Document:

exv4w2

 

Exhibit 4.2

EXHIBIT D-3

CERTIFICATE OF DESIGNATIONS

OF

CLASS 3 UNITS

OF JCM PARTNERS, LLC

(As Created by the Board of Managers

Pursuant to Section 2.1.6 of the Amended and

Restated Operating Agreement, dated as of June 25, 2003)

WHEREAS, Section 2.1.6 of that Amended and Restated Operating Agreement dated
as of June 25, 2003, as it may be amended thereafter (“Agreement”) of JCM
Partners, LLC, a Delaware limited liability company (“Company”), provides that
the Board of Managers may create a class of Units by approving a Certificate of
Designations for such class; and

WHEREAS, this Certificate of Designations sets forth the rights, preferences,
privileges and restrictions of the Class 3 Units;

NOW, THEREFORE, BE IT RESOLVED, that the Class 3 Units shall have the rights,
preferences, privileges and restrictions set forth herein. Capitalized terms
not otherwise defined herein have the meaning set forth in the Agreement.

	1.	 	Designation of Class.
	 
	 	 	The Company shall have a class of Units which shall be designated “Class
3 Units” (the “Class 3 Units”).
	 
	2.	 	Number of Class 3 Units.
	 
	 	 	The number of Class 3 Units that may be issued shall not exceed the
number of Units authorized for issuance as Units under Section 2.1.2 of
the Agreement.
	 
	3.	 	Status of Class 3 Units.
	 
	 	 	All Class 3 Units shall remain Class 3 Units until converted in
accordance with Section 7 of this Certificate of Designations and the
terms of the Agreement.
	 
	4.	 	Distributions to Holders of Class 3 Units.

			
	 	4.1	Priority of Distributions.

		
	 	The holders of Class 3 Units shall have the right to receive Class
3 Mandatory Monthly Distributions (see Section 4.2 below). The
Class 3 Mandatory Monthly Distributions shall be paid in full each
month prior to payment of any distributions 

 

		
	 	on any series of
Preferred Units or any Additional Distributions to any class of
Units. In addition, the Company shall not issue any class of Units
with the right to receive any distribution prior to payment of the
Class 3 Mandatory Monthly Distributions; provided, however, that
the Company is authorized to issue classes of Units or series of
Preferred Units with the right to receive Mandatory Distributions
on the terms set forth in Section 2.1.4.2(b) of the Agreement
without the need to obtain any additional authorization or vote of
the Class 3 Units. Class 3 Units shall have the same priority as
Class 1 Units for participating in any shortfall as set forth in
Section 2.1.4.2(b)(1) of the Agreement. Subject to Section
2.1.4.2(c) of the Agreement, the Class 3 Units shall receive
Additional Distributions as determined by the Board in its sole
discretion, but at no time will the amount of Additional
Distributions be less than the amount that the Class 1 Units
receive on a per Unit basis.

			
	 	4.2	Class 3 Mandatory Monthly Distributions.

		
	 	The Company shall make a monthly distribution to the holders of
Class 3 Units in an amount equal to one-twelfth (1/12th) of eight
and 25/100 cents ($0.0825) per Class 3 Unit (the “Class 3 Mandatory
Monthly Distributions”). If the Company fails, for any reason, to
pay any Class 3 Mandatory Monthly Distribution(s) in a timely
manner (“Overdue Class 3 Mandatory Monthly Distributions”), the
Company shall begin liquidating its assets as quickly as
commercially reasonable and shall pay the holders of Class 3 Units
interest on any Overdue Class 3 Mandatory Monthly Distributions at
the rate of ten percent (10%) per annum. The Company may cease
liquidating its assets when the Company no longer has any Overdue
Class 3 Mandatory Monthly Distributions.

			
	 	4.3	Payment.

		
	 	The Class 3 Mandatory Monthly Distributions shall be paid to the
holders of record of Class 3 Units as of the first day of the month
and mailed by the Company to such holders of record no later than
the last day of each month. In lieu of mailing, the Company may
transmit payment to a holder of Class 3 Units in any other manner
agreed to in writing by a holder of Class 3 Units.

			
	 	4.4	Termination of Class 3 Mandatory Monthly Distributions.

		
	 	The Class 3 Mandatory Monthly Distributions shall remain in effect
until the first to occur of the following events (each, a “Class 3
Mandatory Distribution Termination Event”):

			
	 	4.4.1	The monthly record date immediately prior to the
dissolution of the Company pursuant to Section 5.1.1 of the
Agreement; or

2

 

			
	 	4.4.2	The closing of a Change of Control Merger or
Consolidation. “Change of Control Merger or Consolidation”
means any merger or consolidation in which the Company is not
the surviving entity, except a transaction that results in the
Members of the Company immediately prior to the transaction
owning securities representing at least fifty percent (50%) of
the voting power of the surviving entity after the
transaction.

	5.	 	[Intentionally Left Blank]
	 
	6.	 	Voting Rights.
	 
	 	 	The holders of the Class 3 Units shall have the voting rights granted to
Units in the Agreement, including the right to vote on certain matters as
a separate class of Units as set forth in Sections 2.2.2 and 2.2.3 of the
Agreement. In addition, provided the Board has first approved such
amendment, any amendment to this Certificate of Designations shall
require that a majority of the Class 3 Units who are present (by person
or proxy) at a duly called and held meeting at which a quorum is present
shall be required to approve such amendment (or if no meeting is to be
held, then upon the written consent executed by a majority in interest of
the outstanding Class 3 Units).
	 
	7.	 	Conversion Rights and Restrictions.

			
	 	7.1	The Right of Holders of Other Units to Convert to Class 3 Units.

			
	 	7.1.1	Any holder of Class 1 Units, who has not
exercised the holder’s Class 1 Put Right pursuant to Section
5.3 of the Certificate of Designations of Class 1 Units, may
convert the holder’s Class 1 Units into Class 3 Units at any
time by complying with the procedures herein.

			
	 	7.1.2	Any holder of Class 2 Units, who has not
exercised the holder’s Class 2 Put Right pursuant to Section
5.3 of the Certificate of Designations of Class 2 Units, may
convert the holder’s Class 2 Units into Class 3 Units at any
time by complying with the procedures herein.

			
	 	7.1.3	Any holder of Class 1 or Class 2 Units wishing
to convert such Units into Class 3 Units must convert their
Class 1 or Class 2 Units on both a Unit-for-Unit basis and a
certificate-by-certificate basis by delivering properly
completed conversion form(s) to the Company. (The Company has
not issued certificates for existing Units. However, the
Company has an internal system that creates book entry
certificates for the holders of existing Units. The Company
issues distribution checks on a book entry
certificate-by-certificate basis.)

			
	 	7.1.4	The Board shall have the right to impose
reasonable procedures and controls related to the conversion
of other Units to Class 3 Units as permitted by this Section 7
to include requiring holders of other Units to deliver written
notice to the Company that the holder elects to convert

3

 

			
	 	 	those
Units to Class 3 Units. Any conversion shall be processed
according to the Company’s procedures.

			
	 	7.2	The Right of Holders of Class 3 Units to Convert to Other Units.

			
	 	7.2.1	The rights and conditions governing the
conversion of Class 3 Units to other Units are specified in
the Certificates of Designations for those other Units.

			
	 	7.2.2	When Class 3 Units are converted to another
class of Units, the holder shall then hold the new class of
Units, and the converted Class 3 Units shall assume the status
of authorized but unissued Units. The Company shall at all
time reserve and keep available out of its authorized Units
sufficient Units to satisfy any the conversion rights granted
to holders of Class 3 Units.

	8.	 	No Impairment.
	 
	 	 	The Company will not, by amendment of the Agreement or through any
reorganization, recapitalization, transfer of assets, consolidation,
merger, dissolution, issuance or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Certificate of Designations to be observed or
performed by the Company, but will at all times in good faith assist in
carrying out all the provisions of this Certificate of Designations and
in the taking of all such action as may be necessary or appropriate in
order to protect the rights (including but not limited to the conversion
rights) of the holders of Class 3 Units against impairment.
Notwithstanding any implication to the contrary, the foregoing shall not
have the affect of requiring the unanimous approval or consent of each
holder of Class 3 Units in order to amend the Agreement or this
Certificate of Designations, or to permit the Company to engage in a
reorganization, recapitalization, transfer or sale of assets,
consolidation, merger, dissolution, or issuance of Units or Preferred
Units.
	 
	9.	 	Residual Rights.
	 
	 	 	Except as expressly provided for herein, the Class 3 Units shall be
vested with the rights, preferences, privileges and restrictions accruing
to Units under the Agreement.

	 	 	 	 
	 	 	
JCM PARTNERS, LLC
	 
	 	 	By	/s/ Gayle M. Ing
	 	 	 	

	 	 	 	Gayle M. Ing,

Chief Executive Officer
	 
	 	 	
Dated:  Effective September 24, 2003

4<PAGE>
                                                                    EXHIBIT 10.1

                        GOVERNMENT PROPERTIES TRUST, INC.

                           2003 EQUITY INCENTIVE PLAN

ARTICLE 1.        ESTABLISHMENT, OBJECTIVES AND DURATION

         1.1 ESTABLISHMENT OF THE PLAN. Government Properties Trust, Inc., a
Maryland corporation (hereinafter referred to as the "Company"), hereby
establishes a long-term incentive compensation plan to be known as the
"Government Properties Trust, Inc. 2003 Equity Incentive Plan" (hereinafter
referred to as the "Plan"), as set forth in this document. The Plan permits the
grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation
Rights, Restricted Stock, and Performance Units.

         Subject to the approval of the Company's shareholders, the Plan shall
become effective on the date it is approved by the Board (the "Effective Date")
and shall remain in effect as provided in Section 1.3 hereof.

         1.2 OBJECTIVES OF THE PLAN. The objectives of the Plan are to optimize
the profitability and growth of the Company through long-term incentives which
are consistent with the Company's objectives and which link the interests of
Participants to those of the Company's shareholders; to provide Participants
with an incentive for excellence in individual performance and to promote
teamwork among Participants; and to give the Company a significant advantage in
attracting and retaining officers, key employees and directors.

         The Plan is further intended to provide flexibility to the Company in
its ability to motivate, attract and retain the services of Participants who
make significant contributions to the Company's success and to allow
Participants to share in the success of the Company.

         1.3 DURATION OF THE PLAN. The Plan shall commence on the Effective Date
and shall remain in effect, subject to the right of the Board of Directors to
amend or terminate the Plan at any time pursuant to Article 15 until all Shares
subject to the Plan pursuant to Article 4 shall have been purchased or acquired
according to the provisions hereof. In no event, however, may an Award be
granted under the Plan on or after the tenth anniversary of the Effective Date.

ARTICLE 2.        DEFINITIONS

         Whenever used in the Plan, the following terms shall have the meanings
set forth below, and when the meaning is intended, the initial letter of the
word shall be capitalized:

<PAGE>

         2.1 "AWARD" means, individually or collectively, a grant under this
Plan of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation
Rights, Restricted Stock, or Performance Units.

         2.2 "AWARD AGREEMENT" means an agreement entered into by the Company
and a Participant setting forth the terms and provisions applicable to an Award
or Awards granted under this Plan to such Participant.

         2.3 "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the
Company.

         2.4 "CODE" means the Internal Revenue Code of 1986, as amended from
time to time.

         2.5 "COMMITTEE" means, as specified in Article 3 herein, the
Compensation Committee of the Board or such other committee as may be appointed
by the Board to administer the Plan.

         2.6 "COMPANY" means Government Properties Trust, Inc., a Michigan
corporation and any successor thereto as provided in Article 18 herein.

         2.7 "DIRECTOR" means any individual who is a member of the Board of
Directors.

         2.8 "DISABILITY" shall mean (a) long-term disability as defined under a
long-term disability plan maintained by an Employer and covering that
individual, or (b) if the individual is not covered by such a long-term
disability plan, disability as defined for purposes of eligibility for a
disability award under the Social Security Act.

         2.9 "EFFECTIVE DATE" shall have the meaning ascribed to such term in
Section 1.1 hereof.

         2.10 "ELIGIBLE EMPLOYEE" means any officer or other key employee of the
Company or of any other Employer. Directors who are not employed by the Company
or another Employer shall not be considered Eligible Employees under this Plan.

         2.11 "EMPLOYER" means, individually, the Company and any other
corporation, trust or partnership in which the Company owns directly or
indirectly at least 50% in value of the outstanding capital or profits interest.

         2.12 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act thereto.

                                       2
<PAGE>

         2.13 "EXERCISE PRICE" means the price at which a Share may be purchased
pursuant to the exercise of an Option.

         2.14 "FAIR MARKET VALUE" means the per share value of the Shares as of
a given date, determined as follows:

                  (a) If the Shares are listed or admitted for trading on the
         New York Stock Exchange (or if not, on another national securities
         exchange upon which the Shares are listed), the Fair Market Value of a
         Share is the closing quotation for such shares based on composite
         transactions for the New York Stock Exchange (or if not listed on it,
         such other national securities exchange) on the last trading day for
         the Shares prior to such given date.

                  (b) If the Shares are not traded on any national securities
         exchange, but are quoted on the National Association of Securities
         Dealers, Inc. Automated Quotation System (NASDAQ System) or any similar
         system of automated dissemination of quotations of prices in common
         use, the Fair Market Value of a Share is the last sales price (if the
         Shares are then listed as a national market issue under the NASDAQ
         System), or the mean between the closing representative bid and asked
         prices (in all other cases) on the day in question or, if there should
         be no sale on that date, on the next preceding day on which there was a
         sale.

                  (c) If neither clause (a) nor clause (b) of this Section 2.14
         is applicable, the Fair Market Value of a Share is the fair market
         value per share as of such valuation date, as determined by the
         Committee in good faith and in accordance with uniform principles
         consistently applied; provided, however, that the Fair Market Value of
         a Share on the date of the completion of an initial public offering of
         the Shares shall be the initial public offering price.

         2.15 "FREESTANDING SAR" means an SAR that is granted independently of
any Option, as described in Article 7 herein.

         2.16 "INCENTIVE STOCK OPTION" or "ISO" means an option to purchase
Shares granted under Article 6 herein which is designated as an Incentive Stock
Option and that is intended to meet the requirements of Code Section 422.

         2.17 "NONEMPLOYEE DIRECTOR" means an individual who is a member of the
Board of Directors of the Company but who is not an employee of the Company or
any other Employer.

         2.18 "NONQUALIFIED STOCK OPTION" or "NQSO" means an option to purchase
Shares granted under Article 6 herein that is not intended to meet the
requirements of Code Section 422.

                                       3
<PAGE>

         2.19 "OPTION" means an Incentive Stock Option or a Nonqualified Stock
Option, as described in Article 6 herein.

         2.20 "PARTICIPANT" means an Eligible Employee, Nonemployee Director,
consultant or advisor who has been selected by the Committee to participate in
the Plan pursuant to Section 5.2 and who has outstanding an Award granted under
the Plan.

         2.21 "PERFORMANCE-BASED EXCEPTION" means the performance-based
exception from the tax deductibility limitations of Code Section 162(m) and any
regulations promulgated thereunder.

         2.22 "PERFORMANCE UNIT" means a Share equivalent Award granted to a
Participant, as described in Article 9 herein.

         2.23 "RESTRICTION PERIOD" means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage of time,
the achievement of performance objectives, or upon the occurrence of other
events as determined by the Committee, at its discretion), and/or the Restricted
Stock are not vested.

         2.24 "RESTRICTED STOCK" means a contingent grant of Shares awarded to a
Participant pursuant to Article 8 herein.

         2.25 "RETIREMENT" shall mean termination of service on or after (a)
attaining the normal retirement age under the tax-qualified defined benefit
retirement plan or, if none, the tax-qualified defined contribution retirement
plan, sponsored by the Company or another Employer in which the Participant
participates, or (b) in the absence of such any such plan, attaining age
sixty-two with ten years of continuous service with one or more Employers
provided that the retirement is approved by the Chief Executive Officer of the
Company unless the Participant is an officer subject to Section 16 of the
Exchange Act in which case the retirement must be approved by the Committee.

         2.26     "SHARES" means the Company's common shares.

         2.27 "STOCK APPRECIATION RIGHT" or "SAR" means an Award, granted alone
or in connection with a related Option, designated as an SAR, pursuant to the
terms of Article 7 herein.

         2.29 "SUBSIDIARY" means a subsidiary corporation of the Company within
the meaning of Code Section 424(f).

         2.30 "TANDEM SAR" means an SAR that is granted in connection with a
related Option pursuant to Article 7 herein, the exercise of which requires
forfeiture of the right to

                                       4
<PAGE>

purchase a Share under the related Option (and when a Share is purchased under
the Option, the Tandem SAR shall similarly be canceled).

ARTICLE 3.        ADMINISTRATION

         3.1 THE COMMITTEE. The Plan shall be administered by the Compensation
Committee of the Board, or by any other Committee appointed by the Board, which
Committee (unless otherwise determined by the Board) shall satisfy the
"nonemployee director" requirements of Rule 16b-3 under the Exchange Act and the
regulations thereunder and the "outside director" provisions of Code Section
162(m), or any successor regulations or provisions.

         3.2 AUTHORITY OF THE COMMITTEE. Except as limited by law and subject to
the provisions herein, the Committee shall have full power and discretion to:
select Eligible Employees, Nonemployee Directors, consultants and advisors who
shall participate in the Plan; determine the sizes and types of Awards;
determine the terms and conditions of Awards in a manner consistent with the
Plan; construe and interpret the Plan and any agreement or instrument entered
into under the Plan; establish, amend or waive rules and regulations for the
Plan's administration; and, subject to the provisions of Article 15 herein,
amend the terms and conditions of any outstanding Award to the extent such terms
and conditions are within the discretion of the Committee as provided in the
Plan. Further, the Committee shall make all other determinations which may be
necessary or advisable for the administration of the Plan. Except as limited by
law, the Committee may authorize one or more officers of the Company to do one
or both of the following: (i) designate Eligible Employees, consultants and
advisors of the Company or any of its Subsidiaries to be recipients of Awards,
and (ii) determine the size, terms and conditions of any Award; provided,
however, that no such authority may be delegated with respect to Awards made to
any person subject to Section 16 of the Exchange Act, any "covered employee"
(within the meaning of Code Section 162(m)), or any Nonemployee Director.

         3.3 DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan shall be final, conclusive and
binding on all persons, including the Company, its Board of Directors, its
shareholders, all Employers, employees, Participants and their estates and
beneficiaries.

ARTICLE 4.        SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS

         4.1 NUMBER OF SHARES AVAILABLE FOR GRANTS. Subject to adjustment as
provided in Section 4.3 herein, the number of Shares that may be issued or
transferred to Participants under the Plan shall be 1,000,000 Shares plus an
annual increase to be added on the first day of each Company fiscal year that
commences after December 31, 2004, equal to the lesser of (i) 200,000 Shares,
(ii) 5% of the number of Shares issued by the Company during the preceding
fiscal year or (iii) a lesser amount determined by the Board.

                                       5
<PAGE>

         The maximum number of Shares and Share equivalent units that may be
granted during any calendar year to any one Participant under Options,
Freestanding SARs, Restricted Stock, or Performance Units, shall be 150,000 (on
an aggregate basis for all such types of Awards), which limit shall apply
regardless of whether such compensation is paid in Shares or in cash.

         4.2 LAPSED AWARDS. Unless determined otherwise by the Committee, any
Shares related to an Award that are forfeited, terminated, expire unexercised,
tendered by a Participant to the Company in connection with the exercise of an
Award, withheld from issuance in connection with a Participant's payment of tax
withholding liability, settled in cash in lieu of Shares, or settled in such
other manner so that a portion or all of the Shares included in such Award are
not issued to a Participant shall be available for other Awards.

         4.3      ADJUSTMENTS FOR CERTAIN TRANSACTIONS.

         (a)      In the event the Shares, as presently constituted, shall be
                  changed into or exchanged for a different number or kind of
                  shares of securities or other property of the Company or of
                  another legal entity (whether by reason of merger,
                  consolidation, recapitalization, reclassification, split,
                  reverse split, combination of shares, or otherwise) or if the
                  number of such Shares shall be increased through the payment
                  of a share dividend, then the Committee shall make appropriate
                  adjustments to each Share theretofore appropriated or
                  thereafter subject or which may become subject to an Award
                  under this Plan, the number and kind of shares of securities
                  into which each outstanding Share shall be so changed, or for
                  which each such Share shall be exchanged, or to which each
                  such Share shall be entitled, as the case may be. Outstanding
                  Awards shall also be appropriately amended as to price and
                  other terms as may be necessary to reflect the foregoing
                  events. In the event there shall be any other change in the
                  number or kind of the outstanding Shares, or of any stock or
                  other securities into which such Shares shall have been
                  changed, or for which it shall have been exchanged, then, if
                  the Committee shall, in its sole discretion, determine that
                  such change equitably requires an adjustment in any Award
                  therefore granted or which may be granted under the Plan, such
                  adjustments shall be made in accordance with such
                  determination.

         (b)      Fractional Shares resulting from any adjustment in Awards
                  pursuant to this section may be settled in cash or otherwise
                  as the Committee shall determine. Notice of any adjustment
                  shall be given by the Company to each Participant who holds an
                  Award which has been so adjusted and such adjustment (whether
                  or not such notice is given) shall be effective and binding
                  for all purposes of the Plan.

                                       6
<PAGE>

         4.4 EMPLOYER PAYMENT. In the case of Shares delivered pursuant to an
Award granted to an employee of an Employer other than the Company or a
Subsidiary, such Employer shall make a payment to the Company with respect to
such Shares in an amount equal to (i) the Fair Market Value of the Shares on the
date as of which they are so delivered, less (ii) in the case of an option, the
aggregate exercise price for such Shares. For this purpose, the obligation to
deliver Shares shall first be satisfied from any Shares transferred in payment
of an exercise price.

ARTICLE 5.        ELIGIBILITY AND PARTICIPATION

         5.1 ELIGIBILITY. Individuals eligible to participate in this Plan
consist of Eligible Employees, including Eligible Employees who are members of
the Board, and subject to the limitations herein, Nonemployee Directors,
consultants and advisors.

         5.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible persons those to whom
Awards shall be granted and shall determine the nature and amount of each Award.

ARTICLE 6.        STOCK OPTIONS

         6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the Plan,
Options may be granted in such number, and upon such terms, and at any time and
from time to time as shall be determined by the Committee. Options granted to
Eligible Employees who are employees of the Company or a Subsidiary may be
either ISOs or NQSOs. Options granted to all other Participants who are not
employees of the Company or a Subsidiary may only be NQSOs.

         6.2 AWARD AGREEMENT. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Exercise Price, the duration of the Option, the
number of Shares to which the Option pertains, the manner, time and rate of
exercise or vesting of the Option, and such other provisions as the Committee
shall determine. The Award Agreement also shall specify whether the Option is
intended to be an ISO within the meaning of Code Section 422 or an NQSO which is
not intended to qualify under the provisions of Code Section 422.

         6.3 EXERCISE PRICE. The Exercise Price for each Share subject to an
NQSO granted under this Plan shall be at least equal to eighty-five percent of
the Fair Market Value of a Share on the date the Option is granted The Exercise
Price for each Share subject to an ISO granted under this Plan shall be at least
equal to one hundred percent of the Fair Market Value of a Share on the date the
Option is granted; provided, however, that the price per share shall not be less
than 110% of the Fair Market Value of such Share if on the date of grant the
Participant owns (within the meaning of Code Section 422(b)(6)) more than 10% of
the total combined voting power of all classes of shares of beneficial interest
of the Company or any Subsidiary.

                                       7
<PAGE>

         6.4 DURATION OF OPTIONS. Each Option granted to a Participant shall
expire at such time as the Committee shall determine at the time of grant;
provided, however, that no Option shall be exercisable later than the tenth
anniversary of the date of its grant; provided, further, that in the case of an
ISO granted to a Participant owning (within the meaning of Code Section
422(b)(6)), on the date of grant, more than 10% of the total combined voting
power of all classes of shares of beneficial interest of the Company or any
Subsidiary, the Option shall not be exercisable later than the fifth anniversary
of the date of its grant. An ISO must be exercised no later than (a) three
months following the Participant's termination of service with the Company, or
(b) if the Participant is disabled (within the meaning of Section 22(e)(3) of
the Code), 12 months following the Participant's termination of service with the
Company.

         6.5 DIVIDEND EQUIVALENTS. The Committee may grant dividend equivalents
in connection with Options granted under this Plan. Such dividend equivalents
may be payable in cash or in Shares, upon such terms as the Committee, in its
sole discretion, deems appropriate.

         6.6 EXERCISE OF OPTIONS. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each Award or for each Participant. To the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options (within the
meaning of Section 422 of the Code, but without regard to Section 422(d) of the
Code) are exercisable for the first time by the Participant during any calendar
year (under the Plan and all other incentive stock option plans of the Company)
exceeds $100,000, such Options shall be treated as Nonqualified Options. The
rule set forth in the preceding sentence shall be applied by taking Options into
account in the order in which they were granted, and the Fair Market Value of
the Shares shall be determined as of the time the Option with respect to such
Shares is granted.

         6.7 PAYMENT. Options granted under this Article 6 shall be exercised by
the delivery of a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised accompanied
by full payment for the Shares and any withholding tax relating to the exercise
of the Option.

         The Exercise Price, and any related withholding taxes, upon exercise of
any Option shall be payable: (a) in cash, or its equivalent, in United States
dollars, or (b) if permitted in the governing Award Agreement, by tendering
previously acquired Shares having an aggregate Fair Market Value at the time of
exercise equal to the total Exercise Price, or (c) if permitted in the governing
Award Agreement, by a combination of (a) and (b). The Committee also may allow
cashless exercise as permitted under Federal Reserve Board's Regulation T,
subject to applicable securities law restrictions, or by any other means which
the Committee determines to be consistent with the Plan's purpose and applicable
law.

                                       8
<PAGE>

         6.8 TERMINATION OF SERVICE. Each Option Award Agreement shall set forth
the extent to which the Participant shall have the right to exercise the Option
following termination of the Participant's service with the Company and all
other Employers. Such provisions shall be determined by the Committee, shall be
included in the Award Agreement entered into with each Participant, need not be
uniform among all Options issued pursuant to this Article 6, and may reflect
distinctions based on the reasons for termination of service. Except to the
extent otherwise provided by the Committee in the Option Award Agreement, if a
Participant terminates service with the Company for any reason other than (a)
death on or after the first anniversary of the date of grant, or (b) Disability
on or after the first anniversary of the date of grant, all Options granted to
such Participant which have not yet become fully vested shall be immediately
forfeited.

         6.9 NONTRANSFERABILITY OF OPTIONS. No Option granted under the Plan may
be sold, transferred, pledged, assigned or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution or, in the case of
an Option other than an ISO, pursuant to a domestic relations order (within the
meaning of Rule 16a-12 promulgated under the Exchange Act). Further, all Options
granted to a Participant under the Plan shall be exercisable during the
Participant's lifetime only by such Participant or the Participant's guardian or
legal representative. The Committee may require a Participant's guardian or
legal representative to supply it with such evidence as the Committee deems
necessary to establish the authority of the guardian or legal representative to
act on behalf of the Participant.

         6.10 NOTIFICATION OF DISQUALIFYING DISPOSITION. If any Participant
shall make any disposition of Shares issued pursuant to the exercise of an ISO
under the circumstances described in Section 421(b) of the Code (relating to
certain disqualifying dispositions), such Participant shall notify the Company
of such disposition within ten (10) days thereof.

ARTICLE 7.        STOCK APPRECIATION RIGHTS

         7.1 GRANT OF SARS. Subject to the terms and conditions of the Plan,
SARs may be granted to Participants at any time and from time to time as shall
be determined by the Committee. The Committee may grant Freestanding SARs,
Tandem SARs or any combination of these forms of SAR.

         Subject to Article 4 hereof, the Committee shall determine the number
of SARs granted to each Participant and, consistent with the provisions of the
Plan, determine the terms and conditions pertaining to such SARs.

         The grant price of a Freestanding SAR shall equal the Fair Market Value
of a Share on the date of grant of the SAR. The grant price of Tandem SARs shall
equal the Exercise Price of the related Option.

                                       9
<PAGE>

         7.2 EXERCISE OF TANDEM SARS. Tandem SARs may be exercised for all or
part of the Shares subject to the related Option upon the surrender of the right
to exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.

         7.3 EXERCISE OF FREESTANDING SARS. Freestanding SARs may be exercised
upon whatever terms and conditions the Committee imposes upon them.

         7.4 AWARD AGREEMENT. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the grant price, the term of the SAR and such other
provisions as the Committee shall determine.

         7.5 DURATION OF SARS. The term of an SAR granted under the Plan shall
be determined by the Committee; provided, however, that such term shall not
exceed ten years.

         7.6 PAYMENT OF SAR AMOUNT. Upon exercise of an SAR, a Participant shall
be entitled to receive payment from his or her Employer in an amount determined
by multiplying:

                  (a)      the excess (or some portion of such excess as
                           determined at the time of the grant by the Committee)
                           if any, of the Fair Market Value of a Share on the
                           date of exercise of the SAR over the grant price
                           specified in the Award Agreement; by

                  (b)      the number of Shares with respect to which the SAR is
                           exercised.

         At the discretion of the Committee, the payment upon SAR exercise may
be in cash, in Shares of equivalent Fair Market Value or in some combination
thereof.

         7.7 TERMINATION OF SERVICE. Each SAR Award Agreement shall set forth
the extent to which the Participant shall have the right to exercise the SAR
following termination of the Participant's service with the Company and all
other Employers. Such provisions shall be determined by the Committee, shall be
included in the Award Agreement entered into with Participants, need not be
uniform among all SARs issued pursuant to the Plan, and may reflect distinctions
based on the reasons for termination of service.

         7.8 NONTRANSFERABILITY OF SARS. Except as otherwise provided in a
Participant's Award Agreement, no SAR granted under the Plan may be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
otherwise provided in a Participant's Award Agreement, all SARs granted to a
Participant under the Plan shall be exercisable during the Participant's
lifetime only by such Participant or the Participant's guardian or legal
representative. The Committee

                                       10
<PAGE>

may require a Participant's guardian or legal representative to supply it with
such evidence as the Committee deems necessary to establish the authority of the
guardian or legal representative to act on behalf of the Participant.

ARTICLE 8.        RESTRICTED STOCK

         8.1 GRANT OF RESTRICTED STOCK. Subject to the terms and provisions of
the Plan, the Committee may, at any time and from time to time, grant Restricted
Stock to Participants in such amounts as the Committee shall determine. Each
grant of Restricted Stock shall be represented by the number of Shares to which
the Award relates.

         8.2 AWARD AGREEMENT. Each Restricted Stock grant shall be evidenced by
an Award Agreement that shall specify the Restriction Periods, the number of
Shares granted, and such other provisions as the Committee shall determine.

         8.3 NONTRANSFERABILITY. Except as provided in this Article 8, the
Restricted Stock granted herein may not be sold, transferred, pledged, assigned
or otherwise alienated or hypothecated until the end of the applicable
Restriction Period established by the Committee and as specified in the Award
Agreement, or upon earlier satisfaction of any other conditions, as specified by
the Committee and as set forth in the Award Agreement. All rights with respect
to Restricted Stock granted to a Participant under the Plan shall be available
during the Participant's lifetime only to such Participant or the Participant's
guardian or legal representative. The Committee may require a Participant's
guardian or legal representative to supply it with such evidence as the
Committee deems necessary to establish the authority of the guardian or legal
representative to act on behalf of the Participant.

         8.4 OTHER RESTRICTIONS. The Committee may impose such other conditions
and/or restrictions on any Restricted Stock granted pursuant to the Plan as it
deems advisable including, without limitation, restrictions based upon the
achievement of specific performance objectives (Company-wide, business unit,
and/or individual), time-based restrictions on vesting following the attainment
of the performance objectives, and/or restrictions under applicable federal or
state securities laws.

         The Company shall retain the certificates representing Shares of
restricted Stock in the Company's possession until such time as all conditions
and/or restrictions applicable to such Shares have been satisfied.

         8.5 PAYMENT OF AWARDS. Except as otherwise provided in this Article 8,
Shares covered by each Restricted Stock grant made under the Plan shall become
freely transferable by the Participant after the last day of the applicable
Restriction Period.

                                       11
<PAGE>

         8.6 VOTING RIGHTS. Except as otherwise set forth in an Award Agreement,
Participants holding Shares of Restricted Stock granted hereunder may exercise
full voting rights with respect to those Shares during the Restriction Period.

         8.7 DIVIDENDS AND OTHER DISTRIBUTIONS. Except as set forth in an Award
Agreement, Participants holding Shares of Restricted Stock hereunder shall be
credited with regular cash dividends or dividend equivalents paid with respect
to the underlying Shares while they are so held during the Restriction Period.
Such dividends may be paid currently, accrued as contingent cash obligations, or
converted into additional Shares, upon such terms as the Committee establishes.

         The Committee may apply any restrictions to the crediting and payment
of dividends and other distributions that the Committee deems advisable. Without
limiting the generality of the preceding sentence, if the grant or vesting of
Restricted Stock is designed to qualify for the Performance-Based Exception, the
Committee may apply any restrictions it deems appropriate to the payment of
dividends declared with respect to such Restricted Stock, such that the
dividends and/or the Restricted Stock maintain eligibility for the
Performance-Based Exception.

         8.8 TERMINATION OF SERVICE. Each Award Agreement shall set forth the
extent to which the Participant shall have the right to retain unvested
Restricted Stock following termination of the Participant's service with the
Company and all other Employers. Such provisions shall be determined by the
Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Awards of Restricted Stock issued
pursuant to the Plan, and may reflect distinctions based on the reasons for
termination of service.

ARTICLE 9.        PERFORMANCE UNITS

         9.1 GRANT OF PERFORMANCE UNITS. Subject to the terms of the Plan,
Performance Units may be granted to Participants in such amounts and upon such
terms, and at any time and from time to time, as shall be determined by the
Committee.

         9.2 VALUE OF PERFORMANCE UNITS. Each grant of Performance Units shall
be represented by the number of Share equivalent units to which the Award
relates. The Committee shall set performance objectives in its discretion which,
depending on the extent to which they are met, will determine the number of
Performance Units that will be paid out to the Participant. For purposes of this
Article 9, the time period during which the performance objectives must be met
shall be called a "Performance Period" and shall be set by the Committee in its
discretion.

         9.3 EARNING OF PERFORMANCE UNITS. Subject to the terms of this Plan,
after the applicable Performance Period has ended, the holder of Performance
Units shall be entitled to

                                       12
<PAGE>

receive payout on the number of Performance Units earned by the Participant over
the Performance Period, to be determined as a function of the extent to which
the corresponding performance objectives have been achieved.

         9.4 AWARD AGREEMENT. Each grant of Performance Units shall be evidenced
by an Award Agreement which shall specify the material terms and conditions of
the Award, and such other provisions as the Committee shall determine.

         9.5 FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS. Except as provided
in Article 12, payment of earned Performance Units shall be made within
seventy-five calendar days following the close of the applicable Performance
Period in a manner determined by the Committee. Payment of earned Performance
Units may be in the form of cash or in Shares (or in a combination thereof).

         9.6 TERMINATION OF SERVICE DUE TO DEATH, DISABILITY, OR RETIREMENT.
Unless determined otherwise by the Committee and set forth in the Participant's
Award Agreement, in the event the service of a Participant is terminated by
reason of death, Disability or Retirement during a Performance Period, the
Participant shall receive a payout of the Performance Units which is prorated,
as specified by the Committee in the Award Agreement. Payment of earned
Performance Units shall be made at a time specified by the Committee and set
forth in the Participant's Award Agreement.

         9.7 TERMINATION OF SERVICE FOR OTHER REASONS. In the event that a
Participant's service terminates during a Performance Period for any reason
other than those reasons set forth in Section 9.6 herein, all Performance Units
shall be forfeited by the Participant, unless determined otherwise by the
Committee in the Participant's Award Agreement.

         9.8 NONTRANSFERABILITY. Except as otherwise provided in a Participant's
Award Agreement, Performance Units may not be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, except as otherwise provided in a
Participant's Award Agreement, a Participant's rights under the Plan shall be
exercisable during the Participant's lifetime only by such Participant or
Participant's guardian or legal representative. The Committee may require a
Participant's guardian or legal representative to supply it with such evidence
as the Committee deems necessary to establish the authority of the guardian or
legal representative to act on behalf of the Participant.

ARTICLE 10.       PERFORMANCE MEASURES

         Unless and until the Committee proposes for shareholder approval and
the Company's shareholders approve a change in the general performance measures
set forth in this Article 10,

                                       13
<PAGE>

the attainment of which may determine the degree of payout and/or vesting with
respect to Awards which are designed to qualify for the Performance-Based
Exception, the performance measure(s) to be used for purposes of such awards
shall be chosen from among the following alternatives:

         (a)      Net earnings;

         (b)      Revenues;

         (c)      Earnings per share;

         (d)      Net income (before or after taxes);

         (e)      Net operating profit;

         (f)      Return measures (including, but not limited to, return on
                  assets, capital, equity, or revenue);

         (g)      Cash flow (including, but not limited to, operating cash flow
                  and free cash flow);

         (h)      Cash flow return on investments, which equals net cash flows
                  divided by owner's equity;

         (i)      Earnings before or after taxes, interest, depreciation and/or
                  amortization;

         (j)      Internal rate of return or increase in net present value;

         (k)      Share price (including, but not limited to, growth measures
                  and total shareholder return);

         (l)      Comparisons to various stock market indices;

         (m)      Comparisons to the performance of other companies;

         (n)      Economic value added (income in excess of capital costs);

         (o)      Level of dividends; and

         (p)      Market share.

         The Committee shall have the discretion to adjust the determinations of
the degree of attainment of the preestablished performance objectives; provided,
however, that Awards which

                                       14
<PAGE>

are designed to qualify for the Performance-Based Exception may not be adjusted
except to the extent permitted under Code Section 162(m).

         In the event that Code Section 162(m) or applicable tax and/or
securities laws change to permit Committee discretion to alter the governing
performance measures without obtaining shareholder approval of such changes, the
Committee shall have sole discretion to make such changes without obtaining
shareholder approval. In addition, in the event that the Committee determines
that it is advisable to grant Awards which shall not qualify for the
Performance-Based Exception, the Committee may make such grants without
satisfying the requirements of Code Section 162(m).

ARTICLE 11.       BENEFICIARY DESIGNATION

         Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of the death of the
Participant before he or she receives any or all of such benefit. Each such
designation shall revoke all prior designations by the same Participant, shall
be in a form prescribed by the Committee during the Participant's lifetime. If
the Participant's designated beneficiary predeceases the Participant or no
beneficiary has been designated, benefits remaining unpaid at the Participant's
death shall be paid to the Participant's spouse or if none, the Participant's
estate.

ARTICLE 12.       DEFERRALS

         The Committee may permit or require a Participant to defer such
Participant's receipt of the payment of cash or the delivery of Shares that
would otherwise be due to such Participant by virtue of the exercise of an
Option or SAR, the lapse or waiver of restrictions with respect to Restricted
Stock, or the satisfaction of any requirements or objectives with respect to
Performance Units. If any such deferral election is permitted or required, the
Committee shall, in its sole discretion, establish rules and procedures for such
deferrals. Notwithstanding the foregoing, the Committee in its sole discretion
may defer payment of cash or the delivery of Shares that would otherwise be due
to a Participant under the Plan if such payment or delivery would result in
compensation not deductible by the Company or any other Employer by virtue of
Code Section 162(m). Such a deferral may continue until the payment or delivery
would result in compensation deductible by the Company or such other Employer
under Code Section 162(m).

                                       15
<PAGE>

ARTICLE 13.       RIGHTS OF EMPLOYEES

         13.1 SERVICE. Nothing in the Plan shall interfere with or limit in any
way the right of the Company or any other Employer to terminate any
Participant's service at any time, or confer upon any Participant any right to
continue in the employ of the Company or any other Employer.

         13.2 PARTICIPATION. No person shall have the right to be selected to
receive an Award under this Plan, or, having been so selected, to be selected to
receive a future Award.

ARTICLE 14.       REPLACEMENT AWARDS.

         The Committee is expressly authorized, in its discretion, to effect a
"repricing" (as defined by the listing standards of the national securities
exchange or automated quotation system on which the Shares are traded or if the
Shares are not traded on a national securities exchange or automated quotation
system, then by the listing standards of the New York Stock Exchange) of any
Award made under the Plan if the Committee determines that such action is in the
best interests of the Company and its shareholders.

ARTICLE 15.       AMENDMENT, MODIFICATION AND TERMINATION

         15.1 AMENDMENT, MODIFICATION AND TERMINATION. The Board may at any time
and from time to time, alter, amend, modify or terminate the Plan in whole or in
part.

         Subject to the terms and conditions of the Plan, the Committee may
modify, extend or renew outstanding Awards under the Plan, or accept the
surrender of outstanding Awards (to the extent not theretofore exercised) and
grant new Awards in substitution therefor (to the extent not theretofore
exercised). The Committee shall not, however, modify any outstanding Incentive
Stock Option so as to specify a lower Exercise Price. Notwithstanding the
foregoing, no modification of an Award shall, without the consent of the
Participant, alter or impair any rights or obligations under any Award
theretofore granted under the Plan.

         15.2 ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4.3 hereof) affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, subject to the requirements of
Code Section 162(m) for the Performance-Based Exception in the case of Awards
designed to qualify for the Performance-Based Exception.

                                       16
<PAGE>

         15.3 AWARDS PREVIOUSLY GRANTED. No termination, amendment or
modification of the Plan shall adversely affect in any material way any Award
previously granted under the Plan, without the written consent of the
Participant holding such Award.

         15.4 COMPLIANCE WITH CODE SECTION 162(m). Awards, when Code Section
162(m) is applicable, shall comply with the requirements of Code Section 162(m);
provided, however, that in the event the Committee determines that such
compliance is not desired with respect to any Award or Awards available for
grant under the Plan, then compliance with Code Section 162(m) will not be
required. In addition, in the event that changes are made to Code Section 162(m)
to permit greater flexibility with respect to any Award or Awards available
under the Plan, the Committee may, subject to this Article 15, make any
adjustments it deems appropriate.

ARTICLE 16.       WITHHOLDING

         16.1 TAX WITHHOLDING. Each Employer shall have the power and the right
to deduct or withhold, or require a Participant to remit to the Employer, an
amount (either in cash or Shares) sufficient to satisfy federal, state, and
local taxes, domestic or foreign, required by law or regulation to be withheld
with respect to any taxable event arising as a result of this Plan.

         16.2 SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock,
or upon any other taxable event arising as a result of Awards granted hereunder,
an Employer may satisfy the minimum withholding requirement for supplemental
wages, in whole or in part, by withholding from the Award Shares having a Fair
Market Value (determined on the date the Participant recognizes taxable income
on the Award) equal to the withholding tax required to be collected on the
transaction. The Participant may elect, subject to the approval of the
Committee, to deliver the necessary funds to satisfy the withholding obligation
to an Employer, in which case there will be no reduction in the Shares otherwise
distributable to the Participant.

ARTICLE 17.       INDEMNIFICATION

         Each person who is or has been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by such person in connection with or resulting from any claim, action,
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 failure to act under the Plan
and against and from any and all amounts paid by such person in a settlement
approved by the Company, or paid by such person in satisfaction of any judgment
in any such action, suit, or proceeding against such person, provided such
person shall give the Company an opportunity, at its own expense, to handle and
defend the same before such person undertakes to handle and defend it. The
foregoing right of indemnification shall not be exclusive of any other rights of

                                       17
<PAGE>

indemnification to which such persons may be entitled under the Company's
Articles of Incorporation or By-Laws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them harmless.

ARTICLE 18.       SUCCESSORS

         All obligations of an Employer under the Plan or any Award Agreement
with respect to Awards granted hereunder shall be binding on any successor to
the Employer, whether the existence of such successor is the result of a direct
or indirect purchase of all or substantially all of the business and/or assets
of the Employer, or a merger, consolidation, or otherwise.

ARTICLE 19.       LEGAL CONSTRUCTION

         19.1 GENDER AND NUMBER. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.

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

         19.3 REQUIREMENTS OF LAW. The granting of Awards and the issuance of
Share and/or cash payouts under the Plan shall be subject to all applicable
laws, rules, and regulations, and to such approvals by any governmental agencies
or national securities exchanges as may be required. The Committee may impose
such restrictions on any Shares delivered pursuant to any Award granted under
this Plan as the Committee deems necessary or advisable, including, without
limitation, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws applicable
to such Shares.

         19.4 SECURITIES LAW COMPLIANCE. With respect to any individual who is,
on the relevant date, an officer, director or ten percent beneficial owner of
any class of the Company's equity securities that is registered pursuant to
Section 12 of the Exchange Act, all as defined under Section 16 of the Exchange
Act, transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 under the Exchange Act, or any successor rule. To the
extent any provision of the Plan or action by the Committee fails to so comply,
it shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.

         19.5 AWARDS TO FOREIGN NATIONALS AND EMPLOYEES OUTSIDE THE UNITED
STATES. To the extent the Committee deems it necessary, appropriate or desirable
to comply with foreign law

                                       18
<PAGE>

of practice and to further the purposes of this Plan, the Committee may, without
amending the Plan, (i) establish rules applicable to Awards granted to
Participants who are foreign nationals, are employed outside the United States,
or both, including rules that differ from those set forth in this Plan, and (ii)
grant Awards to such Participants in accordance with those rules.

         19.6 UNFUNDED STATUS OF THE PLAN. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments or deliveries of Shares not yet made to a Participant by the Company or
any other Employer, nothing contained herein shall give any rights that are
greater than those of a general creditor. The Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Shares or payments hereunder consistent with the foregoing.

         The Plan is not intended to be subject to the Employee Retirement
Income Security Act of 1974, as amended.

         19.7 GOVERNING LAW. To the extent not preempted by federal law, the
Plan, and all agreements hereunder, shall be construed in accordance with and
governed by the laws of the State of Maryland.

ARTICLE 20.       SHAREHOLDER APPROVAL

         This Plan will be submitted for the approval of the Company's
shareholders within twelve months before or after the date of the Board's
initial adoption of the Plan. Awards may be granted prior to such shareholder
approval; provided, however, that such Awards shall not be exercisable or
payable prior to the time when the Plan is approved by the shareholders;
provided, further, that if such approval has not been obtained at the end of
said twelve-month period, all Awards previously granted under the Plan shall
thereupon be cancelled and become null and void.

                                       19

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