FRANKLIN RESOURCES, INC.
 
                       2002 UNIVERSAL STOCK INCENTIVE PLAN
 
                  [(as amended and restated December 16, 2004)]
 
1.   GENERAL
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     1.1  PURPOSE.  The Franklin Resources,  Inc. 2002 Universal Stock Incentive
Plan (the "2002 Stock Plan") has been established by Franklin Resources, Inc., a
Delaware  corporation (the "Company") to (i) attract and retain persons eligible
to  participate  in the 2002 Stock Plan;  (ii) motivate  employees,  by means of
appropriate  incentives,  to achieve long-range performance goals; (iii) provide
incentive  compensation  opportunities  that are competitive with those of other
similar companies;  and (iv) further identify employees' interests with those of
the  Company's  other  stockholders  through  compensation  that is based on the
Company's common stock; and thereby promote the long-term  financial interest of
the Company and the Subsidiaries.
 
     1.2  PARTICIPATION.  Subject to the terms and  conditions of the 2002 Stock
Plan, the Committee shall determine and designate, from time to time, from among
the Participants, those persons who will be granted one or more Awards under the
2002 Stock Plan.  In the  discretion  of the  Committee,  a  Participant  may be
granted any Award  permitted  under the  provisions of the 2002 Stock Plan,  and
more than one Award may be  granted to a  Participant.  Awards may be granted as
alternatives to or replacement of awards  outstanding under the 2002 Stock Plan,
or any other plan or  arrangement  of the Company or a  Subsidiary  (including a
plan or  arrangement  of a  business  or  entity,  all or a portion  of which is
acquired by the Company or a Subsidiary).
 
     1.3  OPERATION,   ADMINISTRATION,   AND  DEFINITIONS.   The  operation  and
administration of the 2002 Stock Plan,  including the Awards made under the 2002
Stock  Plan,  shall be  subject to the  provisions  of  Section 4  (relating  to
operation and administration). Capitalized terms in the 2002 Stock Plan shall be
defined as set forth in the 2002 Stock Plan (including the definition provisions
of Section 8 of the 2002 Stock Plan).
 
     1.4  STOCK  SUBJECT  TO 2002  STOCK  PLAN;  SHARE  COUNTING. Subject to the
provisions  of this  Section 1.4 and  Section  6.1 of the 2002 Stock  Plan,  the
maximum  aggregate  number of shares which may be delivered  pursuant to Awards,
including  without  limitation,  Options and SAR's  granted under the 2002 Stock
Plan, is 30,000,000.  The shares may be authorized,  but unissued, or reacquired
Common Stock.
 
          (a) To the extent any Shares  covered by an Award are not delivered to
a Participant or beneficiary because the Award is forfeited or canceled,  or the
Shares are not delivered because the Award is settled in cash, such Shares shall
not be deemed to have been  delivered  for purposes of  determining  the maximum
number of Shares  available  for delivery  pursuant to Awards  granted under the
2002 Stock Plan.
 
          (b) If the exercise  price of any Option  granted under the 2002 Stock
Plan is satisfied by tendering  Shares to the Company (by either actual delivery
or by attestation),  only the number of Shares issued net of the Shares tendered
shall be deemed  delivered  for purposes of  determining  the maximum  number of
Shares  available for delivery  pursuant to Awards (other than Options)  granted
under the 2002 Stock Plan.
 
          (c) Subject to adjustment under Section 6.1, (i) the maximum number of
shares that may be granted to any one individual pursuant to Section 2 (relating
to Options and SARs) shall be 400,000 Shares during any one-calendar-year period
and (ii) the maximum  number of Shares that may be granted to any one individual
subject to Section 3 (relating to Stock Unit Awards,  Restricted  Stock  Awards,
Restricted  Stock Unit Awards and  Performance  Share Awards) shall be 1,000,000
Shares during any  one-calendar-year  period (regardless of when such Shares are
deliverable).
 
2.   OPTIONS AND SARS
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        2.1    OPTIONS.
 
          (a) An Option is a grant of rights to  purchase  Shares at an Exercise
Price established by the Committee.  Options granted under this Section 2 may be
either Incentive Stock Options ("ISO") or Nonstatutory Stock Options ("NSO"), as
determined in the discretion of the Committee.
 
          (b) Each Option shall be designated in the written option agreement as
either an  Incentive  Stock  Option or a  Nonstatutory  Stock  Option.  However,
notwithstanding such designations,  to the extent that the aggregate Fair Market
Value of the Shares with respect to which Options  designated as Incentive Stock
Options are  exercisable  for the first time by any Optionee during any calendar
year  (under  all plans of the  Company  or any  Parent or  Subsidiary)  exceeds
$100,000,  such excess Options shall be  automatically  treated as  Nonstatutory
Stock Options.  For purposes of this paragraph  2.1(b),  Incentive Stock Options
shall be taken into  account in the order in which  they were  granted,  and the
Fair Market Value of the Shares shall be  determined as of the original date the
Option with respect to such Shares is granted.
 
          (c) The term of each  Option  shall be the term  stated in the  Option
Agreement;  provided,  however,  that in the case of any Incentive Stock Option,
the term shall be no more than ten (10) years from the date of grant  thereof or
such shorter term as may be provided in the Option  Agreement.  However,  in the
case of an Incentive  Stock Option  granted to an Optionee  who, at the time the
Option is granted,  owns stock  representing  more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the term of the Option shall be five (5) years from the date of grant thereof or
such shorter term as may be provided in the Option Agreement.
 
          (d) The date of grant of an Option  shall,  for all  purposes,  be the
date on which the Committee  makes the  determination  granting such Option,  or
such other date as is determined by the Board. Notice of the determination shall
be given to each Participant to whom an Option is so granted within a reasonable
time after the date of such grant.
 
     2.2  STOCK APPRECIATION RIGHTS. A "Stock  Appreciation  Right" ("SAR") is a
grant of rights to receive,  in cash or Stock (as determined by the  Committee),
value equal to (or otherwise  based on) the excess of: (a) the Fair Market Value
of a specified  number of Shares at the time of  exercise;  over (b) an Exercise
Price established by the Committee.
 
     2.3  EXERCISE  PRICE.  The  Exercise  Price of each Option and SAR shall be
established  by the Committee or shall be determined by a method  established by
the Committee at the time the Option or SAR is granted; provided that:
 
          (a) In the case of an ISO,
 
               (i) granted to an employee  who, at the time of the grant of such
Incentive Stock Option,  owns stock  representing more than ten percent (10%) of
the  voting  power of all  classes  of stock of the  Company  or any  Parent  or
Subsidiary,  the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.
 
               (ii) granted to any employee,  the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date of grant.
 
     2.4  TIME AND MANNER OF EXERCISE.  Options and SARs shall be exercisable in
accordance  with such terms and  conditions  and during  such  periods as may be
established by the Committee; subject to the following terms regarding Options:
 
          (a)  TERMINATION  OF  EMPLOYMENT.  In the event of  termination  of an
Optionee's Continuous Status as an employee with the Company, such Optionee may,
but only  within  ninety (90) days after the date of such  termination  (or such
other period as is set out by the Committee in the Option  Agreement,  but in no
event
 
later than the  expiration  date of the term of such  Option as set forth in the
Option Agreement),  exercise the Option to the extent that Optionee was entitled
to exercise it at the date of such termination.  To the extent that Optionee was
not  entitled  to  exercise  the Option at the date of such  termination,  or if
Optionee does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.
 
          (b)  DISABILITY  OF  OPTIONEE.   Notwithstanding   the  provisions  of
paragraph 2.4(a) above, in the event of termination of an Optionee's  Continuous
Status as an employee as a result of disability  (as  determined by the Board in
accordance with the policies of the Company),  Optionee may, but only within six
(6) months from the date of such termination (or such other period as is set out
by the  Committee  in the  Option  Agreement,  but in no  event  later  than the
expiration  date  of the  term  of  such  Option  as  set  forth  in the  Option
Agreement),  exercise the Option to the extent otherwise entitled to exercise it
at the date of such termination. To the extent that Optionee was not entitled to
exercise the Option at the date of termination, or if Optionee does not exercise
such  Option to the extent so entitled  within the time  specified  herein,  the
Option shall terminate.
 
          (c) DEATH OF OPTIONEE.  In the event of the death of an Optionee,  the
Option may be  exercised,  at any time within  twelve (12) months  following the
date of death (or such other period as is set out by the Committee in the Option
Agreement,  but in no event later than the  expiration  date of the term of such
Option as set forth in the Option  Agreement),  by the Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or  inheritance,
but only to the extent the  Optionee  was entitled to exercise the Option at the
date of death.  To the extent that  Optionee  was not  entitled to exercise  the
Option at the date of termination,  or if Optionee does not exercise such Option
to the extent so entitled  within the time  specified  herein,  the Option shall
terminate.
 
     2.5  PAYMENT OF EXERCISE  PRICE. Payment of the Exercise Price of an Option
shall be subject to the following:
 
          (a) The full Exercise Price for Shares  purchased upon the exercise of
any Option shall be paid at the time of such exercise  (except that, in the case
of an exercise  arrangement approved by the Committee and described in paragraph
2.5(b), payment may be made as soon as practicable after the exercise).
 
          (b) The  consideration  to be paid for the  Shares to be  issued  upon
exercise of an Option,  including the method of payment,  shall be determined by
the  Committee  (and,  in the  case  of an  Incentive  Stock  Option,  shall  be
determined  at the time of grant) and may  consist  entirely  of (i) cash,  (ii)
check, (iii) other Shares (by delivery of certificates or attestation) which (x)
either have been owned by the  Optionee  for more than six months on the date of
surrender or were not acquired,  directly or indirectly,  from the Company,  and
(y) have a Fair Market  Value on the date of  surrender  equal to the  aggregate
exercise  price of the Shares as to which said Option shall be  exercised,  (iv)
delivery of  authorization  for the  Company to retain from the total  number of
Shares as to which the Option is exercised  that number of Shares  having a Fair
Market Value on the date of exercise  equal to the exercise  price for the total
number of Shares as to which the Option is exercised, (v) delivery of a properly
executed  exercise notice together with irrevocable  instructions to a broker to
promptly deliver to the Company the amount of sale or loan proceeds  required to
pay the  exercise  price,  (vi)  irrevocably  authorizing  a third party to sell
Shares (or a sufficient  portion of the shares)  acquired  upon  exercise of the
Option and remit to the Company a sufficient portion of the sale proceeds to pay
the entire Exercise Price and any tax withholding  resulting from such exercise,
(vii) any combination of the foregoing methods of payment,  (viii) or such other
consideration  and method of payment  for the  issuance  of Shares to the extent
permitted under Applicable Laws.
 
     2.6  SETTLEMENT OF AWARD.  Shares delivered  pursuant to the exercise of an
Option  or  SAR  shall  be  subject  to  such   conditions,   restrictions   and
contingencies  as the Committee may establish in the applicable  Award Agreement
at the time of grant.  Settlement of SARs may be made in Shares (valued at their
Fair  Market  Value  at the time of  exercise),  in  cash,  or in a  combination
thereof, as determined in the discretion of the Committee. The Committee, in its
discretion,  may impose such  conditions,  restrictions and  contingencies  with
respect to Shares  acquired  pursuant to the  exercise of an Option or an SAR as
the Committee determines to be desirable.
 
3.   OTHER STOCK AWARDS
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     3.1  DEFINITIONS.
 
          (a) A "Stock Unit" Award is the grant of a right to receive  Shares in
the future.
 
          (b) A  "Performance  Share"  Award is a grant  of a right  to  receive
Shares or Stock Units which is contingent on the  achievement  of performance or
other objectives during a specified period.
 
          (c) A "Restricted Stock" Award is a grant of Shares, and a "Restricted
Stock Unit" Award is the grant of a right to receive Shares in the future,  with
such  Shares or right to future  delivery  of such  Shares  subject to a risk of
forfeiture or other  restrictions that will lapse upon the achievement of one or
more goals relating to completion of service by the Participant,  or achievement
of performance or other objectives, as determined by the Committee.
 
     3.2  RESTRICTIONS ON STOCK AWARDS.  Each Stock Unit Award, Restricted Stock
Award,  Restricted Stock Unit Award and Performance Share Award shall be subject
to the following:
 
          (a) Any such Award shall be subject to such  conditions,  restrictions
and contingencies as the Committee shall determine.
 
          (b) The Committee  may designate  whether any such Award being granted
to any Participant are intended to be  "performance-based  compensation" as that
term is used in  Section  162(m)  of the Code.  Any such  Awards  designated  as
intended to be  "performance-based  compensation"  shall be  conditioned  on the
achievement of one or more Performance  Measures.  The Performance Measures that
may be used by the  Committee  for such Awards shall be based on any one or more
of the  criteria  attached  hereto on  Attachment  I, as selected  [and  further
defined] by the Committee.  [The  Performance  Measures may be applicable to the
Company  and/or  any of its  individual  business  units  and  may  differ  from
Participant  to  Participant.]  For  Awards  intended  to be  "performance-based
compensation,"  the grant of the Awards and the establishment of the Performance
Measures  shall be made during the period  required  under Section 162(m) of the
Code and shall be  subject  to the  individual  share  limit set out in  Section
1.4(c) above.
 
4.   OPERATION AND ADMINISTRATION
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     4.1  EFFECTIVE  DATE.  ^[The]  2002 Stock Plan  ^[became]  effective  as of
October 10,  2002^.  The 2002 Stock Plan shall be unlimited in duration  and, in
the event of [the] 2002 Stock Plan  termination,  shall remain in effect as long
as any Awards under it are outstanding;  provided,  however, that, to the extent
required  by the Code,  no ISO may be granted  under the 2002 Stock Plan ^[after
October 9, 2012].
 
     4.2  GENERAL RESTRICTIONS.  Delivery of Shares or other  amounts  under the
2002 Stock Plan shall be subject to the following:
 
          (a)  Notwithstanding  any other  provision of the 2002 Stock Plan, the
Company  shall have no liability to deliver any Shares under the 2002 Stock Plan
or make any other distribution of benefits under the 2002 Stock Plan unless such
delivery or  distribution  would  comply with all  applicable  laws  (including,
without  limitation,  the  requirements of the Securities Act of 1933),  and the
applicable requirements of any securities exchange or similar entity.
 
          (b) To the extent that the 2002 Stock Plan  provides  for  issuance of
stock  certificates  to reflect the  issuance  of Shares,  the  issuance  may be
effected on a non-certificated basis, to the extent not prohibited by applicable
law or the applicable rules of any stock exchange.
 
     4.3  TAX WITHHOLDING.  All  distributions  under  the 2002  Stock  Plan are
subject to withholding of all applicable  taxes, and the Committee may condition
the  delivery  of any  shares or other  benefits  under the 2002  Stock  Plan on
satisfaction of the applicable withholding  obligations.  The Committee,  in its
discretion,  and subject to such  requirements as the Committee may impose prior
to the occurrence of such withholding,  may permit such
 
withholding obligations to be satisfied through cash payment by the Participant,
through the surrender of Shares which the  Participant  already owns, or through
the surrender of Shares to which the Participant is otherwise entitled under the
2002  Stock  Plan,  provided;  however,  that in either  case only the number of
Shares  sufficient to satisfy the  Company's  minimum  required tax  withholding
obligations may be surrendered to the Company.
 
     4.4  USE OF  SHARES.  Subject to the  overall  limitation  on the number of
Shares that may be delivered  under the 2002 Stock Plan,  the  Committee may use
available  Shares  as the form of  payment  for  compensation,  grants or rights
earned or due under any other  compensation plans or arrangements of the Company
or a  Subsidiary,  including  the plans and  arrangements  of the  Company  or a
Subsidiary assumed in business combinations.
 
     4.5  DIVIDENDS  AND  DIVIDEND  EQUIVALENTS.  An  Award  (including  without
limitation an Option or SAR Award) may provide the Participant with the right to
receive dividend payments or dividend  equivalent payments with respect to Stock
subject to the Award  (both  before and after the Stock  subject to the Award is
earned,  vested,  or acquired),  which  payments may be either made currently or
credited to an account for the Participant,  and may be settled in cash or Stock
as determined by the Committee. Any such settlements,  and any such crediting of
dividends or dividend  equivalents or reinvestment in Shares,  may be subject to
such  conditions,   restrictions  and   contingencies  as  the  Committee  shall
establish,  including  the  reinvestment  of  such  credited  amounts  in  Stock
equivalents.
 
     4.6  PAYMENTS. Awards may be settled through cash payments, the delivery of
Shares,  the  granting of  replacement  Awards,  or  combination  thereof as the
Committee shall determine.  Any Award settlement,  including payment  deferrals,
may be  subject  to  such  conditions,  restrictions  and  contingencies  as the
Committee shall  determine.  The Committee may permit or require the deferral of
any Award  payment,  subject to such rules and  procedures as it may  establish,
which may  include  provisions  for the payment or  crediting  of  interest,  or
dividend  equivalents,  including  converting  such credits into deferred  Stock
equivalents.  Each Subsidiary  shall be liable for payment of cash due under the
2002 Stock Plan with respect to any Participant to the extent that such benefits
are   attributable  to  the  services   rendered  for  that  Subsidiary  by  the
Participant.  Any  disputes  relating  to  liability  of a  Subsidiary  for cash
payments shall be resolved by the Committee.
 
     4.7  TRANSFERABILITY. Unless specifically  provided by the Committee in the
Award Agreement,  Awards under the 2002 Stock Plan are nontransferable except as
designated  by  the   Participant  by  will  or  by  the  laws  of  descent  and
distribution.
 
     4.8  FORM AND TIME OF ELECTIONS. Unless otherwise  specified  herein,  each
election  required or  permitted to be made by any  Participant  or other person
entitled to benefits under the 2002 Stock Plan, and any permitted  modification,
or  revocation  thereof,  shall be in writing  filed with the  Committee at such
times,  in such form,  and subject to such  restrictions  and  limitations,  not
inconsistent  with the terms of the 2002  Stock  Plan,  as the  Committee  shall
require.
 
     4.9  AGREEMENT  WITH  COMPANY.  An Award under the 2002 Stock Plan shall be
subject to such terms and conditions, not inconsistent with the 2002 Stock Plan,
as the  Committee  shall,  in its sole  discretion,  prescribe.  The  terms  and
conditions  of any Award to any  Participant  shall be reflected in such form of
written  document as is  determined  by the  Committee.  A copy of such document
shall be  provided  to the  Participant,  and the  Committee  may,  but need not
require that the Participant  shall sign a copy of such document.  Such document
is  referred  to in the 2002 Stock Plan as an "Award  Agreement"  regardless  of
whether any Participant signature is required.
 
     4.10 ACTION BY COMPANY OR SUBSIDIARY.  Any action  required or permitted to
be taken by the Company or any Parent or  Subsidiary  shall be by  resolution of
its  board of  directors,  or by  action  of one or more  members  of the  board
(including  a  committee  of the board) who are duly  authorized  to act for the
board, or (except to the extent prohibited by applicable law or applicable rules
of any stock exchange) by a duly authorized officer of the Company.
 
     4.11 GENDER AND NUMBER. Where the context admits, words in any gender shall
include any other gender, words in the singular shall include the plural and the
plural shall include the singular.
 
     4.12 LIMITATION OF IMPLIED RIGHTS.
 
          (a) Neither a  Participant  nor any other person  shall,  by reason of
participation  in the 2002  Stock  Plan,  acquire  any  right in or title to any
assets, funds or property of the Company or any Parent or Subsidiary whatsoever,
including,  without  limitation,  any specific funds,  assets, or other property
which the Company or any Parent or Subsidiary, in their sole discretion, may set
aside in  anticipation  of a liability  under the 2002 Stock Plan. A Participant
shall have only a  contractual  right to the Stock or amounts,  if any,  payable
under the 2002 Stock Plan,  unsecured by any assets of the Company or any Parent
or Subsidiary,  and nothing  contained in the 2002 Stock Plan shall constitute a
guarantee  that the assets of the Company or any Parent or  Subsidiary  shall be
sufficient to pay any benefits to any person.
 
          (b) The 2002 Stock Plan does not  constitute a contract of employment,
and selection as a  Participant  will not give any  Participant  the right to be
retained in the employ of the Company or any Subsidiary,  nor any right or claim
to any  benefit  under  the 2002  Stock  Plan,  unless  such  right or claim has
specifically accrued under the terms of the 2002 Stock Plan. Except as otherwise
provided in the 2002 Stock Plan, no Award under the 2002 Stock Plan shall confer
upon the holder  thereof any rights as a stockholder of the Company prior to the
date on which the individual fulfills all conditions for receipt of such rights.
 
5.   COMMITTEE
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     5.1  COMMITTEE.  The  authority  to control  and manage the  operation  and
administration  of the 2002  Stock  Plan  shall be  vested in a  committee  (the
"Committee")  in accordance with this Section 5. The Committee shall be selected
by the Board,  and shall be  comprised[,]  unless  otherwise  determined  by the
Board, solely of not less than two members [of the Board] who shall be "outside"
directors within the meaning of Treasury Regulation Section 1.162-27(e)(3) under
Section 162(m) of the Code^.  [With] respect to Awards granted  ^[under the 2002
Stock  Plan  that  are  not   intended]   to  [qualify   as   "performance-based
compensation" under] Section 162(m) of the Code, the Committee shall be composed
of two or more members of the Board who are not employees of the Company. If the
Committee does not exist, or for any other reason  determined by the Board,  the
Board may take any action under the 2002 Stock Plan that would  otherwise be the
responsibility of the Committee.
 
     5.2  POWERS OF COMMITTEE.  The Committee's administration of the 2002 Stock
Plan shall be subject to the following:
 
          (a) Subject to the  provisions  of the 2002 Stock Plan,  the Committee
will have the  authority and  discretion  to select from among the  Participants
those  persons  who shall  receive  Awards,  to  determine  the time or times of
receipt,  to determine  the types of Awards and the number of shares  covered by
the Awards,  to establish the terms,  conditions,  performance  criteria (except
that for purposes of Section 162(m) of the Code,  performance  measures shall be
based  on one or  more  of the  criteria  set  out on  Attachment  I  hereto)  ,
restrictions, and other provisions of such Awards, and (subject to Section 7) to
cancel or suspend Awards.
 
          (b) To the extent that the Committee  determines that the restrictions
imposed by the 2002 Stock Plan preclude the achievement of the material purposes
of the Awards in  jurisdictions  outside the United  States,  the Committee will
have the authority and discretion to modify those  restrictions as the Committee
determines to be necessary or appropriate to conform to applicable  requirements
or practices of jurisdictions outside of the United States.
 
          (c) The Committee may grant Awards to Participants  who are subject to
the tax laws of  nations  other than the United  States,  which  Awards may have
terms and  conditions as determined by the Committee as necessary to comply with
applicable  foreign  laws.  The  Committee  may take any  action  which it deems
advisable  to  obtain  approval  of  such  Awards  by  the  appropriate  foreign
government  entity;  provided  however that no such Awards may be granted  under
this  2002  Stock  Plan and no  action  may be taken  which  would  result  in a
violation of the Exchange Act, the Code or any other applicable law.
 
          (d) The Committee  will have the authority and discretion to interpret
the 2002 Stock Plan, to establish,  amend, and rescind any rules and regulations
relating to the 2002 Stock Plan,  to determine  the terms and  provisions of any
Award  Agreement  made  pursuant to the 2002 Stock  Plan,  and to make all other
determinations  that may be necessary or advisable for the administration of the
2002 Stock Plan.
 
          (e) Any interpretation of the 2002 Stock Plan by the Committee and any
decision  made by it under  the 2002  Stock  Plan is final  and  binding  on all
persons.
 
          (f) In controlling  and managing the operation and  administration  of
the 2002 Stock Plan,  the Committee  shall take action in a manner that conforms
to the articles and by-laws of the Company, and applicable state corporate law.
 
     5.3  DELEGATION BY COMMITTEE. Except to the extent prohibited by Applicable
Law or the applicable rules of a stock exchange,  the Committee may allocate all
or any  portion  of its  responsibilities  and  powers to any one or more of its
members and may  delegate  all or any part of its  administrative  duties to any
person or persons  selected  by it. Any such  allocation  or  delegation  may be
revoked by the Committee at any time.
 
     5.4  INFORMATION  TO BE FURNISHED TO COMMITTEE.  The Company and its Parent
and  Subsidiaries  shall furnish the Committee with such data and information as
it determines may be required for it to discharge its duties. The records of the
Company  and its  Parent  and  Subsidiaries  as to a  Participant's  employment,
termination of employment, leave of absence, reemployment and compensation shall
be conclusive  on all persons  unless  determined to be incorrect.  Participants
entitled to benefits  under the 2002 Stock Plan must furnish the Committee  such
evidence,  data or information as the Committee considers desirable to carry out
the terms of the 2002 Stock Plan.
 
6.   ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR CORPORATE TRANSACTION
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     6.1  CHANGES  IN  CAPITALIZATION.  Subject  to any  required  action by the
stockholders  of the Company,  [(a)] the number [and/or class] of  ^[securities]
covered by each  outstanding  Award,  [(b)] the price per share  covered by each
such  outstanding  Award,  [(c)] the number ^[and/or class of securities]  which
have been  authorized  for issuance under the 2002 Stock Plan but as to which no
Awards have yet been granted or which have been  returned to the 2002 Stock Plan
upon  cancellation  or expiration of an Award,  and [(d)] the maximum  number of
Options,  SARs,  Stock Unit Awards,  Restricted  Stock Awards,  Restricted Stock
Units  Awards  and  Performance  Share  Awards  which  may  be  granted  to  any
Participant in any  one-calendar-year  period shall be proportionately  adjusted
for any  increase  or decrease  in the number of issued  shares of Common  Stock
resulting from a stock split,  reverse stock split, stock dividend,  combination
or  reclassification  of the Common Stock,  or any other increase or decrease in
the  number  of issued  shares  of Common  Stock  effected  without  receipt  of
consideration  by  the  Company;  provided,  however,  that  conversion  of  any
convertible securities of the Company shall not be deemed to have been "effected
without  receipt  of  consideration."  Such  adjustment  shall  be  made  by the
^[Committee.  The  Committee  may  also  make,  in its  discretion,  adjustments
described  in (a)-(d) of this  Section 6.1 in the event of any  distribution  of
cash or other assets to  stockholders  other than an ordinary cash dividend.  In
determining  adjustments  to be made under this Section 6.1, the  Committee  may
take into  account  such  factors  as it deems  appropriate,  including  (i) the
restrictions  of applicable  law, (ii) the  potential  tax,  accounting or other
consequences of an adjustment and (iii) the possibility  that some  Participants
might receive an adjustment and a distribution or other unintended benefit,  and
in light of such  factors or  circumstances  may make  adjustments  that are not
uniform or proportionate among outstanding  Awards,  modify vesting dates, defer
the delivery of stock certificates or make other equitable adjustments. Any such
adjustments  to  outstanding  Awards will be effected in a manner that precludes
the enlargement of rights and benefits under such Awards.  Adjustments,  if any,
and any  determinations  or  interpretations,  including  any  determination  of
whether a  distribution  is other than an ordinary  cash  dividend,  made by the
Committee] shall be final, binding and conclusive.  Except as expressly provided
herein,  no  issuance  by the  Company  of Shares of any  class,  or  securities
convertible into Shares of any class,  shall affect, and no adjustment by reason
thereof  shall be made with  respect to, the number or price of shares of Common
Stock subject to an Award.
 
     6.2  TRANSACTIONS.  In the event of the proposed dissolution or liquidation
of the Company or of a merger or  corporate  combination  (a  "Transaction")  in
which the successor corporation does not agree to assume the Award or substitute
an  equivalent  Award,  the  Committee  shall make a  determination  (subject to
Section 7) as to the equitable  treatment of  outstanding  Awards under the 2002
Stock Plan and shall  notify  Participants  of such  treatment no later than ten
(10) days  prior to such  proposed  Transaction.  To the  extent it has not been
previously  exercised,   an  Award  will  terminate  immediately  prior  to  the
consummation of such proposed Transaction.
 
7.   AMENDMENT AND TERMINATION
     -------------------------
 
The Board may, at any time,  amend or  terminate  the 2002 Stock Plan,  provided
that no amendment or termination  may, in the absence of written  consent to the
change by the affected  Participant  (or, if the Participant is not then living,
the affected  beneficiary),  adversely  affect the rights of any  Participant or
beneficiary  under any Award granted under the 2002 Stock Plan prior to the date
such amendment is adopted by the Board;  provided that  adjustments  pursuant to
^Section  6.2 shall in no event be deemed to have an  adverse  ^[effect]  on any
Award.
 
8.   DEFINED TERMS
     -------------
 
In addition to the other definitions contained herein, the following definitions
shall apply:
 
          (a) APPLICABLE  LAW  means  the  corporate,  securities  and tax laws
(including,  without  limitation,  the Delaware corporate law, the Exchange Act,
the Securities  Act of 1933 and the Code)  applicable to the  establishment  and
administration of an employee stock incentive plans.
 
          (b) AWARD.  The term "Award"  shall mean any award or benefit  granted
under the 2002 Stock Plan, including,  without limitation, the grant of Options,
SARs, Stock Unit Awards,  Restricted Stock Awards,  Restricted Stock Unit Awards
and Performance Share Awards.
 
          (c) BOARD.  The term "Board"  shall mean the Board of Directors of the
Company.
 
          (d) CODE. The term "Code" means the Internal  Revenue Code of 1986, as
amended. A reference to any provision of the Code shall include reference to any
successor provision of the Code.
 
          (e) COMMON  STOCK  shall mean the common  stock,  par value,  $.10 per
share, of the Company.
 
          (f) CONTINUOUS  STATUS  AS AN  EMPLOYEE  means  the  absence  of  any
interruption or termination of the employment relationship by the Company or any
Subsidiary. Continuous Status as an employee shall not be considered interrupted
in the case of: (i) sick  leave,  military  leave or any other  leave of absence
approved by the Board, provided that such leave is for a period of not more than
ninety  (90) days,  unless  reemployment  upon the  expiration  of such leave is
guaranteed  by contract or statute,  or unless  provided  otherwise  pursuant to
Company  policy  adopted  from  time to time;  or (ii) in the case of  transfers
between locations of the Company or between the Company, its Subsidiaries or its
successor.
 
          (g) EXCHANGE  ACT  means  the  Securities  Exchange  Act of 1934,  as
amended.
 
          (h) FAIR MARKET VALUE.  For purposes of  determining  the "Fair Market
Value" of a share of Stock  granted  pursuant  to Section 2 as of any date,  the
following rules shall apply:
 
              (i) If the  principal  market for the Stock is the New York Stock
Exchange  ("NYSE"),  then the "Fair  Market  Value" as of that date shall be the
closing price of the stock on the NYSE  composite  tape on that date as reported
in the Wall Street Journal for such date;
 
             (ii) If the  principal  market  for  the  Stock  is the  another
national  securities  exchange or the NASDAQ stock market, then the "Fair Market
Value" as of that date shall be the mean between the lowest and highest reported
composite sale prices of the Stock on that date on such exchange for such date;
 
 
            (iii) If sale prices are not available or if the principal market
for the Stock is not the NYSE or another  national  securities  exchange and the
Stock is not quoted on the NASDAQ stock market,  the average between the highest
bid and lowest  asked prices for the Stock on such day as reported on the NASDAQ
OTC Bulletin Board Service or by the National Quotation Bureau,  Incorporated or
a comparable service.
 
             (iv) If  the  day  is  not a  business  day,  and  as a  result,
paragraphs  (i),  (ii) and (iii) next above are  inapplicable,  the Fair  Market
Value of the Stock shall be determined as of the last preceding business day. If
paragraphs (i), (ii) and (iii) next above are otherwise  inapplicable,  then the
Fair  Market  Value  of the  Stock  shall  be  determined  in good  faith by the
Committee.
 
          (i) INCENTIVE  STOCK OPTION means an Option  intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
 
          (j) NONSTATUTORY  STOCK OPTION means an Option not intended to qualify
as an Incentive Stock Option.
 
          (k) OPTIONEE means a Participant who receives an Option.
 
          (l) PARENT  means a "parent  corporation",  whether  now or  hereafter
existing, as defined in Section 424(e) of the Code.
 
          (m) PARTICIPANTS. The term "Participant" shall mean any key executive,
employee or director of the Company,  its Parent or Subsidiary.  An Award may be
granted to an employee, in connection with hiring, retention or otherwise, prior
to the date the employee first  performs  services for the Company or its Parent
or Subsidiaries,  provided that such Awards shall not become vested prior to the
date the employee  first  performs such services.  The term  "Participant"  also
includes any non-employee director of the Company, its Parent or Subsidiary.
 
          (n) SHARE means a share of the Common Stock, as adjusted in accordance
with Section 6 of the 2002 Stock Plan.
 
          (o) STOCK.  The term "Stock"  shall mean shares of Common Stock of the
Company.
 
          (p) SUBSIDIARY   or   SUBSIDIARIES.   The   term   "Subsidiary"   or
"Subsidiaries"  mean any company  during any period in which it is a "subsidiary
corporation"  (as that term is defined in Code  section  424(f)) with respect to
the Company.
 
[9.  PLAN HISTORY
     ------------
 
The 2002 Stock Plan became effective as of October 10, 2002. The 2002 Stock Plan
was originally  approved by the stockholders of the Company on January 30, 2003.
The Board  approved  an  amendment  and  restatement  of the 2002  Stock Plan on
December 16, 2004 to (a) include additional  Performance  Measures applicable to
the grant of Awards  intended  to  qualify as  "performance-based  compensation"
under Section 162(m) of the Code and (b) amend Section 6.1 to increase the scope
of adjustments that may be made as a result of changes in  capitalization of the
Company,  which  amendment  and  restatement  is subject to the  approval of the
stockholders of the Company.]
 
 
                                  ATTACHMENT I
 
                             PERFORMANCE ^[MEASURES]
 
 
The Committee shall grant  performance-based  compensation Awards tied to one or
more of the following business criteria:
 
     1. ^earnings per share
     2. ^pre-tax operating income
     3. ^value of [Company] stock (i.e., stock price)
     [4. annual revenue
     5. budget comparisons
     6. controllable profits
     7. expense management
     8. improvements in capital structure
     9. operating income
     10. net income
     11. net sales
     12. profit margins
     13. profitability of an identifiable business unit or product
     14. return on investments
     15. return on sales
     16. return on stockholders' equity
     17. total return to stockholders
     18. performance  of the Company  relative to a peer group of  companies on
         any of the foregoing measures]