that
such  shares  of  Stock  used  to  pay  the exercise price have been held by the
Participant  for  at  least six months prior to the exercise date.  If shares of
Stock  are being used in part or full payment for the shares to be acquired upon
exercise  of  the  Option,  such

                                        8

<PAGE>
shares  shall  be  valued  for  the  purpose  of such exchange as of the date of
exercise of the Option at the Fair Market Value of the shares.  Any certificates
evidencing  shares  of Stock used to pay the purchase price shall be accompanied
by  stock  powers  duly  endorsed  in  blank  by  the  registered  holder of the
certificate (with signatures thereon guaranteed).  In the event the certificates
tendered  by  the holder in such payment cover more shares than are required for
such payment, the certificate shall also be accompanied by instructions from the
holder  to  the  Company's  transfer agent with regard to the disposition of the
balance  of  the  shares  covered  thereby.

                         Article VIII.  Reload Options.
                         -----------------------------

     8.1     Grants  of Reload Options.  Concurrently with any award of Options,
             -------------------------
the Board may grant Reload Options to purchase a number of shares of Stock equal
to the sum of (i) the number of outstanding shares of Stock used to exercise the
underlying  Option  pursuant  to  section  7.7, and (ii) the number of shares of
Stock  used  to satisfy any tax withholding requirement incident to the exercise
of  the underlying Options pursuant to section 15.1.  If the Board grants Reload
Options in connection with a grant of Options, the Option Agreement with respect
to  such  underlying  Options  shall state that Reload Options have been granted
with  respect to the underlying Options.  Upon exercise of an underlying Option,
the  Reload  Option  will  be evidenced by an amendment to the underlying Option
Agreement.  No  additional  Reload  Options will be granted to the Optionee when
Options  are  exercised pursuant to the terms of this Plan following termination
of  the  Optionee's  employment.

     8.2     Terms of Reload Options.  A Reload Option will be subject to all of
             -----------------------
the  terms  and  conditions of the underlying Option, except that (i) the option
price per share of Stock purchasable under a Reload Option shall be equal to the
Fair  Market Value of the Stock at time of grant upon exercise of the underlying
Option,  and  (ii) the term of the Reload Option will equal the remaining option
term  of  the  underlying  Option.

     Article IX.  Written Notice, Issuance of Stock Certificates, Stockholder
     ------------------------------------------------------------------------
                                   Privilege.
                                   ---------

     9.1     Written  Notice.  An  Optionee  wishing to exercise an Option shall
             ---------------
give  written  notice  to  the Company, in the form and manner prescribed by the
Board.  Full  payment  for  the  Options  exercised,  as provided in section 7.7
above,  must  accompany  the  written  notice.

                                        9

<PAGE>
     9.2     Issuance  of  Stock  Certificate.  As soon as practicable after the
             --------------------------------
receipt of written notice and payment, the Company shall deliver to the Optionee
or  to a nominee of the Optionee a certificate or certificates for the requisite
number  of  shares  of  Stock.

     9.3     Privileges  of  a  Stockholder.  An  Optionee  or  any other person
             ------------------------------
entitled  to  exercise  an  Option  under  this  Plan shall not have stockholder
privileges  with  respect  to  any Stock covered by the Option until the date of
issuance  of  a  stock  certificate  for  such  Stock.

               Article X.  Termination of Employment or Services.
               -------------------------------------------------

     Except  as  otherwise expressly specified by the Board, all Options granted
under  this  Plan  shall  be  subject  to  the following termination provisions.

     10.1     Death.  If an Optionee's employment in the case of an Employee, or
              -----
provision of services as a Consultant in the case of a Consultant, terminates by
reason of death, the Option may thereafter be exercised at any time prior to the
expiration  date of the Option or within 12 months after the date of such death,
whichever  period  is  the  shorter,  by the person or persons entitled to do so
under  the Optionee's will or, if the Optionee shall fail to make a testamentary
disposition  of  an  Option  or  shall  die  intestate,  the  Optionee's  legal
representative  or representatives.  The Option shall be exercisable only to the
extent  that  such  Option  was  exercisable  as  of  the  date  of  death.

     10.2     Termination Other Than for Cause or Due to Death.  In the event of
              ------------------------------------------------
an  Optionee's  termination  of  employment  in  the  case  of  an  Employee, or
termination  of  the  provision  of  services  as  a Consultant in the case of a
Consultant,  other  than  for  Cause  or  by  reason  of death, the Optionee may
exercise  such  portion  of  his Option as was exercisable by him at the date of
such termination (the "Termination Date") at any time within three months of the
Termination Date; provided, however, that where the Optionee is an Employee, and
is  terminated  due to disability within the meaning of Code section 422, he may
exercise such portion of his Option as was exercisable by him on his Termination
Date  within  one year of his Termination Date.  In any event, the Option cannot
be  exercised  after the expiration of the original term of the Option.  Options
not  exercised  within  the  applicable  period specified above shall terminate.

     In  the  case  of  an  Employee,  a change of duties or position within the
Company,  if  any,  shall  not  be  considered  a  termination of employment for
purposes of this Plan.  The Option Agreements may contain such provisions as the

                                       10

<PAGE>
Board  shall  approve  with  respect to the effect of approved leaves of absence
upon  termination  of  employment.

     10.3     Termination  for Cause.  In the event of an Optionee's termination
              ----------------------
of  employment  in  the  case of an Employee, or termination of the provision of
services  as  a  Consultant in the case of a Consultant, which termination is by
the  Company for Cause, any Option or Options held by him under the Plan, to the
extent  not  exercised  before  such  termination,  shall  forthwith  terminate.

                        Article XI.  Rights of Optionees
                        --------------------------------

     11.1     Service.  Nothing  in  this  Plan shall interfere with or limit in
              -------
any  way the right of the Company to terminate any Employee's employment, or any
Consultant's  services,  at  any time, nor confer upon any Employee any right to
continue  in  the  employ  of  the  Company, or upon any Consultant any right to
continue  to  provide  services  to  the  Company.

     11.2     Nontransferability.  Options  granted  under  this  Plan  shall be
              ------------------
nontransferable  by  the Optionee, other than by will or the laws of descent and
distribution,  and  shall  be exercisable during the Optionee's lifetime only by
the  Optionee.

                      Article XII.  Amendment, Modification
                      -------------------------------------
                           and Termination of the Plan
                           ---------------------------

     12.1     Amendment,  Modification,  and  Termination  of  the  Plan.
              -----------------------------------------------------------
The  Board  may  at any time terminate and from time to time may amend or modify
the  Plan  provided, however, that no such action of the Board, without approval
of  the  stockholders,  may:

     (a)     increase  the  total amount of Stock which may be purchased through
Options  granted  under  the  Plan,  except  as  provided  in  Article  V;

     (b)     change  the  class  of Employees or Consultants eligible to receive
Options;  or

     (c)     extend  the  maximum  exercise  period  under  section  7.5.

                                       11

<PAGE>
No  amendment,  modification  or  termination  of  the  Plan shall in any manner
adversely  affect  any  outstanding Option under the Plan without the consent of
the  Optionee  holding  the  Option.

               Article XIII.  Acquisition, Merger and Liquidation
               --------------------------------------------------

     13.1     Acquisition.  Notwithstanding  anything herein to contrary, in the
              -----------
event that an Acquisition (as defined below) occurs with respect to the Company,
the  Company  shall  have  the option, but not the obligation, to cancel Options
outstanding as of the effective date of Acquisition, whether or not such Options
are  then exercisable, in return for payment to the Optionees for each Option of
an  amount  equal to a reasonable, good faith estimate of an amount (hereinafter
the  "Spread")  equal to the difference between the net amount per share payable
in  the  Acquisition, or as a result of the Acquisition, less the exercise price
per  share  of the Option.  In estimating the Spread, appropriate adjustments to
give  effect  to the existence of the options shall be made, such as deeming the
Options  to  have  been exercised, with the Company receiving the exercise price
payable  thereunder,  and  treating  the  shares receivable upon exercise of the
Options  as  being  outstanding  in  determining  the net amount per share.  For
purposes  of  this section, an "Acquisition" shall mean any transaction in which
substantially all of the Company's assets are acquired or in which a controlling
amount  of  the  Company's  outstanding  shares  are acquired, in each case by a
single  person or entity or an affiliated group of persons and/or entities.  For
purposes  of  this  section a controlling amount shall mean more than 50% of the
issued  and  outstanding shares of stock of the Company.  The Company shall have
such  an  option  regardless  of  how the Acquisition is effectuated, whether by
direct  purchase,  through  a  merger  or  similar  corporate  transaction,  or
otherwise.  In cases where the acquisition consists of the acquisition of assets
of the Company, the net amount per share shall be calculated on the basis of the
net amount receivable with respect to shares upon a distribution and liquidation
by  the  Company  after giving effect to expenses and charges, including but not
limited  to  taxes,  payable  by  the  Company  before  the  liquidation  can be
completed.

     Where the Company does not exercise its option under this section 13.1, the
remaining provisions of this Article XIII shall apply, to the extent applicable.

     13.2     Merger  or  Consolidation.  Subject  to  section  13.1  and to any
              -------------------------
required  action  by  the  stockholders,  if  the Company shall be the surviving
corporation  in  any merger or consolidation, any Option granted hereunder shall
pertain to and apply to the securities to which a holder of the number of shares
of  Stock  subject  to  the  Option  would  have been entitled in such merger or
consolidation.

                                       12

<PAGE>
     13.3     Other  Transactions.  Subject  to  section  13.1, dissolution or a
              -------------------
liquidation of the Company or a merger and consolidation in which the Company is
not  the surviving corporation shall cause every Option outstanding hereunder to
terminate  as  of  the effective date of the dissolution, liquidation, merger or
consolidation.  However,  the  Optionee  either  (i)  shall  be  offered  a firm
commitment  whereby  the  resulting  or  surviving  corporation  in  a merger or
consolidation will tender to the Optionee an option (the "Substitute Option") to
purchase  its  shares  on  terms  and conditions both as to number of shares and
otherwise,  which  will  substantially  preserve  to the Optionee the rights and
benefits  of  the  Option  outstanding hereunder granted by the Company, or (ii)
shall have the right immediately prior to such dissolution, liquidation, merger,
or  consolidation  to  exercise  any  unexercised  Options  whether  or not then
exercisable,  subject  to  the  provisions  of  this Plan.  The Board shall have
absolute  and uncontrolled discretion to determine whether the Optionee has been
offered  a  firm  commitment  and  whether  the  tendered Substitute Option will
substantially  preserve  to  the  Optionee the rights and benefits of the Option
outstanding  hereunder.  In  any  event,  any Substitute Option for an Incentive
Stock  Option  shall  comply  with  the  requirements  of  the  Code.

                      Article XIV. Securities Registration
                      ------------------------------------

     14.1     Securities Registration.  In the event that the Company shall deem
              -----------------------
it  necessary  or  desirable  to  register  under the Securities Act of 1933, as
amended,  or any other applicable statute, any Options or any Stock with respect
to which an Option may be or shall have been granted or exercised, or to qualify
any  such  Options or Stock under the Securities Act of 1933, as amended, or any
other  statute, then the Optionee shall cooperate with the Company and take such
action  as  is necessary to permit registration or qualification of such Options
or  Stock.

     Unless  the  Company  has  determined  that the following representation is
unnecessary,  each person exercising an Option under the Plan may be required by
the  Company,  as a condition to the issuance of the shares pursuant to exercise
of the Option, to make a representation in writing (a) that he is acquiring such
shares for his own account for investment and not with a view to, or for sale in
connection  with,  the distribution of any part thereof, and (b) that before any
transfer  in  connection  with  the  resale  of  such shares, he will obtain the
written  opinion  of  counsel to the Company, or other counsel acceptable to the
Company, that such shares may be transferred.  The Company may also require that
the  certificates  representing  such  shares  contain  legends  reflecting  the
foregoing.

                                       13

<PAGE>
                          Article XV.  Tax Withholding
                          ----------------------------

     15.1     Tax  Withholding.  Whenever  shares  of  Stock are to be issued in
              ----------------
satisfaction  of  Options  exercised under this Plan, the Company shall have the
power  to  require  the recipient of the Stock to remit to the Company an amount
sufficient  to  satisfy  federal,  state and local withholding tax requirements.
Unless otherwise determined by the Board, withholding obligations may be settled
with  Stock,  including  Stock  that is part of the award that gives rise to the
withholding requirement.  The obligations of the Company under the Plan shall be
conditional  on  such payment or arrangements, and the Company, its subsidiaries
and  affiliates  shall, to the extent permitted by law, have the right to deduct
any  such  taxes  from  any  payment  otherwise  due  to  the  participant.

                          Article XVI.  Indemnification
                          -----------------------------

     16.1     Indemnification.  To  the extent permitted by law, each person who
              ---------------
is  or  shall  have  been  a  member  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 in connection with or
resulting from any claim, action, suit, or proceeding to which he may be a party
or  in  which he 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 in
settlement  thereof, with the Company's approval, or paid by him in satisfaction
of  judgment  in  any  such  action, suit or proceeding against him, provided he
shall  give the Company an opportunity, at its own expense, to handle and defend
it  on  his  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.

                       Article XVII.  Requirements of Law
                       ----------------------------------

     17.1     Requirements  of Law.  The granting of Options and the issuance of
              --------------------
shares  of  Stock  upon  the  exercise  of  an  Option  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.

     17.2     Governing  Law.  The  Plan  and  all agreements hereunder shall be
              --------------
construed  in accordance with and governed by the laws of the state of Delaware.

                                       14

<PAGE>
                      Article XVIII.  Compliance with Code
                      ------------------------------------

     18.1     Compliance  with  Code.  Incentive Stock Options granted hereunder
              ----------------------
are intended to qualify as "incentive stock options" under Code section 422.  If
any  provision of this Plan is susceptible to more than one interpretation, such
interpretation  shall  be  given  thereto  as is consistent with Incentive Stock
Options  granted  under this Plan being treated as incentive stock options under
the  Code.  Options  granted hereunder to any person who is a "covered employee"
under  Code  section  162(m)  at  any  time  when the Company is subject to Code
section  162(m) are intended to qualify as performance-based compensation within
the  meaning  of  Code  section  162(m)(4)(C).  If any provision of this Plan is
susceptible  to more than one interpretation, such interpretation shall be given
thereto  as  is consistent with Options granted under this Plan to such "covered
employees"  being  treated  as performance-based compensation under Code section
162(m).

                                       15Deferred Comp NYSEG's LTEISP

Exhibit 10-14

 

ENERGY EAST CORPORATION

LONG TERM EXECUTIVE INCENTIVE SHARE PLAN

DEFERRED COMPENSATION PLAN

 

     1.  Effective Date.

          Energy East Corporation (the "Company") hereby establishes a deferred compensation plan (the "Plan") that permits Company participants in the Long Term Executive Incentive Share Plan (the
"Share Plan") to defer receipt of all or a portion of incentive award payments due to them under the Share Plan until they are no longer employed by any Affiliated Employer (as defined herein). The Plan shall be effective as of January 1, 1999, and shall
continue in effect from year to year thereafter unless terminated or modified by the Company. Participation in the Plan shall be at the sole discretion of each Company participant in the Share Plan. For purposes of this Plan, "Affiliated Employer" shall
mean the Company and the members of the "affiliated group" within the meaning of Section 1504 of the Internal Revenue Code of 1986, as amended, of which the Company is the common parent.

          All Company participants in the Share Plan are eligible to participate in the Plan. Election to participate shall be evidenced by the execution of a deferred compensation agreement by a
prospective participant in the Plan (a "Participant") and the Company prior to commencement of the three-year Performance Cycle (as defined in the Share Plan) of the Company to which the election is to be effective; provided, however, that if an
individual becomes eligible to participate in the Share Plan during a Performance Cycle, the agreement with respect to the Performance Cycle that began in the same calendar year that the individual became a participant in the Share Plan may be executed
prior to the first to occur of (a) the 15th day following the effective date of the Participant's participation in the Share Plan or (b) the 182nd day of the Performance Cycle. An employee who (i) commences employment during a calendar year, (ii)
immediately before commencing employment was employed by an Affiliated Employer, and (iii) was participating in an analogous deferred compensation plan of that Affiliated Employer shall be deemed to have elected, prior to January 1 of that calendar year,
to participate in the Plan on terms analogous to the terms under which he participated in the deferred compensation plan of the Affiliated Employer. A separate executed deferred compensation agreement is required for each Performance Cycle for which the
Participant wishes to defer compensation.

     2.  Amounts Deferred.

          Article IX of the Share Plan provides for incentive award payments with respect to the Company's achieving certain performance levels. Such incentive award payments, if any, are to be made at
the end of each three year Performance Cycle. A Participant may elect to defer any percentage of any incentive award payments under the Share Plan for a particular Performance Cycle. The percentage deferred must be specified by the Participant prior to
the commencement of the Performance Cycle to which it is to relate, provided however that, if the Participant becomes eligible to participate in the Share Plan during a Performance Cycle, the percentage deferred with respect to the Performance Cycle that
began in the same calendar year that the individual became a participant in the Share Plan may be specified by the Participant prior to the first to occur of (a) the 15th day following the effective date of his participation in the Share Plan or (b) the
182nd day of the Performance Cycle. Moreover, a Participant's election with respect to a particular Performance Cycle shall be null and void if the payment attributable to such particular Performance Cycle is to be made (without regard to the provisions
of the Plan) after the Participant is no longer employed by any Affiliated Employer.

     3.  Payment of Amounts Deferred.

          The accumulated amount deferred for a particular Performance Cycle and interest thereon shall be paid to a Participant after the Participant is no longer employed by any Affiliated Employer
("Service Termination Date") in a lump sum within one year following said termination or in installments in such percentages and over such period of years (not exceeding 10) as the Participant may elect. Such election shall be made at the time that a
Participant elects a deferral percentage with respect to a particular Performance Cycle pursuant to Section 2 hereof and may be changed only in accordance with the provisions of Section 6 hereof. If a Participant elects payment over a period of years, the
Participant also will be paid annually, after the Service Termination Date, amounts equal to such interest on the remaining balance of the accumulated amount deferred. In the event of a Participant's death, payments shall be made to the Participant's
estate or the beneficiary designated by the Participant. Notwithstanding any other provision of the Plan, the Company reserves the right to pay the accumulated amount deferred in one lump sum within a year if a Participant's employment is terminated by
any Affiliated Employer.

 

     4.   Other Provisions.

          The Company reserves the right, at any time, to terminate or modify the Plan by action of the Board of Directors of the Company. Any such termination or modification shall not affect rights
previously accrued. Participation in the Plan shall not be deemed an employment contract. A Participant's rights and benefits under the Plan may not be assigned, pledged or encumbered by him or his estate or beneficiary.

     5.  Funding.

          There will be no funding of any amounts to be paid pursuant to this Plan; provided, however, that the Company, in its discretion, may establish a trust to pay such amounts, which trust shall
be subject to the claims of the Company's creditors in the event of the Company's bankruptcy or insolvency; and provided, further, that the Company shall remain responsible for the payment of any such amounts which are not so paid by any such trust. 

     6.  Change in Payment Election.

          A participant may change, but only with the Company's consent, his election of payment terms by executing a new Pay-back Schedule. However, no such change shall be effective during the
one-year period beginning on the day the Participant executes the new Pay-back Schedule. If, during such one-year period, a Participant becomes entitled to receive a payment or payments under the Plan pursuant to the Participant's last effective payment
terms election, said last effective payment terms election shall remain in full force and effect and the new election shall be null and void.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00004-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00004-of-00352.parquet"}]]