Document:

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                                                                  EXHIBIT 10.11

                                                         [SENIOR VICE PRESIDENT
                                                                   SPLIT BONUS]

         EMPLOYMENT AGREEMENT dated August 1, 2004 between PALL CORPORATION, a
New York corporation (the "Company") and James R. Western, Jr. ("Executive").

         In consideration of the mutual agreements hereinafter set forth, the
parties hereto agree as follows:

SECTION 1. EMPLOYMENT AND TERM

         The Company hereby employs Executive, and Executive hereby agrees to
serve, as an executive employee of the Company with the duties set forth in
ss.2, for a term (hereinafter called the "Term of Employment") beginning August
1, 2004 (the "Term Commencement Date") and ending, unless sooner terminated
under ss.4, on the effective date specified in a notice of termination given by
either party to the other except that such effective date shall not be earlier
than the first anniversary of the date on which such notice is given.

SECTION 2. DUTIES

         (a)      Executive agrees that during the Term of Employment he will
                  hold such offices or positions with the Company, and perform
                  such duties and assignments relating to the business of the
                  Company, as the Chief Executive Officer of the Company shall
                  direct except that Executive shall not be required to hold any
                  office or position or to perform any duties or assignment
                  inconsistent with his experience and qualifications.

         (b)      If the Chief Executive Officer of the Company so directs,
                  Executive shall serve as an officer of one or more
                  subsidiaries of the Company (provided that the duties of such
                  office are not inconsistent with Executive's experience and
                  qualifications and are duties customarily performed by a
                  corporate officer) and part or all of the compensation to
                  which Executive is entitled hereunder may be paid by such
                  subsidiary or subsidiaries. However, such employment and/or
                  payment of Executive by a subsidiary or subsidiaries shall not
                  relieve the Company from any of its obligations under this
                  Agreement except to the extent of payments actually made to
                  Executive by a subsidiary.

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         (c)      During the Term of Employment Executive shall, except during
                  customary vacation periods and periods of illness, devote
                  substantially all of his business time and attention to the
                  performance of his duties hereunder and to the business and
                  affairs of the Company and its subsidiaries and to promoting
                  the best interests of the Company and its subsidiaries and he
                  shall not, either during or outside of such normal business
                  hours, engage in any activity inimical to such best interests.

SECTION 3. COMPENSATION DURING TERM OF EMPLOYMENT

         (a)      Base Salary. With respect to the period beginning on the Term
                  Commencement Date and ending on the 31st day of July next
                  following the Term Commencement Date, the Company shall pay
                  Executive a Base Salary (in addition to the compensation
                  provided for elsewhere in this Agreement) at the rate of
                  $175,000 per annum (hereinafter called the "Original Base
                  Salary"). With respect to each Contract Year beginning with
                  the Contract Year which starts on the first day of August next
                  following the Term Commencement Date, the Company shall pay
                  Executive a Base Salary at such rate as the Board of Directors
                  may determine but not less than the Original Base Salary
                  adjusted as follows: The term "Contract Year" as used herein
                  means the period from August 1 of each year through July 31 of
                  the following year. The term "Consumer Price Index" as herein
                  used means the "Consumer Price Index for all Urban Consumers"
                  compiled and published by the Bureau of Labor Statistics of
                  the United States Department of Labor for "New York - Northern
                  N.J. - Long Island, NY-NJ-CT-PA". For each Contract Year
                  during the Term of Employment beginning with the Contract Year
                  which starts on the first day of August next following the
                  Term Commencement Date, the minimum compensation payable to
                  Executive under this ss.3(a) (hereinafter called the "Minimum
                  Base Salary") shall be determined by increasing (or
                  decreasing) the Original Base Salary by the percentage
                  increase (or decrease) of the Consumer Price Index for the
                  month of June immediately preceding the start of the Contract
                  Year in question over (or below) the Consumer Price Index for
                  the month of June next preceding the Term Commencement Date.
                  [To illustrate the operation of the foregoing provisions of
                  this paragraph: In an Employment Agreement as to which

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                  the Term Commencement Date was August 1, 2004, the executive's
                  base salary for the Contract Year August 1, 2005 through July
                  31, 2006 would be not less than the Original Base Salary under
                  that Employment Agreement adjusted by the percentage increase
                  (or decrease) of the Consumer Price Index for June 2005 over
                  (or below) said Index for June 2004.] Further adjustment in
                  the Minimum Base Salary shall be made for each ensuing
                  Contract Year, in each case (i) using the Consumer Price Index
                  for the month of June next preceding the Term Commencement
                  Date as the base except as provided in the immediately
                  following paragraph hereof and (ii) applying the percentage
                  increase (or decrease) in the Consumer Price Index since said
                  base month to the Original Base Salary to determine the
                  Minimum Base Salary. The Base Salary shall be paid in such
                  periodic installments as the Company may determine but not
                  less often than monthly.

                         If with respect to any Contract Year (including the
                  Contract Year beginning on the first day of August next
                  following the Term Commencement Date) the Board of Directors
                  fixes the Base Salary at an amount higher than the Minimum
                  Base Salary, then (unless the order fixing such higher Base
                  Salary provides otherwise), for the purpose of determining the
                  Minimum Base Salary for subsequent Contract Years: (1) the
                  amount of the higher Base Salary so fixed shall be deemed
                  substituted for the Original Base Salary wherever the Original
                  Base Salary is referred to in the immediately preceding
                  paragraph hereof, and (ii) the base month for determining the
                  Consumer Price Index adjustment shall be June of the calendar
                  year in which the Contract Year to which such higher Base
                  Salary is applicable begins. [To illustrate the operation of
                  the foregoing provisions of this paragraph: If the Board of
                  Directors were to fix a Base Salary for a Contract Year
                  beginning, say, August 1, 2006 which is higher than the
                  Minimum Base Salary for that Contract Year, then June 2006
                  would become the base month for the purposes of making the
                  Consumer Price Index adjustment to determine the Minimum Base
                  Salary for subsequent Contract Years unless and until the
                  Board of Directors were to fix a Base Salary higher than the
                  Minimum Base Salary for a subsequent Contract Year.]

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         (b)      Bonus Compensation.

                           (i) Plan Bonus. As used herein, the term "Bonus Plan"
                  means the Pall Corporation Executive Incentive Bonus Plan
                  adopted by the Compensation Committee of the Board of
                  Directors of the Company on July 17, 2001, approved by
                  shareholders at the annual meeting of shareholders on November
                  14, 2001 and amended by the Compensation Committee on July 16,
                  2002 and November 1, 2002 effective for the Fiscal Year
                  beginning August 4, 2002, a copy of which is annexed hereto
                  and incorporated herein by reference. Words and terms used
                  herein with initial capital letters and not defined herein are
                  used herein as defined in the Bonus Plan. With respect to each
                  Fiscal Year of the Company falling in whole or in part within
                  the Term of Employment beginning with the Fiscal Year ending
                  on the Saturday nearest to the 31st day of the month of July
                  next following the Term Commencement Date:

                           o        if Executive is a member of the Operating
                                    Committee of the Company, Executive shall be
                                    eligible to receive a Bonus pursuant to and
                                    in accordance with the terms of the Bonus
                                    Plan; or

                           o        if Executive is not a member of the
                                    Operating Committee, Executive shall be
                                    entitled to receive a Bonus pursuant to this
                                    Agreement in an amount determined in
                                    accordance with and subject to all of the
                                    terms of the Bonus Plan.

                  For purposes of determining the amount of the Bonus payable to
                  Executive for any Fiscal Year as provided in this ss.3(b)(i)
                  (the "Plan Bonus"), Executive's Target Bonus Percentage shall
                  be 42% of his Base Salary for such Fiscal Year.

                         (ii) Business Segment Bonus. Inasmuch as Executive's
                  services for the Company relate primarily to the operations of
                  a subsidiary, a division or other segment of the overall
                  operations of the Company and its subsidiaries (a "Business
                  Segment"), Executive shall be considered for additional bonus
                  compensation for each Fiscal Year based on the results of
                  operations of such Business Segment for such Fiscal Year. The
                  amount of such additional bonus compensation, if any, shall be
                  determined by the Chief Executive Officer in his sole
                  discretion but in no event shall such additional bonus
                  compensation exceed 63% of Executive's Base Salary.

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                           (iii) Payment of Bonus Compensation. Executive's
                  Bonus Compensation (which term as used herein includes both
                  the Plan Bonus and the Business Segment Bonus, if any) shall
                  be paid in accordance with ss.5 of the Bonus Plan. With
                  respect to any Fiscal Year which falls in part but not in
                  whole within the Term of Employment, the pro rata portion of
                  the Bonus Compensation to which Executive is entitled under
                  this ss.3(b) shall be determined in accordance with ss.3(c) of
                  the Bonus Plan.

         (c)      Fringe Benefits and Perquisites. During the Term of
                  Employment, Executive shall enjoy the customary perquisites of
                  office, including but not limited to office space and
                  furnishings, secretarial services, expense reimbursements, and
                  any similar emoluments customarily afforded to senior
                  executive officers of the Company at the same level as
                  Executive. Executive shall also be entitled to receive or
                  participate in all "fringe benefits" and employee benefit
                  plans provided or made available by the Company to its
                  executives or management personnel generally, such as, but not
                  limited to, group hospitalization, medical, life and
                  disability insurance, and pension, retirement, profit-sharing
                  and stock option or purchase plans.

          (d)     Vacations. Executive shall be entitled each year to a vacation
                  or vacations in accordance with the policies of the Company as
                  determined by the Board or by an authorized senior officer of
                  the Company from time to time. The Company shall not pay
                  Executive any additional compensation for any vacation time
                  not used by Executive.

SECTION 4. TERMINATION BY REASON OF DISABILITY, DEATH, RETIREMENT OR CHANGE IN
           CONTROL

         (a)      Disability or Death. If, during the Term of Employment,
                  Executive, by reason of physical or mental disability, is
                  incapable of performing his principal duties hereunder for an
                  aggregate of 130 working days out of any period of twelve
                  consecutive months, the Company at its option may terminate
                  the Term of Employment effective immediately by notice to
                  Executive given within 90 days after the end of such
                  twelve-month period. If Executive shall die during the Term of
                  Employment or if the Company terminates the Term of Employment
                  pursuant to the immediately preceding sentence by reason of
                  Executive's disability, the

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                  Company shall pay to Executive, or to Executive's legal
                  representatives, or in accordance with a direction given by
                  Executive to the Company in writing, the following: (i)
                  Executive's Base Salary to the end of the month in which such
                  death or termination for disability occurs and Executive's
                  Bonus Compensation prorated to said last day of the month and
                  (ii) for each month in the period from the end of the month in
                  which such death or termination for disability occurs until
                  the earlier of (x) the first anniversary of the date of death
                  or termination and (y) the date on which the Term of
                  Employment would have ended but for such death or termination
                  for disability, monthly payments of (I) an amount equal to
                  1/12th of one-half of the annual Base Salary in effect for
                  Executive immediately prior to the date on which Executive's
                  death or termination for disability occurs, plus (II) an
                  amount equal to 1/12th of one-half of the maximum Bonus
                  Compensation that Executive could receive with respect to each
                  of such months based on (A) the Target Bonus Percentage
                  specified in ss. 3(b)(i) of this Agreement (as amended to the
                  date on which Executive's death or disability occurs) and (B)
                  the maximum percentage of Base Salary specified in ss.
                  3(b)(ii) of this Agreement (as so amended).

         (b)      Retirement. (i) The Term of Employment shall end
                  automatically, without action by either party, on Executive's
                  65th birthday unless, prior to such birthday, Executive and
                  the Company have agreed in writing that the Term of Employment
                  shall continue past such 65th birthday. In the latter event,
                  unless the parties have agreed otherwise, the Term of
                  Employment shall be automatically renewed and extended each
                  year, as of Executive's birthday, for an additional one-year
                  term, unless either party has given a Non-Renewal Notice. A
                  Non-Renewal Notice shall be effective as of Executive's
                  ensuing birthday only if given not less than 60 days before
                  such birthday, and shall state that the party giving such
                  notice elects that this Agreement shall not automatically
                  renew itself further, with the result that the Term of
                  Employment shall end on Executive's ensuing birthday. (ii) If
                  the Term of Employment ends pursuant to this ss.4(b) by reason
                  of a notice given by either party as herein permitted or
                  automatically at age 65 or any subsequent birthday, the
                  Company shall pay to Executive, or to another payee specified
                  by Executive to the Company in writing, Executive's Base
                  Salary and Bonus

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                  Compensation prorated to the date on which the Term of
                  Employment ends. (iii) Anything hereinabove to the contrary
                  notwithstanding, if any provision of this ss.4(b) violates
                  federal or applicable state law relating to discrimination on
                  account of age, such provision shall be deemed modified or
                  suspended to the extent necessary to eliminate such violation
                  of law. If at a later date, by reason of changed circumstances
                  or otherwise, the enforcement of such provision as set forth
                  herein would no longer constitute a violation of law, then it
                  shall be enforced in accordance with its terms as set forth
                  herein.

         (c)      Change in Control. In event of a Change in Control (as defined
                  in the Bonus Plan), Executive shall have the right to
                  terminate the Term of Employment, by notice to the Company
                  given at any time after such Change in Control, effective on
                  the date specified in such notice, which date shall not be
                  more than (but can be less than) one year after the giving of
                  such notice.

SECTION 5. COVENANT NOT TO COMPETE

          For a period of eighteen months after the end of the Term of
Employment if the Term of Employment is terminated by notice to the Company
given by Executive under ss.1 or ss.4 hereof, or for a period of twelve months
after the end of the Term of Employment if the Term of Employment is terminated
by notice to Executive given by the Company under ss.1 or ss.4 hereof or
terminates under ss.4 by reason of Executive attaining the age of 65, Executive
shall not render services to any corporation, individual or other entity engaged
in any activity, or himself engage directly or indirectly in any activity, which
is competitive to any material extent with the business of the Company or any of
its subsidiaries, provided, however, that if the Company terminates under ss.1
following a Change in Control (as defined in the Bonus Plan), the foregoing
covenant not to compete shall not apply.

SECTION 6. COMPANY'S RIGHT TO INJUNCTIVE RELIEF

         Executive acknowledges that his services to the Company are of a unique
character, which gives them a peculiar value to the Company, the loss of which
cannot be reasonably or adequately compensated in damages in an action at law,
and that therefore, in addition to any other remedy which the Company may have
at law or in equity, the Company shall be entitled to injunctive relief for a
breach of this Agreement by Executive.

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SECTION 7. INVENTIONS AND PATENTS

          All inventions, ideas, concepts, processes, discoveries, improvements
and trademarks (hereinafter collectively referred to as intangible rights),
whether patentable or registrable or not, which are conceived, made, invented or
suggested either by Executive alone or by Executive in collaboration with others
during the Term of Employment, and whether or not during regular working hours,
shall be disclosed to the Company and shall be the sole and exclusive property
of the Company. If the Company deems that any of such intangible rights are
patentable or otherwise registrable under any federal, state or foreign law,
Executive, at the expense of the Company, shall execute all documents and do all
things necessary or proper to obtain patents and/or registrations and to vest
the Company with full title thereto.

SECTION 8. TRADE SECRETS AND CONFIDENTIAL INFORMATION

          Executive shall not, either directly or indirectly, except as required
in the course of his employment by the Company, disclose or use at any time,
whether during or subsequent to the Term of Employment, any information of a
proprietary nature owned by the Company, including but not limited to, records,
data, formulae, documents, specifications, inventions, processes, methods and
intangible rights which are acquired by him in the performance of his duties for
the Company and which are of a confidential information or trade-secret nature.
All records, files, drawings, documents, equipment and the like, relating to the
Company's business, which Executive shall prepare, use, construct or observe,
shall be and remain the Company's sole property. Upon the termination of his
employment or at any time prior thereto upon request by the Company, Executive
shall return to the possession of the Company any materials or copies thereof
involving any confidential information or trade secrets and shall not take any
material or copies thereof from the possession of the Company.

SECTION 9. MERGERS AND CONSOLIDATIONS; ASSIGNABILITY

          In the event that the Company, or any entity resulting from any merger
or consolidation referred to in this ss.9 or which shall be a purchaser or
transferee so referred to, shall at any time be merged or consolidated into or
with any other entity or entities, or in the event that substantially all of the
assets of the Company or any such entity shall be sold or otherwise transferred
to another entity, the provisions of this Agreement shall be binding upon and
shall inure to the benefit of the continuing entity in or the entity resulting
from such merger or consolidation or the entity to which such assets shall be
sold or transferred. Except as provided in the immediately preceding sentence of
this ss.9, this Agreement shall not be assignable by the Company or by any
entity referred to in such immediately preceding sentence. This Agreement shall
not be assignable by Executive, but in the event of his death it shall be
binding upon and inure to the benefit of his legal representatives to the extent
required to effectuate the terms hereof.

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SECTION 10. CAPTIONS

          The captions in this Agreement are not part of the provisions hereof,
are merely for the purpose of reference and shall have no force or effect for
any purpose whatsoever, including the construction of the provisions of this
Agreement, and if any caption is inconsistent with any provisions of this
Agreement, said provisions shall govern.

SECTION 11. CHOICE OF LAW

         This Agreement is made in, and shall be governed by and construed in
accordance with the laws of, the State of New York.

SECTION 12. ENTIRE CONTRACT

          This instrument contains the entire agreement of the parties on the
subject matter hereof except that the rights of the Company hereunder shall be
deemed to be in addition to and not in substitution for its rights under the
Company's standard printed form of "Employee's Secrecy and Invention Agreement"
or "Employee Agreement" if heretofore or hereafter entered into between the
parties hereto so that the making of this Agreement shall not be construed as
depriving the Company of any of its rights or remedies under any such Secrecy
and Invention Agreement or Employee Agreement. This Agreement may not be changed
orally, but only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification, extension or discharge is
sought.

SECTION 13. NOTICES

          All notices given hereunder shall be in writing and shall be sent by
registered or certified mail, overnight courier service such as Federal Express
or UPS Next Day Air or delivered by hand, and, if intended for the Company,
shall be addressed to it (if sent by mail) or delivered to it (if delivered by
hand) at its principal office for the attention of the Corporate Secretary of
the Company, or at such other address and for the attention of such other person
of which the Company shall have given notice to Executive in the manner herein
provided, and, if intended for Executive, shall be delivered to him personally
or shall be addressed to him (if sent by mail) at his most recent residence
address shown in the Company's employment records or at such other address or to
such designee of which Executive shall have given notice to the Company in the
manner herein provided. Each such notice shall be deemed to be given on the date
of mailing thereof or delivery to the overnight courier service or, if delivered
personally, on the date so delivered.

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SECTION 14. TERMINATION OF EXISTING AGREEMENT

          Any employment agreement between the parties hereto which is in effect
on the date hereof is hereby terminated and replaced and superseded by this
Agreement effective on the Term Commencement Date. All payments, of Base Salary
or otherwise, made by the Company under any such existing agreement with respect
to any period commencing on or after the Term Commencement Date shall be
credited against the corresponding payment obligations of the Company under this
Agreement with respect to such period.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                 PALL CORPORATION

                                 BY:
                                     ------------------------------------------
                                     NAME:  MARCUS WILSON
                                     TITLE: PRESIDENT

                                 EXECUTIVE

                                 ---------------------------------
                                 JAMES R. WESTERN, JR.

[Form prepared 2/03]

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                                PALL CORPORATION

                         EXECUTIVE INCENTIVE BONUS PLAN

                                      -----

1. PURPOSE

         This document sets forth the Pall Corporation Executive Incentive Bonus
Plan as adopted by the Committee on and effective July 17, 2001, approved by
shareholders on November 14, 2001 and amended by the Committee on July 16, 2002
and November 1, 2002 effective for the Fiscal Year beginning August 4, 2002.

         The purpose of the Plan is to encourage greater focus on performance
among the key executives of the Corporation by relating a significant portion of
their total compensation to the achievement of annual financial objectives.

2. CERTAIN DEFINITIONS

         As used herein with initial capital letters, the following terms shall
have the following meanings:

         "AVERAGE EQUITY" shall mean, for any Fiscal Year, the average of
stockholders' equity as shown on the fiscal year-end consolidated balance sheet
of the Corporation and its subsidiaries as of the end of such Fiscal Year and as
of the end of the immediately preceding Fiscal Year except that the amounts
shown on said balance sheets as "Accumulated other comprehensive" income or
loss, as the case may be, shall be disregarded.

         "BASE SALARY" shall mean, with respect to any Executive and for any
Fiscal Year, the annual rate of base salary in effect for the Executive as of
the first day of such year or, if later, as of the first day of the Executive's
Term of Employment, as determined under the Executive's Employment Agreement.

         "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Corporation.

         "BONUS" shall mean the bonus payable to an Executive under this Plan
for any Fiscal Year.

         "CEO" shall mean the Chief Executive Officer of the Corporation.

         "CHANGE IN CONTROL" means the occurrence of any of the following:

         (a) the "Distribution Date" as defined in Section 3 of the Rights
Agreement dated as of November 17, 1989 between the Corporation and United
States Trust Company of New York as Rights Agent, as amended by Amendment No. 1
thereto dated April 20, 1999, and as the same may have been further amended or
extended to the time in question or in any successor agreement (the "Rights
Agreement"); or

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         (b) any event described in Section 11(a)(ii)(B) of the Rights
Agreement; or

         (c) any event described in Section 13 of the Rights Agreement; or

         (d) the date on which the number of duly elected and qualified
directors of the Corporation who were not either elected by the Board of
Directors or nominated by the Board of Directors or its Nominating Committee for
election by the shareholders shall equal or exceed one-third of the total number
of directors of the Corporation as fixed by its by-laws;

         provided, however, that no Change in Control shall be deemed to have
occurred, and no rights arising upon a Change in Control as provided in Section
6 shall exist, to the extent that the Board of Directors so determines by
resolution adopted prior to the Change in Control.

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

         "COMMITTEE" shall mean the Compensation Committee of the Board of
Directors.

         "CORPORATION" shall mean Pall Corporation.

         "COVERED EXECUTIVE" shall mean, with respect to any Fiscal Year, each
individual who is a "Covered Employee" of the Corporation for such year for the
purpose of section 162(m) of the Code.

         "EMPLOYMENT AGREEMENT" shall mean, with respect to any executive
employee of the Corporation, an employment agreement between the Corporation and
such employee which provides that the employee shall be eligible to receive
annual bonuses under this Plan.

         "EXECUTIVE" shall mean an executive employee of the Corporation with
whom the Corporation has entered into an Employment Agreement.

         "FISCAL YEAR" shall mean the fiscal year of the Corporation ending on
August 3, 2002, and each subsequent fiscal year of the Corporation.

         "MAXIMUM R.O.E. TARGET" shall mean, for any Fiscal Year, the Return on
Equity that must be achieved or exceeded in order for the Performance Percentage
for the year to equal 100%, as determined by the Committee prior to the first
day of such year or within such period of time thereafter as may be permitted
under the regulations issued under section 162(m) of the Code.

         "MINIMUM R.O.E. TARGET" shall mean, for any Fiscal Year, the Return on
Equity that must be exceeded in order for any Bonus to be paid to any Executive
for the year, as determined by the Committee prior to the first day of such year
or within such period of time thereafter as may be permitted under the
regulations issued under section 162(m) of the Code.

         "NET EARNINGS" shall mean, for any Fiscal Year, the after-tax
consolidated net earnings of the Corporation and its subsidiaries as certified
by the Corporation's independent accountants for inclusion in the annual report
to shareholders ("Annual Report"), adjusted so as to eliminate the effects of
any decreases in or charges to earnings for (a) the effect of foreign currency
exchange rates, (b) any acquisitions, divestitures, discontinuance of business
operations, restructuring or any other special charges, (c) the cumulative
effect of any accounting changes, and (d) any "extraordinary items" as
determined under generally accepted accounting principles, to the extent such
decreases or charges referred to in clauses (a) through (d) are separately
disclosed in the Corporation's Annual Report for the year.

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         "PLAN" shall mean the Pall Corporation Executive Incentive Bonus Plan,
as set forth herein and as amended from time to time.

         "RETURN ON EQUITY" shall mean, for any Fiscal Year, the percentage
determined by dividing the Net Earnings for the year by the Average Equity for
the year.

         "TARGET BONUS PERCENTAGE" shall mean, with respect to any Executive,
the target bonus percentage specified for such Executive in his or her
Employment Agreement.

3. DETERMINATION OF BONUS AMOUNTS

         For each Fiscal Year falling in whole or in part within an Executive's
Term of Employment, as defined in his or her Employment Agreement, the Executive
shall be entitled to receive a Bonus in an amount determined in accordance with
the provisions of this Section 3, subject, however, to the provisions of Section
4.

         (a) The amount of the Bonus payable to an Executive for each such
Fiscal Year shall be equal to (i) the Target Bonus Percentage of the Executive's
Base Salary for such year, multiplied by (ii) the Performance Percentage for
such year, as determined under (b) below.

         (b) The Performance Percentage for any Fiscal Year shall be determined
in accordance with he following provisions:

                  (i) If the Return on Equity equals or exceeds the Maximum
         R.O.E. Target for the year, the Performance Percentage for the year
         shall be 100%.

                  (ii) If the Return on Equity is less than the Maximum R.O.E.
         Target for the year but exceeds the Minimum R.O.E. Target for the year,
         the Performance Percentage for the year shall be equal to the quotient
         resulting from dividing (A) the excess of the Return on Equity for the
         year over the Minimum R.O.E. Target for the year, by (B) the excess of
         the Maximum R.O.E. Target for the year over the Minimum R.O.E. Target
         for the year.

                  (iii) If the Return on Equity equals or is less than the
         Minimum R.O.E. Target for the year, the Performance Percentage for the
         year shall be zero, and no Bonus shall be payable under the Plan for
         such year to any Executive.

         (c) If an Executive's Term of Employment commences after the start of a
Fiscal Year, or ends prior to the close of a Fiscal Year, the amount of the
Bonus payable to the Executive for the Fiscal Year in which the Executive's Term
of Employment commences, or for the Fiscal Year in which the Executive's Term of
Employment ends, as determined in accordance with the other applicable
provisions of the Plan, shall be prorated on the basis of the number of days of
such Fiscal Year that fall within the Executive's Term of Employment; provided,
however, that (i) if an Executive's Term of Employment ends within 5 days prior
to the close of a Fiscal Year, there shall be no proration and the Executive
shall be entitled to receive the entire amount of the Bonus payable to the
Executive for such year, as determined in accordance with such other provisions,
and (ii) if the Executive's Term of Employment ends within 5 days following the
start of a Fiscal Year, the Executive shall not be entitled to receive any Bonus
with respect to such Fiscal Year.

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4. ADJUSTMENT OF AND LIMITATION ON BONUS AMOUNTS

         The amount of the Bonus otherwise payable to an Executive for any
Fiscal Year in accordance with Section 3 shall be subject to the following
adjustments and limitation:

         (a) The Committee may, in its discretion, reduce the amount of the
Bonus otherwise payable to any Executive in accordance with Section 3, (i) to
reflect any decreases in or charges to earnings that were not taken into account
in determining Net Earnings for the year pursuant to clause (a), (b), (c) or (d)
contained in the definition of such term in Section 2, (ii) to reflect any
credits to earnings for extraordinary items of income or gain that were taken
into account in determining Net Earnings for the year, (iii) to reflect the
Committee's evaluation of the Executive's individual performance, or (iv) to
reflect any other events, circumstances or factors which the Committee believes
to be appropriate in determining the amount of the Bonus to be paid to the
Executive for the year.

         (b) The Committee may, in its discretion, increase the amount of the
Bonus otherwise payable to any Executive who is not a Covered Executive, as
determined under Section 3, to reflect the Committee's evaluation of the
Executive's individual performance, or to reflect such other circumstances or
factors as the Committee believes to be appropriate in determining the amount of
the Bonus to be paid to the Executive for the year. The Committee shall not have
any discretion to increase the amount of the Bonus payable to any Covered
Executive for the year, as determined under Section 3.

         (c) Notwithstanding any other provision herein to the contrary, the
amount of the Bonus otherwise payable to any Executive for any Fiscal Year shall
not exceed the lesser of (i) $1.0 million and (ii) 100% of the Executive's Base
Salary for the Fiscal Year ending August 3, 2002 and 150% of the Executive's
Base Salary for each subsequent Fiscal Year.

5. PAYMENT OF BONUSES

         The Bonus payable to an Executive for any Fiscal Year shall be paid in
accordance with the following provisions:

         (a) Except as otherwise provided in (b) or (c) below,

                  (i) if the Executive is not a Covered Executive for such year,
         50% of the estimated amount of the Executive's Bonus shall be paid to
         the Executive on such date in September next following the close of
         such year as the Committee in its discretion shall determine (the first
         "Bonus Payment Date"), and the remaining amount of the Executive's
         Bonus shall be paid to the Executive by no later than January 15 next
         following the close of such year;

                                       4
<PAGE>

                  (ii) if the Executive is a Covered Executive for such year,
         50% of the amount of the Executive's Bonus shall be paid to the
         Executive as soon as practicable after the Committee has certified in
         writing that all conditions for the payment of such Bonus to the
         Executive for such year have been satisfied, and the remaining amount
         of the Executive's Bonus shall be paid to the Executive by no later
         than January 15 next following the close of such year;

                  (iii) each amount payable to an Executive under (i) and (ii)
         above, reduced by the amount of all federal, state and local taxes
         required by law to be withheld therefrom, shall be paid to the
         Executive in the form of a single lump sum cash payment.

         (b) To the extent that an Executive has elected under the applicable
provisions of the Pall Corporation Management Stock Purchase Plan (the "MSPP")
to have any part of the Bonus payable to the Executive for any Fiscal Year paid
in the form of Restricted Units to be credited to the Executive's account under
the MSPP, no cash payments shall be made to the Executive pursuant to (a) above
with respect to the part of the Executive Bonus that is subject to such
election; and the obligation of the Corporation under this Plan with respect to
payment of such part of the Executive's Bonus shall be fully discharged upon the
crediting of Restricted Units to the Executive's account under the MSPP in
accordance with the applicable provisions of such Plan.

         (c) To the extent that an Executive has elected under the applicable
provisions of the Pall Corporation Profit-Sharing Plan (the "Profit-Sharing
Plan") to have any part of the Bonus payable to the Executive for any Fiscal
Year reduced, and to have an amount equal to such part of the Executive's Bonus
contributed to the Profit-Sharing Plan as a 401(k) Contribution on the
Executive's behalf, an amount equal to such part of the Executive's Bonus shall
be contributed to the Profit-Sharing Plan on behalf of the Executive; and
thereupon, the obligation of the Corporation under this Plan with respect to
payment of such part of the Executive's Bonus shall be fully discharged.
However, no such contribution shall be made to the extent it would cause any
limitation applicable under the 401(k) Plan to be exceeded.

6. CHANGE IN CONTROL

         Notwithstanding any other provision in the Plan to the contrary (but
subject to the "provided, however" clause contained in the definition of "Change
in Control" in Section 2), upon the occurrence of a Change in Control, the
following provisions shall apply.

         (a) The amount of the Bonus payable to any Executive for the Fiscal
Year in which a Change in Control occurs shall be at least equal to the Target
Bonus Percentage of the Executive's Base Salary for such year or, in the case of
any Executive whose Term of Employment commences after the start of such year or
ends prior to the close of such year, a pro rata portion thereof determined on
the basis of the number of days of such Fiscal Year that fall within the
Executive's Term of Employment.

                                       5
<PAGE>

         (b) Each Executive whose Term of Employment has not ended prior to the
occurrence of a Change in Control shall be entitled to receive a Bonus for each
Contract Year (as defined in the Executive's Employment Agreement) that falls in
whole or in part within the Executive's Term of Employment and that ends after
the Fiscal Year in which the Change in Control occurs. The amount of the Bonus
payable to the Executive for each such Contract Year shall be at least equal to
the Target Bonus Percentage of the Executive's Base Salary for such Contract
Year or, in the case of any Executive whose Term of Employment ends after the
start of such Contract Year but prior to the close of such year, a pro rata
portion thereof determined on the basis of the number of days of such Contract
Year that fall within the Executive's Term of Employment.

         (c) The entire amount of the Bonus payable to an Executive for any
Fiscal Year or Contract Year pursuant to (a) or (b) above, reduced by the amount
of all federal, state and local taxes required to be withheld therefrom, shall
be paid to the Executive in a single cash lump sum as soon as practicable after
the close of such Fiscal Year or Contract Year.

7. RIGHTS OF EXECUTIVES

         An Executive's rights and interests under the Plan shall be subject to
the following provisions:

         (a) An Executive's rights to payments under the Plan shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, or garnishment by creditors of the Executive.

         (b) Neither the Plan nor any action taken hereunder shall be construed
as giving any Executive any right to be retained in the employment of the
Corporation or any of its subsidiaries.

8. ADMINISTRATION

         The Plan shall be administered by the Committee. A majority of the
members of the Committee shall constitute a quorum. The Committee may act at a
meeting, including a telephone meeting, by action of a majority of the members
present, or without a meeting by unanimous written consent. In addition to the
responsibilities and powers assigned to the Committee elsewhere in the Plan, the
Committee shall have the authority, in its discretion, to establish from time to
time guidelines or regulations for the administration of the Plan, interpret the
Plan, and make all determinations considered necessary or advisable for the
administration of the Plan.

         The Committee may delegate any ministerial or nondiscretionary function
pertaining to the administration of the Plan to any one or more officers of the
Corporation.

                                       6
<PAGE>

         All decisions, actions or interpretations of the Committee under the
Plan shall be final, conclusive and binding upon all parties. Notwithstanding
the foregoing, any determination made by the Committee after the occurrence of a
Change in Control that denies in whole or in part any claim made by any
individual for benefits under the Plan shall be subject to judicial review,
under a "de novo", rather than a deferential standard.

9. AMENDMENT OR TERMINATION

         The Board of Directors may, with prospective or retroactive effect,
amend, suspend or terminate the Plan or any portion thereof at any time;
provided, however, that (a) no amendment, suspension or termination of the Plan
shall adversely affect the rights of any Executive with respect to any Bonus
that has become payable to the Executive under the Plan, without his or her
written consent, and (b) following a Change in Control, no amendment to Section
6, and no termination of the Plan, shall be effective if such amendment or
termination adversely affects the rights of any Executive under the Plan.

10. SUCCESSOR CORPORATION

         The obligations of the Corporation under the Plan shall be binding upon
any successor corporation or organization resulting from the merger,
consolidation or other reorganization of the Corporation, or upon any successor
corporation or organization succeeding to substantially all of the assets and
business of the Corporation. The Corporation agrees that it will make
appropriate provision for the preservation of Executives' rights under the Plan
in any agreement or plan which it may enter into or adopt to effect any such
merger, consolidation, reorganization or transfer of assets.

11. GOVERNING LAW

         The Plan shall be governed by and construed in accordance with the laws
of the State of New York.

12. EFFECTIVE DATE

         The Plan was adopted effective as of July 17, 2001 by the Board of
Directors, acting by the Committee, subject, however, to approval by the
shareholders of the Corporation by a majority of the votes cast in person or by
proxy at the 2001 annual meeting of the Corporation's shareholders, including
any adjournment thereof. The Plan was approved by shareholders on November 14,
2001 and amended by the Committee on July 16, 2002 and November 1, 2002
effective for the Fiscal Year beginning August 4, 2002.

                                       7<PAGE>

                                                                  EXHIBIT 10.23

                                PALL CORPORATION

                          2005 STOCK COMPENSATION PLAN

                                      -----

1. PURPOSE

         This document sets forth the Pall Corporation 2005 Stock Compensation
Plan as adopted by the Board of Directors of Pall Corporation on September 17,
2004, subject to approval by shareholders at the 2004 Annual Meeting of
Shareholders including any adjournment thereof.

         The purpose of the Plan is to attract and retain individuals of
outstanding ability to serve as employees in positions of responsibility with
the Corporation and its Affiliated Companies, or to serve as non-employee
directors of the Corporation, by providing them with the opportunity to acquire
a proprietary interest (or to increase their proprietary interest) in the
Corporation, and to provide them with incentives and awards that will motivate
their efforts and contributions towards the success of the Corporation and its
Affiliated Companies and the growth of their businesses.

2. DEFINITIONS

         As used herein, the following terms shall have the following meanings:

         "AFFILIATED COMPANIES" shall mean each direct or indirect subsidiary of
the Corporation.

         "ANNUAL AWARD UNITS" shall mean Units awarded to an Eligible Director
pursuant to Section 8.

         "ANNUAL AWARD GRANT DATE" shall mean, with respect to any calendar year
beginning on or after January 1, 2005, January 5 of such year or, if January 5
of such year is not a Trading Day, the next day following January 5 of such year
that is a Trading Day.

         "AWARD" shall mean the grant of any Option, Share or Unit to any
Eligible Employee or Eligible Director under the Plan.

         "BENEFICIARY" shall mean the person or persons designated by a
Participant in accordance with Section 15 to receive any payment that is
required to be made under the Plan upon or after the Participant's death.

         "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Corporation.

         "CEO" shall mean the Chief Executive Officer of the Corporation.

<PAGE>

         "CHANGE IN CONTROL" means the occurrence of any of the following:

         (a)      the "Distribution Date" as defined in Section 3 of the Rights
                  Agreement dated as of November 17, 1989 between the
                  Corporation and United States Trust Company of New York as
                  Rights Agent, as amended by Amendment No. 1 thereto dated
                  April 20, 1999, and as the same may have been further amended
                  or extended to the time in question or in any successor
                  agreement (the "Rights Agreement"); or

         (b)      any event described in Section 11(a)(ii)(B) of the Rights
                  Agreement; or

         (c)      any event described in Section 13 of the Rights Agreement; or

         (d)      the date on which the number of duly elected and qualified
                  directors of the Corporation who were not either elected by
                  the Board of Directors or nominated by the Board of Directors
                  or its Nominating Committee for election by the shareholders
                  shall equal or exceed one-third of the total number of
                  directors of the Corporation as fixed by its by-laws;

provided, however, that no Change in Control shall be deemed to have occurred,
and no rights arising upon a Change in Control as provided in Section 12 hereof
shall exist (other than the rights provided for in Section 12(b) hereof), to the
extent that the Board of Directors so determines by resolution adopted and not
rescinded prior to the Change in Control.

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

         "COMMITTEE" shall mean (i) the Board of Directors, with respect to any
Award that may be granted, or that has been granted, to any Eligible Director;
(ii) the Compensation Committee, with respect to any Award that may be granted,
or that has been granted, to any Eligible Employee, except as otherwise provided
in (iii); or (iii) the CEO, with respect to those specific matters pertaining to
Awards to Eligible Employees who are not Elected Officers that are within the
scope of the authority granted to the CEO under Section 14(d) or delegated to
the CEO by the Compensation Committee under to Section 14(e).

         "COMMON STOCK" shall mean the common stock ($0.10 par value) of the
Corporation.

         "COMPENSATION COMMITTEE" shall mean the Compensation Committee of the
Board of Directors.

         "CORPORATION" shall mean Pall Corporation, a New York Corporation.

         "COVERED EXECUTIVE" shall mean, with respect to any Award granted
hereunder, any individual who at the Date of Grant of such Award is a "Covered
Employee" of the Corporation for such year for purposes of section 162(m) of the
Code.

         "DATE OF GRANT" shall mean, with respect to any Award, the date on
which the Committee approves the grant of such Award, or such later date as may
be specified as the date of grant of such Award in the instrument evidencing the
grant of such Award.

                                       2
<PAGE>

         "DISABILITY" shall mean, with respect to any Eligible Employee, such
employee's "permanent and total disability" as defined in section 22(e)(3) of
the Code or any successor provision.

         "DIVIDEND EQUIVALENT UNITS" shall mean additional Units credited with
respect to a Participant's Restricted Units, Performance Units, or Annual Award
Units pursuant to Section 6(c), Section 7(b) or Section 8(b).

         "DIVIDEND PAYMENT DATE" shall mean each date on which the Corporation
pays a dividend on its Common Stock.

         "ELECTED OFFICER" shall mean any individual who is an Elected Officer
under Section 4.01(a)(i) of the By-Laws of the Corporation.

         "ELIGIBLE DIRECTOR" shall mean any member of the Board of Directors who
is not an employee of the Corporation or any of its Affiliated Companies.

         "ELIGIBLE EMPLOYEE" shall mean any employee of the Corporation or any
of its Affiliated Companies who, in the judgment of the Committee, is expected
to make significant contributions to the success of the Corporation and its
Affiliated Companies and to the growth of their businesses.

         "FAIR MARKET VALUE" shall mean, with respect to any Share or Unit or
any fractional Share or fractional Unit as of any date of reference herein, the
closing price of a share of Common Stock as reported in the New York Stock
Exchange Consolidated Transactions for such date or, if such date is not a
Trading Day, on the next Trading Day preceding such date.

         "INCENTIVE STOCK OPTION" shall mean an Option that is an "incentive
stock option" within the meaning of Section 422 of the Code.

         "NON-QUALIFIED STOCK OPTION" shall mean an Option that is not an
Incentive Stock Option.

         "OPTION" shall mean an option to purchase Shares granted pursuant to
Section 5 of the Plan or, solely for purposes of Section 5(h)(ii), granted under
any other stock option plan maintained by the Corporation.

         "PARTICIPANT" shall mean any Eligible Employee or Eligible Director who
holds an Award granted under the Plan, and any successor, permitted transferee
or Beneficiary that succeeds to such individual's interest in such Award.

         "PERFORMANCE GOALS" shall mean the performance goals established by the
Committee in connection with Awards granted to Eligible Employees under Section
7 that must be met in order for payment to be made with respect to such Awards.

         "PERFORMANCE PERIOD" shall mean the period established by the Committee
for measuring whether, and to what extent, any Performance Goals established in
connection with any Award granted under Section 7 hereof have been met.

                                       3
<PAGE>

         "PERFORMANCE SHARES" shall mean Shares that may be issued and delivered
at the end of a Performance Period pursuant to an Award made to an Eligible
Employee under Section 7, depending on the achievement, or the level of
achievement, of one or more Performance Goals within such period, as provided in
Section 7.

         "PERFORMANCE UNITS" shall mean Units credited to an Eligible Employee
at the beginning of a Performance Period pursuant to an Award made to such
employee under Section 7, and any Dividend Equivalent Units that are credited to
the employee with respect to such Units during such Performance Period, payment
with respect to which Units and related Dividend Equivalent Units depends on the
achievement, or the level of achievement, of one or more Performance Goals
within such period, as provided in Section 7.

         "PLAN" shall mean the Pall Corporation 2005 Stock Compensation Plan, as
set forth herein and as amended from time to time.

         "PRO RATA PORTION" shall mean, with respect to any portion of the
Restricted Shares or Restricted Units granted pursuant to an Award made
hereunder to an Eligible Employee, or with respect to any Performance Shares or
Performance Units included in an Award made hereunder to an Eligible Employee,
the percentage determined by dividing (i) the number of months in the period
commencing on the first day of the Restricted Period established for such
portion of the Restricted Shares or Restricted Units so granted, or the
Performance Period established for the Performance Shares or Performance Units
so awarded, and ending on the date of the Eligible Employee's Termination of
Employment, by (ii) the total number of months in such Restricted Period, or in
such Performance Period.

         "RESTRICTED PERIOD" shall mean the period of time during which
Restricted Shares or Restricted Share Units are subject to Restrictions as set
forth in Section 6.

         "RESTRICTED SHARES" shall mean Shares which are granted subject to
Restrictions pursuant to Section 6.

         "RESTRICTED UNITS" shall mean Units credited to an Eligible Employee
subject to Restrictions at the beginning of a Restricted Period pursuant to an
Award made to such employee under Section 6, and any Dividend Equivalent Units
that are credited to the employee with respect to such Units during such
Restricted Period as provided in Section 6.

         "RESTRICTIONS" shall mean the restrictions to which Restricted Shares
or Restricted Units are subject under the provisions of Section 6.

         "RETIREMENT" shall mean the termination of a Participant's employment
with the Corporation and all of its Affiliated Companies, if at the time of such
termination of employment the Participant has attained age 62 and is eligible to
receive a Retirement Benefit under the Pall Corporation Cash Balance Pension
Plan or (ii), in the case of any Participant who is not a resident of the U.S.,
a similar type of benefit under any plan or program maintained by the
Corporation or any of its Affiliated Companies (or to which the Corporation or
any of its Affiliated Companies makes contributions) that provides benefits to
Employees upon their retirement.

                                       4
<PAGE>

         "SHARE" shall mean a share of Common Stock.

         "TERMINATION OF BOARD MEMBERSHIP" shall mean, with respect to any
Eligible Director, his or her ceasing to be a member of the Board of Directors.

         "TERMINATION OF EMPLOYMENT" shall mean, with respect to any Eligible
Employee, his or her ceasing to be employed by the Corporation or any of its
Affiliated Companies.

         "TRADING DAY" shall mean any day on which the New York Stock Exchange
is open for trading.

         "UNIT" shall mean a unit of measurement equivalent to one share of
Common Stock, with none of the attendant rights of a shareholder of such share,
(including among the rights which the holder of a Unit does not have are the
right to vote such share and the right to receive dividends thereon), except to
the extent otherwise specifically provided herein.

3. AWARDS

         (a) Form of Awards. Awards under the Plan may be made in the form of
Options, Restricted Shares, Restricted Units, Performance Shares, Performance
Units, and Annual Award Units. An Award in any of the foregoing forms other than
Annual Award Units may be granted to any individual Eligible Employee, or to any
group of Eligible Employees, upon terms and conditions that differ from the
terms and conditions upon which any other Awards in the same form are made to
other individual Eligible Employees or groups of Eligible Employees.

         (b) Written Instrument. Each Award made to an Eligible Employee or
Eligible Director under the Plan shall be evidenced by a written instrument in
such form as the Committee shall prescribe, setting forth the terms and
conditions of the Award. The instrument evidencing the grant of any Award
hereunder shall specify that the Award shall be subject to all of the terms and
provisions of the Plan as in effect from time to time but subject to the
limitation on amendments set forth in Section 16 of the Plan.

         (c) Surrender and Exchange of Awards. The Committee may in its
discretion grant to a Participant who has been granted an Award under the Plan
or an award under any other employee compensation or benefit plan maintained by
the Corporation or any of its Affiliates (any such Award or award is referred to
herein as a "Prior Award"), in exchange for the surrender and cancellation of
such Prior Award or any portion thereof, a new Award under the Plan. As the
Committee may determine in its discretion, the new Award so granted may be in a
form different than that of the Prior Award surrendered, and may be granted
subject to terms and conditions that differ from those to which the surrendered
Prior Award were subject. Notwithstanding the foregoing, no grant of a new Award
in exchange for a Prior Award may be made hereunder unless (i) the aggregate
fair value of the new Award does not exceed the aggregate fair value of the
Prior Award, determined as of the time the new Award is granted; and (ii) the
grant of the new Award would not constitute a "repricing" of any Option or would
not otherwise be treated as a "material revision" of the Plan for purposes of
the applicable rules of the New York Stock Exchange.

                                       5
<PAGE>

4. SHARES AVAILABLE FOR AWARDS

         Shares distributed in respect of Awards made under the Plan may be
authorized but unissued Shares, Shares held in the treasury of the Corporation,
or Shares purchased by the Corporation on the open market at such time or times
and in such manner as it may determine. The Corporation shall be under no
obligation to issue or acquire Shares in respect of an Award made under the Plan
before the time when delivery of Shares is due under the terms of the Award. The
number of Shares available for distribution in respect of Awards made under the
Plan shall be subject to the following limitations:

         (a) The aggregate number of Shares that may be distributed in respect
of Awards made under the Plan shall be limited to 5,000,000 Shares. Of that
aggregate number, no more than 2,500,000 Shares in the aggregate shall be
available for Awards of Restricted Shares, Restricted Units, Performance Shares,
Performance Units and Annual Award Units. The maximum aggregate number of Shares
that may be issued pursuant to the exercise of Incentive Stock Options granted
under the Plan shall not exceed 2,500,000 Shares.

         (b) Upon the grant of any Award, the overall aggregate number of Shares
available for further Awards under the Plan , and if the Award so granted was in
a form subject to a limitation on the aggregate number of shares available for
Awards in that form, the aggregate number of Shares available for further Awards
under the Plan in that form, shall be reduced by the number of Shares subject to
the Award so granted.

         (c) There shall be added back to the aggregate number of Shares
available for the grant of Awards under the Plan, as determined under (a) and
(b) above, the following: (i) any Shares as to which an Option granted hereunder
has not been exercised at the time of its expiration, cancellation or
forfeiture; (ii) any Shares that otherwise would have been issued upon the
exercise of an Option granted hereunder that are surrendered in payment of the
exercise price of such Option; (iii) any Shares included in any other form of
Award granted hereunder, to the extent that the Participant's right to receive
such Shares, or any cash payment in settlement of such Award, becomes forfeited;
(iv) any Shares that otherwise would have been issued upon the exercise of an
Option or in payment with respect to any other form of Award granted hereunder,
that are surrendered in payment or partial payment of taxes required to be
withheld with respect to the exercise of such option or the making of such
payment; (iv) any Shares represented by Restricted Units or Performance Units
granted hereunder as to which payment is made in cash instead of by the issuance
and delivery of Shares; and (v) any Shares subject to an Option granted
hereunder, or covered by any other form of Award made hereunder, to the extent
such Option or other Award is surrendered in exchange for any other Award made
hereunder, subject to the limitations set forth in the last sentence of Section
3(c) hereof.

         (d) The limitations provided in this Section 4 shall be subject to
adjustment as provided in Section 13.

5. AWARDS OF OPTIONS.

         Subject to the limitations set forth in Section 4 and to the other
terms and conditions of the Plan, Options may be granted under the Plan to such
Eligible Employees for the purchase of such number of Shares, at such times, and
upon such terms and conditions, as the Committee in its discretion may
determine. Options shall be granted in accordance with the provisions set forth
below.

                                       6
<PAGE>

         (a) Type of Options. Each Option granted hereunder shall be identified
in the instrument evidencing such grant as either (i) an Option intended to be
treated as an Incentive Stock Option, or (ii) an Option that shall be treated as
a Non-Qualified Stock Option.

         (b) Maximum Number of Shares Subject to Options. The total number of
Shares with respect to which Options may be granted to any Eligible Employee
during any period of 24 consecutive months shall not exceed 300,000 Shares,
subject to adjustment as provided in Section 13.

         (c) Term of Options. The term during which an Option may be exercised
shall be such period of time as determined by the Committee and specified in the
Option, but in no event may the term of any Option exceed ten years from the
Date of Grant of the Option. Notwithstanding any other provision in the Plan to
the contrary, no Option may be exercised after its expiration.

         (d) Exercise of Options. Each Option granted hereunder shall become
exercisable, in whole or in part, at such time or times during its term as the
instrument evidencing the grant of such Option shall specify. To the extent that
an Option has become exercisable pursuant to the preceding sentence, it may be
exercised thereafter at any time or from time to time during its term, as to any
or all Shares as to which the Option has become and remains exercisable, subject
to the provisions of (e) below.

         (e) Termination of Employment. Except as the instrument evidencing the
grant of an Option may otherwise provide, the portion of any outstanding Option
held by an Eligible Employee on the date of his or her Termination of Employment
that has not become exercisable prior to such date, and the portion of such
Option which was exercisable but had not been exercised prior to such date,
shall be forfeited on such date.

         The instrument evidencing the grant of an Option may provide for the
portion of the Option that is exercisable at the time of the Eligible Employee's
Termination of Employment to remain exercisable, and for the portion of such
Option that is not yet exercisable at such time to become exercisable in
accordance with the terms of the Option and remain exercisable thereafter,
during such period of time after the date on which the Eligible Employee's
Termination of Employment occurs (but not beyond the expiration of the term of
the Option), in such circumstances and subject to such terms and conditions, as
are specified in such instrument. However, to the extent that any Option granted
hereunder to an Eligible Employee as an Incentive Stock Option is exercised more
than three months after the date of such employee's Termination of Employment
for any reason other than Disability, or more than one year after such date if
the employee's Termination of Employment occurred because of Disability, the
Option shall be treated as a Non-Qualified Stock Option for purposes of the
Plan.

         (f) Exercise Price and Method of Exercise. The price at which Shares
may be purchased upon any exercise of an Option shall be the price per share
determined by the Committee and specified in the instrument evidencing the grant
of such Option, but in no event shall the exercise price per share be less than
(i) the Fair Market Value of a Share determined as of the Date of Grant of the
Option, or (ii), if greater, the par value of a Share.

                                       7
<PAGE>

         An Option shall be exercised by delivery of a written notice of
exercise, in a form satisfactory to the Committee, to the Corporation at its
principal business office and addressed to the attention of the Corporation's
Secretary or such other person as the Corporate Secretary may have designated to
receive such notice.. The notice shall specify the number of Shares with respect
to which the Option is being exercised. The notice shall be accompanied by
payment of the exercise price of the Shares for which the Option is being
exercised, which payment shall be made under one or more of the methods of
payment provided in (g) below. An Option may not be exercised at any one time as
to less than 100 Shares, or less than the number of Shares to which the Option
is then exercisable if that number is less than 100 Shares.

         (g) Payment. Payment of the exercise price for Shares purchased upon
the exercise of an Option shall be made by one, or by a combination of any, of
the following methods: (i) in cash, which may be paid by check or other
instrument acceptable to the Corporation, or by wire transfer of funds, in each
case in United States dollars; (ii) if permitted by the Committee and subject to
any terms and conditions it may impose on the use of such methods, by (A) the
delivery to the Corporation of other Shares owned by the Participant, or (B) the
surrender to the Corporation of Shares that otherwise would have been delivered
to the Participant upon exercise of the Option; (iii) to the extent permissible
under applicable law, through any cashless exercise sale and remittance
procedure that the Committee in its discretion may from time to time approve;
(iv) to the extent permissible under applicable law and permitted by the
Committee, by the execution by the Participant and delivery to the Corporation
of a promissory note or other instrument evidencing the Participant's agreement
to pay part or all of the option exercise price on a deferred or installment
payment basis, upon such terms and conditions (including without limitation
terms requiring Shares purchased upon the exercise of the Option to be pledged
to the Corporation to secure payment of any outstanding balance of the option
exercise price ) as the Committee shall require; or (v) any other method of
payment as the Committee may from time to time approve.

         For purposes of determining the portion of the exercise price payable
upon the exercise of an Option that will be treated as satisfied by the delivery
or surrender of Shares pursuant to clause (ii) (A) or (B) above, Shares so
delivered or surrendered shall be valued at their Fair Market Value determined
as of the Trading Day next preceding the date on which the Option is exercised .

         (h) Incentive Stock Options. Notwithstanding any other provisions of
the Plan, Incentive Stock Options granted under the Plan shall be subject to the
following provisions:

                  (i) No Incentive Stock Option may be granted under the Plan
         after November 16, 2014, unless the shareholders of the Corporation
         have approved an extension of the period for granting Incentive Stock
         Options under the Plan beyond that date.

                                       8
<PAGE>

                  (ii) To the extent that the aggregate Fair Market Value of
         Shares with respect to which Incentive Stock Options granted under the
         Plan and under all other stock option plans maintained by the
         Corporation are exercisable for the first time by a Participant during
         any calendar year shall exceed $100,000, the Incentive Stock Options so
         exercisable shall be treated as Non-Qualified Stock Options. For
         purposes of the foregoing, the Fair Market Value of Shares as to which
         any Incentive Stock Option may be exercised shall be determined as of
         the date on which such Option is granted. The determination of whether
         the limitation set forth in the second preceding sentence shall apply
         with respect to any Incentive Stock Option granted under the Plan shall
         be made in accordance with applicable provisions of section 422 of the
         Code and the regulations issued thereunder.

                  (iii) No Incentive Stock Option shall be granted to an
         Eligible Employee if, as of the Date of Grant of such Option, such
         Eligible Employee owns stock possessing more than ten percent of the
         total combined voting power of all classes of stock of the Corporation,
         unless (A) the exercise price per Share under such Option is at least
         110% percent of the Fair Market Value of a Share determined as of the
         Date of Grant of such Option, and (B) such Option is not exercisable
         after the expiration of five years from the Date of Grant of such
         Option.

                  (iv) The instrument evidencing the grant of any Incentive
         Stock Option shall require that if any Shares acquired upon the
         exercise of such option are disposed of within 2 years from the Date of
         Grant of such option, or within one year from the date as of which the
         Shares disposed of were transferred to the Participant pursuant to the
         exercise of such option, the Participant shall give the Corporation
         written notice of such disposition, within ten days following the date
         of such disposition.

         (i) Other Option Provisions. The instrument evidencing the grant of any
Option hereunder may contain such other terms and conditions, not inconsistent
with the provisions of the Plan or any applicable law, as the Committee may
determine.

         (j) Rights of a Shareholder. Upon the exercise of an Option or any
portion thereof in accordance with the Plan, the provisions of the instrument
evidencing the grant of such Option and any applicable rules and regulations
established by the Committee, the holder of the Option shall have all of the
rights of a shareholder of the Corporation with respect to the Shares issued as
a result of such exercise.

6. AWARDS OF RESTRICTED SHARES AND RESTRICTED UNITS

         Subject to the limitations set forth in Section 4 and to the other
terms and conditions of the Plan, Restricted Shares or Restricted Units may be
granted to such Eligible Employees, at such times, and in such amounts, as the
Committee may determine in its discretion. Restricted Shares and Restricted
Units shall be granted in accordance with the provisions set forth below.

                                       9
<PAGE>

         (a) Restrictions and Restricted Period. At the time of each grant of
Restricted Shares or Restricted Units to any Participant, the Committee shall
establish a period of time within which the Restricted Shares or Restricted
Units covered by such grant (and the Participant's right to receive payment with
respect to such restricted Units) may not be sold, assigned, transferred (other
than a transfer to the Participant's Beneficiary occurring by reason of the
Participant's death), made subject to gift, or otherwise disposed of, mortgaged,
pledged or otherwise encumbered, whether voluntarily or by operation of law. The
Committee in its discretion may prescribe a separate Restricted Period for any
specified portion of the Restricted Shares or Restricted Units granted pursuant
to any Award.

         (b) Rights While Restricted Shares Remain Subject to Restrictions.
Restricted Shares granted to a Participant hereunder shall be issued to the
Participant as of the Date of Grant as uncertificated shares. Until the
Restrictions to which such shares are subject lapse in accordance with the
provisions of (d) below or Section 12(c), the Restricted Shares granted to a
Participant shall be held in the Participant's name in a bookkeeping account
maintained by the Corporation. A separate account shall be maintained for all
Restricted Shares granted to a Participant with a Restricted Period ending on
the same date.

         Except for the Restrictions to which such shares are subject, and
subject to the forfeiture provisions applicable under (e) below, a Participant
shall have, with respect to all Restricted Shares so held for his account, all
of the rights of a shareholder of the Corporation, including full voting rights
with respect to such shares and the right to receive currently with respect to
the Participant's Restricted Shares all dividends and other distributions
payable generally on the Corporation's Shares. If any dividends or distributions
so payable are paid in Shares, the Shares paid as a dividend or distribution
with respect to a Participant's Restricted Shares shall be subject to the same
Restrictions and provisions relating to forfeiture as apply to the Restricted
Shares with respect to which they were paid. Such stock dividend Shares shall
themselves be treated as Restricted Shares, and shall be credited to the same
account which the Corporation maintains for those Restricted Shares of the
Participant with respect to which such stock dividends or distributions were
paid.

         Notwithstanding the foregoing, if the instrument evidencing the grant
of any Restricted Shares to a Participant so provides, all cash dividends and
distributions payable generally on the Corporation's Shares that are otherwise
payable with respect to the Restricted Shares granted to the Participant shall
not be paid currently to the Participant but instead, shall be applied to the
purchase of additional Shares for the Participant's account. The additional
Shares so purchased shall be subject to the same Restrictions and provisions
relating to forfeiture as apply to the Restricted Shares with respect to which
they were paid. Such additional Shares shall themselves be treated as Restricted
Shares, and shall be credited to the same account which the Corporation
maintains for those Restricted Shares of the Participant with respect to which
such dividends or distributions were paid. The purchase of any such additional
Shares shall be made either (i) through the Corporation's Dividend Reinvestment
Plan, or (ii) in accordance with such other procedure as may be specified in the
instrument evidencing the grant of the Restricted Shares on which such dividends
are paid.

         (c) Rights While Restricted Units Remain Subject to Restrictions. No
Shares shall be issued at the time any award of Restricted Units is made
hereunder. Restricted Units granted to a Participant hereunder shall be credited
to a bookkeeping account maintained by the Corporation for the Participant. A
separate account shall be maintained for all Restricted Units granted to a
Participant with a Restricted Period ending on the same date, and for all
Dividend Equivalent Units that are to be credited to such account in accordance
with the next following paragraph.

                                       10
<PAGE>

         Until the Restrictions applicable to the Restricted Units credited upon
grant to any account maintained for a Participant in accordance with the
preceding paragraph shall lapse, additional Restricted Units shall be credited
to such account with respect to the Restricted Units so credited, as of each
Dividend Payment Date. The number of additional Restricted Units to be credited
shall be determined by first multiplying (A) the total number of Restricted
Units standing to the Participant's credit in such account on the day
immediately preceding such Dividend Payment Date (including all Dividend
Equivalent Units credited to such account on all previous Dividend Payment
Dates), by (B) the per-share dollar amount of the dividend paid on such Dividend
Payment Date and then, dividing the resulting amount by the Closing Price of one
share of Common Stock on such Dividend Payment Date.

         (d) Lapse of Restrictions and Payment. Upon the expiration of the
Restricted Period for any Restricted Shares or Restricted Units granted to a
Participant hereunder but subject to the provisions of (e) below, the
Restrictions applicable to such Restricted Shares or Restricted Units shall
lapse, and payment with respect to such Restricted Shares or Restricted Units
(including any related Dividend Equivalent Units) shall be made in accordance
with the following provisions:

                  (i) In the case of Restricted Shares, payment shall be made by
         delivery to the Participant of a stock certificate for the number of
         such Restricted Shares, free and clear of all Restrictions to which
         such shares were subject. However, if the Restricted Shares with
         respect to which the applicable Restrictions have lapsed includes a
         fractional Share, payment for such fractional Share shall be made in
         cash, in an amount equal to the Fair Market Value of such fractional
         Share determined as of the date on which such Restrictions lapsed.
         Delivery of such stock certificate and any such cash payment shall be
         made to the Participant as soon after the lapse of the applicable
         Restriction as is practicable.

                  (ii) In the case of Restricted Units (including related
         Dividend Equivalent Units), payment shall be made (A) by the issuance
         and delivery to the Participant of a stock certificate for a number of
         Shares equal to the number of whole Restricted Units and related
         Dividend Equivalent Units with respect to which the applicable
         Restrictions have lapsed, and (B) by payment in cash for any fractional
         Restricted Unit payable as a result of the lapse of such Restrictions,
         in an amount equal to the Fair Market Value of such fractional
         Restricted Unit determined as of the date as of which such Restrictions
         lapsed. Notwithstanding the foregoing, payment for Restricted Units
         (including related Dividend Equivalent Units) with respect to which the
         applicable Restrictions have lapsed shall be made solely in cash, in an
         amount equal to the Fair Market Value of all of such Units and any
         fractional Unit, determined as of the date on which such Restrictions
         lapsed, if the instrument evidencing the grant of such Restricted Units
         so provides. Payment shall be made in such manner and at such time or
         times as provided in such instrument. If such instrument so permits,
         payment with respect to any part or all of an Eligible Employee's
         Restricted Units (including related Dividend Equivalent Units) may be
         deferred, at the Eligible Employee's election, upon such terms and
         conditions as are specified in such instrument.

                                       11
<PAGE>

         (e) Termination of Employment. Upon an Eligible Employee's Termination
of Employment for any reason prior to the expiration of the Restricted Period
for any Restricted Shares or Restricted Units (and related Dividend Equivalent
Units) standing to his or her credit immediately prior to such Termination of
Employment, the Eligible Employee's right to receive payment with respect to
such Restricted Shares, Restricted Units and Dividend Equivalent Units shall be
forfeited and cancelled as of the date of such Termination of Employment, and no
payment of any kind shall be made with respect to such Restricted Shares,
Restricted Units and Dividend Equivalent Units, except as otherwise provided in
the instrument or instruments evidencing the grant of such Shares or Units.

         If the Committee so determines in its discretion, the instrument
evidencing the Award of such Restricted Shares or Restricted Units may provide
that if the Eligible Employee's Termination of Employment prior to the end of
the Restricted Period established for such Restricted Shares or Restricted Units
occurs as a result of the Eligible Employee's death, Disability, Retirement, or
for any other reason other than discharge by the Corporation or any of its
Affiliated Companies for "cause" as defined in such instrument, payment shall be
made with respect to all or a Pro Rata Portion of such Restricted Shares or
Restricted Units and any related Dividend Equivalent Units . In such case, only
the Eligible Employee's right to receive payment with respect to any remaining
portion of the Restricted Shares or Restricted Units (and related Dividend
Equivalent Units) for which such Restricted Period was established shall be
cancelled and forfeited. Any payment required to be made with respect to an
Eligible Employee's Restricted Shares or Restricted Units (and related Dividend
Equivalent Units) pursuant to this paragraph shall be made as soon as
practicable after the date of such employee's Termination of Employment, and
shall be made in the manner specified in Section 6(d)

         (f) Notice of Code Section 83(b) Election. A Participant who files an
election under section 83(b) of the Code to include in gross income the Fair
Market Value of any Restricted Shares granted hereunder while such Shares are
still subject to Restrictions shall furnish the Corporation with a copy of the
election so filed by the Participant, within ten days of the filing of such
election with the Internal Revenue Service.

7. AWARDS OF PERFORMANCE SHARES AND PERFORMANCE UNITS

         Subject to the limitations set forth in Section 4 and to the other
terms and conditions of the Plan, Performance Shares or Performance Units may be
granted to such Eligible Employees, at such times, in such amounts, and upon
such terms and conditions, as the Committee may determine in its discretion.
Performance Shares and Performance Units shall be granted in accordance with the
provisions set forth below.

                                       12
<PAGE>

         (a) Establishment of Performance Goals and Performance Targets. In
connection with each Award of Performance Shares or Performance Units, the
Committee shall establish in writing, and the instrument evidencing the grant of
such Award shall specify, (i) the Performance Goal or Goals and the Performance
Period that will apply with respect to such Award; (ii) the level or levels of
achievement of the Performance Goal or Goals that must be met in order for
payment to be made with respect to the Award; (iii) the number of Performance
Shares that will be issued and delivered to the recipient of the Award, or the
percentage of the Performance Units (and any related Dividend Equivalent Units)
credited to the recipient in connection with the Award as to which payment will
be made, if the Performance Goal or Goals applicable to such Award (A) have been
fully achieved, (B) have been exceeded, or (C) have not been fully achieved but
have been achieved at or beyond any minimum or intermediate level of achievement
specified in the instrument evidencing the grant of such Award, and (iv) such
other terms and conditions pertaining to the Award as the Committee in its
discretion may determine. In connection with any such Award made to any Covered
Executive, the matters described in the preceding sentence shall be established
within such period of time as may be permitted by the regulations issued under
section 162(m) of the Code.

         (b) Accounts and Dividend Equivalent Units for Performance Units
Awards. No Shares shall be issued at the time any award of Performance Units is
made hereunder. Performance Units granted to an Eligible Employee hereunder
shall be credited to a bookkeeping account maintained by the Corporation for
such employee. A separate account shall be maintained for all Performance Units
included in each separate Award of Performance Units made to an Eligible
Employee, and for all Dividend Equivalent Units that are to be credited with
respect to the Performance Units included in such Award in accordance with the
next following sentence. If the instrument evidencing the grant of any Award of
Performance Units so provides, Dividend Equivalent Units shall be credited with
respect to the Performance Units included in such Award on each Dividend Payment
Date occurring within the Performance Period applicable to such Award in the
same manner as Dividend Equivalent Units are credited with respect to Restricted
Units during the applicable Restricted Period, as set forth in Section 6(c)
above.

         (c) Limit on Award Amounts. The total number of Shares for which any
Award of Performance Shares may be made to any Eligible Employee, and the total
number of Units for which any Award of Performance Units may be made to any
Eligible Employee (exclusive of any Dividend Equivalent Units credited with
respect to the Performance Units awarded to such employee), may not exceed
75,000 Shares, or 75,000 Units, for each 12-month period included in the
Performance Period established for such Award. The foregoing limits shall be
subject to adjustment as provided in Section 13.

         (d) Performance Goals for Covered Executives. In the case of any Award
of Performance Shares or Performance Units to any Eligible Employee who is a
Covered Executive, the Performance Goal or Goals established in connection with
such Award shall be based on one or more of the following business criteria, as
determined by the Committee in its discretion: (i) the attainment of specified
levels of, or increases in, the Corporation's after-tax or pretax return on
stockholder's equity, (ii) the attainment of specified levels in the fair market
value of the Corporation's Shares; (iii) the attainment of specified levels of
growth in the value of an investment in the Corporation's Shares, assuming that
all dividends paid on the Corporation's Common Stock are reinvested in
additional Shares; (iv) the attainment of specified levels of, or increases in,
the Corporation's pre-tax or after-tax earnings, profits, net income, or
earnings per share; (v) the attainment of specified levels of, or increases in,
the Corporation's earnings before income tax, depreciation and amortization
(EBITDA); (vi) attainment of specified levels of, or increases in, the
Corporation's net sales, gross revenues or cash flow from operations; (vii) the
attainment of specified levels of, or increases in, the Corporation's working
capital, or in its return on capital employed or invested; (viii) the attainment
of specified levels of, or decreases in, the Corporation's operating costs or
any one or more components thereof, or in the amount of all or any specified
portion of the Corporation's debt or other outstanding financial obligations.

                                       13
<PAGE>

         Any of the business criteria described in the preceding sentence which
the Committee establishes as a Performance Goal may be measured either by the
performance of the Corporation and its Affiliated Companies on a consolidated
basis, or by the performance of any one or more of the Corporation's
subsidiaries, divisions, or other business units, as the Committee in its
discretion may determine. In its discretion, the Committee may also establish
Performance Goals, based on any of the business criteria described in this
Section 7(d), that require the attainment of a specified level of performance of
the Corporation, or any of its subsidiaries, divisions or other business units,
relative to the performance of other specified corporations, in order for such
Goals to be met.

         The Committee may also, in its discretion, include in any Performance
Goal the attainment of which depends on a determination of the net earnings or
income of the Corporation or any of its subsidiaries, divisions or other
business units, provisions which require such determination to be made by
eliminating the effects of any decreases in or charges to earnings for (A) the
effect of foreign currency exchange rates, (B) any acquisitions, divestitures,
discontinuances of business operations, restructurings or other special charges,
(C) the cumulative effect of any accounting changes, and (D) any "extraordinary
items" as determined under generally accepted accounting principles, to the
extent that such decreases or charges referred to in clauses (A) through (D) are
separately disclosed in the Corporation's Annual Report for each fiscal year
within the applicable Performance Period.

         (e) Performance Goals for Non-Covered Executives. In the case of Awards
of Performance Shares or Performance Units made hereunder to Eligible Employees
who are not Covered Executives, the Performance Goal or Goals applicable to such
Awards shall be such corporate or individual goals as the Committee in its
discretion may determine.

         (f) Measurement of Performance. At the end of the Performance Period
established in connection with any Award, the Committee shall determine the
extent to which the Performance Goal or Goals established for such Award have
been attained, and shall determine, on that basis, the number of Performance
Shares or Performance Units included in such Award that have been earned and as
to which payment will be made pursuant to section 7(h) below, subject to the
adjustments provide for in Section (7)(g) and the forfeiture provisions of
Section 7(i). In the case of any Award granted to a Covered Executive, the
Committee shall certify in writing the extent to which it has determined that
the Performance Goal or Goals established by it for such Award have been
attained.

         (g) Adjustment of Award Amounts. The Number of Shares or the amount of
cash otherwise payable with respect to an Award on the basis of the level of
attainment of the applicable Performance Goals as determined by the Committee
under Section 7(f) shall be subject to adjustment in accordance with the
following provisions.

                                       14
<PAGE>

                  (i) To the extent not inconsistent with the terms of the Plan
         and if the instrument evidencing the Award so provides, the number of
         Shares or the amount of cash otherwise so payable with respect to an
         Award to an Eligible Employee who is not a Covered Executive may be
         increased or decreased to the extent determined by the Committee in its
         discretion, based on the Committee's evaluation of the Eligible
         Employee's individual performance or to reflect such other events,
         circumstances or factors as the Committee in its discretion deems
         appropriate in determining the extent to which payment should be made
         with respect to the Eligible Employee's Award.

                  (ii) The Committee shall not have any authority to increase
         the number of Shares or the amount of cash otherwise so payable with
         respect to any Award to a Covered Executive. However, if the instrument
         evidencing such Award so provides, the Committee may in its discretion
         reduce the number of Shares or the amount of cash otherwise so payable
         with respect to such Award (A) to reflect any decreases in or charges
         to earnings that were not taken into account pursuant to clause (A),
         (B), (C), or (D) of Section 7(e) in determining net earnings or income
         for purposes of any Performance Goal established in connection with
         such Award; (B) to reflect any credits to earnings for extraordinary
         items of income or gain that were taken into account in determining net
         earnings or income for such purposes; (C) to reflect the Committee's
         evaluation of the Covered Executive's individual performance; or (D) to
         reflect any other events, circumstances or factors which the Committee
         believes to be appropriate in determining the extent to which payment
         should be made with respect to the Covered Executive's Award.

         (h) Payment of Awards. Payment with respect to that number of
Performance Shares or Performance Units subject to any Award which the Committee
has determined under Section 7(f) above to have been earned, as adjusted to the
extent determined by the Committee under Section 7(g), shall be made in
accordance with the following provisions:

                  (i) In the case of any such Performance Shares, payment shall
         be made by the issuance and delivery to the Participant of a stock
         certificate for the requisite number of such Shares. If the instrument
         evidencing the Award of such Shares so provides, a cash payment shall
         also be made to the Participant, in an amount equal to all of the
         dividends that would have been paid to the Participant upon such earned
         and adjusted number of Shares if such Shares had been issued to the
         Participant as of the Date of Grant of the Award in question. Such
         Shares shall be issued and delivered, and, if applicable, such cash
         payment shall be made, to the Participant as soon as practicable after
         the end of the Performance Period applicable to the Award in question.

                  (ii) In the case of any such Performance Units, (including
         related Dividend Equivalent Units), payment shall be made (A) by the
         issuance and delivery to the Participant of a stock certificate for a
         number of Shares equal to the total number of such whole Performance
         Units and related Dividend Equivalent Units, and (B) by payment in cash
         for any fractional Unit in an amount equal to the Fair Market Value of
         such fractional Unit determined as of the Trading Day immediately
         preceding the date as of which payment is to be made. Notwithstanding
         the foregoing, payment for such Performance Units (including related
         Dividend Equivalent Units) shall be made solely in cash, in an amount
         equal to the Fair Market Value of all of such Units and any fractional
         Unit, determined as of the Trading Day immediately preceding the date
         as of which payment is to be made, if the instrument evidencing the
         grant of such Performance Units so provides. Payment shall be made in
         such manner and at such time or times as provided in such instrument.
         If such instrument so permits, payment with respect to any part or all
         of an Eligible Employee's Performance Units (including any related
         Dividend Equivalent Units) may be deferred, at the Eligible Employee's
         election, upon such terms and conditions as are specified in such
         instrument.

                                       15
<PAGE>

         (i) Termination of Employment. Upon an Eligible Employee's Termination
of Employment for any reason prior to the end of the Performance Period
established for any Award of Performance Shares or Performance Units made to the
Eligible Employee hereunder, such Award shall be cancelled as of the date of
such Termination of Employment, the Eligible Employee's right to receive payment
with respect to any Performance Shares or Performance Units included in such
Award and any Dividend Equivalent Units that were credited with respect to such
Performance Units, shall be forfeited as of such date, and no payment of any
kind shall be made with respect to such Award, except as otherwise provided in
the instrument evidencing the grant of such Award.

          If the Committee so determines in its discretion, the instrument
evidencing any Award of Performance Shares or Performance Units may provide that
if the Eligible Employee's Termination of Employment prior to the end of the
Performance Period established for such Award occurs as a result of the Eligible
Employee's death, Disability, Retirement, or for any other reason other than
discharge by the Corporation or any of its Affiliated Companies for "cause" as
defined in such instrument, payment shall be made at the end of the Performance
Period, in accordance with the provisions of Section 7(h), with respect to all
or a Pro Rata Portion of the number of Shares and/or the amount of cash that
otherwise would have been payable to the Eligible Employee, as determined in
accordance with the provisions of Sections 7(f) and (g), if the Eligible
Employee's Termination of Employment had not occurred prior to the end of such
Performance Period. In such case, only the Eligible Employee's right to receive
payment with respect to any remaining portion of the Performance Shares or
Performance Units (and related Dividend Equivalent Units) included in such Award
shall be cancelled and forfeited.

8. AWARDS TO ELIGIBLE DIRECTORS

         Subject to the limitations set forth in Section 4 and to the other
terms and conditions of the Plan, Annual Award Units shall be granted to
Eligible Directors in accordance with the provisions set forth below:

         (a) Annual Grants. On each Annual Award Grant Date, each member of the
Board of Directors who is an Eligible Director on such date shall automatically
be granted 1,000 Annual Award Units. Each person who is elected a director of
the Corporation by shareholders at an annual meeting of shareholders for the
first time (i.e., disregarding any previous election of such person by the Board
of Directors) and thereby becomes an Eligible Director shall automatically be
granted 1,000Annual Award Units on the date of such annual meeting of
shareholders.

                                       16
<PAGE>

         (b) Accounts and Dividend Equivalent Units. No Shares shall be issued
at the time any Annual Award Units are granted hereunder. Annual Award Units
granted to an Eligible Director hereunder shall be credited to a bookkeeping
account maintained by the Corporation for the Eligible Director. As of each
Dividend Payment Date occurring prior to the date on which payment with respect
to an Eligible Director's Annual Award Units is made pursuant to (c) below,
Dividend Equivalent Units shall be credited to the Eligible Director's account
with respect to all Annual Award Units (and all Dividend Equivalent Units
credited to such account on all previous Dividend Payment Dates) standing to the
Eligible Director's credit in such account immediately prior to such Dividend
Payment Date. The number of Dividend Equivalent Units to be so credited shall be
determined in the same manner as Dividend Equivalent Units are credited with
respect to Restricted Units during the applicable Restricted Period, as set
forth in Section 6(c) above.

         (c) Payment with respect to Annual Award Units. Upon an Eligible
Director's Termination of Board Membership for any reason other than removal for
cause in accordance with law, the Eligible Director (or if such Termination has
occurred by reason of death, his or her Beneficiary) shall be entitled to
receive payment with respect to all Annual Award Units and related Dividend
Equivalent Units then standing to his or her credit in the account maintained
for the Eligible Director pursuant to (b) above. Payment shall be made (i) by
the issuance and delivery to the Eligible Director, or to his or her
Beneficiary, of a stock certificate for a number of Shares equal to the number
of whole Annual Award Units and related Dividend Equivalent Units standing to
the Eligible Director's credit immediately prior to such Termination of Board
Membership, and (ii) by payment in cash for any fractional Annual Award Unit
standing to the Eligible Director's credit at such time. Payment shall be made
as soon as practicable after the date on which the Eligible Director's
Termination of Board Membership occurs.

         (d) Forfeiture of Annual Award Units. Upon an Eligible Director's
Termination of Board Membership as a result of removal for cause in accordance
with law, all Annual Award Units and related Dividend Equivalent Units standing
to his or her credit immediately prior to such Termination of Board Membership
shall be cancelled as of the date of such Termination of Board Membership, the
Eligible Director's right to receive payment with respect to such Annual Award
Units and Dividend Equivalent Units shall be forfeited as of such date, and no
payment of any kind shall be made with respect to such Annual Award Units and
Dividend Equivalent Units.

9. TRANSFERABILITY OF AWARDS

         Any Option granted to an Eligible Employee under the Plan shall be
nontransferable and may be exercised during the Eligible Employee's lifetime
only by the Eligible Employee. A Participant's right to receive payment of
Shares or cash with respect to any other Award granted to the Participant under
the Plan shall not be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment, or garnishment by
creditors of the Participant.

         Notwithstanding the foregoing, if the instrument evidencing the grant
of any Award other than an Incentive Stock Option so provides, the recipient of
such Award may transfer his or her rights with respect to such Award, or any
portion thereof, to any "family member" of the recipient, as that term is
defined in the General Instructions to Form S-8 promulgated by the Securities
and Exchange Commission under the Securities Act of 1933, as amended, subject to
such limitations, terms and conditions as may be specified in such instrument.

                                       17
<PAGE>

10. LISTING AND QUALIFICATION OF SHARES

         The Corporation, in its discretion, may postpone the issuance,
delivery, or distribution of Shares with respect to any Award until completion
of such stock exchange listing or other qualification of such Shares under any
state or federal law, rule or regulation as the Corporation may consider
appropriate, and may require any Participant to make such representations and
furnish such information as it may consider appropriate in connection with the
issuance or delivery of the Shares in compliance with applicable laws, rules and
regulations.

11. TAXES

         Notwithstanding any other provision of the Plan, the Corporation or any
of its Affiliated Companies may make such provisions and take such steps as it
may deem necessary or appropriate for the withholding of all federal, state and
local taxes required by law to be withheld with respect to the exercise of any
Option or with respect any payments to be made in respect of any other form of
Award granted to a Participant under the Plan, including but not limited to (i)
deducting the amount of taxes so required to be withheld from any other
compensation or other amounts then or thereafter payable to the Participant,
and/or (ii) withholding delivery of any Shares or payment of any cash amount
otherwise required to be delivered or paid to the Participant with respect to
the exercise of such Option, or with respect to such other form of Award, until
the amount of taxes so required to be withheld has been paid in full to the
Corporation or any of its Affiliated Companies. With the approval of the
Compensation Committee and subject to such terms and conditions as it may
require, such amount may be paid in Shares previously owned by the Participant,
or by the surrender of a portion of the Shares that otherwise would be delivered
or paid to such Participant with respect to his or her Award, or by a
combination of payments in cash and Shares.

12. CHANGE IN CONTROL

         Notwithstanding any other provision in the Plan to the contrary (but
subject to the "provided, however" clause contained in the definition of "Change
in Control" in Section 2), upon the occurrence of a Change in Control, the
following provisions shall apply.

         (a) Each Option outstanding under the Plan on the day preceding the
date on which the Change in Control occurs shall become immediately and fully
exercisable on the date of the Change in Control, and shall remain fully
exercisable, irrespective of the Participant's subsequent Termination of
Employment for any reason, until the date on which the Option otherwise would
expire by the passage of time in accordance with its terms.

         (b) If a Change in Control would be treated as having occurred but for
the adoption by the Board of Directors of a resolution described in the
"provided, however" clause in the definition of "Change in Control" in Section
2, and if such resolution so provides and has not been rescinded prior to the
Change in Control, the Board of Directors shall have the right in its discretion
(i) to direct that all Options then outstanding and held by Participants shall
be cancelled as of a date to be fixed by the Board, provided, however, that not
less than 30 days written notice of the date so fixed shall be given to each
such Participant, and each such Participant shall have the right during such
period (irrespective of the Participant's Termination of Employment during such
period) to exercise his or her Option as to all or any part of the Shares
covered thereby, including any Shares as to which the Option has not yet become
exercisable, or (ii) to authorize the substitution for each outstanding Option
of a new Option, provided that (A) each such new Option has a value at the time
it is granted that is at least equal to the value of the outstanding Option in
substitution for which it is granted, and contains terms and conditions no less
favorable to the Participant than those contained in his or her outstanding
Option, and (B) in the case of any new Incentive Stock Option that is granted in
substitution of an outstanding Incentive Stock Option, the requirements of
section 424(a) of the Code are met with regard to such substitution.

                                       18
<PAGE>

         (c) The Restricted Periods applicable to all Restricted Shares and
Restricted Units (including any related Dividend Equivalent Units) granted to a
Participant hereunder that are still outstanding on the day immediately
preceding the date on which such Change in Control occurs shall expire on such
date; all Restrictions applicable to such outstanding Restricted Shares,
Restricted Units and related Dividend Equivalent Units shall lapse on such date;
and the Participant's rights to receive payment with respect to all such
outstanding Shares, Restricted Units and related Dividend Equivalent Units shall
become nonforfeitable as of such date. Payment with respect to such outstanding
Restricted Shares, Restricted Units and related Dividend Equivalent Units shall
be made at the time or times, and in the manner, specified in the instrument or
instruments evidencing the grant thereof, except as the Committee may otherwise
determine in its discretion at any time prior to the Change in Control .

         (d) The Performance Periods applicable to all Performance Shares and
Performance Units (including any related Dividend Equivalent Units) granted to a
Participant hereunder that are still outstanding on the day immediately
preceding the date on which such Change in Control occurs shall end on such
date; all Performance Goals that were established in connection with the Award
of such Performance Shares or Performance Units shall be deemed to have been
attained as of such date to the fullest extent necessary in order for the
Participant to be entitled to receive payment with respect to the maximum number
of such Performance Shares, or with respect to the maximum percentage of such
Performance Units (and any related Dividend Equivalent Units), as to which
payment could be made under the terms of the applicable Awards, as specified in
the instrument or instruments evidencing the grant thereof; and the Participant
shall acquire on such date a nonforfeitable right to receive payment with
respect to such maximum number of Performance Shares (including any cash payment
with respect to dividends that would have been paid thereon, if the instrument
evidencing the grant of such shares provides for such cash payment), or with
respect to such maximum percentage of Performance Units (and any related
Dividend Equivalent Units), determined without any adjustment under Section
7(g)(i) or (ii); provided, however, that any Participant who, pursuant to
Section 7(i), would have been entitled to receive payment with respect to only a
Pro Rata Portion of the number of Shares or the amount of cash otherwise payable
with respect to such Performance Shares or Performance Units if no Change in
Control had occurred, shall be entitled to receive only a Pro Rata Portion of
the payment that otherwise would be made with respect to such Performance Shares
or Performance Units under the provisions of this Section 7(d). Payment with
respect to such Performance Shares, Performance Units and related Dividend
Equivalent Units shall be made at the time or times, and in the manner,
specified in the instrument or instruments evidencing the grant thereof, except
as the Committee may otherwise determine in its discretion at any time prior to
the Change in Control.

                                       19
<PAGE>

         (e) Unless the Board of Directors otherwise determines prior to the
Change in Control, all Annual Award Units and Related Dividend Equivalent Units
standing to an Eligible Director's credit on the day immediately preceding the
date on which such Change in Control occurs shall become immediately payable
upon such date.

         (f) If any payment that is required to be made hereunder with respect
to any outstanding Award as a result of the occurrence of a Change in Control is
to be made by the issuance and delivery of Shares to the Participant, the
Corporation shall take whatever steps are necessary to cause such Shares to be
issued to the Participant, and to be treated as outstanding, at the effective
time of the transaction constituting the Change in Control.

13. CERTAIN ADJUSTMENTS TO SHARES

         In the event of any change in the shares of Common Stock by reason of
any stock dividend, stock split, recapitalization, reorganization, merger,
consolidation, split-up, combination or exchange of shares, or any rights
offering to purchase shares of Common Stock at a price substantially below fair
market value, or any similar change affecting the shares of Common Stock, (i)
the maximum aggregate number and kind of shares specified herein as available
for the grant of Awards, or for the grant of any particular form of Award, under
the Plan, (ii) the number and kind of shares that may be issued and delivered to
Participants upon the exercise of any Option, or in payment with respect to any
Award of Restricted Shares or Performance Shares, that is outstanding at the
time of such change, (iii) the number and kind of shares represented by any
Restricted Units, Performance Units, Annual Award Units or Dividend Equivalent
Units that are outstanding at the time of such change, and (iv) the exercise
price per share of any Options granted hereunder that are outstanding at the
time of such change, shall be appropriately adjusted consistent with such change
in such manner as the Compensation Committee, in its sole discretion, may deem
equitable to prevent substantial dilution or enlargement of the rights granted
to, or available for, the Participants hereunder.

         In the case of any outstanding Incentive Stock Option, any such change
shall be made in the manner that satisfies the requirements that must be met
under section 424 of the Code in order for such change not to be treated as a
"modification" of such Option as defined under section 424 of the Code.

         The Committee shall give notice to each Participant of any adjustment
made pursuant to this Section and, upon such notice, such adjustment shall be
effective and binding for all purposes.

14. ADMINISTRATION

         The Plan shall be administered in accordance with the provisions set
forth below.

         (a) In General. Except as otherwise specifically provided in the Plan,
the Plan shall be administered by (i) the Board of Directors, with respect to
all matters pertaining to Awards that may be granted or that have been granted
hereunder to Eligible Directors; (ii) by the Compensation Committee, with
respect to all matters pertaining to Awards that may be made or that have been
made to Eligible Employees, except as otherwise provided in (iii); and (iii) by
the CEO, with respect to those specific matters pertaining to Awards to Eligible
Employees who are not Elected Officers that are within the scope of the
authority granted to the CEO under (d) below or delegated by the Compensation
Committee to the CEO pursuant to (e) below.

                                       20
<PAGE>

         (b) The Committee's Authority and Powers. In addition to the
responsibilities and powers assigned to the Committee elsewhere in the Plan, the
Committee shall have the authority, in its discretion, to establish from time to
time guidelines or regulations for the administration of the Plan, to interpret
the Plan, and to make all determinations it considers necessary or advisable for
the administration of the Plan. All decisions, actions or interpretations of the
Committee under the Plan shall be final, conclusive and binding upon all
parties. Notwithstanding the foregoing, any determination made by the Committee
after the occurrence of a Change in Control that denies in whole or in part any
claim made by any individual for benefits under the Plan shall be subject to
judicial review under a "de novo", rather than a deferential, standard.

         (c) Modification of Awards. To the extent not inconsistent with the
terms of the Plan or any provision of applicable law, the Committee in its
discretion may waive or modify any of the terms and conditions set forth in the
instrument evidencing the grant of any Award made to a Participant hereunder,
including without limitation, (i) in the case of any Option, to permit such
Option to become exercisable as to any portion of the Shares subject to the
Option at any time earlier than the time specified in such instrument, to extend
the term of such Option beyond the date specified in such instrument as the
expiration date for the term of the Option (but not beyond the day immediately
preceding the tenth anniversary of the Date of Grant of the Option), or to
permit such Option, to the extent it has become or becomes exercisable, to
remain exercisable for any period of time (including any period after the
Eligible Employee's Termination of Employment) beyond the period of time
specified in such instrument but not beyond the date of expiration of the
Option, including any extension thereof permitted under this clause (i); and
(ii) in the case of any Award of Restricted Shares or Restricted Units, to cause
the Restricted Period applicable to such Restricted Shares or restricted Units
to expire, and the Restrictions applicable to such Restricted Shares or
Restricted Units to lapse, as of any date earlier than the date provided for in
such instrument;

         Notwithstanding the foregoing, no waiver or amendment may be authorized
or directed by the Committee pursuant to this Section 14 (c) without the consent
of the Participant if (A) it would adversely affect, to any material extent, any
of the rights or obligations of the Participant with respect to such Award, or
(B) in the case of any Option granted hereunder that was intended to constitute
an Incentive Stock Option, if such waiver or amendment would cause such Option
to fail to be treated as an "incentive stock option" within the meaning of
section 422 of the Code. In addition, no such waiver or amendment may be
authorized or directed by the Committee pursuant to this Section 14(c) with
respect to any Option, Performance Shares or Performance Units awarded to any
Covered Executive, if such waiver or amendment would cause the delivery of
Shares or the payment of any cash amounts that are made with respect to such
Award to fail to be deductible for federal income tax purposes pursuant to the
applicable provisions of section 162(m) of the Code and the regulations issued
thereunder.

                                       21
<PAGE>

         (d) The CEO's Authority and Powers. With respect to such number of
Shares as the Compensation Committee may in its discretion determine to be
available from time to time for the grant of Awards in any form to Eligible
Employees who are not Elected Officers, the CEO shall have the authority (i) to
determine which of such Eligible Employees shall receive Awards in each form
specified by the Compensation Committee; (ii) to determine the time or times
when Awards in such form shall be made to such Eligible Employees; (iii) to
determine the number of Shares that will be subject to any Option, or the number
of Restricted Shares, Restricted Units, Performance Shares or Performance Units,
to be included in any Award to any such Eligible Employee; (iv) with respect to
any Award of Performance Shares or Performance Units made to any such Eligible
Employees, to make all determinations which the Committee is authorized to make
with respect to such Award under the provisions of Section 7(a)(i),(ii) and
(iii), Section 7(e) and Section 7(g)(i); and (v) with respect to any Awards made
to any such Eligible Employees pursuant to the CEO's exercise of the authority
granted to him under this Section 14(d), to exercise all of the authority and
powers granted to the Committee under (b) above and under the second paragraph
of (e) below, but only to the extent that any such exercise by the CEO is not
inconsistent with any action taken by the Compensation Committee, or with any
determination, decision or interpretation of the Plan made by the Compensation
Committee, under (b) above or any delegation made by the Compensation Committee
under the second paragraph of (e) below.

         Except for the matters specified in the foregoing paragraph and any
additional matters pertaining to Awards to Eligible Employees who are not
Elected Officers with respect to which authority has been granted to the CEO
pursuant to (e) below, the CEO shall not have any of the authority or powers
otherwise granted to the Committee under any other provisions of the Plan.

         The Compensation Committee in its discretion may at any time, by
resolution duly adopted by it and without any amendment of the Plan, revoke or
modify in any manner or respect the authority and powers granted to the CEO
under this Section 14(d)

         (e) Delegation. In addition to the authority and powers granted to the
CEO under (d) above, the Compensation Committee in its discretion may, by
resolution duly adopted by it, delegate to the CEO authority with respect to
such other matters pertaining to Awards to Eligible Employees who are not
Elected Officers as the Compensation Committee may specify in such resolution.
Any authority so delegated to the CEO may be revoked or modified by the
Compensation Committee, in whole or in part, at any time.

         The Committee may delegate any ministerial or nondiscretionary function
pertaining to the administration of the Plan to any one or more officers or
other employees of the Corporation or any of its Affiliated Companies.

         (f) Non- U.S. Participants. In order to comply with any applicable
provisions of local law and regulations in any foreign country in which the
Corporation or any of its Affiliated Companies operates, the Committee may in
its sole discretion (i) modify the terms and conditions of Awards granted under
the Plan to Eligible Employees located in such foreign country, (ii) establish
subplans with such modifications to the terms of the Plan as it determines to be
necessary or appropriate under the circumstances applicable in such foreign
country, or (iii) take any other action that it deems necessary or appropriate
in order to comply with, or obtain any exemptions from the applicability of, the
local laws and regulations in such foreign country.

                                       22
<PAGE>

15. DESIGNATION AND CHANGE OF BENEFICIARY

         Each Participant shall file with the Committee, or with such employee
of the Corporation who has been designated by the Committee to receive same, a
written designation of one or more persons as the Beneficiary who shall be
entitled to receive any Shares or cash amount payable under the Plan upon or
after the Participant's death. A Participant may, from time to time, revoke or
change his or her Beneficiary designation without the consent of any previously
designated Beneficiary by filing a new designation with the Committee or its
designee. The last such designation received by the Committee or its designee
shall be controlling; provided, however, that no designation, or change or
revocation thereof, shall be effective unless received by the Committee prior to
the Participant's death, and in no event shall it be effective as of a date
prior to such receipt. If at the date of a Participant's death, there is no
designation of a Beneficiary in effect for the Participant pursuant to the
provisions of this Section 15, or if no Beneficiary designated by the
Participant in accordance with the provisions hereof survives to receive any
Shares or cash amount payable under the Plan with respect to the Participant
after his or death, the Participant's estate shall be treated as the
Participant's Beneficiary for purposes of the Plan.

16. AMENDMENT OR TERMINATION

         The Board of Directors may, with prospective or retroactive effect,
amend, suspend or terminate the Plan or any portion thereof at any time;
provided, however, that (a) no amendment, suspension or termination of the Plan
shall adversely affect the rights of any Participant with respect to any Awards
previously granted to the Participant without his or her written consent, and
(b) no amendment which constitutes a "material revision" of the Plan, as the
term material revision is defined in the applicable rules of the New York Stock
Exchange, shall be effective unless approved by the shareholders of the
Corporation in the manner required by such rules and by applicable law.

17. GENERAL PROVISIONS

         (a) Rights of Participants. A Participant's rights and interests under
the Plan shall be subject to the following provisions:

                  (i) A Participant shall have the status of a general unsecured
         creditor of the Corporation with respect to his or her right to receive
         any payment under the Plan. The Plan shall constitute a mere promise by
         the Corporation or the applicable Affiliated Company to make payments
         in the future of the benefits provided for herein. It is intended that
         the arrangements reflected in the Plan be treated as unfunded for tax
         purposes, as well as for purposes of any applicable provisions of Title
         I of ERISA.

                  (ii) Neither the Plan nor any action taken hereunder shall be
         construed as giving any Participant any right to be retained in the
         employment of the Corporation or any of its Affiliated Companies, or
         shall interfere with the right of the Corporation or any of its
         Affiliated Companies with whom the Participant is employed to terminate
         the Participant's employment at any time subject, however, to the
         Participant's rights under any employment contract in effect between
         the Participant and the Corporation or any of its Affiliated Companies.

                                       23
<PAGE>

                  (iii) No Award made to a Participant under the Plan, and no
         payment made with respect to such Award, shall be considered as
         compensation under any employee benefit plan of the Corporation or any
         of its Affiliated Companies, except as specifically provided in such
         plan or as otherwise determined by the Board of Directors.

         (b) Successors. The obligations of the Corporation under the Plan shall
be binding upon any successor corporation or organization resulting from the
merger, consolidation or other reorganization of the Corporation, or upon any
successor corporation or organization succeeding to substantially all of the
assets and business of the Corporation. The Corporation agrees that it will make
appropriate provision for the preservation of Participants' rights under the
Plan in any agreement or plan which it may enter into or adopt to effect any
such merger, consolidation, reorganization or transfer of assets.

         The provisions of the Plan and the terms and conditions contained in
the instrument evidencing any Award made to a Participant hereunder shall be
binding upon the Participant, his or her successors and permitted transferees.

         (c) Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the State of New York.

18. EFFECTIVE DATE

         The Plan was adopted on September 17, 2004 by the Board of Directors,
subject, however, to approval by the shareholders of the Corporation, in
accordance with the requirements of the New York Stock Exchange and applicable
law, at the 2004 annual meeting of the Corporation's shareholders including any
adjournment thereof. The effective date of the Plan shall be the date of such
approval by the Corporation's shareholders, and no Awards may be granted
hereunder prior to such date.

                                       24

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