Document:

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       STATEMENT OF RIGHTS, DESIGNATIONS AND PREFERENCES OF VARIABLE RATE
                      CUMULATIVE PREFERRED STOCK, SERIES G

      1.    Name of Corporation: Metropolitan Mortgage & Securities Co., Inc.

      2. Copy of resolution establishing and designating Variable Rate
Cumulative Preferred Stock, Series G, and determining the relative rights and
preferences thereof: Attached hereto.

      3. The undersigned does hereby certify that the attached resolution was
duly adopted by the Board of Directors of the corporation on November 30, 2000.

      Dated this 30th day of November, 2000.

                                       /s/ REUEL SWANSON
                                       ---------------------------------------
                                       Reuel Swanson, Secretary

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                  METROPOLITAN MORTGAGE & SECURITIES CO., INC.
                PREFERRED STOCK, SERIES G, AUTHORIZING RESOLUTION

      Resolved, that pursuant to the authority expressly granted and vested in
the Board of Directors (the "Board") of this Corporation by its Articles of
Incorporation, as amended, a subseries of preferred stock, Series G of the
Corporation be, and is hereby, established which will have a par value of $10.00
per share, designated "Variable Rate Cumulative Preferred Stock, Series G"
(hereafter called "Series G Preferred Stock"), and which shall have rights,
preferences, qualifications and restrictions as follows:

      1.    DIVIDENDS.

            (a) Dividends (or other distributions deemed dividends for purposes
      of this resolution) on the issued and outstanding shares of Series G
      Preferred Stock shall be declared and paid monthly at a percentage rate
      per annum of the liquidation preference of $100.00 per share equal to the
      "Distribution Rate," as hereinafter defined, or such greater rate as may
      be determined by the Board. Notwithstanding the foregoing, the
      Distribution Rate for any monthly dividend period shall, in no event, be
      less than 6% per annum or greater than 14% per annum. Such dividends shall
      be cumulative from the date of original issue of each share and shall be
      payable, when and as declared by the board, on such dates as the Board
      deems advisable, but at least once a year, commencing March 1, 2001. Each
      such dividend shall be paid to the holders of record of shares of Series G
      Preferred Stock as they appear on the stock register of the Corporation on
      such record date as shall be fixed by the Board in advance of the payment
      date thereof. Dividends on account of arrears for any past Dividend
      Periods may be declared and paid at any time, without reference to any
      regular dividend payment date, to holders of record on such date as shall
      be fixed by the Board in advance of the payment date thereof.

            (b) Except as provided below in this section, the Distribution Rate
      for any monthly dividend period shall be the highest of the Treasury Bill
      Rate, the Ten Year Constant Maturity Rate and the Twenty Year Constant
      Maturity Rate (each as defined in Exhibit A attached hereto and
      incorporated by reference herein) plus ____%. In the event that the Board
      determines in good faith that for any reason one or more of such rates
      cannot be determined for any dividend period, then the Distribution Rate
      for such dividend period shall be the higher of whichever of such rates
      can be so determined. In the event that the Board determines in good faith
      that none of such rates can be determined for any dividend period, then
      the Distribution Rate in effect for the preceding dividend period shall be
      continued for such dividend period. The Treasury Bill Rate, the Ten Year
      Constant Maturity Rate and the Twenty Year Constant Maturity Rate shall
      each be rounded to the nearest five hundredths of a percentage point.

            (c) No dividend shall be paid upon, or declared or set apart for,
      any share of Series G Preferred Stock for any Dividend Period unless at
      the same time a like dividend shall be paid upon, or be declared and set
      apart for, all shares of Series G Preferred Stock then issued and
      outstanding. Holders of Series G Preferred Stock shall not be entitled to
      any dividend, whether payable in cash, property or stock, in excess of
      full cumulative dividends as herein provided. No interest, or sum of money
      in lieu of interest, shall be

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      payable in respect of any dividend payment or payments which may be in
      arrears on Series G Preferred Stock.

            (d) Dividends payable for each full monthly Dividend Period shall be
      computed by dividing the Distribution Rate for such monthly Dividend
      Period by 12 and applying such rate against the liquidation preference of
      $100.00 per share. Dividends shall be rounded to the nearest whole cent.
      Dividends payable for any period less than a full monthly Dividend Period
      shall be computed on the basis of 30-day months and a 360-day year. The
      Distribution Rate with respect to each monthly Dividend Period shall be
      calculated as promptly as practicable by the Corporation according to the
      method provided herein. The Corporation will cause notice of such
      Distribution Rate to be enclosed with the dividend payment check next
      mailed to the holders of shares of Series G Preferred Stock.

            (e) So long as any shares of Series G Preferred Stock are
      outstanding, (i) no dividend (other than a dividend in common stock or in
      any other stock ranking junior to Series G Preferred Stock as to dividends
      and upon liquidation and other than as provided in the foregoing section
      1(c)) shall be declared or paid or set aside for payment; (ii) no other
      distribution shall be declared or made upon common stock or upon any other
      stock ranking junior to or on a parity with Series G Preferred Stock as to
      dividends or upon liquidation; and (iii) no common stock or any other
      stock of the Corporation ranking junior to or on a parity with Series G
      Preferred Stock as to dividends or upon liquidation shall be redeemed,
      purchased or otherwise acquired by the Corporation for any consideration
      (or any monies paid to or made available for a sinking fund for the
      redemption of any shares of any such stock) except by conversion into or
      exchange for stock of the Corporation ranking junior to Series G Preferred
      Stock as to dividends and upon liquidation unless, in each case, the full
      cumulative dividends on all outstanding shares of Series G Preferred Stock
      shall have been paid or declared and set apart for all past dividend
      payment periods.

            (f) The holders of Series G Preferred Stock shall be entitled to
      receive, when and as declared by the Board, dividend distributions out of
      the funds of the Corporation legally available therefor. Any distribution
      made which may be deemed to have been made out of the capital surplus of
      Series G Preferred Stock shall not reduce either the redemption process or
      the liquidation rights as hereafter specified.

      2.    REDEMPTION.

            (a) REDEMPTION AT THE OPTION OF THE CORPORATION. The Corporation, at
      its option, may redeem shares of Series G Preferred Stock, in whole or in
      part, at any time or from time to time, at redemption prices hereafter set
      forth plus accrued and unpaid dividends to the date fixed for redemption.

                  [(i) In the event of a redemption of shares pursuant to this
            subsection prior to _________, 20__ [or set number of years, like 3,
            from issuance], the redemption price shall be $102.00 per share; and
            the redemption price shall be $100.00 per share in the event of
            redemption anytime after ________, 20__.]

                                       2

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                  (ii) In the event that fewer than all of the outstanding
            shares of Series G Preferred Stock are to be redeemed, the number of
            shares to be redeemed shall be determined by the Corporation and the
            shares to be redeemed shall be determined by lot, or pro rata, or by
            any other method, as may be determined by the Corporation in its
            sole discretion to be equitable.

                  (iii) In the event that the Corporation shall redeem shares
            hereunder, notice of such redemption shall be given by first class
            mail, postage prepaid, mailed not less than 30 days or more than 60
            days prior to the redemption date, to each holder of record of the
            shares to be redeemed, at such holder's address as it appears on the
            stock register of the Corporation. Each such notice shall state: (A)
            the redemption date; (B) the number of shares to be redeemed and, if
            fewer than all shares held by such holder are to be redeemed, the
            number of such shares to be redeemed from such holder; (C) the
            redemption price; (D) the place or places where certificates for
            such shares are to be surrendered for payment of the redemption
            price; and (E) that dividends on the shares to be redeemed will
            cease to accrue on such redemption date.

                  (iv) Notice having been mailed as aforesaid, from and after
            the redemption date (unless default shall be made by the Corporation
            in providing money for the payment of the redemption price),
            dividends on the shares so called for redemption shall no longer be
            deemed to be outstanding, and all rights of the holders thereof as
            stockholders of the Corporation (except the right to receive from
            the Corporation the redemption price) shall cease. Upon surrender in
            accordance with said notice of the certificates representing shares
            redeemed (properly endorsed or assigned for transfer, if the Board
            shall so require and the notice shall so state), such shares shall
            be redeemed by the Corporation at the redemption price aforesaid. In
            case fewer than all of the shares represented by any such
            certificate are redeemed, a new certificate shall be issued
            representing the unredeemed shares without cost to the holder
            thereof.

            (b) DISCRETIONARY REDEMPTION UPON REQUEST OF THE HOLDER. The shares
      of Series G Preferred Stock are not redeemable at the option of the
      holder. If, however, the Corporation receives an unsolicited written
      request for redemption of shares from any holder, the Corporation may, in
      its sole discretion and subject to the limitations described below, accept
      such shares for redemption. Any shares so tendered, which the Corporation
      in its discretion, allows for redemption, shall be redeemed by the
      Corporation directly, and not from or through a broker or dealer, at a
      price established from time to time by the Board in its sole discretion,
      plus any declared but unpaid dividends.

            The Corporation may not redeem any such shares tendered for
      redemption if to do so would be unsafe or unsound in light of the
      Corporation's financial condition (including its liquidity position); if
      payment of interest or principal on any outstanding instrument of
      indebtedness is in arrears or in default; or if payment of any dividend on
      Series G Preferred Stock or share of any stock of the Company ranking on
      parity with or senior to the Series G Preferred Stock is in arrears as to
      dividends.

                                       3

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            (c) Any shares of Series G Preferred Stock which shall at any time
      have been redeemed shall, after such redemption, have the status of
      authorized but unissued shares of preferred stock, without designation as
      to series until such shares are designated as part of a particular series
      by the Board.

            (d) Notwithstanding the foregoing provisions of this Section 2, if
      any dividends on Series G Preferred Stock are in arrears, no shares of
      Series G Preferred Stock shall be redeemed unless all outstanding shares
      of Series G Preferred Stock are simultaneously redeemed, and the
      Corporation shall not purchase or otherwise acquire any shares of Series G
      Preferred Stock; provided, however, that the foregoing shall not prevent
      the purchase or acquisition of shares of Series G Preferred Stock pursuant
      to a purchase or exchange offer made on the same terms to holders of all
      of the outstanding shares of Series G Preferred Stock.

      3. CONVERSION OR EXCHANGE. The holders of shares of Series G Preferred
Stock shall not have any rights to convert such shares into or exchange such
shares for shares of any other class or series of any class of securities of the
Corporation.

      4. VOTING. Except as required from time to time by law, the shares of
Series G Preferred Stock shall have no voting powers. Provided, however,
notwithstanding the foregoing, that whenever and as often as dividends payable
on any shares of Series G Preferred Stock shall be in arrears in an amount equal
to 24 full monthly dividends or more per share, the holders of Series G
Preferred Stock together with the holders of any other preferred stock then
outstanding, voting separately and as a single class shall be entitled to elect
a majority of the Board of Directors of the Corporation. Such right shall
continue until all dividends in arrears on preferred stock have been paid in
full.

      5.    LIQUIDATION RIGHTS.

            (a) Upon the dissolution, liquidation or winding up of the
      Corporation, the holders of the shares of Series G Preferred Stock shall
      be entitled to receive out of the assets of the Corporation, before any
      payment or distribution shall be made on the Common Stock, or on any other
      class of stock ranking junior to Series G Preferred Stock, upon
      liquidation, the amount of $100.00 per share, plus a sum equal to all
      dividends (whether or not earned or declared) on such shares accrued and
      unpaid thereon to the date of final distribution.

            (b) Neither the sale, lease or conveyance of all or substantially
      all the property or business of the Corporation, nor the merger or
      consolidation of the Corporation into or with any other corporation or the
      merger or consolidation of any other corporation into or with the
      Corporation, shall be deemed to be a dissolution, liquidation or winding
      up, voluntary or involuntary, for the purposes of this Section.

            (c) After the payment to the holders of the shares of Series G
      Preferred Stock of the full preferential amounts provided for in this
      Section, the holders of Series G Preferred Stock as such shall have no
      right or claim to any of the remaining assets of the Corporation.

                                         4

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            (d) In the event the assets of the Corporation available for
      distribution to the holders of shares of Series G Preferred Stock upon any
      dissolution, liquidation or winding up of the Corporation, whether
      voluntary or involuntary, shall be insufficient to pay in full all amounts
      to which such holders are entitled pursuant to this Section, no such
      distribution shall be made on account of any shares or any other series of
      preferred stock ranking on parity with the Series G Preferred Stock or any
      other class of stock ranking on a parity with the shares of Series G
      Preferred Stock upon such dissolution, liquidation or winding up, unless
      proportionate distributive amounts shall be paid on account of the shares
      of Series G Preferred Stock, ratably in accordance with the sums which
      would be payable in such distribution if all sums payable in respect of
      the shares of all series of preferred stock and any such other class of
      stock, both as aforesaid, were discharged in full.

      6.    PRIORITIES.  For  purposes  of this  Resolution,  any stock of any
class or classes of the Corporation shall be deemed to rank:

            (a) Prior to the shares of Series G Preferred Stock, either as to
      dividends or upon liquidation if the holders of such class or classes
      shall be entitled to the receipt of dividends or of amounts distributable
      upon dissolution, liquidation or winding up of the Corporation, as the
      case may be, in preference or priority to the holders of shares of Series
      G Preferred Stock.

            (b) On a parity with shares of Series G Preferred Stock, either as
      to dividends or upon liquidation, whether or not the dividend rates,
      dividend payment dates or redemption or liquidation prices per share or
      sinking fund provisions, if any, are different from those of Series G
      Preferred Stock, if the holder of such stock shall be entitled to the
      receipt of dividends or of amounts distributable upon dissolution,
      liquidation or winding up of the Corporation, as the case may be, in
      proportion to their respective dividend rates or liquidation prices,
      without preference or priority, one over the other, as between the holder
      of such stock and the holders of Series G Preferred Stock; and

            (c) Junior to shares of Series G Preferred Stock, either as to
      dividends or upon liquidation, if the holders of shares of Series G
      Preferred Stock shall be entitled to receipt of dividends or of amounts
      distributable upon dissolution, liquidation or winding up of the
      Corporation, as the case may be, in preference or priority to the holders
      of shares of such class or classes.

      7. RANKING AND SUBORDINATION. The Series G Preferred Stock shall rank on
parity with the Series R Preferred Stock of the Corporation. The Series G
Preferred Stock shall be subordinate in right of payment for distributions and
upon liquidation of the Corporation to the Corporations Series C, D and E
Preferred Stock.

      8. SHARES NON-ASSESSABLE. Any and all shares of Series G Preferred Stock
issued, and for which the full consideration has been paid or delivered, shall
be deemed fully paid stock and the holder of such shares shall not be liable for
any further call or assessment or any other payment thereon.

                                        5

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      9. PRE-EMPTIVE RIGHTS. Holders of Series G Preferred Stock shall have no
pre-emptive rights to acquire additional shares of Series G Preferred Stock.

                                        6

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                                    EXHIBIT A

TREASURY BILL RATE

      Except as provided below in this paragraph, the "Treasury Bill Rate"
for each dividend period will be the arithmetic average of the two most
recent weekly per annum market discount rates (or the one weekly per annum
market discount rate, if only one such rate shall be published during the
relevant Calendar Period (as defined below)) for three-month U.S. Treasury
bills, as published weekly by the Federal Reserve Board during the Calendar
Period that begins 24 days prior to the first day of the dividend period for
which the dividend rate on Preferred Stock Series G, is being determined. In
the event that the Federal Reserve Board does not publish such a weekly per
annum market discount rate during any such Calendar Period, then the Treasury
Bill Rate for the related dividend period shall be the arithmetic average of
the two most recent weekly per annum market discount rates (or the one weekly
per annum market discount rate, if only one such rate shall be published
during the relevant Calendar Period) for three-month U.S. Treasury bills, as
published weekly during such Calendar Period by any Federal Reserve Bank or
by any U.S. Government department or agency selected by the Company. In the
event that a per annum market discount rate for three-month U.S. Treasury
bills shall not be published by the Federal Reserve Board or by any Federal
Reserve Bank or by any U.S. Government department or agency during such
Calendar Period, then the Treasury Bill Rate for such dividend period shall
be the arithmetic average of the two most recent weekly per annum market
discount rates (or the one weekly per annum market discount rate, if only one
such rate shall be published during the relevant Calendar Period) for all of
the U.S. Treasury bills then having maturities of not less than 80 nor more
than 100 days, as published during such Calendar Period by the Federal
Reserve Board or, if the Federal Reserve Board shall not publish such rates,
by any Federal Reserve Bank or by any U.S. Government department or agency
selected by the Company. In the event that the Company determines in good
faith that for any reason no such U.S. Treasury bill rates are published as
provided above during such Calendar Period, then the Treasury Bill Rate for
such dividend period shall be the arithmetic average of the per annum market
discount rates based upon bids during such Calendar Period for each of the
issues of marketable non-interest bearing U.S. Treasury securities with a
maturity of not less than 80 nor more than 100 days from the date of each
such quotation, as quoted daily for each business day in New York City (or
less frequently if daily quotations shall not be generally available) to the
Company by at least three recognized primary U.S. Government securities
dealers selected by the Company. In the event that the Company determines in
good faith that for any reason the Company cannot determine the Treasury Bill
Rate for any dividend period as provided above in this paragraph, the
Treasury Bill Rate for such dividend period shall be the arithmetic average
of the per annum market discount rates based upon the closing bids during
such Calendar Period for each of the issues of marketable interest-bearing
U.S. Treasury securities with a maturity of not less than 80 nor more than
100 days from the date of each such quotation, as quoted daily for each
business day in New York City (or less frequently if daily quotations shall
not be generally available) to the Company by at least three recognized
primary U.S. Government securities dealers selected by the Company.

                                      A-1

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TEN YEAR CONSTANT MATURITY RATE

      Except as provided below in this paragraph, the "Ten Year Constant
Maturity Rate" for each dividend period shall be the arithmetic average of
the two most recent weekly per annum Ten Year Average Yields (or the one
weekly per annum Ten Year Average Yield, if only one such Yield shall be
published during the relevant Calendar Period as provided below), as
published weekly by the Federal Reserve Board during the Calendar Period that
begins 24 days prior to the first day of the dividend period for which the
dividend rate on Preferred Stock, Series G is being determined. In the event
that the Federal Reserve Board does not publish such a weekly per annum Ten
Year Average Yield during such Calendar Period, then the Ten Year Constant
Maturity Rate for such dividend period shall be the arithmetic average of the
two most recent weekly per annum Ten Year Average Yields (or the one weekly
per annum Ten Year Average Yield, if only one such Yield shall be published
during such Calendar Period), as published weekly during such Calendar Period
by any Federal Reserve Bank or by any U.S. Government department or agency
selected by the Company. In the event that a per annum Ten Year Average Yield
shall not be published by the Federal Reserve Board or by any Federal Reserve
Bank or by any U.S. Government department or agency during such Calendar
Period, then the Ten Year Constant Maturity Rate for such dividend period
shall be the arithmetic average of the two most recent weekly per annum
average yields to maturity (or the one weekly average yield to maturity, if
only one such yield shall be published during the relevant Calendar Period)
for all of the actively traded marketable U.S. Treasury fixed interest rate
securities (other than Special Securities (as defined below)) then having
maturities of not less than eight nor more than 12 years, as published during
such Calendar Period by the Federal Reserve Board or, if the Federal Reserve
Board shall not publish such yields, by any Federal Reserve Bank or by any
U.S. Government department or agency selected by the Company. In the event
that the Company determines in good faith that for any reason the Company
cannot determine the Ten Year Constant Maturity Rate for any dividend period
as provided above in this paragraph, then the Ten Year Constant Maturity Rate
for such dividend period shall be the arithmetic average of the per annum
average yields to maturity based upon the closing bids during such Calendar
Period for each of the issues of actively traded marketable U.S. Treasury
fixed interest rate securities (other than Special Securities) with a final
maturity date not less than eight nor more than 12 years from the date of
each such quotation, as quoted daily for each business day in New York City
(or less frequently if daily quotations shall not be generally available) to
the Company by at least three recognized primary U.S. Government securities
dealers selected by the Company.

TWENTY YEAR CONSTANT MATURITY RATE

      Except as provided below in this paragraph, the "Twenty Year Constant
Maturity Rate" for each dividend period shall be the arithmetic average of
the two most recent weekly per annum Twenty Year Average Yields (or the one
weekly per annum Twenty year Average Yield, if only one such Yield shall be
published during the relevant Calendar Period), as published weekly by the
Federal Reserve Board during the Calendar Period that begins 24 days prior to
the first day of the dividend period for which the dividend rate on Preferred
Stock, Series G is being determined. In the event that the Federal Reserve
Board does not publish such a weekly per annum Twenty Year Average Yield
during such Calendar Period, then the Twenty Year Constant Maturity Rate for
such dividend period shall be the arithmetic average of the two most recent

                                    A-2

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weekly per annum Twenty Year Average Yields (or the one weekly per annum
Twenty Year Average Yield, if only one such Yield shall be published during
such Calendar Period), as published weekly during such Calendar Period by any
Federal Reserve Bank or by any U.S. Government department or agency selected
by the Company. In the event that a per annum Twenty Year Average Yield shall
not be published by the Federal Reserve Board or by any Federal Reserve Bank
or by any U.S. Government department or agency during such Calendar Period,
then the Twenty Year Constant Maturity Rate for such dividend period shall be
the arithmetic average of the two most recent weekly per annum average yields
to maturity (or the one weekly average yield to maturity, if only one such
yield shall be published during such Calendar Period) for all of the actively
traded marketable U.S. Treasury fixed interest rate securities (other than
Special Securities) then having maturities of not less than 18 nor more than
22 years, as published during such Calendar Period by the Federal Reserve
Board or, if the Federal Reserve Board shall not publish such yields, by any
Federal Reserve Bank or by any U.S. Government department or agency selected
by the Company. In the event that the Company determines in good faith that
for any reason the Company cannot determine the Twenty Year Constant Maturity
Rate for any dividend period as provided above in this paragraph, then the
Twenty Year Constant Maturity Rate for such dividend period shall be the
arithmetic average of the per annum average yields to maturity based upon the
closing bids during such Calendar Period for each of the issues of actively
traded marketable U.S. Treasury fixed interest rate securities (other than
Special Securities) with a final maturity date not less than 18 nor more than
22 years from the date of each such quotation, as quoted daily for each
business day in New York City (or less frequently if daily quotations shall
not be generally available) to the Company by at least three recognized
primary U.S. Government securities dealers selected by the Company.

      As used herein, the term "Calendar Period" means a period of 14
calendar days; the term "Special Securities" means securities which may, at
the option of the holder, be surrendered at face value in payment of any
federal estate tax or which provide tax benefits to the holder and are priced
to reflect such tax benefits or which were originally issued at a deep or
substantial discount; the term "Ten Year Average Yield" means the average
yield to maturity for actively traded marketable U.S. Treasury fixed interest
rate securities (adjusted to constant maturities of ten years); and the term
"Twenty Year Average Yield" means the average yield to maturity for actively
traded marketable U.S. Treasury fixed interest rate securities (adjusted to
constant maturities of 20 years).

                                     A-3<PAGE>

                                                                    EXHIBIT 10.1

                        1997 Incentive Compensation Plan
                               As Amended Through
                                   April 2001
<PAGE>

<TABLE>
<CAPTION>
                                                                                                  Page
                                                                                                  ----

  <S>    <C>                                                                                      <C>
  1.     Purpose                                                                                   1

  2.     Definitions                                                                               1

  3.     Administration                                                                            3
         (a)      Authority of the Committee                                                       3
         (b)      Manner of Exercise of Committee Authority                                        3
         (c)      Limitation of Liability                                                          4

  4.     Stock Subject to Plan                                                                     4
         (a)      Overall Number of Shares Available for Delivery                                  4
         (b)      Application of Limitation to Grants of Awards                                    4
         (c)      Availability of Shares Not Delivered under Awards                                5

  5.     Eligibility; Per-Person Award Limitations                                                 5

  6.     Specific Terms of Awards                                                                  5
         (a)      General                                                                          5
         (b)      Options                                                                          5
         (c)      Stock Appreciation Rights                                                        6
         (d)      Restricted Stock                                                                 6
         (e)      Deferred Stock                                                                   7
         (f)      Bonus Stock and Awards in Lieu of Obligations                                    7
         (g)      Dividend Equivalents                                                             7
         (h)      Other Stock-Based Awards                                                         8

  7.     Certain Provisions Applicable to Awards                                                   8
         (a)      Stand-Alone, Additional, Tandem, and Substitute Awards                           8
         (b)      Term of Awards                                                                   8
         (c)      Form and Timing of Payment under Awards; Deferrals                               8
         (d)      Exemptions from Section 16(b) Liability                                          9
         (e)      Cancellation and Rescission of Awards                                            9
         (f)      Limitations on Vesting of Certain Awards                                        10

  8.     Performance and Annual Incentive Awards                                                  10
         (a)      Performance Conditions                                                          10
         (b)      Performance Awards Granted to Designated Covered Employees                      10
         (c)      Annual Incentive Awards Granted to Designated Covered Employees                 11
         (d)      Written Determinations                                                          12
         (e)      Status of Section 8(b) and 8(c) Awards under Code Section 162(m)                12

                                       (i)
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                                                                                                 Page
                                                                                                 ----
  9.     Change in Control                                                                       13
         (a)      Effect of "Change in Control"                                                  13
         (b)      Definition of "Change in Control"                                              13
         (c)      Definition of "Change in Control Price"                                        14

 10.     General Provisions                                                                      14
         (a)      Compliance with Legal and Other Requirements                                   14
         (b)      Limits on Transferability; Beneficiaries                                       15
         (c)      Adjustments                                                                    15
         (d)      Taxes                                                                          16
         (e)      Changes to the Plan and Awards                                                 16
         (f)      Limitation on Rights Conferred under Plan                                      16
         (g)      Unfunded Status of Awards; Creation of Trusts                                  16
         (h)      Non-exclusivity of the Plan                                                    17
         (i)      Payments in the Event of Forfeitures; Fractional Shares                        17
         (j)      Governing Law                                                                  17
         (k)      Awards under Preexisting Plans                                                 17
         (l)      Plan Effective Date and Shareholder Approval                                   17
</TABLE>

                                      (ii)
<PAGE>

                                 CVS CORPORATION

                        1997 INCENTIVE COMPENSATION PLAN

                             AS AMENDED AND RESTATED

         1. PURPOSE. The purpose of this 1997 Incentive Compensation Plan (the
"Plan") is to assist CVS Corporation, a Delaware corporation (the
"Corporation"), and its subsidiaries in attracting, retaining, and rewarding
high-quality executives, employees, and other persons who provide services to
the Corporation and/or its subsidiaries, enabling such persons to acquire or
increase a proprietary interest in the Corporation in order to strengthen the
mutuality of interests between such persons and the Corporation's shareholders,
and providing such persons with annual and long-term performance incentives to
expend their maximum efforts in the creation of shareholder value. The Plan is
also intended to qualify certain compensation awarded under the Plan for tax
deductibility under Code Section 162(m) (as hereafter defined) to the extent
deemed appropriate by the Committee (or any successor committee) of the Board of
Directors of the Corporation.

          2. DEFINITIONS. For purposes of the Plan, the following terms shall be
defined as set forth below, in addition to such terms defined in Section 1
hereof:

                  (a) "Annual Incentive Award" means a conditional right granted
         to a Participant under Section 8(c) hereof to receive a cash payment,
         Stock or other Award, unless otherwise determined by the Committee,
         after the end of a specified fiscal year.

                  (b) "Award" means any Option, Restricted Stock, Deferred
         Stock, Stock granted as a bonus or in lieu of another award, Dividend
         Equivalent, Other Stock-Based Award, Performance Award or Annual
         Incentive Award, together with any other right or interest granted to a
         Participant under the Plan.

                  (c) "Beneficiary" means the person, persons, trust or trusts
         which have been designated by a Participant in his or her most recent
         written beneficiary designation filed with the Committee to receive the
         benefits specified under the Plan upon such Participant's death or to
         which Awards or other rights are transferred if and to the extent
         permitted under Section 10(b) hereof. If, upon a Participant's death,
         there is no designated Beneficiary or surviving designated Beneficiary,
         then the term Beneficiary means person, persons, trust or trusts
         entitled by will or the laws of descent and distribution to receive
         such benefits.

                  (d) "Beneficial Owner" shall have the meaning ascribed to such
         term in Rule 13d-3 under the Exchange Act and any successor to such
         Rule.

                  (e) "Board" means the Corporation's Board of Directors.

                  (f) "Change in Control" means Change in Control as defined
         with related terms in Section 9 of the Plan.

                  (g) "Change in Control Price" means the amount calculated in
         accordance with Section 9(c) of the Plan.

                  h) "Code" means the Internal Revenue Code of 1986, as amended
         from time to time, including regulations thereunder and successor
         provisions and regulations thereto.
<PAGE>

                  (i) "Committee" means a committee of two or more directors
         designated by the Board to administer the Plan; provided, however,
         that, unless otherwise determined by the Board, the Committee shall
         consist solely of two or more directors, each of whom shall be (i) a
         "non-employee director" within the meaning of Rule 16b-3 under the
         Exchange Act, unless administration of the Plan by "non-employee
         directors" is not then required in order for exemptions under Rule
         16b-3 to apply to transactions under the Plan, and (ii) an "outside
         director" as defined under Code Section 162(m), unless administration
         of the Plan by "outside directors" is not then required in order to
         qualify for tax deductibility under Code Section 162(m).

                  (j) "Covered Employee" means an Eligible Person who is a
         Covered Employee as specified in Section 8(e) of the Plan.

                  (k) "Deferred Stock" means a right, granted to a Participant
         under Section 6(e) hereof, to receive Stock, cash or a combination
         thereof at the end of a specified deferral period.

                  (l) "Dividend Equivalent" means a right, granted to a
         Participant under Section 6(g), to receive cash, Stock, other Awards or
         other property equal in value to dividends paid with respect to a
         specified number of shares of Stock, or other periodic payments.

                  (m) "Effective Date" means January 8, 1997.

                  (n) "Eligible Person" means each Executive Officer and other
         officers and employees of the Corporation or of any subsidiary,
         including such persons who may also be directors of the Corporation. An
         employee on leave of absence may be considered as still in the employ
         of the Corporation or a subsidiary for purposes of eligibility for
         participation in the Plan.

                  (o) "Exchange Act" means the Securities Exchange Act of 1934,
         as amended from time to time, including rules thereunder and successor
         provisions and rules thereto.

                  (p) "Executive Officer" means an executive officer of the
         Corporation as defined under the Exchange Act.

                  (q) "Fair Market Value" means the fair market value of Stock,
         Awards or other property as determined by the Committee or under
         procedures established by the Committee. Unless otherwise determined by
         the Committee, the Fair Market Value of Stock shall be the average of
         the highest and lowest prices of a share of Stock, as quoted on the
         composite transactions table on the New York Stock Exchange, on the
         last trading day prior to the date on which the determination of fair
         market value is being made.

                  (r) "Incentive Stock Option" or "ISO" means any Option
         intended to be and designated as an incentive stock option within the
         meaning of Code Section 422 or any successor provision thereto.

                  (s) "Limited SAR" means a right granted to a Participant under
         Section 6(c) hereof.

                  (t) "Option" means a right, granted to a Participant under
         Section 6(b) hereof, to purchase Stock or other Awards at a specified
         price during specified time periods.

                  (u) "Other Stock Based Awards" means Awards granted to a
         Participant under Section 6(h) hereof.

                                       2
<PAGE>

                  (v) "Participant" means a person who has been granted an Award
         under the Plan that remains outstanding, including a person who is no
         longer an Eligible Person.

                  (w) "Performance Award" means a right, granted to a
         Participant under Section 8 hereof, to receive Awards based upon
         performance criteria specified by the Committee.

                  (x) "Person" shall have the meaning ascribed to such term in
         Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and
         14(d) thereof, and shall include a "group" as defined in Section 13(d)
         thereof.

                  (y) "Preexisting Plans" mean the CVS Corporation Omnibus Stock
         Incentive Plan, the CVS Corporation 1987 Stock Option Plan, and the CVS
         Corporation 1973 Stock Option Plan.

                  (z) "Qualified Member" means a member of the Committee who is
         a "Non-Employee Director" within the meaning of Rule 16b-3(b)(3) and an
         "outside director" within the meaning of Regulation 1.162-27 under Code
         Section 162(m).

                  (aa) "Restricted Stock" means Stock granted to a Participant
         under Section 6(d) hereof, that is subject to certain restrictions and
         to a risk of forfeiture.

                  (bb) "Rule 16b-3" means Rule 16b-3, as from time to time in
         effect and applicable to the Plan and Participants, promulgated by the
         Securities and Exchange Commission under Section 16 of the Exchange
         Act.

                  (cc) "Stock" means the Corporation's Common Stock, and such
         other securities as may be substituted (or resubstituted) for Stock
         pursuant to Section 10(c) hereof.

                  (dd) "Stock Appreciation Rights" or "SAR" means a right
         granted to a Participant under Section 6(c) hereof.

3.       ADMINISTRATION.

                  (a) AUTHORITY OF THE COMMITTEE. The Plan shall be administered
         by the Committee, except to the extent the Board elects to administer
         the Plan, in which case references herein to the "Committee" shall be
         deemed to include references to the "Board". The Committee shall have
         full and final authority, in each case subject to and consistent with
         the provisions of the Plan, to select Eligible Persons to become
         Participants, grant Awards, determine the type, number and other terms
         and conditions of, and all other matters relating to, Awards, prescribe
         Award agreements (which need not be identical for each Participant) and
         rules and regulations for the administration of the Plan, construe and
         interpret the Plan and Award agreements and correct defects, supply
         omissions or reconcile inconsistencies therein, and to make all other
         decisions and determinations as the Committee may deem necessary or
         advisable for the administration of the Plan.

                  (b) MANNER OF EXERCISE OF COMMITTEE AUTHORITY. At any time
         that a member of the Committee is not a Qualified Member, any action of
         the Committee relating to an Award granted or to be granted to a
         Participant who is then subject to Section 16 of the Exchange Act in
         respect of the Corporation, or relating to an Award intended by the
         Committee to qualify as "performance-based compensation" within the
         meaning of Code Section 162(m) and regulations thereunder, may be taken
         either (i) by a subcommittee, designated by the Committee, composed

                                       3
<PAGE>

         solely of two or more Qualified Members, or (ii) by the Committee but
         with each such member who is not a Qualified Member abstaining or
         recusing himself or herself from such action; provided, however, that,
         upon such abstention or recusal, the Committee remains composed solely
         of two or more Qualified Members. Such action, authorized by such a
         subcommittee or by the Committee upon the abstention or recusal of such
         non-Qualified Member(s), shall be the action of the Committee for
         purposes of the Plan. Any action of the Committee shall be final,
         conclusive and binding on all persons, including the Corporation, its
         subsidiaries, Participants, Beneficiaries, transferees under Section
         10(b) hereof or other persons claiming rights from or through a
         Participant, and shareholders. The express grant of any specific power
         to the Committee, and the taking of any action by the Committee, shall
         not be construed as limiting any power or authority of the Committee.
         The Committee may delegate to officers or managers of the Corporation
         or any subsidiary, or committees thereof, the authority, subject to
         such terms as the Committee shall determine, to perform such functions,
         including administrative functions, as the Committee may determine, to
         the extent that such delegation will not result in the loss of an
         exemption under Rule 16b-3(d)(1) for Awards granted to Participants
         subject to Section 16 of the Exchange Act in respect of the Corporation
         and will not cause Awards intended to qualify as "performance-based
         compensation" under Code Section 162(m) to fail to so qualify. The
         Committee may appoint agents to assist it in administering the Plan.

                  (c) LIMITATION OF LIABILITY. The Committee and each member
         thereof shall be entitled to, in good faith, rely or act upon any
         report or other information furnished to him or her by any executive
         officer, other officer or employee of the Corporation or a subsidiary,
         the Corporation's independent auditors, consultants or any other agents
         assisting in the administration of the Plan. Members of the Committee
         and any officer or employee of the Corporation or a subsidiary acting
         at the direction or on behalf of the Committee shall not be personally
         liable for any action or determination taken or made in good faith with
         respect to the Plan, and shall, to the extent permitted by law, be
         fully indemnified and protected by the Corporation with respect to any
         such action or determination.

4.       STOCK SUBJECT TO PLAN.

                  (a) OVERALL NUMBER OF SHARES AVAILABLE FOR DELIVERY. Subject
         to adjustment as provided in Section 10(c) hereof, the total number of
         shares of Stock reserved and available for delivery in connection with
         Awards under the Plan shall be (i) 24.5 million, plus (ii) the number
         of shares of Stock remaining available under Preexisting Plans
         immediately prior to the date on which shareholders of the Corporation
         originally approved the adoption of the Plan, plus (iii) the number of
         shares of Stock subject to awards under Preexisting Plans which become
         available in accordance with Section 4(c) hereof after the date on
         which shareholders of the Corporation originally approved the adoption
         of the Plan, plus (iv) 9.4% of the number of shares of Stock issued or
         delivered by the Corporation during the term of the Plan (excluding any
         issuance or delivery in connection with Awards, or any other
         compensation or benefit plan of the Corporation); provided, however,
         that the total number of shares of Stock with respect to which ISOs may
         be granted shall not exceed 4 million and the total number of shares of
         Restricted Stock, Deferred Stock, Stock awarded as a bonus or in lieu
         of an obligation, and Other Stock-Based Awards awarded under the Plan
         shall not exceed 9.0 million. Any shares of Stock delivered under the
         Plan shall consist of authorized and unissued shares or treasury
         shares.

                  (b) APPLICATION OF LIMITATION TO GRANTS OF AWARDS. No Award
         may be granted if the number of shares of Stock to be delivered in
         connection with such Award or, in the case of an Award relating to
         shares of Stock but settleable only in cash, the number of shares to
         which such Award relates, exceeds the number of shares of Stock
         remaining available under the Plan minus

                                        4
<PAGE>

         the number of shares of Stock issuable in settlement of or relating to
         then-outstanding Awards. The Committee may adopt reasonable counting
         procedures to ensure appropriate counting, avoid double counting (as,
         for example, in the case of tandem or substitute awards) and make
         adjustments if the number of shares of Stock actually delivered differs
         from the number of shares previously counted in connection with an
         Award.

                  (c) AVAILABILITY OF SHARES Not Delivered under Awards. Shares
         of Stock subject to an Award under the Plan or award under a
         Preexisting Plan that is canceled, expired, forfeited, settled in cash
         or otherwise terminated without a delivery of shares to the
         Participant, including (i) the number of shares withheld in payment of
         any exercise or purchase price of an Award or award or taxes relating
         to Awards or awards, and (ii) the number of shares surrendered in
         payment of any exercise or purchase price of an Award or award or taxes
         relating to any Award or award, will again be available for Awards
         under the Plan, except that if any such shares could not again be
         available for Awards to a particular Participant under any applicable
         law or regulation, such shares shall be available exclusively for
         Awards to Participants who are not subject to such limitation.

5.       ELIGIBILITY; PER-PERSON AWARD LIMITATIONS. Awards may be granted
under the Plan only to Eligible Persons. In each fiscal year during any part of
which the Plan is in effect, an Eligible Person may not be granted Awards
relating to more than 1.5 million shares of Stock, subject to adjustment as
provided in Section 10(c), under each of Sections 6(b), 6(c), 6(d), 6(e), 6(f),
6(g), 6(h), 8(b) and 8(c). In addition, the maximum cash amount that may be
earned under the Plan as a final Annual Incentive Award or other cash annual
Award in respect of any fiscal year by any one Participant shall be $5 million,
and the maximum cash amount that may be earned under the Plan as a final
Performance Award or other cash Award in respect of a performance period other
than an annual period by any one Participant on an annualized basis shall be $5
million.

6.       SPECIFIC TERMS OF AWARDS.

         (a) GENERAL. Awards may be granted on the terms and conditions set
forth in this Section 6. In addition, the Committee may impose on any Award or
the exercise thereof, at the date of grant or thereafter (subject to Section
10(e)), such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine, including terms
requiring forfeiture of Awards in the event of termination of employment by the
Participant and terms permitting a Participant to make elections relating to his
or her Award. The Committee shall retain full power and discretion to
accelerate, waive or modify, at any time, any term or condition of an Award that
is not mandatory under the Plan. Except in cases in which the Committee is
authorized to require other forms of consideration under the Plan, or to the
extent other forms of consideration must by paid to satisfy the requirements of
the Delaware General Corporation Law, no consideration other than services may
be required for the grant (but not the exercise) of any Award.

         (b) OPTIONS. The Committee is authorized to grant Options to
Participants on the following terms and conditions:

                  (i) EXERCISE PRICE. The exercise price per share of Stock
         purchasable under an Option shall be determined by the Committee,
         provided that such exercise price shall be not less than the Fair
         Market Value of a share of Stock on the date of grant of such Option
         except as provided under the first sentence of Section 7(a) hereof.

                  (ii) TIME AND METHOD OF EXERCISE. The Committee shall
         determine the time or times at which or the circumstances under which
         an Option may be exercised in whole or in part

                                       5
<PAGE>

         (including based on achievement of performance goals and/or future
         service requirements), the methods by which such exercise price may be
         paid or deemed to be paid, the form of such payment, including, without
         limitation, cash, Stock, other Awards or awards granted under other
         plans of the Corporation or any subsidiary, or other property
         (including notes or other contractual obligations of Participants to
         make payment on a deferred basis), and the methods by or forms in which
         Stock will be delivered or deemed to be delivered to Participants.

                  (iii) ISOS. The terms of any ISO granted under the Plan shall
         comply in all respects with the provisions of Code Section 422.
         Anything in the Plan to the contrary notwithstanding, no term of the
         Plan relating to ISOs shall be interpreted, amended or altered, nor
         shall any discretion or authority granted under the Plan be exercised,
         so as to disqualify either the Plan or any ISO under Code Section 422,
         unless the Participant has first requested the change that will result
         in such disqualification.

         (c) STOCK APPRECIATION RIGHTS. Effective April 18, 2001, the Committee
shall not be authorized to grant SARs or Limited SARs to Participants under the
Plan.

         (d) RESTRICTED STOCK. The Committee is authorized to grant Restricted
Stock to Participants on the following terms and conditions:

                  (i) GRANT AND RESTRICTIONS. Restricted Stock shall be subject
         to such restrictions on transferability, risk of forfeiture and other
         restrictions, if any, as the Committee may impose, which restrictions
         may lapse separately or in combination at such times, under such
         circumstances (including based on achievement of performance goals
         and/or future service requirements), in such installments or otherwise,
         as the Committee may determine at the date of grant or thereafter.
         Except to the extent restricted under the terms of the Plan and any
         Award agreement relating to the Restricted Stock, a Participant granted
         Restricted Stock shall have all of the rights of a shareholder,
         including the right to vote the Restricted Stock and the right to
         receive dividends thereon (subject to any mandatory reinvestment or
         other requirement imposed by the Committee). During the restricted
         period applicable to the Restricted Stock, subject to Section 10(b)
         below, the Restricted Stock may not be sold, transferred, pledged,
         hypothecated, margined or otherwise encumbered by the Participant.

                  (ii) FORFEITURE. Except as otherwise determined by the
         Committee, upon termination of employment during the applicable
         restriction period, Restricted Stock that is at that time subject to
         restrictions shall be forfeited and reacquired by the Corporation;
         provided that the Committee may provide, by rule or regulation or in
         any Award agreement, or may determine in any individual case, that
         restrictions or forfeiture conditions relating to Restricted Stock
         shall be waived in whole or in part in the event of terminations
         resulting from specified causes, and the Committee may in other cases
         waive in whole or in part the forfeiture of Restricted Stock.

                  (iii) CERTIFICATES FOR STOCK. Restricted Stock granted under
         the Plan may be evidenced in such manner as the Committee shall
         determine. If certificates representing Restricted Stock are registered
         in the name of the Participant, the Committee may require that such
         certificates bear an appropriate legend referring to the terms,
         conditions and restrictions applicable to such Restricted Stock, that
         the Corporation retain physical possession of the certificates, and
         that the Participant deliver a stock power to the Corporation, endorsed
         in blank, relating to the Restricted Stock.

                  (iv) DIVIDENDS AND SPLITS. As a condition to the grant of an
         Award of Restricted Stock, the Committee may require that any cash
         dividends paid on a share of Restricted Stock be automatically
         reinvested in additional shares of Restricted Stock or applied to the
         purchase of

                                       6
<PAGE>

         additional Awards under the Plan. Unless otherwise determined by the
         Committee, Stock distributed in connection with a Stock split or Stock
         dividend, and other property distributed as a dividend, shall be
         subject to restrictions and a risk of forfeiture to the same extent as
         the Restricted Stock with respect to which such Stock or other property
         has been distributed.

         (e) DEFERRED STOCK. The Committee is authorized to grant Deferred Stock
to Participants, which are rights to receive Stock, cash, or a combination
thereof at the end of a specified deferral period, subject to the following
terms and conditions:

                  (i) AWARD AND RESTRICTIONS. Satisfaction of an Award of
         Deferred Stock shall occur upon expiration of the deferral period
         specified for such Deferred Stock by the Committee (or, if permitted by
         the Committee, as elected by the Participant). In addition, Deferred
         Stock shall be subject to such restrictions (which may include a risk
         of forfeiture) as the Committee may impose, if any, which restrictions
         may lapse at the expiration of the deferral period or at earlier
         specified times (including based on achievement of performance goals
         and/or future service requirements), separately or in combination, in
         installments or otherwise, as the Committee may determine. Deferred
         Stock may be satisfied by delivery of Stock, cash equal to the Fair
         Market Value of the specified number of shares of Stock covered by the
         Deferred Stock, or a combination thereof, as determined by the
         Committee at the date of grant or thereafter.

                  (ii) FORFEITURE. Except as otherwise determined by the
         Committee, upon termination of employment during the applicable
         deferral period or portion thereof to which forfeiture conditions apply
         (as provided in the Award agreement evidencing the Deferred Stock), all
         Deferred Stock that is at that time subject to deferral (other than a
         deferral at the election of the Participant) shall be forfeited;
         provided that the Committee may provide, by rule or regulation or in
         any Award agreement, or may determine in any individual case, that
         restrictions or forfeiture conditions relating to Deferred Stock shall
         be waived in whole or in part in the event of terminations resulting
         from specified causes, and the Committee may in other cases waive in
         whole or in part the forfeiture of Deferred Stock.

                  (iii) DIVIDEND EQUIVALENTS. Unless otherwise determined by the
         Committee at date of grant, Dividend Equivalents on the specified
         number of shares of Stock covered by an Award of Deferred Stock shall
         be either (A) paid with respect to such Deferred Stock at the dividend
         payment date in cash or in shares of unrestricted Stock having a Fair
         Market Value equal to the amount of such dividends, or (B) deferred
         with respect to such Deferred Stock and the amount or value thereof
         automatically deemed reinvested in additional Deferred Stock, other
         Awards or other investment vehicles, as the Committee shall determine
         or permit the Participant to elect.

         (f) BONUS STOCK AND AWARDS IN LIEU OF OBLIGATIONS. The Committee is
authorized to grant Stock as a bonus, or to grant Stock or other Awards in lieu
of obligations to pay cash or deliver other property under the Plan or under
other plans or compensatory arrangements, provided that, in the case of
Participants subject to Section 16 of the Exchange Act, the amount of such
grants remains within the discretion of the Committee to the extent necessary to
ensure that acquisitions of Stock or other Awards are exempt from liability
under Section 16(b) of the Exchange Act. Stock or Awards granted hereunder shall
be subject to such other terms as shall be determined by the Committee. In the
case of any grant of Stock to an officer of the Corporation in lieu of salary or
other cash compensation, the number of shares granted in place of such
compensation shall be reasonable, as determined by the Committee.

         (g) DIVIDEND EQUIVALENTS. The Committee is authorized to grant Dividend
Equivalents to a Participant, entitling the Participant to receive cash, Stock,
other Awards, or other property equal in value to dividends paid with respect to
a specified number of shares of Stock, or other periodic payments.

                                       7
<PAGE>

Dividend Equivalents may be awarded on a free-standing basis or in connection
with another Award. The Committee may provide that Dividend Equivalents shall be
paid or distributed when accrued or shall be deemed to have been reinvested in
additional Stock, Awards, or other investment vehicles, and subject to such
restrictions on transferability and risks of forfeiture, as the Committee may
specify.

         (h) OTHER STOCK-BASED AWARDS. The Committee is authorized, subject to
limitations under applicable law, to grant to Participants such other Awards
that may be denominated or payable in, valued in whole or in part by reference
to, or otherwise based on, or related to, Stock, as deemed by the Committee to
be consistent with the purposes of the Plan, including, without limitation,
convertible or exchangeable debt securities, other rights convertible or
exchangeable into Stock, purchase rights for Stock, Awards with value and
payment contingent upon performance of the Corporation or any other factors
designated by the Committee, and Awards valued by reference to the book value of
Stock or the value of securities of or the performance of specified
subsidiaries. The Committee shall determine the terms and conditions of such
Awards. Stock delivered pursuant to an Award in the nature of a purchase right
granted under this Section 6(h) shall be purchased for such consideration, paid
for at such times, by such methods, and in such forms, including, without
limitation, cash, Stock, other Awards, or other property, as the Committee shall
determine. Cash awards, as an element of or supplement to any other Award under
the Plan, may also be granted pursuant to this Section 6(h).

7.       CERTAIN PROVISIONS APPLICABLE TO AWARDS.

         (a) STAND-ALONE, ADDITIONAL, TANDEM, AND SUBSTITUTE AWARDS. Awards
granted under the Plan may, in the discretion of the Committee, be granted at
any time, either alone or in addition to, in tandem with, or in substitution or
exchange for, any other Award or any award granted under another plan of the
Corporation, any subsidiary, or any business entity to be acquired by the
Corporation or a subsidiary, or any other right of a Participant to receive
payment from the Corporation or any subsidiary, but if an Award is granted in
substitution or exchange for another Award or award, the Committee shall require
the surrender of such other Award or award in consideration for the grant of the
new Award. In addition, Awards may be granted in lieu of cash compensation,
including in lieu of cash amounts payable under other plans of the Corporation
or any subsidiary, in which the value of Stock subject to the Award (for
example, Deferred Stock or Restricted Stock) is equivalent in value to the cash
compensation, provided, however, that any such Award that is an Option shall
have an exercise price that is at least 100% of the Fair Market Value of a share
of Stock on the date of grant of such Option.

         (b) TERM OF AWARDS. The term of each Award shall be for such period as
may be determined by the Committee; provided that in no event shall the term of
any Option exceed a period of ten years (or such shorter term as may be required
in respect of an ISO under Code Section 422).

         (c) FORM AND TIMING OF PAYMENT UNDER AWARDS; DEFERRALS. Subject to the
terms of the Plan and any applicable Award agreement, payments to be made by the
Corporation or a subsidiary upon the exercise of an Option or other Award or
settlement of an Award may be made in such forms as the Committee shall
determine, including, without limitation, cash, Stock, other Awards or other
property, and may be made in a single payment or transfer, in installments, or
on a deferred basis. The settlement of any Award may be accelerated, and cash
paid in lieu of Stock in connection with such settlement, in the discretion of
the Committee or upon occurrence of one or more specified events (in addition to
a Change in Control). Installment or deferred payments may be required by the
Committee (subject to Section 10(e) of the Plan, including the consent
provisions thereof in the case of any deferral of an outstanding Award not
provided for in the original Award agreement) or permitted at the election of
the Participant on terms and conditions established by the Committee. Payments
may include, without limitation, provisions for the payment or crediting of
reasonable interest on installment or deferred payments or the grant or

                                       8
<PAGE>

crediting of Dividend Equivalents or other amounts in respect of installment or
deferred payments denominated in Stock.

         (d) EXEMPTIONS FROM SECTION 16(b) LIABILITY. It is the intent of the
Corporation that the grant of any Awards to or other transaction by a
Participant who is subject to Section 16 of the Exchange Act shall be exempt
under Rule 16b-3 (except for transactions acknowledged in writing to be
non-exempt by such Participant). Accordingly, if any provision of this Plan or
any Award agreement does not comply with the requirements of Rule 16b-3 as then
applicable to any such transaction, such provision shall be construed or deemed
amended to the extent necessary to conform to the applicable requirements of
Rule 16b-3 so that such Participant shall avoid liability under Section 16(b).

         (e) CANCELLATION AND RESCISSION OF AWARDS. Unless the Award agreement
specifies otherwise, the Committee may cancel any unexpired, unpaid, or deferred
Awards at any time, and the Corporation shall have the additional rights set
forth in Section 7(e)(iv) below, if the Participant is not in compliance with
all applicable provisions of the Award agreement and the Plan including the
following conditions:

                  (i) A Participant shall not render services for any
         organization or engage directly or indirectly in any business that, in
         the judgment of the Chief Executive Officer of the Corporation or other
         senior officer designated by the Committee, is or becomes competitive
         with the Corporation. For Participants whose employment has terminated,
         the judgment of the Chief Executive Officer or other senior officer
         designated by the Committee shall be based on the Participant's
         position and responsibilities while employed by the Corporation, the
         Participant's post-employment responsibilities and position with the
         other organization or business, the extent of past, current and
         potential competition or conflict between the Corporation and the other
         organization or business, the effect on the Corporation's shareholders,
         customers, suppliers and competitors of the Participant assuming the
         post-employment position and such other considerations as are deemed
         relevant given the applicable facts and circumstances. A Participant
         who has terminated employment shall be free, however, to purchase as an
         investment or otherwise, stock or other securities of such organization
         or business so long as they are listed upon a recognized securities
         exchange or traded over-the-counter, and such investment does not
         represent a greater than five percent equity interest in the
         organization or business.

                  (ii) A Participant shall not, without prior written
         authorization from the Corporation, disclose to anyone outside the
         Corporation, or use in other than the Corporation's business, any
         confidential information or material relating to the business of the
         Corporation that is acquired by the Participant either during or after
         employment with the Corporation.

                  (iii) A Participant shall disclose promptly and assign to the
         Corporation all right, title, and interest in any invention or idea,
         patentable or not, made or conceived by the Participant during
         employment by the Corporation, relating in any manner to the actual or
         anticipated business, research or development work of the Corporation
         and shall do anything reasonably necessary to enable the Corporation to
         secure a patent where appropriate in the United States and in foreign
         countries.

                  (iv) Upon exercise, settlement, payment or delivery pursuant
         to an Award, the Participant shall certify on a form acceptable to the
         Committee that he or she is in compliance with the terms and conditions
         of the Plan. Failure to comply with the provisions of this Section 7(e)
         prior to, or during the six months after, any exercise, payment or
         delivery pursuant to an Award shall cause such exercise, payment or
         delivery to be rescinded. The Corporation shall notify the Participant
         in writing of any such rescission within two years after such exercise,

                                       9
<PAGE>

         payment or delivery. Within ten days after receiving such a notice from
         the Corporation, the Participant shall pay to the Corporation the
         amount of any gain realized or payment received as a result of the
         rescinded exercise, payment or delivery pursuant to an Award. Such
         payment shall be made either in cash or by returning to the Corporation
         the number of shares of Stock that the Participant received in
         connection with the rescinded exercise, payment or delivery.

         (f) LIMITATION OF VESTING OF CERTAIN AWARDS. Restricted Stock, Deferred
Stock, and Other Stock-Based Awards, as described in Section 6(d), 6(e) and 6(h)
of the Plan, respectively, generally will vest over a minimum period of three
years, except in the event of a Participant's death, disability, or retirement,
or in the event of a Change in Control or other special circumstances. The
foregoing notwithstanding, (i) Restricted Stock, Deferred Stock, and Other
Stock-Based Awards as to which either the grant or the vesting is based on the
achievement of one or more performance conditions generally will vest over a
minimum period of one year except in the vent of a Participant's death,
disability, or retirement, or in the event of a Change in Control or other
special circumstances, and (ii) up to 5% of the shares of Stock authorized under
the Plan may be granted as Restricted Stock, Deferred Stock, or Other
Stock-Based Awards without any minimum vesting requirements. For purposes of
this Section 7(f), vesting over a three-year period or one-year period will
include periodic vesting over such period if the rate of such vesting is
proportional throughout such period.

8.       PERFORMANCE AND ANNUAL INCENTIVE AWARDS.

         (a) PERFORMANCE CONDITIONS. The right of a Participant to exercise or
receive a grant or settlement of any Award, and the timing thereof, may be
subject to such performance conditions as may be specified by the Committee. The
Committee may use such business criteria and other measures of performance as it
may deem appropriate in establishing any performance conditions, and may
exercise its discretion to reduce or increase the amounts payable under any
Award subject to performance conditions, except as limited under Sections 8(b)
and 8(c) hereof in the case of a Performance Award or Annual Incentive Award
intended to qualify under Code Section 162(m).

         (b) PERFORMANCE AWARDS GRANTED TO DESIGNATED COVERED EMPLOYEES. If the
Committee determines that a Performance Award to be granted to an Eligible
Person who is designated by the Committee as likely to be a Covered Employee
should qualify as "performance-based compensation" for purposes of Code Section
162(m), the grant, exercise and/or settlement of such Performance Award shall be
contingent upon achievement of pre-established performance goals and other terms
set forth in this Section 8(b).

                  (i) PERFORMANCE GOALS GENERALLY. The performance goals for
         such Performance Awards shall consist of one or more business criteria
         and a targeted level or levels of performance with respect to each of
         such criteria, as specified by the Committee consistent with this
         Section 8(b). Performance goals shall be objective and shall otherwise
         meet the requirements of Code Section 162(m) and regulations thereunder
         (including Regulation 1.162-27 and successor regulations thereto),
         including the requirement that the level or levels of performance
         targeted by the Committee result in the achievement of performance
         goals being "substantially uncertain." The Committee may determine that
         such Performance Awards shall be granted, exercised and/or settled upon
         achievement of any one performance goal or that two or more of the
         performance goals must be achieved as a condition to grant, exercise
         and/or settlement of such Performance Awards. Performance goals may
         differ for Performance Awards granted to any one Participant or to
         different Participants.

                  (ii) BUSINESS CRITERIA. One or more of the following business
         criteria for the Corporation, on a consolidated basis, and/or for
         specified subsidiaries or business units of the

                                       10
<PAGE>

         Corporation (except with respect to the total shareholder return and
         earnings per share criteria), shall be used by the Committee in
         establishing performance goals for such Performance Awards: (1)
         earnings per share; (2) revenues; (3) cash flow; (4) cash flow return
         on investment; (5) return on net assets, return on assets, return on
         investment, return on capital, return on equity; (6) economic value
         added; (7) operating margin; (8) net income; pretax earnings; pretax
         earnings before interest, depreciation and amortization; pretax
         operating earnings after interest expense and before incentives,
         service fees, and extraordinary or special items; operating earnings;
         (9) total shareholder return; and (10) any of the above goals as
         compared to the performance of a published or special index deemed
         applicable by the Committee including, but not limited to, the Standard
         & Poor's 500 Stock Index or a group of comparator companies. One or
         more of the foregoing business criteria shall also be exclusively used
         in establishing performance goals for Annual Incentive Awards granted
         to a Covered Employee under Section 8(c) hereof.

                  (iii) PERFORMANCE PERIOD; TIMING FOR ESTABLISHING PERFORMANCE
         GOALS. Achievement of performance goals in respect of such Performance
         Awards shall be measured over a performance period of up to ten years,
         as specified by the Committee. Performance goals shall be established
         not later than 90 days after the beginning of any performance period
         applicable to such Performance Awards, or at such other date as may be
         required or permitted for "performance-based compensation" under Code
         Section 162(m).

                  (iv) PERFORMANCE AWARD POOL. The Committee may establish a
         Performance Award pool, which shall be an unfunded pool, for purposes
         of measuring performance of the Corporation in connection with
         Performance Awards. The amount of such Performance Award pool shall be
         based upon the achievement of a performance goal or goals based on one
         or more of the business criteria set forth in Section 8(b)(ii) hereof
         during the given performance period, as specified by the Committee in
         accordance with Section 8(b)(iii) hereof. The Committee may specify the
         amount of the Performance Award pool as a percentage of any of such
         business criteria, a percentage thereof in excess of a threshold
         amount, or as another amount which need not bear a strictly
         mathematical relationship to such business criteria.

                  (v) SETTLEMENT OF PERFORMANCE AWARDS; OTHER TERMS. Settlement
         of such Performance Awards shall be in cash, Stock, other Awards or
         other property, in the discretion of the Committee. The Committee may,
         in its discretion, reduce the amount of a settlement otherwise to be
         made in connection with such Performance Awards, but may not exercise
         discretion to increase any such amount payable to a Covered Employee in
         respect of a Performance Award subject to this Section 8(b). The
         Committee shall specify the circumstances in which such Performance
         Awards shall be paid or forfeited in the event of termination of
         employment by the Participant prior to the end of a performance period
         or settlement of Performance Awards.

         (c) ANNUAL INCENTIVE AWARDS GRANTED TO DESIGNATED COVERED EMPLOYEES. If
the Committee determines that an Annual Incentive Award to be granted to an
Eligible Person who is designated by the Committee as likely to be a Covered
Employee should qualify as "performance-based compensation" for purposes of Code
Section 162(m), the grant, exercise and/or settlement of such Annual Incentive
Award shall be contingent upon achievement of pre-established performance goals
and other terms set forth in this Section 8(c).

                  (i) ANNUAL INCENTIVE AWARD POOL. The Committee may establish
         an Annual Incentive Award pool, which shall be an unfunded pool, for
         purposes of measuring performance of the Corporation in connection with
         Annual Incentive Awards. The amount of such Annual Incentive Award pool
         shall be based upon the achievement of a performance goal or goals
         based

                                       11
<PAGE>

         on one or more of the business criteria set forth in Section 8(b)(ii)
         hereof during the given performance period, as specified by the
         Committee in accordance with Section 8(b)(iii) hereof. The Committee
         may specify the amount of the Annual Incentive Award pool as a
         percentage of any of such business criteria, a percentage thereof in
         excess of a threshold amount, or as another amount which need not bear
         a strictly mathematical relationship to such business criteria.

                  (ii) POTENTIAL ANNUAL INCENTIVE AWARDS. Not later than the end
         of the 90th day of each fiscal year, or at such other date as may be
         required or permitted in the case of Awards intended to be
         "performance-based compensation" under Code Section 162(m), the
         Committee shall determine the Eligible Persons who will potentially
         receive Annual Incentive Awards, and the amounts potentially payable
         thereunder, for that fiscal year, either out of an Annual Incentive
         Award pool established by such date under Section 8(c)(i) hereof or as
         individual Annual Incentive Awards. In the case of individual Annual
         Incentive Awards intended to qualify under Code Section 162(m), the
         amount potentially payable shall be based upon the achievement of a
         performance goal or goals based on one or more of the business criteria
         set forth in Section 8(b)(ii) hereof in the given performance year, as
         specified by the Committee; in other cases, such amount shall be based
         on such criteria as shall be established by the Committee. In all
         cases, the maximum Annual Incentive Award of any Participant shall be
         subject to the limitation set forth in Section 5 hereof.

                  (iii) PAYOUT OF ANNUAL INCENTIVE AWARDS. After the end of each
         fiscal year, the Committee shall determine the amount, if any, of (A)
         the Annual Incentive Award pool, and the maximum amount of potential
         Annual Incentive Award payable to each Participant in the Annual
         Incentive Award pool, or (B) the amount of potential Annual Incentive
         Award otherwise payable to each Participant. The Committee may, in its
         discretion, determine that the amount payable to any Participant as a
         final Annual Incentive Award shall be increased or reduced from the
         amount of his or her potential Annual Incentive Award, including a
         determination to make no final Award whatsoever, but may not exercise
         discretion to increase any such amount in the case of an Annual
         Incentive Award intended to qualify under Code Section 162(m). The
         Committee shall specify the circumstances in which an Annual Incentive
         Award shall be paid or forfeited in the event of termination of
         employment by the Participant prior to the end of a fiscal year or
         settlement of such Annual Incentive Award.

         (d) WRITTEN DETERMINATIONS. All determinations by the Committee as to
the establishment of performance goals, the amount of any Performance Award pool
or potential individual Performance Awards and as to the achievement of
performance goals relating to Performance Awards under Section 8(b), and the
amount of any Annual Incentive Award pool or potential individual Annual
Incentive Awards and the amount of final Annual Incentive Awards under Section
8(c), shall be made in writing in the case of any Award intended to qualify
under Code Section 162(m). The Committee may not delegate any responsibility
relating to such Performance Awards or Annual Incentive Awards.

         (e) STATUS OF SECTION 8(B) AND SECTION 8(C) AWARDS UNDER CODE SECTION
162(M). It is the intent of the Corporation that Performance Awards and Annual
Incentive Awards under Sections 8(b) and 8(c) hereof granted to persons who are
designated by the Committee as likely to be Covered Employees within the meaning
of Code Section 162(m) and regulations thereunder (including Regulation 1.162-27
and successor regulations thereto) shall, if so designated by the Committee,
constitute "performance-based compensation" within the meaning of Code Section
162(m) and regulations thereunder. Accordingly, the terms of Sections 8(b), (c),
(d) and (e), including the definitions of Covered Employee and other terms used
therein, shall be interpreted in a manner consistent with Code Section 162(m)
and regulations thereunder. The foregoing notwithstanding, because the Committee
cannot determine with certainty whether a given Participant will be a Covered
Employee with respect to a fiscal year that has not

                                       12
<PAGE>

yet been completed, the term Covered Employee as used herein shall mean only a
person designated by the Committee, at the time of grant of Performance Awards
or an Annual Incentive Award, as likely to be a Covered Employee with respect to
that fiscal year. If any provision of the Plan as in effect on the date of
adoption or any agreements relating to Performance Awards or Annual Incentive
Awards that are designated as intended to comply with Code Section 162(m) does
not comply or is inconsistent with the requirements of Code Section 162(m) or
regulations thereunder, such provision shall be construed or deemed amended to
the extent necessary to conform to such requirements.

9.       CHANGE IN CONTROL.

         (a) EFFECT OF "CHANGE IN CONTROL." In the event of a "Change in
Control," the following provisions shall apply unless otherwise provided in the
Award agreement:

                  (i) Any Award carrying a right to exercise that was not
         previously exercisable and vested shall become fully exercisable and
         vested as of the time of the Change in Control and shall remain
         exercisable and vested for the balance of the stated term of such Award
         without regard to any termination of employment by the Participant,
         subject only to applicable restrictions set forth in Section 10(a)
         hereof;

                  (ii) Any optionee who holds an Option shall be entitled to
         elect, during the 60-day period immediately following a Change in
         Control, in lieu of acquiring the shares of Stock covered by such
         Option, to receive, and the Corporation shall be obligated to pay, in
         cash the excess of the Change in Control Price over the exercise price
         of such Option, multiplied by the number of shares of Stock covered by
         such Option;

                  (iii) The restrictions, deferral of settlement, and forfeiture
         conditions applicable to any other Award granted under the Plan shall
         lapse and such Awards shall be deemed fully vested as of the time of
         the Change in Control, except to the extent of any waiver by the
         Participant and subject to applicable restrictions set forth in Section
         10(a) hereof; and

                  (iv) With respect to any outstanding Award subject to
         achievement of performance goals and conditions under the Plan, such
         performance goals and other conditions will be deemed to be met if and
         to the extent so provided by the Committee in the Award agreement
         relating to such Award.

         (b)      DEFINITION OF "CHANGE IN CONTROL."  A "Change in Control"
shall be deemed to have occurred if:

                  (i) any Person (other than the Company, any trustee or other
         fiduciary holding securities under any employee benefit plan of the
         Company, or any company owned, directly or indirectly, by the
         stockholders of the Company immediately prior to the occurrence with
         respect to which the evaluation is being made in substantially the same
         proportions as their ownership of the common stock of the Company)
         becomes the Beneficial Owner (except that a Person shall be deemed to
         be the Beneficial Owner of all shares that any such Person has the
         right to acquire pursuant to any agreement or arrangement or upon
         exercise of conversion rights, warrants or options or otherwise,
         without regard to the sixty day period referred to in Rule 13d-3 under
         the Exchange Act), directly or indirectly, of securities of the Company
         or any Significant Subsidiary (as defined below), representing 25% or
         more of the combined voting power of the Company's or such subsidiary's
         then outstanding securities;

                                       13
<PAGE>

                  (ii) during any period of two consecutive years, individuals
         who at the beginning of such period constitute the Board, and any new
         director (other than a director designated by a person who has entered
         into an agreement with the Company to effect a transaction described in
         clause (i), (iii), or (iv) of this paragraph) whose election by the
         Board or nomination for election by the Company's stockholders was
         approved by a vote of at least two-thirds of the directors then still
         in office who either were directors at the beginning of the two-year
         period or whose election or nomination for election was previously so
         approved but excluding for this purpose any such new director whose
         initial assumption of office occurs as a result of either an actual or
         threatened election contest (as such terms are used in Rule 14a-11 of
         Regulation 14A promulgated under the Exchange Act) or other actual or
         threatened solicitation of proxies or consents by or on behalf of an
         individual, corporation, partnership, group, associate or other entity
         or Person other than the Board, cease for any reason to constitute at
         least a majority of the Board;

                  (iii) the consummation of a merger or consolidation of the
         Company or any subsidiary owning directly or indirectly all or
         substantially all of the consolidated assets of the Company (a
         "Significant Subsidiary") with any other entity, other than a merger or
         consolidation which would result in the voting securities of the
         Company or a Significant Subsidiary outstanding immediately prior
         thereto continuing to represent (either by remaining outstanding or by
         being converted into voting securities of the surviving or resulting
         entity) more than 50% of the combined voting power of the surviving or
         resulting entity outstanding immediately after such merger or
         consolidation;

                  (iv) the stockholders of the Company approve a plan or
         agreement for the sale or disposition of all or substantially all of
         the consolidated assets of the Company (other than such a sale or
         disposition immediately after which such assets will be owned directly
         or indirectly by the stockholders of the Company in substantially the
         same proportions as their ownership of the common stock of the Company
         immediately prior to such sale or disposition) in which case the Board
         shall determine the effective date of the Change in Control resulting
         therefrom; or

                  (v) any other event occurs which the Board determines, in its
         discretion, would materially alter the structure of the Company or its
         ownership.

         (c) DEFINITION OF "CHANGE IN CONTROL PRICE." The "Change in Control
Price" means an amount in cash equal to the higher of (i) the amount of cash and
fair market value of property that is the highest price per share paid
(including extraordinary dividends) in any transaction triggering the Change in
Control or any liquidation of shares following a sale of substantially all
assets of the Corporation, or (ii) the highest Fair Market Value per share at
any time during the 60-day period preceding and 60-day period following the
Change in Control.

10.      GENERAL PROVISIONS.

         (a) COMPLIANCE WITH LEGAL AND OTHER REQUIREMENTS. The Corporation may,
to the extent deemed necessary or advisable by the Committee, postpone the
issuance or delivery of Stock or payment of other benefits under any Award until
completion of such registration or qualification of such Stock or other required
action under any federal or state law, rule or regulation, listing or other
required action with respect to any stock exchange or automated quotation system
upon which the Stock or other securities of the Corporation are listed or
quoted, or compliance with any other obligation of the Corporation, as the
Committee may consider appropriate, and may require any Participant to make such
representations, furnish such information and comply with or be subject to such
other conditions as it may consider appropriate in connection with the issuance
or delivery of Stock or payment of other benefits in compliance with applicable
laws, rules, and regulations, listing requirements, or other

                                       14
<PAGE>

obligations. The foregoing notwithstanding, in connection with a Change in
Control, the Corporation shall take or cause to be taken no action, and shall
undertake or permit to arise no legal or contractual obligation, that results or
would result in any postponement of the issuance or delivery of Stock or payment
of benefits under any Award or the imposition of any other conditions on such
issuance, delivery or payment, to the extent that such postponement or other
condition would represent a greater burden on a Participant than existed on the
90th day preceding the Change in Control.

         (b) LIMITS ON TRANSFERABILITY; BENEFICIARIES. No Award or other right
or interest of a Participant under the Plan shall be pledged, hypothecated or
otherwise encumbered or subject to any lien, obligation or liability of such
Participant to any party (other than the Corporation or a subsidiary), or
assigned or transferred by such Participant otherwise than by will or the laws
of descent and distribution or to a Beneficiary upon the death of a Participant,
and such Awards or rights that may be exercisable shall be exercised during the
lifetime of the Participant only by the Participant or his or her guardian or
legal representative, except that Awards and other rights (other than ISOs in
tandem therewith) may be transferred to one or more Beneficiaries or other
transferees during the lifetime of the Participant, and may be exercised by such
transferees in accordance with the terms of such Award, but only if and to the
extent such transfers are permitted by the Committee pursuant to the express
terms of an Award agreement (subject to any terms and conditions which the
Committee may impose thereon). A Beneficiary, transferee, or other person
claiming any rights under the Plan from or through any Participant shall be
subject to all terms and conditions of the Plan and any Award agreement
applicable to such Participant, except as otherwise determined by the Committee,
and to any additional terms and conditions deemed necessary or appropriate by
the Committee.

         (c) ADJUSTMENTS. In the event that any dividend or other distribution
(whether in the form of cash, Stock, or other property), recapitalization,
forward or reverse split, reorganization, merger, consolidation, spin-off,
combination, repurchase, share exchange, liquidation, dissolution or other
similar corporate transaction or event affects the Stock such that an adjustment
is determined by the Committee to be appropriate under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and kind of shares of Stock which may be delivered in connection
with Awards granted thereafter, (ii) the number and kind of shares of Stock by
which annual per-person Award limitations are measured under Section 5 hereof,
(iii) the number and kind of shares of Stock subject to or deliverable in
respect of outstanding Awards and (iv) the exercise price, grant price or
purchase price relating to any Award and/or make provision for payment of cash
or other property in respect of any outstanding Award. In addition, the
Committee is authorized to make adjustments in the terms and conditions of, and
the criteria included in, Awards (including Performance Awards and performance
goals, and Annual Incentive Awards and any Annual Incentive Award pool or
performance goals relating thereto) in recognition of unusual or nonrecurring
events (including, without limitation, events described in the preceding
sentence, as well as acquisitions and dispositions of businesses and assets)
affecting the Corporation, any subsidiary or any business unit, or the financial
statements of the Corporation or any subsidiary, or in response to changes in
applicable laws, regulations, accounting principles, tax rates and regulations
or business conditions or in view of the Committee's assessment of the business
strategy of the Corporation, any subsidiary or business unit thereof,
performance of comparable organizations, economic and business conditions,
personal performance of a Participant, and any other circumstances deemed
relevant; provided that no such adjustment shall be authorized or made if and to
the extent that such authority or the making of such adjustment would cause
Options, Performance Awards granted under Section 8(b) hereof or Annual
Incentive Awards granted under Section 8(c) hereof to Participants designated by
the Committee as Covered Employees and intended to qualify as "performance-based
compensation" under Code Section 162(m) and regulations thereunder to otherwise
fail to qualify as "performance-based compensation" under Code Section 162(m)
and regulations thereunder.

                                       15
<PAGE>

         (d) TAXES. The Corporation and any subsidiary is authorized to withhold
from any Award granted, any payment relating to an Award under the Plan,
including from a distribution of Stock, or any payroll or other payment to a
Participant, amounts of withholding and other taxes due or potentially payable
in connection with any transaction involving an Award, and to take such other
action as the Committee may deem advisable to enable the Corporation and
Participants to satisfy obligations for the payment of withholding taxes and
other tax obligations relating to any Award. This authority shall include
authority to withhold or receive Stock or other property and to make cash
payments in respect thereof in satisfaction of a Participant's tax obligations,
either on a mandatory or elective basis in the discretion of the Committee.

         (e) CHANGES TO THE PLAN AND AWARDS. The Board may amend, alter,
suspend, discontinue or terminate the Plan or the Committee's authority to grant
Awards under the Plan without the consent of shareholders or Participants,
except that any amendment or alteration to the Plan shall be subject to the
approval of the Corporation's shareholders not later than the annual meeting
next following such Board action if such shareholder approval is required by any
federal or state law or regulation or the rules of any stock exchange or
automated quotation system on which the Stock may then be listed or quoted, or
if the amendment increases the number of shares of Stock reserved and available
for delivery in connection with Awards, materially modifies the requirements as
to eligibility for participation in the Plan, or materially increases the
benefits accruing to Participants, and the Board may otherwise, in its
discretion, determine to submit other such changes to the Plan to shareholders
for approval; provided that, without the consent of an affected Participant, no
such Board action may materially and adversely affect the rights of such
Participant under any previously granted and outstanding Award. The Committee
may waive any conditions or rights under, or amend, alter, suspend, discontinue
or terminate any Award theretofore granted and any Award agreement relating
thereto, except as otherwise provided in the Plan; provided that, without the
consent of an affected Participant, no such Committee action may materially and
adversely affect the rights of such Participant under such Award.
Notwithstanding anything in the Plan to the contrary, if any right under this
Plan would cause a transaction to be ineligible for pooling of interest
accounting that would, but for the right hereunder, be eligible for such
accounting treatment, the Committee may modify or adjust the right so that
pooling of interest accounting shall be available, including the substitution of
Stock having a Fair Market Value equal to the cash otherwise payable hereunder
for the right which caused the transaction to be ineligible for pooling of
interest accounting.

         (f) LIMITATION ON RIGHTS CONFERRED UNDER PLAN. Neither the Plan nor any
action taken hereunder shall be construed as (i) giving any Eligible Person or
Participant the right to continue as an Eligible Person or Participant or in the
employ or service of the Corporation or a subsidiary, (ii) interfering in any
way with the right of the Corporation or a subsidiary to terminate any Eligible
Person's or Participant's employment or service at any time, (iii) giving an
Eligible Person or Participant any claim to be granted any Award under the Plan
or to be treated uniformly with other Participants and employees, or (iv)
conferring on a Participant any of the rights of a shareholder of the
Corporation unless and until the Participant is duly issued or transferred
shares of Stock in accordance with the terms of an Award.

         (g) UNFUNDED STATUS OF AWARDS; CREATION OF TRUSTS. The Plan is intended
to constitute an "unfunded" plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant or obligation to deliver
Stock pursuant to an Award, nothing contained in the Plan or any Award shall
give any such Participant any rights that are greater than those of a general
creditor of the Corporation; provided that the Committee may authorize the
creation of trusts and deposit therein cash, Stock, other Awards or other
property, or make other arrangements to meet the Corporation's obligations under
the Plan. Such trusts or other arrangements shall be consistent with the
"unfunded" status of the Plan unless the Committee otherwise determines with the
consent of each affected Participant. The trustee of such trusts may be
authorized to dispose of trust assets and reinvest the proceeds in alternative

                                       16
<PAGE>

investments, subject to such terms and conditions as the Committee may specify
and in accordance with applicable law.

         (h) NON-EXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan by
the Board nor its submission to the shareholders of the Corporation for approval
shall be construed as creating any limitations on the power of the Board or a
committee thereof to adopt such other incentive arrangements as it may deem
desirable including incentive arrangements and awards which do not qualify under
Code Section 162(m).

         (i) PAYMENTS IN THE EVENT OF FORFEITURES; FRACTIONAL SHARES. Unless
otherwise determined by the Committee, in the event of a forfeiture of an Award
with respect to which a Participant paid cash or other consideration, the
Participant shall be repaid the amount of such cash or other consideration. No
fractional shares of Stock shall be issued or delivered pursuant to the Plan or
any Award. The Committee shall determine whether cash, other Awards or other
property shall be issued or paid in lieu of such fractional shares or whether
such fractional shares or any rights thereto shall be forfeited or otherwise
eliminated.

         (j) GOVERNING LAW. The validity, construction and effect of the Plan,
any rules and regulations under the Plan, and any Award agreement shall be
determined in accordance with the Delaware General Corporation Law, without
giving effect to principles of conflicts of laws, and applicable federal law.

         (k) AWARDS UNDER PREEXISTING PLANS. Upon approval of the Plan by
shareholders of the Corporation as required under Section 10(l) hereof, no
further awards shall be granted under the Preexisting Plans.

         (l) PLAN EFFECTIVE DATE AND SHAREHOLDER APPROVAL. The Plan has been
adopted by the Board effective January 8, 1997, subject to approval by the
shareholders of the Corporation. The Plan has been amended and restated
effective January 14, 1998 and further amended effective April 18, 2001.

                                       17

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