Document:

Emplyment Agreement

 
Exhibit 10-25

December 20, 2002 
 
 
Mr. Michael Smith 
150 Millstone Road 
Deerfield, Illinois 60015 
 
Dear Michael: 
 
This letter is to confirm the terms of your employment with Cobra Electronics Corporation (the “Company”). 
 
1.    During the term of your employment pursuant to this agreement, you shall be employed as Senior Vice President and Chief
Financial Officer of the Company and shall have the normal duties, responsibilities and attendant authorities of that position, including, but not limited to, primary authority and supervisory responsibility for all accounting, finance and human
resource functions and all other tasks as may be assigned from time to time by the President and Chief Executive Officer. You shall report to the President and Chief Executive Officer of the Company. 
 
2.    The term of your employment by the Company pursuant
to this agreement shall begin on January 1, 2003 and shall end on December 31, 2005 (the “Employment Period”) unless terminated earlier pursuant to paragraph 11 of this agreement. In any event, the Company agrees to provide to you written
notice, on or prior to June 30, 2005, if the Company elects to (i) offer to you or not offer to you a renewal of this agreement or (ii) offer to you a continuation of employment upon other terms and conditions than are provided in this agreement. In
the event the Company either offers to you a renewal of this agreement or offers to you a continuation of employment upon other terms and conditions than are provided in this agreement, the Company and you agree to proceed promptly with good faith
negotiations toward the end of fulfilling the Company and your mutual intent to reach agreement, no later than December 31, 2005, as to the terms and conditions of such continuation of employment. In the event the Company and you are unable to reach
agreement as to such terms and conditions within such period, it shall be deemed to be a timely notice that the Company does not intend to continue your employment beyond the Employment Period. 
 
3.    During your employment by the Company pursuant to
this agreement, you shall receive a regular annual salary at the rate per period hereinafter set forth, payable every two weeks. Such annual salary shall be $225,000 for the period January 1, 2003 through and including December 31, 2003 (the
“First Annual Period”), shall be $240,000 for the period January 1, 2004 through and including December 31, 2004 (the “Second Annual Period”) and shall be $254,000 for the period January 1, 2005 through and including December
31,2005 (the “Third Annual Period”). 

 
Mr. Michael Smith 
December 20, 2002 
Page 2. 
 
Your salary will be subject to annual review of the Compensation Committee of the Company’s Board of Directors, but in no event shall your salary for
any Annual Period be reduced below the rate set forth above for that Annual Period. 
 
4.    In addition to your regular annual salary, you shall also receive for each Annual Period a bonus of up to 35% of your regular annual salary, comprised of a Company performance bonus of up to 22.75%
of your regular annual salary for that Annual Period (the “maximum Company performance bonus amount”) and an individual performance bonus of up to 12.25% of your regular annual salary for that Annual Period (the “maximum individual
performance bonus amount”). Except as provided elsewhere herein, you shall only be entitled to receive any bonus for an Annual Period if you are employed by the Company throughout the Annual Period. 
 
As for the Company performance bonus, no later than February 1 of the First
Annual Period, the Second Annual Period and the Third Annual Period, respectively, the Chief Executive Officer of the Company (i) shall choose performance criteria of the Company and/or the subsidiaries of the Company that shall be applicable for
that Annual Period, (ii) shall determine a goal amount for such performance criteria such that, if the goal amount is attained for the Annual Period, you will receive a Company performance bonus for the Annual Period equal to the maximum Company
performance bonus amount for the Annual Period. 
 
As for the
individual performance bonus, no later than February 1 of the First Annual Period, the Second Annual Period and the Third Annual Period, respectively, the Chief Executive Officer of the Company shall in his sole discretion choose one or more
personal performance goals that shall be applicable for such Annual Period. As soon as administratively practicable after the end of each Annual Period, the Chief Executive Officer shall determine, in his sole discretion, whether such goals for the
Annual Period were attained during the Annual Period. If such goals are so determined to have been attained, and the Company has achieved the minimum pretax income targets established as part of the performance criteria, you shall receive an
individual performance bonus equal to the individual performance bonus maximum amount for the Annual Period. If such goals are not so determined to have been attained, you shall receive any percentage, including zero percentage, of such individual
performance bonus maximum amount for the Annual Period as determined by the Chief Executive Officer in his sole discretion. 
 
5.    You also shall receive $10,000 each Annual Period to be used for prerequisites of your choice, payable in monthly payments of
$833.33 while you are employed by the Company, in lieu of any other allowances. 
 
6.    If you are a full-time employee of the Company on January 15, 2003 the Company shall grant to you a stock option to purchase an aggregate of 10,000 shares of the Company’s common stock, the per share
exercise price for which will be 100% of the closing price on the date of grant of a share of common stock. Any such stock option to be granted on January 15, 2003 shall become exercisable, if you are employed by the Company (i) on January 15, 2004
as to 25% of the number of shares of common stock subject to such option; (ii) on January 15, 2005 as 

 
Mr. Michael Smith 
December 20, 2002 
Page 3. 
 
to an additional 25% of the number of shares of common stock subject to such option (50% on a cumulative basis); (iii) on January 15, 2006 as to an
additional 25% of the number of shares of common stock subject to such option (75% on a cumulative basis); and (iv) on January 15, 2007 as to an additional 25% of the number of shares of common stock subject to such option (100% on a cumulative
basis). 
 
Any such option may, in the sole discretion of the
committee designated by the Company’s Board of Directors to administer the COBRA Electronics Corporation 2000 Stock Option Plan or any other stock option plan maintained by the Company (an “Option Plan”), be granted under and subject
to the terms and conditions of such Option Plan, and will in all respects be consistent with options granted under the terms of such Option Plan, as determined by such committee; provided, however, that no such option shall be exercised later than
ten years after its date of grant, each such option shall be exercised by payment in cash or in any other manner permitted by such committee, and each such option shall, in the event a Change of Control occurs, be immediately exercisable in full in
a manner consistent with this sentence. 
 
For the purpose of this
agreement, a Change of Control shall be deemed to have occurred if: (i) any person, including a group within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires the beneficial ownership of, and the right to
vote, shares having at least 50 percent of the aggregate voting power of the class or classes of capital stock of the Company having the ordinary and sufficient voting power (not depending upon the happening of a contingency) to elect at least a
majority of the directors of the board of directors of the Company, or (ii) as the result of any tender or exchange offer, substantial purchase of the Company’s equity securities, merger, consolidation, sale of assets or contested election, or
any combination of the foregoing transactions, the persons who were directors of the Company immediately prior to such transaction or transactions shall not constitute a majority of the board of directors (or the board of directors of any successor
to or assign of the Company) immediately after the next meeting of stockholders of the Company (or such successor or assign) following such transaction, or (iii) there is consummated a reorganization, merger or consolidation of the Company or sale
or other disposition of all or substantially all of the assets of the Company (a “Corporate Transaction”), excluding any Corporate Transaction pursuant to which (A) all or substantially all of the individuals or entities who are the
beneficial owners, respectively, of the outstanding voting securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than 50% of the combined voting power of the outstanding securities entitled to
vote generally in the election of directors of the corporation resulting from such Corporate Transaction (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 indirectly) in substantially the same proportions relative to each other as their ownership, immediately prior to such Corporate Transaction, of the outstanding voting securities, (B) no person (other than
the Company, any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company) will beneficially own, directly or indirectly, 50% or more of the combined voting power of the outstanding
securities of the corporation resulting from such Corporate Transaction entitled to vote generally 

 
Mr. Michael Smith 
December 20, 2002 
Page 4. 
 
in the election of directors, and (C) the persons who were directors of the Company immediately prior to such Corporate Transaction will constitute at
least a majority of the board of directors of the corporation resulting from such Corporate Transaction. 
 
It is anticipated that during the First Annual Period the Company’s Board of Directors will approve a new equity compensation plan for members of senior management of the Company providing for
grants to members of the senior management of the Company of stock options or other forms of equity compensation, or some combination thereof. In the Second Annual Period and the Third Annual Period you will be eligible to receive such grants of
equity compensation under such new equity compensation plan as shall be approved by the Board of Directors. Should such a new plan not be approved, the Company shall grant to you a stock option to purchase an aggregate of 10,000 shares of the
Company’s common stock as of January 15, 2004, if you are a full time employee of the Company on that date, and a stock option to purchase an aggregate of 10,000 shares of the Company’s common stock as of January 17, 2005, if you are
a full time employee of the Company on that date, on substantially the same terms as the stock options granted as of January 15, 2003. For each additional stock option granted, the per share exercise price will be 100% of the closing price on the
date of grant of a share of common stock. 
 
7.    During your employment hereunder, you shall be entitled to participate in such employee benefits including, but not limited to, life, short and long term disability and health insurance and other medical
benefits (after you have completed any applicable qualifying period) as the Company makes available to individuals employed by the Company at the Senior Vice President level. 
 
8.    You shall be reimbursed for all of your reasonable and necessary business expenses incurred in
performing your duties for the Company upon presentation to the Company of the Company’s standard forms for expense reimbursement. 
 
9.    You shall be entitled to a benefit from the Company pursuant and subject to the terms and conditions of (including but not
limited to the vesting provisions of) the COBRA Electronics Corporation Deferred Compensation Plan for Select Executives as in effect as of the date hereof or any similar plan which the Company adopts for this purpose; provided, however, that for
purposes of any such plan your years of service shall be the number of complete years included in the period of time commencing on January 31, 2001 and ending on the date your employment with the Company terminates. 
 
10.    In the event your employment with the Company is
terminated by the Company prior to the end of the Employment Period for reasons other than for “Cause” (as defined below), the Company shall continue to make biweekly payments to you in an amount equal to your regular biweekly salary
(described in Paragraph 3) (“continued salary payments”) until the Company has made 13 such payments to you or until the end of the Employment Period, whichever occurs later; provided, however, that if a Change of Control occurs between
January 1, 2003 and the date of such termination of employment, then the Company shall continue to make such 

 
Mr. Michael Smith 
December 20, 2002 
Page 5. 
 
biweekly payments until the Company has made 26 such payments to you or until the end of the Employment Period, whichever occurs later. The Company’s
obligation to make such payments to you shall be reduced by any salary, commission or other type of compensation paid or payable to you as a result of your subsequent employment, contract or engagement with any new employer if such employment,
contract or engagement commences prior to the end of such payments. In addition, (i) the Company shall while making continued salary payments pay your cost of continued health and dental coverage under the Company’s group health and dental
plans for such period as you elect pursuant to the Consolidated Budget Reconciliation Act of 1984 (“COBRA”), (ii) the Company shall pay a pro-rata portion of the Company performance bonus described in paragraph 4 of this agreement for the
Annual Period during which your termination of employment occurs, such portion to be determined based on the number of days during such Annual Period during which you are employed by the Company plus the number of days during such Annual Period for
which the Company is making continued salary payments, and (iii) any stock options granted to you pursuant to paragraph 6 of this agreement or pursuant to paragraph 7 of the letter of employment dated January 17, 2001 between you and the Company
(the “Prior Employment Agreement”) which are not incentive stock options shall, subject to the second paragraph of paragraph 6 of this agreement or subject to the third paragraph of paragraph 7 of the Prior Employment Agreement, continue
to become exercisable pursuant to the schedule described in paragraph 6 or such paragraph 7, respectively, and shall remain exercisable, until the last day on which the Company makes a continued salary payment as if you had remained employed by the
Company until such date. Except as otherwise provided herein, all of your remaining benefits, including the continued vesting and exercisability of Company stock options, shall immediately end upon your termination of employment, whether by
expiration of the Employment Period or otherwise. 
 
The Company
may at any time terminate your employment with the Company for “Cause”, which shall mean embezzlement, misappropriation, theft or other criminal conduct, of which you are convicted, related to the property or assets of the Company or your
willful refusal to perform or substantial disregard of your duties assigned to you by the Chief Executive Officer of the Company, unless you have reasonable and just cause for such refusal to perform or disregard of your duties or unless you
commence immediate corrective actions within 15 days after the Chief Executive Officer gives you notice of his objection to your refusal to perform or disregard of your duties. If the Company terminates your employment for Cause, you shall be
entitled to salary through and including the effective date of your termination of employment, and all other benefits provided for hereunder shall immediately cease. Except as otherwise provided herein, all of your remaining benefits, including the
continued vesting and exercisability of incentive stock options, shall immediately end upon your termination of employment, whether by expiration of the Employment Period or otherwise. 
 
If prior to your termination of full-time employment with the Company pursuant to this agreement (i) you are removed as Chief
Financial Officer or as a Senior Vice President of the Company, (ii) you are demoted in title or responsibilities and duties, (iii) your principal permanent office with the Company is relocated to a location more than 50 miles from the 

 
Mr. Michael Smith 
December 20, 2002 
Page 6. 
 
Company’s headquarter location (in Chicago, Illinois) as of the date of this agreement, (iv) you are prevented by the Chief Executive Officer or
Board of Directors or employees of the Company from exercising the duties and responsibilities of the Chief Financial Officer, or (v) there is a material breach by the Company of a material provision of this agreement and such breach remains uncured
for at least 60 days following written notice from you, and as a result thereof you terminate your employment with the Company, then you shall be entitled, as of the effective date of your termination of employment, to (I) salary through and
including the effective date of your termination of employment, and (II) continued biweekly payments to you in an amount equal to your regular biweekly salary (described in paragraph 3) (“continued salary payments”) until the Company has
made 13 such payments to you or until the end of the Employment Period, whichever occurs later; provided, however, that if a Change of Control occurs between January 1, 2003 and the date of such termination of employment, then the Company shall
continue to make such biweekly payments until the Company has made 26 such payments to you or until the end of the Employment Period, whichever occurs later; and, provided, further, that, during any period during which you are receiving payments you
shall remain subject to the provisions of paragraph 11 of this agreement. The Company’s obligation to make such payments to you shall be reduced by any salary, commission or other type of compensation paid or payable to you as a result of your
subsequent employment, contract or engagement with any other employer if such employment, contract or engagement commences prior to the end of such payments. In addition, (i) the Company shall while making continued salary payments pay your cost of
continued health and dental coverage under the Company’s group health and dental plans for such period as you elect pursuant to COBRA, (ii) the Company shall pay a pro-rata portion of the Company performance bonus described in paragraph 4 of
this agreement for the Annual Period during which your termination of employment occurs, such portion to be determined based on the number of days during such Annual Period during which you are employed by the Company plus the number of days during
such Annual Period for which the Company is making continued salary payments, and (iii) any stock options granted to you pursuant to paragraph 6 of this agreement or pursuant to paragraph 7 of the Prior Employment Agreement which are not incentive
stock options shall, subject to the second paragraph of paragraph 6 of this agreement or subject to the third paragraph of paragraph 7 of the Prior Employment Agreement, continue to become exercisable pursuant to the schedule described in paragraph
6 or such paragraph 7, respectively, and shall remain exercisable, until the last day on which the Company makes a continued salary payment as if you had remained employed by the Company until such date. Except as otherwise provided herein, all of
your remaining benefits, including the continued vesting and exercisability of incentive stock options, shall immediately end upon your termination of employment, whether by expiration of the Employment Period or otherwise. 
 
If prior to the end of the Employment Period you terminate your employment
with the Company and the immediately preceding paragraph does not apply, you shall be entitled to salary through and including the effective date of your termination of employment, and all other benefits provided for hereunder shall immediately
cease. Except as otherwise provided herein, all of your remaining benefits, including the continued vesting and exercisability of Company stock options, 

 
Mr. Michael Smith 
December 20, 2002 
Page 7. 
 
shall immediately end upon your termination of employment, whether by expiration of the Employment Period or otherwise. 
 
If prior to the end of the Employment Period either you terminate your
employment with the Company and the third paragraph of this paragraph 10 applies or your employment is terminated by the Company for reasons other than for Cause, the Company shall provide you with an executive outplacement program of your choice,
but the program will be subject to similar terms and conditions as the Company’s other executive outplacement program. These conditions include a maximum fee of 15% of your total compensation and monthly reports from the outplacement firm of
your active job search. 
 
After the payment of any applicable
amounts described in this paragraph 10, you shall have no further rights to recover any amounts from the Company. 
 
If at any time while you are employed by the Company you die or are determined in good faith by the Board of Directors of the Company to be disabled, the
Company may immediately terminate this agreement and your employment. Any such termination of your employment will be with the same consequences as if it were for Cause. For the purpose of this agreement, you shall be deemed to be disabled if you
are physically or mentally unable to perform your duties for a period of 180 consecutive days. 
 
11.    For a one-year period following the termination of your employment by your decision or by the Company for Cause, you shall not for the benefit of yourself or any business or
other entity solicit, directly or indirectly, any of the Company’s employees, or solicit, directly or indirectly, any of the customers of the Company for products which are currently marketed or which have been announced by the Company. In
addition, at no time following any termination of your employment shall you disclose or in any way use the confidential and proprietary information obtained during the course of your employment with the Company, including, but not limited to, the
Company’s financial and product information and information relating to the Company’s customer and supplier relations. 
 
12.    If, at any time of enforcement of any provisions of paragraph 11 of this agreement, a court holds that the restrictions stated
therein are unreasonable under the circumstances then existing, you agree that the maximum period, scope, or geographical area reasonable under such circumstances will be substituted for the stated period, scope or area. 
 
13.    You acknowledge that the services to be rendered by
you hereunder are unique and personal. Accordingly, you may not assign any of your rights or delegate any of your duties or obligations under this agreement. The Company may assign its rights, duties or obligations under this agreement to a
purchaser or transferee of all, or substantially all, of the assets of the Company. 

 
Mr. Michael Smith 
December 20, 2002 
Page 8. 
 
14.    The waiver by either party of a breach by the other party of any provision of this agreement shall not be valid unless in a
writing signed by the non-breaching party, and any valid waiver shall not operate or be construed as a waiver of any subsequent breach. 
 
15.    This agreement embodies the entire agreement and understanding of the parties hereto with respect to the matters described
herein and supersedes any and all prior and/or contemporaneous agreements and understandings, oral or written, between the parties, except for the Prior Employment Agreement (to the extent not expressly provided otherwise as described in paragraph
17). 
 
16.    This agreement shall be, in all
respects, construed in accordance with and governed by the laws of the State of Illinois. 
 
17.    It is acknowledged and agreed upon by you and the Company that the terms of this agreement shall not be effective unless you are employed as a full-time employee of the Company on January 1, 2003,
in which event the terms of this agreement shall become effective. Furthermore, upon the terms of this agreement so becoming effective, paragraphs 3, 4 and 5 of this agreement, rather than the same numbered paragraphs of the Prior Employment
Agreement, shall provide for the terms of your salary, bonus and prerequisites for your period of employment for January, 2003. Furthermore, if you are a full-time employee of the Company on January 1, 2003, paragraph 11 of the Prior Employment
Agreement shall no longer be effective. 

 
Mr. Michael Smith 
December 20, 2002 
Page 9. 
 
If you are in agreement with the foregoing, please sign this agreement in the appropriate place below and return it to me as soon as
possible. 
 
Best regards,

 
 
James Bazet 
President and Chief Executive Officer

 
 
Agreed and Accepted 
as of the 8th day of

January, 2003: 
 
 

	
	 /s/    MICHAEL
SMITH

	 Michael Smith<PAGE>

                                                                    Exhibit 10.8

                              Kansas City Southern

                     1991 Amended and Restated Stock Option
                           and Performance Award Plan

           (as amended and restated effective as of November 7, 2002)

<PAGE>

                                                                    Exhibit 10.8

                                Table of Contents

<TABLE>
<CAPTION>
                                                                                       Page
                                                                                       ----
<S>                                                                                     <C>
Article 1.  Amendment and Restatement, Effective Date, Objectives and Duration.........  1

Article 2.  Definitions................................................................  2

Article 3.  Administration.............................................................  8

Article 4.  Shares Subject to the Plan and Maximum Awards.............................. 10

Article 5.  Eligibility and General Conditions of Awards............................... 11

Article 6.  Stock Options.............................................................. 15

Article 7.  Stock Appreciation Rights and Limited Stock Appreciation Rights............ 17

Article 8.  Restricted Shares.......................................................... 19

Article 9.  Performance Units and Performance Shares................................... 20

Article 10. Bonus Shares............................................................... 21

Article 11. Beneficiary Designation.................................................... 21

Article 12. Deferrals.................................................................. 21

Article 13. Rights of Employees/Directors/Consultants.................................. 21

Article 14. Change of Control.......................................................... 21

Article 15. Amendment, Modification, and Termination................................... 23

Article 16. Withholding................................................................ 23

Article 17. Successors................................................................. 24

Article 18. Additional Provisions...................................................... 25
</TABLE>

                                       -i-

<PAGE>

                                                                    Exhibit 10.8

                              KANSAS CITY SOUTHERN
                     1991 AMENDED AND RESTATED STOCK OPTION
                           AND PERFORMANCE AWARD PLAN
           (AS AMENDED AND RESTATED EFFECTIVE AS OF NOVEMBER 7, 2002)

ARTICLE 1. AMENDMENT AND RESTATEMENT, EFFECTIVE DATE, OBJECTIVES AND DURATION

        1.1         Amendment and Restatement of the Plan. Kansas City Southern,
a Delaware corporation (the "Company"), has heretofore amended, restated and
combined the Kansas City Southern Industries, Inc. 1991 Amended and Restated
Stock Option and Performance Award Plan (as amended through September 18, 1997),
the Kansas City Southern Industries, Inc. 1993 Directors' Stock Option Plan (the
"1993 Plan"), the Kansas City Southern Industries, Inc. 1987 Stock Option Plan
(as amended September 26, 1996) (the "1987 Plan") and the Kansas City Southern
Industries, Inc. 1983 Stock Option Plan (as amended September 26, 1996) (the
"1983 Plan") (as the same may be amended from time to time, the "Plan"). The
Plan, as so amended, restated and combined, was adopted by the Board of
Directors of the Company (the "Board") and approved by the stockholders of the
Company, to be effective as of July 15, 1998 (the "Effective Date"). On May 6,
1999, the Board amended Sections 2.14 and 15.1 of the Plan. Effective as of July
11, 2000, the Compensation and Organization Committee of the Board (the
"Compensation Committee") amended Sections 2.50, 4.1 and 5.7 of the Plan and,
effective as of July 12, 2000, adjusted the number of Shares referred to as
reserved for issuance in Section 4.1 of the Plan to reflect the 1-for-2 reverse
stock split that took place on that date. On November 7, 2002, the Compensation
Committee amended the Plan to reflect the Company's name change from Kansas City
Southern Industries, Inc. to Kansas City Southern. The Plan, as so amended, has
been restated as set forth herein effective as of November 7, 2002.

        1.2         Objectives of the Plan. The Plan is intended to allow
employees, directors and consultants of the Company and its Subsidiaries to
acquire or increase equity ownership in the Company, thereby strengthening their
commitment to the success of the Company and stimulating their efforts on behalf
of the Company, and to assist the Company and its Subsidiaries in attracting new
employees, directors and consultants and retaining existing employees, directors
and consultants. The Plan also is intended to optimize the profitability and
growth of the Company through incentives which are consistent with the Company's
goals; to provide employees, directors and consultants with an incentive for
excellence in individual performance; and to promote teamwork among employees,
directors and consultants.

        1.3         Duration of the Plan. The Plan shall remain in effect,
subject to the right of the Board to amend or terminate the Plan at any time
pursuant to Article 15 hereof, until all Shares subject to it shall have been
purchased or acquired according to the Plan's provisions. However, in no event
may an Incentive Stock Option be granted under the Plan on or after the date 10
years following the earlier of (i) the date the Plan was adopted and (ii) the
date the Plan was approved by the stockholders of the Company.

<PAGE>

                                                                    Exhibit 10.8

ARTICLE 2. DEFINITIONS

        Whenever used in the Plan, the following terms shall have the meanings
set forth below:

        2.1         "Article" means an Article of the Plan.

        2.2         "Award" means Options (including Incentive Stock Options),
Restricted Shares, Bonus Shares, stock appreciation rights (SARs), limited stock
appreciation rights (LSARs), Performance Units or Performance Shares granted
under the Plan.

        2.3         "Award Agreement" means the written agreement by which an
Award shall be evidenced.

        2.4         "Board" has the meaning set forth in Section 1.1.

        2.5         "Bonus Shares" means Shares that are awarded to a Grantee
without cost and without restrictions in recognition of past performance
(whether determined by reference to another employee benefit plan of the Company
or otherwise) or as an incentive to become an employee, director or consultant
of the Company or a Subsidiary.

        2.6         "Cause" means, unless otherwise defined in an Award
Agreement,

           (i)      before the occurrence of a Change of Control, any one or
more of the following, as determined by the Committee:

                    (A) a Grantee's commission of a crime which, in the judgment
        of the Committee, resulted or is likely to result in damage or injury to
        the Company or a Subsidiary;

                    (B) the material violation by the Grantee of written
        policies of the Company or a Subsidiary;

                    (C) the habitual neglect or failure by the Grantee in the
        performance of his or her duties to the Company or a Subsidiary (but
        only if such neglect or failure is not remedied within a reasonable
        remedial period after Grantee's receipt of written notice from the
        Company which describes such neglect or failure in reasonable detail and
        specifies the remedial period); or

                    (D) action or inaction by the Grantee in connection with his
        or her duties to the Company or a Subsidiary resulting, in the judgment
        of the Committee, in material injury to the Company or a Subsidiary; and

                                       -2-

<PAGE>

                                                                    Exhibit 10.8

           (ii)     from and after the occurrence of a Change of Control, the
occurrence of any one or more of the following, as determined in the good faith
and reasonable judgment of the Committee:

                    (A) Grantee's conviction for committing an act of fraud,
        embezzlement, theft, or any other act constituting a felony involving
        moral turpitude or causing material damage or injury, financial or
        otherwise, to the Company;

                    (B) a demonstrably willful and deliberate act or failure to
        act which is committed in bad faith, without reasonable belief that such
        action or inaction is in the best interests of the Company, which causes
        material damage or injury, financial or otherwise, to the Company (but
        only if such act or inaction is not remedied within 15 business days of
        Grantee's receipt of written notice from the Company which describes the
        act or inaction in reasonable detail); or

                    (C) the consistent gross neglect of duties or consistent
        wanton negligence by the Grantee in the performance of the Grantee's
        duties (but only if such neglect or negligence is not remedied within a
        reasonable remedial period after Grantee's receipt of written notice
        from the Company which describes such neglect or negligence in
        reasonable detail and specifies the remedial period).

        2.7         "Change of Control" means, unless otherwise defined in an
Award Agreement, any one or more of the following:

           (i)      the acquisition or holding by any person, entity or "group"
(within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act), other than
by the Company or any Subsidiary or any employee benefit plan of the Company or
a Subsidiary, of beneficial ownership (within the meaning of Rule 13d-3 under
the 1934 Act) of 20% or more of the then-outstanding Common Stock or the
then-outstanding Voting Power of the Company; provided, however, that no Change
of Control shall occur solely by reason of any such acquisition by a corporation
with respect to which, after such acquisition, more than 60% of both the
then-outstanding common shares and the then-outstanding Voting Power of such
corporation are then beneficially owned, directly or indirectly, by the persons
who were the beneficial owners of the then-outstanding Common Stock and Voting
Power of the Company immediately before such acquisition, in substantially the
same proportions as their respective ownership, immediately before such
acquisition, of the then-outstanding Common Stock and Voting Power of the
Company; or

           (ii)     individuals who, as of the Effective Date, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least 75% of
the Board; provided that any individual who becomes a director after the
Effective Date whose election or nomination for election by the Company's
stockholders was approved by at least 75% of the Incumbent Board (other than an
election or nomination of an individual whose initial assumption of office is in
connection with an actual or threatened "election contest" relating to the
election of the directors of the Company (as such terms are used in Rule 14a-11
under the 1934 Act) or "tender offer" (as such term is used in

                                       -3-

<PAGE>

                                                                    Exhibit 10.8

Section 14(d) of the 1934 Act) or a proposed Extraordinary Transaction (as
defined below)) shall be deemed to be a member of the Incumbent Board; or

           (iii)    approval by the stockholders of the Company of any one or
more of the following:

                    (A) a merger, reorganization, consolidation or similar
transaction (any of the foregoing, an "Extraordinary Transaction") with respect
to which persons who were the respective beneficial owners of the
then-outstanding Common Stock and Voting Power of the Company immediately before
such Extraordinary Transaction would not, if such Extraordinary Transaction were
to be consummated immediately after such stockholder approval (but otherwise in
accordance with the terms presented in writing to the stockholders of the
Company for their approval), beneficially own, directly or indirectly, more than
60% of both the then-outstanding common shares and the then-outstanding Voting
Power of the corporation resulting from such Extraordinary Transaction, in
substantially the same proportions as their respective ownership, immediately
before such Extraordinary Transaction, of the then-outstanding Common Stock and
Voting Power of the Company,

                    (B) a liquidation or dissolution of the Company, or

                    (C) the sale or other disposition of all or substantially
all of the assets of the Company in one transaction or a series of related
transactions.

        2.8         "Change of Control Value" means the Fair Market Value of a
Share on the date of a Change of Control.

        2.9         "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and regulations and rulings thereunder. References to a
particular section of the Code include references to successor provisions of the
Code or any successor code.

        2.10        "Committee," "Plan Committee" and "Management Committee"
have the meaning set forth in Article 3.

        2.11        "Common Stock" means the common stock, $.01 par value, of
the Company.

        2.12        "Company" has the meaning set forth in Section 1.1.

        2.13        "Covered Employee" means a Grantee who, as of the date that
the value of an Award is recognizable as taxable income, is one of the group of
"covered employees," within the meaning of Code Section 162(m).

        2.14        "Disability" means, unless otherwise defined in an Award
Agreement, for purposes of the exercise of an Incentive Stock Option after
Termination of Affiliation, a disability within the meaning of Section 22(e)(3)
of the Code, and for all other purposes, means total disability as determined
for purposes of the long term disability plan of KCS or any

                                       -4-

<PAGE>

                                                                    Exhibit 10.8

Subsidiary or other employer of the Grantee and disability shall be deemed to
occur for purposes of the Plan on the date such determination of disability is
made.

        2.15        "Disqualifying Disposition" has the meaning set forth in
Section 6.4.

        2.16        "Effective Date" has the meaning set forth in Section 1.1.

        2.17        "Eligible Person" means (i) any employee (including any
officer) of the Company or any Subsidiary, including any such employee who is on
an approved leave of absence, layoff, or has been subject to a disability which
does not qualify as a Disability, (ii) any director of the Company or any
Subsidiary and (iii) any person performing services for the Company or a
Subsidiary in the capacity of a consultant.

        2.18        "Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time. References to a particular section of the Exchange
Act include references to successor provisions.

        2.19        "Extraordinary Transaction" has the meaning set forth in
Section 2.7.

        2.20        "Fair Market Value" means (A) with respect to any property
other than Shares, the fair market value of such property determined by such
methods or procedures as shall be established from time to time by the
Committee, and (B) with respect to Shares, unless otherwise determined by the
Committee, as of any date, (i) the average of the high and low trading prices on
the date of determination on the New York Stock Exchange (or, if no sale of
Shares was reported for such date, on the next preceding date on which a sale of
Shares was reported); (ii) if the Shares are not listed on the New York Stock
Exchange, the average of the high and low trading prices of the Shares on such
other national exchange on which the Shares are principally traded or as
reported by the National Market System, or similar organization, or if no such
quotations are available, the average of the high bid and low asked quotations
in the over-the-counter market as reported by the National Quotation Bureau
Incorporated or similar organizations; or (iii) in the event that there shall be
no public market for the Shares, the fair market value of the Shares as
determined by the Committee.

        2.21        "Freestanding SAR" means an SAR that is granted
independently of any other Award.

        2.22        "Good Reason" means, unless otherwise defined in an Award
Agreement, the occurrence after a Change of Control, without a Grantee's prior
written consent, of any one or more of the following:

           (i)      the assignment to the Grantee of any duties which result in
        a material adverse change in the Grantee's position (including status,
        offices, titles, and reporting requirements), authority, duties, or
        other responsibilities with the Company, or any other action of the
        Company which results in a material adverse change in such position,
        authority, duties, or

                                       -5-

<PAGE>

                                                                    Exhibit 10.8

        responsibilities, other than an insubstantial and inadvertent action
        which is remedied by the Company promptly after receipt of notice
        thereof given by the Grantee,

           (ii)     any relocation of the Grantee of more than 40 miles from the
        place where the Grantee was located at the time of the Change of
        Control, or

           (iii)    a material reduction or elimination of any component of the
        Grantee's rate of compensation, including (x) base salary, (y) any
        incentive payment or (z) benefits or perquisites which the Grantee was
        receiving immediately prior to a Change of Control.

        2.23        "Grant Date" has the meaning set forth in Section 5.2.

        2.24        "Grantee" means an individual who has been granted an Award.

        2.25        "Incentive Stock Option" means an option granted under
Article 6 of the Plan that is intended to meet the requirements of Section 422
of the Code or any successor provisions thereto.

        2.26        "including" or "includes" means "including, without
limitation," or "includes, without limitation," respectively.

        2.27        "LSAR" means a limited stock appreciation right.

        2.28        "Mature Shares" means Shares for which the holder thereof
has good title, free and clear of all liens and encumbrances, and which such
holder either (i) has held for at least six months or (ii) has purchased on the
open market.

        2.29        "Minimum Consideration" means $.01 per Share or such other
amount that is from time to time considered to be capital for purposes of
Section 154 of the Delaware General Corporation Law.

        2.30        "Option" means an option granted under Article 6 of the
Plan.

        2.31        "Option Price" means the price at which a Share may be
purchased by a Grantee pursuant to an Option.

        2.32        "Option Term" means the period beginning on the Grant Date
of an Option and ending on the expiration date of such Option, as specified in
the Award Agreement for such Option and as may, consistent with the provisions
of the Plan, be extended from time to time by the Committee prior to the
expiration date of such Option then in effect.

        2.33        "Outside Director" means a member of the Board who is not an
employee of the Company or any Subsidiary.

                                       -6-

<PAGE>

                                                                    Exhibit 10.8

        2.34        "Performance-Based Exception" means the performance-based
exception from the tax deductibility limitations of Code Section 162(m).

        2.35        "Performance Period" has the meaning set forth in Section
9.2.

        2.36        "Performance Share" or "Performance Unit" has the meaning
set forth in Article 9.

        2.37        "Period of Restriction" means the period during which the
transfer of Restricted Shares is limited in some way (the length of the period
being based on the passage of time, the achievement of performance goals, or
upon the occurrence of other events as determined by the Committee), and the
Shares are subject to a substantial risk of forfeiture, as provided in Article
8.

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

        2.39        "Plan" has the meaning set forth in Section 1.1.

        2.40        "Required Withholding" has the meaning set forth in Article
16.

        2.41        "Restricted Shares" means Shares that are subject to
forfeiture if the Grantee does not satisfy the conditions specified in the Award
Agreement applicable to such Shares.

        2.42        "Retirement" means for any Grantee who is an employee,
Termination of Affiliation by the Grantee upon either (i) having both attained
age fifty-five (55) and completed at least ten (10) years of service with the
Company or a Subsidiary or (ii) meeting such other requirements as may be
specified by the Committee.

        2.43        "Rule 16b-3" means Rule 16b-3 promulgated by the SEC under
the Exchange Act, as amended from time to time, together with any successor
rule, as in effect from time to time.

        2.44        "SAR" means a stock appreciation right.

        2.45        "SEC" means the United States Securities and Exchange
Commission, or any successor thereto.

        2.46        "Section" means, unless the context otherwise requires, a
Section of the Plan.

        2.47        "Section 16 Person" means a person who is subject to
potential liability under Section 16(b) of the 1934 Act with respect to
transactions involving equity securities of the Company.

        2.48        "Share" means a share of Common Stock.

        2.49        "Strike Price" of any SAR shall equal, for any Tandem SAR
(whether such Tandem SAR is granted at the same time as or after the grant of
the related Option), the Option

                                       -7-

<PAGE>

                                                                    Exhibit 10.8

Price of such Option, or for any other SAR, 100% of the Fair Market Value of a
Share on the Grant Date of such SAR; provided that the Committee may specify a
higher Strike Price in the Award Agreement.

        2.50        "Subsidiary" means, for purposes of grants of Incentive
Stock Options, a corporation as defined in Section 424(f) of the Code (with the
Company being treated as the employer corporation for purposes of this
definition) and, for all other purposes, a United States or foreign corporation
or partnership or other similar entity with respect to which the Company owns,
directly or indirectly, 50% (or such lesser percentage as the Committee may
specify, which percentage may be changed from time to time and may be different
for different entities) or more of the Voting Power of such corporation,
partnership or other entity.

        2.51        "Tandem SAR" means an SAR that is granted in connection with
a related Option, the exercise of which shall require cancellation of the right
to purchase a Share under the related Option (and when a Share is purchased
under the related Option, the Tandem SAR shall similarly be canceled).

        2.52        "Termination of Affiliation" occurs on the first day on
which an individual is for any reason no longer providing services to the
Company or any Subsidiary in the capacity of an employee, director or
consultant, or with respect to an individual who is an employee or director of,
or consultant to, a corporation which is a Subsidiary, the first day on which
such corporation ceases to be a Subsidiary.

        2.53        "10% Owner" means a person who owns capital stock (including
stock treated as owned under Section 424(d) of the Code) possessing more than
10% of the total combined voting power of all classes of capital stock of the
Company or any Subsidiary.

        2.54        "Voting Power" means the combined voting power of the
then-outstanding securities of a corporation entitled to vote generally in the
election of directors.

ARTICLE 3. ADMINISTRATION

        3.1         Committee.

                    (a) Subject to Article 15, and to Section 3.2, the Plan
shall be administered by the Board, or a committee appointed by the Board to
administer the Plan ("Plan Committee"). To the extent the Board considers it
desirable to comply with or qualify under Rule 16b-3 or meet the
Performance-Based Exception, the Plan Committee shall consist of two or more
directors of the Company, all of whom qualify as "outside directors" as defined
for purposes of the regulations under Code Section 162(m) and "non-employee
directors" within the meaning of Rule 16b-3. The number of members of the Plan
Committee shall from time to time be increased or decreased, and shall be
subject to such conditions, in each case as the Board deems appropriate to
permit transactions in Shares pursuant to the Plan to satisfy such conditions of
Rule 16b-3 and the Performance-Based Exception as then in effect.

                                       -8-

<PAGE>

                                                                    Exhibit 10.8

                    (b) The Board or the Plan Committee may appoint and delegate
to another committee ("Management Committee") any or all of the authority of the
Board or the Plan Committee, as applicable, with respect to Awards to Grantees
other than Grantees who are Section 16 Persons at the time any such delegated
authority is exercised.

                    (c) Any references herein to "Committee" are references to
the Board, or the Plan Committee or the Management Committee, as applicable.

        3.2         Powers of Committee. Subject to the express provisions of
the Plan, the Committee has full and final authority and sole discretion as
follows:

           (i)      to determine when, to whom and in what types and amounts
Awards should be granted and the terms and conditions applicable to each Award,
including the benefit payable under any SAR, Performance Unit or Performance
Share, and whether or not specific Awards shall be granted in connection with
other specific Awards, and if so whether they shall be exercisable cumulatively
with, or alternatively to, such other specific Awards;

           (ii)     to determine the amount, if any, that a Grantee shall pay
for Restricted Shares, whether to permit or require the payment of cash
dividends thereon to be deferred and the terms related thereto, when Restricted
Shares (including Restricted Shares acquired upon the exercise of an Option)
shall be forfeited and whether such shares shall be held in escrow;

           (iii)    to construe and interpret the Plan and to make all
determinations necessary or advisable for the administration of the Plan;

           (iv)     to make, amend, and rescind rules relating to the Plan,
including rules with respect to the exercisability and nonforfeitability of
Awards upon the Termination of Affiliation of a Grantee;

           (v)      to determine the terms and conditions of all Award
Agreements (which need not be identical) and, with the consent of the Grantee,
to amend any such Award Agreement at any time, among other things, to permit
transfers of such Awards to the extent permitted by the Plan; provided that the
consent of the Grantee shall not be required for any amendment which (A) does
not adversely affect the rights of the Grantee, or (B) is necessary or advisable
(as determined by the Committee) to carry out the purpose of the Award as a
result of any new or change in existing applicable law;

           (vi)     to cancel, with the consent of the Grantee, outstanding
Awards and to grant new Awards in substitution therefor;

           (vii)    to accelerate the exercisability (including exercisability
within a period of less than six months after the Grant Date) of, and to
accelerate or waive any or all of the terms and conditions applicable to, any
Award or any group of Awards for any reason and at any time, including in
connection with a Termination of Affiliation;

                                       -9-

<PAGE>

                                                                    Exhibit 10.8

           (viii)   subject to Sections 1.3 and 5.3, to extend the time during
which any Award or group of Awards may be exercised;

           (ix)     to make such adjustments or modifications to Awards to
Grantees working outside the United States as are advisable to fulfill the
purposes of the Plan or to comply with applicable local law;

           (x)      to impose such additional terms and conditions upon the
grant, exercise or retention of Awards as the Committee may, before or
concurrently with the grant thereof, deem appropriate, including limiting the
percentage of Awards which may from time to time be exercised by a Grantee; and

           (xi)     to take any other action with respect to any matters
relating to the Plan for which it is responsible.

        All determinations on all matters relating to the Plan or any Award
Agreement may be made in the sole and absolute discretion of the Committee, and
all such determinations of the Committee shall be final, conclusive and binding
on all Persons. No member of the Committee shall be liable for any action or
determination made with respect to the Plan or any Award.

ARTICLE 4. SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS

        4.1         Number of Shares Available for Grants. Subject to adjustment
as provided in Section 4.2, the number of Shares hereby reserved for issuance
under the Plan shall be equal to the sum of (i) 15,600,000, and (ii) the total
number of Shares subject to Awards granted under the 1993 Plan, 1987 Plan and
1983 Plan that are outstanding as of the Effective Date (for a total of
16,003,186); and the number of Shares for which Awards may be granted to any
Grantee on any Grant Date, when aggregated with the number of Shares for which
Awards have previously been granted to such Grantee in the same calendar year,
shall not exceed the greater of (i) one percent (1%) of the total Shares
outstanding as of such Grant Date or (ii) 1,300,000; provided, however, that the
total number of Shares for which Awards may be granted to any Grantee in any
calendar year shall not exceed 2,000,000. If any Shares subject to an Award
granted hereunder are forfeited or such Award otherwise terminates without the
issuance of such Shares or of other consideration in lieu of such Shares, the
Shares subject to such Award, to the extent of any such forfeiture or
termination shall again be available for grant under the Plan. If any Shares
(whether subject to or received pursuant to an Award granted hereunder,
purchased on the open market, or otherwise obtained) are withheld, applied as
payment, or sold pursuant to procedures approved by the Committee and the
proceeds thereof applied as payment in connection with the exercise of an Award
or the withholding of taxes related thereto, such Shares, to the extent of any
such withholding or payment, shall again be available or shall increase the
number of Shares available, as applicable, for grant under the Plan. The
Committee may from time to time determine the appropriate methodology for
calculating the number of Shares issued pursuant to the Plan. Shares issued
pursuant to the Plan may be treasury Shares or newly-issued Shares.

                                      -10-

<PAGE>

                                                                    Exhibit 10.8

        4.2         Adjustments in Authorized Shares. In the event that the
Committee determines that any dividend or other distribution (whether in the
form of cash, Shares, other securities, or other property), recapitalization,
stock split, reverse stock split, subdivision, consolidation or reduction of
capital, reorganization, merger, scheme of arrangement, split-up, spin-off or
combination involving the Company or repurchase or exchange of Shares or other
rights to purchase Shares or other securities of the Company, or other similar
corporate transaction or event affects the Shares such that any adjustment is
determined by the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the Committee shall, in such manner as it may deem
equitable, adjust any or all of (i) the number and type of Shares (or other
securities or property) with respect to which Awards may be granted, (ii) the
number and type of Shares (or other securities or property) subject to
outstanding Awards, and (iii) the grant or exercise price with respect to any
Award or, if deemed appropriate, make provision for a cash payment to the holder
of an outstanding Award or the substitution of other property for Shares subject
to an outstanding Award; provided, in each case that with respect to Awards of
Incentive Stock Options no such adjustment shall be authorized to the extent
that such adjustment would cause the Plan to violate Section 422(b)(1) of the
Code or any successor provision thereto; and provided further, that the number
of Shares subject to any Award denominated in Shares shall always be a whole
number.

ARTICLE 5. ELIGIBILITY AND GENERAL CONDITIONS OF AWARDS

        5.1         Eligibility. The Committee may grant Awards to any Eligible
Person, whether or not he or she has previously received an Award.

        5.2         Grant Date. The Grant Date of an Award shall be the date on
which the Committee grants the Award or such later date as specified by the
Committee.

        5.3         Maximum Term. The Option Term or other period during which
an Award may be outstanding shall under no circumstances extend more than 10
years after the Grant Date, and shall be subject to earlier termination as
herein provided; provided, however, that any deferral of a cash payment or of
the delivery of Shares that is permitted or required by the Committee pursuant
to Article 12 may, if so permitted or required by the Committee, extend more
than 10 years after the Grant Date of the Award to which the deferral relates.

        5.4         Award Agreement. To the extent not set forth in the Plan,
the terms and conditions of each Award (which need not be the same for each
grant or for each Grantee) shall be set forth in an Award Agreement.

        5.5         Restrictions on Share Transferability. The Committee may
impose such restrictions on any Shares acquired pursuant to the exercise or
vesting of an Award as it may deem advisable, including restrictions under
applicable federal securities laws.

        5.6         Termination of Affiliation. Except as otherwise provided in
an Award Agreement, and subject to the provisions of Section 14.1, the extent to
which the Grantee shall

                                      -11-

<PAGE>

                                                                    Exhibit 10.8

have the right to exercise, vest in, or receive payment in respect of an Award
following Termination of Affiliation shall be determined in accordance with the
following provisions of this Section 5.6.

           (a)      For Cause. If a Grantee has a Termination of Affiliation for
Cause, (i) the Grantee's Restricted Shares that are forfeitable shall thereupon
be forfeited, subject to the provisions of Section 8.4 regarding repayment of
certain amounts to the Grantee; and (ii) any unexercised Option, LSAR or SAR,
and any Performance Share or Performance Unit with respect to which the
Performance Period has not ended as of the date of such Termination of
Affiliation, shall terminate effective immediately upon such Termination of
Affiliation.

           (b)      On Account of Death or Disability. If a Grantee has a
Termination of Affiliation on account of death or Disability, then:

              (i)   the Grantee's Restricted Shares that were forfeitable shall
thereupon become nonforfeitable;

              (ii)  any unexercised Option or SAR, whether or not exercisable on
the date of such Termination of Affiliation, may be exercised, in whole or in
part, within the first 12 months after such Termination of Affiliation (but only
during the Option Term) by the Grantee or, after his or her death, by (A) his or
her personal representative or the person to whom the Option or SAR, as
applicable, is transferred by will or the applicable laws of descent and
distribution, or (B) the Grantee's beneficiary designated in accordance with
Article 11; and

              (iii) the benefit payable with respect to any Performance Share or
Performance Unit with respect to which the Performance Period has not ended as
of the date of such Termination of Affiliation on account of death or Disability
shall be equal to the product of the Fair Market Value of a Share as of the date
of such Termination of Affiliation or the value of the Performance Unit
specified in the Award Agreement (determined as of the date of such Termination
of Affiliation), as applicable, multiplied successively by each of the
following:

                    (1)  a fraction, the numerator of which is the number of
months (including as a whole month any partial month) that have elapsed since
the beginning of such Performance Period until the date of such Termination of
Affiliation and the denominator of which is the number of months (including as a
whole month any partial month) in the Performance Period; and

                    (2)  a percentage determined by the Committee that would be
earned under the terms of the applicable Award Agreement assuming that the rate
at which the performance goals have been achieved as of the date of such
Termination of Affiliation would continue until the end of the Performance
Period, or, if the Committee elects to compute the benefit after the end of the
Performance Period, the Performance Percentage, as determined by the Committee,
attained during the Performance Period.

                                      -12-

<PAGE>

                                                                    Exhibit 10.8

           (c)      On Account of Retirement. If a Grantee has a Termination of
Affiliation on account of Retirement, then:

              (i)   the Grantee's Restricted Shares that were forfeitable shall
thereupon become nonforfeitable;

              (ii)  any unexercised Option or SAR, whether or not exercisable on
the date of such Termination of Affiliation, may be exercised, in whole or in
part, within the first five years after such Termination of Affiliation (but
only during the Option Term) by the Grantee or, after his or her death, by (A)
his or her personal representative or the person to whom the Option or SAR, as
applicable, is transferred by will or the applicable laws of descent and
distribution, or (B) the Grantee's beneficiary designated in accordance with
Article 11; and

              (iii) the benefit payable with respect to any Performance Share or
Performance Unit with respect to which the Performance Period has not ended as
of the date of such Termination of Affiliation on account of Retirement shall be
equal to the product of the Fair Market Value of a Share as of the date of such
Termination of Affiliation or the value of the Performance Unit specified in the
Award Agreement (determined as of the date of such Termination of Affiliation),
as applicable, multiplied successively by each of the following:

                    (1)  a fraction, the numerator of which is the number of
months (including as a whole month any partial month) that have elapsed since
the beginning of such Performance Period until the date of such Termination of
Affiliation and the denominator of which is the number of months (including as a
whole month any partial month) in the Performance Period; and

                    (2)  a percentage determined by the Committee that would be
earned under the terms of the applicable Award Agreement assuming that the rate
at which the performance goals have been achieved as of the date of such
Termination of Affiliation would continue until the end of the Performance
Period, or, if the Committee elects to compute the benefit after the end of the
Performance Period, the Performance Percentage, as determined by the Committee,
attained during the Performance Period.

           (d)      Any Other Reason. If a Grantee has a Termination of
Affiliation for any reason other than for Cause, death, Disability or
Retirement, then:

              (i)   the Grantee's Restricted Shares, to the extent forfeitable
on the date of the Grantee's Termination of Affiliation, shall be forfeited on
such date;

              (ii)  any unexercised Option or SAR, to the extent exercisable
immediately before the Grantee's Termination of Affiliation, may be exercised in
whole or in part, not later than three months after such Termination of
Affiliation (but only during the Option Term) by the Grantee or, after his or
her death, by (A) his or her personal representative or the person to whom the
Option or SAR, as applicable, is transferred by will or the applicable laws of
descent and distribution, or (B) the Grantee's beneficiary designated in
accordance with Article 11; and

                                      -13-

<PAGE>

                                                                    Exhibit 10.8

              (iii) any Performance Shares or Performance Units with respect to
which the Performance Period has not ended as of the date of such Termination of
Affiliation shall terminate immediately upon such Termination of Affiliation.

        5.7         Nontransferability of Awards.

           (a)      Except as provided in Section 5.7(c) below, each Award, and
each right under any Award, shall be exercisable only by the Grantee during the
Grantee's lifetime, or, if permissible under applicable law, by the Grantee's
guardian or legal representative;

           (b)      Except as provided in Section 5.7(c) below, no Award (prior
to the time, if applicable, Shares are issued in respect of such Award), and no
right under any Award, may be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by a Grantee otherwise than by will or by
the laws of descent and distribution (or in the case of Restricted Shares, to
the Company), and any such purported assignment, alienation, pledge, attachment,
sale, transfer or encumbrance shall be void and unenforceable against the
Company or any Subsidiary; provided, that the designation of a beneficiary shall
not constitute an assignment, alienation, pledge, attachment, sale, transfer or
encumbrance.

           (c)      To the extent and in the manner permitted by the Committee,
and subject to such terms, conditions, restrictions or limitations that may be
prescribed by the Committee, a Grantee may transfer an Award (other than an
Incentive Stock Option) to (i) a spouse, sibling, parent, child (including an
adopted child) or grandchild (any of which, an "Immediate Family Member") of the
Grantee; (ii) a trust, the primary beneficiaries of which consist exclusively of
the Grantee or Immediate Family Members of the Grantee; or (iii) a corporation,
partnership or similar entity, the owners of which consist exclusively of the
Grantee or Immediate Family Members of the Grantee.

        5.8         Cancellation and Rescission of Awards. Unless the Award
Agreement specifies otherwise, the Committee may cancel, rescind, suspend,
withhold, or otherwise limit or restrict any unexercised Award at any time if
the Grantee is not in compliance with all applicable provisions of the Award
Agreement and the Plan or if the Grantee has a Termination of Affiliation for
Cause.

        5.9         Loans and Guarantees. The Committee may, subject to
applicable law, (i) allow a Grantee to defer payment to the Company of all or
any portion of the Option Price of an Option or the purchase price of Restricted
Shares, or (ii) cause the Company to loan to the Grantee, or guarantee a loan
from a third party to the Grantee for, all or any portion of the Option Price of
an Option or the purchase price of Restricted Shares or all or any portion of
any taxes associated with the exercise of, nonforfeitability of, or payment of
benefits in connection with, an Award. Any such payment deferral, loan or
guarantee by the Company shall be on such terms and conditions as the Committee
may determine.

                                      -14-

<PAGE>

                                                                    Exhibit 10.8

ARTICLE 6. STOCK OPTIONS

        6.1         Grant of Options. Subject to the terms and provisions of the
Plan, Options may be granted to any Eligible Person in such number, and upon
such terms, and at any time and from time to time as shall be determined by the
Committee. Without in any manner limiting the generality of the foregoing, the
Committee may grant to any Eligible Person, or permit any Eligible Person to
elect to receive, an Option in lieu of or in substitution for any other
compensation (whether payable currently or on a deferred basis, and whether
payable under this Plan or otherwise) which such Eligible Person may be eligible
to receive from the Company or a Subsidiary.

        6.2         Award Agreement. Each Option grant shall be evidenced by an
Award Agreement that shall specify the Option Price, the Option Term, the number
of shares to which the Option pertains, the time or times at which such Option
shall be exercisable and such other provisions as the Committee shall determine.

        6.3         Option Price. The Option Price of an Option under this Plan
shall be determined by the Committee, and shall be equal to or more than 100% of
the Fair Market Value of a Share on the Grant Date; provided, however, that any
Option that is (x) granted to a Grantee in connection with the acquisition
("Acquisition"), however effected, by the Company of another corporation or
entity ("Acquired Entity") or the assets thereof, (y) associated with an option
to purchase shares of stock of the Acquired Entity or an affiliate thereof
("Acquired Entity Option") held by such Grantee immediately prior to such
Acquisition, and (z) intended to preserve for the Grantee the economic value of
all or a portion of such Acquired Entity Option ("Substitute Option") may, to
the extent necessary to achieve such preservation of economic value, be granted
with an Option Price that is less than 100% of the Fair Market Value of a Share
on the Grant Date.

        6.4         Grant of Incentive Stock Options. At the time of the grant
of any Option, the Committee may designate that such Option shall be made
subject to additional restrictions to permit it to qualify as an "incentive
stock option" under the requirements of Section 422 of the Code. Any Option
designated as an Incentive Stock Option shall, to the extent required by Section
422 of the Code:

           (i)      if granted to a 10% Owner, have an Option Price not less
than 110% of the Fair Market Value of a Share on its Grant Date;

           (ii)     be exercisable for a period of not more than 10 years (five
years in the case of an Incentive Stock Option granted to a 10% Owner) from its
Grant Date, and be subject to earlier termination as provided herein or in the
applicable Award Agreement;

           (iii)    not have an aggregate Fair Market Value (as of the Grant
Date of each Incentive Stock Option) of the Shares with respect to which
Incentive Stock Options (whether granted under the Plan or any other stock
option plan of the Grantee's employer or any parent or Subsidiary

                                      -15-

<PAGE>

                                                                    Exhibit 10.8

thereof ("Other Plans")) are exercisable for the first time by such Grantee
during any calendar year, determined in accordance with the provisions of
Section 422 of the Code, which exceeds $100,000 (the "$100,000 Limit");

           (iv)     if the aggregate Fair Market Value of the Shares (determined
on the Grant Date) with respect to the portion of such grant which is
exercisable for the first time during any calendar year ("Current Grant") and
all Incentive Stock Options previously granted under the Plan and any Other
Plans which are exercisable for the first time during the same calendar year
("Prior Grants") would exceed the $100,000 Limit be exercisable as follows:

                    (A) the portion of the Current Grant which would, when added
        to any Prior Grants, be exercisable with respect to Shares which would
        have an aggregate Fair Market Value (determined as of the respective
        Grant Date for such options) in excess of the $100,000 Limit shall,
        notwithstanding the terms of the Current Grant, be exercisable for the
        first time by the Grantee in the first subsequent calendar year or years
        in which it could be exercisable for the first time by the Grantee when
        added to all Prior Grants without exceeding the $100,000 Limit; and

                    (B) if, viewed as of the date of the Current Grant, any
        portion of a Current Grant could not be exercised under the preceding
        provisions of this Section during any calendar year commencing with the
        calendar year in which it is first exercisable through and including the
        last calendar year in which it may by its terms be exercised, such
        portion of the Current Grant shall not be an Incentive Stock Option, but
        shall be exercisable as an Option which is not an Incentive Stock Option
        at such date or dates as are provided in the Current Grant;

           (v)      be granted within 10 years from the earlier of the date the
Plan is adopted or the date the Plan is approved by the stockholders of the
Company; and

           (vi)     by its terms not be assignable or transferable other than by
will or the laws of descent and distribution and may be exercised, during the
Grantee's lifetime, only by the Grantee; provided, however, that the Grantee
may, in any manner permitted by the Plan and specified by the Committee,
designate in writing a beneficiary to exercise his or her Incentive Stock Option
after the Grantee's death.

        Any Option designated as an Incentive Stock Option shall also require
the Grantee to notify the Committee of any disposition of any Shares issued
pursuant to the exercise of the Incentive Stock Option under the circumstances
described in Section 421(b) of the Code (relating to certain disqualifying
dispositions) (any such circumstance, a "Disqualifying Disposition"), within 10
days of such Disqualifying Disposition.

        Notwithstanding the foregoing and Section 3.2(v), the Committee may,
without the consent of the Grantee, at any time before the exercise of an Option
(whether or not an Incentive Stock Option), take any action necessary to prevent
such Option from being treated as an Incentive Stock Option.

                                      -16-

<PAGE>

                                                                    Exhibit 10.8

        6.5         Payment. Options granted under this Article 6 shall be
exercised by the delivery of a written notice of exercise to the Company,
setting forth the number of Shares with respect to which the Option is to be
exercised, accompanied by full payment for the Shares made by any one or more of
the following means subject to the approval of the Committee:

                    (a)  cash, personal check or wire transfer;

                    (b)  Mature Shares, valued at their Fair Market Value on the
date of exercise;

                    (c)  Restricted Shares held by the Grantee for at least six
months prior to the exercise of the Option, each such Share valued at the Fair
Market Value of a Share on the date of exercise;

                    (d)  subject to applicable law, pursuant to procedures
approved by the Committee, through the sale of the Shares acquired on exercise
of the Option through a broker-dealer to whom the Grantee has submitted an
irrevocable notice of exercise and irrevocable instructions to deliver promptly
to the Company the amount of sale or loan proceeds sufficient to pay for such
Shares, together with, if requested by the Company, the amount of federal,
state, local or foreign withholding taxes payable by Grantee by reason of such
exercise; or

                    (e)  when permitted by the Committee, payment may also be
made in accordance with Section 5.9.

If any Restricted Shares ("Tendered Restricted Shares") are used to pay the
Option Price, a number of Shares acquired on exercise of the Option equal to the
number of Tendered Restricted Shares shall be subject to the same restrictions
as the Tendered Restricted Shares, determined as of the date of exercise of the
Option.

ARTICLE 7. STOCK APPRECIATION RIGHTS AND LIMITED STOCK APPRECIATION RIGHTS

        7.1         Grant of SARs. Subject to the terms and conditions of the
Plan, SARs may be granted to any Eligible Person at any time and from time to
time as shall be determined by the Committee. The Committee may grant
Freestanding SARs, Tandem SARs, or any combination thereof.

        The Committee shall determine the number of SARs granted to each Grantee
(subject to Article 4), the Strike Price thereof, and, consistent with Section
7.2 and the other provisions of the Plan, the other terms and conditions
pertaining to such SARs.

        7.2         Exercise of Tandem SARs. Tandem SARs may be exercised for
all or part of the Shares subject to the related Award upon the surrender of the
right to exercise the equivalent portion of the related Award. A Tandem SAR may
be exercised only with respect to the Shares for which its related Award is then
exercisable.

                                      -17-

<PAGE>

                                                                    Exhibit 10.8

        Notwithstanding any other provision of this Plan to the contrary, with
respect to a Tandem SAR, (i) the Tandem SAR will expire no later than the
expiration of the underlying Option; (ii) the value of the payout with respect
to the Tandem SAR may be for no more than 100% of the difference between the
Option Price of the underlying Option and the Fair Market Value of the Shares
subject to the underlying Option at the time the Tandem SAR is exercised; and
(iii) the Tandem SAR may be exercised only when the Fair Market Value of the
Shares subject to the Option exceeds the Option Price of the Option.

        7.3         Payment of SAR Amount. Upon exercise of an SAR, the
Grantee shall be entitled to receive payment from the Company in an amount
determined by multiplying:

                    (a) the excess of the Fair Market Value of a Share on the
                        date of exercise over the Strike Price;

by

                    (b) the number of Shares with respect to which the SAR is
                        exercised;

provided that the Committee may provide in the Award Agreement that the benefit
payable on exercise of an SAR shall not exceed such percentage of the Fair
Market Value of a Share on the Grant Date as the Committee shall specify. As
determined by the Committee, the payment upon SAR exercise may be in cash, in
Shares which have an aggregate Fair Market Value (as of the date of exercise of
the SAR) equal to the amount of the payment, or in some combination thereof, as
set forth in the Award Agreement.

        7.4         Grant of LSARs. Subject to the terms and conditions of the
Plan, LSARs may be granted to any Eligible Person at any time and from time to
time as shall be determined by the Committee. Each LSAR shall be identified with
a Share subject to an Option or SAR held by the Grantee, which may include an
Option or SAR previously granted under the Plan. Upon the exercise, expiration,
termination, forfeiture or cancellation of the Option or SAR with which an LSAR
is identified, such LSAR shall terminate.

        7.5         Exercise of LSARs. Each LSAR shall automatically be
exercised upon a Change of Control which has not been approved by the Incumbent
Board. The exercise of an LSAR shall result in the cancellation of the Option or
SAR with which such LSAR is identified, to the extent of such exercise.

        7.6         Payment of LSAR Amount. Within 10 business days after the
exercise of an LSAR, the Company shall pay to the Grantee, in cash, an amount
equal to the difference between:

                (a)     the greatest of (i) the Change of Control Value, (ii)
                        the Fair Market Value of a Share on the date occurring
                        during the 180-day period immediately preceding the date
                        of the Change of Control on which such Fair Market Value
                        is the greatest, or (iii) such other valuation amount,
                        if any, as may be determined pursuant to the provisions
                        of the applicable Award Agreement;

                                      -18-

<PAGE>

                                                                    Exhibit 10.8

minus

                (b)     either (i) in the case of an LSAR identified with an
                        Option, the Option Price of such Option or (ii) in the
                        case of an LSAR identified with an SAR, the Strike Price
                        of such SAR.

ARTICLE 8. RESTRICTED SHARES

        8.1         Grant of Restricted Shares. Subject to the terms and
provisions of the Plan, the Committee, at any time and from time to time, may
grant Restricted Shares to any Eligible Person in such amounts as the Committee
shall determine.

        8.2         Award Agreement. Each grant of Restricted Shares shall be
evidenced by an Award Agreement that shall specify the Period(s) of Restriction,
the number of Restricted Shares granted, and such other provisions as the
Committee shall determine. The Committee may impose such conditions and/or
restrictions on any Restricted Shares granted pursuant to the Plan as it may
deem advisable, including restrictions based upon the achievement of specific
performance goals (Company-wide, divisional, Subsidiary and/or individual),
time-based restrictions on vesting, and/or restrictions under applicable
securities laws.

        8.3         Consideration. The Committee shall determine the amount, if
any, that a Grantee shall pay for Restricted Shares, which shall be (except with
respect to Restricted Shares that are treasury shares) at least the Minimum
Consideration for each Restricted Share. Such payment shall be made in full by
the Grantee before the delivery of the shares and in any event no later than 10
business days after the Grant Date for such shares.

        8.4         Effect of Forfeiture. If Restricted Shares are forfeited,
and if the Grantee was required to pay for such shares or acquired such
Restricted Shares upon the exercise of an Option, the Grantee shall be deemed to
have resold such Restricted Shares to the Company at a price equal to the lesser
of (x) the amount paid by the Grantee for such Restricted Shares, or (y) the
Fair Market Value of a Share on the date of such forfeiture. The Company shall
pay to the Grantee the required amount as soon as is administratively practical.
Such Restricted Shares shall cease to be outstanding, and shall no longer confer
on the Grantee thereof any rights as a stockholder of the Company, from and
after the date of the event causing the forfeiture, whether or not the Grantee
accepts the Company's tender of payment for such Restricted Shares.

        8.5         Escrow; Legends. The Committee may provide that the
certificates for any Restricted Shares (x) shall be held (together with a stock
power executed in blank by the Grantee) in escrow by the Secretary of the
Company until such Restricted Shares become nonforfeitable or are forfeited
and/or (y) shall bear an appropriate legend restricting the transfer of such
Restricted Shares. If any Restricted Shares become nonforfeitable, the Company
shall cause certificates for such shares to be issued without such legend.

                                      -19-

<PAGE>

                                                                    Exhibit 10.8

ARTICLE 9. PERFORMANCE UNITS AND PERFORMANCE SHARES

        9.1         Grant of Performance Units and Performance Shares. Subject
to the terms of the Plan, Performance Units or Performance Shares may be granted
to any Eligible Person in such amounts and upon such terms, and at any time and
from time to time, as shall be determined by the Committee.

        9.2         Value/Performance Goals. Each Performance Unit shall have an
initial value that is established by the Committee at the time of grant. Each
Performance Share shall have an initial value equal to the Fair Market Value of
a Share on the date of grant. The Committee shall set performance goals which,
depending on the extent to which they are met, will determine the number or
value of Performance Units or Performance Shares that will be paid out to the
Grantee. For purposes of this Article 9, the time period during which the
performance goals must be met shall be called a "Performance Period."

        9.3         Earning of Performance Units and Performance Shares. Subject
to the terms of this Plan, after the applicable Performance Period has ended,
the holder of Performance Units or Performance Shares shall be entitled to
receive a payout based on the number and value of Performance Units or
Performance Shares earned by the Grantee over the Performance Period, to be
determined as a function of the extent to which the corresponding performance
goals have been achieved.

        If a Grantee is promoted, demoted or transferred to a different business
unit of the Company during a Performance Period, then, to the extent the
Committee determines the performance goals or Performance Period are no longer
appropriate, the Committee may adjust, change or eliminate the performance goals
or the applicable Performance Period as it deems appropriate in order to make
them appropriate and comparable to the initial performance goals or Performance
Period.

        9.4         Form and Timing of Payment of Performance Units and
Performance Shares. Payment of earned Performance Units or Performance Shares
shall be made in a lump sum following the close of the applicable Performance
Period. The Committee may pay earned Performance Units or Performance Shares in
the form of cash or in Shares (or in a combination thereof) which have an
aggregate Fair Market Value equal to the value of the earned Performance Units
or Performance Shares at the close of the applicable Performance Period. Such
Shares may be granted subject to any restrictions deemed appropriate by the
Committee. The form of payout of such Awards shall be set forth in the Award
Agreement pertaining to the grant of the Award.

        As determined by the Committee, a Grantee may be entitled to receive any
dividends declared with respect to Shares which have been earned in connection
with grants of Performance Units or Performance Shares but not yet distributed
to the Grantee. In addition, a Grantee may, as determined by the Committee, be
entitled to exercise his or her voting rights with respect to such Shares.

                                      -20-

<PAGE>

                                                                    Exhibit 10.8

ARTICLE 10. BONUS SHARES

        Subject to the terms of the Plan, the Committee may grant Bonus Shares
to any Eligible Person, in such amount and upon such terms and at any time and
from time to time as shall be determined by the Committee. The terms of such
Bonus Shares shall be set forth in the Award Agreement pertaining to the grant
of the Award.

ARTICLE 11. BENEFICIARY DESIGNATION

        Each Grantee under the Plan may, from time to time, name any beneficiary
or beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his or her death before he or
she receives any or all of such benefit. Each such designation shall revoke all
prior designations by the same Grantee, shall be in a form prescribed by the
Company, and will be effective only when filed by the Grantee in writing with
the Company during the Grantee's lifetime. In the absence of any such
designation, benefits remaining unpaid at the Grantee's death shall be paid to
the Grantee's estate.

ARTICLE 12. DEFERRALS

        The Committee may permit or require a Grantee to defer receipt of the
payment of cash or the delivery of Shares that would otherwise be due by virtue
of the exercise of an Option or SAR, the lapse or waiver of restrictions with
respect to Restricted Shares, the satisfaction of any requirements or goals with
respect to Performance Units or Performance Shares, or the grant of Bonus
Shares. If any such deferral is required or permitted, the Committee shall
establish rules and procedures for such deferrals. Except as otherwise provided
in an Award Agreement, any payment or any Shares that are subject to such
deferral shall be made or delivered to the Grantee upon the Grantee's
Termination of Affiliation.

ARTICLE 13. RIGHTS OF EMPLOYEES/DIRECTORS/CONSULTANTS

        13.1        Employment. Nothing in the Plan shall interfere with or
limit in any way the right of the Company to terminate any Grantee's employment,
directorship or consultancy at any time, nor confer upon any Grantee the right
to continue in the employ or as a director or consultant of the Company.

        13.2        Participation. No employee, director or consultant shall
have the right to be selected to receive an Award under the Plan, or, having
been so selected, to be selected to receive a future Award.

ARTICLE 14. CHANGE OF CONTROL

        14.1        Change of Control. Except as otherwise provided in an Award
Agreement, if a Change of Control occurs, then:

                                      -21-

<PAGE>

                                                                    Exhibit 10.8

           (i)      the Grantee's Restricted Shares that were forfeitable shall
thereupon become nonforfeitable;

           (ii)     any unexercised Option or SAR, whether or not exercisable on
the date of such Change of Control, shall thereupon be fully exercisable and may
be exercised, in whole or in part; and

           (iii)    the Company shall immediately pay to the Grantee, with
respect to any Performance Share or Performance Unit with respect to which the
Performance Period has not ended as of the date of such Change of Control, a
cash payment equal to the product of (A) in the case of a Performance Share, the
Change of Control Value or (B) in the case of a Performance Unit, the value of
the Performance Unit specified in the Award Agreement, as applicable, multiplied
successively by each of the following:

                    (1) a fraction, the numerator of which is the number of
whole and partial months that have elapsed between the beginning of such
Performance Period and the date of such Change of Control and the denominator of
which is the number of whole and partial months in the Performance Period; and

                    (2) a percentage equal to a greater of (x) the target
percentage, if any, specified in the applicable Award Agreement or (y) the
maximum percentage, if any, that would be earned under the terms of the
applicable Award Agreement assuming that the rate at which the performance goals
have been achieved as of the date of such Change of Control would continue until
the end of the Performance Period.

        14.2        Pooling of Interests Accounting. If the Committee
determines, prior to a sale or merger of the Company that the Committee
determines is reasonably likely to occur, that the grant or exercise of Options,
SARs or LSARs would preclude the use of pooling of interests accounting
("pooling") after the consummation of such sale or merger and that such
preclusion of pooling would have a material adverse effect on such sale or
merger, the Committee may (a) make any adjustments in such Options, SARs or
LSARs prior to the sale or merger that will permit pooling after the
consummation of such sale or merger or (b) cause the Company to pay the benefits
attributable to such Options, SARs or LSARs (including for this purpose not only
the spread between the then Fair Market Value of the Shares subject to such
Options, SARs or LSARs and the Option Price or Strike Price applicable thereto,
but also the additional value of such Options, SARs, or LSARs in excess of such
spread, as determined by the Committee) in the form of Shares if such payment
would not cause the transaction to remain or become ineligible for pooling;
provided, however, no such adjustment or payment may be made that would
adversely affect in any material way any such Options, SARs or LSARs without the
consent of the affected Grantee.

                                      -22-

<PAGE>

                                                                    Exhibit 10.8

ARTICLE 15. AMENDMENT, MODIFICATION, AND TERMINATION

        15.1        Amendment, Modification, and Termination. Subject to the
terms of the Plan, the Board may at any time and from time to time, alter,
amend, suspend or terminate the Plan in whole or in part without the approval of
the Company's stockholders. The Board may delegate to the Plan Committee any or
all of the authority of the Board under Section 15.1 to alter, amend suspend or
terminate the Plan.

        15.2        Adjustment of Awards Upon the Occurrence of Certain Unusual
or Nonrecurring Events. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including the events described in Section 4.2) affecting
the Company or the financial statements of the Company or of changes in
applicable laws, regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan; provided that no such adjustment shall be authorized to the
extent that such authority would be inconsistent with the Plan's meeting the
requirements of the Performance-Based Exception.

        15.3        Awards Previously Granted. Notwithstanding any other
provision of the Plan to the contrary, no termination, amendment, or
modification of the Plan shall adversely affect in any material way any Award
previously granted under the Plan, without the written consent of the Grantee of
such Award.

ARTICLE 16. WITHHOLDING

        16.1        Withholding

                    (a)     Mandatory Tax Withholding.

                        (1) Whenever under the Plan, Shares are to be delivered
                upon exercise or payment of an Award or upon Restricted Shares
                becoming nonforfeitable, or any other event with respect to
                rights and benefits hereunder, the Company shall be entitled to
                require (i) that the Grantee remit an amount in cash, or if
                determined by the Committee, Mature Shares, sufficient to
                satisfy all federal, state, local and foreign tax withholding
                requirements related thereto ("Required Withholding"), (ii) the
                withholding of such Required Withholding from compensation
                otherwise due to the Grantee or from any Shares or other payment
                due to the Grantee under the Plan or (iii) any combination of
                the foregoing.

                        (2) Any Grantee who makes a Disqualifying Disposition or
                an election under Section 83(b) of the Code shall remit to the
                Company an amount sufficient to satisfy all resulting Required
                Withholding; provided that, in lieu of or in addition to the
                foregoing, the Company shall have the right to withhold such
                Required Withholding from compensation otherwise due to the
                Grantee or from any Shares or other payment due to the Grantee
                under the Plan.

                                      -23-

<PAGE>

                                                                    Exhibit 10.8

                    (b)     Elective Share Withholding.

                        (1) Subject to subsection 16.1(b)(2), a Grantee may
                elect the withholding ("Share Withholding") by the Company of a
                portion of the Shares subject to an Award upon the exercise of
                such Award or upon Restricted Shares becoming non-forfeitable or
                upon making an election under Section 83(b) of the Code (each, a
                "Taxable Event") having a Fair Market Value equal to (i) the
                minimum amount necessary to satisfy Required Withholding
                liability attributable to the Taxable Event; or (ii) with the
                Committee's prior approval, a greater amount, not to exceed the
                estimated total amount of such Grantee's tax liability with
                respect to the Taxable Event.

                        (2) Each Share Withholding election shall be subject to
                the following conditions:

                            (A) any Grantee's election shall be subject to the
Committee's discretion to revoke the Grantee's right to elect Share Withholding
at any time before the Grantee's election if the Committee has reserved the
right to do so in the Award Agreement;

                            (B) the Grantee's election must be made before the
date (the "Tax Date") on which the amount of tax to be withheld is determined;
and

                            (C) the Grantee's election shall be irrevocable.

        16.2        Notification Under Code Section 83(b). If the Grantee, in
connection with the exercise of any Option, or the grant of Restricted Shares,
makes the election permitted under Section 83(b) of the Code to include in such
Grantee's gross income in the year of transfer the amounts specified in Section
83(b) of the Code, then such Grantee shall notify the Company of such election
within 10 days of filing the notice of the election with the Internal Revenue
Service, in addition to any filing and notification required pursuant to
regulations issued under Section 83(b) of the Code. The Committee may, in
connection with the grant of an Award or at any time thereafter prior to such an
election being made, prohibit a Grantee from making the election described
above.

ARTICLE 17. SUCCESSORS

        All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise of all or substantially all of the business
and/or assets of the Company.

                                      -24-

<PAGE>

                                                                    Exhibit 10.8

ARTICLE 18. ADDITIONAL PROVISIONS

        18.1        Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine, the
plural shall include the singular and the singular shall include the plural.

        18.2        Severability. If any part of the Plan is declared by any
court or governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not invalidate any other part of the Plan. Any Section or part
of a Section so declared to be unlawful or invalid shall, if possible, be
construed in a manner which will give effect to the terms of such Section or
part of a Section to the fullest extent possible while remaining lawful and
valid.

        18.3        Requirements of Law. The granting of Awards and the issuance
of Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or stock
exchanges as may be required. Notwithstanding any provision of the Plan or any
Award, Grantees shall not be entitled to exercise, or receive benefits under,
any Award, and the Company shall not be obligated to deliver any Shares or other
benefits to a Grantee, if such exercise or delivery would constitute a violation
by the Grantee or the Company of any applicable law or regulation.

        18.4        Securities Law Compliance.

                    (a)     If the Committee deems it necessary to comply with
any applicable securities law, or the requirements of any stock exchange upon
which Shares may be listed, the Committee may impose any restriction on Shares
acquired pursuant to Awards under the Plan as it may deem advisable. All
certificates for Shares delivered under the Plan pursuant to any Award or the
exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations
and other requirements of the SEC, any stock exchange upon which Shares are then
listed, any applicable 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. If so requested by the Company, the Grantee shall make a written
representation to the Company that he or she will not sell or offer to sell any
Shares unless a registration statement shall be in effect with respect to such
Shares under the Securities Act of 1993, as amended, and any applicable state
securities law or unless he or she shall have furnished to the Company evidence
satisfactory to the Company that such registration is not required.

                    (b)     If the Committee determines that the exercise or
nonforfeitability of, or delivery of benefits pursuant to, any Award would
violate any applicable provision of securities laws or the listing requirements
of any stock exchange upon which any of the Company's equity securities are
listed, then the Committee may postpone any such exercise, nonforfeitability or
delivery, as applicable, but the Company shall use all reasonable efforts to
cause such exercise, nonforfeitability or delivery to comply with all such
provisions at the earliest practicable date.

                                      -25-

<PAGE>

                                                                    Exhibit 10.8

        18.5        No Rights as a Stockholder. A Grantee shall not have any
rights as a stockholder of the Company with respect to the Shares (other than
Restricted Shares) which may be deliverable upon exercise or payment of such
Award until such shares have been delivered to him or her. Restricted Shares,
whether held by a Grantee or in escrow by the Secretary of the Company, shall
confer on the Grantee all rights of a stockholder of the Company, except as
otherwise provided in the Plan or Award Agreement. At the time of a grant of
Restricted Shares, the Committee may require the payment of cash dividends
thereon to be deferred and, if the Committee so determines, reinvested in
additional Restricted Shares. Stock dividends and deferred cash dividends issued
with respect to Restricted Shares shall be subject to the same restrictions and
other terms as apply to the Restricted Shares with respect to which such
dividends are issued. The Committee may provide for payment of interest on
deferred cash dividends.

        18.6        Nature of Payments. Awards shall be special incentive
payments to the Grantee and shall not be taken into account in computing the
amount of salary or compensation of the Grantee for purposes of determining any
pension, retirement, death or other benefit under (a) any pension, retirement,
profit-sharing, bonus, insurance or other employee benefit plan of the Company
or any Subsidiary or (b) any agreement between (i) the Company or any Subsidiary
and (ii) the Grantee, except as such plan or agreement shall otherwise expressly
provide.

        18.7        Performance Measures. Unless and until the Committee
proposes for stockholder vote and stockholders approve a change in the general
performance measures set forth in this Section 18.7, the performance measure(s)
to be used for purposes of such Awards shall be chosen from among the following:

        (a)    Earnings (either in the aggregate or on a per-share basis);

        (b)    Net income (before or after taxes);

        (c)    Operating income;

        (d)    Cash flow;

        (e)    Return measures (including return on assets, equity, or sales);

        (f)    Earnings before or after either, or any combination of, taxes,
               interest or depreciation and amortization;

        (g)    Gross revenues;

        (h)    Share price (including growth measures and stockholder return or
               attainment by the Shares of a specified value for a specified
               period of time);

                                      -26-

<PAGE>

                                                                    Exhibit 10.8

        (i)    Reductions in expense levels in each case, where applicable,
               determined either on a Company-wide basis or in respect of any
               one or more business units;

        (j)    Net economic value; or

        (k)    Market share.

        Any of the foregoing performance measures may be applied, as determined
by the Committee, on the basis of the Company as a whole, or in respect of any
one or more Subsidiaries or divisions of the Company or any part of a Subsidiary
or division of the Company that is specified by the Committee.

        The Committee may adjust the determinations of the degree of attainment
of the preestablished performance goals; provided, however, that Awards which
are designed to qualify for the Performance-Based Exception may not be adjusted
upward without the approval of the Company's stockholders (the Committee may
adjust such Awards downward).

        In the event that applicable tax and/or securities laws change to permit
Committee discretion to alter the governing performance measures without
obtaining stockholder approval of such changes, and still qualify for the
Performance-Based Exception, the Committee shall have sole discretion to make
such changes without obtaining stockholder approval.

        18.8        Governing Law. The Plan, and all agreements hereunder,
shall be construed in accordance with and governed by the laws of the State of
Delaware other than its laws respecting choice of law.

                                      -27-

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