Document:

EXHIBIT 4(iii)
                            FLOATING RATE SENIOR NOTE

REGISTERED                                                   REGISTERED No. R-
U.S.$                                                          CUSIP: 617446JA8
                                                             ISIN: US617446JA85
                                                          COMMON CODE: 16610216

     Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.

     Unless and until it is exchanged in whole or in part for Securities in
definitive registered form, this certificate may not be transferred except as a
whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another
nominee of DTC or by DTC or any such nominee to a successor Depositary or a
nominee of such successor Depositary.

                                 MORGAN STANLEY
                           FLOATING RATE NOTE DUE 2006

     Morgan Stanley (formerly known as Morgan Stanley Dean Witter & Co.), a
Delaware corporation (together with its successors and assigns, the "Issuer"),
for value received, hereby promises to pay to Cede & Co., or registered assigns,
the principal sum of             United States Dollars (U.S.$          ), on
March 27, 2006 (the "Maturity Date"), and to pay interest thereon at the rate
of 1.57% per annum (the "Initial Interest Rate") from and including March 27,
2003 (the "Original Issue Date") to but excluding June 27, 2003 and thereafter
at a rate per annum equal to LIBOR (as defined below) plus .28% until the
principal hereof is paid or duly made available for payment, quarterly in
arrears on the 27th day of March, June, September and December in each year
(each such date, an "Interest Payment Date"), commencing on June 27, 2003,
and on the Maturity Date. Interest will be computed based on an actual/360 day
count basis. Interest payments for this Registered Global Security shall
include accrued interest from and including the Original Issue Date or from and
including the last date in respect of which interest has been paid or duly
provided for, as the case may be, to but excluding the Interest Payment Date or
Maturity Date (except as described below), as the case may be.

     If any Interest Payment Date, other than the Maturity Date, falls on a day
that is not a Business Day (as defined below), the interest payment shall be
postponed to the next day that is a Business Day, except if that Business Day is
in the next succeeding calendar month, the Interest Payment Date shall be the
immediately preceding Business Day. If the Maturity Date falls on a day that is
not a

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Business Day, the payment of interest and principal on this Registered Global
Security shall be made on the next succeeding Business Day, and no interest on
such payment shall accrue for the period from and after the Maturity Date.

     The rate of interest on this Registered Global Security shall be reset
quarterly (the "Interest Reset Period," and the first day of each Interest Reset
Period being an "Interest Reset Date"). The Interest Reset Dates shall be March
27, June 27, September 27 and December 27 of each year; provided that the
interest rate in effect from the Original Issue Date to but excluding the first
Interest Reset Date shall be the Initial Interest Rate. If any Interest Reset
Date falls on a day that is not a Business Day (as defined below), the Interest
Reset Date shall be postponed to the next day that is a Business Day, except if
that Business Day is in the next succeeding calendar month, the Interest Reset
Date shall be the next preceding Business Day.

     As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law or regulation to close in The City of New
York.

     JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank) is the
"Calculation Agent" for this Registered Global Security. Upon the request of the
Holder of this Registered Global Security, the Calculation Agent shall provide
the interest rate then in effect and, if determined, the interest rate that
shall become effective on the next Interest Reset Date.

     The Calculation Agent shall determine the interest rate for each succeeding
Interest Reset Period by reference to LIBOR on the second London banking day
preceding the applicable Interest Reset Date (each such day, an "Interest
Determination Date"). "London banking day" means any day on which dealings in
deposits in U.S. dollars are transacted in the London interbank market.

     "LIBOR" shall be determined by the Calculation Agent as follows:

     (i)  As of each Interest Determination Date, LIBOR shall be the rate for
          deposits in U.S. dollars for a period of three months, commencing on
          the related Interest Reset Date, that appears on Page 3750, or any
          successor page, on Moneyline Telerate Inc., or any successor service,
          at approximately 11:00 a.m., London time, on such Interest
          Determination Date.

     (ii) If no rate so appears, then the Calculation Agent shall request the
          principal London offices of each of four major reference banks in the
          London interbank market, as selected by the Calculation Agent after
          consultation with the Issuer, to provide the Calculation Agent with
          its offered quotation for deposits in U.S. dollars for a period of
          three months, commencing on the related Interest Reset Date, to prime
          banks in the London interbank market at approximately 11:00 a.m.,
          London time, on such Interest Determination Date and in a principal
          amount that is representative of a single transaction in U.S. dollars
          in that market at that time. If at least two quotations are provided,
          LIBOR determined on such Interest Determination Date shall be the
          arithmetic mean of those quotations. If fewer than two quotations are

                                        2

<PAGE>

          provided, LIBOR shall be determined for the related Interest Reset
          Date as the arithmetic mean of the rates quoted at approximately 11:00
          a.m., New York City time, on that Interest Reset Date, by three major
          banks in New York City, as selected by the Calculation Agent after
          consultation with the Issuer, for loans in U.S. dollars to leading
          European banks, for a period of three months, commencing on the
          related Interest Reset Date, and in a principal amount that is
          representative of a single transaction in U.S. dollars in that market
          at that time. If the banks so selected by the Calculation Agent are
          not quoting as set forth above, LIBOR for such Interest Determination
          Date shall remain LIBOR for the immediately preceding Interest Reset
          Period, or, if there was no such Interest Reset Period, the rate of
          interest payable shall be the Initial Interest Rate.

     Accrued interest on this Registered Global Security shall be calculated by
multiplying the principal amount hereof by an accrued interest factor. The
accrued interest factor shall be computed by adding the interest factors
calculated for each day in the period for which interest is being paid. The
interest factor for each day is computed by dividing the interest rate
applicable to that day by 360. The interest rate in effect on any Interest Reset
Date shall be the applicable rate as reset on that date. The interest rate
applicable to any other day is the interest rate from the immediately preceding
Interest Reset Date, or if none, the Initial Interest Rate. All percentages used
in or resulting from any calculation of the rate of interest on this Registered
Global Security shall be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point (with .000005% rounded up to .00001%),
and all U.S. dollar amounts used in or resulting from these calculations shall
be rounded to the nearest cent (with one-half cent rounded upward).

     Reference is hereby made to the further provisions of this certificate set
forth on the succeeding pages hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.

                                        3

<PAGE>

     IN WITNESS WHEREOF, Morgan Stanley has caused this Registered Global
Security to be duly executed.

DATED: March 27, 2003              MORGAN STANLEY

                                   By:________________________________________
                                       Name:  Alexander C. Frank
                                       Title: Treasurer

TRUSTEE'S CERTIFICATE
      OF AUTHENTICATION

This is one of the Securities referred
     to in the within-mentioned
     Senior Indenture.

JPMORGAN CHASE BANK,
     as Trustee

By:_________________________________________
      Authorized Officer

                                        4

<PAGE>

                               Reverse of Security

     The interest payable, and punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the person in whose name this Registered
Global Security (or one or more predecessor Registered Global Securities) is
registered at the close of business on the fifteenth calendar day (whether or
not a Business Day) preceding such Interest Payment Date (each such date, a
"Record Date").

     Payment of the principal of this Registered Global Security and the
interest due on the Maturity Date shall be made upon surrender of this
Registered Global Security at the office or agency of the Issuer maintained for
that purpose in the Borough of Manhattan, The City of New York, or at such other
paying agency as the Issuer may determine. Payment of the principal of and
interest on this Registered Global Security shall be made in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Issuer, interest may be paid by wire transfer or by mailing checks
for such interest payable to or upon the written order of such person at its
last address as it appears on the registry books of the Issuer.

     This Registered Global Security is one of the duly authorized debt
securities of the Issuer (the "Securities" and, individually, a "Security")
issued or to be issued under and pursuant to an Amended and Restated Senior
Indenture dated as of May 1, 1999, between the Issuer and JPMorgan Chase Bank
(formerly known as The Chase Manhattan Bank), as Trustee (the "Trustee," which
term includes any successor Trustee under the Senior Indenture) (as may be
amended or supplemented from time to time, the "Senior Indenture"), to which
Senior Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties and
immunities of the Issuer, the Trustee and Holders of the Securities and the
terms upon which the Securities are, and are to be, authenticated and delivered.
The terms of the Senior Indenture are hereby incorporated by reference herein.
The Securities may be issued in one or more series, which different series may
be issued in various aggregate principal amounts, may mature at different times,
may bear interest (if any) at different rates, may be subject to different
redemption or repayment provisions (if any), may be subject to different
sinking, purchase or analogous funds (if any) and may otherwise vary as provided
in the Senior Indenture. This security is a Registered Global Security of a
series of Securities designated as the Floating Rate Notes Due 2006 of the
Issuer (the "Notes").

     The Notes shall not be subject to any sinking fund and shall not be
repayable at the option of the Holder prior to maturity. The Notes shall not be
redeemed prior to the Maturity Date.

     This Registered Global Security and all obligations of the Issuer hereunder
are direct, unsecured obligations of the Issuer and rank without preference or
priority among themselves and pari passu with all other existing and future
unsecured and unsubordinated indebtedness of the Issuer, subject to certain
statutory exceptions in the event of liquidation upon insolvency.

     This Registered Global Security, and any Registered Global Security or
Registered Global Securities issued upon transfer or exchange hereof, is
issuable only in fully registered form, without

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<PAGE>

coupons, and in denominations of U.S.$1,000 and any integral multiple of
U.S.$1,000 in excess thereof.

     The Trustee has been appointed registrar for the Notes, and the Trustee
will maintain at its office in the Borough of Manhattan, The City of New York, a
register for the registration and transfer of Notes. Subject to the limitations,
terms and conditions set forth herein and in the Senior Indenture, this
Registered Global Security may be transferred at the aforesaid office of the
Trustee by surrendering this Registered Global Security for cancellation, and
thereupon the Issuer shall execute and the Trustee shall authenticate and
deliver in the name of the transferee or transferees, in exchange herefor, a new
Registered Global Security or Registered Global Securities having identical
terms and provisions and having a like aggregate principal amount in authorized
denominations. Upon the occurrence of certain events specified in Section 2.08
of the Senior Indenture, this Registered Global Security is exchangeable at the
office of the Trustee for definitive registered Notes without coupons of
authorized denominations in an equal aggregate principal amount and having
identical terms and provisions as the surrendered Registered Global Security.

     All Registered Global Securities surrendered for transfer or exchange shall
be duly endorsed by, or be accompanied by a written instrument or instruments of
transfer in form satisfactory to, the Issuer and the Trustee and executed by the
registered Holder or by the Holder's attorney duly authorized in writing. The
Issuer may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such exchange or
registration of transfer.

     In case an Event of Default, as defined in the Senior Indenture, with
respect to the Notes shall have occurred and be continuing, the principal hereof
may be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Senior
Indenture.

     The Senior Indenture permits the Issuer and the Trustee, with the consent
of the Holders of not less than a majority in aggregate principal amount of the
debt securities of all series issued under the Senior Indenture then outstanding
and affected (voting as one class), to execute supplemental indentures adding
any provisions to or changing in any manner the rights of the Holders of each
series so affected; provided that the Issuer and the Trustee may not, without
the consent of the Holder of each outstanding debt security affected thereby,
(a) extend the final maturity of any such debt security, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, or reduce any amount payable on repayment thereof, or change the
currency of payment thereof, or modify or amend the provisions for conversion of
any currency into any other currency, or modify or amend the provisions for
conversion or exchange of the debt security for securities of the Issuer or
other entities (other than as provided in the antidilution provisions or other
similar adjustment provisions of the debt securities or otherwise in accordance
with the terms thereof), or impair or affect the rights of any Holder to
institute suit for the payment thereof or (b) reduce the aforesaid percentage in
principal amount of debt securities the consent of the Holders of which is
required for any such supplemental indenture.

                                        6

<PAGE>

     The Senior Indenture provides that (a) if an Event of Default (as defined
in the Senior Indenture) due to the default in payment of principal of, premium,
if any, or interest on, any series of debt securities issued under the Senior
Indenture, including the series of Floating Rate Notes Due 2006 which this
Registered Global Security forms a part, or due to the default in the
performance or breach of any other covenant or warranty of the Issuer applicable
to the debt securities of such series but not applicable to all outstanding debt
securities issued under the Senior Indenture shall have occurred and be
continuing, either the Trustee or the Holders of not less than 25% in principal
amount of the debt securities of each affected series (voting as a single class)
may then declare the principal of all debt securities of all such series and
interest accrued thereon to be due and payable immediately and (b) if an Event
of Default due to a default in the performance of any other of the covenants or
agreements in the Senior Indenture applicable to all outstanding debt securities
issued thereunder, including this Registered Global Security, or due to certain
events of bankruptcy or insolvency of the Issuer, shall have occurred and be
continuing, either the Trustee or the Holders of not less than 25% in principal
amount of all debt securities issued under the Senior Indenture then outstanding
(treated as one class) may declare the principal of all such debt securities and
interest accrued thereon to be due and payable immediately, but upon certain
conditions such declarations may be annulled and past defaults may be waived
(except a continuing default in payment of principal (or premium, if any) or
interest on such debt securities) by the Holders of a majority in principal
amount of the debt securities of all affected series then outstanding.

     No provision of this Registered Global Security or of the Senior Indenture
shall alter or impair the obligation of the Issuer, which is absolute and
unconditional, to pay the principal of, premium, if any, and interest on this
Registered Global Security at the time, place and rates, and in the coin or
currency, herein prescribed unless otherwise agreed between the Issuer and the
registered Holder of this Registered Global Security.

     The Issuer, the Trustee and any agent of the Issuer or the Trustee may deem
and treat the registered Holder hereof as the absolute owner of this Registered
Global Security (whether or not this Registered Global Security shall be overdue
and notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or on account of, the principal hereof and,
subject to the provisions on the face hereof, interest hereon, and for all other
purposes, and none of the Issuer, the Trustee or any agent of the Issuer or the
Trustee shall be affected by any notice to the contrary.

     No recourse under or upon any obligation, covenant or agreement of the
Issuer in the Senior Indenture or any indenture supplemental thereto or in any
Security, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer or director, as
such, past, present or future, of the Issuer or of any successor corporation,
either directly or through the Issuer or any successor corporation, under any
rule of law, statute or constitutional provision or by the enforcement of
penalty or assessment or by any legal or equitable proceeding or otherwise, all
such liability being expressly waived and released by the acceptance hereof and
as part of the consideration for the issue hereof.

     This Registered Global Security shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.

                                        7

<PAGE>

     All terms used in this Registered Global Security, which are defined in the
Senior Indenture and not otherwise defined herein, shall have the meanings
assigned to them in the Senior Indenture.

     Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Registered Global Security shall not be
entitled to any benefit under the Senior Indenture or be valid or obligatory for
any purpose.

                                        8

<PAGE>

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto

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[PLEASE INSERT SOCIAL SECURITY OR OTHER
     IDENTIFYING NUMBER OF ASSIGNEE]

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[PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]

the within Registered Global Security, and all rights thereunder, hereby
irrevocably constituting and appointing

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attorney to transfer such security on the books of the Issuer, with full power
of substitution in the premises.

Dated:_________________________                Signature: _____________________

NOTICE:  The signature to this assignment must correspond with the name as
         written upon the face of the within Registered Global Security in
         every particular without alteration or enlargement or any change
         whatsoever.

                                        9

<PAGE>EXHIBIT 4(c)

                           LASALLE HOTEL PROPERTIES

                     1998 SHARE OPTION AND INCENTIVE PLAN

                       As Amended Through March 27, 2003

     1. Purpose. The purpose of this Plan is to attract and retain qualified
key employees of, and consultants and other service providers to, LaSalle
Hotel Properties (the "Company") and its Subsidiaries (if any), to provide
such persons with appropriate incentives, and to provide an interest in the
Company to certain members of the Board. The Company has adopted the Plan
effective as of April 22, 1998 and approved by the Company's shareholders, and
unless extended by amendment in accordance with the terms of the Plan, no
Option Rights, Appreciation Rights or Restricted Shares will be granted
hereunder after the tenth anniversary of such effective date.

     2. Definitions. As used in this Plan,

        "Appreciation Right" means a right granted pursuant to Section 5 of
this Plan, including a Free-standing Appreciation Right and a Tandem
Appreciation Right.

        "Base Price" means the price to be used as the basis for determining
the Spread upon the exercise of a Free-standing Appreciation Right.

        "Board" means the Board of Trustees of the Company.

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

        "Committee" means the Compensation Committee of the Board of Trustees,
as described in Section 12(a) of this Plan, or, in the absence of a
Compensation Committee, the full Board.

        "Common Shares" means (i) Common Shares of Beneficial Interest, par
value $.01 per share, of the Company and (ii) any security into which Common
Shares may be converted by reason of any transaction or event of the type
referred to in Section 8 of this Plan.

        "Date of Grant" means the date specified by the Committee on which a
grant of Option Rights or Appreciation Rights or a grant or sale of Restricted
Shares shall become effective, which shall not be earlier than the date on
which the Committee takes action with respect thereto.

                                      1
<PAGE>

        "Free-standing Appreciation Right" means an Appreciation Right granted
pursuant to Section 5 of this Plan that is not granted in tandem with an
Option Right or similar right.

        "Incentive Stock Option" means an Option Right that is intended to
qualify as an "incentive stock option" under Section 422 of the Code or any
successor provision thereto.

        "Market Value per Share" means the fair market value of the Common
Shares as determined by the Committee from time to time.

        "Nonqualified Option" means an Option Right that is not intended to
qualify as a Tax-qualified Option.

        "Optionee" means the person so designated in an agreement evidencing
an outstanding Option Right.

        "Option Price" means the purchase price payable upon the exercise of
an Option Right.

        "Option Right" means the right to purchase Common Shares from the
Company upon the exercise of a Nonqualified Option or a Tax-qualified Option
granted pursuant to Section 4 of this Plan.

        "Participant" means a person who is selected by the Committee (or its
delegate) to receive benefits under this Plan and (i) is at that time a key
employee of, or consultant or service provider to, the Company or any
Subsidiary, or (ii) has agreed to commence serving in any such capacity.

        "Reload Option Rights" means additional Option Rights automatically
granted to an Optionee upon the exercise of Option Rights pursuant to Section
4(f) of this Plan.

        "Restricted Shares" means Common Shares granted or sold pursuant to
Section 6 of this Plan as to which neither the substantial risk of forfeiture
nor the restrictions on transfer referred to in Section 6 hereof has expired.

        "Rule 16b-3" means Rule 16b-3, as promulgated and amended from time to
time by the Securities and Exchange Commission under the Securities Exchange
Act of 1934, or any successor rule to the same effect.

        "Spread" means, in the case of a Free-standing Appreciation Right, the
amount by which the Market Value per Share on the date when the Appreciation
Right is exercised exceeds the Base

                                      2
<PAGE>

Price specified therein or, in the case of a Tandem Appreciation Right, the
amount by which the Market Value per Share on the date when the Appreciation
Right is exercised exceeds the Option Price specified in the related Option
Right.

        "Subsidiary" means a corporation, partnership, limited liability
company, joint venture, unincorporated association or other entity in which
the Company has a direct or indirect ownership or other equity interest;
provided, however, that for purposes of determining whether any person may be
a Participant for purposes of any grant of Incentive Stock Options,
"Subsidiary" means any corporation, partnership, limited liability company,
joint venture, unincorporated association or other entity in which the Company
owns or controls directly or indirectly more than 50% of the total combined
voting power represented by all classes of stock issued by such corporation at
the time of the grant.

        "Tandem Appreciation Right" means an Appreciation Right granted
pursuant to Section 5 of this Plan that is granted in tandem with an Option
Right or any similar right granted under any other plan of the Company.

        "Tax-qualified Option" means an Option Right that is intended to
qualify under particular provisions of the Code, including without limitation
an Incentive Stock Option.

     3. Shares Available under the Plan.

        (a) Subject to adjustment as provided in Section 8 of this Plan, the
number of Common Shares which may be (i) issued or transferred upon the
exercise of Option Rights or Appreciation Rights, or (ii) awarded as
Restricted Shares and released from substantial risk of forfeiture thereof,
shall not in the aggregate exceed 1.9 million Common Shares, which may be
Common Shares of original issuance or Common Shares held in treasury or a
combination thereof. For the purposes of this Section 3(a):

            (i) Upon payment in cash of the benefit provided by any award
     granted under this Plan, any Common Shares that were covered by that
     award shall again be available for issuance or transfer hereunder.

            (ii) Upon the full or partial payment of any Option Price by the
     transfer to the Company of Common Shares or upon satisfaction of tax
     withholding obligations in connection with any such exercise or any other
     payment made or benefit realized under this Plan by the transfer or
     relinquishment of Common Shares, there shall be deemed to have been
     issued

                                      3
<PAGE>

     or transferred under this Plan only the net number of Common Shares
     actually issued or transferred by the Company less the number of
     Common Shares so transferred or relinquished.

        (b) Notwithstanding anything in Section 3(a) hereof, or elsewhere in
this Plan, to the contrary, the aggregate number of Common Shares actually
issued or transferred by the Company upon the exercise of Incentive Stock
Options shall not exceed the total number of Common Shares first specified in
Section 3(a) hereof.

        (c) Notwithstanding any other provision of this Plan to the contrary,
no Participant shall be granted Option Rights and Appreciation Rights, in the
aggregate, for more than 500,000 Common Shares during any calendar year,
subject to adjustment as provided in Section 8 of this Plan.

        (d) Notwithstanding any other provision of this Plan to the contrary,
no Participant shall be granted Restricted Shares for more than 500,000 Common
Shares during any calendar year, subject to adjustment as provided in Section
8 of this Plan.

     4. Option Rights. The Committee may from time to time authorize grants to
Participants of options to purchase Common Shares upon such terms and
conditions as the Committee may determine in accordance with the following
provisions:

        (a) Each grant shall specify the number of Common Shares to which it
pertains.

        (b) Each grant shall specify an Option Price per Common Share, which
may be equal to or greater or less than the Market Value per Share on the Date
of Grant.

        (c) Each grant shall specify the form of consideration to be paid in
satisfaction of the Option Price and the manner of payment of such
consideration, which may include (i) cash in the form of currency or check or
other cash equivalent acceptable to the Company, (ii) nonforfeitable,
unrestricted Common Shares, which are already owned by the Optionee, (iii) any
other legal consideration that the Committee may deem appropriate, including
without limitation any form of consideration authorized under Section 4(d)
below, on such basis as the Committee may determine in accordance with this
Plan and (iv) any combination of the foregoing.

        (d) Any grant of a Nonqualified Option may provide that payment of the
Option Price may also be made in whole or in part in the form of Restricted
Shares or other Common Shares that are subject to risk of forfeiture or
restrictions on transfer. Unless otherwise determined by the Committee on or
after the Date of Grant, whenever any Option Price is paid in whole or in part
by means of any of the forms of consideration specified in this Section 4(d),
the Common Shares received by the Optionee

                                      4
<PAGE>

upon the exercise of the Nonqualified Option shall be subject to the same
risks of forfeiture or restrictions on transfer as those that applied to the
consideration surrendered by the Optionee; provided, however, that such risks
of forfeiture and restrictions on transfer shall apply only to the same number
of Common Shares received by the Optionee as applied to the forfeitable or
restricted Common Shares surrendered by the Optionee.

        (e) Any grant may, if there is then a public market for the Common
Shares, provide for deferred payment of the Option Price from the proceeds of
sale through a broker of some or all of the Common Shares to which the
exercise relates.

        (f) Any grant may provide for the automatic grant to the Optionee of
Reload Option Rights upon the exercise of Option Rights, including Reload
Option Rights, for Common Shares or any other noncash consideration authorized
under Sections 4(c) and (d) above; provided, however, that the term of any
Reload Option Right shall not extend beyond the term of the Option Right
originally exercised.

        (g) Successive grants may be made to the same Optionee regardless of
whether any Option Rights previously granted to the Optionee remain
unexercised.

        (h) Each grant shall specify the period or periods of continuous
employment of, or continuous performance of services by, the Optionee that are
necessary before the Option Rights or installments thereof shall become
exercisable, and any grant may provide for the earlier exercise of the Option
Rights in the event of a change in control of the Company or other similar
transaction or event.

        (i) Option Rights granted pursuant to this Section 4 may be
Nonqualified Options or Tax-qualified Options or combinations thereof.

        (j) Any grant of an Option Right may provide for the payment to the
Optionee of dividend equivalents thereon in cash or Common Shares on a
current, deferred or contingent basis, or the Committee may provide that any
dividend equivalents shall be credited against the Option Price.

        (k) No Option Right granted pursuant to this Section 4 may be
exercised more than 10 years from the Date of Grant.

        (l) Each grant shall be evidenced by an agreement, which shall be
executed on behalf of the Company by any officer thereof and delivered to and
accepted by the Optionee and shall contain such terms and provisions as the
Committee may determine consistent with this Plan.

                                      5
<PAGE>

     5. Appreciation Rights. The Committee may also authorize grants to
Participants of Appreciation Rights. An Appreciation Right shall be a right of
the Participant to receive from the Company an amount, which shall be
determined by the Committee and shall be expressed as a percentage (not
exceeding 100%) of the Spread at the time of the exercise of an Appreciation
Right. Any grant of Appreciation Rights under this Plan shall be upon such
terms and conditions as the Committee may determine in accordance with the
following provisions:

        (a) Any grant may specify that the amount payable upon the exercise of
an Appreciation Right may be paid by the Company in cash, Common Shares or any
combination thereof and may either (i) grant to the Participant or reserve to
the Committee the right to elect among those alternatives or (ii) preclude the
right of the Participant to receive and the Company to issue Common Shares or
other equity securities in lieu of cash.

        (b) Any grant may specify that the amount payable upon the exercise of
an Appreciation Right shall not exceed a maximum specified by the Committee on
the Date of Grant.

        (c) Any grant may specify (i) a waiting period or periods before
Appreciation Rights shall become exercisable and (ii) permissible dates or
periods on or during which Appreciation Rights shall be exercisable.

        (d) Any grant may specify that an Appreciation Right may be exercised
only in the event of a change in control of the Company or other similar
transaction or event.

        (e) Any grant may provide for the payment to the Participant of
dividend equivalents thereon in cash or Common Shares on a current, deferred
or contingent basis.

        (f) Each grant shall be evidenced by an agreement, which shall be
executed on behalf of the Company by any officer thereof and delivered to and
accepted by the Optionee and shall describe the subject Appreciation Rights,
identify any related Option Rights, state that the Appreciation Rights are
subject to all of the terms and conditions of this Plan and contain such other
terms and provisions as the Committee may determine consistent with this Plan.

        (g) Regarding Tandem Appreciation Rights only: Each grant shall
provide that a Tandem Appreciation Right may be exercised only (i) at a time
when the related Option Right (or any similar right granted under any other
plan of the Company) is also exercisable and the Spread is positive and (ii)
by surrender of the related Option Right (or such other right) for
cancellation.

                                      6
<PAGE>

        (h) Regarding Free-standing Appreciation Rights only:

            (i) Each grant shall specify in respect of each Free-standing
     Appreciation Right a Base Price per Common Share, which shall be equal to
     or greater than the Market Value per Share on the Date of Grant;

            (ii) Successive grants may be made to the same Participant
     regardless of whether any Free-standing Appreciation Rights previously
     granted to the Participant remain unexercised;

            (iii) Each grant shall specify the period or periods of
     continuous employment of, or continuous performance of services by, the
     Participant that are necessary before the Free-standing Appreciation
     Rights or installments thereof shall become exercisable; and any grant
     may provide for the earlier exercise of the Free-standing Appreciation
     Rights in the event of a change in control of the Company or other
     similar transaction or event; and

            (iv) No Free-standing Appreciation Right granted under this Plan
     may be exercised more than 10 years from the Date of Grant.

     6. Restricted Shares. The Committee may also authorize grants or sales to
Participants of Restricted Shares upon such terms and conditions as the
Committee may determine in accordance with the following provisions:

        (a) Each grant or sale shall constitute an immediate transfer of the
ownership of Common Shares to the Participant in consideration of the
performance of services, entitling such Participant to dividend, voting and
other ownership rights, subject to the substantial risk of forfeiture and
restrictions on transfer hereinafter referred to.

        (b) Each grant or sale may be made without additional consideration
from the Participant or in consideration of a payment by the Participant that
is less than the Market Value per Share on the Date of Grant.

        (c) Each grant or sale shall provide that the Restricted Shares
covered thereby shall be subject to a "substantial risk of forfeiture" within
the meaning of Section 83 of the Code for a period to be determined by the
Committee on the Date of Grant, and any grant or sale may provide for the
earlier termination of such period in the event of a change in control of the
Company or other similar transaction or event.

                                      7
<PAGE>

        (d) Each grant or sale shall provide that, during the period for which
such substantial risk of forfeiture is to continue, the transferability of the
Restricted Shares shall be prohibited or restricted in the manner and to the
extent prescribed by the Committee on the Date of Grant. Such restrictions may
include without limitation rights of repurchase or first refusal in the
Company or provisions subjecting the Restricted Shares to a continuing
substantial risk of forfeiture in the hands of any transferee.

        (e) Any grant or sale may require that any or all dividends or other
distributions paid on the Restricted Shares during the period of such
restrictions be automatically sequestered and reinvested on an immediate or
deferred basis in additional Common Shares, which may be subject to the same
restrictions as the underlying award or such other restrictions as the
Committee may determine.

        (f) Each grant or sale shall be evidenced by an agreement, which shall
be executed on behalf of the Company by an officer thereof and delivered to
and accepted by the Participant and shall contain such terms and provisions as
the Committee may determine consistent with this Plan. Unless otherwise
directed by the Committee, all certificates representing Restricted Shares,
together with a stock power that shall be endorsed in blank by the Participant
with respect to the Restricted Shares, shall be held in custody by the Company
until all restrictions thereon lapse.

     7. Transferability.

        (a) No Option Right, Appreciation Right or other derivative security
(as that term is used in Rule 16b-3) granted under this Plan may be
transferred by a Participant except by will or the laws of descent and
distribution. Option Rights and Appreciation Rights granted under this Plan
may not be exercised during a Participant's lifetime except by the Participant
or, in the event of the Participant's legal incapacity, by his guardian or
legal representative acting in a fiduciary capacity on behalf of the
Participant under state law and court supervision. Notwithstanding the
foregoing, the Committee, in its sole discretion, may provide for the
transferability of particular awards under this Plan so long as such
provisions will not disqualify the exemption for other awards under Rule
16b-3, if such Rule is then applicable to awards under the Plan.

        (b) Any grant made under this Plan may provide that all or any part of
the Common Shares that are to be issued or transferred by the Company upon the
exercise of Option Rights or Appreciation Rights, or are no longer subject to
the substantial risk of forfeiture and restrictions on transfer referred to in
Section 6 of this Plan, shall be subject to further restrictions upon
transfer.

                                      8
<PAGE>

     8. Adjustments.

        (a) The Committee may make or provide for such adjustments in the
number of Common Shares covered by outstanding Option Rights, Appreciation
Rights and Restricted Shares granted hereunder, the Option Prices per Common
Share or Base Prices per Common Share applicable to any such Option Rights and
Appreciation Rights, and the kind of shares (including shares of another
issuer) covered thereby, as the Committee may in good faith determine to be
equitably required in order to prevent dilution or expansion of the rights of
Participants that otherwise would result from (i) any stock dividend, stock
split, combination of shares, recapitalization or similar change in the
capital structure of the Company or (ii) any merger, consolidation, spin-off,
spin-out, split-off, split-up, reorganization, partial or complete liquidation
or other distribution of assets, issuance of warrants or other rights to
purchase securities or any other corporate transaction or event having an
effect similar to any of the foregoing. In the event of any such transaction
or event, the Committee may provide in substitution for any or all outstanding
awards under this Plan such alternative consideration as it may in good faith
determine to be equitable under the circumstances and may require in
connection therewith the surrender of all awards so replaced. Moreover, the
Committee may on or after the Date of Grant provide in the agreement
evidencing any award under this Plan that the holder of the award may elect to
receive an equivalent award in respect of securities of the surviving entity
of any merger, consolidation or other transaction or event having a similar
effect, or the Committee may provide that the holder will automatically be
entitled to receive such an equivalent award. The Committee may also make or
provide for such adjustments in the maximum numbers of Common Shares specified
in Section 3 of this Plan as the Committee may in good faith determine to be
appropriate in order to reflect any transaction or event described in this
Section 8.

        (b) If another corporation is merged into the Company or the Company
otherwise acquires another corporation, the Committee may elect to assume
under this Plan any or all outstanding stock options or other awards granted
by such corporation under any stock option or other plan adopted by it prior
to such acquisition. Such assumptions shall be on such terms and conditions as
the Committee may determine; provided, however, that the awards as so assumed
do not contain any terms, conditions or rights that are inconsistent with the
terms of this Plan. Unless otherwise determined by the Committee, such awards
shall not be taken into account for purposes of the limitations contained in
Section 3 of this Plan.

                                      9
<PAGE>

     9. Fractional Shares. The Company shall not be required to issue any
fractional Common Shares pursuant to this Plan. The Committee may provide for
the elimination of fractional Common Shares or for the settlement thereof in
cash.

     10. Withholding Taxes. To the extent that the Company or any Subsidiary
is required to withhold federal, state, local or foreign taxes in connection
with any payment made or benefit realized by a Participant or other person
under this Plan, and the amounts available to the Company or such Subsidiary
for the withholding are insufficient, it shall be a condition to the receipt
of any such payment or the realization of any such benefit that the
Participant or such other person make arrangements satisfactory to the Company
or such Subsidiary for payment of the balance of any taxes required to be
withheld. At the discretion of the Committee, any such arrangements may
without limitation include voluntary or mandatory relinquishment of a portion
of any such payment or benefit or the surrender of outstanding Common Shares.
The Company or such Subsidiary and any Participant or such other person may
also make similar arrangements with respect to the payment of any taxes with
respect to which withholding is not required.

     11. Certain Terminations of Employment or Service, Hardship, and Approved
Leaves of Absence. Notwithstanding any other provision of this Plan to the
contrary, in the event of the termination of employment or service by reason
of death, disability or retirement, termination of employment or service to
enter public or military service with the consent of the Company or any
Subsidiary, or leave of absence approved by the Company or such Subsidiary, or
in the event of the hardship or other special circumstances, of a Participant
who holds an Option Right or Appreciation Right that is not immediately and
fully exercisable, or any Restricted Shares as to which the substantial risk
of forfeiture or the prohibition or restriction on transfer has not lapsed,
the Committee may take any action that it deems to be equitable under the
circumstances or in the best interests of the Company or such Subsidiary,
including without limitation waiving or modifying any limitation or
requirement with respect to any award under this Plan.

     12. Administration of the Plan.

        (a) This Plan shall be administered by the Committee, which shall be
composed of not less than two members of the Board, or, in the absence of the
Committee, by the full Board. At any time that awards under the Plan are
subject to Rule 16b-3, each member of the Committee shall be a "non-employee
director" within the meaning of such Rule 16b-3. In addition, at any time that
the Company is subject to Section 162(m) of the Code, each member of the
Committee shall be an "outside

                                      10
<PAGE>

director" within the meaning of Section 162(m) of the Code. A majority of the
Committee shall constitute a quorum, and the acts of the members of the
Committee who are present at any meeting thereof at which a quorum is present,
or acts unanimously approved by the members of the Committee in writing, shall
be the acts of the Committee.

        (b) The interpretation and construction by the Committee of any
provision of this Plan or any agreement, notification or document evidencing
the grant of Option Rights, Appreciation Rights or Restricted Shares, and any
determination by the Committee pursuant to any provision of this Plan or any
such agreement, notification or document, shall be final and conclusive. No
member of the Committee shall be liable for any such action taken or
determination made in good faith.

     13. Amendments and Other Matters.

        (a) This Plan may be amended from time to time by the Committee;
provided, however, that except as expressly authorized by this Plan, no such
amendment shall cause this Plan to cease to satisfy any applicable condition
of Rule 16b-3 or cause any award under the Plan to cease to qualify for any
applicable exception to Section 162(m) of the Code, without the further
approval of the shareholders of the Company.

        (b) With the concurrence of the affected Participant, the Committee
may cancel any agreement evidencing Option Rights or any other award granted
under this Plan. In the event of any such cancellation, the Committee may
authorize the granting of new Option Rights or other awards hereunder, which
may or may not cover the same number of Common Shares as had been covered by
the cancelled Option Rights or other award, at such Option Price, in such
manner and subject to such other terms, conditions and discretion as would
have been permitted under this Plan had the cancelled Option Rights or other
award not been granted.

        (c) The Committee may condition the grant of any award or combination
of awards authorized under this Plan on the surrender or deferral by the
Participant of his or her right to receive a cash bonus or other compensation
otherwise payable by the Company or any Subsidiary to the Participant.

        (d) This Plan shall not confer upon any Participant any right with
respect to continuance of employment or other service with the Company or any
Subsidiary and shall not interfere in any way with any right that the Company
or such Subsidiary would otherwise have to terminate any Participant's
employment or other service at any time.

                                      11
<PAGE>

        (e) To the extent that any provision of this Plan would prevent any
Option Right that was intended to qualify as a Tax-qualified Option from so
qualifying, any such provision shall be null and void with respect to any such
Option Right; provided, however, that any such provision shall remain in
effect with respect to other Option Rights, and there shall be no further
effect on any provision of this Plan.

        (f) Any award that may be made pursuant to an amendment to this Plan
that shall have been adopted without the approval of the shareholders of the
Company shall be null and void if it is subsequently determined that such
approval was required under the terms of the Plan or applicable law.

        (g) Unless otherwise determined by the Committee, this Plan is
intended to comply with Rule 16b-3 at all times that awards hereunder are
subject to such Rule.

                                      12

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