Document:

Exhibit 10.1 

AGREEMENT

CONCERNING THE EXCHANGE OF SECURITIES

BETWEEN

ZHENG HE REAL ESTATE, INC.

AND

LIAONING JIN GE REAL ESTATE, INC.

AND

THE STOCKHOLDERS OF

LIAONING JIN GE REAL ESTATE, INC.

INDEX

	
 

	
 

	
 

	
ARTICLE I -
  EXCHANGE OF SECURITIES

	
4

	
 

	
 

	
 

	
 1.1

	
- Issuance
  of Securities

	
4

	
 1.2

	
- Corporate
  Action By ZhengHe

	
4

	
 1.3

	
- Exemption
  from Registration

	
4

	
 

	
 

	
 

	
ARTICLE II -
  REPRESENTATIONS AND WARRANTIES OF JINGE

	
5

	
 

	
 

	
 2.1

	
-
  Organization

	
5

	
 2.2

	
- Capital

	
5

	
 2.3

	
-
  Subsidiaries

	
5

	
 2.4

	
- Directors
  and Officers

	
5

	
 2.5

	
- Financial
  Statements

	
5

	
 2.6

	
- Absence of
  Changes

	
5

	
 2.7

	
- Absence of
  Undisclosed Liabilities

	
6

	
 2.8

	
- Tax
  Returns

	
6

	
 2.9

	
-
  Investigation of Financial Condition

	
6

	
 2.10

	
- Patents
  and Rights

	
6

	
 2.11

	
- Compliance
  with Laws

	
6

	
 2.12

	
- Litigation

	
6

	
 2.13

	
- Authority

	
6

	
 2.14

	
- Ability to
  Carry Out Obligations

	
6

	
 2.15

	
- Full
  Disclosure

	
7

	
 2.16

	
- Assets

	
7

	
 2.17

	
- Material
  Contracts

	
7

	
 2.18

	
-
  Indemnification

	
7

	
 2.19

	
- Criminal
  or Civil Acts

	
7

	
 2.20

	
- Restricted
  Securities

	
7

	
 

	
 

	
 

	
ARTICLE III
  - REPRESENTATIONS AND WARRANTIES OF ZHENGHE

	
7

	
 

	
 

	
 

	
 3.1

	
-
  Organization

	
7

	
 3.2

	
- Capital

	
8

	
 3.3

	
-
  Subsidiaries

	
8

	
 3.4

	
- Directors
  and Officers

	
8

	
 3.5

	
- Financial
  Statements

	
8

	
 3.6

	
- Absence of
  Changes

	
8

	
 3.7

	
- Absence of
  Undisclosed Liabilities

	
8

	
 3.8

	
- Tax Returns

	
8

	
 3.9

	
-
  Investigation of Financial Condition

	
8

i

INDEX
(Continued)

	
 

	
 

	
 

	
3.10

	
- Patents and Rights

	
8

	
3.11

	
- Compliance
  with Laws

	
9

	
3.12

	
- Litigation

	
9

	
3.13

	
- Authority

	
9

	
3.14

	
- Ability to
  Carry Out Obligations

	
9

	
3.15

	
- Full
  Disclosure

	
9

	
3.16

	
- Assets

	
9

	
3.17

	
- Material
  Contracts

	
9

	
3.18

	
-
  Indemnification

	
9

	
3.19

	
- Criminal
  or Civil Acts

	
10

	
 

	
 

	
 

	
ARTICLE IV -
  COVENANTS PRIOR TO THE CLOSING DATE

	
10

	
 

	
 

	
 

	
4.1

	
-
  Investigative Rights

	
10

	
4.2

	
- Conduct of
  Business

	
10

	
 

	
 

	
 

	
ARTICLE V -
  CONDITIONS PRECEDENT TO ZHENGHE’S PERFORMANCE

	
10

	
 

	
 

	
 

	
5.1

	
- Conditions

	
10

	
5.2

	
- Accuracy
  of Representations

	
10

	
5.3

	
-
  Performance

	
11

	
5.4

	
- Absence of
  Litigation

	
11

	
5.5

	
- Officer’s
  Certificate

	
11

	
 

	
 

	
 

	
ARTICLE VI -
  CONDITIONS PRECEDENT TO JINGE’S PERFORMANCE

	
11

	
 

	
 

	
 

	
6.1

	
- Conditions

	
11

	
6.2

	
- Accuracy
  of Representations

	
11

	
6.3

	
-
  Performance

	
11

	
6.4

	
- Absence of
  Litigation

	
11

	
6.5

	
- Officer’s
  Certificate

	
11

	
6.6

	
- Directors
  of ZhengHe

	
12

	
6.7

	
- Officers
  of ZhengHe

	
12

	
6.8

	
- Corporate
  Action

	
12

	
 

	
 

	
 

	
ARTICLE VII
  - CLOSING

	
12

	
 

	
 

	
 

	
7.1

	
- Closing

	
12

	
7.2

	
- Ownership
  of ZhengHe

	
12

ii

INDEX
(Continued)

	
 

	
 

	
 

	
ARTICLE
  VIII- COVENANTS SUBSEQUENT TO THE CLOSING DATE

	
13

	
 

	
 

	
 

	
 8.1

	
-
  Registration and Listing

	
13

	
 8.2

	
- Material
  Acquisitions

	
13

	
 8.3

	
- Financial
  Public Relations

	
13

	
 

	
 

	
 

	
ARTICLE IX-
  MISCELLANEOUS

	
13

	
 

	
 

	
 

	
 9.1

	
- Captions
  and Headings

	
13

	
 9.2

	
- No Oral
  Change

	
13

	
 9.3

	
- Non-Waiver

	
14

	
 9.4

	
- Time of
  Essence

	
14

	
 9.5

	
- Entire
  Agreement

	
14

	
 9.6

	
- Choice of
  Law

	
14

	
 9.7

	
-
  Counterparts

	
14

	
 9.8

	
- Notices

	
14

	
 9.9

	
- Binding
  Effect

	
14

	
 9.10

	
- Mutual
  Cooperation

	
14

	
 9.11

	
- Finders

	
14

	
 9.12

	
-
  Announcements

	
15

	
 9.13

	
- Expenses

	
15

	
 9.14

	
- Survival
  of Representations and Warranties

	
15

	
 9.15

	
- Exhibits

	
15

	
 9.16

	
- Legal
  Counsel

	
15

	
 

	
 

	
 

	
 

	
Signatures

	
15

	
 

	
 

	
 

	
EXHIBITS

	
 

	
 

	
 

	
 

	
Allocation
  of Shares

	
Exhibit 1.1 

	
 

	
Subscription
  Agreement

	
Exhibit 1.2 

	
 

	
Form of
  ZhengHe Warrant

	
Exhibit
  1.2(b) 

	
 

	
Audited
  Financial Statements of Jinge

	
Exhibit 2.5 

	
 

	
Material
  Contracts of Jinge

	
Exhibit 2.17
  

	
 

	
Financial
  Statements of ZhengHe

	
Exhibit 3.5 

	
 

	
Certificate
  of Officer - Jinge

	
Exhibit 5.5 

	
 

	
Certificate
  of Officer - ZhengHe

	
Exhibit 6.5 

iii

AGREEMENT

          AGREEMENT
made this 8 day of May, 2006, by and between ZHENGHE ENTERPRISES, INC., a
Colorado corporation (“ZhengHe”), LIAONING JIN GE REAL ESTATE, INC., a Chinese corporation
(“Jinge”), and the stockholders of Jinge (the “Jinge Stockholders”) who are
listed on Exhibit 1.1 hereto and have executed Subscription Agreements in the
form attached in Exhibit 1.2, hereto.

          WHEREAS,
ZhengHe desires to acquire all of the issued and outstanding shares of common
stock of Jinge from the Jinge Stockholders in exchange for newly issued
unregistered shares of common stock of ZhengHe; 

          WHEREAS,
Jinge desires to assist ZhengHe in acquiring all of the issued and outstanding
common stock of Jinge pursuant to the terms of this Agreement; and

          WHEREAS,
all of the Jinge Stockholders, by execution of Exhibit 1.2 hereto, agree to
exchange all common shares of Jinge for 10,000,000 common shares of ZhengHe. 

          NOW,
THEREFORE, in consideration of the mutual promises, covenants and
representations contained herein, THE PARTIES HERETO AGREE AS FOLLOWS:

ARTICLE I

Exchange of
Securities

          1.1
Issuance of Securities. Subject
to the terms and conditions of this Agreement, ZhengHe agrees to issue and
exchange 10,000,000 fully paid and nonassessable unregistered shares of its no
par value common stock (the “ZhengHe Shares”) for all issued and outstanding
shares of common stock of Jinge (including all shares issued in the private
placement of Jinge set forth in paragraph 5.6, below) (the “Jinge Shares”) held
by the Jinge Stockholders (the “Jinge Stockholders”). Exhibit 1.1 lists all
Jinge Stockholders, their shareholdings in Jinge and the number of ZhengHe
Shares to be issued to them. All ZhengHe Shares will be issued directly to the
Jinge Stockholders on the Closing Date, as hereinafter defined. 

          1.2
Corporate Action by ZhengHe. On
the Closing Date of this Agreement (the “Closing Date”), ZhengHe shall have
taken the following corporate action:

	
 

	
 

	
 

	
 

	
(1)

	
ZhengHe has
  14,140,000 shares currently outstanding and

          1.3
Exemption from Registration. The
parties hereto intend that all ZhengHe Shares to be issued to the Jinge
Stockholders shall be exempt from the registration requirements of the
Securities Act of 1933, as amended (the “Act”), pursuant to Section 4(2) of the
Act and the rules and regulations promulgated thereunder. 

4

ARTICLE II

Representations and
Warranties of Jinge

          Jinge
hereby represents and warrants to ZhengHe that:

          2.1
Organization. Jinge is a
corporation duly organized, validly existing and in good standing under the
laws of Liaoning, China, has all necessary corporate powers to own its
properties and to carry on its business as now owned and operated by it, and is
duly qualified to do business and is in good standing in each of the states
where its business requires qualification.

          2.2
Capital. The issued and
outstanding capital stock of Jinge consists solely of 55,000,000 shares of
$0.12 par value common stock issued and outstanding for LIAONING JINGE REAL
ESTATE, INC. All of the outstanding common stock of Jinge is duly and validly
issued, fully paid and nonassessable. There are no outstanding subscriptions,
options, rights, warrants, debentures, instruments, convertible securities or
other agreements or commitments obligating Jinge to issue or to transfer from
treasury any additional shares of its capital stock of any class.

          2.3
Subsidiaries.
Jinge has no subsidiaries.

          2.4
Directors and Officers. The names
and titles of all directors and officers of Jinge as of the date of this
Agreement are as follows: You Jin, Chief Executive Officer and Director and Yi
Shuang Mei, Chief Financial Officer and Director.

          2.5
Financial Statements. Exhibit 2.5
hereto consists of the unaudited financial statements of Jinge for the years
ended December 31, 2005 and 2006 (the “Jinge Financial Statements”). The Jinge
Financial Statements have been prepared in accordance with generally accepted
accounting principles and practices consistently followed by Jinge throughout
the period indicated, and fairly present the financial position of Jinge as of
the dates of the balance sheets included in the Jinge Financial Statements and
the results of operations for the periods indicated. On the Closing Date, the
Jinge Financial Statements, including the December 31, 2006 year end statement,
will be certified by an auditor admitted to practice before the Securities and
Exchange Commission (“Commission”), and Jinge will also provide unaudited
financial statements for the three months ended Jun 30, 2007.

          2.6
Absence of Changes. Since March
31, 2007, there has not been any change in the financial condition or
operations of Jinge, except for changes in the ordinary course of business,
which changes have not in the aggregate been materially adverse.

5

          2.7
Absence of Undisclosed Liabilities.
As of March 31, 2007, Jinge did not have any material debt, liability or
obligation of any nature, whether accrued, absolute, contingent or otherwise,
and whether due or to become due, that is not reflected in the Jinge Financial
Statements.

          2.8
Tax Returns. Jinge has filed all
federal, state and local tax returns required by law and has paid all taxes,
assessments and penalties due and payable. The provisions for taxes, if any,
reflected in Exhibit 2.5 are adequate for the periods indicated. There are no
present disputes as to taxes of any nature payable by Jinge.

          2.9
Investigation of Financial Condition.
Without in any manner reducing or otherwise mitigating the representations
contained herein, ZhengHe, its legal counsel and accountants shall have the
opportunity to meet with Jinge’s accountants and attorneys to discuss the
financial condition of Jinge. Jinge shall make available to ZhengHe all books
and records of Jinge.

          2.10
Patents and Rights. Jinge owns
and holds all necessary trademarks, service marks, trade names, copyrights, patents
and proprietary information and other rights necessary or material to its
business as now conducted or proposed to be conducted. 

          2.11
Compliance with Laws. Jinge has
complied with, and is not in violation of, applicable federal, state or local
statutes, laws and regulations, including federal and state securities laws.

          2.12
Litigation. Jinge is not a
defendant in any suit, action, arbitration or legal, administrative or other
proceeding, or governmental investigation which is pending or, to the best
knowledge of Jinge, threatened against or affecting Jinge or its business,
assets or financial condition. Jinge is not in default with respect to any
order, writ, injunction or decree of any federal, state, local or foreign
court, department, agency or instrumentality applicable to it. Jinge is not
engaged in any material litigation to recover monies due to it.

          2.13
Authority. The Board of Directors
of Jinge has authorized the execution of this Agreement and the consummation of
the transactions contemplated herein, and Jinge has full power and authority to
execute, deliver and perform this Agreement, and this Agreement is a legal,
valid and binding obligation of Jinge and is enforceable in accordance with its
terms and conditions. By execution of Exhibit 1.2, all of the Jinge
Stockholders have agreed to and have approved the terms of this Agreement. 

          2.14
Ability to Carry Out Obligations.
The execution and delivery of this Agreement by Jinge and the performance by
Jinge of its obligations hereunder in the time and manner contemplated will not
cause, constitute or conflict with or result in (a) any breach or violation of
any of the provisions of or constitute a default under any license, indenture,
mortgage, instrument, article of incorporation, bylaw, or other agreement or
instrument to which Jinge is a party, or by which it may be bound, nor will any
consents or authorizations of any party other than those hereto be required,
(b) an event that would permit any party to any agreement or instrument to
terminate it or to accelerate the maturity of any indebtedness or other
obligation of Jinge, or (c) an event that would result in the creation or
imposition of any lien, charge or encumbrance on any asset of Jinge.

6

          2.15
Full Disclosure. None of the
representations and warranties made by Jinge herein or in any exhibit,
certificate or memorandum furnished or to be furnished by Jinge, or on its
behalf, contains or will contain any untrue statement of material fact or omit
any material fact the omission of which would be misleading.

          2.16
Assets. Jinge has good and
marketable title to all of its property, free and clear of all liens, claims
and encumbrances, except as otherwise indicated in Exhibit 2.5.

          2.17
Material Contracts. Exhibit 2.17
sets forth all of the material contracts of Jinge.

          2.18
Indemnification. Jinge agrees to
indemnify, defend and hold ZhengHe harmless against and in respect of any and
all claims, demands, losses, costs, expenses, obligations, liabilities,
damages, recoveries and deficiencies, including interest, penalties and
reasonable attorney fees, that it shall incur or suffer, which arise out of,
result from or relate to any breach of, or failure by Jinge to perform any of
its representations, warranties, covenants or agreements in this Agreement or
in any schedule, certificate, exhibit or other instrument furnished or to be
furnished by Jinge under this Agreement.

          2.19
Criminal or Civil Acts. For a
period of ten years prior to the execution of this Agreement, no executive
officer, director or principal stockholder of Jinge has been convicted of a
felony crime, filed for personal bankruptcy, been the subject of a Commission
judgment or decree, or is currently the subject to any investigation in
connection with a felony crime or Commission proceeding.

          2.20
Restricted Securities. Jinge and
the Jinge Stockholders, by execution of this Agreement and of Exhibit 1.2,
acknowledge that all of the ZhengHe securities issued by ZhengHe are restricted
securities and none of such securities may be sold or publicly traded except in
accordance with the provisions of the Act.

ARTICLE III

Representations and
Warranties of ZhengHe

          ZhengHe
represents and warrants to Jinge that:

          3.1
Organization. ZhengHe is a
corporation duly organized, validly existing and in good standing under the
laws of Colorado, has all necessary corporate powers to carry on its business,
and is duly qualified to do business and is in good standing in each of the
states where its business requires qualification.

7

          3.2
Capital. The authorized capital
stock of ZhengHe on the Closing Date will consist of (i) 150,000,000 shares of
no par value common stock, of which 14,140,000 shares of common stock will be
issued and outstanding on the Closing Date. All of the outstanding common stock
is duly and validly issued, fully paid and nonassessable. There are no other
outstanding subscriptions, options, rights, warrants, debentures, instruments,
convertible securities or other agreements or commitments obligating ZhengHe to
issue or to transfer from treasury any additional shares of its capital stock
of any class except the ZhengHe Warrants and shares underlying the ZhengHe
Warrants to be issued pursuant to paragraph 1.2(b), above, and the Acquisition
Warrants which may be issued pursuant to 5.7, below.

          3.3
Subsidiaries. ZhengHe does not
have any subsidiaries or own any interest in any other enterprise.

          3.4
Directors and Officers. Gordon Ge
Wang, Di Wu and Danning Wang are officers and directors of ZhengHe.

          3.5
Financial Statements. Exhibit 3.5
hereto consists of the audited financial statements of ZhengHe for the period
ended December 31, 2006 (the “ZhengHe Financial Statements”). The ZhengHe
Financial Statements have been prepared in accordance with generally accepted
accounting principles and practices consistently followed by ZhengHe throughout
the period indicated, and fairly present the financial position of ZhengHe as
of the dates of the balance sheet included in the ZhengHe Financial Statements
and the results of operations for the period indicated. 

          3.6
Absence of Changes. Since
December 31, 2006, there has not been any material change in the financial
condition or operations of ZhengHe, except as contemplated by this Agreement.

          3.7
Absence of Undisclosed Liabilities.
As of December 31, 2006, ZhengHe did not have any material debt, liability or
obligation of any nature, whether accrued, absolute, contingent or otherwise,
and whether due or to become due, that is not reflected in the ZhengHe
Financial Statements.

          3.8
Tax Returns. Within the times and
in the manner prescribed by law, ZhengHe has filed all federal, state and local
tax returns required by law and has paid all taxes, assessments, and penalties
due and payable. 

          3.9
Investigation of Financial Condition.
Without in any manner reducing or otherwise mitigating the representations
contained herein, Jinge, its legal counsel and accountants shall have the
opportunity to meet with ZhengHe’s accountants and attorneys to discuss the
financial condition of ZhengHe. ZhengHe shall make available to Jinge all books
and records of ZhengHe.

          3.10
Patents and Rights. ZhengHe does
not own nor use any patent, trademark, service mark, trade name or copyright in
its business.

8

          3.11
Compliance with Laws. ZhengHe has
complied with, and is not in violation of, applicable federal, state or local
statutes, laws or regulations including federal and state securities laws.

          3.12
Litigation. ZhengHe is not a
defendant in any suit, action, arbitration, or legal, administrative or other
proceeding, or governmental investigation which is pending or, to the best
knowledge of ZhengHe, threatened against or affecting ZhengHe or its business,
assets or financial condition. ZhengHe is not in default with respect to any
order, writ, injunction or decree of any federal, state, local or foreign
court, department, agency or instrumentality applicable to it. ZhengHe is not
engaged in any material litigation to recover monies due to it. 

          3.13
Authority. The Board of Directors
of ZhengHe has authorized the execution of this Agreement and the transactions
contemplated herein, and ZhengHe has full power and authority to execute,
deliver and perform this Agreement, and this Agreement is the legal, valid and
binding obligation of ZhengHe, and is enforceable in accordance with its terms
and conditions.

          3.14
Ability to Carry Out Obligations.
The execution and delivery of this Agreement by ZhengHe and the performance by
ZhengHe of its obligations hereunder will not cause, constitute or conflict
with or result in (a) any breach or violation of any of the provisions of or
constitute a default under any license, indenture, mortgage, instrument,
article of incorporation, bylaw or other agreement or instrument to which
ZhengHe is a party, or by which it may be bound, nor will any consents or
authorization of any party other than those hereto be required, (b) an event
that would permit any party to any agreement or instrument to terminate it or
to accelerate the maturity of any indebtedness or other obligation of ZhengHe,
or (c) an event that would result in the creation or imposition of any lien,
charge or encumbrance on any asset of ZhengHe.

          3.15
Full Disclosure. None of the
representations and warranties made by ZhengHe herein, or in any exhibit,
certificate or memorandum furnished or to be furnished by ZhengHe or on its
behalf, contains or will contain any untrue statement of material fact or omit
any material fact the omission of which would be misleading.

          3.16
Assets. ZhengHe has good and
marketable title to all of its property, free and clear of all liens, claims
and encumbrances, except as otherwise indicated in Exhibit 3.5.

          3.17
Material Contracts. ZhengHe has
no material contracts.

          3.18
Indemnification. ZhengHe agrees
to indemnify, defend and hold Jinge harmless against and in respect of any and
all claims, demands, losses, costs, expenses, obligations, liabilities,
damages, recoveries and deficiencies, including interest, penalties, and
reasonable attorney fees, that it shall incur or suffer, which arise out of,
result from or relate to any breach of, or failure by ZhengHe to perform any of
its representations, warranties, covenants or agreements in this Agreement or
in any schedule, certificate, exhibit or other instrument furnished or to be
furnished by ZhengHe under this Agreement.

9

          3.19
Criminal or Civil Acts. For a
period of ten years prior to the execution of this Agreement, no executive
officer, director or principal stockholder of ZhengHe has been convicted of a
felony crime, filed for personal bankruptcy, been the subject of a Commission
judgment or decree, or is currently the subject to an investigation in
connection with any felony crime or Commission proceeding.

ARTICLE IV

Covenants Prior to
the Closing Date

          4.1
Investigative Rights. Prior to
the Closing Date, each party shall provide to the other party, and such other
party’s counsel, accountants, auditors and other authorized representatives,
full access during normal business hours and upon reasonable advance written
notice to all of each party’s properties, books, contracts, commitments and
records for the purpose of examining the same. Each party shall furnish the
other party with all information concerning each party’s affairs as the other
party may reasonably request.

          4.2
Conduct of Business. Prior to the
Closing Date, each party shall conduct its business in the normal course and
shall not sell, pledge or assign any assets without the prior written approval
of the other party, except in the normal course of business. Neither party
shall amend its Articles of Incorporation or Bylaws (except as may be described
in this Agreement), declare dividends, redeem or sell stock or other
securities, incur additional or newly-funded liabilities, acquire or dispose of
fixed assets, change employment terms, enter into any material or long-term
contract, guarantee obligations of any third party, settle or discharge any
balance sheet receivable for less than its stated amount, pay more on any
liability than its stated amount, or enter into any other transaction other
than in the normal course of business. Neither party shall enter into
negotiations with any third party or complete any transaction with a third
party involving the sale of any of its assets or the exchange of any of its
common stock.

ARTICLE V

Conditions Precedent
to ZhengHe’s Performance

          5.1
Conditions. ZhengHe’s obligations
hereunder shall be subject to the satisfaction at or before the Closing of all
the conditions set forth in this Article V. ZhengHe may waive any or all of
these conditions in whole or in part without prior notice; provided, however,
that no such waiver of a condition shall constitute a waiver by ZhengHe of any
other condition of or any of ZhengHe’s other rights or remedies, at law or in
equity, if Jinge shall be in default of any of its representations, warranties
or covenants under this Agreement.

          5.2
Accuracy of Representations.
Except as otherwise permitted by this Agreement, all representations and
warranties by Jinge in this Agreement or in any written statement that shall be
delivered to ZhengHe by Jinge under this Agreement shall be true and accurate
on and as of the Closing Date as though made at that time.

10

          5.3
Performance. Jinge shall have
performed, satisfied and complied with all covenants, agreements and conditions
required by this Agreement to be performed or complied with by it on or before
the Closing Date.

          5.4
Absence of Litigation. No action,
suit, or proceeding before any court or any governmental body or authority,
pertaining to the transaction contemplated by this Agreement or to its
consummation, shall have been instituted or threatened against Jinge on or
before the Closing Date.

          5.5
Officer’s Certificate. Jinge
shall have delivered to ZhengHe a certificate dated the Closing Date in the
form of Exhibit 5.5 and signed by the Chief Executive Officer of Jinge
certifying that each of the conditions specified in this Article has been
fulfilled and that all of the representations set forth in Article II are true
and correct as of the Closing Date.

ARTICLE VI

Conditions Precedent
to Jinge’s Performance

          6.1
Conditions. Jinge’s obligations
hereunder shall be subject to the satisfaction at or before the Closing of all
the conditions set forth in this Article VI. Jinge may waive any or all of
these conditions in whole or in part without prior notice; provided, however,
that no such waiver of a condition shall constitute a waiver by Jinge of any
other condition of or any of Jinge’s rights or remedies, at law or in equity,
if ZhengHe shall be in default of any of its representations, warranties or
covenants under this Agreement.

          6.2
Accuracy of Representations.
Except as otherwise permitted by this Agreement, all representations and warranties
by ZhengHe in this Agreement or in any written statement that shall be
delivered to Jinge by ZhengHe under this Agreement shall be true and accurate
on and as of the Closing Date as though made at that time.

          6.3
Performance. ZhengHe shall have
performed, satisfied and complied with all covenants, agreements and conditions
required by this Agreement to be performed or complied with by it on or before
the Closing Date.

          6.4
Absence of Litigation. No action,
suit or proceeding before any court or any governmental body or authority,
pertaining to the transaction contemplated by this Agreement or to its
consummation, shall have been instituted or threatened against ZhengHe on or
before the Closing Date.

          6.5
Officer’s Certificate. ZhengHe
shall have delivered to Jinge a certificate dated the Closing Date in the form
of Exhibit 6.5 and signed by the President of ZhengHe certifying that each of
the conditions specified in this Article has been fulfilled and that all of the
representations set forth in Article III are true and correct as of the Closing
Date.

11

          6.6
Officers of ZhengHe. On the
Closing Date, the newly constituted Board of Directors of ZhengHe shall elect
the officers of Jinge as set forth in paragraph 2.4, above, to be the officers
of ZhengHe.

          6.7
Corporate Action. On the Closing
Date, ZhengHe shall have taken the corporate action described in paragraph 1.2,
above.

ARTICLE VII

Closing

          7.1
Closing. The Closing of this
Agreement shall be held at the offices of Gary A. Agron, at any mutually
agreeable time and date (the “Closing Date”) prior to May 31, 2007, unless
extended by mutual agreement. At the Closing:

	
 

	
 

	
 

	
 

	
(1)

	
Jinge shall
  deliver to ZhengHe copies of Exhibit 1.2 executed by all of the Jinge
  Stockholders together with certificates representing all outstanding Jinge
  Shares duly endorsed to ZhengHe;

	
 

	
 

	
 

	
 

	
(2)

	
ZhengHe
  shall deliver to the Jinge Stockholders 10,000,000 shares of ZhengHe common
  stock, for which the Jinge Shares have been exchanged, pursuant to the
  computations set forth in Exhibit 1.1 hereto; 

	
 

	
 

	
 

	
 

	
(3)

	
ZhengHe
  shall deliver (i) the officer’s certificate described in paragraph 6.5 and
  (ii) a signed consent and/or minutes of its directors approving this
  Agreement and each matter to be approved under this Agreement;

	
 

	
 

	
 

	
 

	
(4)

	
Jinge shall
  deliver (i) the officer’s certificate described in paragraph 5.5 and (ii) a
  signed consent and/or minutes of its directors approving this Agreement and
  each matter to be approved under this Agreement.

          7.2
Ownership of ZhengHe. Following
the Closing, the common stock ownership of ZhengHe shall be as follows:

	
 

	
 

	
 

	
Jinge
  Stockholders: 10,000,000 shares of ZhengHe consisting of:

	
 

	
 

	
 

	
4,000,000
  shares held by You Jin

	
 

	
3,000,000
  shares held by You Jia Jun

	
 

	
2,000,000
  shares held by Yi Shuang Mei

	
 

	
1,000,000
  shares held by Gordon Ge Wang

	
 

	
 

	
 

	
ZhengHe
  Stockholders: 14,140,000 shares of ZhengHe consisting of:

	
 

	
 

	
 

	
862,000
  shares held by the public stockholders of ZhengHe

	
 

	
4,000,000
  shares held by Gary Agron 

	
 

	
4,000,000
  shares held by Andy Chu or his designated entities

	
 

	
5,278,000
  shares held by Gordon Ge Wang

	
 

	
 

	
 

	
14,140,000
  shares total

12

ARTICLE VIII

Covenants Subsequent
to the Closing Date

          8.1
Registration and Listing. As soon
as practicable following the Closing Date, the newly constituted executive
officers and directors of ZhengHe shall use their best efforts to:

	
 

	
 

	
 

	
 

	
(1)

	
File, and
  obtain effectiveness for, a Registration Statement on Form SB-2 covering all
  14,140,000 shares of ZhengHe outstanding following the Closing Date. ZhengHe
  shall cause the Registration Statement to remain current with the Commission
  for at least 27 months following its effective date;

	
 

	
 

	
 

	
 

	
(2)

	
List
  ZhengHe’s common stock with Standard & Poor’s OTC or corporate manual;
  and

	
 

	
 

	
 

	
 

	
(3)

	
File and
  clear with the National Association of Securities Dealers, Inc. a Form
  15c-2(11) allowing for the listing of ZhengHe’s common stock on the
  Electronic Bulletin Board. Thereafter, ZhengHe shall at all times maintain
  its Electronic Bulletin Board listing or other listing on a recognized stock
  exchange.

          8.2
Material Acquisitions. Following
the Closing Date and for a period of five years thereafter, ZhengHe shall not
acquire any other company or entity for which audited financial statements are
required pursuant to the Securities and Exchange Act of 1934, unless such
company or entity provides audited financial statements at the closing of the
transaction.

          8.3
Financial Public Relations. On
the Closing Date, ZhengHe will retain for a period of 18 months a financial
public relations firm satisfactory to ZhengHe’s pre-closing executive officer.

ARTICLE IX

Miscellaneous

          9.1
Captions and Headings. The
article and paragraph headings throughout this Agreement are for convenience
and reference only and shall not define, limit or add to the meaning of any
provision of this Agreement.

          9.2
No Oral Change. This Agreement
and any provision hereof may not be waived, changed, modified or discharged
orally, but only by an agreement in writing signed by the party against whom
enforcement of any such waiver, change, modification or discharge is sought.

13

          9.3
Non-Waiver. The failure of any
party to insist in any one or more cases upon the performance of any of the
provisions, covenants or conditions of this Agreement or to exercise any option
herein contained shall not be construed as a waiver or relinquishment for the
future of any such provisions, covenants or conditions. No waiver by any party
of one breach by another party shall be construed as a waiver with respect to
any other subsequent breach.

          9.4
Time of Essence. Time is of the
essence of this Agreement and of each and every provision hereof.

          9.5
Entire Agreement. This Agreement
contains the entire Agreement and understanding between the parties hereto and
supersedes all prior agreements and understandings.

          9.6
Choice of Law. This Agreement and
its application shall be governed by the laws of the state of Colorado, United
States of America.

          9.7
Counterparts. This Agreement may
be executed simultaneously in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

          9.8
Notices. All notices, requests,
demands and other communications under this Agreement shall be in writing and
shall be deemed to have been duly given on the date of service if served
personally on the party to whom notice is to be given, or on the third day
after mailing if mailed to the party to whom notice is to be given, by first
class mail, registered or certified, postage prepaid, and properly addressed as
follows:

	
 

	
 

	
 

	
 

	
ZhengHe:

	
Zheng He
  Real Estate, Inc.

	
 

	
 

	
5445 DTC
  Parkway, Suite 520

	
 

	
 

	
Greenwood
  Village, Colorado 80111

	
 

	
 

	
Attn: Gordon
  Ge Wang, Director

	
 

	
 

	
 

	
 

	
Jinge:

	
Liaoning
  Jinge Real Estate, Inc.

	
 

	
 

	
5,Jingong
  Street,Tiexi District,

	
 

	
 

	
Shenyang,
  Liaoning, China.

	
 

	
 

	
Attn: You
  Jin, Chief Executive Officer

          9.9
Binding Effect. This Agreement
shall inure to and be binding upon the heirs, executors, personal
representatives, successors and assigns of each of the parties to this
Agreement.

          9.10
Mutual Cooperation. The parties
hereto shall cooperate with each other to achieve the purpose of this Agreement
and shall execute such other and further documents and take such other and
further actions as may be necessary or convenient to effect the transaction
described herein.

          9.11
Finders. The parties hereto
represent that no finder has brought about this Agreement, and no finder’s fee
has been paid or is payable by either party.

14

          9.12
Announcements. The parties will
consult and cooperate with each other as to the timing and content of any
public announcements regarding this Agreement.

          9.13
Expenses. Each party will pay its
own legal, accounting and other out-of-pocket expenses incurred in connection
with this Agreement if this Agreement is closed. In the event this Agreement is
not closed due to the failure of Jinge to perform its obligations under the
Agreement or because of misrepresentations made by Jinge and contained in this
Agreement, then Jinge shall be responsible to pay, within ten days of
termination of this Agreement, the legal fees and out-of-pocket expenses
actually incurred by ZhengHe in connection with this Agreement, not to exceed
$50,000. In the event this Agreement is not closed due to the failure of
ZhengHe to perform its obligations under this Agreement or because of misrepresentations
made by ZhengHe contained in this Agreement, then ZhengHe shall be responsible
to pay, within ten days of termination of this Agreement, the legal fees and
out-of-pocket expenses actually incurred by Jinge, not to exceed $10,000. In
the event this Agreement is not consummated for any other reason, ZhengHe and
Jinge will pay their own legal fees and any out-of-pocket expenses incurred in
connection with this Agreement, and neither party shall have any further
liability to the other party. 

          9.14
Survival of Representations and Warranties.
The representations, warranties, covenants and agreements of the parties set
forth in this Agreement or in any instrument, certificate, opinion or other
writing providing for in it, shall survive the Closing, including but not
limited to the covenants set forth in Article VIII, above.

          9.15
Exhibits. As of the execution
hereof, the parties have provided each other with the Exhibits described
herein. Any material changes to the Exhibits shall be immediately disclosed to
the other party.

          9.16
Legal Counsel. ZhengHe has been
represented in connection with this Agreement by Gary A. Agron, Esq. Jinge has
been represented in connection with this Agreement by securities counsel of its
choice.

          IN WITNESS
WHEREOF, the parties have executed this Agreement on the date indicated above.

	
 

	
 

	
 

	
 

	
 

	
ZHENG HE
  REAL ESTATE, INC.

	
 

	
LIAONING
  JINGE REAL ESTATE, INC.

	
 

	
 

	
 

	
By:

	
/s/ Godron Wang

	
 

	
By:

	
/s/ You Jin

	
 

	

	
 

	
 

	

	
 

	
 Godron Wang, Director

	
 

	
 

	
You Jin,
  Chief Executive Officer

15

EXHIBIT 1.1

SCHEDULE OF JINGE STOCKHOLDERS

AND

ALLOCATION OF ZHENGHE SHARES

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Name of Stockholder

	
 

	
 

	
Number of Jinge Group 

  Real Estate Development LTD

  Shares Exchanged (1)

	
 

	
 

	
Number of ZhengHe

  Common Shares

  To Be Issued (1)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
You Jin

	
 

	
 

	
20,000,000

	
 

	
 

	
4,000,000

	
You Jia Jun

	
 

	
 

	
15,000,000

	
 

	
 

	
3,000,000

	
Gordon Wang

	
 

	
 

	
0

	
 

	
 

	
1,000,000

	
Yi Shuang
  Mei

	
 

	
 

	
20,000,000

	
 

	
 

	
2,000,000

	
 

	
 

	

	

	
 

	

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Totals

	
 

	
 

	
55,000,000

	
 

	
 

	
10,000,000

EXHIBIT 1.2

SUBSCRIPTION AGREEMENT

          In
connection with my exchange of $.12 par value common stock of Liaoning Jinge
Group Real Estate Development Limited and Liaoning Dong Ya Hui Fung Automobile
Trading Limited (“Jinge”) for the no par value common stock of Zheng He Real
Estate, Inc. (“ZhengHe”), I acknowledge the matters set forth below and promise
that the statements made herein are true. I understand that ZhengHe is relying
on my truthfulness in issuing its securities to me.

          I
understand that ZhengHe’s common stock (the “Securities) is being issued to me
in a private transaction in exchange for my shares in Jinge and in reliance
upon the exemption provided in section 4(2) of the Securities Act of 1933, as
amended (the “Act”) for non-public offerings and pursuant to the Agreement
Concerning the Exchange of Securities between ZhengHe and Jinge (“Agreement”).
I understand that the Securities are “restricted” under applicable securities
laws and may not be sold by me except in a registered offering (which may not
ever occur) or in a private transaction like this one. I know this is an
illiquid investment and that therefore I may be required to hold the Securities
for an indefinite period of time, but under no circumstances less than one year
from the date of its issuance.

          I
am acquiring the Securities solely for my own account, for long-term investment
purposes only and not with a view to sale or other distribution. I agree not to
dispose of any Securities unless and until counsel for ZhengHe shall have
determined that the intended disposition is permissible and does not violate
the Act, any applicable state securities laws or rules and regulations
promulgated thereunder.

          All
information, financial and otherwise, or documentation pertaining to all
aspects of my acquisition of the Securities and the activities and financial
information of ZhengHe has been made available to me and my representatives, if
any, and I have had ample opportunity to meet with and ask questions of senior
officers of ZhengHe, and I have received satisfactory answers to any questions
I asked.

          In
acquiring the Securities, I have reviewed the Agreement and any independent
investigations made by me or my representatives. I am an experienced investor,
have made speculative investments in the past and am capable of analyzing the
merits of an investment in the Securities.

          I
understand that the Securities are highly speculative, involves a great degree
of risk and should only be acquired by individuals who can afford to lose their
entire investment. Nevertheless, I consider this a suitable investment for me
because I have adequate financial resources and income to maintain my current
standard of living even after my acquisition of the Securities. I know that
ZhengHe is merely a “shell” company with no significant assets or liabilities,
its financial affairs can fluctuate dramatically from time to time, and that
although I could lose my entire investment, I am acquiring the Securities
because I believe the potential rewards are commensurate with the risk. Even if
the Securities became worthless, I could still maintain my standard of living
without significant hardship on me or my family.

          By
signing this Agreement, I also accept and agree to abide by the terms and
conditions of the Agreement as if I had executed the Agreement itself.

          Dated
as of this _____ day of _______________, 2007.

	
 

	
 

	
 

	

	
 

	
Signature

	
 

	
 

	
 

	
 

	
 

	

	
 

	
Name, Please
  Print

	
 

	
 

	
 

	
 

	
 

	

	
 

	
Residence
  Address

	
 

	
 

	
 

	
 

	
 

	

	
 

	
City, State
  and Zip Code

	
 

	
 

	
 

	
 

	
 

	

	
 

	
Area Code
  and Telephone Number

	
 

	
 

	
 

	
 

	
 

	

	
 

	
Social Security
  Number

	
 

	
 

	
 

	
 

	
 

	

	
 

	
Number of
  Jinge Shares Exchanged

2Exhibit 4.3

 

EQT CORPORATION

 

2009 LONG-TERM INCENTIVE PLAN

 

SECTION 1.  PURPOSES

 

1.01  The
purpose of the 2009 Long-Term Incentive Plan (the “Plan”) of EQT Corporation
(the “Company”) is to assist the Company in attracting, retaining and
motivating employees and non-employee directors of outstanding ability and to
align their interests with those of the shareholders of the Company.

 

SECTION 2.  DEFINITIONS; CONSTRUCTION

 

2.01  Definitions.  In
addition to the terms defined elsewhere in the Plan, the following terms as
used in the Plan shall have the following meanings when used with initial
capital letters:

 

2.01.1  “Affiliate” means (i) any Subsidiary or
Parent, or (ii) an entity that directly or through one or more
intermediaries controls, is controlled by or is under common control with, the
Company, as determined by the Committee.

 

2.01.2  “Award” means any Option, Stock Appreciation
Right, Restricted Stock, Restricted Stock Unit, Performance Award, Restricted
Performance Share or Other Stock-Based Award, or any other right or interest
relating to Shares or cash granted under the Plan.

 

2.01.3  “Award Agreement” means any written
agreement, contract or other instrument or document evidencing an Award.

 

2.01.4  “Board” means the Company’s Board of Directors.

 

2.01.5  “Cause,” unless otherwise determined by the
Committee, when used with respect to the termination of employment or service
of a Participant includes:

 

(a)       the conviction of a
felony, a crime of moral turpitude or fraud or having committed fraud,
misappropriation or embezzlement in connection with the performance of his
duties;

 

(b)        willful and
repeated failures to substantially perform his assigned duties; or

 

(c)        a violation of any
express significant policies of the Company.

 

For purposes of this Section 2.01.5,
no act, or failure to act, on the Participant’s part shall be considered “willful”
unless done, or omitted to be done, by the Participant in bad faith and without
reasonable belief that such action or omission was in the best 

 

 

interest of the
Company.  Notwithstanding the foregoing,
a Participant who served as an Executive Officer at anytime during the twelve
(12) months immediately preceding termination shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to him a
copy of a resolution duly adopted by the affirmative vote of a majority of the
members of the Committee at a duly-held meeting of the Committee finding that
in the good faith opinion of the Board the Participant is guilty of the conduct
set forth above in clauses (a), (b) or (c) of this Section 2.01.5.

 

2.01.6  “Code” means the Internal Revenue Code of
1986, as amended from time to time, together with rules, regulations and
interpretations promulgated thereunder. 
References to particular sections of the Code shall include any
successor provisions.

 

2.01.7  “Change of Control” has the meaning provided
in Section 9.03.

 

2.01.8  “Committee” means (a) with respect to
Participants who are employees, the Compensation Committee or such other
committee of the Board as may be designated by the Board to administer the
Plan, as referred to in Section 3.01 hereof, provided however, that any
member of the Committee participating in the taking of any action under the
Plan shall qualify as (1) an “outside director” as then defined under Section 162(m) of
the Code or any successor provision, (2) a “non-employee director” as then
defined under Rule 16b-3 or any successor rule and (3) an “independent”
director under the rules of the New York Stock Exchange, or (b) with
respect to Participants who are non-employee directors, the Board.

 

2.01.9  “Common Stock” means shares of the common
stock, without par value, and such other securities of the Company or other
corporation or entity as may be substituted for Shares pursuant to Section 8.01
hereof.

 

2.01.10  “Covered Employee” shall have the meaning
provided in Section 162(m)(3) of the Code.

 

2.01.11  “Disability” of a Participant has the meaning
set forth in Section 409A of the Code and, as of the effective date of the
Plan, means that the Participant (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical
or mental impairment that can be expected to result in death or can be expected
to last for a continuous period of not less than 12 months, or (ii) is, by
reason of any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement benefits for a period
of not less than three months under an accident and health plan covering
employees of the Participant’s employer. 
If the determination of Disability relates to an Incentive Stock Option,
Disability means Permanent and Total Disability as defined in Section 22(e)(3) of
the Code.

 

2.01.12  “Exchange Act” means the Securities Exchange
Act of 1934, as amended.

 

2.01.13  “Fair Market Value” of shares of any stock,
including but not limited to Common Stock, or units of any other securities
(herein “shares”), shall be the closing 

 

- 2 -

 

price per share
for the date as of which Fair Market Value is to be determined in the principal
market in which such shares are traded, as quoted in the printed or the
electronic version of The Wall Street Journal
(or in such other reliable printed or electronic publication as the Committee,
in its discretion, may determine to rely upon). 
If the Fair Market Value of shares on any date cannot be determined on
the basis set forth in the preceding sentence, or if a determination is
required as to the Fair Market Value on any date of property other than shares,
the Committee shall determine the Fair Market Value of such shares or other
property on such date by such method as the Committee determines in good faith
to be reasonable and in compliance with Section 409A of the Code.  Fair Market Value shall be determined without
regard to any restriction other than a restriction that, by its terms, will
never lapse.

 

2.01.14  “Incentive
Stock Option” means an Option that is intended to meet the requirements of Section 422
of the Code and is designated as such in the Award Agreement relating thereto.
If all of the requirements of Section 422 of the Code are not met, the
Option shall automatically become a nonstatutory Option.

 

2.01.15  “Option” means a right, granted under Section 6.02
hereof, to purchase Shares at a specified price during specified time
periods.  An Option may be either an
Incentive Stock Option or a nonstatutory stock option, which is an Option not
intended to be an Incentive Stock Option.

 

2.01.16  “Other Stock-Based Award” means an Award,
granted under Section 6.07 hereof, that is denominated or payable in,
valued in whole or in part by reference to, or otherwise based on, or related
to, Shares.

 

2.01.17  “Parent” means a corporation, limited
liability company, partnership or other entity that owns or beneficially owns a
majority of the outstanding voting stock or voting power of the Company.  Notwithstanding the above, with respect to an
Incentive Stock Option, Parent shall have the meaning set forth in Section 424(e) of
the Code.

 

2.01.18  “Participant” means an employee or a
non-employee director of the Company or any Affiliate, including, but not
limited to, a Covered Employee, who is granted an Award under the Plan.

 

2.01.19  “Performance Award,” “Performance Goal” and “Performance
Period” shall have the meanings provided in Section 6.06.

 

2.01.20  “Qualified Business Criteria” shall have the
meaning provided in Section 6.06(iii).

 

2.01.21  “Restricted Performance Shares” shall have
the meaning provided in Section 6.06.

 

2.01.22  “Restricted Stock” means Shares, granted
under Section 6.04 hereof, that are subject to certain restrictions.

 

2.01.23  “Restricted Stock Unit” shall have the
meaning provided in Section 6.05.

 

- 3 -

 

2.01.24  “Rule 16b-3” means Rule 16b-3 under
the Exchange Act, as amended from time to time, or any successor to such Rule promulgated
by the Securities and Exchange Commission under Section 16 of the Exchange
Act.

 

2.01.25  “Shares” means shares of Common Stock.

 

2.01.26  “Stock Appreciation Right” means an award
granted under Section 6.03 hereof.

 

2.01.27  “Subsidiary” means any corporation, limited
liability company, partnership or other entity in an unbroken chain of entities
beginning with the Company, if each of the entities other than the last entity
in the chain owns stock or other ownership interests possessing at least 50% of
the total combined voting power in one of the other entities in the chain.  Notwithstanding the above, with respect to an
Incentive Stock Option, Subsidiary shall have the meaning set forth in Section 424(f) of
the Code.

 

2.02  Construction.  For
purposes of the Plan, the following rules of construction shall apply:

 

2.02.1  The word “or” is disjunctive but not
necessarily exclusive.

 

2.02.2  Words in the singular include the plural;
words in the plural include the singular; words in the neuter gender include
the masculine and feminine genders, and words in the masculine or feminine
gender include the other and neuter genders.

 

SECTION 3.
ADMINISTRATION

 

3.01  The Plan
shall be administered by the Committee. 
References hereinafter to the Committee shall mean the Compensation
Committee of the Board (or other appointed committee) with respect to employee
Participants and the Board with respect to non-employee director Participants.

 

The Committee shall have full and final authority to
take the following actions, in each case subject to and consistent with the
provisions of the Plan:

 

(i)  to designate
Participants;

 

(ii)  to determine
the type or types of Awards to be granted to each Participant;

 

(iii)  to determine
the number of Awards to be granted, the number of Shares or amount of cash or
other property to which an Award will relate, the terms and conditions of any
Award (including, but not limited to, any exercise price, grant price or
purchase price, any limitation or restriction, any schedule for lapse of
limitations, forfeiture restrictions or restrictions on exercisability or
transferability, and accelerations or waivers thereof, based in each case on
such considerations as the Committee shall determine), and all other matters to
be determined in connection with an Award;

 

(iv)  to determine
whether, to what extent and under what circumstances an Award may be settled
in, or the exercise price of an Award may be paid in cash, Shares, 

 

- 4 -

 

other Awards or
other property, or an Award may be accelerated, vested, canceled, forfeited,
exchanged or surrendered;

 

(v)  to interpret
and administer the Plan and any instrument or agreement relating to, or Award
made under, the Plan;

 

(vi)  to prescribe
the form of each Award Agreement, which need not be identical for each
Participant;

 

(vii)  to adopt,
amend, suspend, waive and rescind such rules and regulations as the
Committee may deem necessary or advisable to administer the Plan;

 

(viii)  to correct
any defect or supply any omission or reconcile any inconsistency, and to
construe and interpret the Plan, the rules and regulations, any Award
Agreement or other instrument entered into or Award made under the Plan;

 

(ix)  to make all
other decisions and determinations as may be required under the terms of the
Plan or as the Committee may deem necessary or advisable for the administration
of the Plan;

 

(x)  to make such
filings and take such actions as may be required from time to time by
appropriate state, regulatory and governmental agencies; and

 

(xi)  adopt such
modifications, procedures, and subplans as may be necessary or desirable to
comply with provisions of the laws of non-U.S. jurisdictions in which the
Company or any Affiliate may operate, in order to assure the viability of the
benefits of Awards granted to participants located in such other jurisdictions
and to meet the objectives of the Plan.

 

Any action of the Committee with respect to the Plan
shall be final, conclusive and binding on all persons, including the Company,
Affiliates, Participants, any person claiming any rights under the Plan from or
through any Participant, employees, directors and shareholders.  The express grant of any specific power to
the Committee, and the taking of any action by the Committee, shall not be
construed as limiting any power or authority of the Committee.  The Committee may delegate, including, in the
case of the Board, delegation to the Corporate Governance Committee, within
limits and subject to the terms it may establish from time to time, the
authority to perform administrative functions under the Plan and, with respect
to Participants who are not subject to Section 16 of the Exchange Act and
who are not Covered Employees, to grant Awards and take such actions and
perform such functions under the Plan as the Committee may specify.  Each member of the Committee shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him by an officer, manager or other employee of the Company or an
Affiliate, the Company’s independent certified public accountants, or any
executive compensation consultant or other professional retained by the Company
and/or the Committee to assist in the administration of the Plan.

 

- 5 -

 

SECTION 4.  SHARES SUBJECT TO THE PLAN

 

4.01  The
maximum net number of Shares that may be issued and in respect of which Awards
may be granted under the Plan shall be 9,500,000 Shares of Common Stock,
subject to adjustment as provided in Section 8.01, which may be used for
all forms of Awards.  Each Share issued
under the Plan pursuant to an Award other than (i) an Option or other
purchase right for which the Participant pays the Fair Market Value for such
Share measured as of the grant date, or (ii) a Stock Appreciation Right
having a Base Price equal to the Fair Market Value of a Share as of the grant
date, shall reduce the number of available Shares by 1.9.

 

For purposes of this Section 4.01, the number of
Shares to which an Award relates shall be counted against the number of Shares
available under the Plan at the time of grant of the Award, unless such number
of Shares cannot be determined at that time, in which case the number of Shares
actually distributed pursuant to the Award shall be counted against the number
of Shares available under the Plan at the time of distribution; provided,
however, that Awards related to or retroactively added to, or granted in tandem
with, substituted for or converted into, other Awards shall be counted or not
counted against the number of Shares reserved and available under the Plan in
accordance with procedures adopted by the Committee so as to ensure appropriate
counting but avoid double counting.

 

If any Shares to which an Award relates are forfeited,
or payment is made to the Participant in the form of cash, cash equivalents or
other property other than Shares, or the Award otherwise terminates without
payment being made to the Participant in the form of Shares, any Shares counted
against the number of Shares available under the Plan with respect to such
Award shall, to the extent of any such forfeiture, alternative payment or
termination, again be available for Awards under the Plan.  Notwithstanding the foregoing, the following
Shares shall not become available for purposes of the Plan:  (1) Shares previously owned or acquired
by the Participant that are delivered to the Company, or withheld from an
Award, to pay the exercise price, or (2) Shares that are delivered or
withheld for purposes of satisfying a tax withholding obligation.  Any Shares distributed pursuant to an Award
may consist, in whole or part, of authorized and unissued Shares or of treasury
Shares, including Shares repurchased by the Company for purposes of the Plan.

 

SECTION 5.  ELIGIBILITY

 

5.01  Awards may
be granted only to individuals who are active employees (including, without
limitation, employees who also are directors or officers and Covered Employees)
or non-employee directors of the Company or any Affiliate; provided, however,
Incentive Stock Options may be granted only to eligible Participants who are
employees of the Company or a Parent or Subsidiary as defined in Section 424(e) and
(f) of the Code.  Eligible
Participants who are service providers to an Affiliate may be granted Options
or Stock Appreciation Rights under this Plan only if the Affiliate qualifies as
an “eligible issuer of service recipient stock” within the meaning of
§1.409A-1(b)(5)(iii)(E) of the final regulations under Code Section 409A.

 

SECTION 6.  SPECIFIC TERMS OF AWARDS

 

6.01  General.  Subject to
the terms of the Plan and any applicable Award Agreement, Awards may be granted
as set forth in this Section 6.  In
addition, the Committee may impose on 

 

- 6 -

 

any Award or the exercise
thereof, at the date of grant or thereafter (subject to the terms of Section 10.01),
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Committee shall determine, including separate escrow
provisions and terms requiring forfeiture of Awards in the event of termination
of employment by the Participant.  Except
as required by applicable law, Awards may be granted for no consideration other
than prior and/or future services.

 

6.02  Options.  The
Committee is authorized to grant Options to Participants on the following terms
and conditions:

 

(i)  Exercise Price.  The
exercise price per Share of an Option shall not be less than 100% of the Fair
Market Value of a Share on the date of grant of such Option.

 

(ii)  Option Term.  The term
of each Option shall be determined by the Committee, except that no Option
(other than nonstatory Options granted to Participants outside the United
States) shall be exercisable after the expiration of ten years from the date of
grant.  The Option shall be evidenced by
a form of written Award Agreement, and subject to the terms thereof.

 

(iii)  Times and Methods of Exercise.  The Committee shall determine the time or
times at which an Option may be exercised in whole or in part, the methods by
which the exercise price may be paid or deemed to be paid, and the form of such
payment, including, without limitation, cash, Shares, or other property or any
combination thereof, having a Fair Market Value on the date of exercise equal
to the exercise price, provided, however, that (1) in the case of a
Participant who is at the time of exercise subject to Section 16 of the
Exchange Act, any portion of the exercise price representing a fraction of a
Share shall in any event be paid in cash or in property other than any equity
security (as defined by the Exchange Act) of the Company and (2) Shares
delivered or withheld may be subject to terms and conditions imposed by the
Committee.

 

Shares may be withheld
from the exercise or delivered in payment of the exercise price of an Option,
if authorized by the Committee, which in the case of delivery may be
accomplished through the effective transfer to the Company of Shares held by a
broker or other agent.  Unless otherwise
determined by the Committee, the Company will also cooperate with any person
exercising an Option who participates in a cashless exercise program of a
broker or other agent under which all or part of the Shares received upon
exercise of the Option are sold through the broker or other agent, for the
purpose of paying the exercise price of an Option.  Notwithstanding the preceding sentence,
unless the Committee, in its discretion, shall otherwise determine, the exercise
of the Option shall not be deemed to occur, and no Shares will be issued by the
Company upon exercise of an Option, until the Company has received payment in
full of the exercise price.

 

Notwithstanding any other
provision contained in the Plan or in any Award Agreement, but subject to the
possible exercise of the Committee’s discretion contemplated in the last
sentence of this Section 6.02(iii), the aggregate Fair Market Value,
determined as of the date of grant, of the Shares with respect to which
Incentive Stock Options are exercisable for the first time by a Participant
during any calendar year under all plans of the corporation employing such
employee, any parent or subsidiary 

 

- 7 -

 

corporation of
such corporation and any predecessor corporation of any such corporation shall
not exceed $100,000.  If the date on
which one or more of such Incentive Stock Options could first be exercised
would be accelerated pursuant to any provision of the Plan or any Award
Agreement, and the acceleration of such exercise date would result in a
violation of the restriction set forth in the preceding sentence, then,
notwithstanding any such provision, but subject to the provisions of the next
succeeding sentence, the exercise dates of such Incentive Stock Options shall
be accelerated only to the date or dates, if any, that do not result in a
violation of such restriction and, in such event, the exercise dates of the
Incentive Stock Options with the lowest exercise prices shall be accelerated to
the earliest such dates.  The Committee
may, in its discretion, authorize the acceleration of the exercise date of one
or more Incentive Stock Options even if such acceleration would violate the
$100,000 restriction set forth in the first sentence of this paragraph and even
if such Incentive Stock Options are thereby converted in whole or in part to
nonstatutory stock options.

 

(iv)  Termination of Employment. 
In the case of Participants who are employees, unless otherwise
determined by the Committee and reflected in the Award Agreement:

 

(A)  If a
Participant shall die while employed by the Company or an Affiliate or during a
period following termination of employment during which an Option otherwise
remains exercisable under this Section 6.02(iv) or terminate employment
due to Disability, Options granted to the Participant, to the extent
exercisable at the time of the Participant’s death or termination of employment
due to Disability, may be exercised within one year after the date of the
Participant’s death or termination due to Disability, but not later than the
expiration date of the Option, by the Participant, or executor or administrator
of the Participant’s estate or by the person or persons to whom the Participant
shall have transferred such right by will, by the laws of descent and
distribution or, if permitted by the Committee, by inter vivos
transfer.

 

(B)  If the
employment of a Participant with the Company or an Affiliate shall be
involuntarily terminated under circumstances that would qualify the Participant
for benefits under any Company severance plan or arrangement, Options granted
to the Participant, to the extent exercisable at the date of the Participant’s
termination of employment, may be exercised within 90 days after the date of
termination of employment, but not later than the expiration date of the
Option.

 

(C)  Subject to Section 9.02,
if the Participant voluntarily terminates employment with the Company or an
Affiliate for any reason, including retirement, Options granted to the
Participant, whether exercisable or not, shall terminate immediately upon the
termination of employment of the Participant.

 

(D)  Except to the
extent an Option remains exercisable under paragraph (A) or (B) above
or under Section 9.02, any Option granted to a Participant shall terminate
immediately upon the termination of employment of the Participant with the
Company and/or an Affiliate.

 

- 8 -

 

(v)  Termination
of Service.  In the case of
Participants who are non-employee directors, unless otherwise determined by the
Committee and reflected in the Award Agreement:

 

(A)     If a Participant shall die while in service
as a director of the Company or an Affiliate or during a period following
termination of service during which an Option otherwise remains exercisable
under this Section 6.02(v), Options granted to the Participant, to the
extent exercisable at the time of the Participant’s death, may be exercised
within three years after the date of the Participant’s death, but not later
than the expiration date of the Option, by the executor or administrator of the
Participant’s estate or by the person or persons to whom the Participant shall
have transferred such right by will or by the laws of descent and distribution
or, if permitted by the Committee, by inter
vivos transfer.

 

(B)     If the service of a Participant as a
director of the Company or an Affiliate shall be terminated for reasons other
than removal for cause by the Board or a Court pursuant to applicable law,
Options granted to the Participant, to the extent exercisable at the date of
the Participant’s termination of service, may be exercised within three years
after the date of termination of service, but not later than the expiration
date of the Option.

 

(C)     Except to the extent an Option remains
exercisable under paragraph (A) or (B) above or under
Section 9.02, any Option granted to a Participant shall terminate
immediately upon the termination of service of the Participant as a director of
the Company and/or an Affiliate.

 

(vi)  Individual
Limit on Options and Stock Appreciation Rights. 
The aggregate number of Shares for which Options and Stock
Appreciation Rights may be granted under the Plan to any single Participant in
any calendar year shall not exceed 1,000,000 Shares.  The limitation in the preceding sentence
shall be interpreted and applied in a manner consistent with
Section 162(m) of the Code and, to the extent consistent with
Section 162(m) of the Code, in accordance with Section 4.01
hereof.

 

(vii)  Prohibition on Repricing.  Except as otherwise provided in
Section 8, the exercise price of an Option may not be reduced, directly or
indirectly by cancellation and regrant or otherwise, without the prior approval
of the shareholders of the Company.

 

(viii)  Section 409A Limits.  Notwithstanding anything in this Plan or any
Award Agreement, no Option shall provide for dividend equivalents or have any
feature for the deferral of compensation other than the deferral of recognition
of income until the exercise or disposition of the Option.

 

(xi)  Reload
Rights.  No Option shall be
granted with reload rights.

 

6.03     Stock Appreciation Rights.  The Committee is authorized to
grant Stock Appreciation Rights, on a stand-alone basis or in tandem with
Options on the following terms and conditions:

 

- 9 -

 

(i)   Price of
Stand-Alone Stock Appreciation Rights.  The base price for stand-alone Stock
Appreciation Rights (the “Base Price”) shall be such price as the Committee, in
its sole discretion, shall determine but shall not be less than one hundred
percent (100%) of the Fair Market Value per share of the Common Stock covered
by the stand-alone Stock Appreciation Right on the date of grant.

 

(ii)    Payment
of Stock Appreciation Rights. 
Stock Appreciation Rights shall entitle the Participant upon exercise to
receive the amount by which the Fair Market Value of a share of Common Stock on
the date of exercise exceeds the Option Price of any tandem Option or the Base
Price of a stand-alone Stock Appreciation Right, multiplied by the number of
shares in respect of which the Stock Appreciation Right shall have been
exercised.  In the sole discretion of the
Committee, the Company may pay all or any part of its obligation arising out of
a Stock Appreciation Right exercise in cash, shares of Common Stock or any
combination thereof.  Payment shall be
made by the Company upon the date of exercise.

 

(iii)   Term and
Exercise of Stand-Alone Stock Appreciation Rights.  The term of any stand-alone Stock
Appreciation Right granted under the Plan shall be for such period as the
Committee shall determine, but for not more than ten years from the date of
grant thereof.  Each stand-alone Stock
Appreciation Right shall be subject to earlier termination under the
rules applicable to Options as provided in Section 6.02(iv) and
(v) hereof.  Each stand-alone Stock
Appreciation Right granted under the Plan shall be exercisable on such date or
dates during the term thereof and for such number of shares of Common Stock as
may be provided in the Award Agreement.

 

(iv)   Term and
Exercise of Tandem Stock Appreciation Rights.  If Stock Appreciation Rights are granted in
tandem with an Option (A) the Stock Appreciation Rights shall be
exercisable at such time or times and to such extent, but only to such extent
and by the same person, that the related Option shall be exercisable,
(B) the exercise of the related Option shall cause a share for share reduction
in the number of Stock Appreciation Rights that were granted in tandem with the
Option; and (C) the payment of Stock Appreciation Rights shall cause a
share for share reduction in the number of shares covered by such Option.  Stock appreciation rights granted in
conjunction with an Incentive Stock Option shall not be exercisable unless the
then Fair Market Value of the Common Stock exceeds the exercise price of the
Shares subject to the Incentive Stock Option. 
Each tandem Stock Appreciation Right granted under the Plan shall be
subject to earlier termination under the rules applicable to Options as
provided in Section 6.02(iv) and (v) hereof.

 

(v)    Prohibition
on Repricing.  Except as
otherwise provided in Section 8, the base price of a Stock Appreciation
Right may not be reduced, directly or indirectly by cancellation and regrant or
otherwise, without the prior approval of the shareholders of the Company.

 

(vi)   Section 409A
Limits.  Notwithstanding
anything in this Plan or any Award Agreement, no Stock Appreciation Right shall
provide for dividend equivalents or have any feature for the deferral of
compensation other than the deferral of 

 

- 10 -

 

recognition of income
until the exercise or disposition of the Stock Appreciation Right.

 

6.04  Restricted
Stock.  The Committee is
authorized to grant Restricted Stock to Participants on the following terms and
conditions:

 

(i)  Issuance
and Restrictions.  Restricted
Stock shall be subject to such restrictions on transferability and other
restrictions as the Committee may impose (including, without limitation,
limitations on the right to vote Restricted Stock or the right to receive
dividends thereon), which restrictions may lapse separately or in combination at
such times, under such circumstances, in such installments or otherwise, as the
Committee shall determine at the time of grant or thereafter.  The restriction period applicable to
Restricted Stock (other than Restricted Stock granted to non-employee directors)
shall, in the case of a time-based restriction period, be not less than three
years, with no more frequent than annual ratable vesting over such period or,
in the case of a performance-based restriction period, be not less than one
year; provided, however, that up to 250,000 shares may be granted as Restricted
Stock or Restricted Stock Units, in either case with no minimum vesting period.

 

(ii)  Forfeiture.  Except as otherwise determined by the
Committee at the time of grant or thereafter, upon termination of employment or
service during the applicable restriction period, Restricted Stock that is at
that time subject to restrictions shall be forfeited and reacquired by the
Company for no consideration; provided, however, that the Committee may provide,
by rule or regulation or in any Award Agreement, that restrictions on
Restricted Stock shall be waived in whole or in part in the event of
terminations resulting from specified causes.

 

(iii)  Certificates
for Shares.  Restricted Stock
granted under the Plan may be evidenced in such manner as the Committee shall
determine, including, without limitation, issuance of certificates representing
Shares, which may be held in escrow or recordation in book entry form.  Certificates representing Shares of Restricted
Stock shall be registered in the name of the Participant and shall bear an
appropriate legend referring to the terms, conditions and restrictions
applicable to such Restricted Stock.

 

6.05  Restricted Stock Units.  The Committee may, subject to the
provisions of the Plan and such other terms and conditions as it may prescribe,
grant Restricted Stock Units to Participants.

 

(i)  Issuance
and Restrictions.  The
restricted period applicable to Restricted Stock Units (other than Restricted
Stock Units granted to non-employee directors) shall, in the case of a
time-based restriction, be not less than three years, with no more frequent
than annual ratable vesting over such period or, in the case of a
performance-based restriction, be not less than one year; provided, however,
that up to 250,000 shares may be granted as Restricted Stock Units or
Restricted Stock, in either case with no minimum vesting period.  The Committee may also provide the right to
receive dividend equivalents on Restricted Stock Units, on a current,
reinvested and/or restricted basis.

 

- 11 -

 

(ii)  Forfeiture.  Except as otherwise determined by the
Committee at the time of grant or thereafter, upon termination of employment or
service during the applicable restriction period, Restricted Stock Units that
at that time are subject to restrictions shall be forfeited; provided, however,
that the Committee may provide, by rule or regulation or in any Award
Agreement, that restrictions on Restricted Stock Units shall be waived in whole
or in part in the event of terminations resulting from specified causes.

 

 (iii)  Payment. 
Unless otherwise determined by the Committee and provided in an Award
Agreement, during the two and one-half months following the end of the calendar
year in which vesting occurs, the Company shall pay to the Participant in cash
an amount equal to the number of Restricted Share Units vested multiplied by
the Fair Market Value of a Share of the Common Stock on such date.  Notwithstanding the foregoing sentence, the
Committee shall have the authority, in its discretion, to determine that the
obligation of the Company shall be paid in shares of Common Stock or part in
cash and part in shares of Common Stock.

 

6.06  Performance Awards and Restricted Performance Shares.  The Committee is authorized to grant
Performance Awards and Restricted Performance Shares to Participants on the
following terms and conditions:

 

(i)  General.  A Performance Award shall represent a right
to receive Shares, cash, other property or any combination thereof based on the
achievement, or the level of achievement, during a specified Performance Period
of one or more Performance Goals established by the Committee at the time of
the Award.  Restricted Performance Shares
are an award of Shares with restrictions based upon achievement of Performance
Goals during a specified Performance Period. 
Performance Periods for Performance Awards or Restricted Performance
Shares shall be no less than one year in duration.

 

(ii)  Terms.  At or prior to the time a Performance Award
or Restricted Performance Share is granted, the Committee shall cause to be set
forth in the Award Agreement or otherwise in writing (1) the Performance
Goals applicable to the Award and the Performance Period during which the
achievement of the Performance Goals shall be measured, (2) the number of
Shares or amount that may vest or be earned by the Participant based on the
achievement, or the level of achievement, of the Performance Goals or the formula
by which such number of Shares or amount shall be determined and (3) such
other terms and conditions applicable to the Award as the Committee may, in its
discretion, determine to include therein. The terms for such Award so
established by the Committee shall be objective such that a third party having
knowledge of the relevant facts could determine whether or not any Performance
Goal has been achieved, or the extent of such achievement, and the amount, if
any, that has been earned by the Participant based on such performance.  The Committee may retain the discretion to
reduce (but not to increase) the amount of a Performance Award or a number of
Restricted Performance Shares that will be earned based on the achievement of
Performance Goals.  When the Performance
Goals are established, the Committee shall also specify the manner in which the
level of achievement of such Performance Goals shall be calculated and the
weighting assigned to such Performance Goals. 
The Committee may determine and specify within the first 90 days of the
Performance Period that unusual items or certain specified events or
occurrences, including changes in accounting standards or tax laws and the
effects of non-operational items or extraordinary items as defined by generally
accepted accounting principles or international financial reporting standards
as specified by the Committee, 

 

- 12 -

 

shall be excluded from the calculation to the extent
permitted in Section 162(m).

 

(iii)  Performance
Goals.  “Performance Goals”
shall mean one or more preestablished, objective measures of performance during
a specified Performance Period, selected by the Committee in its
discretion.  Such Performance Goals may
be based upon one or more of the following objective performance measures
(“Qualified Business Criteria”): 
earnings per share, earnings per share growth, revenue growth, revenues,
expenses, return on equity, return on total capital, return on assets, earnings
(such as net income, EBIT and similar measures), earnings growth, cash flow
(such as EBITDA, EBITDAX, after-tax cash flow and similar measures), share
price, economic value added, gross margin, operating income, volumes metrics
(such as volumes sold, volumes produced, volumes transported and similar
measures), drilling and well metrics (such as number of gross or net wells
drilled, number of horizontal wells drilled, cost per well and similar
measures), operating efficiency metrics (such as lease operating expense and
other unit operating expense measures, general & administrative
expense (“G&A”) per mcf, G&A per customer and other G&A metrics,
unit gathering and compression expenses and other midstream efficiency
measures, lost and unaccounted for gas metrics, compressor or processing downtime,
days from completed well to flowing gas and similar measures), customer
services measures (such as wait time, on-time service, calls answered and
similar measures) or total shareholder return. 
Performance Goals based on such Qualified Business Criteria may be based
either on the performance of the Company, one or more Subsidiaries or other
Affiliates, any branch, department, business unit or other portion thereof
under such measure for the Performance Period and/or upon a comparison of such
performance with the performance of a peer group of corporations, prior Company
performance or other measure selected or defined by the Committee at the time
of grant.  Performance Goals with respect
to Qualified Business Criteria may be specified in absolute terms, in
percentages, or in terms of growth from period to period or growth rates over
time, as well as measured relative to the performance of a group of comparator
companies, or a published or special index, or a stock market index, that the
Committee deems appropriate.  Performance
Goals need not be based upon an increase or positive result under a business
criterion and could include, for example, the maintenance of the status quo or
the limitation of economic losses (measured, in each case, by reference to a
specific business criterion).

 

(iv)  Committee
Certification.  Following
completion of the applicable Performance Period, and prior to any payment of or
release of Shares pursuant to a Performance Award to the Participant, or
release of restrictions applicable to Restricted Performance Shares, the
Committee shall determine in accordance with the terms of the Award and shall
certify in writing whether the applicable Performance Goal or Goals were
achieved, or the level of such achievement, and the amount, if any, earned by
the Participant based upon such performance. 
For this purpose, approved minutes of the meeting of the Committee at
which certification is made shall be sufficient to satisfy the requirement of a
written certification.  Performance
Awards are not intended to provide for the deferral of compensation, such that
payment for earned Performance Awards shall be paid within two and one-half
months following the end of the calendar year in which the Performance Period
ends or upon vesting, as may be required to avoid 

 

- 13 -

 

characterization of such Awards as deferred
compensation under Section 409A of the Code.

 

(v)  Maximum
Individual Performance Award Payments.  In any one calendar year, the maximum amount
that may be earned by any single Participant for Performance Awards shall be
the sum of (a) $10,000,000 for Performance Awards granted under the Plan
and payable in cash or property (other than Shares) and (b) 500,000 Shares
for Performance Awards granted under the Plan and payable in Shares.  In any one calendar year, the maximum number
of Restricted Performance Shares that may be earned by any single Participant
is 800,000 Shares.  For purposes of
applying these limits in the case of multi-year Performance Periods, the amount
or number of Shares deemed earned in any one calendar year is the total amount
paid or Shares earned for the Performance Period divided by the number of
calendar years in the Performance Period. 
In applying this limit, the amount of any cash or the Fair Market Value
or number of any Shares or other property earned by a Participant shall be
measured as of the close of the final year of the Performance Period regardless
of the fact that certification by the Committee and actual payment or release
of restrictions to the Participant may occur in a subsequent calendar year or
years.

 

(vi)  Certificates
for Shares.  Restricted
Performance Shares granted under the Plan may be evidenced in such manner as
the Committee shall determine, including, without limitation, issuance of
certificates representing Shares, which may be held in escrow, or recordation
in book-entry form.  Certificates
representing Restricted Performance Shares shall be registered in the name of
the Participant and shall bear an appropriate legend referring to the terms,
conditions and restrictions applicable to such Restricted Performance Shares.

 

6.07  Other Stock-Based Awards.  The Committee is authorized, subject to
limitations under applicable law, to grant to Participants such other Awards
that are denominated or payable in, valued in whole or in part by reference to,
or otherwise based on, or related to, Shares, as deemed by the Committee to be
consistent with the purposes of the Plan, including, without limitation,
purchase rights, Shares awarded that are not subject to any restrictions or
conditions, convertible securities, exchangeable securities or other rights
convertible or exchangeable into Shares, as the Committee in its discretion may
determine.  In the discretion of the
Committee, such Other Stock-Based Awards, including Shares, or other types of
Awards authorized under the Plan, may be used in connection with, or to satisfy
obligations of the Company or an Affiliate under, other compensation or incentive
plans, programs or arrangements of the Company or any Affiliate for eligible
Participants.

 

The Committee shall determine the terms and conditions
of Other Stock-Based Awards.  Shares or
securities delivered pursuant to a purchase right granted under this
Section 6.07 shall be purchased for such consideration, paid for by such
methods and in such forms, including, without limitation, cash, Shares
delivered or withheld, or other property or any combination thereof, as the
Committee shall determine, but the value of such consideration shall not be
less than the Fair Market Value of such Shares or other securities on the date
of grant of such purchase right. 
Delivery of Shares or other securities in payment of a purchase right,
if authorized by the Committee, may be accomplished through the effective
transfer to the Company of Shares or other securities held by a broker or other
agent.  Unless otherwise 

 

- 14 -

 

determined by the
Committee, the Company will also cooperate with any person exercising a
purchase right who participates in a cashless exercise program of a broker or
other agent under which all or part of the Shares or securities received upon
exercise of a purchase right are sold through the broker or other agent, or
under which the broker or other agent makes a loan to such person, for the
purpose of paying the exercise price of a purchase right.  Notwithstanding the preceding sentence,
unless the Committee, in its discretion, shall otherwise determine, the
exercise of the purchase right shall not be deemed to occur, and no Shares or
other securities will be issued by the Company upon exercise of a purchase
right, until the Company has received payment in full of the exercise price.  Shares, securities, cash or other payments
made with respect to particular Other Stock-Based Awards that may constitute
deferred compensation under Section 409A of the Code may only be payable
upon a permissible payment event under Section 409A of the Code and the
terms and conditions of such awards shall be in compliance with such, and all
related, requirements.

 

6.08  Dividend Equivalents.  The Committee is authorized to grant dividend
equivalents with respect to any Awards granted hereunder (other than Options or
SARs), subject to such terms and conditions as may be selected by the
Committee; provided that, subject to Section 12.04 hereof, no dividends
shall be paid or distributed in advance of the vesting of the underlying
Award.  Dividend equivalents shall
entitle the Participant to receive payments equal to dividends with respect to
all or a portion of the number of Shares subject to the Award, as determined by
the Committee.  The Committee may provide
that dividend equivalents will be deemed to have been reinvested in additional
Shares, or otherwise reinvested.  To the
extent that dividend equivalents are deemed to be reinvested in additional
Shares with respect to an Award, such additional Shares shall, as the time of
such deemed reinvestment, be included in the number of Shares as to which the
host Award relates for purposes of the shares limits of Section 4.01 of
the Plan.

 

SECTION 7. 
GENERAL TERMS OF AWARDS

 

7.01  Stand-Alone, Tandem and Substitute Awards.  Awards granted under the Plan may, in the
discretion of the Committee, be granted either alone or in addition to, or in
tandem with, any other Award granted under the Plan or any award granted under
any other plan, program or arrangement of the Company or any Affiliate (subject
to the terms of Section 10.01) or any business entity acquired or to be
acquired by the Company or an Affiliate, except that an Incentive Stock Option
may not be granted in tandem with other Awards or awards, and Awards intended
to qualify as performance-based compensation under Section 162(m) of
the Code may not be granted in tandem with other Awards or awards.  Awards granted in addition to or in tandem
with other Awards or awards may be granted either at the same time as or at a
different time from the grant of such other Awards or awards

 

7.02  Certain Restrictions Under Rule 16b-3.  Upon the effectiveness of any amendment to
Rule 16b-3, this Plan and any Award Agreement for an outstanding Award
held by a Participant then subject to Section 16 of the Exchange Act shall
be deemed to be amended, without further action on the part of the Committee,
the Board or the Participant, to the extent necessary for Awards under the Plan
or such Award Agreement to qualify for the exemption provided by
Rule 16b-3, as so amended, except to the extent any such amendment
requires shareholder approval.

 

- 15 -

 

7.03  Decisions Required to be Made by the Committee.  Other provisions of the Plan and any Award
Agreement notwithstanding, if any decision regarding an Award or the exercise
of any right by a Participant, at any time such Participant is subject to
Section 16 of the Exchange Act, is required to be made or approved by the
Committee in order that a transaction by such Participant will be exempt under
Rule 16b-3, then the Committee shall retain full and exclusive power and
authority to make such decision or to approve or disapprove any such decision
by the Participant.

 

7.04  Term of Awards.  The term of each Award shall be for such
period as may be determined by the Committee; provided, however, that in no
event shall the term of any Option (other than a nonstatutory Option granted to
a Participant outside the United States) exceed a period of ten years from the
date of its grant.

 

7.05  Form of Payment of Awards.  Subject to the terms of the Plan and any
applicable Award Agreement, payments or substitutions to be made by the Company
upon the grant, exercise or other payment or distribution of an Award may be
made in such forms as the Committee shall determine at the time of grant or
thereafter (subject to the terms of Section 10.01), including, without
limitation, cash, Shares, or other property or any combination thereof, in each
case in accordance with rules and procedures established, or as otherwise
determined, by the Committee.

 

7.06  Limits on Transfer of Awards; Beneficiaries.  No right or interest of a Participant in any
Award shall be pledged, encumbered or hypothecated to or in favor of any person
other than the Company, or shall be subject to any lien, obligation or
liability of such Participant to any person other than the Company or an
Affiliate.  Except to the extent
otherwise determined by the Committee with respect to Awards other than
Incentive Stock Options, no Award and no rights or interests therein shall be
assignable or transferable by a Participant otherwise than by will or the laws
of descent and distribution, and any Option or other right to purchase or
acquire Shares granted to a Participant under the Plan shall be exercisable
during the Participant’s lifetime only by such Participant.  A beneficiary, guardian, legal representative
or other person claiming any rights under the Plan from or through any
Participant shall be subject to all the terms and conditions of the Plan and
any Award Agreement applicable to such Participant as well as any additional
restrictions or limitations deemed necessary or appropriate by the Committee.

 

7.07  Registration and Listing Compliance.  No Award shall be paid and no Shares or other
securities shall be distributed with respect to any Award in a transaction
subject to the registration requirements of the Securities Act of 1933, as
amended, or any state securities law or subject to a listing requirement under
any listing agreement between the Company and any national securities exchange,
and no Award shall confer upon any Participant rights to such payment or
distribution until such laws and contractual obligations of the Company have
been complied with in all material respects. 
Except to the extent required by the terms of an Award Agreement or
another contract between the Company and the Participant, neither the grant of
any Award nor anything else contained herein shall obligate the Company to take
any action to comply with any requirements of any such securities laws or
contractual obligations relating to the registration (or exemption therefrom)
or listing of any Shares or other securities, whether or not necessary in order
to permit any such payment or distribution.

 

- 16 -

 

7.08  Evidence of Ownership;
Trading Restrictions.  Shares
delivered under the terms of the Plan may be recorded in book entry or
electronic form or issued in the form of certificates.  Shares delivered under the terms of the Plan
shall be subject to such stop-transfer orders and other restrictions as the
Committee may deem advisable under federal or state securities laws, rules and
regulations thereunder, and the rules of any national securities exchange or
automated quotation system on which Shares are listed or quoted.  The Committee may cause a legend or legends
to be placed on any such certificates or issue instructions to the transfer
agent to make appropriate reference to such restrictions or any other restrictions
or limitations that may be applicable to Shares.  In addition, during any period in which
Awards or Shares are subject to restrictions or limitations under the terms of
the Plan or any Award Agreement, the Committee may require any Participant to
enter into an agreement providing that certificates representing Shares
issuable or issued pursuant to an Award shall remain in the physical custody of
the Company or such other person as the Committee may designate.

 

SECTION 8.  ADJUSTMENT PROVISIONS

 

8.01  If a dividend or other distribution shall be
declared upon the Common Stock payable in shares of Common Stock, the number of
shares of Common Stock then subject to any outstanding Options, Stock
Appreciation Rights, Restricted Stock Units, Performance Awards or Other
Stock-Based Awards, the number of shares of Common Stock that may be issued
under the Plan but are not then subject to outstanding Options, Stock
Appreciation Rights, Restricted Stock Units, Performance Awards or Other
Stock-Based Awards and the maximum number of Shares as to which Options, Stock
Appreciation Rights, Restricted Performance Shares or Performance Awards may be
granted and as to which shares may be awarded under Sections 6.02(vi) and
6.06(v), shall be adjusted by adding thereto the number of shares of Common
Stock that would have been distributable thereon if such shares had been
outstanding on the date fixed for determining the shareholders entitled to
receive such stock dividend or distribution. 
Shares of Common Stock so distributed with respect to any Restricted
Stock or Restricted Performance Shares, held in escrow shall also be held by
the Company in escrow and shall be subject to the same restrictions as are
applicable to the Restricted Stock or Restricted Performance Shares on which
they were distributed.

 

If
the outstanding shares of Common Stock shall be changed into or exchangeable
for a different number or kind of shares of stock or other securities of the
Company or another corporation, or cash or other property, whether through
reorganization, reclassification, recapitalization, stock split-up, combination
of shares, merger or consolidation, then there shall be substituted for each
share of Common Stock subject to any then outstanding Option, Stock
Appreciation Right, Restricted Stock Unit, Performance Award or Other
Stock-Based Award, and for each share of Common Stock that may be issued under
the Plan but that is not then subject to any outstanding Option, Stock
Appreciation Right, Restricted Stock Unit, Performance Award or Other
Stock-Based Award, the number and kind of shares of stock or other securities
(and in the case of outstanding Options, Stock Appreciation Rights, Restricted
Stock Units, Performance Awards or Other Stock-Based Awards, the cash or other
property) into which each outstanding share of the Common Stock shall be so
changed or for which each such share shall be exchangeable.  Unless otherwise determined by the Committee
in its discretion, any such stock or securities, as well as any cash or other
property, into or for which any Restricted Stock or Restricted Performance
Shares held in escrow shall be changed or exchangeable in any such 

 

- 17 -

 

transaction shall also be held by the Company in escrow and shall be
subject to the same restrictions as are applicable to the Restricted Stock or
Restricted Performance Shares in respect of which such stock, securities, cash
or other property was issued or distributed.

 

In case of any adjustment or substitution as provided for in this Section
8.01, the aggregate exercise price for all Shares subject to each then
outstanding Option, Stock Appreciation Right, or other purchase right, prior to
such adjustment or substitution shall be the aggregate exercise price for all
shares of stock or other securities (including any fraction), cash or other
property to which such Shares shall have been adjusted or which shall have been
substituted for such Shares.  Any new
exercise price per share or other unit shall be carried to at least three
decimal places with the last decimal place rounded upwards to the nearest whole
number.

 

If the outstanding shares of the Common Stock shall be changed in value
by reason of any spin-off, split-off or split-up, or dividend in partial
liquidation, dividend in property other than cash, or extraordinary
distribution to shareholders of the Common Stock, (a) the Committee shall make
any adjustments to any then outstanding Option, Stock Appreciation Rights,
Restricted Stock Units, Performance Award or Other Stock-Based Award, that it
determines are equitably required to prevent dilution or enlargement of the
rights of optionees and awardees that would otherwise result from any such
transaction, and (b) unless otherwise determined by the Committee in its
discretion, any stock, securities, cash or other property distributed with
respect to any Restricted Stock or Restricted Performance Shares held in escrow
or for which any Restricted Stock or Restricted Performance Shares held in
escrow shall be exchanged in any such transaction shall also be held by the
Company in escrow and shall be subject to the same restrictions as are
applicable to the Restricted Stock or Restricted Performance Shares in respect
of which such stock, securities, cash or other property was distributed or
exchanged.

 

No adjustment or substitution provided for in this Section 8.01 shall
require the Company to issue or sell a fraction of a Share or other
security.  Accordingly, all fractional
Shares or other securities that result from any such adjustment or substitution
shall be eliminated and not carried forward to any subsequent adjustment or
substitution.  Owners of Restricted Stock
or Restricted Performance Shares held in escrow shall be treated in the same
manner as owners of Common Stock not held in escrow with respect to fractional
Shares created by an adjustment or substitution of Shares, except that, unless
otherwise determined by the Committee in its discretion, any cash or other
property paid in lieu of a fractional Share shall be subject to restrictions
similar to those applicable to the Restricted Stock or Restricted Performance
Shares exchanged therefor.

 

If any such adjustment or substitution provided for in this Section 8
requires the approval of shareholders in order to enable the Company to grant
Incentive Stock Options, then no such adjustment or substitution shall be made
without the required shareholder approval. Notwithstanding the foregoing, in
the case of Incentive Stock Options, if the effect of any such adjustment or
substitution would be to cause the Option to fail to continue to qualify as an
Incentive Stock Option or to cause a modification, extension or renewal of such
Option within the meaning of Section 424 of the Code, the Committee may elect
that such adjustment or substitution not be made but rather shall use
reasonable efforts to effect such other adjustment of each then outstanding
Option as the Committee, in its discretion, shall deem equitable and that will
not result in any disqualification, modification, extension or renewal (within
the meaning of 

 

- 18 -

 

Section 424 of the Code) of such Incentive Stock Option.  All adjustments shall be made in a manner
compliant with Section 409A of the Code.  Without
limiting the foregoing, the Committee shall not make any adjustments to
outstanding Options or Stock Appreciation Rights that would constitute a
modification or substitution of the stock right under Treas. Reg.
§1.409A-1(b)(5)(v) that would be treated as the grant of a new stock right or
change in the form of payment for purposes of Section 409A of the Code.

 

SECTION 9.  CHANGE OF CONTROL PROVISIONS

 

9.01  Acceleration of
Exercisability and Lapse of Restrictions.  Unless otherwise determined by the Committee
at the time of grant of an Award or unless otherwise provided in the applicable
Award Agreement, if any Change of Control of the Company shall occur:

 

(i)  all outstanding Awards
pursuant to which the Participant may have exercise rights, the exercise of
which is restricted or limited, shall become fully exercisable;

 

(ii)  all restrictions or
limitations, including risks of forfeiture but excluding performance-based
restrictions, on outstanding Awards subject to restrictions or limitations
under the Plan shall lapse; and

 

(iii)  all performance criteria
and other conditions to payment of Awards under which payments of cash, Shares
or other property are subject to performance conditions shall be deemed to be
achieved or fulfilled, measured at the actual performance level achieved as of
the end of the calendar quarter immediately preceding the date of the Change of
Control, and payment of such Awards on that basis shall be made or otherwise
settled at the time of the Change of Control; provided,
however, that, if such Awards constitute deferred compensation under
Section 409A of the Code, the Awards shall vest on the basis described above
but shall remain payable on the date(s) provided in the underlying Award
Agreements.

 

9.02  Termination of Employment
Following Change of Control. 
If within three years following the date of any Change of Control the
employment or service of a Participant shall be terminated voluntarily or
involuntarily for any reason other than for Cause, then unless otherwise
provided in the applicable Award Agreement, and in addition to any other rights
of post-termination exercise that the Participant (or other holder of the
Award) may have under the Plan or the applicable Award Agreement, any Option,
Stock Appreciation Right or other Award granted to the Participant and outstanding
on the date of the Change of Control, the payment or receipt of which is
dependent upon exercise by the Participant (or other holder of the Award) shall
be exercisable for a period of 90 days following the date of such termination
of employment or service but not later than the expiration date of the Award.

 

9.03  Definition of Change of
Control.  For purposes of this
Section 9, a “Change of Control” of the Company shall mean any of the following
events:

 

(a)  The sale or other
disposition by the Company of all or substantially all of its assets to a
single purchaser or to a group of purchasers, other than to a corporation with
respect to which, following such sale or disposition, more than eighty percent
(80%) of, respectively, the then outstanding shares of Common Stock and the
combined voting 

 

- 19 -

 

power of the then outstanding voting
securities entitled to vote generally in the election of the Board is then
owned beneficially, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
outstanding Common Stock and the combined voting power of the then outstanding
voting securities immediately prior to such sale or disposition in
substantially the same proportion as their ownership of the outstanding Common
Stock and voting power immediately prior to such sale or disposition;

 

(b)  The acquisition in one or more transactions by
any person or group, directly or indirectly, of beneficial ownership of twenty
percent (20%) or more of the outstanding shares of Common Stock or the combined
voting power of the then outstanding voting securities of the Company entitled
to vote generally in the election of the Board; provided, however, the
following shall not constitute a Change of Control:  (i) any acquisition by the Company or any of
its subsidiaries, or any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its subsidiaries and (ii) an acquisition by
any person or group of persons of not more than forty percent (40%) of the
outstanding shares of Company common stock or the combined voting power of the
then outstanding voting securities of the Company if such acquisition resulted
from the issuance of capital stock by the Company and the issuance and the
acquiring person or group was approved in advance of such issuance by at least
two-thirds of the Continuing Directors then in office;

 

(c)  The Company’s termination of its business and
liquidation of its assets;

 

(d)  There is consummated a merger, consolidation,
reorganization, share exchange, or similar transaction involving the Company
(including a triangular merger), in any case, unless immediately following such
transaction:  (i) all or substantially
all of the persons who were the beneficial owners of the outstanding Common
Stock and outstanding voting securities of the Company immediately prior to the
transaction beneficially own, directly or indirectly, more than sixty percent
(60%) of the outstanding shares of Common Stock and the combined voting power
of the then outstanding voting securities entitled to vote generally in the
election of directors of the corporation resulting from such transaction
(including a corporation or other person which as a result of such transaction
owns the Company or all or substantially all of the Company’s assets through
one or more subsidiaries (a “Parent Company”)) in substantially the same
proportion as their ownership of the Common Stock and other voting securities
of the Company immediately prior to the consummation of the transaction, (ii) no
person (other than (A) the Company, any employee benefit plan sponsored or
maintained by the Company or, if reference was made to equity ownership of any
Parent Company for purposes of determining whether clause (i) above is
satisfied in connection with the transaction, such Parent Company, or (B) any
person or group that satisfied the requirements of subsection (b)(ii), above)
beneficially owns, directly or indirectly, 20% or more of the outstanding
shares of Common Stock or the combined voting power of the voting securities
entitled to vote generally in the election of directors of the corporation
resulting from such transaction and (iii) individuals who were members of the
Board immediately prior to the consummation of the transaction constitute at
least a majority of the members of the board of directors resulting from such
transaction (or, if reference was made to equity 

 

- 20 -

 

ownership of any Parent Company for purposes
of determining whether clause (i) above is satisfied in connection with the
transaction, such Parent Company); or

 

(e)  The following individuals (sometimes referred
to herein as “Continuing Directors”) cease for any reason to constitute a
majority of the number of directors then serving:  individuals who, on the date hereof,
constitute the entire Board and any new director (other than a director whose
initial assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent solicitation, relating
to the election of directors of the Company) whose appointment or election by
the Board or nomination for election by the Company’s shareholders was approved
by a vote of at least two-thirds (2/3) of the directors then still in office
who either were directors on the effective date of the Plan or whose
appointment, election or nomination for election was previously so approved.

 

SECTION 10.  AMENDMENTS TO AND TERMINATION OF THE PLAN

 

10.01  The Board may amend, alter, suspend,
discontinue or terminate the Plan without the consent of shareholders or
Participants, except that, without the approval of the shareholders of the
Company, no amendment, alteration, suspension, discontinuation or termination
shall be made if shareholder approval is required by any federal or state law
or regulation or by the rules of any stock exchange on which the Shares may
then be listed, or if the amendment, alteration or other change materially
increases the benefits accruing to Participants, increases the number of Shares
available under the Plan or modifies the requirements for participation under
the Plan, or if the Board in its discretion determines that obtaining such shareholder
approval is for any reason advisable; provided, however, that except as
provided in Section 7.02, without the consent of the Participant, no amendment,
alteration, suspension, discontinuation or termination of the Plan may
materially and adversely affect the rights of such Participant under any Award
theretofore granted to him.  The
Committee may, consistent with the terms of the Plan, waive any conditions or
rights under, amend any terms of, or amend, alter, suspend, discontinue or
terminate, any Award theretofore granted, prospectively or retrospectively;
provided, however, that except as provided in Section 7.02, without the consent
of a Participant, no amendment, alteration, suspension, discontinuation or
termination of any Award may materially and adversely affect the rights of such
Participant under any Award theretofore granted to him.

 

SECTION 11.  GENERAL PROVISIONS

 

11.01  No Right to Awards; No
Shareholder Rights.  No
Participant, employee or director shall have any claim to be granted any Award
under the Plan, and there is no obligation for uniformity of treatment of
Participants, employees and directors, except as provided in any other
compensation, fee or other arrangement with the Participant, employee or
director.  No Award shall confer on any
Participant any of the rights of a shareholder of the Company unless and until
Shares are in fact issued to such Participant in connection with such Award.

 

11.02  Withholding.  To the extent required by applicable Federal,
state, local or foreign law, the Participant or his successor shall make
arrangements satisfactory to the Company, in its discretion, for the
satisfaction of any withholding tax obligations that arise in connection with
an Award.  The Company shall not be
required to issue any Shares or make any cash or other payment under the Plan
until such obligations are satisfied.

 

- 21 -

 

The Company is authorized to withhold from any Award
granted or any payment due under the Plan, including from a distribution of
Shares, amounts of withholding taxes due with respect to an Award, its exercise
or any payment thereunder, and to take such other action as the Committee may
deem necessary or advisable to enable the Company and Participants to satisfy obligations
for the payment of such taxes.  This
authority shall include authority to withhold or receive Shares, Awards or
other property and to make cash payments in respect thereof in satisfaction of
such tax obligations.

 

11.03  No Right to Employment or
Continuation of Service. 
Nothing contained in the Plan or any Award Agreement shall confer, and
no grant of an Award shall be construed as conferring, upon any Participant any
right to continue in the employ or service of the Company or to interfere in any
way with the right of the Company or shareholders to terminate a Participant’s
employment or service at any time or increase or decrease his compensation,
fees or other payments from the rate in existence at the time of granting of an
Award, except as provided in any Award Agreement or other compensation, fee or
other arrangement with the Participant.

 

11.04  Unfunded Status of Awards;
Creation of Trusts.  The Plan
is intended to constitute an “unfunded” plan for incentive compensation.  With respect to any payments not yet made to
a Participant pursuant to an Award, nothing contained in the Plan or any Award
Agreement shall give any such Participant any rights that are greater than
those of a general unsecured creditor of the Company; provided, however, that
the Committee may authorize the creation of trusts or make other arrangements
to meet the Company’s obligations under the Plan to deliver cash, Shares or
other property pursuant to any Award, which trusts or other arrangements shall
be consistent with the “unfunded” status of the Plan unless the Committee
otherwise determines.

 

11.05  No Limit on Other
Compensatory Arrangements. 
Nothing contained in the Plan shall prevent the Company from adopting
other or additional compensation arrangements (which may include, without
limitation, employment agreements with executives and arrangements that relate
to Awards under the Plan), and such arrangements may be either generally
applicable or applicable only in specific cases.  Notwithstanding anything in the Plan to the
contrary, the terms of each Award shall be construed so as to be consistent
with such other arrangements in effect at the time of the Award.

 

11.06  No Fractional Shares.  No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award. 
The Committee shall determine whether cash, other Awards or other
property shall be issued or paid in lieu of fractional Shares or whether such
fractional Shares or any rights thereto shall be forfeited or otherwise
eliminated.

 

11.07  Governing Law.  The validity, interpretation, construction
and effect of the Plan and any rules and regulations relating to the Plan shall
be governed by the laws of the Commonwealth of Pennsylvania (without regard to
the conflicts of laws thereof), and applicable Federal law.

 

11.08  Severability.  If any provision of the Plan or any Award is
or becomes or is deemed invalid, illegal or unenforceable in any jurisdiction,
or would disqualify the Plan or any Award under any law deemed applicable by
the Committee, such provision shall be construed or deemed amended to conform
to applicable laws or if it cannot be construed or deemed amended 

 

- 22 -

 

without, in the
determination of the Committee, materially altering the intent of the Plan or
Award, it shall be deleted and the remainder of the Plan or Award shall remain
in full force and effect; provided, however, that, unless otherwise determined
by the Committee, the provision shall not be construed or deemed amended or deleted
with respect to any Participant whose rights and obligations under the Plan are
not subject to the law of such jurisdiction or the law deemed applicable by the
Committee.

 

SECTION 12.  SPECIAL PROVISIONS RELATED TO SECTION 409A OF THE
CODE.

 

12.01  It is intended that the payments and benefits
provided under the Plan and any Award shall either be exempt from the
application of, or comply with, the requirements of Section 409A of the
Code.  The Plan and all Award Agreements
shall be construed in a manner that effects such intent.  Nevertheless, the tax treatment of the
benefits provided under the Plan or any Award is not warranted or
guaranteed.  Neither the Company, its Affiliates
nor their respective directors, officers, employees or advisers shall be held
liable for any taxes, interest, penalties or other monetary amounts owed by any
Participant or other taxpayer as a result of the Plan or any Award.

 

12.02  Notwithstanding anything in the Plan or in
any Award Agreement to the contrary, to the extent that any amount or benefit
that would constitute non-exempt “deferred compensation” for purposes of Section
409A of the Code would otherwise be payable or distributable, or a different
form of payment (e.g., lump sum or installment) would be effected, under the
Plan or any Award Agreement by reason of the occurrence of a Change of Control,
or the Participant’s Disability or separation from service, such amount or
benefit will not be payable or distributable to the Participant, and/or such
different form of payment will not be effected, by reason of such circumstance
unless the circumstances giving rise to such Change of Control, Disability or
separation from service meet any description or definition of “change in
control event”, “disability” or “separation from service”, as the case may be,
in Section 409A of the Code and applicable regulations (without giving effect
to any elective provisions that may be available under such definition).  This provision does not prohibit the vesting of any Award upon a change of control, disability or
separation from service, however defined. 
If this provision prevents the payment or distribution of any amount or
benefit, such payment or distribution shall be made on the next earliest
payment or distribution date or event specified in the Award Agreement that is
permissible under Section 409A.  If this
provision prevents the application of a different form of payment of any amount
or benefit, such payment shall be made in the same form as would have applied
absent such designated event or circumstance.

 

12.03  Notwithstanding anything in the Plan or in
any Award Agreement to the contrary, if any amount or benefit that would
constitute non-exempt “deferred compensation” for purposes of Section 409A of
the Code would otherwise be payable or distributable under this Plan or any
Award Agreement by reason of a Participant’s separation from service during a
period in which the Participant is a Specified Employee (as defined below),
then, subject to any permissible acceleration of payment by the Committee under
Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts
of interest), or (j)(4)(vi) (payment of employment taxes): (i) the amount of
such non-exempt deferred compensation that would otherwise be payable during
the six-month period immediately following the Participant’s separation from
service will be accumulated through and paid or provided on the first day of
the seventh month following the Participant’s separation from service (or, if
the Participant dies during such period, 

 

- 23 -

 

within
30 days after the Participant’s death) (in either case, the “Required Delay
Period”); and (ii) the normal payment or distribution schedule for any
remaining payments or distributions will resume at the end of the Required
Delay Period.

 

For purposes of this Plan,
the term “Specified Employee” has the meaning given such term in Code Section 409A
and the final regulations thereunder, provided, however,
that, as permitted in such final regulations, the Company’s Specified Employees
and its application of the six-month delay rule of Code Section 409A(a)(2)(B)(i)
shall be determined in accordance with rules adopted by the Board or any
committee of the Board, which shall be applied consistently with respect to all
nonqualified deferred compensation arrangements of the Company, including this
Plan.

 

12.04   Timing of Distribution of Dividend Equivalents.  Unless otherwise provided in the applicable
Award Agreement, any dividend equivalents granted with respect to an Award
hereunder will be paid or distributed no later than the 15th day of the 3rd month following the later of (i) the calendar
year in which the corresponding dividends were paid to shareholders, or (ii) the
first calendar year in which the Participant’s right to such dividends
equivalents is no longer subject to a substantial risk of forfeiture.

 

SECTION 13.  EFFECTIVE DATE AND TERM OF THE PLAN

 

13.01  The effective date and date of adoption of
the Plan shall be February 18, 2009, the date of adoption of the Plan by
the Board, provided that such adoption of the Plan is approved by a majority of
the votes cast at the Company’s Annual Meeting of Shareholders in 2009, at
which a quorum representing a majority of the outstanding voting stock of the
Company is, either in person or by proxy, present and voting.  Absent additional shareholder approval, (1) no
Performance Award or Restricted Performance Shares may be granted under the
Plan subsequent to the Company’s Annual Meeting of Shareholders in 2014, (2) no
Incentive Stock Option may be granted under the Plan subsequent to February 18,
2019 and (3) no other Award may be granted under the Plan subsequent to the
Company’s Annual Meeting in 2019.

 

- 24 -

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