Document:

Exhibit 10.4

 

AMENDED AND RESTATED

1993 DIRECTORS’ STOCK OPTION PLAN OF

INCYTE CORPORATION

(As Amended as of May 19,
2005)

 

SECTION 1.         INTRODUCTION.

 

The Plan was adopted on July 28, 1993, amended
and restated as of March 30, 2001, and last amended as of May 19, 2005.  The purpose of the Plan is to offer the
Company’s Nonemployee Directors an opportunity to acquire a proprietary
interest in the success of the Company, or to increase such interest, by
purchasing Shares of the Company’s Stock. 
The Plan seeks to achieve this purpose by providing for the grant of
nonstatutory options to purchase Stock.

 

The Plan is intended to comply in all respects with Rule 16b-3
(or its successor) under the Exchange Act and shall be construed accordingly.

 

SECTION 2.         DEFINITIONS.

 

(a)           “Board of Directors” shall mean the Board of Directors of the
Company, as constituted from time to time.

 

(b)           “Change in Control” shall mean the occurrence of either of
the following events:

 

(i)            A change
in the composition of the Board of Directors, as a result of which fewer than
one-half of the incumbent directors are directors who either:

 

(A)          Had been
directors of the Company 24 months prior to such change; or

 

(B)           Were
elected, or nominated for election, to the Board of Directors with the affirmative
votes of at least a majority of the directors who had been directors of the
Company 24 months prior to such change and who were still in office at the time
of the election or nomination; or

 

(ii)           Any “person”
(as such term is used in sections 13(d) and 14(d) of the Exchange
Act) by the acquisition or aggregation of securities is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company’s then
outstanding securities ordinarily (and apart from rights accruing under special
circumstances) having the right to vote at elections of directors (the “Base
Capital Stock”); except that any change in the relative beneficial ownership of
the Company’s securities by any person resulting solely from a reduction in the
aggregate number of outstanding shares of Base Capital Stock, and any decrease
thereafter in such person’s ownership of securities, shall be disregarded until
such person increases in any manner, directly or indirectly, such person’s
beneficial ownership of any securities of the Company.

 

 

(c)           “Code” shall mean the Internal Revenue Code of 1986, as
amended.

 

(d)           “Company” shall mean Incyte Corporation (formerly Incyte
Genomics, Inc.), a Delaware corporation.

 

(e)           “Employee” shall mean an employee (within the meaning of section 3401(c) of
the Code and the regulations thereunder) of the Company or of a Subsidiary of
the Company.

 

(f)            “Exchange Act” shall mean the Securities Exchange Act of
1934, as amended.

 

(g)           “Exercise Price” shall mean the amount for which one Share
may be purchased upon exercise of an Option, as specified in the applicable
Stock Option Agreement.

 

(h)           “Fair Market Value” shall mean the market price of Stock,
determined by the Board of Directors as follows:

 

(i)            If Stock
was traded over-the-counter on the date in question but was not traded on The
Nasdaq Stock Market, then the Fair Market Value shall be equal to the mean
between the last reported representative bid and asked prices quoted for such
date by the principal automated inter-dealer quotation system on which Stock is
quoted or, if the Stock is not quoted on any such system, by the “Pink Sheets”
published by the National Quotation Bureau, Inc.;

 

(ii)           If Stock
was traded over-the-counter on the date in question and was traded on The
Nasdaq Stock Market, then the Fair Market Value shall be equal to the
last-transaction price quoted for such date by The Nasdaq Stock Market;

 

(iii)          If
Stock was traded on a stock exchange on the date in question, then the Fair
Market Value shall be equal to the closing price reported for such date by the
applicable composite-transactions report; and

 

(iv)          If none of
the foregoing provisions is applicable, then the Fair Market Value shall be
determined by the Board of Directors in good faith on such basis as it deems
appropriate.

 

In all cases, the
determination of Fair Market Value by the Board of Directors shall be
conclusive and binding on all persons.

 

(i)            “Full Retirement” shall mean the retirement from the Board
of Directors of a member after such member reaches the age of 70.

 

(j)            “Nonemployee Director” shall mean a member of the Board of
Directors who is not an Employee.

 

(k)           “Nonstatutory Option” shall mean a stock option not described
in sections 422(b) or 423(b) of the Code.

 

2

 

(l)            “Option” shall mean a Nonstatutory Option granted under the
Plan and entitling the holder to purchase Shares.

 

(m)          “Optionee” shall mean an individual who holds an Option.

 

(n)           “Plan” shall mean this 1993 Directors’ Stock Option Plan of
Incyte Corporation (formerly Incyte Genomics, Inc.), as it may be amended
from time to time.

 

(o)           “Reverse Split” shall mean the one-for-two reverse split of
the Stock authorized by the Board of Directors prior to the initial adoption of
the Plan.

 

(p)           “Service” shall mean service as a member of the Board of
Directors, whether or not as a Nonemployee Director.

 

(q)           “Share” shall mean one share of Stock, as adjusted in
accordance with Section 6 (if applicable). 
All references to numbers of Shares in Section 3 hereof give effect
to the Reverse Split and the 100% stock dividends paid in November 1997
and August 2000.

 

(r)            “Stock” shall mean the Common Stock ($.001 par value) of the
Company.

 

(s)           “Stock Option Agreement” shall mean the agreement between the
Company and an Optionee that contains the terms, conditions and restrictions
pertaining to his or her Option.

 

(t)            “Subsidiary” shall mean any corporation, if the Company
and/or one or more other Subsidiaries own not less than 50 percent of the
total combined voting power of all classes of outstanding stock of such
corporation.  A corporation that attains
the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.

 

(u)           “Total and Permanent Disability” shall mean that the Optionee
is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or which has lasted, or can be expected to last, for a
continuous period of not less than one year.

 

SECTION 3.      STOCK
SUBJECT TO PLAN.

 

(a)           Basic
Limitation.  Shares offered under the
Plan shall be authorized but unissued Shares or treasury Shares.  The aggregate number of Shares which may be
issued under the Plan shall not exceed 1,500,000 Shares, subject to adjustment
pursuant to Section 6. The number of Shares that are subject to Options at
any time shall not exceed the number of Shares that then remain available for
issuance under the Plan.  The Company,
during the term of the Plan, shall at all times reserve and keep available
sufficient Shares to satisfy the requirements of the Plan.

 

(b)           Additional
Shares.  In the event that any
outstanding Option for any reason expires or is canceled or otherwise
terminated, the Shares allocable to the unexercised portion of such Option
shall again be available for the purposes of the Plan.

 

3

 

SECTION 4.      TERMS
AND CONDITIONS OF OPTIONS.

 

(a)           Stock
Option Agreement.  Each grant of an
Option under the Plan shall be evidenced by a Stock Option Agreement between
the Optionee and the Company.  Such
Option shall be subject to all applicable terms and conditions of the Plan and
may be subject to any other terms and conditions that are not inconsistent with
the Plan and that the Board of Directors deems appropriate for inclusion in a
Stock Option Agreement.

 

(b)           Initial
Grants.  Each new Nonemployee
Director who first joins the Board of Directors after June 1, 2005 shall
receive an Option covering 35,000 Shares within one business day after his or
her initial election to the Board of Directors. 
The number of Shares included in an Option shall be subject to
adjustment under Section 6.

 

(c)           Annual
Grants.  On the first business day
following the conclusion of each regular annual meeting of the Company’s
stockholders, each Nonemployee Director who will continue serving as a member
of the Board of Directors thereafter shall receive an Option covering 20,000
Shares, subject to adjustment under Section 6.  Each Nonemployee Director who is not
initially elected at a regular annual meeting of the Company’s stockholders
shall receive an Option to purchase a pro rata portion of 20,000 Shares within
ten business days of such Director’s election based on the number of full
months remaining from date of election until the next regular annual meeting of
the Company’s stockholders divided by twelve. 
Any fractional shares resulting from such calculation shall be rounded
up to the nearest whole number.

 

(d)           Exercise
Price.  The Exercise Price under each
Option shall be equal to 100 percent of the Fair Market Value of the Stock
subject to such Option on the date when such Option is granted.  The entire Exercise Price of Shares issued
under the Plan shall be payable in cash when such Shares are purchased, except
as follows:

 

(i)            Payment
may be made all or in part with Shares that have already been owned by the
Optionee or the Optionee’s representative for more than six months and that are
surrendered to the Company in good form for transfer.  Such Shares shall be valued at their Fair
Market Value on the date when the new Shares are purchased under the Plan.

 

(ii)           Payment may
be made all or in part by the delivery (on a form prescribed by the Company) of
an irrevocable direction to a securities broker approved by the Company to sell
Shares and to deliver all or part of the sales proceeds to the Company in
payment of all or part of the Exercise Price and any withholding taxes.

 

(iii)          Payment
may be made all or in part by the delivery (on a form prescribed by the
Company) of an irrevocable direction to pledge Shares to a securities broker or
lender approved by the Company, as security for a loan, and to deliver all or
part of the loan proceeds to the Company in payment of all or part of the
Exercise Price and any withholding taxes.

 

(e)           Vesting.  Each Option granted under Subsection (b) above
shall become exercisable (i) as to one-fourth (1/4) of the total number of
shares covered by such Option on

 

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the first anniversary of the date of grant and (ii) as
to one-forty-eighth (1/48) of the total number of shares covered by such Option
on each of a series of thirty-six (36) monthly installments
thereafter.  Except as set forth in the
next succeeding sentence and in the last sentence of this Subsection (e),
each Option granted under Subsection (c) above shall become
exercisable in full on the first anniversary of the date of grant; provided,
however, that each such Option shall become exercisable in full immediately
prior to the next regular annual meeting of the Company’s stockholders
following such date of grant in the event such meeting occurs prior to such
first anniversary date.  Except as set
forth in the last sentence of this Subsection (e), each Option granted
under Subsection (c) to Nonemployee Directors who were not initially
elected at a regular annual meeting of the Company’s stockholders shall become
exercisable in full immediately prior to the next regular annual meeting of the
Company’s stockholders following the date of grant.  Notwithstanding the foregoing, each Option
granted under Subsection (c) above that is outstanding shall become
exercisable in full in the event that a Change in Control occurs with respect
to the Company.

 

(f)            Term
of Options.  Subject to Subsections (g) and
(h) below, each Option shall expire on the 10th anniversary of the date
when such Option was granted.

 

(g)           Termination
of Service (Except by Death).  If an
Optionee’s Service terminates for any reason other than death, then his or her
Options shall expire on the earliest of the following occasions (provided,
however, that clause (iii) below shall be applicable only to Options
granted after March 29, 2005):

 

(i)            The
expiration date determined pursuant to Subsection (f) above;

 

(ii)           The date
24 months after the termination of the Optionee’s Service, if the
termination occurs because of his or her Total and Permanent Disability;

 

(iii)          The
date 12 months after the termination of the Optionee’s Service, if the
termination occurs because of his or her Full Retirement; or

 

(iv)          The date
six months after the termination of the Optionee’s Service for any reason
other than Total and Permanent Disability or, if clause (iii) above is
applicable, Full Retirement.

 

The Optionee may exercise
all or part of his or her Options at any time before the expiration of such
Options under the preceding sentence, but only to the extent that such Options
had become exercisable before his or her Service terminated.  The balance of such Options shall lapse when
the Optionee’s Service terminates.  In
the event that the Optionee dies after the termination of his or her Service but
before the expiration of his or her Options, all or part of such Options may be
exercised at any time prior to their expiration by the executors or
administrators of the Optionee’s estate or by any person who has acquired such
Options directly from him or her by bequest, inheritance or beneficiary
designation under the Plan, but only to the extent that such Options had become
exercisable before his or her Service terminated.

 

(h)           Death
of Optionee.  If an Optionee dies
while he or she is in Service, then his or her Options shall expire on the
earlier of the following dates:

 

5

 

(i)            The
expiration date determined pursuant to Subsection (f) above; or

 

(ii)           The date
24 months after his or her death.

 

All or part of the
Optionee’s Options may be exercised at any time before the expiration of such
Options under the preceding sentence by the executors or administrators of his
or her estate or by any person who has acquired such Options directly from him
or her by bequest, inheritance or beneficiary designation under the Plan.

 

(i)            Nontransferability.  No Option shall be transferable by the
Optionee other than by will, by written beneficiary designation or by the laws
of descent and distribution.  An Option
may be exercised during the lifetime of the Optionee only by the Optionee or by
the Optionee’s guardian or legal representative.  No Option or interest therein may be
transferred, assigned, pledged or hypothecated by the Optionee during his or
her lifetime, whether by operation of law or otherwise, or be made subject to
execution, attachment or similar process.

 

(j)            Stockholder
Approval.  Subsection (e) above
notwithstanding, no Option shall be exercisable under any circumstances unless
and until the Company’s stockholders have approved the Plan.

 

(k)           Notwithstanding
the foregoing, the Board of Directors may from time to time increase the number
of Shares subject to an initial or annual grant of Options under Subsection (b) or
(c) above to any Nonemployee Director to the extent the Board of Directors
determines necessary to induce a Nonemployee Director to become or remain a
Nonemployee Director or to reflect an increase in the duties or
responsibilities of the Nonemployee Director, subject to all terms and
conditions of the Plan otherwise applicable to grants of Options, except that
the Exercise Price under each such Option may be equal to or greater than one
hundred percent (100%) of the Fair Market Value of the Stock subject to the
Option on the date when such Option is granted and each such Option may become
exercisable on the same schedule as set forth in Subsection (e) or
on a different schedule, as the Board of Directors in each case shall
determine.

 

SECTION 5.      MISCELLANEOUS
PROVISIONS.

 

(a)           No
Rights as a Stockholder.  An
Optionee, or a transferee of an Optionee, shall have no rights as a stockholder
with respect to any Shares covered by his or her Option until he or she becomes
entitled, pursuant to the terms of such Option, to receive such Shares.  No adjustment shall be made, except as
provided in Section 6.

 

(b)          Modification,
Extension and Assumption of Options. 
Within the limitations of the Plan, the Board of Directors may modify,
extend or assume outstanding Options or may accept the cancellation of outstanding
Options (whether granted by the Company or another issuer) in return for the
grant of new Options for the same or a different number of Shares and at the
same or a different Exercise Price; provided, however, that the Board of
Directors may not modify outstanding Options to lower the Exercise Price nor
may the Board of Directors assume or accept the cancellation of outstanding
Options in return for the grant of new Options with a lower Exercise Price,
unless such action has been approved by the Company’s stockholders..  The foregoing notwithstanding, no
modification of an Option shall, without the

 

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consent of the Optionee, impair such Optionee’s rights
or increase his or her obligations under such Option.

 

(c)           Restrictions
on Issuance of Shares.  Shares shall
not be issued under the Plan unless the issuance and delivery of such Shares
comply with (or are exempt from) all applicable requirements of law, including
(without limitation) the Securities Act of 1933, as amended, the rules and
regulations promulgated thereunder, state securities laws and regulations, and
the regulations of any stock exchange on which the Company’s securities may
then be listed.  The Company may impose
restrictions upon the sale, pledge or other transfer of such Shares (including
the placement of appropriate legends on stock certificates) if, in the judgment
of the Company and its counsel, such restrictions are necessary or desirable in
order to achieve compliance with the provisions of the Securities Act of 1933,
as amended, the securities laws of any state or any other law.

 

(d)           Withholding
Taxes.  The Company’s obligation to
deliver Stock upon the exercise of an Option shall be subject to any applicable
tax withholding requirements.

 

(e)           No
Retention Rights.  No provision of
the Plan, nor any Option granted under the Plan, shall be construed as giving
any person the right to be elected as, or to be nominated for election as, a
Nonemployee Director or to remain a Nonemployee Director.

 

SECTION 6.      ADJUSTMENT
OF SHARES.

 

(a)           General.  In the event of a subdivision of the
outstanding Stock, a declaration of a dividend payable in Shares, a declaration
of a dividend payable in a form other than Shares in an amount that has a material
effect on the value of Shares, a combination or consolidation of the
outstanding Stock into a lesser number of Shares, a recapitalization, a
spin-off, a reclassification or a similar occurrence, the Board of Directors
shall make appropriate adjustments in one or more of (i) the number of Shares
available for future grants under Section 3, (ii) the number of
Shares to be covered by each new Option under Section 4, (iii) the
number of Shares covered by each outstanding Option or (iv) the Exercise
Price under each outstanding Option.

 

(b)           Reorganizations.  In the event that the Company is a party to a
merger or other reorganization, outstanding Options shall be subject to the
agreement of merger or reorganization. 
Such agreement shall provide (i) for the assumption of outstanding
Options by the surviving corporation or its parent, (ii) for their
continuation by the Company, if the Company is a surviving corporation, (iii) for
payment of a cash settlement equal to the difference between the amount to be paid
for one Share pursuant to such agreement and the Exercise Price or (iv) for
the acceleration of their exercisability followed by the cancellation of
Options not exercised, in all cases without the Optionees’ consent.  Any cancellation shall not occur until after
such acceleration is effective and Optionees have been notified of such
acceleration.

 

(c)           Reservation
of Rights.  Except as provided in
this Section 6, an Optionee shall have no rights by reason of (i) any
subdivision or consolidation of shares of stock of any class, (ii) the
payment of any dividend or (iii) any other increase or decrease in the
number of shares

 

7

 

of stock of any class. 
Any issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or
Exercise Price of Shares subject to an Option. 
The grant of an Option pursuant to the Plan shall not affect in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge or
consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business or assets.

 

SECTION 7.      DURATION
AND AMENDMENTS.

 

(a)           Term
of the Plan.  The Plan shall become
effective on the date of its adoption by the Board of Directors, subject to
approval of the Company’s stockholders. 
The Plan shall remain in effect until it is terminated under Subsection (b) below.

 

(b)           Right
to Amend or Terminate the Plan.  The
Board of Directors may amend, suspend or terminate the Plan at any time and for
any reason, except that the provisions of the Plan relating to the amount, price
and timing of Option grants shall not be amended more than once in any
six-month period.  Any amendment of the
Plan shall be subject to the approval of the Company’s stockholders to the
extent required by applicable laws, regulations, rules, listing standards or
other requirements, including (without limitation) Rule 16b-3 under the
Exchange Act.  Stockholder approval shall
not be required for any other amendment of the Plan.

 

(c)           Effect
of Amendment or Termination.  No
Shares shall be issued or sold under the Plan after the termination thereof,
except upon exercise of an Option granted prior to such termination.  The termination of the Plan, or any amendment
thereof, shall not affect any Option previously granted under the Plan.

 

SECTION 8.      EXECUTION.

 

To record the amendment of the Plan as of May 19,
2005, the Company has caused its authorized officer to execute the same.

 

	
   

  	
  INCYTE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
    /s/
  Paul A. Friedman

  
	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
      President
  & Chief Executive Officer

  
					

 

8Exhibit 10.1

 

 

Amended
and Restated 2005 Long-Term Incentive Plan

 

 

Sabre Holdings Corporation

 

 

CONTENTS

 

	
  Section 1.  Purpose; Definitions

  	
   

  
	
   

  	
   

  
	
  Section 2.  Administration

  	
   

  
	
   

  	
   

  
	
  Section 3.  Stock Subject to Plan

  	
   

  
	
   

  	
   

  
	
  Section 4.  Eligibility

  	
   

  
	
   

  	
   

  
	
  Section 5.  Stock Options

  	
   

  
	
   

  	
   

  
	
  Section 6.  Stock Appreciation Rights

  	
   

  
	
   

  	
   

  
	
  Section 7.  Restricted Stock

  	
   

  
	
   

  	
   

  
	
  Section 8.  Deferred Stock

  	
   

  
	
   

  	
   

  
	
  Section 9.  Stock Purchase Rights

  	
   

  
	
   

  	
   

  
	
  Section 10.  Other Stock-Based Awards

  	
   

  
	
   

  	
   

  
	
  Section 11.  Performance Related Awards

  	
   

  
	
   

  	
   

  
	
  Section 12.  Change in Control Provisions

  	
   

  
	
   

  	
   

  
	
  Section 13.  Amendments and Termination

  	
   

  
	
   

  	
   

  
	
  Section 14.  Unfunded Status of Plan

  	
   

  
	
   

  	
   

  
	
  Section 15.  General Provisions

  	
   

  
	
   

  	
   

  
	
  Section 16.  Term of Plan

  	
   

  

 

i

 

Sabre
Holdings Corporation

Amended and Restated 2005 Long-Term Incentive Plan

 

Section 1.  Purpose; Definitions

 

The Sabre Holdings Corporation Amended and
Restated 1996 Long-Term Incentive Plan is hereby amended and restated (the “2005
Restatement”) and renamed the Sabre Holdings Corporation Amended and Restated
2005 Long-Term Incentive Plan (the “Plan”). 
The 2005 Restatement will be effective May 17, 2005, subject to its
approval by shareholders on that date; provided, however, that, as applied to
awards of Deferred Stock (as defined below) that are granted and/or become
vested on or after January 1, 2005, the 2005 Restatement shall be
effective as of January 1, 2005. 
Awards of Deferred Stock that are both earned and vested on or
prior to December 31, 2004 shall continue to be governed by the terms of
the Plan that were in effect prior to this 2005 Restatement.  As applied to awards of Deferred Stock, the
2005 Restatement is intended as good faith compliance with the provisions of
the American Jobs Creation Act of 2004.

 

The purpose of the Plan is to enable Sabre
Holdings Corporation (the “Company”) to attract, retain, and reward
non-employee directors, executive officers, managers, and key employees of the
Company and its Subsidiaries and Affiliates, and strengthen the mutuality of
interests between such individuals and the Company’s shareholders, by offering
such individuals performance-based stock incentives and/or other equity
interests or equity-based incentives in the Company, as well as
performance-based incentives payable in cash. 
The Plan is an amendment and restatement of the Company’s Amended and
Restated 1996 Long-Term Incentive Plan, which was intended to replace and
supersede the Company’s 1996 Long-Term Incentive Plan (the “1996 Plan”).

 

For purposes of the Plan, the following terms
shall be defined as set forth below

 

(a)                                  “Affiliate” means any entity other than the
Company and its Subsidiaries that is designated by the Board as a participating
employer under the Plan, provided that the Company directly or indirectly owns
at least twenty percent (20%) of the combined voting power of all classes of
stock of such entity or at least twenty percent (20%) of the ownership
interests in such entity.

 

(b)                                 “Board” means the Board of Directors of the
Company.

 

(c)                                  “Book  Value”
means, as of any given date, on a per share basis (a) the Stockholders’
Equity in the Company as of the end of the immediately preceding fiscal year as
reflected in the Company’s consolidated balance sheet, subject to such
adjustments as the Committee shall specify at or after grant, divided by (b) the
number of then outstanding shares of Stock as of such year-end date (as
adjusted by the Committee for subsequent events).

 

(d)                                 “Cause” means, but is not limited to, any of
the following actions: theft, dishonesty or fraud, insubordination, persistent
inattention to duties or excessive absenteeism, violation of the Company’s Work
Principles, Business Ethics or other policies, or state or federal law, or any
other conduct which would disqualify the participant from entitlement to unemployment
benefits. The determination of whether Cause exists shall be made in the
Company’s sole discretion.

 

 

(e)                                  “Code” means the Internal Revenue Code of
1986, as amended from time to time, and any successor thereto.

 

(f)                                    “Committee” means the Committee referred to
in Section 2 of the Plan.  If at any
time no Committee shall be in office, then the functions of the Committee
specified in the Plan shall be exercised by the Board.

 

(g)                                 “Company” means Sabre Holdings Corporation,
a corporation organized under the laws of the State of Delaware, or any
successor corporation.

 

(h)                                 “Deferred Stock” means an award made
pursuant to Section 8 below of the right to receive Stock at the end of a
specified deferral period.

 

(i)                                     “Disability” means disability as determined
under procedures established by the Committee for purposes of this Plan;
provided, however, that for the purposes of Section 8(b)(iii) and Section 12(a)(ii)(C),
the term “Disability” shall mean a
condition under which a participant either (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 twelve 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 twelve months, receiving income replacement benefits
for a period of not less than three months under an accident and health plan
covering employees of the Company.

 

(j)                                     “Effective  Date”
means May 14, 2002.  Except as
otherwise provided for herein with respect to awards of Deferred Stock, the
effective date of this 2005 Restatement is May 17, 2005.

 

(k)                                  “Exchange Act” means the Securities Exchange
Act of 1934, as amended from time to time, and any successor thereto.

 

(l)                                     “Fair  Market
Value” means, as of any given
date, unless otherwise determined by the Committee in good faith, the mean
between the highest and lowest quoted selling price, regular was, of the Stock
on the New York Stock Exchange or, if no such sale of Stock occurs on the New
York Stock Exchange on such date, the fair market value of the Stock as
determined by the Committee in good faith.

 

(m)                               “Incentive Stock Option” means any Stock
Option intended to be and designated as and incentive Stock Option” within the
meaning of Section 422 of the Code.

 

(n)                                 “Key Employee” shall mean a “key employee” as defined in Section 416(i) of
the Code without regard to paragraph (5) thereof.

 

(o)                                 “Nonqualified Stock Option” means any Stock
Option that is not an Incentive Stock Option.

 

2

 

(p)                                 “Other Stock-Based Award” means an award
under Section 10 below that is valued in whole or in part by reference to,
or is otherwise based on, Stock.

 

(q)                                 “Performance Award” means an award under Section 11
below that is valued based on the level of attainment of performance objectives
related to the performance measures set forth in Section 11.

 

(r)                                    “Person” means “person” as defined in Section 3(a)(9) of
the Exchange Act and as used in Sections 13(d) and 14(d) thereof,
including a “group” as defined in Section 13(d) of the Exchange Act
but excluding the Company and Subsidiary and any employee benefit plan
sponsored or maintained by the Company or any Subsidiary (including any trustee
of such plan acting as trustee).

 

(s)                                  “Plan” means Sabre Holdings Corporation’s
Amended and Restated 2005 Long-Term Incentive Plan (formerly known as the
Amended and Restated 1996 Long-Term Incentive Plan), as hereinafter amended
from time to time.

 

(t)                                    “Restricted  Stock” means an award of shares of Stock that is subject to
restrictions under Section 7 below.

 

(u)                                 “Stock” means the Class A Common Stock,
$.01 par value per share, of the Company.

 

(v)                                 “Stock  Appreciation
Right” means the right to
participate in an increase in the value of a share of Stock pursuant to an
award granted under Section 6.

 

(w)                               “Stock  Option”
or “Option” means any option to
purchase shares of Stock (including Restricted Stock and Deferred Stock, if the
Committee so determines) granted pursuant to Section 5 below.

 

(x)                                   “Stock  Purchase
Right” means the right to purchase
Stock pursuant to Section 9.

 

(y)                                 “Subsidiary” means a corporation (other than
the Company) in an unbroken chain of corporations beginning with the Company if
each of the corporations (other than the last corporation in the unbroken
chain) owns stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations in the
chain.

 

In addition, the terms “Change in Control,” “Potential
Change in Control,” “Change in Control Price,” “Good Reason,” and “Notice of
Termination” shall have the meanings set forth, respectively, in Sections
12(b), (c), (d), (e), and (f) below.

 

Section 2.  Administration

 

The Plan shall be administered by a committee
of not less than two members of the Board, who shall be appointed by, and serve
at the pleasure of, the Board. In selecting the members of the Committee, the
Board shall take into account the requirements for the members of the Committee
to be treated as “Outside Directors” within the meaning of Section 162(m)
of the Code and “Non-Employee Directors” for purposes of Rule 16b-3, as
promulgated under Section 16 of the Exchange Act. The functions of the
Committee specified in the Plan shall be

 

3

 

exercised by the Board, if and to the extent that no Committee exists
which has the authority to so administer the Plan or to the extent that the
Committee is not comprised solely of Non-Employee Directors for purposes of Rule 16b-3,
as promulgated under Section 16 of the Exchange Act.

 

The Committee shall have full authority to
grant, pursuant to the terms of the Plan, to non-employee directors, executive
officers, managers, and key Employees, eligible under Section 4: (i) Stock
Options and Incentive Stock Options: (ii) Stock Appreciation Rights: (iii) Restricted
Stock: (iv) Deferred Stock: (v) Stock Purchase Rights: (vi) Other
Stock-Based Awards: and/or (vii) Performance Awards.

 

In particular the Committee shall have the
authority:

 

	
  (i)

  	
   

  	
  To select the non-employee directors,
  executive officers, managers, and key employees of the Company and its
  Subsidiaries and Affiliates to whom Stock Options, Incentive Stock Options,
  Stock Appreciation Rights, Restricted Stock, Deferred Stock, Stock Purchase
  Rights, Other Stock-Based Awards, and/or Performance Awards may from time to
  time be granted hereunder;

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  To determine whether and to what extent
  Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights,
  Restricted Stock, Deferred Stock, Stock Purchase Rights, Other Stock Based
  Awards, and/or Performance Awards or any combination thereof, are to be
  granted hereunder to one or more eligible employees and non-employee
  directors;

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  Subject to the provisions of Sections 3, 5
  and 11, to determine the number of shares to be covered by each such award
  granted hereunder;

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  To determine the terms and conditions, not
  inconsistent with the terms of the Plan, of any award granted hereunder
  (including, but not limited to, the share price and any restriction or
  limitation, or any vesting acceleration or waiver of forfeiture restrictions
  regarding any Stock Option or other award and or the shares of Stock relating
  thereto, based in each case on such factors as the Committee shall determine
  in its sole discretion);

  
	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  To determine whether and under what
  circumstances a Stock Option may be settled in cash, Restricted Stock and/or
  Deferred Stock under Section 5(l) or (m), as applicable, instead of Stock;

  
	
   

  	
   

  	
   

  
	
  (vi)

  	
   

  	
  To determine whether and under what
  circumstances an award of Restricted Stock or Deferred Stock may be settled
  in cash;

  
	
   

  	
   

  	
   

  
	
  (vii)

  	
   

  	
  To determine whether, to what extent and
  under what circumstances Option grants and/or other awards under the Plan
  and/or other cash awards made by the Company are to be made, and operate, on
  a tandem basis vis-à-vis other awards under the Plan and/or cash awards made
  outside of the Plan, or on an additive basis;

  

 

 

4

 

	
  (viii)

  	
   

  	
  To determine whether, to what extent and
  under what circumstances Stock and other amounts payable with respect to an
  award under this Plan shall be deferred either automatically or at the
  election of the participant (including providing for and determining the
  amount (if any) of any deemed earnings on any deferred amount during any
  deferral period);

  
	
   

  	
   

  	
   

  
	
  (ix)

  	
   

  	
  To determine the terms and restrictions
  applicable to Stock Purchase Rights and the Stock purchased by exercising
  such Rights; and

  
	
   

  	
   

  	
   

  
	
  (x)

  	
   

  	
  To designate the Corporate Secretary of the
  Company, other executive officers or employees of the Company or competent
  professional advisors to assist the Committee in the administration of the
  Plan, and to grant authority to such persons to execute agreements or other
  documents on its behalf.

  

 

 

The Committee shall have the authority to
adopt, alter, and repeal such rules, guidelines and practices governing the
Plan as it shall, from time to time, deem advisable: to interpret the terms and
provisions of the Plan and any award issued under the Plan (and any agreements
relating thereto): and to otherwise supervise the administration of the Plan.

 

All decisions made by the Committee pursuant
to the provisions of the Plan shall be made in the Committee’s sole discretion
and shall be final and binding on all persons, including the Company and Plan
participants.

 

Section 3.  Stock Subject to Plan

 

Effective May 14, 2002, the total number
of shares of Stock reserved and available for distribution under the Plan was
increased by 14,000,000 shares. Along with the 13,000,000 shares previously
reserved (which have grown to be 13,635,410 as a result of the adjustment for
the dividend preceding the Company’s spin-off from AMR Corporation) the total
number of shares reserved under the plan is 27,635,410 shares.

 

From and after May 17, 2005, no more
than five million (5,000,000) shares of Stock shall be granted in the form of
Restricted Stock, Deferred Stock, Stock Purchase Rights, Other Stock Based
Awards, Performance Awards.  The five
million (5,000,000) share limit is inclusive of the approximately forty-one
thousand (41,000) shares remaining of the previous two million (2,000,000)
share Restricted Stock limit and the approximately one million (1.000,000)
shares remaining of the previous one million (1,000,000) share limit of
Deferred Stock, Stock Purchase Rights, Performance Awards, or Other Stock Based
Awards, but does not include shares of Stock subject to awards of Restricted
Stock, Deferred Stock, Stock Purchase Rights, Performance Awards, or Other
Stock Based Awards that were granted prior to May 17, 2005.

 

Subject to Section 6(b)(iv) below,
if any shares of Stock that have been optioned cease to be subject to a Stock
Option or an Incentive Stock Option, or if any such shares of Stock that are
subject to any Restricted Stock or Deferred Stock award, Stock Purchase Right,
Performance Awards, or Other Stock-Based Award granted hereunder are forfeited
or any such award otherwise terminates without a payment being made to the
participant in the form of Stock, such shares shall not be counted against the
share limits set forth in this Section 3 and shall again be available for
distribution in connection with future awards under the Plan.

 

5

 

In the event of any merger, reorganization,
consolidation, recapitalization, Stock dividend, large non-recurring cash
dividend (as determined by the Committee), Stock split or other change in
corporate structure affecting the Stock, such substitution or adjustment shall
be made in the aggregate number of shares reserved for issuance under the Plan,
in the number and option price of shares subject to outstanding Options granted
under the Plan, in the number and purchase price of shares subject to
outstanding Stock Purchase Rights under the Plan, and in the number of shares
subject to other outstanding awards granted under the Plan as may be determined
to be appropriate by the Committee, in its sole discretion, provided that the
number of shares subject to any award shall always be a whole number. Such
adjusted option price shall also be used to determine the amount payable by the
Company upon the exercise of any Stock Appreciation Right.

 

Section 4.  Eligibility

 

Non-employee directors, executive officers,
managers, and other key employees of the Company and its Subsidiaries and
Affiliates who are responsible for or contribute to the management, growth
and/or profitability of the business of the Company and/or its Subsidiaries and
Affiliates are eligible to be granted awards under the Plan.

 

Section 5.  Stock Options

 

Stock Options may be granted alone, in
addition to or in tandem with other awards granted under the Plan. Any Stock
Option granted under the Plan shall be in such form as the Committee may from
time to time approve.

 

Stock Options granted under the Plan may be
of two types:  (i) Incentive Stock
Options and (ii) Nonqualified Stock Options.

 

The Committee shall have the authority to
grant to any optionee Incentive Stock Options, Nonqualified Stock Options, or
both types of Stock Options (in each case with or without Stock Appreciation
Rights); provided that, in no event shall the number of shares of Stock subject
to any Stock Options granted to any employee during any twelve (12) month
period (determined without regard to whether any option is cancelled) exceed
one million (1,000,000) shares, as such number may be adjusted pursuant to Section 3.

 

Options granted under the Plan shall be
subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the Plan, as the
Committee shall deem desirable:

 

(a)                                  Option Price.  The Option price per share of Stock
purchasable under a Stock Option shall be determined by the Committee at the
time of grant but shall be not less than one hundred percent (100%) of the Fair
Market Value of the Stock at grant, provided however, that the Option price per
share of Stock purchasable under a Stock Option that is granted in connection with
a merger, stock exchange, or other acquisition as a substitute or replacement
award for options held by optionees of the acquired entity may be less than one
hundred percent (100%) of the Fair Market Value of the Stock at the time of
grant.

 

6

 

(b)                                 Option Term.  The term of
each Stock Option shall be fixed by the Committee, but no Stock Option shall be
exercisable more than ten (10) years after the date the Option is granted.

 

(c)                                  Exercisability.  Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined
by the Committee at or after grant: provided, however, that, except as provided
in Section 12, or unless otherwise determined by the Committee at or after
grant, no Stock Option shall be exercisable prior to the first anniversary date
of the granting of the Option. If the Committee provides, in its sole
discretion, that any Stock Option is exercisable only in installments, the
Committee may waive such installment exercise provisions at any time at or
after grant in whole or in part, based on such factors as the Committee shall
determine, in its sole discretion.

 

(d)                                 Method of Exercise.  Subject to whatever installment exercise
provisions apply under Section 5(c), Stock Options may be exercised in
whole or in part at any time during the option period, by giving written notice
of exercise to the Company, or its designated representative, specifying the
number of shares to be purchased.

 

Such notice shall be accompanied by payment
in full of the purchase price, either by check, note or such other instrument
as the Committee may accept.  As
determined by the Committee, in its sole discretion, at or after grant, payment
in full or in part may also be made in the form of unrestricted Stock already
owned by the optionee or, in the case of the exercise of a Nonqualified Stock
Option, in the form of Restricted Stock, or Deferred Stock subject to an award
hereunder (based, in each case, on the Fair Market Value of the Stock on the
date the Option is exercised).

 

If payment of the option exercise price of a
Nonqualified Stock Option is made in whole or in part in the form of Restricted
Stock or Deferred Stock, such Restricted Stock or Deferred Stock (and any replacement
shares relating thereto) shall remain (or be) restricted or deferred, as the
case may be, in accordance with the original terms of the Restricted Stock
award or Deferred Stock award in question, and any additional Stock received
upon the exercise shall be subject to the same forfeiture restrictions or
deferral limitations, unless otherwise determined by the Committee, in its sole
discretion, at or after grant.

 

No shares of Stock shall be issued until full
payment therefore has been made. An optionee shall generally have the rights to
dividends or other rights of a shareholder with respect to the shares subject
to the Option when the optionee has given written notice of exercise, has paid
in full for such shares, and, if requested, has given the representation
described in Section 15(a).

 

(e)                                  Transferability of Options.  Unless the Committee shall permit (on such
terms and conditions as it shall establish) an Option to be transferred to a
member of the participant’s immediate family or to a trust or similar vehicle
for the benefit of such immediate family members, no Option shall be assignable
or transferable except by will or the laws of descent and distribution, and
except to the extent required by law, no right or interest of any participants
shall be subject to any lien, obligation or liability of the participant.

 

7

 

(f)                                    Termination by Death.  Subject to Section 5(k), if an optionee’s
employment by or service with the Company and any Subsidiary or Affiliate
terminates by reason of death, any Stock Option held by such optionee may
thereafter be exercised in accordance with the terms and conditions established
by the Committee.

 

(g)                                 Termination by Reason of Disability.  Subject to Section 5(k), if an optionee’s
employment by or service with the Company and any Subsidiary or Affiliate
terminates by reason of Disability, any Stock Option held by such optionee may
thereafter be exercised by the optionee in accordance with the terms and
conditions established by the Committee. In the event of termination of
employment or service by reason of Disability, if an Incentive Stock Option is
exercised after the expiration of the exercise periods that apply for purposes
of Section 422 of the Code, such Stock Option will thereafter be treated
as a Nonqualified Stock Option.

 

(h)                                 Termination for Cause.  Subject to Section 5(k), if an optionee’s
employment by the Company and any Subsidiary or Affiliate is terminated for
Cause, the Stock Option shall thereupon terminate, whether or not exercisable
at that time.

 

(i)                                     Other Termination.  Unless otherwise determined by the Committee,
if an optionee’s employment by or service with the Company and any Subsidiary
or Affiliate terminates for any reason other than death or Disability, the
Stock Option shall thereupon terminate.

 

(j)                                     Incentive Stock Options.  Anything in the Plan to the contrary
notwithstanding, no term of this Plan relating to Incentive Stock Options shall
be interpreted, amended or altered, nor shall any discretion or authority
granted under the Plan be so exercised, so as to disqualify the Plan under Section 422
of the Code, or, without the consent of the optionee(s) affected, to disqualify
any Incentive Stock Option under such Section 422.

 

(k)                                  Buyout Provisions.  The Committee may at any time offer to buy
out for payment in cash, Stock, Deferred Stock or Restricted Stock, an Option
previously granted, based on such terms and conditions as the Committee shall
establish and communicate to the participant at the time that such offer is
made.

 

(l)                                     Settlement Provisions.  If the option agreement so provides at grant
or is amended after grant but prior to the exercise to so provide (with the
optionee’s consent), the Committee may require that all or part of the shares to
be issued with respect to the spread value of an exercised Option take the form
of Deferred or Restricted Stock, which shall be valued on the date of exercise
on the basis of the Fair Market Value (as determined by the Committee) of such
Deferred or Restricted Stock determined without regard to the deferral
limitations and/or forfeiture restrictions involved.

 

8

 

(m)                               Repricing. The price payable for any Share
issued under the Plan may not be decreased after the date of grant, nor may an
Option or Stock Appreciation Right granted under the Plan be surrendered to the
Company as consideration for the grant of a new Option or Stock Appreciation
Right with a lower price payable per Share; except that the Committee may make
adjustments pursuant to Section 3.

 

Section 6.  Stock Appreciation Rights

 

(a)                                  Grant and Exercise.  Stock Appreciation Rights may be granted
alone or in conjunction with all or part of any Stock Option granted under the
Plan: provided that, in no event shall the number of shares subject to Stock
Appreciation Rights granted to any employee during any twelve (12) month period
exceed one million (1,000,000) shares, as such number may be adjusted pursuant
to Section 3. In the case of a Nonqualified Stock Option, such rights may
be granted either at or after the time of the grant of such Stock Option. In
the case of an Incentive Stock Option, such rights may be granted only at the
time of grant of such Stock Option.

 

The term of each Stock Appreciation Right
granted independent of a Stock Option shall be fixed by the Committee, but no
Stock Appreciation Right shall be exercisable more than ten (10) years
after the date the Stock Appreciation Right is granted. A Stock Appreciation
Right or applicable portion thereof granted with respect to a given Stock
Option shall terminate and no longer be exercisable upon the termination or
exercise of the related Stock Option, subject to such provisions as the
Committee may specify at grant where a Stock Appreciation Right is granted with
respect to less than the full number of shares covered by a related Stock
Option.

 

A Stock Appreciation Right may be exercised
by an optionee, subject to Section 6(b), in accordance with the procedures
established by the Committee for such purposes. Upon such exercise, the
optionee shall be entitled to receive an amount determined in the manner
prescribed in Section 6(b). Stock Options relating to exercised Stock
Appreciation Rights shall no longer be exercisable to the extent that the
related Stock Appreciation Rights have been exercised.

 

(b)                                 Terms and Conditions.  Stock Appreciation Rights shall be subject to such terms and
conditions, not inconsistent with the provisions of the Plan, as shall be
determined from time to time by the Committee, including the following:

 

(i)                                     Stock
Appreciation Rights shall be exercisable at such time or times as shall be
determined by the Committee at or after grant: provided, however, that Stock
Appreciation Rights granted in conjunction with Stock Options shall be
exercisable only at such time or times and to the extent that the Stock Options
to which they relate shall be exercisable in accordance with the provisions of Section 5
and this Section 6 of the Plan.

 

(ii)                                  Upon
the exercise of a Stock Appreciation Right, an optionee shall be entitled to
receive an amount in shares of Stock equal in value to the excess of the Fair
Market Value on the date of exercise of one share of Stock over the exercise
price per share determined by the Committee at the time of grant multiplied by
the number of shares in respect of which the Stock Appreciation Right shall
have been exercised, which exercise price shall not be less than one hundred
percent (100%) of the Fair Market

 

9

 

Value of one share of Stock on the date of
grant. When payment is to be made, the number of shares to be paid shall be
calculated on the basis of the Fair Market Value of the shares on the date of
exercise.  Notwithstanding anything in
this Section 6(b) to the contrary, Stock Appreciation Right
grants made to employees who are not subject to Section 409A of the Code
may be settled in either cash or shares, in compliance with local
regulations.  For employees who are
subject to section 409A of the Code the Committee may provide, at
the time a Stock Appreciation Right is granted, that the Stock Appreciation
Right may be settled in cash or shares of Stock in the sole discretion of the
Committee, so long as any Stock Appreciation Right that may be settled in cash
comply with all of the applicable provisions of Section 409A of the Code
and any regulations promulgated thereunder.

 

(iii)                               Except
to the extent the Committee may authorize or permit Stock Appreciation Rights
to be transferred to, or for the benefit of, members of the participant’s
family, no Stock Appreciation Right shall be transferable by the participant
otherwise than by will or by the law’s of descent and distribution, and all
Stock Appreciation Rights shall be exercisable, during the participant’s
lifetime only by the participant.

 

(iv)                              Upon
the exercise of a Stock Appreciation Right granted in conjunction with a Stock
Option under the Plan, the number of shares issued under such Stock
Appreciation Right based on the value of the Stock Appreciation Right at the
time of exercise shall be deemed to be issued for purposes of the share
authorization set forth in Section 3 of the Plan.

 

Section 7.  Restricted Stock

 

(a)                                  Administration.  Subject to the limitations set forth in Section 3,
shares of Restricted Stock may be issued either alone or, in addition to, or in
tandem with, other awards granted under the Plan and or cash awards made
outside of the Plan. The Committee shall determine the eligible persons to
whom, and the time or times at which, grants of Restricted Stock will be made,
the number of shares to be awarded, the price (if any) to be paid by the
recipient of Restricted Stock (subject to Section 7(b)), the time or times
within which such awards may be subject to forfeiture, and all other terms and
conditions of the awards.

 

The Committee may condition the grant of
Restricted Stock upon the attainment of specified performance goals or such
other factors as the Committee may determine, in its sole discretion.

 

The provisions of Restricted Stock awards
need not be the same with respect to each recipient.

 

(b)                                 Awards and Certificates.  The prospective recipient of a Restricted
Stock award shall not have any rights with respect to such award, unless and
until such recipient has executed an agreement evidencing the award and has
delivered a fully executed copy thereof to the Company, and has otherwise
complied with the applicable terms and conditions of such award.

 

10

 

(i)                                     The
purchase price for shares of Restricted Stock shall be equal to or less than
their par value and may be zero.

 

(ii)                                  Awards
of Restricted Stock must be accepted within a reasonable period (or such
specific period as the Committee may specify at grant) after the award date, by
executing an award agreement and paying whatever price (if any) is required
under Section 7(b)(i).

 

(c)                                  Terms and Conditions.  The shares of Restricted Stock awarded
pursuant to this Section 7 shall he subject to the following restrictions
and conditions:

 

(i)                                     Subject
to the provisions of this Plan and the award agreement, during a period set by
the Committee commencing with the date of such award (the “Restriction Period”),
the participant shall not be permitted to sell, transfer, pledge or assign
shares of Restricted Stock awarded under the Plan. Within these limits, the
Committee, in its sole discretion, may provide for the lapse of such
restrictions in installments and may accelerate or waive such restrictions in
whole or in part, based on service, performance and or such other factors or
criteria as the Committee may determine, in its sole discretion.

 

(ii)                                  Except
as provided in this paragraph (ii) and Section 7(c)(i), the
Committee, in its sole discretion, as determined at the time of the award, may
permit the participant to have, with respect to the shares of Restricted Stock,
all of the rights of a shareholder of the Company, including the right to vote
the shares, and the right to receive any cash dividends. The Committee, in its
sole discretion, as determined at the time of award, may permit or require the
payment of cash dividends and may permit or require such cash dividends to be
deferred and, if the Committee so determines, reinvested, subject to Section 15(e),
in additional Restricted Stock to the extent shares are available under Section 3,
or otherwise reinvested. Pursuant to Section 3 above, Stock dividends
issued with respect to Restricted Stock shall be treated as additional shares
of Restricted Stock that are subject to the same restrictions and other terms
and conditions that apply to the shares with respect to which such dividends
are issued,

 

(iii)                               Subject
to the applicable provisions of the award agreement and this Section 7,
upon termination of a participant’s employment or service with the Company and
any Subsidiary or Affiliate for any reason during the Restriction Period, all
shares still subject to restriction will vest, or be forfeited, in accordance
with the terms and conditions established by the Committee at or after grant.

 

(iv)                              If
and when the Restriction Period expires without a prior forfeiture of the
Restricted Stock subject to such Restriction Period, certificates for an
appropriate number of unrestricted shares shall be delivered to the participant
promptly (unless the Committee decides pursuant to Section 2(vi) to
settle the award in cash).

 

11

 

(d)                                 Minimum Value Provisions. 
In order to better ensure that award payments actually reflect the
performance of the Company, Subsidiaries, Affiliates and service of the
participant, the Committee may provide, in its sole discretion, for a tandem
performance-based or other award designed to guarantee a minimum value, payable
in cash or Stock to the recipient of a Restricted Stock award, subject to such
performance, future service, deferral and other terms and conditions as may be
specified by the Committee.

 

Section 8.  Deferred Stock

 

(a)                                  Administration.  Deferred Stock may be awarded either alone,
in addition to, or in tandem with other awards granted under the Plan and/or
cash awards made outside of the Plan. The Committee shall determine the
eligible persons to whom and the time or times at which Deferred Stock shall be
awarded, the number of shares of Deferred Stock to be awarded to any person,
the duration of the period (the “Deferral Period”) during which, and the
conditions under which, receipt of the Stock will be deferred, and the other
terms and conditions of the award in addition to those set forth in Section 8(b).

 

The Committee may condition the grant of
Deferred Stock upon the attainment of specified performance goals or such other
factors or criteria as the Committee shall determine, in its sole discretion.

 

The provisions of Deferred Stock awards need
not be the same with respect to each recipient.

 

(b)                                 Terms and Conditions.  The shares of Deferred Stock awarded pursuant
to this Section 8(b) shall be subject to the following terms and
conditions:

 

(i)                                     Subject
to the provision of this Plan and the award agreement referred to in Section 8(b)(vi) below,
Deferred Stock awards may not be sold, assigned, transferred, pledged or
otherwise encumbered during the Deferral Period. At the expiration of the
Deferral Period (or the Elective Deferral Period referred to in Section 8(b)(v),
where applicable), share certificates shall be delivered to the participant, or
his legal representative, in a number equal to the shares covered by the
Deferred Stock award (unless the Committee decides pursuant to Section 2(vi) to
settle the award in cash).

 

(ii)                                  Unless
otherwise determined by the Committee at grant, amounts equal to any dividends
declared during the Deferral Period with respect to the number of shares
covered by a Deferred Stock award will be paid to the participant currently, or
deferred and deemed to be reinvested in additional Deferred Stock, or otherwise
reinvested, all as determined at or, with respect to any Deferred Stock award
that is earned and vested as of December 31, 2004 (but not with
respect to any awards of Deferred Stock that are granted and/or become vested
on or after January 1, 2005) after the time of the award by the Committee,
in its sole discretion.

 

(iii)                               Subject
to the provisions of the award agreement and this Section 8, upon
termination of a participant’s employment or service with the Company

 

12

 

and any Subsidiary or Affiliate for any
reason during the Deferral Period for a given award, the Deferred Stock in
question will vest, or be forfeited, in accordance with the terms and
conditions established by the Committee at or after grant.  Notwithstanding anything herein to the
contrary, with respect to any awards of Deferred Stock that are granted and/or
become vested on or after January 1, 2005, no unrestricted Stock subject
to such an award may be distributed to a participant who is a Key Employee on
account of a termination of employment sooner than the date that is six months
following the date of such a participant’s termination of employment with the
Company for any reason other than the participant’s death or Disability.

 

(iv)                              Based
on service, performance, and/or such other factors or criteria as the Committee
may determine, the Committee may, at or after grant, accelerate the vesting of
all or any part of any Deferred Stock award and/or, with respect to any
Deferred Stock award that is earned and vested as of December 31,
2004 (but not with respect to any awards of Deferred Stock that are granted
and/or become vested on or after January 1, 2005), waive the deferral limitations
for all or any part of such award. 
Notwithstanding anything herein to the contrary, the distribution to a
participant of unrestricted Stock with respect to an award of Deferred Stock
that is granted and/or becomes vested on or after January 1, 2005 may not
be accelerated.

 

(v)                                 A
participant may elect (a “Subsequent Election”) to further defer receipt of an
award (or an installment of an award) for a specified period or until a
specified event (the “Elective Deferral Period”), subject to the Committee’s
approval and to such terms as are determined by the Committee, all in its sole
discretion. With respect to awards of Deferred Stock that were earned and
vested as of December 31, 2004, subject to any exceptions adopted by the
Committee, such Subsequent Election must generally be made at least twelve (12)
months prior to completion of the Deferral Period of such Deferred Stock award
(or such installment).  With respect to
awards of Deferred Stock that are granted and/or become vested on or after January 1,
2005, any Subsequent Election must (i) be made in the manner specified by
the Committee at least one (1) calendar year prior to the completion of
the Deferral Period of such Deferred Stock award (or such installment), (ii) not
take effect until at least one (1) calendar year after the Subsequent
Election is submitted, and (iii) provide for the deferral of the date of
the distribution for a minimum of five (5) additional years.

 

(vi)                              Each
award shall be confirmed by, and subject to the terms of, a Deferred Stock
agreement executed by the Company and the participant.

 

(c)                                  Minimum Value Provisions.  In order to better ensure that award payments
actually reflect the performance of the Company, Subsidiaries, Affiliates and
service of the participant, the Committee may provide, in its sole discretion,
for a tandem performance-based

 

13

 

or other award designed to guarantee a minimum value, payable in cash
or Stock to the recipient of a Deferred Stock award, subject to such
performance, future service, deferral and other terms and conditions as may be
specified by the Committee.

 

Section 9.  Stock Purchase Rights

 

(a)                                  Awards and Administration.  The Committee may grant eligible participants
Stock Purchase Rights which shall enable such participants to purchase Stock
(including Deferred Stock and Restricted Stock) at price(s) determined by the
Committee at or after grant.

 

The Committee shall also impose such
deferral, forfeiture, and/or other terms and conditions as it shall determine,
in its sole discretion, on such Stock Purchase Rights or the exercise thereof.

 

The terms of Stock Purchase Rights awards
need not be the same with respect to each participant.

 

Each Stock Purchase Right award shall be
confirmed by, and be subject to the terms of, a Stock Purchase Rights
agreement.

 

(b)                                 Exercisability.  Stock Purchase Rights shall be
exercisable for such period after grant as is determined by the Committee.

 

Section 10.  Other Stock-Based Awards

 

(a)                                  Administration. Other awards of Stock
and other awards that are valued in whole or in part by reference to, or are
otherwise based on, Stock (“Other Stock-Based Awards”), including, without
limitation, stock purchase rights, performance shares, convertible preferred
stock, convertible debentures, exchangeable securities and Stock awards or
options valued by reference to Book Value or subsidiary performance, may be
granted either along with, or in addition to, or in tandem with, Stock Options,
Stock Appreciation Rights, Restricted Stock, Deferred Stock, or Stock Purchase
Rights granted under the Plan and/or cash awards made outside of the Plan.

 

Subject to the provisions of the Plan, the
Committee shall have authority to determine the persons to whom and the time or
times at which such awards shall be made, the number of shares of Stock to be
awarded pursuant to such awards, and all other conditions of the awards. The
Committee may also provide for the grant of Stock upon the completion of a
specified performance period.

 

The provision of Other Stock-Based Awards
need not be the same in respect to each recipient.

 

(b)                                 Terms and Conditions.  Other Stock-Based Awards made pursuant to
this Section 10 shall be subject to the following terms and conditions:

 

(i)                                     Subject
to the provisions of this Plan and the award agreement referred to in Section 10(b)(v) below,
shares subject to awards made under this Section 10 may not be sold,
assigned, transferred, pledged, or otherwise

 

14

 

encumbered prior to the date on which the
shares are issued, or, if later, the date on which any applicable restriction,
performance, or deferral period lapses.

 

(ii)                                  Subject
to the provision of this Plan and the award agreement and unless otherwise
determined by the Committee at grant, the recipient of an award under this Section 10
shall be entitled to receive, currently, or on a deferred basis, interest or
dividends or interest or dividend equivalents with respect to the number of
shares covered by the award, as determined at the time of the award by the
Committee, in its sole discretion, and the Committee may provide that such
amounts (if any) shall be deemed to have been reinvested in additional Stock or
otherwise reinvested.

 

(iii)                               Any
award under Section 10 and any Stock covered by any such award shall vest
or be forfeited to the extent so provided in the award agreement as determined
by the Committee, in its sole discretion.

 

(iv)                              Subject
to any restrictions imposed by Section 409A of the Code, in the event of
the participant’s Disability or death, or in cases of special circumstances,
the Committee may, in its sole discretion, waive in whole or in part any or all
of the remaining limitations imposed hereunder (if any) with respect to any or
all of an award under this Section l0.

 

(v)                                 Each
award under this Section 10 shall be confirmed by, and subject to the
terms of, an agreement or other instrument by the Company and by the
participant.

 

(vi)                              Stock
(including securities convertible into Stock) issued on a bonus basis under
this Section 10 may be issued for no cash consideration. Stock (including
securities convertible into Stock) purchased pursuant to a purchase right
awarded under this Section 10 shall be priced at least fifty percent (50%)
of the Fair Market Value of the Stock on the date of grant.

 

Section 11.  Performance Related Awards

 

(a)                                  Performance Objectives.  Notwithstanding anything else contained in
the Plan to the contrary, unless the Committee otherwise determines at the time
of grant, a cash-based award or any award of Restricted Stock, Deferred Stock,
or Other Stock-Based Awards to an executive officer who is subject to the
reporting requirements of Section 16(a) of the Exchange Act, as
amended, other than an award which will vest solely on the basis of the passage
of time, shall become vested, if at all, upon the determination by the
Committee that performance objectives established by the Committee have been
attained, in whole or in part (a “Performance Award”). Such performance
objectives shall be determined over a measurement period or periods established
by the Committee and related to at least one of the following criteria, which
may be determined solely by reference to the performance of (i) the
Company, (ii) a Subsidiary, (iii) an Affiliate, (iv) a division
or unit of any of the foregoing, or based on comparison performance of any of
the foregoing relative to other companies: (A) return on assets: (B) return
on equity; (C) total shareholder return: (D) revenues: (E) cash
flows, revenues, and/or earnings relative to other

 

15

 

parameters: (F) operating income: (G) return on investment: (H) changes
in the value of the Company’s common stock: and (I) operating margin (the “Performance
Criteria”). Excluding Stock Options and/or Stock Appreciation Rights granted
hereunder, the maximum number of shares of Stock that may be awarded to any one
participant and that may be subject to any such Performance Award in any twelve
(12) month period shall not exceed 200,000 shares, as such number may be
adjusted pursuant to Section 3.

 

(b)                                 Annual Incentive Compensation.  The Committee may, in addition to the
Performance Awards described above, pay cash amounts under the Plan to any
executive officer of the Company and any Subsidiary or Affiliate who is subject
to the reporting requirements of Section 16(a) of the Exchange Act
upon the achievement, in whole or in part, of performance goals or objectives
established in writing by the Committee with respect to such performance
periods as the Committee shall determine. Any such goals or objectives shall be
based on one or more of the Performance Criteria.  Notwithstanding anything else contained
herein to the contrary, the maximum amount of any such cash payment to any
single executive officer with respect to any calendar year shall not exceed the
lesser of (A) $2,000,000 and (B) twice the executive officer’s annual
base salary as in effect on the last day of the preceding fiscal year.

 

(c)                                  Interpretation.  Notwithstanding anything else in the Plan to
the contrary, to the extent a Performance Related Award is intended to qualify
as performance-based compensation within the meaning of Section 162(m)(4)(C) of
the Code, the Committee shall not be entitled to exercise any discretion if the
exercise of such discretion would cause such award to fail to qualify as
performance-based compensation.

 

Section 12.  Change in Control Provisions

 

(a)                                  Impact of Event.  In the event of either:

 

(1)                                  a
“Change in Control” as defined in Section 12(b), or

 

(2)                                  a
“Potential Change in Control” as defined in Section 12(c), but only if and
to the extent so determined by the Committee or the Board at or after grant
subject to any right of approval expressly reserved by the Committee or the
Board at the time of such determination,

 

the following shall occur:

 

(i)                                     Any
issued and outstanding Stock Options, Stock Appreciation Rights, Restricted
Stock, Performance Shares, Stock Equivalent Units, Deferred Stock, Stock
Purchase Rights, Other Stock-Based Awards, Performance Awards, or any other
equity-based compensation (collectively, “Equity Awards”) shall continue in
effect or, if such continuation is not possible, shall be equitably converted
to equivalent Equity Awards of any successor entity.

 

(ii)                                  If
such continuation or conversion is not possible (but only if it is not
possible), all such Equity Awards shall become fully vested and exercisable in
accordance with the following:

 

16

 

(A)                              Any
Stock Appreciation Rights and any Stock Options awarded under the Plan not
previously exercisable and vested shall become fully exercisable and vested.

 

(B)                                The
restrictions or deferral limitations applicable to any Restricted Stock,
Deferred Stock, Stock Purchase Rights. 
Other Stock-Based Awards, and Performance Awards in each case to the
extent not already vested under the Plan, shall lapse and such shares and
awards shall be deemed fully vested and any Performance Criteria shall be
deemed met at target.

 

(C)                                Notwithstanding
anything herein to the contrary, in no event shall amounts in respect of awards
of Deferred Stock any Other Stock-Based Awards that, as determined by the
Committee in its sole discretion, provide for the deferral of compensation, in
each case that are granted or become vested on or after January 1, 2005,
be distributed prior to the occurrence of either (i) a termination of the
participant’s employment with the Company 
(or six months thereafter for Key Employees), (ii) the participant’s
death or Disability, or (iii) a “change in the ownership or effective
control” of the Company or in the “ownership of a substantial portion of the
assets” of the Company within the meanings ascribed to such terms in Treasury
Department regulations issued under Section 409A of the Code.

 

(iii)                               If
any Equity Awards are not vested in accordance with (ii) above, but rather
are continued or converted as provided in (i) above, then they shall
become vested if the participant is involuntarily terminated without Cause or
voluntarily terminates for Good Reason (as defined herein) within one (1) year
after a Change in Control, and, if subject to an exercise right, shall remain
fully exercisable for at least three (3) months following such termination
(or, if longer, pursuant to the terms of such Equity Awards).

 

(iv)                              If
any Equity Awards are not continued or converted, but rather become fully
vested and exercisable as provided in paragraph (ii) above, then the value
of all outstanding Stock Options, Stock Appreciation Rights, Restricted Stock,
Deferred Stock, Stock Purchase Rights, Other Stock-Based Awards, and
Performance Awards in each case to the extent vested, shall, unless determined
otherwise by the Committee in its sole discretion at or after grant but prior
to any Change in Control, be cashed out on the basis of the “Change in Control
Price” as defined in Section 12(d) as of the date such Change in
Control or such Potential Change in Control is

 

17

 

determined to have occurred or such other
date as the Committee may determine prior to the Change in Control.

 

(b)                                 Definition of “Change in Control”.  For purposes of Section 12(a), a “Change
in Control” means the happening of any of the following:

 

(i)                                     When
any Person, directly or indirectly, becomes the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act, as amended from time to time) of
securities of the Company representing twenty-five percent (25%) or more of the
combined voting power of the Company’s then outstanding securities:

 

(ii)                                  The
individuals who, as of the Effective Date of this Plan, constitute the Board
(the “Incumbent Board”) cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director subsequent
to the Effective Date of the Plan whose election, or nomination for election by
the Company’s shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board; or

 

(iii)                               Consummation
of a reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Company or the acquisition of
assets of another corporation (a “Business Combination”), in each case, unless,
following such Business Combination, (A) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
then outstanding share of stock of the Company (the “Outstanding Company Stock”)
and the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”) immediately prior to such Business Combination
beneficially own, directly or indirectly, more than sixty percent (60%) of,
respectively, the then Outstanding Company Stock and the combined voting power
of the then Outstanding Company Voting Securities entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting
from such Business Combination (including, without limitation, a corporation
which as a result of such transaction owns the Company or all or substantially
all of the Company’s assets either directly or throughout one or more
subsidiaries), (B) no Person (excluding any employee benefit plan (or
related trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, twenty-five percent
(25%) or more of respectively, the then Outstanding Company Stock resulting
from such Business Combination or the combined voting power of the then

 

18

 

Outstanding Company Voting Securities except
to the extent that such ownership existed prior to the Business Combination,
and (C) at least a majority of the members of the board of directors of
the corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of
the action of the Board, providing for such Business Combination; or

 

(iv)                              Approval
by the shareholders of the Company of a complete liquidation or dissolution of
the Company.

 

(c)                                  Definition of Potential Change in Control.  For purposes of Section 12(a), a “Potential
Change in Control” means the happening of any one of the following:

 

(i)                                     The
approval by shareholders of an agreement by the Company, the consummation of
which would result in a Change in Control of the Company as defined in Section 12(b);
or

 

(ii)                                  The
acquisition of beneficial ownership, directly or indirectly, by any entity,
person or group (other than the Company or a Subsidiary or any Company employee
benefit plan (including any trustee of such plan acting as such trustee)) of
securities of the Company representing five percent (5%) or more of the
combined voting power of the Company’s outstanding securities and the adoption
by the Board of Directors of a resolution to the effect that a Potential Change
in Control of the Company has occurred for purposes of this Plan.

 

(d)                                 Change in Control Price.  For the purposes of the Section 12, “Change
in Control Price” means the highest price per share paid in any transaction
reported on the New York Stock Exchange Composite Index, or paid or offered in
any bona fide transaction related to a potential or actual Change in Control of
the Company at any time during the sixty (60) day period immediately preceding
the occurrence of the Change in Control (or, where applicable, the occurrence
of the Potential Change in Control event), in each case as determined by the
Committee except that, in the case of Incentive Stock Options and Stock
Appreciation Rights relating to Incentive Stock Options, such price shall be
based only on transactions reported for the date on which the optionee
exercises such Stock Appreciation Rights or, where applicable, the date on
which a cashout occurs under Section 12(a)(iv).

 

(e)                                  Definition of Good Reason.  For purposes of Section 12(a) above,
the participant will be entitled to terminate employment with the Company and
its Subsidiaries for “Good Reason” after a Change in Control if:

 

(i)                                     without
the participant’s written consent, one or more of the following events occurs
at any time during the first twelve (12) months after such Change in Control:

 

(1)                                  the
participant’s base salary rate or annual incentive compensation target is
reduced below that in effect immediately prior to the Change in Control for any
reason other than for Cause;

 

19

 

(2)                                  the
participant’s principal office is moved, without the participant’s consent, to
a location that is more than fifty (50) statute miles from its location
immediately prior to the Change in Control;

 

(3)                                  for
any reason other than for Cause, the participant suffers a significant adverse
change in the nature or scope of the authorities, powers, functions,
responsibilities or duties attached to the position with the Company which the
participant held immediately prior to the Change in Control;

 

(5)                                  a
successor where applicable, does not assume and agree to the terms of this
Plan; or

 

(6)                                  the
Company purports to terminate participant’s employment other than in accordance
with a Notice of Termination, as described below.

 

(ii)                                  the
participant notifies the Company in writing (addressed in care of the Chairman
of the Board of the Company) of the occurrence of such event;

 

(iii)                               within
thirty (30) days following receipt of such written notice, the Company does not
cure such event to the reasonable satisfaction of the participant and deliver
to the participant a written statement that it has done so; and

 

(iv)                              within
sixty (60) days following the expiration of the period specified in Section (12)(e)(iii) above
(without the occurrence of a cure and written notice thereof as described in Section (12)(e)(iii) above),
the participant voluntarily terminates employment with the Company.

 

(v)                                 Notwithstanding
anything to the contrary in Section 12(e), no accelerated vesting will
occur by reason of this Plan in the event of:

 

(A)                              Termination
of the participant’s employment with the Company by reason of the participant’s
death or Disability, so long as neither the participant nor the Company
previously received a Notice of Termination for the participant;

 

(B)                                Termination
by the participant of the participant’s employment with the Company at or after
age sixty-five (65) if the participant is then eligible for retirement; or

 

(C)                                Termination
of the participant’s employment with the Company for Cause.

 

(f)                                    Notice of Termination.  Any termination of the participant’s
employment, by the Participant, as contemplated by Section 12(e) above
will be communicated by written notice to the Company delivered in person or by
certified mail.  Any “Notice of
Termination” will:

 

20

 

(i) state the effective date of termination, which will not be
less than thirty (30) days or more than sixty (60) days after the date the
Notice of Termination is delivered (the “Termination Date”),  (ii) state the specific provision in
this Plan being relied upon for termination; (iii) state the facts and
circumstances claimed to provide a basis for such termination in reasonable
detail.

 

Section 13.  Amendments and Termination

 

The Board may amend, alter, or discontinue
the Plan, but no amendment, alteration, or discontinuation shall be made which
would impair the rights of an optionee or participant under a Stock Option,
Incentive Stock Option, Stock Appreciation Right, Restricted or Deferred Stock
award, Stock Purchase Right, Other Stock-Based Award, or Performance Award
theretofore granted, without the optionee’s or participant’s consent.

 

The Committee and/or the Company’s Benefits
Administration Committee may amend the terms of any Stock Option or other award
theretofore granted, prospectively or retroactively, except that, unless
otherwise permitted by Section 3 above, (i) no such amendment shall
impair the rights of any holder without the holder’s consent; (ii) no such
amendment may decrease the minimum Stock Option Exercise Price set forth in subsection 5(a),
unless any such amendment is approved by the Company’s shareholders; and (iii) the
provisions of subsection 5(n) may not be amended, unless any such
amendment is approved by the Company’s shareholders.

 

Subject to the above provisions, the Board
shall have broad authority to amend the Plan to take in to account changes in
applicable securities and tax laws and accounting rules, as well as other
developments.

 

Section 14.  Unfunded Status of Plan

 

The Plan is intended to constitute an “unfunded”
plan for incentive and deferred compensation. With respect to any payments not
yet made to a participant or optionee by the Company, nothing contained herein
shall give any such participant or optionee any rights that are greater than
those of a general creditor of the Company. In its sole discretion, the
Committee may authorize the creation of trusts or other arrangements to meet
the obligations created under the Plan to deliver Stock or payments in lieu of
or with respect to awards hereunder: provided, however, that unless the
Committee otherwise determines with the consent of the affected participant,
the existence of such trusts or other arrangements is consistent with the “unfunded”
status of the Plan.

 

Section 15.  General Provisions

 

(a)                                  The Committee may
require each person purchasing shares pursuant to a Stock Option or other award
under the Plan to represent to and agree with the Company in writing that the
optionee or participant is acquiring the shares without a view to distribution
thereof. The certificates for such shares may include any legend, which the
Committee deems appropriate to reflect any restrictions on transfer.

 

All certificates for shares of Stock or other
securities delivered under the Plan shall be subject to such stock-transfer
orders and other restrictions as the Committee may deem advisable under the
rules, regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange upon which the Stock is then listed, and any
applicable federal or state

 

21

 

securities law, and the Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such restrictions.

 

(b)                                 Nothing contained in
this Plan shall prevent the Board from adopting other or additional
compensation arrangements, subject to stockholder approval if such approval is
required, and such arrangements may be either generally applicable or
applicable only in specific cases.

 

(c)                                  The adoption of the
Plan shall not confer upon any employee of the Company or any Subsidiary or
Affiliate any right to continued employment or service as a director with the
Company or a Subsidiary or Affiliate, as the case may be, nor shall it
interfere in any way with the right of the Company or a Subsidiary or Affiliate
to terminate the employment of any of its employees or service of a director at
any time.

 

(d)                                 Except as the
participant and the Company may otherwise agree, no later than the date as of
which an amount first becomes includable in the gross income of the participant
for federal income tax purposes with respect to any award under the Plan, the
participant shall pay to the Company, or make arrangements satisfactory to the
Committee regarding the payment of any federal, state, or local taxes of any
kind required by law to be withheld with respect to such amount. Unless
otherwise determined by the Committee, withholding obligations may be settled
with Stock, including Stock that is part of the award that gives rise to the
withholding requirement. The obligations of the Company under the Plan shall be
conditional on such payment of arrangements and the Company and its
Subsidiaries or Affiliates shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to
the participant.

 

(e)                                  The actual or deemed
reinvestment of dividends or dividend equivalents in additional Restricted
Stock (or in Deferred Stock or other types of Plan awards) at the time of any
dividend payment shall only be permissible if sufficient shares of Stock are
available under Section 3 for such reinvestment (taking into account then
outstanding Stock Options. Stock Purchase Rights, and other Plan awards).

 

(f)                                    The Plan and all
awards made and actions taken thereunder shall be governed by and construed in
accordance with the laws of the State of Delaware.

 

Section 16.  Term of Plan

 

No Stock Option, Incentive Stock Option,
Stock Appreciation Right, Restricted Stock award, Deferred Stock award, Stock
Purchase Right, Other Stock-Based Award, or Performance Award shall be granted
pursuant to the Plan on or after the tenth (10th) anniversary of the date of
shareholder approval, but awards granted prior to such tenth (10th) anniversary
may extend beyond that date.

 

22

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