Document:

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                                                                  Exhibit 10.1

                          FIDELITY SOUTHERN CORPORATION

                              EQUITY INCENTIVE PLAN

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FIDELITY SOUTHERN CORPORATION                              EQUITY INCENTIVE PLAN

                                TABLE OF CONTENTS

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Section                                                                     Page
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ARTICLE I DEFINITIONS....................................................     1

   1.01  Affiliate.......................................................     1
   1.02  Agreement.......................................................     1
   1.03  Award...........................................................     1
   1.04  Board...........................................................     1
   1.05  Cause...........................................................     1
   1.06  Change in Control...............................................     2
   1.07  Code............................................................     3
   1.08  Committee.......................................................     3
   1.09  Common Stock....................................................     3
   1.10  Company.........................................................     3
   1.11  Control Change Date.............................................     3
   1.12  Corresponding SAR...............................................     3
   1.13  Exchange Act....................................................     4
   1.14  Fair Market Value...............................................     4
   1.15  Fidelity Bank...................................................     4
   1.16  Incentive Award.................................................     4
   1.17  Incentive Stock Option..........................................     4
   1.18  Initial Value...................................................     4
   1.19  Named Executive Officer.........................................     4
   1.20  Nonqualified Stock Option.......................................     5
   1.21  Option..........................................................     5
   1.22  Participant.....................................................     5
   1.23  Plan............................................................     5
   1.24  Restricted Stock Award..........................................     5
   1.25  Restricted Stock Units..........................................     5
   1.26  SAR.............................................................     5
   1.27  Ten Percent Shareholder.........................................     6

ARTICLE II PURPOSES......................................................     7

ARTICLE III ADMINISTRATION...............................................     8

ARTICLE IV ELIGIBILITY...................................................    10

ARTICLE V COMMON STOCK SUBJECT TO PLAN...................................    11

   5.01  Common Stock Issued.............................................    11
   5.02  Aggregate Limit.................................................    11
   5.03  Individual Limit................................................    11
   5.04  Reallocation of Shares..........................................    11

ARTICLE VI OPTIONS.......................................................    13

   6.01  Grant...........................................................    13
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   6.02  Option Price....................................................    13
   6.03  Maximum Option Period...........................................    13
   6.04  Nontransferability..............................................    13
   6.05  Transferable Options............................................    13
   6.06  Exercise........................................................    14
   6.07  Payment.........................................................    14
   6.08  Employee Status.................................................    15
   6.09  Change in Control...............................................    15
   6.10  Stockholder Rights..............................................    16
   6.11  Disposition of Shares...........................................    16
   6.12  No Liability of Company.........................................    16

ARTICLE VII SARS.........................................................    17

   7.01  Grant...........................................................    17
   7.02  Maximum SAR Period..............................................    17
   7.03  Nontransferability..............................................    17
   7.04  Transferable SARs...............................................    17
   7.05  Exercise........................................................    18
   7.06  Settlement......................................................    18
   7.07  Employee Status.................................................    18
   7.08  Change in Control...............................................    18
   7.09  Stockholder Rights..............................................    19

ARTICLE VIII RESTRICTED STOCK AWARDS.....................................    20

   8.01  Award...........................................................    20
   8.02  Vesting.........................................................    20
   8.03  Maximum Restriction Period......................................    20
   8.04  Employee Status.................................................    20
   8.05  Change in Control...............................................    21
   8.06  Stockholder Rights..............................................    21

ARTICLE IX RESTRICTED STOCK UNITS........................................    23

   9.01  Grant...........................................................    23
   9.02  Earning the Award...............................................    23
   9.03  Maximum Restricted Stock Unit Award Period......................    23
   9.04  Payment.........................................................    23
   9.05  Nontransferability..............................................    23
   9.06  Transferable Restricted Stock Units.............................    24
   9.07  Employee Status.................................................    24
   9.08  Change in Control...............................................    24
   9.09  Stockholder Rights..............................................    25

ARTICLE X INCENTIVE AWARDS...............................................    26

   10.01 Grant...........................................................    26
   10.02 Earning the Award...............................................    26
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   10.03 Maximum Incentive Award Period..................................    26
   10.04 Payment.........................................................    26
   10.05 Nontransferability..............................................    26
   10.06 Transferable Incentive Awards...................................    27
   10.07 Employee Status.................................................    27
   10.08 Change in Control...............................................    27
   10.09 Stockholder Rights..............................................    28

ARTICLE XI QUALIFIED PERFORMANCE-BASED COMPENSATION......................    29

   11.01 Performance Conditions..........................................    29
   11.02 Establishing the Amount of the Award............................    29
   11.03 Earning the Award...............................................    29

ARTICLE XII ADJUSTMENT UPON CHANGE IN COMMON STOCK.......................    31

ARTICLE XIII COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES.......    32

   13.01 Compliance......................................................    32
   13.02 Postponement of Exercise or Payment.............................    32
   13.03 Forfeiture of Payment...........................................    33

ARTICLE XIV LIMITATION ON BENEFITS.......................................    34

ARTICLE XV GENERAL PROVISIONS............................................    35

   15.01 Effect on Employment and Service................................    35
   15.02 Unfunded Plan...................................................    35
   15.03 Rules of Construction...........................................    35
   15.04 Tax Withholding and Reporting...................................    35
   15.05 Reservation of Shares...........................................    36
   15.06 Governing Law...................................................    36
   15.07 Other Actions...................................................    36
   15.08 Repurchase of Common Stock......................................    36
   15.09 Other Conditions................................................    36
   15.10 Forfeiture Provisions...........................................    37

ARTICLE XVI AMENDMENT....................................................    38

ARTICLE XVII DURATION OF PLAN............................................    39

ARTICLE XVIII EFFECTIVE DATE OF PLAN.....................................    40
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                                    ARTICLE I
                                   DEFINITIONS

1.01 AFFILIATE

     Affiliate, as it relates to any limitations or requirements with respect to
Incentive Stock Options, means any "subsidiary" or "parent" corporation (as such
terms are defined in Code Section 424) of the Company. Affiliate otherwise means
any entity that is part of a controlled group of corporations or is under common
control with the Company within the meaning of Code Sections 1563(a), 414(b) or
414(c), except that, in making this determination, Fifty Percent (50%) shall be
substituted for Eighty Percent (80%) under such Code Sections and the related
regulations.

1.02 AGREEMENT

     Agreement means a written agreement (including any amendment or supplement
thereto) between the Company and a Participant specifying the terms and
conditions of an Award granted to such Participant.

1.03 AWARD

     Award means an Incentive Award, Option, Restricted Stock Award, Restricted
Stock Unit or SAR granted under this Plan.

1.04 BOARD

     Board means the Board of Directors of the Company.

1.05 CAUSE

     Cause has the same definition as under any employment or service agreement
between the Company or any Affiliate and the Participant or, if no such
employment or service agreement exists or if such employment or service
agreement does not contain any such definition, Cause shall exist with respect
to a Participant if such Participant has (i) committed an act of fraud,
embezzlement, misappropriation or breach of fiduciary duty against the Company
or any Affiliate or a felony involving the business, assets, customers or
clients of the Company or any Affiliate or has been convicted by a court of
competent jurisdiction or has pled guilty or nolo contendere to any other
felony; (ii) committed a material breach of any written confidentiality,
non-compete, non-solicitation or business opportunity covenant contained in any
agreement entered into by such Participant with the Company or any Affiliate;
(iii) substantially failed to perform such Participant's duties to the Company
or any Affiliate (other than any such failure resulting from the Participant's
disability), including by committing a material breach of any written covenant
contained in any agreement entered into by such Participant and the Company or
any Affiliate (other than a confidentiality, non-compete, non-solicitation or
business opportunity covenant) after written notice and an opportunity to cure
(not to exceed 30 days) (it

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being understood that conduct pursuant to a Participant's exercise of good faith
business judgment should not constitute "Cause" for purposes of this clause
(iii)) or (iv) engaged in intentional misconduct or gross negligence materially
injurious to the Company or any Affiliate. For purposes of the Plan, other than
where the definition of Cause is determined under any employment or service
agreement between the Company or any Affiliate and the Participant, in which
case such employment or service agreement shall control, in no event shall any
termination of employment or service be deemed for Cause unless the Company's
Chief Executive Officer concludes that the situation warrants a determination
that the Participant's employment or service terminated for Cause; in the case
of the Chief Executive Officer, any determination that the Chief Executive
Officer's employment terminated for Cause shall be made by the Board acting
without the Chief Executive Officer.

1.06 CHANGE IN CONTROL

     "Change in Control" means any of the following described in clauses (a)
through (e) below:

     (a) Any "person" (as such term is used in Sections 13(d)(3) or 14(d)(2) of
the Exchange Act), other than an Affiliate or an employee benefit plan
maintained by the Company or an Affiliate, acquires "beneficial ownership" (as
such term is defined in Rule 13d-3 promulgated under the Exchange Act), directly
or indirectly, of equity securities of the Company representing more than fifty
percent (50%) of the combined voting power represented by the outstanding voting
securities of the Company, whether through sale, merger, reorganization or other
transaction.

     (b) Individuals who constitute the membership of the Board or the Board of
Directors of Fidelity Bank on the effective date of this Plan (each being
hereinafter referred to as the "Incumbent Board') cease at any time thereafter,
to constitute at least a majority of the Board or the Board of Directors of
Fidelity Bank, provided that any director whose nomination was approved by a
majority of the Incumbent Board will be considered a member of the Incumbent
Board, excluding any such individual not otherwise a member of the Incumbent
Board whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the directors of the
Company or Fidelity Bank.

     (c) A complete liquidation or dissolution of the Company or Fidelity Bank,
as approved by the stockholders of the Company or Fidelity Bank, as applicable,
other than a liquidation or dissolution of the Company or Fidelity Bank that
would result in voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of any surviving entity) more than fifty
percent (50%) of the combined voting power of the then outstanding securities of
the Company or, directly or indirectly through the purchasing entity, Fidelity
Bank, as applicable, or such surviving entity.

     (d) The acquisition by any person, other than the Company or an Affiliate
or an employee benefit plan maintained by the Company, Fidelity Bank or an
Affiliate, of beneficial

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ownership, directly or indirectly, of equity securities of Fidelity Bank
representing more than fifty percent (50%) of the combined voting power
represented by Fidelity Bank's then outstanding voting securities, whether
through sale, merger, reorganization or other transaction.

     (e) A sale of all or substantially all the assets of the Company or
Fidelity Bank, as approved by the stockholders of the Company or Fidelity Bank,
as applicable, other than such a sale that would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the purchasing entity) more than fifty percent (50%) of the combined voting
power of the then outstanding securities of the Company or, directly or
indirectly through the purchasing entity, Fidelity Bank, as applicable, or such
purchasing entity.

1.07 CODE

     Code means the Internal Revenue Code of 1986 and any amendments thereto.

1.08 COMMITTEE

     Committee means the Compensation Committee of the Board, or the Board
itself if no Compensation Committee exists. If such Compensation Committee
exists, if and to the extent deemed necessary by the Board, such Compensation
Committee shall consist of two or more directors, all of whom are "non-employee
directors" within the meaning of Rule 16b-3 under the Exchange Act and "outside
directors" within the meaning of Code Section 162(m).

1.09 COMMON STOCK

     Common Stock means the common stock, no par value, of the Company.

1.10 COMPANY

     Company means Fidelity Southern Corporation, a Georgia corporation, and any
successor thereto.

1.11 CONTROL CHANGE DATE

     Control Change Date means the date on which a Change in Control occurs. If
a Change in Control occurs on account of a series of transactions, the "Control
Change Date" is the date of the last of such transactions.

1.12 CORRESPONDING SAR

     Corresponding SAR means a SAR that is granted in relation to a particular
Option and that can be exercised only upon the surrender to the Company,
unexercised, of that portion of the Option to which the SAR relates.

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1.13 EXCHANGE ACT

     Exchange Act means the Securities Exchange Act of 1934, as amended.

1.14 FAIR MARKET VALUE

     Fair Market Value of a share of Common Stock means, on any given date, the
fair market value of a share of Common Stock as the Committee in its discretion
shall determine; provided, however, that the Committee shall determine Fair
Market Value without regard to any restriction other than a restriction which,
by its terms, will never lapse and, if the shares of Common Stock are traded on
any national stock exchange or quotation system, the Fair Market Value of a
share of Common Stock shall be the closing price of a share of Common Stock as
reported on such stock exchange or quotation system on such date, or if the
shares of Common Stock are not traded on such stock exchange or quotation system
on such date, then on the next preceding day that the shares of Common Stock
were traded on such stock exchange or quotation system, all as reported by such
source as the Committee shall select. The Fair Market Value that the Committee
determines shall be final, binding and conclusive on the Company, any Affiliate
and each Participant.

1.15 FIDELITY BANK

     Fidelity Bank means Fidelity Bank, a wholly-owned subsidiary of the
Company, and any successor thereto.

1.16 INCENTIVE AWARD

     Incentive Award means an award stated with reference to a specified dollar
amount or number of shares of Common Stock which, subject to such terms and
conditions as may be prescribed by the Committee, entitles the Participant to
receive shares of Common Stock, cash or a combination thereof from the Company
or an Affiliate.

1.17 INCENTIVE STOCK OPTION

     Incentive Stock Option means an incentive stock option within the meaning
of Code Section 422.

1.18 INITIAL VALUE

     Initial Value means, with respect to a Corresponding SAR, the option price
per share of the related Option and, with respect to a SAR granted independently
of an Option, the Fair Market Value of one share of Common Stock on the date of
grant.

1.19 NAMED EXECUTIVE OFFICER

     Named Executive Officer means a Participant who, as of the last day of a
taxable year, is the Chief Executive Officer of the Company (or is acting in
such capacity) or one of the four

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highest compensated officers of the Company (other than the Chief Executive
Officer) or is otherwise one of the group of "covered employees," as defined in
the regulations promulgated under Code Section 162(m).

1.20 NONQUALIFIED STOCK OPTION

     Nonqualified Stock Option means an Option that is not an incentive stock
option within the meaning of Code Section 422.

1.21 OPTION

     Option means a stock option that entitles the holder to purchase from the
Company a stated number of shares of Common Stock at the price set forth in an
Agreement.

1.22 PARTICIPANT

     Participant means an employee of the Company or an Affiliate or a member of
the Board or the Board of Directors of an Affiliate (whether or not an
employee), who satisfies the requirements of Article IV and is selected by the
Committee to receive an Award.

1.23 PLAN

     Plan means this Fidelity Southern Corporation Equity Incentive Plan, in its
current form and as hereafter amended.

1.24 RESTRICTED STOCK AWARD

     Restricted Stock Award means shares of Common Stock granted to a
Participant under Article VIII.

1.25 RESTRICTED STOCK UNITS

     Restricted Stock Units means an award, in the amount determined by the
Committee, stated with reference to a specified number of shares of Common
Stock, that in accordance with the terms of an Agreement entitles the holder to
receive shares of Common Stock.

1.26 SAR

     SAR means a stock appreciation right that in accordance with the terms of
an Agreement entitles the holder to receive cash or a number of shares of Common
Stock based on the increase in the Fair Market Value of the shares underlying
the stock appreciation right during a stated period specified by the Committee.
References to "SARs" include both Corresponding SARs and SARs granted
independently of Options, unless the context requires otherwise.

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1.27 TEN PERCENT SHAREHOLDER

     Ten Percent Shareholder means any individual who (considering the stock
attribution rules described in Code Section 424(d)) owns stock possessing more
than 10 percent of the total combined voting power of all classes of stock of
the Company or any Affiliate.

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                                   ARTICLE II
                                    PURPOSES

     The Plan is intended to assist the Company and its Affiliates in recruiting
and retaining individuals with ability and initiative by enabling such persons
to participate in the future success of the Company and its Affiliates and to
associate their interests with those of the Company and its stockholders. The
Plan is intended to permit the grant of Incentive Stock Options, Nonqualified
Stock Options, SARs, Restricted Stock Awards, Restricted Stock Units and
Incentive Awards in accordance with the Plan and procedures that may be
established by the Committee. No Option that is intended to be an Incentive
Stock Option shall be invalid for failure to qualify as an Incentive Stock
Option. The proceeds received by the Company from the sale of shares of Common
Stock pursuant to this Plan may be used for general corporate purposes.

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                                   ARTICLE III
                                 ADMINISTRATION

     The Plan shall be administered by the Committee. The Committee shall have
authority to grant Awards upon such terms (not inconsistent with the provisions
of this Plan) as the Committee may consider appropriate. Such terms may include
conditions (in addition to those contained in this Plan) on the exercisability
of all or any part of an Option or SAR, the transferability or forfeitability of
a Restricted Stock Award, or the grant or settlement of Restricted Stock Units
or an Incentive Award. Notwithstanding any such conditions, the Committee may,
in its discretion and whether or not in connection with a Change in Control,
accelerate the time at which any Option or SAR may be exercised, or the time at
which a Restricted Stock Award may become transferable or nonforfeitable or the
time at which an Incentive Award or award of Restricted Stock Units may be
earned and settled. In addition, the Committee shall have complete authority to
interpret all provisions of this Plan; to prescribe the form of Agreements; to
adopt, amend, and rescind rules and regulations pertaining to the administration
of the Plan; and to make all other determinations necessary or advisable for the
administration of this Plan. The express grant in the Plan of any specific power
to the Committee shall not be construed as limiting any power or authority of
the Committee. Any decision made, or action taken, by the Committee in
connection with the administration of this Plan shall be final and conclusive.
The members of the Committee shall not be liable for any act done in good faith
with respect to this Plan or any Agreement or Award.

     To the extent applicable law so permits, the Committee, in its discretion,
may delegate to one or more officers of the Company all or part of the
Committee's authority and duties with respect to Awards to be granted to
individuals who are not subject to the reporting and other provisions of Section
16 of the Exchange Act and who are not Named Executive Officers. The Committee
may revoke or amend the terms of a delegation at any time but such action shall
not invalidate any prior actions of the Committee's delegate or delegates that
were consistent with the terms of the Plan and the Committee's prior delegation.
If and to the extent deemed necessary by the Board, (i) all Awards granted to
any individual who is subject to the reporting and other provisions of Section
16 of the Exchange Act shall be made by a Committee comprised solely of two or
more directors, all of whom are "non-employee directors" within the meaning of
Rule 16b-3 under the Exchange Act and (ii) all Awards granted to an individual
who is a Named Executive Officer shall be made by a Committee comprised solely
of two or more directors, all of whom are "outside directors" within the meaning
of Code Section 162(m).

     The Company shall bear all expenses of administering this Plan. The Company
shall indemnify and hold harmless each person who is or shall have been a member
of the Committee acting as administrator of the Plan, or any delegate of such,
against and from any cost, liability, loss or expense that may be imposed upon
or reasonably incurred by such person in connection with or resulting from any
action, claim, suit, or proceeding to which such person may be a party or in
which such person may be involved by reason of any action taken or not taken
under the Plan and against and from any and all amounts paid by such person in
settlement thereof, with the Company's approval, or paid by such person in
satisfaction of any judgment in any such action, suit, or proceeding against
such person, provided he or she shall give the Company an

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opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf. Notwithstanding the
foregoing, the Company shall not indemnify and hold harmless any such person if
(i) applicable law or the Company's Articles of Incorporation or Bylaws prohibit
such indemnification or (ii) such person did not act in good faith and in a
manner that such person believed to be consistent with the Plan or such person's
conduct constituted gross negligence or willful misconduct. The foregoing right
of indemnification shall not be exclusive of any other rights of indemnification
to which such persons may be entitled under the Company's Articles of
Incorporation or Bylaws, as a matter of law or otherwise, or under any other
power that the Company may have to indemnify such person or hold him or her
harmless. The provisions of the foregoing indemnity shall survive indefinitely
the term of this Plan.

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                                   ARTICLE IV
                                   ELIGIBILITY

     Any employee of the Company or an Affiliate (including an entity that
becomes an Affiliate after the adoption of this Plan) and any member of the
Board or the Board of Directors of an Affiliate (including an entity that
becomes an Affiliate after the adoption of this Plan) (whether or not such
person is an employee) is eligible to participate in this Plan, except that only
an employee of the Company or an Affiliate is eligible to receive an Incentive
Stock Option.

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                                    ARTICLE V
                          COMMON STOCK SUBJECT TO PLAN

5.01 COMMON STOCK ISSUED

     Upon the issuance of shares of Common Stock pursuant to an Award, the
Company may deliver to the Participant shares of Common Stock or treasury shares
from its authorized but unissued Common Stock.

5.02 AGGREGATE LIMIT

     The maximum aggregate number of shares of Common Stock that may be issued
under this Plan shall be 750,000 shares. One Hundred Percent (100%) of such
shares may be issued pursuant to Options. However, only 250,000 of such shares
may be issued in the aggregate pursuant to Awards other than Options. For
purposes of the foregoing limit, an Option and its Corresponding SAR shall be
treated as a single Award and count against the limit on Awards other than
Options. In addition, the maximum number of shares of Common Stock that may be
issued under this Plan, and the foregoing limits on the number of shares that
may be issued pursuant to Awards, shall be subject to adjustment as provided in
Article XII.

5.03 INDIVIDUAL LIMIT

     In any calendar year, no Participant may be granted Options, SARs,
Restricted Stock Awards, Restricted Stock Units or any combination thereof that
relate to more than 125,000 shares of Common Stock. For purposes of the
foregoing limit, an Option and its Corresponding SAR shall be treated as a
single Award. In any calendar year, no Participant may be granted an Incentive
Award (i) with reference to a specified dollar limit for more than $250,000 and
(ii) with reference to a specified number of shares of Common Stock for more
than 125,000 shares of Common Stock. If an Award that a Participant holds is
cancelled or subject to a repricing within the meaning of the regulations under
Code Section 162(m), the cancelled Award shall continue to be counted against
the maximum number of shares of Common Stock for which Awards may be granted to
the Participant in any calendar year, as required under Code Section 162(m). The
per individual limits on the maximum number of shares of Common Stock that may
be issued pursuant to Awards shall be subject to adjustment as provided in
Article XII.

5.04 REALLOCATION OF SHARES

     If an Option is terminated, in whole or in part, for any reason other than
its exercise or the exercise of a Corresponding SAR, the number of shares of
Common Stock allocated to the Option or portion thereof may be reallocated to
other Awards to be granted under this Plan. If a SAR is terminated, in whole or
in part, for any reason other than its exercise or the exercise of a related
Option, the number of shares of Common Stock allocated to the SAR or portion
thereof may be reallocated to other Awards to be granted under this Plan. If an
award of Restricted Stock Units is terminated, in whole or in part, for any
reason other than its settlement, the number of shares allocated to the
Restricted Stock Units or portion thereof may be reallocated to

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other Awards to be granted under this Plan. If a Restricted Stock Award is
forfeited, in whole or in part, for any reason, the number of shares of Common
Stock allocated to the Restricted Stock Award or portion thereof may be
reallocated to other Awards to be granted under this Plan. If an Incentive Award
is terminated, in whole or in part, for any reason without payment of Common
Stock, the number of shares allocated to such Incentive Award or a portion
thereof may be reallocated to other Awards to be granted under this Plan.

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                                   ARTICLE VI
                                     OPTIONS

6.01 GRANT

     In accordance with the provisions of Article IV, the Committee will
designate each individual to whom an Option is to be granted and will specify
the number of shares of Common Stock covered by such grant and whether the
Option is an Incentive Stock Option or a Nonqualified Stock Option.
Notwithstanding any other provision of the Plan or any Agreement, the Committee
may only grant an Incentive Stock Option to an individual who is an employee of
the Company or an Affiliate.

6.02 OPTION PRICE

     The price per share of Common Stock purchased on the exercise of an Option
shall be determined by the Committee on the date of grant, but shall not be less
than the Fair Market Value of a share of Common Stock on the date the Option is
granted. However, if at the time of grant of an Option that is intended to be an
Incentive Stock Option, the Participant is a Ten Percent Shareholder, the price
per share of Common Stock purchased on the exercise of such Option shall not be
less than 110% of the Fair Market Value of a share of Common Stock on the date
the Option is granted.

6.03 MAXIMUM OPTION PERIOD

     The maximum period in which an Option may be exercised shall be determined
by the Committee on the date of grant, except that no Option shall be
exercisable after the expiration of ten years from the date such Option was
granted (five years from the date such Option was granted in the event of an
Incentive Stock Option granted to a Ten Percent Shareholder).

6.04 NONTRANSFERABILITY

     Except as provided in Section 6.05, each Option granted under this Plan
shall be nontransferable except by will or by the laws of descent and
distribution. In the event of any transfer of an Option (by the Participant or
his transferee), the Option and any Corresponding SAR that relates to such
Option must be transferred to the same person or persons or entity or entities.
Except as provided in Section 6.05, during the lifetime of the Participant to
whom the Option is granted, the Option may be exercised only by the Participant.
No right or interest of a Participant in any Option shall be liable for, or
subject to, any lien, obligation, or liability of such Participant.

6.05 TRANSFERABLE OPTIONS

     Section 6.04 to the contrary notwithstanding, if the Agreement so provides,
a Nonqualified Stock Option may be transferred by a Participant to the
Participant's children, grandchildren, spouse, one or more trusts for the
benefit of such family members or a partnership

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in which such family members are the only partners, on such terms and conditions
as are appropriate for such transferees to be included in the class of
transferees who may rely on a Form S-8 Registration Statement under the
Securities Act of 1933 to sell shares issuable upon exercise of Options granted
under the Plan. Any such transfer will be permitted only if (i) the Participant
does not receive any consideration for the transfer and (ii) the Committee
expressly approves the transfer. The holder of a Nonqualified Stock Option
transferred pursuant to this Section shall be bound by the same terms and
conditions that governed the Option during the period that it was held by the
Participant; provided, however, that such transferee may not transfer the Option
except by will or the laws of descent and distribution. In the event of any
transfer of an Option (by the Participant or his transferee), the Option and any
Corresponding SAR that relates to such Option must be transferred to the same
person or persons or entity or entities.

6.06 EXERCISE

     Subject to the provisions of this Plan and the applicable Agreement, an
Option may be exercised in whole at any time or in part from time to time at
such times and in compliance with such requirements as the Committee shall
determine; provided, however, that Incentive Stock Options (granted under the
Plan and all plans of the Company and its Affiliates) may not be first
exercisable in a calendar year for shares of Common Stock having a Fair Market
Value (determined as of the date the Option is granted) exceeding $100,000. If
the limitation is exceeded, the Options that cause the limitation to be exceeded
shall be treated as Nonqualified Stock Options. An Option granted under this
Plan may be exercised with respect to any number of whole shares less than the
full number for which the Option could be exercised. A partial exercise of an
Option shall not affect the right to exercise the Option from time to time in
accordance with this Plan and the applicable Agreement with respect to the
remaining shares subject to the Option. The exercise of an Option shall result
in the termination of any Corresponding SAR to the extent of the number of
shares with respect to which the Option is exercised.

6.07 PAYMENT

     Subject to rules established by the Committee and unless otherwise provided
in an Agreement, payment of all or part of the Option price may be made (i) in
cash or certified or bank cashier's check, (ii) if approved by the Committee, by
tendering shares of Common Stock (which, if acquired from the Company and
necessary to avoid variable financial accounting, have been held by the
Participant for at least six months), (iii) by any other legal method acceptable
to the Committee or (iv) by any combination of the foregoing methods. If shares
of Common Stock are used to pay all or part of the Option price, the sum of the
cash and cash equivalent and the Fair Market Value (determined as of the day
preceding the date of exercise) of the shares surrendered must not be less than
the Option price of the shares for which the Option is being exercised.

                                      -14-

<PAGE>

6.08 EMPLOYEE STATUS

     For purposes of determining the applicability of Code Section 422 (relating
to incentive stock options), or in the event that the terms of any Option
provide that it may be exercised only during employment or continued service or
within a specified period of time after termination of employment or continued
service, the Committee may decide to what extent leaves of absence for
governmental or military service, illness, temporary disability, or other
reasons shall not be deemed interruptions of continuous employment or service.

6.09 CHANGE IN CONTROL

     Notwithstanding any provision of any Agreement, in the event of or in
anticipation of a Change in Control, the Committee in its discretion may (i)
declare that some or all outstanding Options previously granted under the Plan,
whether or not then exercisable, shall terminate as of a date before or on the
Control Change Date without any payment to the holder of the Option, provided
the Committee gives prior written notice to the Participants of such termination
and gives such Participants the right to exercise their outstanding Options for
at least seven (7) days before such date to the extent then exercisable (or to
the extent such Options would have been exercisable as of the Control Change
Date), (ii) terminate before or on the Control Change Date some or all
outstanding Options previously granted under the Plan, whether or not then
exercisable, in consideration of payment to the holder of the Option, with
respect to each share of Common Stock for which the Option is then exercisable
(or for which the Option would have been exercisable as of the Control Change
Date), of the excess, if any, of the Fair Market Value on such date of the
Common Stock subject to such portion of the Option over the Option price
(provided that outstanding Options that are not then exercisable and that would
not become exercisable on the Control Change Date, and Options with respect to
which the Fair Market Value of the Common Stock subject to the Options does not
exceed the Option price, shall be cancelled without any payment therefor) or
(iii) take such other action as the Committee determines to be reasonable under
the circumstances to permit the Participant to realize the value of the Option
(which value for purposes of Options that are not then exercisable and that
would not become exercisable as of the Control Change Date, and Options with
respect to which the Fair Market Value of the Common Stock subject to the
Options does not exceed the Option price, shall be deemed to be zero). The
payment described in (ii) above may be made in any manner the Committee
determines, including in cash, stock or other property. The Committee may take
the actions described in (i) or (ii) above with respect to Options that are not
then exercisable whether or not the Participant will receive any payment
therefor. The Committee in its discretion may take any of the actions described
in this Section 6.09 contingent on consummation of the Change in Control and
with respect to some or all outstanding Options, whether or not then
exercisable, or on an Option-by-Option basis, which actions need not be uniform
with respect to all outstanding Options. However, the Options shall not be
terminated to the extent that written provision is made for their continuance,
assumption or substitution by the Company or a successor employer or its parent
or subsidiary in connection with the Change in Control. The Committee may
provide in an applicable Agreement that a Participant's outstanding Options
shall be fully exercisable on and after a Control Change Date or

                                      -15-

<PAGE>

immediately before the date the Options will be terminated in connection with
the Change in Control, as described above.

6.10 STOCKHOLDER RIGHTS

     No Participant shall have any rights as a stockholder with respect to
shares subject to his Option until the date of exercise of such Option.

6.11 DISPOSITION OF SHARES

     A Participant shall notify the Company of any sale or other disposition of
shares of Common Stock acquired pursuant to an Option that was an Incentive
Stock Option if such sale or disposition occurs (i) within two years of the
grant of an Option or (ii) within one year of the issuance of shares of Common
Stock to the Participant. Such notice shall be in writing and directed to the
Secretary of the Company.

6.12 NO LIABILITY OF COMPANY

     The Company shall not be liable to any Participant or any other person if
the Internal Revenue Service or any court or other authority having jurisdiction
over such matter determines for any reason that an Option intended to be an
Incentive Stock Option and granted hereunder does not qualify as an Incentive
Stock Option.

                                      -16-

<PAGE>

                                   ARTICLE VII
                                      SARS

7.01 GRANT

     In accordance with the provisions of Article IV, the Committee will
designate each individual to whom SARs are to be granted and will specify the
number of shares of Common Stock covered by such grant. For purposes of the
foregoing limit, an Option and Corresponding SAR shall be treated as a single
Award. In addition, no Participant may be granted Corresponding SARs (under this
Plan and all other incentive stock option plans of the Company and its
Affiliates) that are related to Incentive Stock Options which are first
exercisable in any calendar year for shares of Common Stock having an aggregate
Fair Market Value (determined as of the date the related Option is granted) that
exceeds $100,000.

7.02 MAXIMUM SAR PERIOD

     The term of each SAR shall be determined by the Committee on the date of
grant, except that no SAR shall have a term of more than ten years from the date
such SAR was granted (five years for a Corresponding SAR that is related to an
Incentive Stock Option and that is granted to a Ten Percent Shareholder).

7.03 NONTRANSFERABILITY

     Except as provided in Section 7.04, each SAR granted under this Plan shall
be nontransferable except by will or by the laws of descent and distribution. In
the event of any such transfer (by the Participant or his transferee), a
Corresponding SAR and the related Option must be transferred to the same person
or persons or entity or entities. Except as provided in Section 7.04, during the
lifetime of the Participant to whom the SAR is granted, the SAR may be exercised
only by the Participant. No right or interest of a Participant in any SAR shall
be liable for, or subject to, any lien, obligation, or liability of such
Participant.

7.04 TRANSFERABLE SARS

     Section 7.03 to the contrary notwithstanding, if the Agreement so provides,
a SAR, other than a Corresponding SAR that is related to an Incentive Stock
Option, may be transferred by a Participant to the Participant's children,
grandchildren, spouse, one or more trusts for the benefit of such family members
or a partnership in which such family members are the only partners, on such
terms and conditions as are appropriate for such transferees to be included in
the class of transferees who may rely on a Form S-8 Registration Statement under
the Securities Act of 1933 to sell shares received pursuant to Awards granted
under the Plan. Any such transfer will be permitted only if (i) the Participant
does not receive any consideration for the transfer and (ii) the Committee
expressly approves the transfer. The holder of a SAR transferred pursuant to
this Section shall be bound by the same terms and conditions that governed the
SAR during the period that it was held by the Participant; provided, however,
that such transferee may not transfer the SAR except by will or the laws of
descent and distribution. In the event of any

                                      -17-

<PAGE>

transfer of a Corresponding SAR (by the Participant or his transferee), the
Corresponding SAR and the related Option must be transferred to the same person
or person or entity or entities.

7.05 EXERCISE

     Subject to the provisions of this Plan and the applicable Agreement, a SAR
may be exercised in whole at any time or in part from time to time at such times
and in compliance with such requirements as the Committee shall determine;
provided, however, that a SAR may be exercised only when the Fair Market Value
of the Common Stock that is subject to the exercise exceeds the Initial Value of
the SAR and a Corresponding SAR may be exercised only to the extent that the
related Option is exercisable. A SAR granted under this Plan may be exercised
with respect to any number of whole shares less than the full number for which
the SAR could be exercised. A partial exercise of a SAR shall not affect the
right to exercise the SAR from time to time in accordance with this Plan and the
applicable Agreement with respect to the remaining shares subject to the SAR.
The exercise of a Corresponding SAR shall result in the termination of the
related Option to the extent of the number of shares with respect to which the
SAR is exercised.

7.06 SETTLEMENT

     The amount payable as a result of the exercise of a SAR shall be settled in
cash, by the issuance of shares of Common Stock or by a combination thereof. No
fractional share will be deliverable upon the exercise of a SAR but a cash
payment will be made in lieu thereof.

7.07 EMPLOYEE STATUS

     If the terms of any SAR provide that it may be exercised only during
employment or continued service or within a specified period of time after
termination of employment or continued service, the Committee may decide to what
extent leaves of absence for governmental or military service, illness,
temporary disability or other reasons shall not be deemed interruptions of
continuous employment or service.

7.08 CHANGE IN CONTROL

     Notwithstanding any provision of any Agreement, in the event of or in
anticipation of a Change in Control, the Committee in its discretion may (i)
declare that some or all outstanding SARs previously granted under the Plan,
whether or not then exercisable, shall terminate as of a date before or on the
Control Change Date without any payment to the holder of the SAR, provided the
Committee gives prior written notice to the Participants of such termination and
gives such Participants the right to exercise their outstanding SARs at least
seven (7) days before such termination date to the extent then exercisable (or
to the extent such SARs would have been exercisable as of the Control Change
Date), (ii) terminate before or on the Control Change Date some or all
outstanding SARs previously granted under the Plan, whether or not then
exercisable, in consideration of payment to the holder of the SARs, with respect
to each share of Common Stock for which the SARs are then exercisable (or for
which the SARs would have been

                                      -18-

<PAGE>

exercisable as of the Control Change Date), of the excess, if any, of the Fair
Market Value of such Common Stock on such date over the Initial Value of the
SARs (provided that outstanding SARs that are not then exercisable and that
would not become exercisable on the Control Change Date, and SARs with respect
to which the Fair Market Value of the Common Stock does not exceed the Initial
Value, shall be cancelled without any payment therefor) or (iii) take such other
action as the Committee determines to be reasonable under the circumstances to
permit the Participant to realize the value of the SARs (which value for
purposes of SARs that are not then exercisable and that would not become
exercisable as of the Control Change Date, and SARs with respect to which the
Fair Market Value of the Common Stock does not exceed the Initial Value, shall
be deemed to be zero). The payment described in (ii) above may be made in any
manner the Committee determines, including in cash, stock or other property. The
Committee may take the actions described in (i) or (ii) above with respect to
SARs that are not then exercisable whether or not the Participant will receive
any payment therefor. The Committee in its discretion may take any of the
actions described in this Section 7.08 contingent on consummation of the Change
in Control and with respect to some or all outstanding SARs, whether or not then
exercisable, or on a SAR-by-SAR basis, which actions need not be uniform with
respect to all outstanding SARs. Notwithstanding the foregoing, no payment shall
be made with respect to a Corresponding SAR to the extent the Committee made a
payment with respect to the Option that relates to the Corresponding SAR. No
SARs shall be terminated to the extent that written provision is made for their
assumption, continuance or substitution by the Company or a successor employer
or its parent or subsidiary in connection with the Change in Control. The
Committee may provide in an applicable Agreement that a Participant's
outstanding SARs shall be fully exercisable on and after a Control Change Date
or immediately before the date the SARs will be terminated in connection with
the Change in Control, as described above.

7.09 STOCKHOLDER RIGHTS

     No Participant shall, as a result of receiving a SAR, have any rights as a
stockholder of the Company or any Affiliate until the date that the SAR is
exercised and then only to the extent that the SAR is settled by the issuance of
Common Stock.

                                      -19-

<PAGE>

                                  ARTICLE VIII
                             RESTRICTED STOCK AWARDS

8.01 AWARD

     In accordance with the provisions of Article IV, the Committee will
designate each individual to whom a Restricted Stock Award is to be granted,
will specify the number of shares of Common Stock covered by such grant and the
price, if any, to be paid for each share of Common Stock covered by the grant.
The purchase price to be paid for each share of Common Stock covered by the
grant shall be paid, as the Committee designates in an Agreement: (i) in cash or
certified or bank cashier's check at the time of purchase, (ii) by any other
legal method acceptable to the Committee or (iii) by any combination of the
foregoing methods.

8.02 VESTING

     The Committee, on the date of grant may, but need not, prescribe that a
Participant's rights in the Restricted Stock Award shall be forfeitable and
nontransferable for a period of time or subject to such conditions as may be set
forth in the Agreement. Notwithstanding any provision herein to the contrary,
the Committee, in its sole discretion may grant Restricted Stock Awards that are
nonforfeitable and transferable immediately upon grant. By way of example and
not of limitation, the Committee may prescribe that a Participant's rights in a
Restricted Stock Award shall be forfeitable and nontransferable subject to (a)
the attainment of objectively determinable performance conditions based on the
criteria described in Article XI, (b) the Participant's completion of a
specified period of employment or service with the Company or an Affiliate; (c)
the Participant's death, disability or retirement or (d) satisfaction of a
combination of any of the foregoing factors. Notwithstanding the preceding
sentence, if and to the extent deemed necessary by the Committee, Restricted
Stock Awards granted to Named Executive Officers shall be forfeitable and
nontransferable subject to attainment of objectively determinable performance
conditions based on the criteria described in Article XI and shall be subject to
the other requirements set forth in Article XI so as to enable such Restricted
Stock Award to qualify as "qualified performance-based compensation" under the
regulations promulgated under Code Section 162(m). A Restricted Stock Award can
only become nonforfeitable and transferable during the Participant's lifetime in
the hands of the Participant.

8.03 MAXIMUM RESTRICTION PERIOD

     To the extent the Participant's rights in a Restricted Stock Award are
forfeitable and nontransferable for a period of time, the Committee on the date
of grant shall determine the maximum period over which the rights may become
nonforfeitable and transferable, except that such period shall not exceed ten
years.

8.04 EMPLOYEE STATUS

     In the event that the terms of any Restricted Stock Award provide that
shares shall become nonforfeitable and transferable thereunder only after
completion of a specified period of

                                      -20-

<PAGE>

employment or continuous service, the Committee may decide in each case to what
extent leaves of absence for governmental or military service, illness,
temporary disability, or other reasons shall not be deemed interruptions of
continuous employment or service.

8.05 CHANGE IN CONTROL

     Notwithstanding any provision of any Agreement, in the event of or in
anticipation of a Change in Control, the Committee in its discretion may (i)
terminate before or on the Control Change Date outstanding Restricted Stock
Awards previously granted under the Plan that are not then nonforfeitable and
transferable (and that will not have become nonforfeitable and transferable as
of the Control Change Date) without any payment to the holder of the Restricted
Stock Awards other than return of the purchase price, if any, paid for the
Restricted Stock Award, (ii) terminate before or on the Control Change Date
outstanding Restricted Stock Awards previously granted under the Plan that are
not then nonforfeitable and transferable (but that would have become
nonforfeitable and transferable as of the Control Change Date) in exchange for a
payment equal to the difference between the then Fair Market Value of the shares
of Common Stock subject to the Restricted Stock Award less the unpaid purchase
price, if any, for such shares or (iii) take such other action as the Committee
determines to be reasonable under the circumstances to permit the Participant to
realize the value of the Restricted Stock Award (which value for purposes of a
Restricted Stock Award that is forfeitable and nontransferable and that would
not have become nonforfeitable and transferable as of the Control Change Date
shall be deemed to be zero). The payment described in (ii) above may be made in
any manner the Committee determines, including in cash, stock or other property.
The Committee in its discretion may take any of the actions described in this
Section 8.05 contingent on the consummation of the Change in Control and with
respect to some or all outstanding Restricted Stock Awards or on a Restricted
Stock Award-by-Restricted Stock Award basis, which actions need not be uniform
with respect to all outstanding Restricted Stock Awards. The preceding sentences
to the contrary notwithstanding, the Restricted Stock Awards shall not be
terminated to the extent that written provision is made for their assumption,
continuance or substitution by the Company or a successor employer or its parent
or subsidiary in connection with the Change in Control. The Committee may
provide in an applicable Agreement that a Participant's outstanding Restricted
Stock Awards shall be nonforfeitable and transferable on and after a Control
Change Date or immediately before the date the Restricted Stock Awards would
otherwise be terminated in connection with the Change in Control, as described
above.

8.06 STOCKHOLDER RIGHTS

     Prior to their forfeiture (in accordance with the applicable Agreement and
while the shares of Common Stock granted pursuant to the Restricted Stock Award
may be forfeited and are nontransferable), a Participant will have all rights of
a stockholder with respect to a Restricted Stock Award, including the right to
receive dividends and vote the shares; provided, however, that during such
period (i) a Participant may not sell, transfer, pledge, exchange, hypothecate,
or otherwise dispose of shares granted pursuant to a Restricted Stock Award,
(ii) the Company shall retain custody of the certificates evidencing shares
granted pursuant to a Restricted Stock Award, and (iii) the Participant will
deliver to the Company a stock power,

                                      -21-

<PAGE>

endorsed in blank, with respect to each Restricted Stock Award. Notwithstanding
the preceding sentence, if and to the extent deemed necessary by the Committee,
dividends payable with respect to Restricted Stock Awards granted to a Named
Executive Officer shall accumulate (without interest) and become payable to the
Named Executive Officer at the time, and only to the extent that, the portion of
the Restricted Stock Award to which the dividends relate has become transferable
and nonforfeitable. The limitations set forth in the preceding sentence shall
not apply after the shares granted under the Restricted Stock Award are
transferable and are no longer forfeitable.

                                      -22-

<PAGE>

                                   ARTICLE IX
                             RESTRICTED STOCK UNITS

9.01 GRANT

     In accordance with the provisions of Article IV, the Committee will
designate each individual to whom a grant of Restricted Stock Units is to be
made and will specify the number of shares covered by such grant.

9.02 EARNING THE AWARD

     The Committee, on the date of grant of the Restricted Stock Units, shall
prescribe that the Restricted Stock Units will be earned and become payable
subject to such conditions as are set forth in the Agreement. By way of example
and not of limitation, the Committee may prescribe that the Restricted Stock
Units will be earned and become payable upon (a) the satisfaction of objectively
determinable performance conditions based on the criteria described in Article
XI as described below; (b) the Participant's completion of a specified period of
employment or service with the Company or an Affiliate; (c) the Participant's
death, disability or retirement or (d) satisfaction of a combination of any of
the foregoing factors. If and to the extent deemed necessary by the Committee,
Restricted Stock Units granted to Named Executive Officers shall become payable
upon the satisfaction of objectively determinable performance conditions based
on the criteria described in Article XI and shall be subject to the other
requirements set forth in Article XI so as to enable such Restricted Stock Units
to qualify as "qualified performance-based compensation" under the regulations
promulgated under Code Section 162(m).

9.03 MAXIMUM RESTRICTED STOCK UNIT AWARD PERIOD

     The Committee, on the date of grant, shall determine the maximum period
over which Restricted Stock Units may be earned, except that such period shall
not exceed ten years.

9.04 PAYMENT

     The amount payable when an award of Restricted Stock Units is earned shall
be settled by the issuance of one share of Common Stock for each Restricted
Stock Unit that is earned. A fractional share of Common Stock shall not be
deliverable when an award of Restricted Stock Units is earned, but a cash
payment will be made in lieu thereof.

9.05 NONTRANSFERABILITY

     Except as provided in Section 9.06, Restricted Stock Units granted under
this Plan shall be nontransferable except by will or by the laws of descent and
distribution. No right or interest of a Participant in any Restricted Stock
Units shall be liable for, or subject to, any lien, obligation, or liability of
such Participant.

                                      -23-

<PAGE>

9.06 TRANSFERABLE RESTRICTED STOCK UNITS

     Section 9.05 to the contrary notwithstanding, if the Agreement provides, an
award of Restricted Stock Units may be transferred by a Participant to the
Participant's children, grandchildren, spouse, one or more trusts for the
benefit of such family members or a partnership in which such family members are
the only partners, on such terms and conditions as are appropriate for such
transferees to be included in the class of transferees who may rely on a Form
S-8 Registration Statement under the Securities Act of 1933 to sell shares
received pursuant to Awards granted under the Plan. Any such transfer will be
permitted only if (i) the Participant does not receive any consideration for the
transfer and (ii) the Committee expressly approves the transfer. The holder of
Restricted Stock Units transferred pursuant to this Section shall be bound by
the same terms and conditions that governed the Restricted Stock Units during
the period that they were held by the Participant; provided, however that such
transferee may not transfer Restricted Stock Units except by will or the laws of
descent and distribution.

9.07 EMPLOYEE STATUS

     In the event that the terms of any Restricted Stock Unit award provide that
no payment will be made unless the Participant completes a stated period of
employment or continued service, the Committee may decide to what extent leaves
of absence for government or military service, illness, temporary disability, or
other reasons shall not be deemed interruptions of continuous employment or
service.

9.08 CHANGE IN CONTROL

     Notwithstanding any provision of any Agreement, in the event of or in
anticipation of a Change in Control, the Committee in its discretion may (i)
terminate before or on the Control Change Date some or all outstanding
Restricted Stock Units previously granted under the Plan that are not then
earned and payable (and that will not become earned and payable as of the
Control Change Date) without any payment to the holder of the Restricted Stock
Units, (ii) terminate before or on the Control Change Date some or all
outstanding Restricted Stock Units previously granted under the Plan that are
not then earned and payable (but that will become earned and payable as of the
Control Change Date) in exchange for a payment equal to the then Fair Market
Value of the Common Stock covered by the Restricted Stock Units or (iii) take
such other action as the Committee determines to be reasonable under the
circumstances to permit the Participant to realize the value of the Restricted
Stock Units (which value for purposes of Restricted Stock Units that are not
then earned and payable and that will not become earned and payable as of the
Control Change Date shall be deemed to be zero). The payment described in (ii)
above may be made in any manner the Committee determines, including in cash,
stock or other property. The Committee in its discretion may take the actions
described in this Section 9.08 contingent on consummation of the Change in
Control and with respect to some or all outstanding Restricted Stock Units or on
a Restricted Stock Unit-by-Restricted Stock Unit basis, which actions need not
be uniform with respect to all outstanding Restricted Stock Units. The
Restricted Stock Units shall not be terminated to the extent that written
provision is made for their assumption, continuance or substitution by the
Company or a successor employer or its

                                      -24-

<PAGE>

parent or subsidiary in connection with the Change in Control. The Committee may
provide in an applicable Agreement that a Participant's outstanding Restricted
Stock Units shall be deemed earned (and any shares of Common Stock to be paid in
settlement of such Restricted Stock Units shall be nonforfeitable and
transferable) as of a Control Change Date or immediately before the date the
Restricted Stock Units would otherwise be terminated in connection with the
Change in Control, as described above.

9.09 STOCKHOLDER RIGHTS

     No Participant shall, as a result of receiving a grant of Restricted Stock
Units, have any rights as a stockholder until and then only to the extent that
the Restricted Stock Units are earned and settled in shares of Common Stock.

                                      -25-
<PAGE>

                                    ARTICLE X
                                INCENTIVE AWARDS

10.01 GRANT

     The Committee shall designate Participants to whom Incentive Awards are to
be granted. All Incentive Awards shall be finally determined exclusively by the
Committee under the procedures established by the Committee.

10.02 EARNING THE AWARD

     The Committee, on the date of grant of an Incentive Award, shall specify in
the applicable Agreement the terms and conditions which govern the grant. By way
of example and not of limitation, the Committee may prescribe that the Incentive
Award shall be earned and payable upon (a) the satisfaction of objectively
determinable performance conditions based on the criteria described in Article
XI; (b) the Participant's completion of a specified period of employment or
service with the Company or an Affiliate; (c) the Participant's death,
disability or retirement or (d) satisfaction of a combination of any of the
foregoing factors. If and to the extent deemed necessary by the Committee,
Incentive Awards granted to Named Executive Officers shall be earned and become
payable upon the satisfaction of objectively determinable performance conditions
based on the criteria described in Article XI and shall be subject to the other
requirements set forth in Article XI so as to enable the Incentive Awards to
qualify as "qualified performance-based compensation" under the regulations
promulgated under Code Section 162(m).

10.03 MAXIMUM INCENTIVE AWARD PERIOD

     The Committee, at the time an Incentive Award is made, shall determine the
maximum period over which the Incentive Award may be earned, except that such
period shall not exceed ten years.

10.04 PAYMENT

     The amount payable when an Incentive Award is earned may be settled in
cash, by the issuance of shares of Common Stock or by a combination thereof. A
fractional share of Common Stock shall not be deliverable when an Incentive
Award is earned, but a cash payment will be made in lieu thereof.

10.05 NONTRANSFERABILITY

     Except as provided in Section 10.06, Incentive Awards granted under this
Plan shall be nontransferable except by will or by the laws of descent and
distribution. No right or interest of a Participant in an Incentive Award shall
be liable for, or subject to, any lien, obligation, or liability of such
Participant.

                                      -26-

<PAGE>

10.06 TRANSFERABLE INCENTIVE AWARDS

     Section 10.05 to the contrary notwithstanding, if an Agreement so provides,
an Incentive Award may be transferred by a Participant to the Participant's
children, grandchildren, spouse, one or more trusts for the benefit of such
family members or to a partnership in which such family members are the only
partners, on such terms and conditions as are appropriate for such transferees
to be included in the class of transferees who may rely on a Form S-8
Registration Statement under the Securities Act of 1933 to sell shares received
pursuant to Awards granted under the Plan. Any such transfer will be permitted
only if (i) the Participant does not receive any consideration for the transfer
and (ii) the Committee expressly approves the transfer. The holder of an
Incentive Award transferred pursuant to this Section shall be bound by the same
terms and conditions that governed the Incentive Award during the period that it
was held by the Participant; provided, however, that such transferee may not
transfer the Incentive Award except by will or the laws of descent and
distribution.

10.07 EMPLOYEE STATUS

     If the terms of an Incentive Award provide that a payment will be made
thereunder only if the Participant completes a stated period of employment or
continuous service, the Committee may decide to what extent leaves of absence
for governmental or military service, illness, temporary disability or other
reasons shall not be deemed interruptions of continuous employment or service.

10.08 CHANGE IN CONTROL

     Notwithstanding any provision of any Agreement, in the event of or in
anticipation of a Change in Control, the Committee in its discretion may (i)
terminate before or on the Control Change Date some or all outstanding Incentive
Awards previously granted under the Plan that are not then earned and payable
(and that will not become earned and payable as of the Control Change Date)
without any payment to the holder of the Incentive Award or (ii) take such other
action as the Committee determines to be reasonable under the circumstances to
permit the Participant to realize the value of the Incentive Awards (which value
for purposes of Incentive Awards that are not then earned and payable and that
will not become earned and payable as of the Control Change Date shall be deemed
to be zero). The Committee in its discretion may take the actions described in
this Section 10.08 contingent on consummation of the Change in Control and with
respect to some or all outstanding Incentive Awards or on an Incentive
Award-by-Incentive Award basis, which actions need not be uniform with respect
to all outstanding Incentive Awards. The Incentive Awards shall not be
terminated to the extent that written provision is made for their assumption,
continuance or substitution by the Company or a successor employer or its parent
or subsidiary in connection with the Change in Control. The Committee may
provide in an applicable Agreement that a Participant's outstanding Incentive
Awards shall be deemed earned (and any shares of Common Stock to be paid in
settlement of such Incentive Awards shall be nonforfeitable and transferable) as
of a Control Change Date or immediately before the date the Incentive Awards
would otherwise be terminated in connection with the Change in Control, as
described above.

                                      -27-

<PAGE>

10.09 STOCKHOLDER RIGHTS

     No Participant shall, as a result of receiving an Incentive Award, have any
rights as a stockholder of the Company or any Affiliate on account of such
Incentive Award, unless and then only to the extent that the Incentive Award is
earned and settled in shares of Common Stock.

                                      -28-

<PAGE>

                                   ARTICLE XI
                    QUALIFIED PERFORMANCE-BASED COMPENSATION

11.01 PERFORMANCE CONDITIONS

     In accordance with Sections 8.02, 9.02 and 10.02, the Committee may
prescribe that Restricted Stock Awards will become nonforfeitable and
transferable, and that Restricted Stock Units and Incentive Awards will become
earned and payable, based on objectively determinable performance conditions.
Objectively determinable performance conditions are performance conditions (i)
that are established in writing (a) at the time of grant or (b) no later than
the earlier of (x) 90 days after the beginning of the period of service to which
they relate and (y) before the lapse of 25% of the period of service to which
they relate; (ii) that are uncertain of achievement at the time they are
established and (iii) the achievement of which is determinable by a third party
with knowledge of the relevant facts. The performance conditions may be stated
with respect to the Company's, an Affiliate's or a business unit's (a) total
stockholder return; (b) total stockholder return as compared to total return (on
a comparable basis) of a publicly available index; (c) net income; (d) pretax
earnings; (e) funds from operations; (f) earnings before interest expense,
taxes, depreciation and amortization; (g) operating margin; (h) earnings per
share; (i) return on equity, capital, assets or investment; (j) operating
earnings; (k) working capital; (l) ratio of debt to stockholders equity and (m)
revenue. The performance conditions may not include solely the mere continued
employment of the Participant. However, the Award may become nonforfeitable and
transferable or earned and payable contingent on the Participant's continued
employment or service, and/or employment or service at the time the Award
becomes nonforfeitable and transferable or earned and payable, in addition to
the performance conditions described above.

11.02 ESTABLISHING THE AMOUNT OF THE AWARD

     The amount of the Award that will become nonforfeitable and transferable or
earned and payable if the performance conditions are obtained (or an objective
formula for, or method of, computing such amount) also must be established at
the time set forth in Section 11.01 above. Notwithstanding the preceding
sentence, the Committee may, in its sole discretion, reduce the amount of the
Award that will become nonforfeitable and transferable or earned and payable, as
applicable, if the Committee determines that such reduction is appropriate under
the facts and circumstances. In no event shall the Committee have the discretion
to increase the amount of the Award that will become nonforfeitable and
transferable or earned and payable.

11.03 EARNING THE AWARD

     If the Committee, on the date of grant, prescribes that an Award shall
become nonforfeitable and transferable or earned and payable only upon the
attainment of any of the above performance conditions, the Award shall become
nonforfeitable and transferable or earned and payable only to the extent that
the Committee certifies in writing that such conditions have been achieved. An
Award will not satisfy the requirements of this Article XI to constitute
"qualified performance-based compensation" if the facts and circumstances
indicate the Award

                                      -29-

<PAGE>

will become nonforfeitable and transferable or earned and payable regardless of
whether the performance conditions are attained. However, an Award does not fail
to meet the requirements of this Article XI merely because the Award would
become nonforfeitable and transferable or earned and payable upon the
Participant's death or disability or upon a Change in Control, although an Award
that actually becomes nonforfeitable and transferable or earned and payable on
account of those events prior to the attainment of the performance conditions
would not constitute "qualified performance-based compensation" under Code
Section 162(m). In determining if the performance conditions have been achieved,
the Committee may adjust the performance targets in the event of any unbudgeted
acquisition, divestiture or other unexpected fundamental change in the business
of the Company, an Affiliate or a business unit that is material taken as a
whole as appropriate to fairly and equitably determine if the Award is to become
nonforfeitable and transferable or earned and payable pursuant to the conditions
set forth in the Award.

                                      -30-

<PAGE>

                                   ARTICLE XII
                     ADJUSTMENT UPON CHANGE IN COMMON STOCK

     The maximum number of shares that may be issued pursuant to Awards, the
terms of outstanding Awards, and the per individual limitations on the number of
shares of Common Stock that may be issued pursuant to Awards shall be adjusted
as the Board shall determine to be equitably required in the event (i) there
occurs a reorganization, recapitalization, stock split, reverse stock split,
spin-off, split-off, stock dividend, combination of shares, merger,
consolidation, or distribution to stockholders other than a cash dividend; (ii)
the Company engages in a transaction Code Section 424 describes or (iii) there
occurs any other transaction or event which, in the judgment of the Board
necessitates such action. In addition, the Committee may make such other
adjustments to the terms of any Awards to the extent equitable and necessary to
prevent an enlargement or dilution of the Participant's rights thereunder as a
result of any such event or similar transaction. Any determination made under
this Article XII by the Board shall be final and conclusive.

     The issuance by the Company of stock of any class, or securities
convertible into stock of any class, for cash or property, or for labor or
services, either upon direct sale or upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of stock or obligations of the Company
convertible into such stock or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the maximum number
of shares that may be issued pursuant to Awards, the per individual limitations
on the number of shares that may be issued pursuant to Awards, or the terms of
outstanding Awards.

     The Committee may grant Awards in substitution for stock options, stock
appreciation rights, restricted stock, restricted stock units, incentive awards,
or similar awards held by an individual who becomes an employee of the Company
or an Affiliate in connection with a transaction described in the first
paragraph of this Article XII. Notwithstanding any provision of the Plan (other
than the limitation of Section 5.02), the terms of such substituted Awards shall
be as the Committee, in its discretion, determines is appropriate.

                                      -31-

<PAGE>

                                  ARTICLE XIII
              COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES

13.01 COMPLIANCE.

     No Option or SAR shall be exercisable, no Restricted Stock Award or
Restricted Stock Unit shall be granted, no shares of Common Stock shall be
issued, no certificates for shares of Common Stock shall be delivered, and no
payment shall be made under this Plan except in compliance with all applicable
Federal and state laws and regulations (including, without limitation,
withholding tax requirements), any listing agreement to which the Company is a
party, and the rules of all domestic stock exchanges on which the Company's
shares may be listed. The Company shall have the right to rely on an opinion of
its counsel as to such compliance. Any stock certificate evidencing shares of
Common Stock issued pursuant to an Award may bear such legends and statements as
the Committee may deem advisable to assure compliance with Federal and state
laws and regulations and to reflect any other restrictions applicable to such
shares as the Committee otherwise deems appropriate. No Option or SAR shall be
exercisable, no Restricted Stock Award or Restricted Stock Unit shall be
granted, no shares of Common Stock shall be issued, no certificate for shares of
Common Stock shall be delivered, and no payment shall be made under this Plan,
until the Company has obtained such consent or approval as the Committee may
deem advisable from regulatory bodies having jurisdiction over such matters.

13.02 POSTPONEMENT OF EXERCISE OR PAYMENT.

     The Committee may postpone any grant, exercise, vesting or payment of an
Award for such time as the Committee in its sole discretion may deem necessary
in order to permit the Company (i) to effect, amend or maintain any necessary
registration of the Plan or the shares of Common Stock issuable pursuant to the
Award under the securities laws; (ii) to take any action in order to (A) list
such shares of Common Stock or other shares of stock of the Company on a stock
exchange if shares of Common Stock or other shares of stock of the Company are
not then listed on such exchange or (B) comply with restrictions or regulations
incident to the maintenance of a public market for its shares of Common Stock or
other shares of stock of the Company, including any rules or regulations of any
stock exchange on which the shares of Common Stock or other shares of stock of
the Company are listed; (iii) to determine that such shares of Common Stock in
the Plan are exempt from such registration or that no action of the kind
referred to in (ii)(B) above needs to be taken; (iv) to comply with any other
applicable law, including without limitation, securities laws; (v) to comply
with any legal or contractual requirements during any such time the Company or
any Affiliate is prohibited from doing any of such acts under applicable law,
including without limitation, during the course of an investigation of the
Company or any Affiliate, or under any contract, loan agreement or covenant or
other agreement to which the Company or any Affiliate is a party or (vi) to
otherwise comply with any prohibition on such acts or payments during any
applicable blackout period; and the Company shall not be obligated by virtue of
any terms and conditions of any Agreement or any provision of the Plan to
recognize the grant, exercise, vesting or payment of an Award or to grant, sell
or issue shares of Common Stock or make any such payments in violation of the

                                      -32-

<PAGE>

securities laws or the laws of any government having jurisdiction thereof or any
of the provisions hereof. Any such postponement shall not extend the term of the
Award and neither the Company nor its directors and officers nor the Committee
shall have any obligation or liability to any Participant or to any other person
with respect to shares of Common Stock or payments as to which the Award shall
lapse because of such postponement.

     Additionally, the Committee shall postpone any grant, exercise, vesting or
payment of an Award if the Company reasonably believes the Company's or an
applicable Affiliate's deduction with respect to such Award would be limited or
eliminated by application of Code Section 162(m); provided, however, such delay
will last only until the earliest date at which the Company reasonably
anticipates that the deduction with respect to the Award will not be limited or
eliminated by the application of Code Section 162(m) or the calendar year in
which the Participant separates from service.

13.03 FORFEITURE OF PAYMENT.

     A Participant shall be required to forfeit any and all rights under Awards
or to reimburse the Company for any payment under any Award (with interest as
necessary to avoid imputed interest or original issue discount under the Code or
as otherwise required by applicable law) to the extent applicable law requires
such forfeiture or reimbursement.

                                      -33-

<PAGE>

                                   ARTICLE XIV
                             LIMITATION ON BENEFITS

     Despite any other provisions of this Plan to the contrary, if the receipt
of any payments or benefits under this Plan would subject a Participant to tax
under Code Section 4999, the Committee may determine whether some amount of
payments or benefits would meet the definition of a "Reduced Amount." If the
Committee determines that there is a Reduced Amount, the total payments or
benefits to the Participant hereunder must be reduced to such Reduced Amount,
but not below zero. If the Committee determines that the benefits and payments
must be reduced to the Reduced Amount, the Company must promptly notify the
Participant of that determination, with a copy of the detailed calculations by
the Committee. All determinations of the Committee under this Article XIV are
final, conclusive and binding upon the Company and the Participant. It is the
intention of the Company and the Participant to reduce the payments under this
Plan only if the aggregate Net After Tax Receipts to the Participant would
thereby be increased. As result of the uncertainty in the application of Code
Section 4999 at the time of the initial determination by the Committee under
this Article XIV, however, it is possible that amounts will have been paid under
the Plan to or for the benefit of a Participant which should not have been so
paid ("Overpayment") or that additional amounts which will not have been paid
under the Plan to or for the benefit of a Participant could have been so paid
("Underpayment"), in each case consistent with the calculation of the Reduced
Amount. If the Committee, based either upon the assertion of a deficiency by the
Internal Revenue Service against the Company or the Participant, which the
Committee believes has a high probability of success, or controlling precedent
or other substantial authority, determines that an Overpayment has been made,
any such Overpayment must be treated for all purposes as a loan which the
Participant must repay to the Company together with interest at the applicable
Federal rate under Code Section 7872(f)(2); provided, however, that no such loan
may be deemed to have been made and no amount shall be payable by the
Participant to the Company if and to the extent such deemed loan and payment
would not either reduce the amount on which the Participant is subject to tax
under Code Section 1, 3101 or 4999 or generate a refund of such taxes. If the
Committee, based upon controlling precedent or other substantial authority,
determines that an Underpayment has occurred, the Committee must promptly notify
the Company of the amount of the Underpayment, which then shall be paid to the
Participant. For purposes of this Section, (i) "Net After Tax Receipt" means the
Present Value of a payment under this Plan net of all taxes imposed on
Participant with respect thereto under Code Sections 1, 3101 and 4999,
determined by applying the highest marginal rate under Code Section 1 which
applies to the Participant's taxable income for the applicable taxable year;
(ii) "Present Value" means the value determined in accordance with Code Section
280G(d)(4) and (iii) "Reduced Amount" means the largest aggregate amount of all
payments and benefits under this Plan which (a) is less than the sum of all
payments and benefits under this Plan and (b) results in aggregate Net After Tax
Receipts which are equal to or greater than the Net After Tax Receipts which
would result if the aggregate payments and benefits under this Plan were any
other amount less than the sum of all payments and benefits to be made under
this Plan.

                                      -34-

<PAGE>

                                   ARTICLE XV
                               GENERAL PROVISIONS

15.01 EFFECT ON EMPLOYMENT AND SERVICE

     Neither the adoption of this Plan, its operation, nor any documents
describing or referring to this Plan (or any part thereof), shall confer upon
any individual any right to continue in the employ or service of the Company or
an Affiliate or in any way affect any right and power of the Company or an
Affiliate to terminate the employment or service of any individual at any time
with or without assigning a reason therefor.

15.02 UNFUNDED PLAN

     This Plan, insofar as it provides for Awards, shall be unfunded, and the
Company shall not be required to segregate any assets that may at any time be
represented by Awards under this Plan. Any liability of the Company to any
person with respect to any Award under this Plan shall be based solely upon any
contractual obligations that may be created pursuant to this Plan. No such
obligation of the Company shall be deemed to be secured by any pledge of, or
other encumbrance on, any property of the Company.

15.03 RULES OF CONSTRUCTION

     Headings are given to the articles and sections of this Plan solely as a
convenience to facilitate reference. The reference to any statute, regulation,
or other provision of law shall be construed to refer to any amendment to or
successor of such provision of law.

15.04 TAX WITHHOLDING AND REPORTING.

     Unless an Agreement provides otherwise, each Participant shall be
responsible for satisfying in cash or cash equivalent acceptable to the
Committee any income and employment (including without limitation Social
Security and Medicare) tax withholding obligations attributable to participation
in the Plan and the grant, exercise, vesting or payment of Awards granted
thereunder (including the making of a Code Section 83(b) election with respect
to an Award). In accordance with procedures that the Committee establishes, the
Committee, to the extent applicable law permits, may allow a Participant to pay
such amounts (i) in cash, (ii) by cash or by a certified or bank cashier's
check, (iii) by tendering shares of Common Stock (which, if acquired from the
Company and necessary to avoid variable financial accounting, have been held by
the Participant for at least six months) and which do not exceed the Company's
minimum statutory withholding obligation or (iv) by any combination of the
aforementioned methods of payment. The Company shall comply with all such
reporting and other requirements relating to the administration of this Plan and
the grant, exercise, vesting or payment of any Award hereunder as applicable law
requires.

                                      -35-

<PAGE>

15.05 RESERVATION OF SHARES.

     The Company, during the term of this Plan, shall at all times reserve and
keep available such number of shares of Common Stock as shall be sufficient to
satisfy the requirements of the Plan. Additionally, the Company, during the term
of this Plan, shall use its best efforts to seek to obtain from appropriate
regulatory agencies any requisite authorizations needed in order to issue and to
sell such number of shares of Common Stock as shall be sufficient to satisfy the
requirements of the Plan. However, the inability of the Company to obtain from
any such regulatory agency the requisite authorizations the Company's counsel
deems to be necessary for the lawful issuance and sale of any shares of Common
Stock hereunder, or the inability of the Company to confirm to its satisfaction
that any issuance and sale of any shares of Common Stock hereunder will meet
applicable legal requirements, shall relieve the Company of any liability in
respect to the failure to issue or to sell such shares of Common Stock as to
which such requisite authority shall not have been obtained.

15.06 GOVERNING LAW.

     This Plan and all Awards granted hereunder shall be governed by the laws of
the State of Georgia, except to the extent Federal law applies.

15.07 OTHER ACTIONS.

     Nothing in the Plan shall be construed to limit the authority of the
Company to exercise its corporate rights and powers, including, by way of
illustration and not by way of limitation, the right to grant options, stock
appreciation rights, restricted stock awards, incentive awards or restricted
stock units for proper corporate purposes otherwise than under the Plan to any
employee or to any other person, firm, corporation, association or other entity,
or to grant options, stock appreciation rights, restricted stock awards,
incentive awards or restricted stock units to, or assume such awards of any
person in connection with, the acquisition, purchase, lease, merger,
consolidation, reorganization or otherwise, of all or any part of the business
and assets of any person, firm, corporation, association or other entity.

15.08 REPURCHASE OF COMMON STOCK

     The Company or its designee may have the option and right to purchase any
Award or any shares of Common Stock issued pursuant to any Award in accordance
with the terms and conditions set forth in the applicable Agreement.

15.09 OTHER CONDITIONS.

     The Committee, in its discretion, may, as a condition to the grant,
exercise, payment or settlement of an Award, require the Participant on or
before the date of grant, exercise, payment or settlement of the Award to enter
into (i) a covenant not to compete (including a confidentiality,
non-solicitation, non-competition or other similar agreement) with the Company
or any Affiliate, which may become effective on the date of termination of
employment or

                                      -36-

<PAGE>

service of the Participant with the Company or any Affiliate or any other date
the Committee may specify and shall contain such terms and conditions as the
Committee shall otherwise specify, (ii) an agreement to cancel any other
employment agreement, service agreement, fringe benefit or compensation
arrangement in effect between the Company or any Affiliate and such Participant
and/or (iii) a shareholders' agreement with respect to shares of Common Stock to
be issued pursuant to the Award. If the Participant shall fail to enter into any
such agreement at the Committee's request, then no Award shall be granted,
exercised, paid or settled and the number of shares of Common Stock that would
have been subject to such Award, if any, shall be added to the remaining shares
of Common Stock available under the Plan.

15.10 FORFEITURE PROVISIONS.

     Notwithstanding any other provisions of the Plan or any Agreement, all
rights to any Award that a Participant has will be immediately discontinued and
forfeited, and the Company shall not have any further obligation hereunder to
the Participant with respect to any Award and the Award will not be exercisable
(whether or not previously exercisable) or become vested or payable on and after
the time the Participant is discharged from employment or service with the
Company or any Affiliate for Cause.

                                      -37-

<PAGE>

                                   ARTICLE XVI
                                    AMENDMENT

     The Board may amend or terminate this Plan at any time; provided, however,
that no amendment to the Plan may adversely impair the rights of a Participant
with respect to outstanding Awards without the Participant's consent. In
addition, an amendment will be contingent on approval of the Company's
stockholders, to the extent required by law or by the rules of any stock
exchange on which the Company's securities are traded or if the amendment would
(i) increase the benefits accruing to Participants under the Plan, including
without limitation, any amendment to the Plan or any Agreement to permit a
repricing or decrease in the exercise price of any outstanding Options, (ii)
increase the aggregate number of shares of Common Stock that may be issued under
the Plan, (iii) modify the requirements as to eligibility for participation in
the Plan or, (iv) change the performance conditions set forth in Article XI.
Additionally, to the extent the Board deems necessary to continue to comply with
the performance-based exception to the deduction limits of Code Section 162(m),
the Board will submit the material terms of the performance conditions set forth
in Article XI to the Company's stockholders for approval no later than the first
stockholder meeting that occurs in the fifth year following the year in which
the stockholders previously approved the performance objectives.

     The Committee may amend any outstanding Awards to the extent it deems
appropriate; provided, however, that no amendment to an outstanding Award may
adversely impair the rights of a Participant without the Participant's consent.
Notwithstanding the preceding sentence, however, the Committee may amend any
outstanding Award without Participant consent if, as determined by the Committee
in its sole discretion, such amendment is required to either (i) comply with
Code Section 409A or (ii) prevent the Participant from being subject to any
excise tax or penalty under Code Section 409A.

                                      -38-

<PAGE>

                                  ARTICLE XVII
                                DURATION OF PLAN

     No Award may be granted under this Plan after January 19, 2016 (10 years
following the effective date of the Plan). Awards granted before that date shall
remain valid in accordance with their terms.

                                      -39-

<PAGE>

                                  ARTICLE XVIII
                             EFFECTIVE DATE OF PLAN

     The Plan is effective on January 19, 2006, the date of adoption by the
Board, contingent, however, on approval of the Plan by the Company's
stockholders within 12 months of such date. Awards may be granted under this
Plan as of the effective date, provided that no Award shall be effective,
exercisable, vested, earned or payable unless the Company's stockholders approve
the Plan within 12 months of the Board's adoption of the Plan.

                                      -40-Ex-10.1

 

Exhibit 10.1

LANCE, INC.

2006 Three-Year Incentive Plan for Officers

	 	 	 	 	 
	Purposes and
Introduction	 	The primary purposes of the 2006 Long-Term Incentive Plan for Officers are
to:
	 
	 	 	 	 
	 

	 	•
	 	Align executives’ interests with those of stockholders by linking a
substantial portion of compensation to the Company’s average Return on
Capital Employed (ROCE) over three fiscal years based on the Company’s
2006-2008 Operations Plan.
	 
	 	 	 	 
	 

	 	•
	 	Provide a way to attract and retain key executives and managers who
are critical to Lance’s future success.
	 
	 	 	 	 
	 

	 	•
	 	Provide competitive total compensation for executives and managers
commensurate with Company performance.
	 
	 	 	 	 
	 	 	To achieve the maximum motivational impact, performance measures, Plan
goals and the awards that will be received for meeting those goals will be
communicated to participants as soon as practical after the 2006 Plan is
approved by the Compensation Committee of the Board of Directors.
	 
	 	 	 	 
	 	 	Each participant will be assigned a Target Incentive, stated as a percent
of Base Salary. The Target Incentive Awards, or a greater or lesser
amount, will be granted after the end of the three fiscal years, 2006
through 2008 (the “Performance Period”), based on the attainment of
predetermined goals.
	 
	 	 	 	 
	 	 	For 2006, participants will be eligible to earn incentive awards based on
the Company’s three-year average ROCE against specific goals as described
below.
	 
	 	 	 	 
	 

	 	•
	 	ROCE is calculated for each fiscal year during the Performance
Period as follows:
	 
	 	 	 	 
	 

	 	 	 	(Net Income + Interest Expense) x (1 — Tax Rate)
	 

	 	 	 	Average Equity + Average Net Debt
	 
	 	 	 	 
	 	 	Tax Rate for ROCE shall be the Company’s actual total effective income tax
rate.

 

 

	 	 	 	 	 
	 	 	Average Net Debt shall be the Company’s average debt less average cash.
	 
	 	 	 	 
	 	 	Average amounts for ROCE shall be calculated on a 12-month basis.
	 
	 	 	 	 
	 	 	Base Salary shall be the annual rate of base compensation for the 2006
fiscal year which is set no later than April of such fiscal year.
	 
	 	 	 	 
	Performance Period	 	The period over which performance will be measured is the Company’s three
fiscal years, 2006 through 2008.
	 
	 	 	 	 
	Eligibility and
Participation	 	Eligibility in the Plan is limited to Executive Officers and managers who
are key to Lance’s success. The Compensation Committee will review and
approve participants nominated by the President and Chief Executive
Officer. Participation in the 2006 Plan does not guarantee participation
in any subsequent long-term incentive plans, but will be reevaluated and
determined on an annual basis.
	 
	 	 	 	 
	 	 	Attachment A includes the list of 2006 Plan participants approved by the
Compensation Committee on April 27, 2006.
	 
	 	 	 	 
	Target Incentives and
Performance Measures	 	Each participant will be assigned a Target Incentive expressed as a
percentage of his or her Base Salary. Participants may be assigned to a
Performance Tier by position, by salary level or based on other factors as
determined by the President and Chief Executive Officer. If the duties of
a participant change significantly during the Performance Period, the
President and Chief Executive Officer, with the approval of the
Compensation Committee, may change the Target Incentive for such
participant for the remaining portion of the Performance Period on a pro
rata basis.
	 
	 	 	 	 
	 	 	The 2006 through 2008 financial performance measure for the Company as a
whole is shown below. Specific goals and related payouts are also shown
below.

	 	 	 	 	 	 	 
	 	 	Threshold	 	Target	 	Maximum
	Lance, Inc. average ROCE
	 	*%
	 	*%
	 	*%
	Award Level Funded
	 	*%
	 	*%
	 	*%

 

	 	 	 	 	 
	[*Targets not required to be disclosed.]
	 
	 	 	 	 
	 	 	Percent of payout will be determined on a straight line basis between
Threshold and Target and between Target and Maximum. There will be no
payouts unless the Threshold performance

2

 

	 	 	 	 	 
	 	 	measure is reached.
	 
	 	 	 	 
	 	 	The performance measure will be communicated to each participant as soon as
practicable after it has been established. Final Target Incentive Awards
will be calculated after the Compensation Committee has reviewed the
Company’s audited financial statements for 2006 through 2008 and determined
the performance level achieved.
	 
	 	 	 	 
	 	 	The following definitions for the terms Maximum, Target and Threshold
should help set the goals for the Performance Period, as well as evaluate
the payouts:
	 
	 	 	 	 
	 

	 	•
	 	Maximum: Excellent; deserves payout above Target
	 
	 	 	 	 
	 

	 	•
	 	Target: Normal or expected performance; deserves Target payout
	 
	 	 	 	 
	 

	 	•
	 	Threshold: Lowest level of performance deserving a payout
	 
	 	 	 	 
	 	 	Attachment A lists the Target Incentives for each participant for the Plan
Years as determined by the Compensation Committee. Target Incentives will
be communicated to each participant as close to the beginning of the year
as practicable, in writing. Target Incentives will be calculated by
multiplying each participant’s Base Salary by the appropriate percentages,
as described below.
	 
	 	 	 	 
	 
	 	Target Incentives shall be
calculated as follows:

	 	 	 	 	 
	 	 	 	 	Percentage of Base Salary
	Performance Tier	 	for 2006-2008 Target Incentives
	 	1	 	 	*%
	 	2	 	 	*%
	 	3	 	 	*%

 

	 	 	 	 	 
	[*Targets not required to be disclosed.]
	 
	 	 	 	 
	 	 	Final Target Incentive Awards will be calculated and granted after the
Compensation Committee has reviewed the Company’s audited financial
statements for 2006 through 2008 and determined the performance levels
achieved.
	 
	 	 	 	 
	Awards	 	Each participant shall receive cash equal to 25% in value of his or her
award, 50% in value will be in restricted stock and 25% in value in stock
options, except that the President and Chief Executive Officer will receive
cash equal to 100% in value of his

3

 

	 	 	 	 	 
	 	 	award and no restricted stock or stock options.
	 
	 	 	 	 
	 	 	The number of shares of the Company’s Common Stock with respect to each
stock option granted pursuant to the 2006 Plan will equal the applicable
dollar value divided by the value of a stock option calculated using the
Black-Scholes or other option valuation model used by the Company as of the
date of grant for financial accounting purposes. Stock options will (i) be
nonqualified, (ii) vest on the date of grant, (iii) have an exercise price
equal to the average of the high and low for the Company’s Common Stock on
the date of grant and (iv) be exercisable for five years after the date of
grant, subject to the provisions below regarding termination of employment.
	 
	 	 	 	 
	 	 	The number of shares of the Company’s Common Stock with respect to each
restricted stock grant pursuant to the 2006 Plan will equal the applicable
dollar value divided by the average of the high and low for the Company’s
Common Stock on the date of grant. Restricted stock will vest as to 50% of
the shares on the date of grant and the balance one year after the date of
grant, subject to the provisions below regarding termination of employment.
	 
	 	 	 	 
	 	 	For purposes of the 2006 Plan, the date of grant of stock options and
restricted stock will be the date established by the Compensation Committee
after the applicable performance level has been determined.
	 
	 	 	 	 
	Form and Timing of
Awards	 	Awards will be made as soon as practicable after performance measures are
calculated and approved by the Compensation Committee. All awards will be
rounded to the nearest multiple of $100 or up to the next whole share, as
the case may be.
	 
	 	 	 	 
	Change In Status	 	An employee hired into an eligible position during the Performance Period
may participate in the 2006 Plan for the balance of the Performance Period
on a pro rata basis.
	 
	 	 	 	 
	Certain
Terminations of
Employment	 	In the event a participant voluntarily terminates employment (other than
retirement) or is terminated involuntarily before the end of the
Performance Period, the participant shall not receive any award hereunder.
In the event of death, permanent disability or retirement before the end of
the Performance Period, any award will be determined after the end of the
Performance Period based on actual performance and paid out on a pro rata
basis all in cash.
	 
	 	 	 	 
	 	 	In the event a participant terminates employment after receiving

4

 

	 	 	 	 	 
	 	 	stock options or restricted stock pursuant to the 2006 Plan, the post-termination
exercise period for stock options and the vesting of restricted stock will
be as follows:
	 
	 	 	 	 
	 

	 	 	 	Voluntary termination (other than retirement): (i) stock options cease to
be exercisable as of the date of termination; and (ii) unvested restricted
stock is forfeited as of the date of termination.
	 
	 	 	 	 
	 

	 	 	 	Involuntary termination: (i) stock options will remain exercisable for a
period of 30 days following the date of termination (or, if earlier, the
original expiration date of the option); and (ii) unvested restricted stock
is forfeited as of the date of termination.
	 
	 	 	 	 
	 

	 	 	 	Death: (i) stock options will remain exercisable for a period of one year
following the date of death (or, if earlier, the original expiration date
of the option); and (ii) unvested restricted stock becomes vested pro rata
based on number of full months completed since the date of grant.
	 
	 	 	 	 
	 

	 	 	 	Permanent disability: (i) stock options will remain exercisable through the
original expiration date of the option; and (ii) unvested restricted stock
becomes vested pro rata based on number of full months completed since the
date of grant.
	 
	 	 	 	 
	 

	 	 	 	Retirement: (i) stock options will remain exercisable for a period of three
years following retirement (or, if earlier, the original expiration date of
the option); and (ii) unvested restricted stock becomes vested pro rata
based on number of full months completed since the date of grant.
	 
	 	 	 	 
	 	 	For purposes hereof, “retirement” means the participant’s termination of
employment with the Company either (i) after attainment of age 65 or (ii)
after attainment of age 55 with the prior consent of the Compensation
Committee.
	 
	 	 	 	 
	Change In Control	 	In the event of a Change in Control, pro rata payouts will be made all in
cash at the greater of (1) Target Incentive or (2) actual results for the
completed fiscal years preceding the Change in Control, with such pro
ration based on the number of days in the Performance Period preceding the
Change in Control. Payouts will be made within 30 days after the relevant
transaction has been completed.
	 
	 	 	 	 
	 	 	Also, in the event of a Change in Control, the vesting of restricted

5

 

	 	 	 	 	 
	 	 	stock will be accelerated to fully vest upon the effective date of a Change in
Control.
	 
	 	 	 	 
	 	 	“Change in Control” means, and shall be deemed to have occurred upon, the
first to occur of any of the following events:
	 
	 	 	 	 
	 	 	(i) Any Outside Person becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing twenty-five percent
(25%) or more of the combined voting power of the Company’s then
outstanding securities; or
	 
	 	 	 	 
	 	 	(ii) During any period of two (2) consecutive years (not including any
period prior to the date hereof), individuals who at the beginning of such
period constitute the Board (and any new Director, whose nomination for
election by the Company’s stockholders was approved by a vote of at least
two-thirds (2/3) of the Directors then in office who either were Directors
at the beginning of the period or whose nomination for election was so
approved) cease for any reason to constitute a majority of the members of
the Board; or
	 
	 	 	 	 
	 	 	(iii) The stockholders of the Company approve: (i) a plan of complete
liquidation of the Company; or (ii) an agreement for the sale or
disposition of all or substantially all of the Company’s assets other than
a sale or disposition of all or substantially all of the Company’s assets
to an entity at least sixty percent (60%) of the combined voting power of
the voting securities of which are owned by the stockholders of the Company
in substantially the same proportions as their ownership of the Company
immediately prior to such sale or disposition; or
	 
	 	 	 	 
	 	 	(iv) The stockholders of the Company approve a merger, consolidation, or
reorganization of the Company with or involving any other corporation,
other than a merger, consolidation, or reorganization that would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or any parent
thereof) at least sixty percent (60%) of the combined voting power of the
voting securities of the Company (or such surviving entity) outstanding
immediately after such merger, consolidation, or reorganization.
	 
	 	 	 	 
	 	 	However, in no event shall a “Change in Control” be deemed to have occurred
with respect to a Participant if that Participant is part of a purchasing
group which consummates the Change in Control

6

 

	 	 	 	 	 
	 	 	transaction. A Participant shall be deemed “part of a purchasing group” for purposes of the preceding
sentence if the Participant is an equity participant in the acquiring
company or group or surviving entity (the “Purchaser”) except for ownership
of less than one percent (1%) of the equity of the Purchaser.
	 
	 	 	 	 
	 	 	“Beneficial Owner” has the meaning ascribed to such term in Section 13(d)
of the Exchange Act and Rule 13d-3 of the General Rules and Regulations
under the Exchange Act.
	 
	 	 	 	 
	 	 	“Board” means the Board of Directors of the Company.
	 
	 	 	 	 
	 	 	“Director” means a member of the Board.
	 
	 	 	 	 
	 	 	“Member of the Van Every Family” means (i) a lineal descendant of Salem A.
Van Every, Sr., including adopted persons as well as persons related by
blood, (ii) a spouse of an individual described in clause (i) of this
Paragraph or (iii) a trust, estate, custodian and other fiduciary or
similar account for an individual described in clause (i) or (ii) of this
Paragraph.
	 
	 	 	 	 
	 	 	“Outside Person” means any Person other than (i) a Member of the Van Every
Family, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or (iii) a corporation owned directly
or indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of the Company.
	 
	 	 	 	 
	 	 	“Participant” means an employee of the Company who is granted an Award
under this Plan.
	 
	 	 	 	 
	Withholding	 	The Company shall withhold from awards any Federal, foreign, state or local
income or other taxes required to be withheld.
	 
	 	 	 	 
	Communications	 	Progress reports should be made to participants annually, showing
performance results.
	 
	 	 	 	 
	Executive Officers	 	Notwithstanding any provisions to the contrary above, participation, awards
and prorations for Executive Officers, including the President and Chief
Executive Officer, shall be approved by the Compensation Committee.
	 
	 	 	 	 
	Governance	 	The Compensation Committee of the Board of Directors of Lance, Inc. is
ultimately responsible for the administration and governance of the Plan.
Actions requiring Committee approval include final determination of plan
eligibility and participation, identification of

7

 

	 	 	 	 	 
	 	 	performance measures and goals, final award components and determination and amendments to the Plan.
The Committee retains the discretion to adjust any award due to
extraordinary events such as acquisitions, dispositions, required
accounting adjustments or similar events; anomalies affecting the
calculations under a performance measure or where fairness to participants
or the Company require an adjustment. The decisions of the Committee shall
be conclusive and binding on all participants.

8

 

Attachment A

	 	 	 	 	 	 	 
	 	 	 	 	Award	 	Target
	Name	 	Title	 	Percentage	 	Incentive
	David V. Singer

	 	President and Chief
	 	*%
	 	$*
	 

	 	Executive Officer	 	 	 	 
	 
	 	 	 	 	 	 
	H. D. Fields

	 	Vice President and
	 	*%
	 	$*
	 

	 	President, Vista	 	 	 	 
	 

	 	Bakery, Inc.	 	 	 	 
	 
	 	 	 	 	 	 
	R. D. Puckett

	 	Executive Vice President,
	 	*%
	 	$*
	 

	 	Chief Financial Officer	 	 	 	 
	 

	 	and Secretary	 	 	 	 
	 
	 	 	 	 	 	 
	L. R. Gragnani, Jr.

	 	Vice President
	 	*%
	 	$*
	 

	 	- Information	 	 	 	 
	 

	 	Technology/CIO	 	 	 	 
	 
	 	 	 	 	 	 
	E. D. Leake

	 	Vice President
	 	*%
	 	$*
	 

	 	— Human Resources	 	 	 	 
	 
	 	 	 	 	 	 
	F. I. Lewis

	 	Vice President — Sales
	 	*%
	 	$*
	 
	 	 	 	 	 	 
	B. W. Thompson

	 	Vice President —
	 	*%
	 	$*
	 

	 	Supply Chain	 	 	 	 
	 
	 	 	 	 	 	 
	M. E. Wicklund

	 	Controller and
	 	*%
	 	$*
	 

	 	Assistant Secretary	 	 	 	 

 

[*Award targets omitted for participants as targets not required to be disclosed.]

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