Document:

exh101_compplan.htm

    Exhibit
      10.1

      THE
        HERSHEY COMPANY

      

      EQUITY
        AND INCENTIVE COMPENSATION PLAN

      

      (As
        adopted February 13, 2007; subject to stockholder approval)

      

      1.     Establishment
        and Purpose

      

      The
        Hershey Company (the "Company") hereby establishes The Hershey Company Equity
        and Incentive Compensation Plan (the "Plan").  The purpose of the Plan
        is to provide to employees, non-employee directors and certain service providers
        to the Company or its subsidiaries (as defined below), upon whose efforts
        the
        Company is dependent for the successful conduct of its business, further
        incentive to continue and increase their efforts and to remain in the service
        of
        the Company and its subsidiaries.

      

      The
        Plan
        is an amendment and restatement of and continues the Key Employee Incentive
        Plan
        (“KEIP”), including the Annual Incentive Program ("AIP") and the Long-Term
        Incentive Program ("LTIP") portion, with certain modifications, and shall
        be the
        vehicle for any future awards under the Broad Based Stock Option Plan,
        Directors’ Compensation Plan and Broad Based Annual Incentive Plan.

      

      The
        Plan
        was adopted by the Board of Directors on February 13, 2007, subject to approval
        of the stockholders at the 2007 Annual Meeting of Stockholders.  The
        Plan shall be effective on the date of such stockholder approval (the “Effective
        Date”).

      

      As
        used
        herein, (i) the term "Subsidiary Company" or “Subsidiary” shall mean any present
        or future corporation or entity which is or would be a "subsidiary" of the
        Company as defined in Section 424 of the Internal Revenue Code of 1986 (the
        "Code") or any successor provision, and (ii) the term "Company" defined above
        shall refer collectively to The Hershey Company and its Subsidiary Companies
        unless the context indicates otherwise.

      

      2.     Stock
        Subject to the Plan

      

      The
        aggregate number of shares of the Company’s common stock, $1.00 par value per
        share (the “Common Stock”), that may be issued under the Plan pursuant to awards
        granted wholly or partly in Common Stock (including rights or options which
        may
        be exercised for or settled in Common Stock) is 19,044,782, plus 13,220,127
        shares that may be issued pursuant to awards outstanding under the KEIP as
        of
        February 13, 2007, the date this Plan was approved by the Board of Directors;
        provided, however, that of the 19,044,782 shares available for issuance under
        the Plan that are not subject to outstanding awards under the KEIP as of
        February 13, 2007, only 6,348,261 shares, representing one-third of such
        shares,
        may be issued under this Plan with respect to awards made on or after February
        13, 2007 that are not stock options or stock appreciation rights.  The
        shares of Common Stock issued under this Plan may be either authorized but
        unissued shares, treasury shares held by the Company or any direct or indirect
        subsidiary thereof, or shares acquired by the Company through open market
        purchases or otherwise.  The number of shares of Common Stock
        underlying any 

       

      
        
          
          

        

        
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      awards
        outstanding on or after the Effective Date that are forfeited or terminated,
        surrendered, expire unexercised, or are settled in cash in lieu of Common
        Stock,
        shall again immediately become available for issuance pursuant to awards
        hereunder.  Shares withheld by the Company to satisfy tax withholding
        obligations and all shares covered by stock appreciation rights, to the extent
        exercised and settled in Common Stock, shall be considered issued or transferred
        pursuant to the Plan.  The Committee may from time to time adopt and
        observe such procedures concerning the counting of shares against the Plan
        maximum as it may deem appropriate.

      

      3.   
         Administration

      

      The
        Plan
        shall be administered by the Compensation and Executive Organization Committee
        (the "Committee"), or any successor committee, appointed by and consisting
        solely of members of the Board of Directors (the "Board") of the
        Company.  To the extent provided by resolution of the Board, the
        Committee may authorize the Chief Executive Officer of the Company, acting
        to
        the extent necessary as a committee of the Board, and other senior officers
        of
        the Company to designate officers and employees to be recipients of awards,
        to
        determine the terms, conditions, form and amount of any such awards, and
        to take
        such other actions which the Committee is authorized to take under this Plan,
        provided that the Committee may not delegate to any person the authority
        to
        grant awards to, or take other action with respect to, participants who at
        the
        time of such awards or action are subject to Section 16 of the Securities
        Exchange Act of 1934, as amended (“Exchange Act”) or are “covered employees” as
        defined in Section 162(m) of the Code.  Notwithstanding the foregoing,
        awards relating to the non-employee directors shall be administered by the
        full
        Board of Directors, who shall have all of the authority and discretion otherwise
        granted to the Committee with respect to the administration of the Plan,
        and
        with respect to such awards, reference herein to “Committee” shall mean
        reference to the Board, and to the extent required by the Company’s governing
        documents or the Board, awards to the Company’s Chief Executive Officer shall be
        administered by the independent directors on the Company’s Board, and with
        respect to such awards references to “Committee” shall mean reference to such
        independent directors.

      

      Subject
        to the terms and conditions of the Plan, the Committee shall have
        authority:  (i) to determine the terms, conditions, form and amount of
        awards, distributions or payments granted or made to each participant, including
        conditions upon and provisions for vesting, exercise and acceleration of
        any
        awards, distributions or payments, which terms and conditions shall be set
        forth
        in a written agreement, subplan, program, statement or other document (which
        may
        be in electronic format) issued by the Company evidencing such award (any
        such
        agreement, subplan, program, statement or document being an “award agreement”);
        (ii) to construe and interpret the terms and intent of the Plan and any award
        agreement; (iii) to define the terms used in the Plan; (iv) to prescribe,
        amend
        and rescind rules and regulations relating to the Plan; (v) to select
        individuals to participate in the Plan; (vi) upon the request of a participant
        in the Plan, to approve and determine the duration of leaves of absence which
        may be granted to the participant without constituting a termination of his
        or
        her employment for purposes of the Plan; (vii)  to adopt such procedures,
        agreements, arrangements, subplans and terms as are necessary or appropriate
        to
        permit participation in the Plan by employees who are foreign nationals or
        employed outside the United States; and (viii) to make all other

       

      
        
          
          

        

        
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      determinations
        necessary or advisable for the administration and operation of the
        Plan.  The Committee shall have the right to impose varying terms and
        conditions with respect to each grant or award.  All determinations
        and interpretations made by the Committee shall be final, binding and conclusive
        on all participants and on their legal representatives and
        beneficiaries.

      

      4.     Fair
        Market Value

      

      As
        used
        in the Plan (unless a different method of calculation is required by applicable
        law, and except as otherwise specifically provided in any Plan provision
        or
        provided by the Committee with respect to an award), "Fair Market Value"
        on or
        as of the applicable date shall mean (i) the closing price of the Common
        Stock
        as reported in the New York Stock Exchange Composite Transactions Report
        (or any
        other consolidated transactions reporting system which subsequently may replace
        such Composite Transactions Report) for the New York Stock Exchange on such
        date
        (or, unless otherwise provided in the award with respect to awards made prior
        to
        the Effective Date, the trading day immediately preceding such date), or
        if
        there are no sales on such date, on the next preceding day on which there
        were
        sales, or (ii) in the event that the Common Stock is no longer listed for
        trading on the New York Stock Exchange, an amount determined in accordance
        with
        standards adopted by the Committee.

      

      5.    
        Eligibility and Participation

      

      Employees,
        non-employee directors and individuals who provide services to the Company
        or
        any of its Subsidiary Companies as consultants, contractors or agency employees,
        shall be eligible for selection to participate in the Plan.  An
        individual who receives an award under the Plan is referred to herein as
        a
        participant.  A participant may receive more than one award from time
        to time, and may be granted any combination of awards as the Committee shall
        determine.

      

      6.     Annual
        Incentive Program

      

      The
        Committee may from time to time, subject to the provisions of the Plan and
        such
        other terms and conditions as the Committee may determine, establish contingent
        target awards for those eligible individuals it selects to participate in
        the
        AIP.  Each such contingent target award shall be evidenced by an award
        agreement, and shall be determined based upon such factors as are deemed
        appropriate by the Committee, subject to the following:

      

      
        	
                        
                  (a)

              	
                The
                  amounts earned by and paid to AIP participants with respect to
                  the
                  contingent target awards ("AIP Awards") will be based primarily
                  upon
                  achievement of Performance Goals (as defined in Paragraph 9 below)
                  over a
                  one-year performance cycle as approved by the
                  Committee.

              

      

       

      
        	
                        
                  (b)

              	
                The
                  Committee, within the limits of the Plan, shall have full authority
                  and
                  discretion to determine the time or times of establishing AIP Awards;
                  to
                  select from among those eligible the individuals to receive AIP
                  Awards; to
                  designate the amounts to be earned under the AIP Award in relation
                  to
                  levels of achievement of Performance Goals; to adopt such financial
                  and
                  nonfinancial performance or other criteria for the payment of AIP
                  Awards
                  as it may determine from time to time; to establish such other
                  measures as
                  may

              

      

    

     

    
      
        
        

      

      
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                be
                  necessary to achieve the objectives of the Plan; and to review
                  and certify
                  the achievement of Performance Goals.  The financial or
                  nonfinancial Performance Goals established by the Committee may
                  be based
                  upon one or more Performance Factors (as defined in Paragraph 9
                  below).

              

      

       

      
        	
                         (c)

              	
                Any
                  AIP Award the Committee intends to be performance-based compensation
                  within the meaning of Section 162(m) of the Code, shall be based on
                  one or more Performance Factors and otherwise established, earned
                  and paid
                  in conformity with the provisions of Paragraph 9 applicable to
                  Performance
                  Awards.

              

      

      

      
        	
                        
                  (d)

              	
                The
                  maximum amount any participant can receive as an AIP Award for
                  any
                  calendar year shall not exceed
                  $10,000,000.

              

      

      

      
        	
                         (e)

              	
                AIP
                  Awards as earned under the terms of the Plan shall be paid in cash,
                  Common
                  Stock or in a combination thereof as the Committee in its sole
                  discretion
                  shall determine, and may be equal to, exceed or be less than the
                  contingent target awards, subject nevertheless to the maximum award
                  limit
                  set forth in subparagraph (d)
                  above.

              

      

      

      7.      Long-Term
        Incentive Program

      

      Awards
        under the LTIP may be one or more of the following:

      

      I.                      
        Performance Stock Units and Performance Stock

      

      The
        Committee may, subject to the provisions of the Plan and such other terms
        and
        conditions as the Committee may determine, grant Performance Stock Units
        and/or
        shares of Performance Stock to reflect the value of contingent target awards
        established for each eligible individual selected for
        participation.  Each grant of Performance Stock Units or Performance
        Stock shall be evidenced by an award agreement, subject to the
        following:

       

      

        
          	
                   

                	
                  (a)

                	
                  Each
                    Performance Stock Unit shall be equivalent to a share of Common
                    Stock and
                    each share of Performance Stock shall be a share of Common
                    Stock.  The amount actually earned by and paid to holders of
                    Performance Stock Units and/or Performance Stock ("PSU/PS Awards")
                    will be
                    based upon achievement of Performance Goals over performance
                    cycles
                    established by the Committee.  Such performance cycles each
                    shall cover such period of time as the Committee from time to
                    time shall
                    determine.

                

        

        

        
          	
                   

                	
                  (b)

                	
                  The
                    Committee, within the limits of the Plan, shall have full authority
                    and
                    discretion to determine the time or times of establishing contingent
                    target awards and the awarding of Performance Stock Units and/or
                    Performance Stock; to select the eligible individuals to receive
                    PSU/PS
                    Awards; to designate levels of awards to be earned in relation
                    to levels
                    of achievement of Performance Goals; to adopt such financial
                    and
                    nonfinancial performance or other criteria for the payment of
                    PSU/PS
                    Awards as it may determine from time to time; to make awards;
                    to establish
                    such other measures as may be necessary to the objectives of
                    the Plan; and
                    to review and certify the achievement of Performance Goals.  The
                    Performance Goals established by the Committee may be based on
                    one or more
                    of the Performance Factors.

                

        

        
          
            
            

          

          
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                  (c)

                	
                  Payments
                    of PSU/PS Awards shall be made in shares of Common Stock, provided
                    payments of Performance Stock Unit awards may be made in Common
                    Stock,
                    cash, or a combination thereof, as the Committee in its sole
                    discretion
                    shall determine; provided, however, that no fractional shares
                    shall be
                    issued and any such fraction will be eliminated by rounding downward
                    to
                    the nearest whole share.

                

        

         

        
          
            	
                     

                  	
                    (d)

                  	
                    PSU/PS
                      Awards earned under the terms of the Plan may be equal to,
                      exceed or be
                      less than the contingent target
                      award.

                  

          

           

        

      

      
        	
                                 
                  

              	
                (e)

              	
                All
                  unearned or unvested PSU/PS Awards shall be forfeited to the
                  Company.

              

      

      

      
        	
                                 
                  

              	
                (f)

              	
                The
                  maximum aggregate number of shares of Common Stock covered by awards
                  of
                  Performance Stock Units and shares of Performance Stock that a
                  participant
                  may receive with respect to any calendar year shall be 500,000
                  shares.

              

      

      

      II.                     Stock
        Options

      

      The
        Committee may, from time to time, subject to the provisions of the Plan and
        such
        other terms and conditions as it may determine, grant an award of nonqualified
        Options to purchase shares of Common Stock of the Company to individuals
        eligible to participate in the Plan.  Each Option award shall be
        evidenced by an award agreement on such terms and conditions and be in such
        form
        as the Committee may from time to time approve, subject to the
        following:

      

      
        	
                                 
                  

              	
                (a)

              	
                The
                  exercise price per share with respect to each Option shall be determined
                  by the Committee in its sole discretion, but shall not be less
                  than 100%
                  of the Fair Market Value of the Common Stock as of the date of
                  the grant
                  of the Option.

              

      

      

      
        	
                                 

              	
                (b)

              	
                Options
                  granted under the Plan shall be exercisable, in such installments
                  and for
                  such periods, as shall be provided by the Committee at the time
                  of
                  granting, but in no event shall any Option granted extend for a
                  period in
                  excess of ten (10) years from the date of
                  grant.

              

      

      

      
        	
                                 
                  

              	
                (c)

              	
                The
                  maximum number of shares of Common Stock covered by Options granted
                  to a
                  participant for any calendar year shall not exceed 500,000; 1,000,000
                  in
                  the participant’s initial calendar year of
                  participation.

              

      

       

      
        
          	
                   

                	
                  (d)

                	
                  Among
                    other conditions that may be imposed by the Committee, if deemed
                    appropriate, are those relating to (i) the period or periods
                    and the
                    conditions of exercisability of any Option; (ii) the minimum
                    periods
                    during which grantees of Options must be employed, or must hold
                    Options
                    before they may be exercised; (iii) the minimum periods during which
                    shares acquired upon exercise must be held before sale or transfer
                    shall
                    be permitted; (iv) conditions under which such Options or shares
                    may be
                    subject to forfeiture; and (v) the frequency of exercise or the
                    minimum or
                    maximum number of shares that may be acquired at any one
                    time.

                

        

        

        
          	
                   

                	
                  (e)

                	
                  Exercise
                    of an Option shall be made by written notice (including electronic
                    notice)
                    in the form and manner determined by the
                    Committee.

                

        

        
          
            
            

          

          
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                (f)

              	
                The
                  purchase price upon exercise of any Option shall be paid in full
                  by making
                  payment (i) in cash; (ii) in whole or in part by the delivery of
                  a
                  certificate or certificates of shares of Common Stock of the Company,
                  valued at the then Fair Market Value; or (iii) by a combination
                  of (i) and
                  (ii).

              

      

      

      
        	
                                 
                  

              	
                (g)

              	
                Notwithstanding
                  subparagraph (f) above, any optionee may make
                  payment of the Option price through a simultaneous exercise of
                  his or her
                  Option and sale of the shares thereby acquired pursuant to a brokerage
                  arrangement compliant with such terms and conditions as the Committee
                  may
                  determine.

              

      

      

      
        	
                                 
                  

              	
                (h)

              	
                The
                  Committee may require the surrender of outstanding Options as a
                  condition
                  to the grant of new Options.

              

      

      

      
        	
                                 

              	
                (i)

              	
                Notwithstanding
                  any other provision of the Plan and except as may be provided in
                  the
                  applicable award agreement, upon the occurrence of a Change in
                  Control,
                  each outstanding Option held by a participant shall become fully
                  vested
                  and exercisable notwithstanding any vesting schedule or installment
                  schedule relating to the exercisability of such Option contained
                  in the
                  applicable Option agreement or otherwise established at the time
                  of grant
                  of the Option.

              

      

      

      
        	
                                 
                  

              	
                (j)

              	
                For
                  purposes of this Plan, a "Change in Control"
                  means:

              

      

      

      
        
          	
                                                  
                     

                	
                  (1)

                	
                  Individuals
                    who, on April 18, 2006, constitute the Board (the “Incumbent Directors”)
                    cease for any reason to constitute at least a majority of the
                    Board,
                    provided that any person becoming a director subsequent to April
                    18, 2006,
                    whose election or nomination for election was approved by a vote
                    of at
                    least two-thirds of the Incumbent Directors then on the Board
                    (either by
                    specific vote or by approval of the proxy statement of the Company
                    in
                    which such person is named as nominee for director, without written
                    objection to such nomination) shall be an Incumbent Director;
                    provided, however, that no individual initially elected or
                    nominated as a director of the Company as a result of an actual
                    or
                    threatened election contest (as described in Rule 14a-11 under
                    the
                    Exchange Act) (“Election Contest”) or other actual or threatened
                    solicitation of proxies or consents by or on behalf of any person
                    (as such
                    term is defined in Section 3(a)(9) of the Exchange Act and as
                    used in
                    Section 13(d)(3) and 14(d)(2) of the Exchange Act) (“Person”) other than
                    the Board (“Proxy Contest”), including by reason of any agreement intended
                    to avoid or settle any Election Contest or Proxy Contest, shall
                    be deemed
                    an Incumbent Director; and provided further,
                    however, that a director who has been approved by the Hershey
                    Trust
                    while it beneficially owns more than 50% of the combined voting
                    power of
                    the then outstanding voting securities of the Company entitled
                    to vote
                    generally in the election of directors (the “Outstanding Company Voting
                    Power”) shall be deemed to be an Incumbent Director;
                    or

                

        

      

       

      
        
          	
                   

                	
                  (2)

                	
                  The
                    acquisition or holding by any Person of beneficial ownership
                    (within the
                    meaning of Section 13(d) under the Exchange Act and the rules
                    and
                    regulations promulgated thereunder) of shares of the Common Stock
                    and/or
                    the Class B Common Stock of the Company representing 25% or more of
                    either (i) the total

                

        

        
          
            
            

          

          
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                  number
                    of then outstanding shares of both Common Stock and Class B Common
                    Stock of the Company (the “Outstanding Company Stock”) or (ii) the
                    Outstanding Company Voting Power; provided that, at the time
                    of such
                    acquisition or holding of beneficial ownership of any such shares,
                    the
                    Hershey Trust does not beneficially own more than 50% of the
                    Outstanding
                    Company Voting Power; and provided, further, that any such acquisition
                    or
                    holding of beneficial ownership of shares of either Common Stock
                    or Class
                    B Common Stock of the Company by any of the following entities
                    shall not
                    by itself constitute such a Change in Control
                    hereunder:  (i) the Hershey Trust; (ii) any trust
                    established by the Company or by any Subsidiary Company for the
                    benefit of
                    the Company and/or its employees or those of a Subsidiary Company
                    or by
                    any Subsidiary Company for the benefit of the Company and/or
                    its employees
                    or those of a Subsidiary Company; (iii) any employee benefit plan (or
                    related trust) sponsored or maintained by the Company or any
                    Subsidiary
                    Company; (iv) the Company or any Subsidiary Company or (v) any
                    underwriter temporarily holding securities pursuant to an offering
                    of such
                    securities; or

                

        

      

       

      
        	
                                                 
                  

              	
                (3)

              	
                The
                  approval by the stockholders of the Company of any merger, reorganization,
                  recapitalization, consolidation or other form of business combination
                  (a
                  “Business Combination”) if, following consummation of such Business
                  Combination, the Hershey Trust does not beneficially own more than
                  50% of
                  the total voting power of all outstanding voting securities of
                  (x) the
                  surviving entity or entities (the “Surviving Company”) or (y) if
                  applicable, the ultimate parent Company that directly or indirectly
                  has
                  beneficial ownership of more than 50% of the combined voting power
                  of the
                  then outstanding voting securities eligible to elect directors
                  of the
                  Surviving Company; or

              

      

      

      
        	
                                                 
                  

              	
                (4)

              	
                The
                  approval by the stockholders of the Company of (i) any sale or other
                  disposition of all or substantially all of the assets of the Company,
                  other than to a company (the “Acquiring Company”) if, following
                  consummation of such sale or other disposition, the Hershey Trust
                  beneficially owns more than 50% of the total voting power of all
                  outstanding voting securities eligible to elect directors (x) of
                  the
                  Acquiring Company or (y) if applicable, the ultimate parent Company
                  that
                  directly or indirectly has beneficial ownership of more than 50%
                  of the
                  combined voting power of the then outstanding voting securities
                  eligible
                  to elect directors of the Acquiring Company, or (ii) a liquidation or
                  dissolution of the Company.

              

      

       

      For
        purposes of this Plan, “Hershey Trust” means either or both of (a) Hershey Trust
        Company, a Pennsylvania corporation, as Trustee for the Milton Hershey School,
        or any successor to Hershey Trust Company as such trustee, and (b) Milton
        Hershey School, a Pennsylvania not-for-profit corporation.

      

      
        	
                                
                  

              	
                (k)           
                  

              	
                For
                  purposes of this Plan, a “Potential Change in Control”
                  means:

              

      

       

      
        
          	
                      

                	
                   (1)   
                    

                	
                  The
                    Hershey Trust by action of any of the Board of Directors of Hershey
                    Trust
                    Company; the Board of Managers of Milton Hershey School; the
                    Investment
                    Committee of the Hershey Trust; and/or any of the officers of
                    Hershey
                    Trust

                

        

        
          
            
            

          

          
            -7-

            
              

            

          

          
            
            

          

        

        
          	
                	
                   

                	
                  Company
                    or Milton Hershey School (acting with authority) undertakes consideration
                    of any action the taking of which would lead to a Change in Control
                    as
                    defined herein, including, but not limited to consideration of
                    (i) an
                    offer made to the Hershey Trust to purchase any number of its
                    shares in
                    the Company such that if the Hershey Trust accepted such offer
                    and sold
                    such number of shares in the Company the Hershey Trust would
                    no longer
                    have more than 50% of the Outstanding Company Voting Power, (ii)
                    an
                    offering by the Hershey Trust of any number of its shares in
                    the Company
                    for sale such that if such sale were consummated the Hershey
                    Trust would
                    no longer have more than 50% of the Outstanding Company Voting
                    Power or
                    (iii) entering into any agreement or understanding with a person or
                    entity that would lead to a Change in Control;
                    or

                

        

         

      

      
        	
                                                
                  

              	
                (2)

              	
                The
                  Board approves a transaction described in subsection (2), (3) or
                  (4) of
                  the definition of a Change in Control contained in subparagraph
                  (j) of
                  Paragraph 7II hereof.

              

      

      

      
        	
                                
                  

              	
                (l)

              	
                In
                  the event that a transaction which would constitute a Change in
                  Control if
                  approved by the stockholders of the Company is to be submitted
                  to such
                  stockholders for their approval, each participant who holds an
                  Option or
                  Stock Appreciation Right (“SAR”) under the Plan at the time scheduled for
                  the taking of such vote, whether or not then exercisable, shall
                  have the
                  right to receive a notice at least ten (10) business days prior
                  to the
                  date on which such vote is to be taken.  Such notice shall set
                  forth the date on which such vote of stockholders is to be taken,
                  a
                  description of the transaction being proposed to stockholders for
                  such
                  approval, a description of the provisions of subparagraph (i) of
                  Paragraph
                  7II of the Plan, or in the case of SARs, subparagraph (f) of Paragraph
                  7III, and a description of the impact thereof on such participant
                  in the
                  event that such stockholder approval is obtained.  Such notice
                  shall also set forth the manner in which and price at which all
                  Options or
                  SARs then held by each such participant could be exercised upon
                  the
                  obtaining of such stockholder
                  approval.

              

      

      

      III.                    Stock
        Appreciation Rights

      

      The
        Committee may, from time to time, subject to the provisions of the Plan and
        such
        other terms and conditions as the Committee may determine, grant an award
        of
        SARs to individuals eligible to participate in the Plan.  SARs shall
        be evidenced by an award agreement, and shall be subject to such terms and
        conditions consistent with the Plan as the Committee shall impose from time
        to
        time, including the following:

      

      
        	
                             
                  

              	
                (a)

              	
                SARs
                  may, but need not, relate to Options granted under the Plan, as
                  the
                  Committee shall determine from time to time.  In no event shall
                  any SARs granted extend for a period in excess of ten (10) years
                  from the
                  date of grant.

              

      

      

      
        	
                 

              	
                (b)

              	
                Exercise
                  of an SAR shall be made by written notice (including electronic
                  notice) in
                  the form and manner determined by the
                  Committee.

              

      

       

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

       

      
        	
                 

              	
                (c)

              	
                A
                  holder of SARs shall be entitled to receive upon exercise the excess
                  of
                  the Fair Market Value of a share of Common Stock at the time of
                  exercise
                  over the Fair Market Value of a share at the time the SARs were
                  granted,
                  multiplied by the number of shares with respect to which the SARs
                  being
                  exercised relate.

              

      

      

      
        	
                 

              	
                (d)

              	
                In
                  the sole discretion of the Committee, the amount payable to the
                  holder
                  upon exercise of SARs may be paid either in Common Stock or in
                  cash or in
                  a combination thereof; provided, however, that no fractional shares
                  shall
                  be issued and any such fraction will be eliminated by rounding
                  downward to
                  the nearest whole share.

              

      

      

      
        	
                 

              	
                (e)

              	
                In
                  the sole discretion of the Committee, SARs related to specific
                  Options may
                  be exercisable only upon surrender of all or a portion of the related
                  Option, or may be exercisable, in whole or in part, only at such
                  times and
                  to the extent that the related Option is exercisable, and the number
                  of
                  shares purchasable pursuant to the related Option may be reduced
                  to the
                  extent of the number of shares with respect to which the SARs are
                  exercised.

              

      

      

      
        	
                 

              	
                (f)

              	
                Notwithstanding
                  any other provision of the Plan and except as may be provided in
                  the
                  applicable award agreement, upon the occurrence of a Change in
                  Control,
                  each outstanding SAR held by a participant shall become fully vested
                  and
                  exercisable notwithstanding any vesting schedule or installment
                  schedule
                  relating to the exercisability of such SAR contained in the applicable
                  SAR
                  agreement or otherwise established at the time of grant of the
                  SAR.

              

      

      

      
        	
                 

              	
                (g)

              	
                The
                  maximum number of SARs granted to a participant during any calendar
                  year
                  shall not exceed 500,000; 1,000,000 in the participant’s initial year of
                  participation.

              

      

      

      IV.                    Restricted
        Stock Units and Restricted Stock

      

      The
        Committee may, from time to time, subject to the provisions of the Plan and
        such
        other terms and conditions as it may determine, grant an award of Restricted
        Stock Units and/or shares of Restricted Stock to individuals eligible to
        participate in the Plan.  Each grant of Restricted Stock Units and/or
        shares of Restricted Stock shall be evidenced by an award
        agreement.  The grant of Restricted Stock Units and/or Restricted
        Stock (an “RSU/RS Award”) shall state the number of Restricted Stock Units or
        shares of Common Stock covered by the grant, and shall contain such terms
        and
        conditions and be in such form as the Committee may from time to time approve,
        subject to the following:

      

      
        	
                 

              	
                (a)

              	
                Each
                  Restricted Stock Unit shall be equivalent in value to a share of
                  Common
                  Stock, and each share of Restricted Stock shall be a share of Common
                  Stock.

              

      

       

      
        
          	
                   

                	
                  (b)

                	
                  Vesting
                    of each RSU/RS Award grant shall require the holder to remain
                    in the
                    service of the Company or a Subsidiary Company for a prescribed
                    period (a
                    "Restriction Period").  The Committee shall determine the
                    Restriction Period or Periods which shall apply to the shares
                    of Common
                    Stock covered by each RSU/RS Award grant.  Except as otherwise
                    determined by the Committee and provided in the award agreement
                    and except
                    as otherwise provided in Paragraph 8, all RSU/RS
                    Awards

                

        

        
          
            
            

          

          
            -9-

            
              

            

          

          
            
            

          

        

        
          	
                	
                   

                	
                  granted
                    to a participant under the Plan shall terminate upon termination
                    of the
                    participant's service with the Company or any Subsidiary Company
                    before
                    the end of the Restriction Period or Periods applicable to such
                    RSU/RS
                    Award, and in such event the holder shall not be entitled to
                    receive any
                    payment with respect to those Restricted Stock Units or to retain
                    those
                    shares of Restricted Stock.  The Committee may also, in its sole
                    discretion, establish other terms and conditions for the vesting
                    of an
                    RSU/RS Award, including conditioning vesting on the achievement
                    of one or
                    more Performance Goals.  Notwithstanding any other provisions of
                    the Plan and except as may be provided in an award agreement,
                    upon the
                    occurrence of a Change in Control, the Restriction Period shall
                    expire and
                    all restrictions on any RSU/RS Awards held by a participant shall
                    lapse.

                

        

      

       

      
        	
                 

              	
                (c)

              	
                Upon
                  expiration of the Restriction Period or Periods applicable to each
                  RSU/RS
                  Award grant, the holder shall, upon such expiration, without payment,
                  be
                  entitled to receive payment in an amount equal to the aggregate
                  Fair
                  Market Value of the shares of Common Stock covered by such award
                  of
                  Restricted Stock Units or retain the shares of Restricted
                  Stock.  Such payment with respect to Restricted Stock Units may
                  be made in cash, in shares of Common Stock equal to the number
                  of
                  Restricted Stock Units with respect to which such payment is made,
                  or in
                  any combination thereof, as the Committee in its sole discretion
                  shall
                  determine; the participant shall retain the shares of Restricted
                  Stock,
                  free of all restrictions.  Further upon such expiration, except
                  as otherwise provided in the award agreement, the holder shall
                  be entitled
                  to receive a cash payment in an amount equal to each cash dividend
                  the
                  Company would have paid to such holder during the term of those
                  Restricted
                  Stock Units as if the holder had been the owner of record of the
                  shares of
                  Common Stock covered by such Restricted Stock Units on the record
                  date for
                  the payment of such dividend.  Cash dividends paid on shares of
                  Restricted Stock shall be paid to the participant as provided in
                  the award
                  agreement.

              

      

      

      
        	
                 

              	
                (d)

              	
                The
                  maximum aggregate number of shares of Common Stock covered by an
                  award of
                  Restricted Stock Units or shares of Restricted Stock that a participant
                  may receive with respect to any calendar year shall be 500,000
                  shares of
                  Common Stock, or equal to the value of 500,000
                  shares.

              

      

      

      V.                     Other
        Cash-Based Awards and Stock-Based Awards

      

      The
        Committee may, from time to time, subject to the provisions of the Plan and
        such
        other terms and conditions as it may determine, grant other Cash-Based Awards
        and/or Stock-Based Awards to individuals eligible to receive awards under
        the
        Plan.  Each grant of a Cash-Based Award or Stock-Based Award shall be
        evidenced by an award agreement, subject to the following:

      

        
          	
                   

                	
                  (a)

                	
                  Each
                    Cash-Based Award shall have a value as may be determined by the
                    Committee.  For each Cash-Based Award, the Committee may
                    establish Performance Goals in its discretion.  If the Committee
                    exercises its discretion to establish such Performance Goals,
                    the number
                    and/or value of Cash-Based Awards that will be paid out to
                    the

                

        

        
          
            
            

          

          
            -10-

            
              

            

          

          
            
            

          

        

        
          	
                	
                	
                  participant
                    will be determined, in the manner determined by the Committee,
                    by the
                    extent to which the Performance Goals are
                    met.

                

        

        
          

            
              	
                       

                    	
                      (b)

                    	
                      Payment
                        of earned Cash-Based Awards shall be as determined by the
                        Committee and
                        evidenced
                        in the award agreement.  The Committee, in its sole discretion,
                        may provide the payment of earned Cash-Based Awards in the
                        form of cash,
                        in shares of Common Stock, or in a combination thereof, that
                        have an
                        aggregate Fair Market Value equal to the value of the earned
                        Cash-Based
                        Awards (the applicable date regarding which aggregate Fair
                        Market Value
                        shall be determined by the Committee).  Such shares may be
                        granted subject to any restrictions deemed appropriate by
                        the
                        Committee.

                    

            

             

          

        

      

      
        	
                 

              	
                (c)

              	
                The
                  Committee may grant Stock-Based Awards, which are equity-based
                  or
                  equity-related awards not otherwise described by the terms of this
                  Plan
                  (including the grant or offer for sale of unrestricted shares of
                  Common
                  Stock), in such amounts and subject to such terms and conditions
                  including, but not limited to being subject to Performance Goals,
                  or in
                  satisfaction of such obligations, as the Committee shall
                  determine.  Stock-Based Awards may entail the transfer of shares
                  to participants, or payment in cash or otherwise of amounts based
                  on the
                  value of shares and may include, without limitation, awards designed
                  to
                  comply with or take advantage of the applicable local laws of
                  jurisdictions other than the United
                  States.

              

      

      

      
        	
                 

              	
                (d)

              	
                Each
                  award agreement shall set forth the extent to which the participant
                  shall
                  have the right to receive Cash-Based Awards and Stock-Based Awards
                  following termination of the participant's service with the Company
                  and
                  Company Subsidiaries.  Such provisions shall be determined in
                  the sole discretion of the Committee, shall be included in the
                  applicable
                  award agreement, need not be uniform among all awards of Cash-Based
                  Awards
                  and Stock-Based Awards issued pursuant to the Plan, and may reflect
                  distinctions based on the reasons for
                  termination.

              

      

      

      
        	
                 

              	
                (e)

              	
                The
                  maximum aggregate amount awarded to any one participant in any
                  calendar
                  year with respect to Cash-Based Awards may not exceed $10,000,000
                  and with
                  respect to Stock-Based Awards, may not exceed 500,000
                  shares.

              

      

      

      8.     Termination
        of Service

      

      Except
        as
        otherwise provided in an award agreement or determined by the Committee,
        upon
        termination of service with the Company of any participant, such participant's
        rights with respect to awards, shall be as follows:

      

      
        	
              	
                (a)

              	
                In
                  the event that the service of a participant is terminated by the
                  Company
                  for any reason, except as and to the extent provided otherwise
                  in this
                  Paragraph 8 below or by the Committee in an award agreement, and
                  except as
                  provided below after the occurrence of a Potential Change in Control
                  or
                  Change in Control, the participant’s rights and interests under the Plan
                  shall immediately terminate upon termination of
                  service.

              

      

       

       

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

      

      Upon
        the
        occurrence of a Potential Change in Control (as defined in subparagraph (k)
        of
        Paragraph 7II hereof) and for a period of one (1) year thereafter, the following
        special provision and notice requirement shall be applicable in the event
        of the
        termination of the service of any participant holding an Option or SAR under
        the
        Plan:   (i) in no event may a notice of termination of service be
        issued to such a participant unless at least ten (10) business days prior
        to the
        effective date of such termination, the participant is provided with a written
        notice of intent to terminate the  participant's service which sets
        forth in reasonable detail the reason for such intent to terminate, the date
        on
        which such termination is to be effective, and a description of the
        participant's rights under this Plan and under the applicable award agreements,
        including the fact that no such Option or SAR may be exercised after such
        termination has become effective and the manner, extent and price at which
        all
        Options and SARs then held by such participant may be exercised; and (ii)
        such
        notice of intent to terminate a participant's employment shall not be considered
        a "termination of service" for purposes of the first sentence of this Paragraph
        8(a).  This Paragraph 8(a) is intended only to provide for a
        requirement of notice to terminate upon the occurrence of the events set
        forth
        herein and shall not be construed to create an obligation of continued service
        in any manner or to otherwise affect or limit the Company's ability to terminate
        the service of any participant holding an Option or SAR under the
        Plan.

      

      Upon
        the
        occurrence of a Change in Control and for a period of two (2) years thereafter,
        in the event of the termination of a participant’s service by the Company for
        any reason other than for Cause (as defined below) or by the participant
        for
        Good Reason (as defined below), such participant shall have one (1) year
        from
        the date of termination of service to exercise such Option or SAR or until
        the
        date of expiration of the Option or SAR, if earlier. In addition, all
        restrictions and limitations on the exercise of such Option or the sale of
        shares of Common Stock received pursuant to exercise of an Option or SAR
        relating to minimum stockholding requirements shall immediately terminate
        upon
        the occurrence of a Change in Control.

      

      For
        purposes of this Plan, “Cause” means, with respect to a participant who is
        covered under the Company’s Severance Benefits Plan for Salaried Employees,
        Employee Benefits Protection Plan (Group 2), Executive Benefits Protection
        Plan
        (Group 3), or Executive Benefits Protection Plan (Group 3A) or any similar
        or
        successor plan, or an employment or similar agreement with the Company or
        any
        Subsidiary, “cause” as defined in the plan or agreement applicable to such
        participant, and with respect to all other participants, means (a) the willful
        and continued failure of the participant to substantially perform the
        participant's duties with the Company (other than any such failure resulting
        from incapacity due to physical or mental illness), after a written demand
        for
        substantial performance is delivered to the participant by the participant's
        supervisor which specifically identifies the manner in which the participant's
        supervisor believes that the participant has not substantially performed
        the
        participant’s duties; (b) the willful engaging by the participant in illegal
        conduct or gross misconduct which is materially and demonstrably injurious
        to
        the Company; (c) the participant having been convicted of, or having
        entered into a plea of nolo contendere to, a crime that constitutes a felony;
        or
        (d) the willful material breach by the participant of the Company’s Code of
        Ethical Business Conduct or any successor or similar code of conduct, or
        other
        material policies applicable to 

       

      
        
          
          

        

        
          -12-

          
            

          

        

        
          
          

        

      

       

      the
        participant, including policies prohibiting disclosure or misuse of confidential
        information.  For purposes of the preceding clauses (a) and (b), no
        act or failure to act, on the part of the participant, shall be considered
        "willful" unless it is done, or omitted to be done, by the participant in
        bad
        faith or without reasonable belief that the participant's action or omission
        was
        in the best interests of the Company.  Any act, or failure to act,
        based upon the instructions or with the approval of a senior officer of the
        Company or the participant's superior or based upon the advice of counsel
        for
        the Company shall be conclusively presumed to be done, or omitted to be done,
        by
        the participant in good faith and in the best interests of the
        Company.

      

      For
        purposes of this Plan, “Good Reason” means, with respect to a participant who is
        covered under the Company’s Severance Benefits Plan for Salaried Employees,
        Employee Benefits Protection Plan (Group 2), Executive Benefits Protection
        Plan
        (Group 3), or Executive Benefits Protection Plan (Group 3A), or any similar
        or successor plan, or an employment or similar agreement with the Company
        or any
        Subsidiary, “good reason” (or other words of similar import) as defined in the
        plan or agreement applicable to such participant, and with respect to all
        other
        participants, means “good reason” as defined in the Company’s Severance Benefits
        Plan for Salaried Employees as in effect immediately prior to the Change
        in
        Control as if such plan applied to such participant.

      

      
        	
              	
                (b)

              	
                If
                  a participant terminates service with the Company as the result
                  of his or
                  her becoming totally disabled or if a participant should die or
                  (except as
                  to RSU/RS Awards) retire (as defined by the Committee with respect
                  to an
                  award) while in the service of the Company or any of its Subsidiary
                  Companies, then the participant or, as the case may be, the person
                  or
                  persons to whom the participant's interest under the Plan shall
                  pass by
                  will or by the laws of descent and distribution (the "Estate"),
                  shall have
                  the following rights:

              

      

      

      
        	
                 

              	
                (i)

              	
                the
                  grantee of a contingent AIP Award or the Estate shall be entitled
                  to
                  receive payment of an AIP Award as, and to the extent, determined
                  by the
                  Committee;

              

      

      

      
        	
                 

              	
                (ii)

              	
                if
                  the holder of a PSU/PS Award shall have performed services for
                  at least
                  two-thirds of the related performance cycle prior to the date of
                  termination or death, then, except as otherwise provided in the
                  award
                  agreement evidencing the PSU/PS Award, and subject to any further
                  adjustments the Committee may make in its absolute discretion,
                  the
                  participant or the Estate shall be entitled to receive payment
                  of a PSU/PS
                  Award upon the expiration of the related performance cycle, provided
                  that
                  such payment shall be adjusted by multiplying the amount thereof
                  by a
                  fraction, the numerator of which shall be the number of full and
                  partial
                  calendar months between the date of the beginning of each such
                  performance
                  cycle and the date of termination or death, and the denominator
                  of which
                  shall be the number of full and partial calendar months from the
                  date of
                  the beginning of the performance cycle to the end of the said performance
                  cycle;

              

      

       

      
        
          	
                   

                	
                  (iii)

                	
                  except
                    as otherwise provided in the terms and conditions of the award
                    agreement,
                    the holder or the Estate shall be entitled to exercise (provided
                    any
                    vesting requirement has been satisfied as of the date of exercise)
                    any
                    Option or SAR for a period of five (5) years from such date of
                    death,
                    total disability or retirement, or
                    for

                

        

        

        
          
            
            

          

          
            -13-

            
              

            

          

          
            
            

          

        

        
          	
                	
                   

                	
                  such
                    longer period as the Committee may determine in the case of financial
                    hardship or other unusual circumstances (subject to the maximum
                    exercise
                    period for Options and SARs specified in Paragraph 7II(b) and 7III(a)
                    hereof, respectively);

                

        

         

      

      
        	
                 

              	
                (iv)

              	
                except
                  as otherwise provided in the award agreement for an RSU/RS Award,
                  (A) upon death or termination due to total disability the holder or
                  the Estate shall be entitled to receive payment in respect of the
                  RSU/RS
                  Award, provided that such award shall be adjusted by multiplying
                  the
                  amount thereof by a fraction, the numerator of which shall be the
                  number
                  of full and partial calendar months between the date of grant of
                  such
                  RSU/RS Award and the date of death or termination, and the denominator
                  of
                  which shall be the number of full and partial calendar months from
                  the
                  date of the grant to the end of the Restriction Period, and (B)
                  upon
                  retirement, the participant's rights with respect to an RSU/RS
                  Award shall
                  immediately terminate; and

              

      

      

      
        	
                 

              	
                (v)

              	
                the
                  grantee of a Cash-Based Award or Stock-Based Award or the Estate
                  shall be
                  entitled to receive payment of such award as, and to the extent,
                  provided
                  in the applicable award agreement.

              

      

      

      
        	
              	
                (c)

              	
                In
                  the event of resignation by the participant, the participant's
                  rights and
                  interests under the Plan shall immediately terminate upon such
                  resignation; provided, however, that the Committee shall have the
                  absolute
                  discretion to review the reasons and circumstances of the resignation
                  and
                  to determine whether, alternatively, and to what extent, if any,
                  the
                  participant may continue to hold any rights or interests under
                  the
                  Plan.

              

      

      

      
        	
              	
                (d)

              	
                A
                  transfer of a participant without an intervening period from the
                  Company
                  to a Subsidiary Company or vice versa, or from one Subsidiary Company
                  to
                  another, shall not be deemed a termination of
                  service.

              

      

      

      
        	
              	
                (e)

              	
                For
                  purposes of this Plan, references to a participant’s “service” and
                  termination thereof shall mean, in the case of (i) an employee,
                  the
                  participant’s employment with the Company or Subsidiary Company, (ii) a
                  non-employee director, the director’s service as a director of the Company
                  or Company Subsidiary, or (iii) of a contractor, consultant or
                  agency
                  employee, the participant’s service to the Company or Subsidiary Company
                  in such capacity.

              

      

      

      
        	
              	
                (f)

              	
                The
                  Committee shall be authorized to make all determinations and calculations
                  required by this Paragraph 8, including any determinations necessary
                  to
                  establish the reason for terminations of employment for purposes
                  of the
                  Plan, which determinations and calculations shall be conclusive
                  and
                  binding on any affected participants and
                  Estates.

              

      

      

      9.      Performance
        Factors; Additional Requirements

      

      Without
        limiting the type or number of awards that may be made under this Plan, an
        award
        may be a performance-based award.  A performance-based award intended
        to comply as “performance-based” compensation under Section 162(m) of the Code
        is referred to as a “Performance Award.”  A Performance Award shall,
        except as may otherwise be permitted 

       

       

      
        
          
          

        

        
          -14-

          
            

          

        

        
          
          

        

      

       

      under
        Section 162(m) of the Code, be paid, vested or otherwise deliverable solely
        on
        account of the attainment of one or more pre-established, objective performance
        goals (“Performance Goals”) established by the Committee prior to the earlier to
        occur of (x) 90 days after the commencement of the period of service to
        which the Performance Goal relates and (y) the elapse of 25% of the period
        of service (as established in good faith at the time the Performance Goal
        is
        established), and in any event while the outcome is substantially
        uncertain.  A Performance Goal is objective if a third party having
        knowledge of the relevant facts could determine whether the goal is
        met.  A Performance Goal may be based on one or more of the following
        measures:  net earnings or net income (before or after taxes),
        earnings per share, net sales or revenue growth, net operating profit, return
        measures (including, but not limited to, return on assets, capital, invested
        capital, equity, revenue, or sales), cash flow (including, but not limited
        to,
        operating cash flow, free cash flow, and cash flow return on equity), earnings
        before or after taxes, interest, depreciation, and/or amortization, gross
        or
        operating margins, productivity ratios, share price (including, but not limited
        to, growth measures and total shareholder return), expense targets, margins,
        operating efficiency, market share, customer satisfaction, and/or balance
        sheet
        measures (including but not limited to, working capital amounts and levels
        of
        short- and long-term debt) (collectively, the “Performance
        Factors”).  Performance Factors may be particular to a participant or
        the division, line of business or other unit, or the Company generally, or
        may
        be absolute in their terms or measured against or in relationship to the
        performance of a peer group or other external or internal measure.  A
        Performance Goal may, but need not be, based upon a change or an increase
        or
        positive result under a particular Performance Factor and could include,
        for
        example, maintaining the status quo, limiting economic losses, or a relative
        comparison of performance to the performance of a peer group or other external
        or internal measure (measured, in each case, by reference to specific
        Performance Factors).  A Performance Goal may include or exclude items
        to measure specific objectives, including, without limitation, extraordinary
        or
        other non-recurring items, acquisitions and divestitures, internal restructuring
        and reorganizations, accounting charges and effects of accounting
        changes.  In interpreting Plan provisions applicable to Performance
        Awards to participants who are “covered employees” under Section 162(m) of the
        Code, it is the intent of the Plan to conform with the standards of
        Section 162(m) of the Code and applicable Treasury Regulations, and the
        Committee in establishing such goals and interpreting the Plan shall be guided
        by such provisions.  Prior to the payment of any compensation based on
        the achievement of Performance Goals to any such “covered employee,” the
        Committee must certify in writing that applicable Performance Goals and any
        of
        the material terms thereof were, in fact, satisfied.  Subject to the
        foregoing provisions, the terms, conditions and limitations applicable to
        any
        Performance Awards made pursuant to this Plan shall be determined by the
        Committee.

      

      The
        Committee has the authority to provide for accelerated vesting of any
        performance-based award based on the achievement of Performance Goals or
        such
        other factors as the Committee shall determine, including a Change in
        Control.

      

      Awards
        that are intended to qualify as Performance Awards may not be adjusted
        upward.  The Committee shall retain the discretion to adjust
        Performance Awards downward, either on a formula or discretionary basis or
        any
        combination, as the Committee determines.  In the event that
        applicable tax and/or securities laws change to permit Committee discretion
        to

       

      
        
          
          

        

        
          -15-

          
            

          

        

        
          
          

        

      

       

      alter
        the
        governing Performance Goals and Performance Factors without obtaining
        stockholder approval of such changes, the Committee shall have sole discretion
        to make such changes without obtaining stockholder approval.

      

      The
        Committee may grant or administer performance-based awards that are not intended
        to or do not qualify as Performance Awards meeting the requirements of Section
        162(m) of the Code and may base vesting, payment or delivery of such awards
        on
        performance criteria (which shall be the Performance Goals with respect to
        such
        awards) which may be other than those set forth in this
        Paragraph 9.

      

      No
        awards
        granted pursuant to the Plan shall be exercisable or realized in whole or
        in
        part, and the Company shall not be obligated to sell, distribute or issue
        any
        shares subject to any such award, if such exercise and sale would, in the
        opinion of counsel for the Company, violate the Securities Act of 1933, as
        amended (or other federal, state or foreign statutes having similar
        requirements).  Each award shall be subject to the further requirement
        that, if at any time the Board of Directors shall determine in its discretion
        that the listing or qualification of the shares relating or subject to such
        award under any securities exchange requirements or under any applicable
        law, or
        the consent or approval of any governmental regulatory body, is necessary
        or
        desirable as a condition of, or in connection with, the granting of such
        award
        or the distribution or issue of shares thereunder, such award may not be
        exercised in whole or in part unless such listing, qualification, consent
        or
        approval shall have been effected or obtained free of any condition not
        acceptable to the Board of Directors.

      

      Awards
        may be subject to restrictions as to resale or other disposition and to such
        other provisions as may be appropriate to comply with federal, state or foreign
        securities laws and stock exchange requirements, and the exercise of any
        award
        or entitlement to payment thereunder may be contingent upon receipt from
        the
        holder (or any other person permitted by this Plan to exercise any award
        or
        receive any distribution hereunder) of a representation that at the time
        of such
        exercise it is his or her then present intention to acquire the shares being
        distributed for investment and not for resale.

      

      10.    Non-Employee
        Directors

      

      The
        Board
        may, from time to time, subject to the provisions of the Plan and such other
        terms and conditions as it may determine, grant awards to non-employee directors
        of the Company.  Such awards shall be evidenced by an award
        agreement.

      

      11.   Nontransferability

      

      Unless
        otherwise approved by the Committee or provided in an award agreement, awards
        granted under the Plan shall be nonassignable and shall not be transferable
        by
        the participant other than by will or the laws of descent and distribution,
        and
        shall be exercisable, during the participant’s lifetime, only by the participant
        or the participant’s guardian or legal representative.

      

      
        
          
          

        

        
          -16-

          
            

          

        

        
          
          

        

      

      12.   Disclaimer
        of Rights

      

      No
        provision in the Plan or any awards granted pursuant to the Plan shall be
        construed to confer upon the participant any right to be employed by or continue
        in the service of the Company or by any Subsidiary Company, to receive
        additional awards, or to interfere in any way with the right and authority
        of
        the Company or any Subsidiary Company either to increase or decrease the
        compensation of the participant at any time, or to terminate any relationship
        between the participant and the Company or any of its Subsidiary
        Companies.

      

      Participants
        under the Plan shall have none of the rights of a stockholder of the Company
        with respect to shares subject to any award hereunder unless and until such
        shares have been issued to them.

      

      13.    Stock
        Adjustments

      

      In
        the
        event that the shares of Common Stock, as presently constituted, shall be
        changed into or exchanged for a different number or kind of shares of stock
        or
        other securities of the Company or of another company (whether by reason
        of
        merger, consolidation, recapitalization, reclassification, stock split,
        combination of shares or otherwise), or if the number of such shares of Common
        Stock shall be increased through the payment of a stock dividend, or a dividend
        on the shares of Common Stock of rights or warrants to purchase securities
        of
        the Company shall be made, then there shall be substituted for or added to
        each
        share available under and subject to the Plan as provided in Paragraph 2
        hereof, and to the limitations set forth in Paragraph 7, and each share
        theretofore appropriated or thereafter subject or which may become subject
        to
        awards under the Plan, the number and kind of shares of stock or other
        securities into which each outstanding share of Common Stock 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 also shall
        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 of Common Stock, or
        of
        any stock or other securities into which the Common Stock 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 the shares available under and subject to the Plan, or in any
        awards theretofore granted or which may be granted under the Plan, such
        adjustments shall be made in accordance with such determination.

      

      No
        fractional shares of Common Stock or units of other securities shall be issued
        pursuant to any such adjustment, and any fractions resulting from any such
        adjustment shall be eliminated in each case by rounding downward to the nearest
        whole share or unit.

      

      14.   Tax
        Withholding

      

      The
        Company shall have the power and the right to deduct or withhold, or require
        a
        participant to remit to the Company, the minimum statutory amount 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.

      
        
          
          

        

        
          -17-

          
            

          

        

        
          
          

        

      

      

      With
        respect to withholding required upon any taxable event arising from the issuance
        or delivery of shares of Common Stock with respect to an award granted
        hereunder, participants may elect, subject to the approval of the Committee,
        to
        satisfy the withholding requirement, in whole or in part, by having the Company
        withhold shares of Common Stock having a Fair Market Value on the date the
        tax
        is to be determined equal to the minimum statutory withholding tax that could
        be
        imposed on the transaction.  All such elections shall be made in
        accordance with procedures and shall be subject to any restrictions or
        limitations that the Committee, in its sole discretion, deems
        appropriate.

       

      15.   General
        Provisions

      

      
        	
                        
                  (a)

              	
                The
                  Committee may specify in an award agreement that the participant’s rights,
                  payments, and benefits with respect to an award shall be subject
                  to
                  reduction, cancellation, forfeiture, or recoupment upon the occurrence
                  of
                  certain specified events, in addition to any otherwise applicable
                  vesting
                  or performance conditions of an award.  Such events may include,
                  but shall not be limited to, termination of employment for Cause,
                  termination of the participant’s provision of services to the Company
                  and/or its Subsidiaries, violation of material policies, breach
                  of
                  noncompetition, confidentiality, or other restrictive covenants
                  that may
                  apply to the participant, or other conduct by the participant that
                  is
                  detrimental to the business or reputation of the Company and/or
                  its
                  Subsidiaries.

              

      

      

      
        	
                        
                  (b)

              	
                If
                  the Company is required to prepare an accounting restatement due
                  to the
                  material noncompliance of the Company, as a result of misconduct,
                  with any
                  financial reporting requirement under the securities laws, if the
                  participant knowingly or grossly negligently engaged in the misconduct,
                  or
                  knowingly or grossly negligently failed to prevent the misconduct,
                  or if
                  the participant is one of the individuals subject to automatic
                  forfeiture
                  under Section 304 of the Sarbanes-Oxley Act of 2002 (and not otherwise
                  exempted), the participant shall reimburse the Company the amount
                  of any
                  payment in settlement of an award earned or accrued during the
                  twelve-month period following the first public issuance or filing
                  with the
                  United States Securities and Exchange Commission (whichever first
                  occurred) of the financial document not in compliance with such
                  financial
                  reporting requirement.

              

      

      

      
        	
                        
                  (c)

              	
                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.

              

      

      

      
        	
                        
                  (d)

              	
                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.

              

      

      

      
        	
                        
                  (e)

              	
                The
                  granting of awards and the issuance of shares under the Plan shall
                  be
                  subject to all applicable laws, rules, and regulations, and to
                  such
                  approvals by any governmental agencies or national securities exchanges
                  as
                  may be required.

              

      

       

      
        
          
          

        

        
          -18-

          
            

          

        

        
          
          

        

      

       

        	
                        
                  (f)

              	
                Notwithstanding
                  any provision of the Plan to the contrary, in order to comply with
                  the
                  laws in other countries in which the Company and/or its Subsidiaries
                  operate or have employees, directors or service providers, the
                  Committee,
                  in its sole discretion, shall have the power and authority
                  to:

              

      

      

      
        	
                 

              	
                (i)

              	
                determine
                  which Subsidiaries shall be covered by the
                  Plan;

              

      

      

      
        	
                 

              	
                (ii)

              	
                determine
                  which individuals outside the United States are eligible to participate
                  in
                  the Plan;

              

      

      

      
        	
                 

              	
                (iii)

              	
                modify
                  the terms and conditions of any award granted to participants outside
                  the
                  United States to comply with applicable foreign
                  laws;

              

      

      

      
        	
                 

              	
                (iv)

              	
                establish
                  subplans and modify exercise procedures and other terms and procedures,
                  to
                  the extent such actions may be necessary or advisable;
                  and/or

              

      

      

      
        	
                 

              	
                (v)

              	
                take
                  any action, before or after an award is made, that it deems advisable
                  to
                  obtain approval or comply with any necessary local government regulatory
                  exemptions or approvals.

              

      

      

      Notwithstanding
        the above, the Committee may not take any actions hereunder, and no awards
        shall
        be granted, that would violate applicable law.

        

        	
                        
                  (g)

              	
                To
                  the extent that the Plan provides for issuance of certificates
                  to reflect
                  the transfer of shares of Common Stock, the transfer of such shares
                  may be
                  effected on a noncertificated basis, to the extent not prohibited
                  by
                  applicable law or the rules of any stock
                  exchange.

              

      

      

      
        	
                        
                  (h)

              	
                The
                  Plan and each award agreement shall be governed by the laws of
                  the
                  Commonwealth of Pennsylvania, excluding any conflicts or choice
                  of law
                  rule or principle that might otherwise refer construction or
                  interpretation of the Plan to the substantive law of another
                  jurisdiction.  Unless otherwise provided in the award agreement,
                  participants are deemed to submit to the exclusive jurisdiction
                  and venue
                  of the federal or state courts of Pennsylvania to resolve any and
                  all
                  issues that may arise out of or relate to the Plan or any related
                  award
                  agreement.

              

      

       

      
        
          	
                	
                  (i)

                	
                  The
                    Committee, in its sole discretion, may permit a participant to
                    defer
                    receipt of the payment of cash or the delivery of shares that
                    would
                    otherwise be delivered to a participant under the Plan in accordance
                    with
                    the Company’s Deferred Compensation Plan, as amended from time to time, or
                    any similar or successor plan providing for deferral of compensation
                    which
                    is applicable to the participant (a “Deferred Compensation
                    Plan”).  Any such deferral elections shall be subject to the
                    provisions of the Deferred Compensation Plan and such rules and
                    procedures
                    as shall be determined by the Committee in its sole
                    discretion.  Notwithstanding the foregoing, any deferral shall
                    be made in accordance with the provisions of Section 409A of the Code
                    and the applicable guidance issued by the Secretary of the Treasury
                    thereunder, and this Plan and awards hereunder are intended and
                    shall be
                    interpreted so as not to violate Section 409A of the
                    Code.

                

        

        
          
            
            

          

          
            -19-

            
              

            

          

          
            
            

          

        

        
          	
                	
                   (j)

                	
                  Subject
                    to the provisions of the Plan and any award agreement, the recipient
                    of an
                    award (including without limitation, any deferred award) may,
                    if so
                    determined by the Committee, be entitled to receive, currently
                    or on a
                    deferred basis, cash or stock dividends, or cash payments in
                    amounts
                    equivalent to cash or stock dividends on shares (“dividend equivalents”)
                    with respect to the number of shares covered by the award, as
                    determined
                    by the Committee and the Committee may provide that such amounts
                    (if any)
                    shall be deemed to have been reinvested in additional shares
                    or otherwise
                    reinvested.

                

        

      

       

      
        	
                        
                  (k)

              	
                Options
                  and SARs may not be repriced without the approval of the Company’s
                  stockholders.  For this purpose, “reprice” means that the
                  Company has:  (a) lowered or reduced the exercise price of
                  outstanding Options and/or outstanding SARs after they have been
                  granted,
                  (b) canceled an Option and/or an SAR when the applicable Exercise
                  Price exceeds the Fair Market Value of the underlying shares in
                  exchange
                  for cash or another award, or (c) taken any other action with respect
                  to an Option and/or an SAR that would be treated as a repricing
                  under the
                  rules and regulations of the principal securities market on which
                  the
                  shares are traded.  An adjustment pursuant to Paragraph 13
                  shall not be treated as a
                  repricing.

              

      

      

      16.   Effective
        Date and Termination of Plan

      

      The
        Plan
        as amended and restated herein shall become effective upon approval by the
        stockholders at the 2007 Annual Meeting of Stockholders.  Upon such
        approval, no further awards shall be made under the Broad Based Stock Option
        Plan, the Broad Based Annual Incentive Plan or the Directors’ Compensation Plan,
        but awards and amounts outstanding under such Plans and this Plan shall remain
        in effect and shall not be modified by this amended and restated
        Plan.

      

      The
        Board
        of Directors at any time may terminate the Plan, but such termination shall
        not
        alter or impair any of the rights or obligations under any awards theretofore
        granted under the Plan unless the affected participant shall so
        consent.

      

      17.   Application
        of Funds

      

      The
        proceeds received by the Company from the sale of shares hereunder will be
        used
        for general corporate purposes.

      

      18.   Amendment

      

      The
        Board
        of Directors at any time and from time to time, may alter or amend the Plan,
        subject to any requirement of stockholder approval imposed by applicable
        law,
        rule or regulation; provided that any such amendment shall not adversely
        alter
        or impair any of the rights or obligations under any award theretofore granted
        under the Plan unless the affected participant shall so
        consent.  Notwithstanding the foregoing, the Plan may not be
        terminated or amended in a manner adverse to the interests of any participant
        (without the consent of the participant) either:  (a) at the time a
        Potential Change in Control occurs and continuing for a period of one (1)
        year
        following the cessation of a Potential Change in Control, or (b) for a two-year
        period beginning as of the date of a Change in Control (the "Coverage
        Period").  Upon the expiration 

       

      
        
          
          

        

        
          -20-

          
            

          

        

        
          
          

        

      

       

       

      of
        the
        Coverage Period, subparagraph (l) of Paragraph 7II of the Plan and Paragraph
        8(a) of the Plan may not be amended in any manner that would adversely affect
        any participant without the consent of the participant.

      

      IN
        WITNESS WHEREOF, the Company has
        caused this Equity and Incentive Compensation Plan to be adopted as of the
        13th
        day of February 2007, subject to stockholder approval.

      

      
        	 	
                 

                /s/
                  Marcella K.
                  Arline                       

                Marcella
                  K. Arline

                Senior
                  Vice President, Chief People Officer

              
	 	 

      

      

      
        
          
          

        

        
          -21-Exhibit 10.69

    Exhibit
      10.69

    

    Compensation
      Committee Resolutions

    

    

    NAVISTAR
      1994 PERFORMANCE INCENTIVE PLAN

    

    WHEREAS,
      Navistar
      International Corporation (the “Corporation”) maintains the Navistar 1994
      Performance Incentive Plan, as may be amended from time to time (the “1994
      Plan”); and

    

    WHEREAS,
      the 1994
      Plan, in relevant part, reserves to the Committee on Compensation and Governance
      of the Corporation’s Board of Directors (n/k/a the Compensation Committee) (the
“Committee”) the right to modify at any time, without the consent of the
      participant, the (1) terms of the 1994 Plan, (2) the terms of any option
      previously granted thereunder, and (3) the terms of restricted shares previously
      awarded thereunder; 

    

    NOW,
      THEREFORE, BE IT RESOLVED, that
      the
      Committee hereby amends the 1994 Plan, effective as of the dates specified
      herein, as follows:

    

    
      	1.  	
              Section
                VII of the 1994 Plan is hereby amended by adding the following new
                paragraph (6), effective as of the date on which the 1994 Plan was
                established, and by adding the following new paragraph (7), effective
                April 16, 2007, to the end thereof, to read as
                follows:

            

    

    

    
      	 	
              “(6)

            	
              Notwithstanding
                any provision of the Plan to the contrary, the exercise of a Stock
                Option
                shall be settled solely in shares of Common Stock, and under no
                circumstances whatsoever shall a Stock Option be exercisable with
                respect
                to any period during which the exercise of such Stock Option would
                violate
                Applicable Law, as defined in Section
                XVIII.”

            

    

        

    
      	2.  	
              Section
                XVIII of the 1994 Plan is hereby amended, in its entirety, effective
                as of
                the date on which the 1994 Plan was established, to read as
                follows:

            

    

    

    “The
      Plan
      shall be governed by and construed in accordance with applicable Federal laws
      and, to the extent not inconsistent therewith or pre-empted thereby, with the
      laws of the State of Delaware (without regard to the conflicts of laws
      provisions of that State or any other jurisdiction), including applicable
      regulations, rules, and such other applicable authorities thereunder
      (“Applicable Law”). Accordingly, for the avoidance of doubt, the receipt,
      exercise, issuance, and disposition, as appropriate, of any Award, Common Stock,
      Stock Option, or other incentive or award under the Plan is expressly
      conditioned upon and subject to any and all limitations, restrictions,
      prohibitions, or such other conditions imposed by Applicable Law, including,
      but
      not limited to, applicable Federal and state securities law. Without limiting
      the generality and applicability of the foregoing and notwithstanding any
      provision of the Plan to the contrary, if and to the extent any amounts payable
      or benefits provided under this Plan are subject to, and would otherwise
      violate, the requirements of Section 409A of the Internal Revenue Code, as
      amended, including applicable regulations, rules, and such other applicable
      authorities thereunder (“Code Section 409A”), such amounts or benefits shall be
      paid or provided under such other conditions, determined by the Committee in
      its
      sole discretion, that cause the provision of such amounts or benefits to comply
      with, or not to be subject to, Code Section 409A and this Plan shall be
      construed and administered accordingly to achieve that objective.” 

    

    E-1

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NAVISTAR
      INTERNATIONAL CORPORATION 

    1998
      INTERIM STOCK PLAN

    

    WHEREAS,
      the
      Corporation maintains the Navistar International Corporation 1998 Interim Stock
      Plan, as may be amended from time to time (the “1998 Interim Plan”);
      and

    

    WHEREAS,
      the 1998
      Interim Plan, in relevant part, reserves to the Committee on Organization of
      the
      Corporation’s Board of Directors (n/k/a the Compensation Committee) (the
“Committee”) the right to modify at any time, without the consent of the
      participant, the (1) terms of the 1998 Interim Plan, (2) the terms of any option
      previously granted thereunder, and (3) the terms of restricted shares previously
      awarded thereunder; 

    

    NOW,
      THEREFORE, BE IT RESOLVED, that
      the
      Committee hereby amends the 1998 Interim Plan, effective as of the dates
      specified herein, as follows:

    

    
      	1.  	
              Section
                IV of the 1998 Interim Plan is hereby amended by adding the following
                text, effective as of the date on which the 1998 Interim Plan was
                established (or such other effective date, as specifically provided
                below), to the end thereof, to read as
                follows:

            

    

    

    “Notwithstanding
      any provision of the Plan to the contrary, the exercise of any Nonqualified
      Stock Option shall be settled solely in shares of Common Stock, and under no
      circumstances whatsoever shall a Nonqualified Stock Option be exercisable with
      respect to any period during which the exercise of such Nonqualified Stock
      Option would violate Applicable Law, as defined in Section X.”

        

    
      	2.  	
              Section
                X of the 1998 Interim Plan is hereby amended, in its entirety, effective
                as of the date on which the 1998 Interim Plan was established, to
                read as
                follows:

            

    

    

    “The
      Plan
      shall be governed by and construed in accordance with applicable Federal laws
      and, to the extent not inconsistent therewith or pre-empted thereby, with the
      laws of the State of Delaware (without regard to the conflicts of laws
      provisions of that State or any other jurisdiction), including applicable
      regulations, rules, and such other applicable authorities thereunder
      (“Applicable Law”). Accordingly, for the avoidance of doubt, the receipt,
      exercise, issuance, and disposition, as appropriate, of any Award, Common Stock,
      Nonqualified Stock Option, or other incentive or award under the Plan is
      expressly conditioned upon and subject to any and all limitations, restrictions,
      prohibitions, or such other conditions imposed by Applicable Law, including,
      but
      not limited to, applicable Federal and state securities law. Without limiting
      the generality and applicability of the foregoing and notwithstanding any
      provision of the Plan to the contrary, if and to the extent any amounts payable
      or benefits provided under this Plan are subject to, and would otherwise
      violate, the requirements of Section 409A of the Internal Revenue Code, as
      amended, including applicable regulations, rules, and such other applicable
      authorities thereunder (“Code Section 409A”), such amounts or benefits shall be
      paid or provided under such other conditions, determined by the Committee in
      its
      sole discretion, that cause the provision of such amounts or benefits to comply
      with, or not to be subject to, Code Section 409A and this Plan shall be
      construed and administered accordingly to achieve that objective.” 

     

    E-2

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NAVISTAR
      1998 SUPPLEMENTAL STOCK PLAN

    

    WHEREAS,
      the
      Corporation maintains the Navistar 1998 Supplemental Stock Plan, as may be
      amended from time to time (the “1998 Supplemental Plan”); and

    

    WHEREAS,
      the 1998
      Supplemental Plan, in relevant part, reserves to the Committee on Compensation
      and Governance of the Corporation’s Board of Directors (n/k/a the Compensation
      Committee) (the “Committee”) the right to modify at any time, without the
      consent of the participant, the (1) terms of the 1998 Supplemental Plan, (2)
      the
      terms of any option previously granted thereunder, and (3) the terms of
      restricted shares previously awarded thereunder; 

    

    NOW,
      THEREFORE, BE IT RESOLVED, that
      the
      Committee hereby amends the 1998 Supplemental Plan, effective as of the dates
      specified herein, as follows:

    

    
      	1.  	
              Section
                IV of the 1998 Supplemental Plan is hereby amended by adding the
                following
                text, effective as of the date on which the 1998 Supplemental Plan
                was
                established (or such other effective date, as specifically provided
                below), to the end thereof, to read as
                follows:

            

    

    

    “Notwithstanding
      any provision of the Plan to the contrary, the exercise of any Nonqualified
      Stock Option shall be settled solely in shares of Common Stock, and under no
      circumstances whatsoever shall a Nonqualified Stock Option be exercisable with
      respect to any period during which the exercise of such Nonqualified Stock
      Option would violate Applicable Law, as defined in Section X.”

        

    
      	2.  	
              Section
                X of the 1998 Supplemental Plan is hereby amended, in its entirety,
                effective as of the date on which the 1998 Supplemental Plan was
                established, to read as follows:

            

    

    

    “The
      Plan
      shall be governed by and construed in accordance with applicable Federal laws
      and, to the extent not inconsistent therewith or pre-empted thereby, with the
      laws of the State of Delaware (without regard to the conflicts of laws
      provisions of that State or any other jurisdiction), including applicable
      regulations, rules, and such other applicable authorities thereunder
      (“Applicable Law”). Accordingly, for the avoidance of doubt, the receipt,
      exercise, issuance, and disposition, as appropriate, of any Award, Common Stock,
      Nonqualified Stock Option, or other incentive or award under the Plan is
      expressly conditioned upon and subject to any and all limitations, restrictions,
      prohibitions, or such other conditions imposed by Applicable Law, including,
      but
      not limited to, applicable Federal and state securities law. Without limiting
      the generality and applicability of the foregoing and notwithstanding any
      provision of the Plan to the contrary, if and to the extent any amounts payable
      or benefits provided under this Plan are subject to, and would otherwise
      violate, the requirements of Section 409A of the Internal Revenue Code, as
      amended, including applicable regulations, rules, and such other applicable
      authorities thereunder (“Code Section 409A”), such amounts or benefits shall be
      paid or provided under such other conditions, determined by the Committee in
      its
      sole discretion, that cause the provision of such amounts or benefits to comply
      with, or not to be subject to, Code Section 409A and this Plan shall be
      construed and administered accordingly to achieve that objective.” 

     

    E-3

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NAVISTAR
      INTERNATIONAL CORPORATION 

    2004
      PERFORMANCE INCENTIVE PLAN

    

    WHEREAS,
      Navistar
      International Corporation (the “Corporation”) maintains the Navistar
      International Corporation 2004 Performance Incentive Plan, as may be amended
      from time to time (the “2004 Plan”); and

    

    WHEREAS,
      the 2004
      Plan, in relevant part, generally reserves to the Committee on Compensation
      and
      Governance of the Corporation’s Board of Directors (n/k/a the Compensation
      Committee) (the “Committee”) the right to modify the 2004 Plan at any time,
      provided that no amendment to the 2004 Plan shall, without the consent of the
      affected participant, terminate or adversely affect any right or obligation
      under any stock option or other award previously granted thereunder;

    

    NOW,
      THEREFORE, BE IT RESOLVED, that
      the
      Committee hereby amends the 2004 Plan, effective as of the dates specified
      herein, as follows:

    

    
      	1.  	
              Section
                III(25) of the 2004 Plan is hereby amended by amended in its entirety,
                effective April 16, 2007, to read as
                follows:

            

    

    

    “(25) ‘Qualified
      Retirement’ means with respect to an Employee a termination from employment from
      the Corporation or any of its subsidiaries that occurs after the Employee
      attains age 55 and at the time of the termination the Employee has either:
      (i)
      10 or more years of continuous service as a full-time Employee, or (ii) 10
      or
      more years of service that would constitute credited service under the
      definition contained in the International Truck and Engine Corporation
      Retirement Plan for Salaried Employees ("RPSE"). Qualified Retirement for a
      Non-Employee Director means retirement under a retirement policy of the Board
      for Non-Employee Directors.”

    

    
      	2.  	
              Section
                VII of the 2004 Plan is hereby amended by adding the following new
                paragraphs (13) and (14), effective April 16, 2007 (or such other
                effective date, as specifically provided below), to the end thereof,
                to
                read as follows:

            

    

    

    
      	 	
              “(13)

            	
              Notwithstanding
                any provision of the Plan to the contrary, (a) the exercise of a
                Stock
                Option granted under the Plan at any time on or after April 16, 2007
                shall
                be settled solely in shares of Common Stock, and under no circumstances
                whatsoever shall a Stock Option be exercisable with respect to any
                period
                during which the exercise of such Stock Option would violate Applicable
                Law, as defined in Section XVIII, and (b) in accordance with both
                the
                terms of the Prospectus for the Plan and the power and authority
                reserved
                to the Committee under Section XIII, and to the fullest extent permitted
                under Applicable Law, as defined in Section XVIII, the exercise of
                a Stock
                Option granted under the Plan at any time before April 16, 2007 shall
                be
                settled solely in shares of Common Stock, and under no circumstances
                whatsoever shall a Stock Option be exercisable with respect to any
                period
                during which the exercise of such Stock Option would violated Applicable
                Law, as defined in Section XVIII.”

            

    

     

    E-4

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	3.  	
              Section
                XXII of the 2004 Plan is hereby amended, in its entirety, effective
                April
                16, 2007 (or, to the fullest extent permitted by applicable law,
                effective
                as of the date on which the 2004 Plan was established), to read as
                follows:

            

    

    

    “The
      Plan
      shall be governed by and construed in accordance with applicable Federal laws
      and, to the extent not inconsistent therewith or pre-empted thereby, with the
      laws of the State of Delaware (without regard to the conflicts of laws
      provisions of that State or any other jurisdiction), including applicable
      regulations, rules, and such other applicable authorities thereunder
      (“Applicable Law”). Accordingly, for the avoidance of doubt, the receipt,
      exercise, issuance, and disposition, as appropriate, of any Award, Common Stock,
      Stock Option, or other incentive or award under the Plan is expressly
      conditioned upon and subject to any and all limitations, restrictions,
      prohibitions, or such other conditions imposed by Applicable Law, including,
      but
      not limited to, applicable Federal and state securities law. Without limiting
      the generality and applicability of the foregoing and notwithstanding any
      provision of the Plan to the contrary, if and to the extent any amounts payable
      or benefits provided under this Plan are subject to, and would otherwise
      violate, the requirements of Section 409A of the Internal Revenue Code, as
      amended, including applicable regulations, rules, and such other applicable
      authorities thereunder (“Code Section 409A”), such amounts or benefits shall be
      paid or provided under such other conditions, determined by the Committee in
      its
      sole discretion, that cause the provision of such amounts or benefits to comply
      with, or not to be subject to, Code Section 409A and this Plan shall be
      construed and administered accordingly to achieve that objective.”

     

    E-5

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    NAVISTAR
      1998 NON-EMPLOYEE DIRECTORS 

    STOCK
      OPTION PLAN

    

    RESOLVED,
      that
      the
      Compensation Committee hereby recommends that the Board approve the following
      preambles and resolutions:

    

    “WHEREAS,
      Navistar
      International Corporation (the “Corporation”) maintains the Navistar 1998
      Non-Employee Directors Stock Option Plan, as may be amended from time to time
      (the “1998 Directors Plan”); and

    

    WHEREAS,
      the 1998
      Directors Plan, in relevant part, generally reserves to the Corporation’s Board
      of Directors (the “Board”) the right to modify the 1998 Directors Plan at any
      time, provided that no amendment to the 1998 Directors Plan shall, without
      the
      consent of the affected option holder, adversely affect any right under any
      stock option or other award previously granted thereunder; 

    

    NOW,
      THEREFORE, BE IT RESOLVED, that
      the
      Board hereby amends the 1998 Directors Plan, effective as of the dates specified
      herein, as follows:

    

    
      	1.  	
              Section
                7 of the 1998 Directors Plan is hereby amended by adding the following
                text, effective as of the date on which the 1998 Directors Plan was
                established (or such other effective date, as specifically provided
                below), to the end thereof, to read as
                follows:

            

    

    

    “Notwithstanding
      any provision of the Plan to the contrary, to the fullest extent permitted
      under
      Applicable Law, as defined in Section 15, the exercise of an option granted
      under the Plan shall be settled solely in shares of Common Stock of the
      Corporation, and under no circumstances whatsoever shall an option be
      exercisable with respect to any period during which the exercise of such option
      would violate Applicable Law, as defined in Section 15.”

        

    
      	2.  	
              The
                1998 Directors Plan is hereby amended, effective April 16, 2007 (or,
                to
                the fullest extent permitted by applicable law, effective as of the
                date
                on which the 1998 Directors Plan was established), by adding a new
                Section
                15 to read as follows:

            

    

    

    “15. Governing
      Law

    

    The
      Plan
      shall be governed by and construed in accordance with applicable Federal laws
      and, to the extent not inconsistent therewith or pre-empted thereby, with the
      laws of the State of Delaware (without regard to the conflicts of laws
      provisions of that State or any other jurisdiction), including applicable
      regulations, rules, and such other applicable authorities thereunder
      (“Applicable Law”). Accordingly, for the avoidance of doubt, the receipt,
      exercise, issuance, and disposition, as appropriate, of any Common Stock,
      option, or other incentive or award under the Plan is expressly conditioned
      upon
      and subject to any and all limitations, restrictions, prohibitions, or such
      other conditions imposed by Applicable Law, including, but not limited to,
      applicable Federal and state securities law. Without limiting the generality
      and
      applicability of the foregoing and notwithstanding any provision of the Plan
      to
      the contrary, if and to the extent any amounts payable or benefits provided
      under this Plan are subject to, and would otherwise violate, the requirements
      of
      Section 409A of the Internal Revenue Code, as amended, including applicable
      regulations, rules, and such other applicable authorities thereunder (“Code
      Section 409A”), such amounts or benefits shall be paid or provided under such
      other conditions, determined by the Board in its sole discretion, that cause
      the
      provision of such amounts or benefits to comply with, or not to be subject
      to,
      Code Section 409A and this Plan shall be construed and administered accordingly
      to achieve that objective.”

    

     

      E-6

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