Document:

Exhibit 10.2

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT is made and entered into as of the 17th day of June,
2004, by and between NEOPHARM, INC., a Delaware corporation (the “Company”) and
GREGORY P. YOUNG (“Executive”).

 

WITNESSETH:

 

WHEREAS, the Company desires to employ the Executive and the Executive
desires to accept such employment, upon the terms and conditions hereinafter
set forth;

 

NOW, THEREFORE, in consideration of the covenants and mutual agreements
set forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby
agree as follows:

 

1.                                       Employment.  Throughout the Term (as defined in
Section 2 below), the Company shall employ Executive as provided herein,
and Executive hereby accepts such employment. 
In accepting such employment, Executive states that, to the best of his
knowledge, (i) he is not now, and by accepting such employment, will not be,
under any restrictions in the performance of the duties contemplated under this
Agreement as a result of the provisions of any prior employment agreement or
non-compete or similar agreement to which Executive is or was a party; and (ii)
he will not make use of or reveal to anyone employed by or affiliated with the
Company any information that is of a confidential or proprietary nature which
he has obtained or which has been disclosed to him as a result of his position
with any entity with which he has been previously employed or affiliated.

 

2.                                       Term of
Employment.  The term of Executive’s
employment by the Company hereunder shall commence on July 13, 2004, or
such earlier date as Executive and the Company may mutually agree (the
“Effective Date”) and shall continue thereafter unless sooner terminated as a
result of Executive’s death or in accordance with the provisions of
Section 7 below (the “Term”).

 

3.                                       Duties.  Throughout the Term, and except as otherwise
expressly provided herein, Executive shall be employed by the Company as the
President and Chief Executive Officer (“CEO”) of the Company.  In such capacity, Executive shall devote his
full time to the performance of his duties as President and CEO of the Company
in accordance with the Company’s By-laws, this Agreement and the directions of
the Company’s Board of Directors.  In
addition, the Company shall promptly appoint Executive to the Board and
thereafter nominate Executive as a nominee for election to the Board and
solicit proxies for his election for so long as this Agreement is in effect.  Without limiting the generality of the
foregoing, throughout the Term, Executive shall faithfully perform his duties
as President and CEO at all times so as to promote the best interests of the
Company.

 

 

4.                                       Compensation.

 

(a)                                  Base Salary.  For any and all services performed by Executive
under this Agreement during the Term, in whatever capacity, the Company shall
pay to Executive an annual salary of Three Hundred Twenty-Five Thousand Dollars
($325,000) per year (the “Base Salary”), less any and all applicable federal,
state and local payroll and withholding taxes. 
The Base Salary shall be paid in the same increments as the Company’s
normal payroll, but no less frequent than monthly and prorated, however, for
any period of less than a full month. 
The Salary will be reviewed annually by the Compensation Committee of
the Board of Directors and a determination shall be made at that time as to the
appropriateness of an increase, if any, thereto.

 

(b)                                 Sign-On Bonus.  If the Executive commences employment with
the Company on or before July 13, 2004, the Company will pay Executive a
sign-on bonus of Ninety-Seven Thousand Five Hundred Dollars ($97,500) (the
“Sign-on Bonus”) with such Sign-on Bonus, if earned, being paid in two
installments, with the first installment of Twenty-Five Thousand ($25,000)
being paid upon the Effective Date, with the balance of Seventy-Two Thousand
Five Hundred ($72,500) being paid in a second installment payment on
February 15, 2005.

 

(c)                                  Bonus.  In addition to the Base Salary, Executive
shall be eligible to receive from the Company an annual incentive compensation
bonus (the “Bonus”) based on a percentage of his Base Salary.  The Bonus, if any, shall be determined based
on the achievement by the Company of certain specific strategic plans and goals
(the “Performance Goals”) during the preceding calendar year (the “Measurement
Period”) as shall be determined by the Board in consultation with the
Executive.  The initial Performance
Goals will be established by the Board within ninety (90) days of Executive’s
employment hereunder.  Thereafter, the
Performance Goals for each Measurement Period shall be established as promptly
as possible in each such Measurement Period, with the expectation that the
Performance Goals be in place each year prior to distribution of the Company’s
annual proxy materials.  Following each
Measurement Period, the Compensation Committee of the Board shall review the
Performance Goals for the prior Measurement Period in light of the Company’s
actual performance during such Measurement Period as reflected on the Company’s
audited financial statements. 
Achievement of various levels of the Performance Goals shall result in
the following payments as a percentage of Salary:

 

	
  Level of Achievement

  	
   

  	
  Bonus as
  Percent of Salary

  	
   

  
	
  Below Threshold

  	
   

  	
  0

  	
  %

  
	
  Threshold Goal

  	
   

  	
  20-50

  	
  %

  
	
  Target Goal

  	
   

  	
  50

  	
  %

  
	
  Overachievement Goal

  	
   

  	
  50-80

  	
  %

  

 

Payment of each year’s Bonus, if any, shall
be made within thirty (30) days after the Company’s performance for the
Measurement Period is established on the basis of the Company’s audited
financial statements.  In addition, and
at its 

 

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sole discretion, the Board may award additional compensation to
Executive based on Executive’s contributions to the Company.  For the 2004 Measurement Period, the Bonus,
if any, shall be prorated to take into account the shortened Measurement
Period.

 

5.                                       Benefits and
Other Rights.  In consideration for
Executive’s performance under this Agreement, the Company shall provide to
Executive the following benefits:

 

(a)                                  The Company will
provide Executive with cash advances for or reimbursement of all reasonable
out-of-pocket business expenses incurred by Executive in connection with his
employment hereunder;  provided,
however, Executive adheres to any and all reasonable policies established by
the Company from time to time with respect to such reimbursements or advances,
including, but not limited to, a requirement that Executive submit supporting
evidence of any such expenses to the Company.

 

(b)                                 The Company will
provide Executive with a monthly car allowance in the amount of Six Hundred
Dollars ($600.00) subject to standard payroll withholding for taxes.

 

(c)                                  The Company will
reimburse Executive for the cost of financial and estate planning up to a
maximum of $3,000 per year.

 

(d)                                 The Company will
provide Executive and his family with the opportunity to receive group medical
coverage under the terms of the Company’s health insurance plan, but subject to
completion of normal waiting periods.  During
any such waiting period, the Company will pay, or reimburse Executive for, the
cost of COBRA coverage for Executive and his family under his prior health
plan.

 

(e)                                  During the Term the
Executive shall be entitled to four (4) weeks paid vacation, it being
understood and agreed that unused vacation shall not be carried over from one
year to the next.

 

(f)                                    During the Term
Executive shall be eligible to participate in the Company’s 401(k) program and
life insurance programs, if any, subject to satisfying any eligibility requirements
for said benefits.

 

6.                                       Options.

 

(a)                                  The Company shall
grant to Executive options pursuant to the Company’s 1998 Equity Incentive Plan
(the “Option Plan”), as amended, to purchase 250,000 shares of the Company’s
common stock (the “Initial Options”) at an option exercise price of 85% of the
Fair Market Value (as determined under the Option Plan) of the Company’s common
stock as of the Effective Date, which date shall be the date of grant of the
Initial Options for purposes of the Option Plan (the “Date of Grant”).  The Initial Options shall vest in equal
installments of 62,500 Initial Options per year on each of the first four
anniversaries of the Date of Grant.  The
Initial Options shall not be exercisable subsequent to the date ten (10)

 

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years after the Date of Grant. In all other respects the Initial
Options shall be governed by the terms and conditions of the Option Plan.

 

(b)                                 Contingent Options.  As additional consideration for Executive to
accept employment, and as an incentive to enhance the performance of the
Company, the Company will reserve an additional 350,000 options under the
Option Plan (the “Contingent Options”) for possible grant to Executive upon
satisfaction of the following conditions to grant:

 

(i)                                     If during the
Term, the closing stock price for the Company’s common stock as reported in the
Wall Street Journal, or if the Wall Street Journal shall not then be published,
such other national business paper as shall be selected by the Company, on the
National Association of Securities Dealers Inc.’s Nasdaq National Market, or,
if the Company’s common stock is not then traded on the Nasdaq National Market,
such other market which the Company may hereafter designate as the principal trading
market for the Company’s common stock (the “Trading Market”) is: (x) in excess
of $18.00 per share for ten (10) consecutive “Trading Days” (as used herein
Trading Days shall mean days when the Trading Market is open for business and
the common shares of the Company are actively traded), the Company will
promptly thereafter grant to Executive 50,000 additional options at an exercise
price equal to the Fair Market Value of the Company’s common stock at the date
of grant of such options, with such options vesting at the rate of 12,500
options per year on each of the next four anniversaries of the date of grant in
accordance with the terms of the Option Plan, (y) in excess of $25.00 per share
for ten (10) consecutive Trading Days, the Company will promptly grant to
Executive another 50,000 options at an exercise price equal to the Fair Market
Value of the Company’s common stock at the date of grant of such options, with
such options vesting at the rate of 12,500 options per year on each of the next
four anniversaries of the date of grant in accordance with the terms of the
Option Plan, and (z) in excess of $35.00 per share for ten (10) consecutive
Trading Days, the Company will promptly grant to Executive an additional
250,000 options at an exercise price equal to the Fair Market Value of the
Company’s common stock at the date of grant of such options, with none of such
250,000 options, however, vesting until the third anniversary of the date of
grant.

 

(ii)                                  All of the Contingent
Options, and the target stock prices for the grant of such Contingent Options
as set forth in § 6(b)(i) shall be adjusted, if necessary, to accurately
and equitably reflect any stock dividends, stock splits or other stock
adjustments that may be announced from time to time by the Company during the
Term.

 

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7.                                       Termination
of the Term.

 

(a)                                  The Company shall
have the right to terminate the Term under the following circumstances:

 

(i)                                     Executive shall
die;

 

(ii)                                  With or without
Cause, as herein defined, effective upon written notice to Executive by the
Company; or,

 

(iii)                               Upon or within one (1)
year following a Change of Control, as herein defined.

 

(b)                                 Executive  shall have the right to terminate the Term
under the following circumstances:

 

(i)                                     At any time upon
sixty (60) days prior written notice to the Company; or

 

(ii)                                  For Good Reason, as
herein defined, upon or within one (1) year following a Change of Control.

 

(c)                                  For purposes of this
Agreement, “Cause” shall mean:

 

(i)                                     Executive shall be
convicted of the commission of a felony or a crime involving dishonesty, fraud
or moral turpitude;

 

(ii)                                  Executive has engaged
in acts of fraud, embezzlement, theft or other dishonest acts against the
Company;

 

(iii)                               Executive commits an act
which negatively impacts the Company or its employees including, but not
limited to, engaging in competition with the Company, disclosing confidential
information or engaging in sexual harassment, discrimination or other human
rights-type violations;

 

(iv)                              Executive’s gross neglect
or willful misconduct in the discharge of his duties and responsibilities; or

 

(v)                                 Executive’s repeated
refusal to follow the lawful direction of the Board of Directors or supervising
officers.

 

(d)                                 For purposes of this
Agreement, “Change of Control” shall mean the occurrence of any of the
following:

 

(i)                                     The acquisition
(other than by a direct purchase of shares from the Company) by any “person,”
including a “syndication” or “group”, as those terms are used in
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (other than any such person currently owning in

 

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excess of the following amount), of securities representing 20% or more
of the combined voting power of the Company’s then outstanding voting
securities, which is any security that ordinarily possesses the power to vote
in the election of the Board of Directors of a corporation without the
happening of any precondition or contingency;

 

(ii)           The Company is merged or consolidated with
another corporation and immediately after giving effect to the merger or
consolidation less than 80% of the outstanding voting securities of the
surviving or resulting entity are then beneficially owned in the aggregate by
(x) the stockholders of the Company immediately prior to such merger or
consolidation, or (y) if a record date has been set to determinate the
stockholders of the Company entitled to vote on such merger or consolidation,
the stockholders of the Company as of such record date;

 

(iii)          If at any time during a calendar year a
majority of the directors of the Company are not persons who were directors at
the beginning of the calendar year or are not persons who were nominated or
approved for election by a majority of directors who were directors at the
beginning of the year (or are deemed to have been in office as of such date
through the prior operation of this provision); or

 

(iv)          The Company transfers substantially all of
its assets to another corporation which is a less than 80% owned subsidiary of
the Company.

 

(e)                                  For purposes of this
Agreement, “Good Reason” shall mean the occurrence of any one or more of the
following events which continues uncured for a period of not less than thirty
(30) days following written notice given by the Executive to the Company within
fifteen (15) days following the occurrence of such event, unless the Executive
specifically agrees in writing that such event shall not be Good Reason:

 

(i)                                     Any material
breach of this Agreement by the Company;

 

(ii)                                  Any failure to
continue the Executive as an executive officer of the Company;

 

(iii)                               The requirement by the
Company that Executive perform his services hereunder primarily at a location
outside of the metropolitan Chicago, Illinois area; or

 

(iv)                              The reduction of the
Employee’s Base Salary below the amount set forth in Section 4(a) above
without the written consent of Executive.

 

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8.                                       Effect of
Expiration or Termination of the Term. 
Promptly following the termination of the Term, and except otherwise
expressly agreed to by the Company, Executive shall:

 

(a)                                  Immediately resign
from any and all other positions or committees which Executive holds or is a
member of with the Company or any subsidiary of the Company, including, but not
limited to, as an officer and director of the Company or any subsidiary of the
Company.

 

(b)                                 Provide the Company
with all reasonable assistance necessary to permit the Company to continue its
business operations without interruption and in a manner consistent with
reasonable business practices; provided, however, that such transition period
shall not exceed thirty (30) days after termination nor require more than
twenty (20) hours of Executive’s time per week and Executive shall be promptly
reimbursed for all out-of-pocket expenses.

 

(c)                                  Deliver to the
Company possession of any and all property owned or leased by the Company which
may then be in Executive’s possession or under his control, including, without
limitation, any and all such keys, credit cards, automobiles, equipment,
supplies, books, records, files, computer equipment, computer software and
other such tangible and intangible property of any description whatsoever.  If, following the expiration or termination
of the Term, Executive shall receive any mail addressed to the Company, then
Executive shall immediately deliver such mail, unopened and in its original
envelope or package, to the Company;

 

(d)                                 Other than as
specifically provided in this Section 8, upon a termination of employment
all other benefits and/or entitlements to participate in programs or benefits,
if any, will cease as of the effective date of such termination

 

(e)                                  Upon termination of
the Executive pursuant to § 7(a)(ii), without Cause, following the six (6)
month anniversary of the Effective Date, the Company shall provide Executive
with Base Salary continuance, subject to § 8(h), for twelve (12) months (a
“Salary Continuance”) at the rate in effect immediately prior to termination.

 

(f)                                    Upon termination of
Executive pursuant to § 7(a)(i) and § 7(a)(ii) with Cause or
§ 7(b)(i), the Company shall pay Executive or Executive’s estate all Base
Salary accrued, but unpaid, as of the date of such termination.

 

(g)                                 Upon termination of
Executive pursuant to §7(a)(iii) or § 7(b)(ii), the Company shall:  (i) provide Executive with Salary
Continuance for twelve (12) months at the rate in effect immediately prior to
termination, plus (ii) a lump sum payment equal to one hundred percent (100%)
of the Bonus, if any, paid to Executive for the calendar year immediately
preceding such termination, plus (iii) all of Executive’s then unvested
options, if any, previously issued pursuant to the Option Plan shall
immediately vest and be exercisable as provided in the Option Plan.

 

7

 

(h)                                 In the event that
Executive shall be entitled to receive a Salary Continuance pursuant to
§ 8(e), such Salary Continuance shall continue only until such time as
Executive shall have accepted another full-time position.  In addition, in the event that Executive
shall perform consulting or other services during the period he is receiving
any Salary Continuance for which he shall receive compensation, all
compensation shall be reported to the Company and shall be offset against any
remaining Salary Continuance payments. 
Failure of Executive to promptly report the receipt of any compensation
from a third party or the acceptance of a new position shall entitle the
Company to terminate all remaining Salary Continuance and to seek restitution
for any payments made to Executive subsequent to such job acceptance or
compensation receipt.

 

(i)                                     Any Salary
Continuance payments shall be made in accordance with the usual payroll
practices which were applicable prior to termination. Except as otherwise
specifically set forth herein, any and all payments made pursuant to this
Agreement shall be net of any and all applicable federal, state and local
payroll and withholding taxes.

 

(j)                                     If the Company or
the Company’s accountants determine that the payments called for under
Section 8(g) of this Agreement either alone or in conjunction with any
other payments or benefits made available to the Executive by the Company will
result in the Executive being subject to an excise tax (“Excise Tax”) under
Section 4999 of the Internal Revenue Code of 1986, as amended (the
“Code”), or if an Excise Tax is assessed against Executive as a result of such
payments or other benefits, the Company shall make a Gross-Up Payment (as defined
below) to or on behalf of Executive as and when such determination(s) and
assessments(s), as appropriate, are made, subject to the conditions of this
subsection (j).  A “Gross-Up
Payment” shall mean a payment to or on behalf of Executive that shall be
sufficient to pay (i) any Excise Tax in full, (ii) any federal, state and local
income tax and Social Security or other employment tax on the payment made to
pay such Excise Tax as well as any additional Excise Tax on the Gross-Up
Payment, and (iii) any interest or penalties assessed by the Internal Revenue
Service on Executive if such interest or penalties are attributable to the
Company’s failure to comply with its obligations under this subsection (j)
or applicable law.  Any determination
under this subsection (j) by the Company or the Company’s accountants
shall be made in accordance with Section 280G of the Code, any applicable
related regulations (whether proposed, temporary or final), any related
Internal Revenue Service rulings and any related case law, and shall assume
that Executive shall pay Federal income taxes at the highest marginal rate in
effect for the year in which the Gross-Up Payment is made and state and local
income taxes at the highest marginal rate in effect in the state of Executive’s
residence for such year.  Executive
shall take such action (other than waiving Executive’s right to any payments or
benefits) as the Company reasonably requests under the circumstances to
mitigate or challenge such tax.  If the
Company reasonably requests that Executive take action to mitigate or
challenge, or to mitigate and challenge, any such tax or assessment and
Executive complies with such request, the Company shall provide Executive with
such information and such expert advice and assistance from the Company’s
accountants, lawyers and other advisors as Executive may reasonably request and
shall pay for all expenses

 

8

 

incurred in effecting such compliance and any related fines, penalties,
interest and other assessments.  Subject
to the provisions of this subsection (j), all determinations required to
be made under this subsection (j), including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made, after
receiving the prior approval of the Audit Committee of the Board of Directors,
by the public accounting firm that is retained by the Company as of the date
immediately prior to the Change of Control (the “Accounting Firm”) which shall
provide detailed supporting calculations both to the Company and Executive
within thirty (30) business days of receipt of notice from the Company or
Executive that there has been a payment that could trigger a Gross-Up Payment,
or such earlier time as is requested by the Company (collectively the
“Determination”).  In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change of Control, or in the event that the Audit
Committee of the Board of Directors shall not approve of the accountants’
performing such services, Executive may appoint another nationally recognized
public accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm
hereunder).  All fees and expenses of
the Accounting Firm shall be borne solely by the Company and the Company shall
enter into any agreement requested by the Accounting Firm in connection with
the performance of the services hereunder. 
The Gross-Up Payment under this subsection (j) with respect to any
payments shall be made no later than sixty (60) days following such payments.  If the Accounting Firm determines that no
Excise Tax is payable by Executive, it shall furnish Executive with a written
opinion to such effect, and to the effect that failure to report the Excise
Tax, if any, on Executive’s applicable federal income tax return will not
result in the imposition of a negligence or similar penalty.  The Determination by the Accounting Firm
shall be binding upon the Company and Executive.  As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the Determination, it is possible
that the Gross-Up Payments which will not have been made by the Company should
have been made (“Underpayment”) or Gross-Up Payments are made by the Company
which should not have been made (“Overpayment”), consistent with the
calculations required to be made hereunder. 
In the event that Executive thereafter is required to make payment of
any additional Excise Tax, the Accounting Firm shall determine the amount of
the Underpayment that has occurred and any such Underpayment (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall
be promptly paid by the Company to or for the benefit of Executive.  In the event the amount of the Gross-Up
Payment exceeds the amount necessary to reimburse Executive for his Excise Tax
as herein set forth, the Accounting Firm shall determine the amount of the
Overpayment that has been made and any such Overpayment (together with interest
at the rate provided in Section 1274(b)(2) of the Code) shall be promptly
paid by Executive to or for the benefit of the Company.  Executive shall cooperate, to the extent
Executive’s expenses are reimbursed by the Company, with any reasonable
requests by the Company in connection with any contests or disputes with the
Internal Revenue Service in connection with the Excise Tax.

 

9

 

9.                                       Restrictive
Covenants for Executive.  Executive
hereby covenants and agrees with the Company that for so long as Executive is
employed by the Company and for a period (the “Restricted Period”) of twelve
(12) months after the termination of such employment for any reason, Executive
shall not, without the prior written consent of the Company, which consent
shall be within the sole and exclusive discretion of the Company, either
directly or indirectly, on his own account or as an executive, consultant,
agent, partner, joint venturer, owner, officer, director or shareholder of any
other person, firm, corporation, partnership, limited liability company or
other entity:

 

(a)                                  Perform services for
the Competing Business, as hereinafter defined, that are substantially similar
in whole or in part to those that he performed for the Company in his role as
President and CEO, including specifically, but not limited to, the research,
development, sale or marketing of drug or non-drug products or the management
of individuals involved in the research, development, sale or marketing of drug
or non-drug products.  For purposes of
this covenant, the term “Competing Business” shall mean any entity engaged in
the research, development, marketing or sale of drug and nondrug products which
are competitive with:  (1) those
products being marketed by the Company at the time of Executive’s termination;
or (2) those products that Executive was aware were under research and
development by the Company and expected to be marketed within four years of
Executive’s termination.  This covenant
shall apply only within the “Territory” which is defined as the fifty states of
the United States.  Executive recognizes
and agrees that in capacity of President and CEO, his duties extend throughout
the entire service area of the Company which includes, at a minimum, the fifty
states of the United States and that, because of the executive nature of
Executive’s position with the Company, in order to afford the Company
protection from unfair competition by the Executive following his termination
of employment, this covenant must extend throughout the stated Territory.  Executive further acknowledges that this
covenant does not prohibit him from engaging in his entire trade or business
but only a very limited segment of the pharmaceuticals industry;

 

(b)                                 Solicit any current
supplier, customer, employee, or client of the Company with whom Executive
dealt, or with whom anyone in Executive’s direct chain of command dealt, on
behalf of the Company within the year preceding Executive’s termination of
employment, for the purpose of researching, developing or purchasing, selling
or marketing drug or non-drug products, which are competitive with:  (1) those products being marketed by the
Company at the time of Executive’s termination; or (2) those products that
Executive was aware were under development by the Company and expected to be
marketed within four years of Executive’s termination;

 

(c)                                  All ideas,
inventions, trademarks, and other developments or improvements conceived or
developed by the Executive, alone or with others, during the term of this
Agreement, whether or not during working hours that are within the scope of the
Company’s business operations, or that relate to any Company work or projects,
shall be conclusively presumed to have been created for or on behalf of

 

10

 

the Company as part of the Executive’s services to the Company
(“Development”).  Executive shall disclose
promptly to Company any and all such Developments.  Such Developments are the exclusive property of the Company
without the payment of consideration therefore, and the Executive hereby
transfers, assigns and conveys all of the Executive’s right, title and interest
in any such Developments to the Company and agrees to execute and deliver any
documents that the Company deems necessary to effect such transfer on the
demand of the Company.  The Executive
agrees to assist the Company, at its expense, to obtain patents on any such
patentable Developments, and agrees to execute all documents necessary to
obtain such patents in the name of the Company.  This Agreement does not apply to any invention for which no equipment,
supplies, facility or trade secret information of the Company was used and
which was developed entirely on the Executive’s own time unless:  (1) the invention relates (a) to the
business of the Company or (b) to the Company’s actual demonstratively anticipated
research and development, or (2) the invention results from any work performed
by the Executive for the Company.

 

(d)                                 Executive recognizes
and understands that Executive’s duties at the Company may include the
preparation of materials, including written or graphic materials and other Developments,
and that any such materials conceived or written by Executive shall be deemed a
“work made for hire” as defined and used in the Federal Copyright Act, 17
U.S.C. § 101.  In the event of
publication of such materials, Executive understands that since such work is
“work made for hire,” the Company shall solely retain and own all rights in
such materials, including any right of copyright.

 

10.                                 Confidentiality.  The Executive acknowledges that during the
period of his employment by the Company, and in his performance of services
hereunder, he will be placed in a relationship of trust and confidence
regarding the Company and its affairs. 
In the course of and due to that relationship he will have contact with
the Company’s customers, suppliers, affiliates, and distributors and their
personnel.  In the course of the
aforesaid relationship, he will have access to and will acquire confidential
information relating to the business and operations of the Company, including,
without limitation, information relating to processes, plans and methods of
operation of the Company.  The Executive
acknowledges that any such information that is not a trade secret, nonetheless
constitutes confidential information as between himself and the Company, that
the disclosure thereof (or of any information which he knows relates to
confidential, trade, or other secret aspects of the Company’s business) would
cause substantial loss to the goodwill of the Company, and will continue to be
made known to Executive only because of the position of trust and confidence
which he will continue to occupy hereunder. 
In view of the foregoing, and in consideration of the covenants and
premises of this Agreement, the Executive agrees that he will not, at any time
during the term of his employment, and for a period of twelve months
thereafter, disclose to any person, firm or company any trade secrets or
confidential information or such ideas which he may have acquired or developed
or may acquire or develop relating to the business of the Company while serving
the Company as an executive.

 

11

 

11.                                 Remedies.

 

(a)                                  The covenants of
Executive set forth in Sections 9 and 10 are separate and independent covenants
for which valuable consideration has been paid, the receipt, adequacy and
sufficiency of which are acknowledged by Executive, and have also been made by
Executive to induce the Company to enter into this Agreement.  Each of the aforesaid covenants may be availed
of, or relied upon, by the Company in any court of competent jurisdiction, and
shall form the basis of injunctive relief and damages including expenses of
litigation (including, but not limited to, reasonable attorney’s fees upon
trial and appeal) suffered by the Company arising out of any breach of the
aforesaid covenants by Executive.  The
covenants of Executive set forth in this Agreement are cumulative to each other
and to all other covenants of Executive in favor of the Company contained in
this Agreement and shall survive the termination of this Agreement for the
purposes intended.

 

(b)                                 Each of the covenants
contained in Sections 9 and 10 above shall be construed as agreements which are
independent of any other provision of this Agreement, and the existence of any
claim or cause of action by any party hereto against any other party hereto, of
whatever nature, shall not constitute a defense to the enforcement of such
covenants.  If any of such covenants
shall be deemed unenforceable by virtue of its scope in terms of geographical
area, length of time or otherwise, but may be made enforceable by the
imposition of limitations thereon, Executive agrees that the same shall be
enforceable to the fullest extent permissible under the laws and public
policies of the jurisdiction in which enforcement is sought.  The parties hereto hereby authorize any
court of competent jurisdiction to modify or reduce the scope of such covenants
to the extent necessary to make such covenants enforceable.

 

(c)                                  In the event that
Executive believes that the Company is in violation of a material obligation
owed to Executive under this Agreement, and the Executive has given notice of
such violation to the Company requesting that the Company cure such violation,
and within twenty (20) business days the Company has not undertaken steps to
cure such violation or to provide information to Executive demonstrating that
the Company is not in violation of the Agreement, and as a result of such
failure to cure or dispute such violation, the Executive terminates the
Agreement in accordance with Section 7(b), Executive shall not be barred
from seeking employment with a competitor notwithstanding the restriction of
Section 9(a); provided, however, that all other restrictions contained in
this Agreement, including, but not limited to, the covenants in
Section 9(a) and in Section 10, shall remain in full force and
effect.

 

12.                                 Enforcement Costs.  If any legal action or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged
dispute, breach, default or misrepresentation in connection with any provisions
of this Agreement, the successful or prevailing party or parties shall be
entitled to recover reasonable attorney’s fees, court costs and all expenses
even if not taxable as court costs (including, without limitation, all such
fees, costs and expenses incident to appeal and other post-judgment
proceedings),

 

12

 

incurred in that action or proceeding, in addition to any other relief
to which such party or parties may be entitled.  Attorney’s fees shall include, without limitation, paralegal
fees, investigative fees, administrative costs, sales and use taxes and all
other charges billed by the attorney to the prevailing party.

 

13.                                 Indemnification.  The Company covenants and agrees that, to
the extent permitted by applicable law, it will indemnify and hold Executive
harmless from any and all liability, loss, damage, cost and expense (including
reasonable attorneys’ fees) which Executive may incur, suffer or be required to
pay and which result from or arise in connection with any act by the Company,
or on the Company’s behalf by any of the Company’s officers, directors,
employees, consultants, representatives or agents, which act occurred prior to
the Effective Date and in which Executive did not, directly or indirectly,
participate.

 

14.                                 Notices.  Any and all notices necessary or desirable
to be served hereunder shall be in writing and shall be

 

(a)                                  personally delivered,
or

 

(b)                                 sent by certified
mail, postage prepaid, return receipt requested, or guaranteed overnight
delivery by a nationally recognized express delivery company, in each case
addressed to the intended recipient at the address set forth below.

 

(c)                                  For notices sent to
the Company:

 

NeoPharm, Inc.

150 Field Drive, Suite 195

Lake Forest, Illinois 60045

 

Telephone No.: (847) 295-8678

Facsimile No.: (847) 295-8654

 

(d)                                 For
notices sent to Executive:

 

Mr. Gregory P. Young

 

 

 

Either party hereto may amend the addresses for notices to such party
hereunder by delivery of a written notice thereof served upon the other party
hereto as provided herein.  Any notice
sent by certified mail as provided above shall be deemed delivered on the third
(3rd) business day next following the postmark date which it bears.

 

15.                                 Entire Agreement.  This Agreement sets forth the entire
agreement of the parties hereto with respect to the subject matter hereof, and
all prior negotiations, agreements and understandings are merged herein.  This Agreement may not be modified or
revised except pursuant to a written instrument signed by the party against
whom enforcement is sought.

 

13

 

16.                                 Severability.  The invalidity or unenforceability of any
provision hereof shall not affect the enforceability of any other provision
hereof, and except as otherwise provided in Section 11 above, any such
invalid or unenforceable provision shall be severed from this Agreement.

 

17.                                 Waiver. Failure
to insist upon strict compliance with any of the terms or conditions hereof
shall not be deemed a waiver or such term or condition, and the waiver or
relinquishment of any right or remedy hereunder at any one or more times shall
not be deemed a waiver or relinquishment of such right or remedy at any other
time or times.

 

18.                                 Governing Law.  This Agreement and the rights and
obligations of the parties hereto shall be governed by and construed in
accordance with the laws of the State of Illinois, without regard to its
conflicts of laws provisions.  Each
party hereto hereby (a) agrees that any litigation which may be initiated with
respect to this Agreement or to enforce rights granted hereunder shall be
initiated in a court located in Cook County, Illinois and (b) consents to
personal jurisdiction of such courts for such purpose.

 

19.                                 Benefit and
Assignability. This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.  The rights and obligations of Executive hereunder are personal to
him, and are not subject to voluntary or involuntary alienation, transfer,
delegation or assignment.

 

[SIGNATURE PAGE FOLLOWS]

 

14

 

IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the day and year first above written.

 

	
   

  	
  NEOPHARM, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  s/ Erick E. Hanson

  	
   

  
	
   

  	
  Its:

  	
  Chairman of the Corp. Gov. Committe

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  s/ Gregory P. Young

  	
   

  
	
   

  	
  GREGORY P. YOUNG

  
					

 

15EXHIBIT
10.1

 

 

 

2004
EQUITY INCENTIVE PLAN

 

 

Adopted May 7, 2004

 

 

TABLE
OF CONTENTS

 

	
  1.

  	
  Purpose

  	
   

  
	
   

  	
   

  	
   

  
	
  2

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Annual Meeting

  	
   

  
	
   

  	
  Appreciation
  Right

  	
   

  
	
   

  	
  Board

  	
   

  
	
   

  	
  Change in
  Control

  	
   

  
	
   

  	
  Code

  	
   

  
	
   

  	
  Common Shares

  	
   

  
	
   

  	
  Covered
  Employee

  	
   

  
	
   

  	
  Date of Grant

  	
   

  
	
   

  	
  Deferral
  Period

  	
   

  
	
   

  	
  Deferred
  Shares

  	
   

  
	
   

  	
  Designated
  Subsidiary

  	
   

  
	
   

  	
  Effective Date

  	
   

  
	
   

  	
  Evidence
  of Award

  	
   

  
	
   

  	
  Exchange Act

  	
   

  
	
   

  	
  Incentive
  Stock Options

  	
   

  
	
   

  	
  Management
  Objectives

  	
   

  
	
   

  	
  Market
  Value per Share

  	
   

  
	
   

  	
  Non-Employee
  Director

  	
   

  
	
   

  	
  Optionee

  	
   

  
	
   

  	
  Option Price

  	
   

  
	
   

  	
  Option Right

  	
   

  
	
   

  	
  Participant

  	
   

  
	
   

  	
  Restricted
  Shares

  	
   

  
	
   

  	
  Retirement

  	
   

  
	
   

  	
  Rule 16b-3

  	
   

  
	
   

  	
  Securities Act

  	
   

  
	
   

  	
  Spread

  	
   

  
	
   

  	
  Subsidiary

  	
   

  
	
   

  	
  Termination
  for Cause

  	
   

  
	
   

  	
  Voting Shares

  	
   

  
	
   

  	
  Year of
  Service

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Shares Available Under
  the Plan

  	
   

  
	
   

  	
   

  	
   

  
	
  4

  	
  Option Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Appreciation
  Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Restricted
  Shares

  	
   

  

 

 

	
  7.

  	
  Deferred
  Shares

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Awards to Non-Employee
  Directors

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Transferability

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Adjustments

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Change in
  Control

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Fractional
  Shares

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Withholding
  Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Participation
  by Employees of Designated Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  Foreign
  Employees

  	
   

  
	
   

  	
   

  	
   

  
	
  16.

  	
  Administration of the Plan

  	
   

  
	
   

  	
   

  	
   

  
	
  17.

  	
  Governing Law

  	
   

  
	
   

  	
   

  	
   

  
	
  18.

  	
  Amendments,
  Etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  19.

  	
  Termination

  	
   

  

 

ii

 

WASHINGTON
GROUP INTERNATIONAL, INC.

 

2004
EQUITY INCENTIVE PLAN

 

1.                                       Purpose.  The
purpose of the 2004 Equity Incentive Plan (this “Plan”) is to attract and retain
directors, officers and key employees for Washington Group International, Inc.
(the “Corporation”) and its Subsidiaries and to provide to such persons
incentives and rewards for superior performance.

 

2.                                       Definitions.  As used in this Plan:

 

“Annual
Meeting”  means the annual meeting
of stockholders of the Corporation.

 

“Appreciation Right” means a right granted pursuant
to Section 5 of this Plan.

 

“Board”
means the Board of Directors of the Corporation and, to the extent of any
delegation by the Board to a committee (or subcommittee thereof) pursuant to
Section 16 of this Plan, such committee (or subcommittee thereof).

 

“Change in Control” shall have the meaning provided
in Section 11 of this Plan.

 

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

 

“Common
Shares” means shares of common stock, par value $.01 per share, of the
Corporation or any security into which such shares of common stock may be
changed by reason of any transaction or event of the type referred to in Section 10
of this Plan.

 

“Covered Employee” means a Participant who is, or
who the Board determines may eventually become, a “covered employee” within the
meaning of Section 162(m) of the Code (or any successor provision).

 

“Date
of Grant” means the date specified by the Board on which a grant of Option
Rights, Appreciation Rights or a grant or sale of Restricted Shares or Deferred
Shares shall become effective (which date shall not be earlier than the date on
which the Board takes action with respect thereto) and shall also include the
date on which a grant of Option Rights to a Non-Employee Director becomes
effective pursuant to Section 8 of this Plan.

 

“Deferral Period” means the period of time during
which Deferred Shares are subject to deferral limitations under Section 7
of this Plan.

 

“Deferred Shares” means an award made pursuant to
Section 7 or Section 8 of this Plan of the right to receive Common
Shares at the end of a specified Deferral Period.

 

“Designated Subsidiary” means a Subsidiary that
is (a) not a corporation or (b) a corporation in which at the time
the Corporation owns or controls, directly or indirectly, less than 80% of the
total combined voting power represented by all classes of stock issued by such
corporation.

 

1

 

“Effective Date” means the date this Plan is approved
by the Corporation’s shareholders.

 

“Evidence of Award” means an agreement, certificate,
resolution or other type of writing or other evidence approved by the Board
which sets forth the terms and conditions of the Option Rights, Appreciation
Rights, Restricted Shares, Deferred Shares or other awards.  An Evidence of Award may be in an electronic
medium, may be limited to a notation on the books and records of the
Corporation and, with the approval of the Board (or committee or subcommittee
thereof delegated pursuant to Section 16 of this Plan), need not be signed
by a representative of the Corporation or a Participant.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder, as such law, rules and regulations may be amended
from time to time.

 

“Incentive Stock Options” means Option Rights
that are intended to qualify as “incentive stock options” under
Section 422 of the Code or any successor provision.

 

“Management Objectives” means the measurable
performance objective or objectives established pursuant to this Plan, when
determined by the Board to be applicable for Participants who have received
grants of Option Rights, Appreciation Rights, Restricted Shares and dividend
credits pursuant to this Plan. 
Management Objectives may be described in terms of Corporation-wide
objectives or objectives that are related to the performance of the individual
Participant or of the Subsidiary, division, department, region or function
within the Corporation or Subsidiary in which the Participant is employed.  The Management Objectives may be made
relative to the performance of other corporations.  The Management Objectives applicable to any award to a Covered
Employee shall be based on specified levels of or growth in one or more of the
following criteria:

 

1.                                       earnings;

 

2.                                       earnings
per share (earnings per share will be calculated without regard to any change
in accounting standards that may be required by the Financial Accounting
Standards Board after the goal is established);

 

3.                                       share
price;

 

4.                                       total
shareholder return;

 

5.                                       return
on invested capital, equity, or assets;

 

6.                                       operating
earnings;

 

7.                                       sales
growth;

 

8.                                       productivity
improvement;

 

2

 

If the Board determines
that a change in the business, operations, corporate structure or capital
structure of the Corporation, or the manner in which it conducts its business,
or other events or circumstances render the Management Objectives unsuitable,
the Board may in its discretion modify such Management Objectives or the
related minimum acceptable level of achievement, in whole or in part, as the
Board deems appropriate and equitable, except in the case of a Covered Employee
where such action would result in the loss of the otherwise available exemption
under Section 162(m) of the Code. 
In such case, the Board shall not make any modification of the Management
Objectives or minimum acceptable level of achievement.

 

“Market Value per Share” means, as of any
particular date, the closing sale price per Common Share on the national
securities exchange on which the Common Shares are then listed, the final
reported bid sale price per Common Share on the principal national automated
system which the Common Shares are then quoted or, if the Common Shares are not
then listed or quoted, the fair market value of the Common Shares as determined
by the Board.

 

“Non-Employee Director” means a Director of the
Corporation who is not an employee of the Corporation or any Subsidiary.

 

“Optionee”
means the optionee named in an Evidence of Award evidencing an outstanding
Option Right.

 

“Option
Price” means the purchase price payable on exercise of an Option Right.

 

“Option
Right” means the right to purchase Common Shares upon exercise of an option
granted pursuant to Section 4 or Section 8 of this Plan.

 

“Participant”
means a person who is selected by the Board to receive benefits under this Plan
and who is at the time an officer or other key employee of the Corporation or
any one or more of its Subsidiaries, or who has agreed to commence serving in
any of such capacities within 90 days of the Date of Grant, and shall also
include each Non-Employee Director who receives an award of Appreciation Rights
pursuant to Section 5 of this Plan, an award of Restricted Shares pursuant
to Section 6 of this Plan, an award of Deferred Shares pursuant to
Section 7 of this Plan, or an award of Option Rights pursuant to Section 8
of this Plan; provided, however, that for purposes of Section 4 of this
Plan, Participant shall not include such Non-Employee Director.

 

“Restricted Shares” means Common Shares granted or
sold pursuant to Section 6 or Section 8 of this Plan as to which
neither the substantial risk of forfeiture nor the prohibition on transfers
referred to in such Section 6 has expired.

 

“Retirement”
means a termination of employment with the Corporation and its Subsidiaries at
or after the attainment of (a) age 65, (b) age 55 with at least ten Years of
Service, or (c) 30 Years of Service.

 

“Rule
l6b-3” means Rule 16b-3 of the Securities and Exchange Commission (or any
successor rule to the same effect) as in effect from time to time.

 

3

 

“Securities Act” means the Securities Act of 1933, as
amended, and the rules and regulations thereunder, as such law, rules and
regulations may be amended from time to time.

 

“Spread”
means the excess of the Market Value per Share of the Common Shares on the date
when an Appreciation Right is exercised, or on the date when Option Rights are
surrendered in payment of the Option Price of other Option Rights, over the
Option Price provided for in the related Option Right.

 

“Subsidiary”
means a corporation, company or other entity (a) more than 50% of whose
outstanding shares or securities (representing the right to vote for the
election of directors or other managing authority) are, or (b) that does
not have outstanding shares or securities (as may be the case in a partnership,
joint venture or unincorporated association), but more than 50% of whose
ownership interest representing the right generally to make decisions for such
other entity is, now or hereafter, owned or controlled, directly or indirectly,
by the Corporation except that for purposes of determining whether any person
may be a Participant for purposes of any grant of Incentive Stock Options,
“Subsidiary” means any corporation in which at the time the Corporation owns or
controls, directly or indirectly, more than 50% of the total combined voting
power represented by all classes of stock issued by such corporation.

 

“Termination for Cause” means a termination of a
Participant’s employment following:

 

(a)                                  the
determination by the Corporation or the Board that the Participant has ceased
to perform his duties to the Corporation (other than as a result of his
incapacity due to physical or mental illness or injury), which failure amounts
to an intentional or extended neglect of his duties to the Corporation, or

(b)                                 the
Corporation’s or Board’s determination that the Participant has engaged in or
is about to engage in conduct materially injurious to the Corporation, or

(c)                                  the
Participant having been convicted of, or plead guilty or no contest to, a felony
or the failure of the Participant to follow instruction of the Board or his
direct superiors.

 

“Voting Shares” means at any time, the
then-outstanding securities entitled to vote generally in the election of
directors of the Corporation.

 

“Year of Service” means a year of service as defined
pursuant to the Washington Group International, Inc. 401(k) Retirement Savings
Plan (or any successor plan thereto) for vesting purposes.

 

3.                                      Shares Available Under the Plan.

 

(a)                                  Subject
to adjustment as provided in Section 10 of this Plan, the number of Common
Shares that may be issued or transferred (i) upon the exercise of Option
Rights or Appreciation Rights, (ii) as Restricted Shares and released from
substantial risks of forfeiture thereof, (iii) as Deferred Shares,
(iv) as awards to Non-Employee Directors or (v) in payment of dividend
equivalents paid with respect to awards made under the Plan shall not exceed in
the aggregate 2,400,000

 

4

 

shares plus any shares relating to awards that expire or are forfeited
or cancelled.  Such shares may be shares
of original issuance or treasury shares or a combination of the foregoing.  Upon the payment of any Option Price by the
transfer to the Corporation of Common Shares or upon satisfaction of any
withholding amount by means of transfer or relinquishment of Common Shares,
there shall be deemed to have been issued or transferred under this Plan only
the net number of Common Shares actually issued or transferred by the Corporation.

 

(b)                                 Notwithstanding
anything in this Section 3, or elsewhere in this Plan, to the contrary,
the aggregate number of Common Shares actually issued or transferred by the
Corporation under this Plan in connection with any awards other than Option
Rights and Appreciation Rights shall not exceed 400,000 shares.  Further, no Participant shall be granted
Option Rights for more than 300,000 Common Shares during any calendar year,
subject to adjustments as provided in Section 10 of this Plan.

 

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

 

(d)                                 Notwithstanding
any other provision of this Plan to the contrary, in no event shall any
Participant in any calendar year receive more than 300,000 Appreciation Rights,
subject to adjustments as provided in Section 10 of this Plan.

 

(e)                            Notwithstanding
any other provision of this Plan to the contrary, in no event shall any
Participant in any calendar year receive more than 200,000 Restricted Shares or
200,000 Deferred Shares, subject to adjustments as provided in Section 10
of this Plan.

 

4.                                      Option Rights.  The Board may, from time to time and upon
such terms and conditions as it may determine, authorize the granting to
Participants of options to purchase Common Shares.  Each such grant may utilize any or all of the authorizations, and
shall be subject to all of the requirements, contained in the following
provisions:

 

(a)                                  Each
grant shall specify the number of Common Shares to which it pertains, subject
to the limitations set forth in Section 3 of this Plan.

 

(b)                                 Each
grant shall specify an Option Price per share, which shall be set by the Board;
provided, however, that such price shall be no less than the Market Value of a
share of Common Stock on the Date of Grant. 
In addition, except as provided in Section 10, no changes shall be
made to any Option Price after the Date of Grant without shareholder approval.

 

(c)                                  Each
such Option Right shall become exercisable as determined by the Board and set
forth in the applicable Option Rights Agreement.  Such Option rights shall become exercisable in full immediately
in the event of a  Change in
Control.  Each such Option Right granted
under this Plan shall expire no later than ten years

 

5

 

from the Date of Grant and shall be subject to earlier termination as
hereinafter provided and as set forth in the applicable Option Rights
Agreement.

 

(d)                                 Each
such Incentive Stock Option shall terminate automatically and without further
notice after the employee ceases to be an employee of the Company and its
Subsidiaries for any reason other than as described in Section 4(e) of
this Plan; provided, however, that the employee shall have until the first to
occur of (i) the stated expiration date of such Option Right or
(ii) the 90th calendar day following the effective date of any
such termination of employment to exercise Option Rights that had vested and
become exercisable as of such effective date of termination of employment to
exercise Incentive Stock Options that had vested and become exercisable as of
such effective date of termination of employment.

 

(e)                                  In
the event of the Optionee’s disability, each of the then outstanding Incentive
Stock Options of such holder may be exercised at any time within one year after
such disability, but in no event after the expiration date of the term of such
Incentive Stock Option.  In the event
of  the Optionee’s (i) death or (ii)
Retirement under a retirement plan of the company or one of its Subsidiaries at
or after the earliest voluntary retirement age provided for in such retirement
plan or retirement at any earlier age with consent of the Board, each of the
then outstanding Incentive Stock Options of such holder may be exercised at any
time within three years after such death or retirement, but in no event after
the expiration date of the term of such Incentive Stock Options.

 

(f)                                    Each
grant shall specify whether the Option Price shall be payable (i) in cash or by
check acceptable to the Corporation, (ii) by the actual or constructive
transfer to the Corporation of nonforfeitable, unrestricted Common Shares owned
for more than six months by the Optionee (or other consideration authorized
pursuant to subsection (g) below) having a value at the time of exercise
equal to the total Option Price or (iii) by a combination of such methods of
payment.

 

(g)                                 The
Board may determine, at or after the Date of Grant, that payment of the Option
Price of any option (other than an Incentive Stock Option) may also be made in
whole or in part in the form of Restricted Shares or other Common Shares that
are forfeitable or subject to restrictions on transfer, Deferred Shares or
other Option Rights (based on the Spread on the date of exercise).  Unless otherwise determined by the Board at
or after the Date of Grant, whenever any Option Price is paid in whole or in
part by means of any of the forms of consideration specified in this paragraph,
the Common Shares received upon the exercise of the Option Rights shall be
subject to such risks of forfeiture or restrictions on transfer as may
correspond to any that apply to the consideration surrendered, but only to the
extent of (i) the number of shares or (ii) the Spread of any
unexercisable portion of Option Rights surrendered.

 

(h)                                 Any
grant may provide for deferred payment of the Option Price from the proceeds of
sale through a bank or broker on a date satisfactory to the Corporation of some
or all of the shares to which such exercise relates.

 

6

 

(i)                                     Successive
grants may be made to the same Participant whether or not any Option Rights
previously granted to such Participant remain unexercised.

 

(j)                                     Any
grant of Option Rights may specify Management Objectives that must be achieved
as a condition to the exercise of such rights.

 

(k)                                  Option
Rights granted under this Plan may be (i) options, including, without
limitation, Incentive Stock Options, that are intended to qualify under
particular provisions of the Code, (ii) options that are not intended so
to qualify or (iii) combinations of the foregoing.

 

(l)                                     The
Board may, at or after the Date of Grant of any Option Rights (other than
Incentive Stock Options), provide for the payment of dividend equivalents to
the Optionee on either a current or deferred or contingent basis or may provide
that such equivalents shall be credited against the Option Price.

 

(m)                               The
exercise of an Option Right shall result in the cancellation on a
share-for-share basis of any related Appreciation Right authorized under
Section 5 of this Plan.

 

(n)                                 Each
grant of Option Rights shall be evidenced by an Option Rights Agreement, which
shall contain such terms and provisions, consistent with this Plan, as the
Board may approve.

 

(o)                                 Each
grant of Option  Rights shall be subject
to the provisions of Section 18(g) of this Plan.

 

5.                                      Appreciation Rights.  The
Board may also authorize the granting to any Optionee of Appreciation Rights in
respect of Option Rights granted hereunder at any time prior to the exercise or
termination of such related Option Rights; provided, however, that an
Appreciation Right awarded in relation to an Incentive Stock Option must be
granted concurrently with such Incentive Stock Option.  An Appreciation Right shall be a right of
the Optionee, exercisable by surrender of the related Option Right, to receive
from the Corporation an amount determined by the Board, which shall be
expressed as a percentage of the Spread (not exceeding 100%) at the time of
exercise. Each such grant may utilize any or all of the authorizations, and
shall be subject to all of the requirements, contained in the following
provisions:

 

(a)                                  Any
grant may specify that the amount payable on exercise of an Appreciation Right
may be paid by the Corporation in cash, in Common Shares or in any combination
thereof and may either grant to the Participant or retain in the Board the
right to elect among those alternatives.

 

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

 

7

 

(c)                                  Any
grant may specify waiting periods before exercise and permissible exercise
dates or periods and shall provide that no Appreciation Right may be exercised
except at a time when the related Option Right is also exercisable and at a
time when the Spread is positive.

 

(d)                                 Any
grant may specify that such Appreciation Right may be exercised only in the
event of a Change in Control or other similar transaction or event.

 

(e)                                  Each
grant of Appreciation Rights shall be evidenced by an Evidence of Award that
shall describe such Appreciation Rights, identify the related Option Rights, state
that such Appreciation Rights are subject to all the terms and conditions of
this Plan, and contain such other terms and provisions, consistent with this
Plan, as the Board may approve.

 

(f)                                    Any
grant of Appreciation Rights may specify Management Objectives that must be
achieved as a condition of the exercise of such rights.

 

(g)                                 Each
grant of Appreciation Rights shall be subject to the provisions of
Section 18(g) of this Plan.

 

6.                                      Restricted Shares.  The Board
may also authorize the grant or sale to Participants of Restricted Shares. Each
such grant or sale may utilize any or all of the authorizations, and shall be
subject to all of the requirements, contained in the following provisions:

 

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

 

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

 

(c)                                  Each
such grant or sale shall provide that the Restricted Shares covered by such
grant or sale shall be subject, except (if the Board shall so determine) in the
event of a Change in Control or other similar transaction or event, for a
period of not less than three years to be determined by the Board at the Date
of Grant, to a “substantial risk of forfeiture” within the meaning of
Section 83 of the Code.

 

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

 

8

 

(e)                                  Any
grant of Restricted Shares may specify Management Objectives that, if achieved,
will result in termination or early termination of the restrictions applicable
to such shares and each grant may specify with respect to such specified
Management Objectives, a minimum acceptable level of achievement and shall set
forth a formula for determining the number of Restricted Shares on which
restrictions will terminate if performance is at or above the minimum level,
but falls short of full achievement of the specified Management Objectives.

 

(f)                                    Any
such grant or sale of Restricted Shares may require that any or all dividends
or other distributions paid thereon during the period of such restrictions be
automatically deferred and reinvested in additional Restricted Shares, which
may be subject to the same restrictions as the underlying award.

 

(g)                                 Each
grant or sale of Restricted Shares shall be evidenced by an Evidence of Award
that shall contain such terms and provisions, consistent with this Plan, as the
Board may approve.  Unless otherwise
directed by the Board, all certificates representing Restricted Shares shall be
held in custody by the Corporation until all restrictions thereon shall have
lapsed, together with a stock power or powers executed by the Participant in
whose name such certificates are registered, endorsed in blank and covering
such Shares.

 

(h)                                 Each
grant or sale of Restricted Shares shall be subject to the provisions of
Section 18(g) of this Plan.

 

7.                                      Deferred Shares.  The Board may also authorize the granting or
sale of Deferred Shares to Participants. 
Each such grant or sale may utilize any or all of the authorizations,
and shall be subject to all of the requirements contained in the following
provisions:

 

(a)                                  Each
such grant or sale shall constitute the agreement by the Corporation to deliver
Common Shares to the Participant in the future in consideration of the
performance of services, but subject to the fulfillment of such conditions
during the Deferral Period as the Board may specify.

 

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

 

(c)                                  Each
such grant or sale shall be subject, except (if the Board shall so determine)
in the event of a Change in Control or other similar transaction or event, to a
Deferral Period as determined by the Board at the Date of Grant.

 

(d)                                 During
the Deferral Period, the Participant shall have no right to transfer any rights
under his or her award and shall have no rights of ownership in the Deferred
Shares and shall have no right to vote them, but the Board may, at or after the
Date of Grant, authorize the payment of dividend equivalents on such Shares on
either a current or deferred or contingent basis, either in cash or in
additional Common Shares.

 

9

 

(e)                                  Each
grant or sale of Deferred Shares shall be evidenced by an Evidence of Award
containing such terms and provisions, consistent with this Plan, as the Board
may approve.

 

(f)                                    Each
grant or sale of Deferred Shares shall be subject to the provisions of
Section 18(g) of this Plan.

 

8.                                      Awards to Non-Employee Directors.  The Board may, from time to time and upon
such terms and conditions as it may determine, authorize the granting to
Non-Employee Directors of Option Rights and Appreciation Rights and may also
authorize the grant or sale of Restricted Shares and Deferred Shares to
Non-Employee Directors.

 

(a)                                  Each
grant of Option Rights awarded pursuant to this Section 8 shall be
evidenced by an Evidence of Award, and shall be subject to the following
additional terms and conditions:

 

(i)                                     Each
grant shall specify the number of Common Shares to which it pertains subject to
the limitations set forth in Section 3 of this Plan.

 

(ii)                                  Each
grant shall specify an Option Price per share, which shall be set by the Board;
provided, however, that such price shall be no less than the Market Value of a
share of Common stock on the Date of Grant. 
In addition, except as provided in Section 10, no change shall be made
to any Option Price after the Date of Grant without shareholder approval.

 

(iii)                               Each such Option Right
shall become exercisable as determined by the Board and set forth in the
applicable Option Rights Agreement. 
Such Option Rights shall become exercisable in full immediately in the
event of a Change in Control. Each such Option Right granted under this Plan
shall expire no later than ten years from the Date of Grant and shall be
subject to earlier termination as hereinafter provided and as set forth in the
applicable Option Rights Agreement.

 

(iv)                              Any
Option rights may provide that a Director who has completed a specified period
of service on the Board or attained a specified age will be entitled to
exercise any such Option Rights immediately in full at any time after any such
termination until their stated expiration date.

 

(v)                                 If
a Non-Employee Director subsequently becomes an employee of the Corporation or
a Subsidiary while remaining a member of the Board, any Option Rights held
under the Plan by such individual at the time of such commencement of
employment shall not be affected thereby.

 

(vi)                              Option
Rights may be exercised by a Non-Employee Director only upon payment to the
Corporation in full of the Option Price of the Common Shares to be delivered.  Such payment shall be made in cash or in 

 

10

 

Common Shares previously
owned by the optionee for more than six months, or in a combination of cash and
such Common Shares.

 

(vii)                           The exercise of an Option
Right shall result in the cancellation on a share-for-share basis of any
related Appreciation Right authorized under this Plan.

 

(b)                                 Each
grant of Appreciation Rights pursuant to this Section 8 shall be upon
terms and conditions consistent with Section 5 of this Plan.

 

(c)                                  Each
grant or sale of Restricted Shares pursuant to this Section 8 shall be
upon terms and conditions consistent with Section 6 of this Plan.

 

(d)                                 Each
grant or sale of Deferred Shares pursuant to this Section 8 shall be upon
terms and conditions consistent with Section 7 of this Plan.

 

9.                                      Transferability.

 

(a)                                  Except
as otherwise determined by the Board, no Option Right, Appreciation Right or
other derivative security granted under the Plan shall be transferable by an
Optionee other than by will or the laws of descent and distribution, except (in
the case of a Participant who is not a Director or officer of the Corporation)
to a fully revocable trust of which the Optionee is treated as the owner for
federal income tax purposes.  Except as
otherwise determined by the Board, Option Rights and Appreciation Rights shall
be exercisable during the Optionee’s lifetime only by him or her or by his or
her guardian or legal representative. 
Notwithstanding the foregoing, the Board in its sole discretion, may
provide for transferability of particular awards under this Plan so long as
such provisions will not disqualify the exemption for other awards under Rule
16b-3.

 

(b)                                 The
Board may specify at the Date of Grant that part or all of the Common Shares
that are (i) to be issued or transferred by the Corporation upon the exercise
of Option Rights or Appreciation Rights or upon the termination of the Deferral
Period applicable to Deferred Shares or (ii) no longer subject to the
substantial risk of forfeiture and restrictions on transfer referred to in
Section 6 of this Plan, shall be subject to further restrictions on
transfer.

 

10.                               Adjustments.  The Board may make or provide for such
adjustments in the numbers of Common Shares covered by outstanding Option
Rights, Appreciation Rights and Deferred Shares granted hereunder, in the
prices per share applicable to such Option Rights and Appreciation Rights and
in the kind of shares covered thereby, as the Board, in its sole discretion,
exercised in good faith, may determine is equitably required to prevent
dilution or enlargement of the rights of Participants or Optionees that
otherwise would result from (a) any stock dividend, stock split, combination of
shares, recapitalization or other change in the capital structure of the
Corporation or (b) any merger, consolidation, spin-off, split-off,
spin-out, split-up, reorganization, partial or complete liquidation or other
distribution of assets or issuance of rights or warrants to purchase securities
or (c) any other corporate transaction or event having an effect

 

11

 

similar to any of the
foregoing.  Moreover, in the event of
any such transaction or event, the Board, in its discretion, may provide in
substitution for any or all outstanding awards under this Plan such alternative
consideration as it, in good faith, may determine to be equitable in the
circumstances and may require in connection therewith the surrender of all
awards so replaced.  The Board may also
make or provide for such adjustments in the numbers of shares specified in
Section 3 of this Plan and in the number of Option Rights to be granted
automatically pursuant to Section 8 of this Plan as the Board in its sole
discretion, exercised in good faith, may determine is appropriate to reflect
any transaction or event described in this Section 10.

 

11.                               Change in Control.  For purposes of this Plan, a “Change in
Control” shall mean if at any time any of the following events shall have
occurred:

 

(a)                                  The
acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of
either: (i) the then-outstanding Common Shares or (ii) the Voting
Shares; provided, however, that the following acquisitions shall not constitute
a Change in Control: (A) any acquisition directly from the Corporation, (B) any
acquisition by the Corporation, (C) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Corporation or
any Subsidiary of the Corporation or (D) any acquisition by any Person
pursuant to a transaction that complies with clauses (i), (ii) and (iii) of
Section 11(c) of this Plan; or

 

(b)                                 Individuals
who, as of the Effective Date, constitute the Board (the “Incumbent Board”)
cease for any reason (other than death or disability) to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the Effective Date, whose election, or nomination for
election by the Corporation’s stockholders, was approved by a vote of at least
a majority of the directors then comprising the Incumbent Board (either by a
specific vote or by approval of the proxy statement of the Corporation in which
such person is named as a nominee for director, without objection to such
nomination) shall be considered as though such individual were a member of the
Incumbent Board, but excluding for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest (within the meaning of Rule 14a-11 of the Exchange Act) with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or

 

(c)                                  Consummation
of a reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Corporation (a “Business
Combination”), in each case, unless, following such Business Combination,
(i) all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Common Shares and Voting Shares
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then-outstanding shares of
common stock and the combined voting power of the then-outstanding voting securities
entitled to vote generally in

 

12

 

the election of
directors, as the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity that as a result of such
transaction owns the Corporation or all or substantially all of the
Corporation’s assets either directly or through one or more subsidiaries) in
substantially the same proportions relative to each other as their ownership,
immediately prior to such Business Combination, of the Common Shares and Voting
Shares, as the case may be, (ii) no Person (excluding any entity resulting
from such Business Combination or any employee benefit plan (or related trust)
sponsored or maintained by the Corporation or such entity resulting from such
Business Combination) beneficially owns, directly or indirectly, 15% or more
of, respectively, the then-outstanding shares of common stock of the entity
resulting from such Business Combination, or the combined voting power of the
then-outstanding voting securities of such corporation except to the extent
that such ownership existed prior to the Business Combination and (iii) at
least a majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board providing for such Business Combination; or

 

(d)                                 Approval
by the stockholders of the Corporation of a complete liquidation or dissolution
of the Corporation.

 

12.                               Fractional Shares.  The
Corporation shall not be required to issue any fractional Common Shares
pursuant to this Plan.  The Board may
provide for the elimination of fractions or for the settlement of fractions in
cash.

 

13.                               Withholding Taxes.  To the
extent that the Corporation is required to withhold federal, state, local or
foreign taxes in connection with any payment made or benefit realized by a
Participant or other person under this Plan, and the amounts available to the
Corporation for such withholding are insufficient, it shall be a condition to
the receipt of such payment or the realization of such benefit that the
Participant or such other person make arrangements satisfactory to the
Corporation for payment of the balance of such taxes required to be withheld,
which arrangements (in the discretion of the Board) may include relinquishment
of a portion of such benefit. 
Participants shall also make such arrangements as the Corporation may
require for the payment of any withholding tax obligations that may arise in
connection with the disposition of shares acquired upon the execution of Option
Rights.  In no event, however, shall the
Corporation accept Common Shares for payment of taxes in excess of required tax
withholding rates, except that, in the discretion of the Committee, a
Participant or such other person may surrender Common Shares owned for more
than six months to satisfy any tax obligations resulting from any such
transaction.

 

14.                               Participation by Employees of
Designated Subsidiaries.  As a
condition to the effectiveness of any grant or award to be made hereunder to a
Participant who is an employee of a Designated Subsidiary, whether or not such
Participant is also employed by the Corporation or another Subsidiary, the
Board may require such Designated Subsidiary to agree to transfer to such
employee (when, as and if provided for under this Plan and any applicable
agreement entered into with any such employee pursuant to this Plan) the Common
Shares that would

 

13

 

otherwise be delivered by
the Corporation, upon receipt by such Designated Subsidiary of any
consideration then otherwise payable by such Participant to the
Corporation.  Any such award shall be
evidenced by an agreement between the Participant and the Designated
Subsidiary, in lieu of the Corporation, on terms consistent with this Plan and
approved by the Board and such Designated Subsidiary.  All such Common Shares so delivered by or to a Designated
Subsidiary shall be treated as if they had been delivered by or to the
Corporation for purposes of Section 3 of this Plan, and all references to
the Corporation in this Plan shall be deemed to refer to such Designated
Subsidiary, except for purposes of the definition of “Board” and except in
other cases where the context otherwise requires.

 

15.                               Foreign Employees.  In order
to facilitate the making of any grant or combination of grants under this Plan,
the Board may provide for such special terms for awards to Participants who are
foreign nationals or who are employed by the Corporation or any Subsidiary
outside of the United States of America as the Board may consider necessary or
appropriate to accommodate differences in local law, tax policy or custom.
Moreover, the Board may approve such supplements to or amendments, restatements
or alternative versions of this Plan as it may consider necessary or
appropriate for such purposes, without thereby affecting the terms of this Plan
as in effect for any other purpose, and the Secretary or other appropriate
officer of the Corporation may certify any such document as having been
approved and adopted in the same manner as this Plan.  No such special terms, supplements, amendments or restatements,
however, shall include any provisions that are inconsistent with the terms of
this Plan as then in effect unless this Plan could have been amended to
eliminate such inconsistency without further approval by the shareholders of
the Corporation.

 

16.                               Administration of the Plan.

 

(a)                                  This
Plan shall be administered by the Board, which may from time to time delegate
all or any part of its authority under this Plan to a committee of the Board
(or subcommittee thereof), consisting of not less than three Non-Employee Directors
appointed by the Board of Directors, each of whom shall be a “Non-Employee
Director” within the meaning of Rule 16b-3 and an “outside director” within the
meaning of Section 162(m) of the Code. 
A majority of the committee (or subcommittee thereof) shall constitute a
quorum, and the action of the members of the committee (or subcommittee
thereof) present at any meeting at which a quorum is present, or acts
unanimously approved in writing, shall be the acts of the committee (or
subcommittee thereof).

 

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

 

17.                               Governing Law.  The Plan and all awards granted and actions
taken thereunder shall be governed by and construed in accordance with the
internal substantive laws of the State of Delaware.

 

14

 

18.                               Amendments, Etc.

 

(a)                                  The
Board may at any time and from time to time amend the Plan in whole or in part;
provided, however, that any amendment that must be approved by the shareholders
of the Corporation in order to comply with applicable law or the rules of any
national securities exchange upon which the Common Shares are traded or quoted
shall not be effective unless and until such approval has been obtained.  Presentation of this Plan or any amendment
hereof for shareholder approval shall not be construed to limit the
Corporation’s authority to offer similar or dissimilar benefits in plans that
do not require shareholder approval.

 

(b)                                 The
Board also may permit Participants to elect to defer the issuance of Common
Shares or the settlement of awards in cash under the Plan pursuant to such
rules, procedures or programs as it may establish for purposes of this
Plan.  The Board also may provide that
deferred issuances or settlements include the payment or crediting of dividend
equivalents or interest on the deferral amounts.

 

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

 

(d)                                 In
case of termination of employment by reason of death, disability or normal or
early retirement, or in the case of hardship or other special circumstances, of
a Participant who holds an Option Right or Appreciation Right not immediately exercisable
in full, or any Restricted Shares as to which the substantial risk of
forfeiture or the prohibition or restriction on transfer has not lapsed, or any
Deferred Shares as to which the Deferral Period has not been completed, or who
holds Common Shares subject to any transfer restriction imposed pursuant to
Section 9(b) of this Plan, the Board may, in its sole discretion,
accelerate the time at which such Option Right or Appreciation Right may be
exercised or the time at which such substantial risk of forfeiture or
prohibition or restriction on transfer will lapse or the time when such
Deferral Period will end or the time when such transfer restriction will
terminate or may waive any other limitation or requirement under any such
award.

 

(e)                                  This
Plan shall not confer upon any Participant any right with respect to
continuance of employment or other service with the Corporation or any
Subsidiary, nor shall it interfere in any way with any right the Corporation or
any Subsidiary would otherwise have to terminate such Participant’s employment
or other service at any time.

 

(f)                                    To
the extent that any provision of this Plan would prevent any Option Right that
was intended to qualify as an Incentive Stock Option from qualifying as such,
that provision shall be null and void with respect to such Option Right.  Such

 

15

 

provision, however, shall
remain in effect for other Option Rights and there shall be no further effect
on any provision of this Plan.

 

(g)                                 This
Plan, the awarding and vesting of Appreciation Rights, Deferred Shares, Option
Rights or Restricted Shares under this Plan and the issuance and delivery of
Common Shares and the payment of money under this Plan or under Appreciation
Rights, Deferred Shares, Option Rights or Restricted Shares awarded hereunder
are subject to compliance with all applicable federal and state laws, rules and
regulations, including (without limitation) state and federal securities law
and federal margin requirements and to such approvals by any listing,
regulatory or governmental authority as may, in the opinion of counsel for the
Corporation, be necessary or advisable in connection therewith.  Any securities delivered under this Plan shall
be subject to such restrictions, and the person acquiring such securities
shall, if requested by the Corporation, provide such assurances and
presentations to the Corporation as the Corporation may deem necessary or
desirable to assure compliance with all applicable legal requirements. To the extent
permitted by applicable law, the Plan, Appreciation Rights, Deferred Shares,
Option Rights and Restricted Shares awarded hereunder shall be deemed amended
to the extent necessary to conform to such laws, rules and regulations.

 

19.                               Termination.  No grant shall be made under this Plan more
than ten years after the Effective Date, but all grants made on or prior to
such date shall continue in effect thereafter subject to the terms thereof and
of this Plan.

 

16

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