US AIRWAYS GROUP, INC.
 
                                 2005 EQUITY INCENTIVE PLAN
 
                             APPROVAL DATE: SEPTEMBER 27, 2005
                            TERMINATION DATE: SEPTEMBER 26, 2015
 
1.    GENERAL.
 
      (a) ELIGIBLE AWARD RECIPIENTS. The persons eligible to receive
discretionary Stock Awards and Performance Cash Awards are Employees, Directors
and Consultants. The persons eligible to receive non-discretionary Stock Awards
under the Non-Discretionary Grant Program are Eligible Directors.
 
      (b) AVAILABLE AWARDS. The Plan provides for the grant of the following
Stock Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock Options,
(iii) Stock Bonus Awards, (iv) Stock Appreciation Rights, (v) Stock Unit Awards,
and (vi) Other Stock Awards. The Plan also provides for the grant of Performance
Cash Awards.
 
      (c) GENERAL PURPOSE. The Company, by means of the Plan, seeks to secure
and retain the services of the group of persons eligible to receive Awards as
set forth in Section 1(a), to provide incentives for such persons to exert
maximum efforts for the success of the Company and any Affiliate and to provide
a means by which such eligible recipients may be given an opportunity to benefit
from increases in value of the Common Stock through the granting of Stock
Awards.
 
2.    DEFINITIONS.
 
      As used in the Plan, the following definitions shall apply to the
capitalized terms indicated below:
 
      (a) "AFFILIATE" means (i) any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, provided each
corporation in the unbroken chain (other than the Company) owns, at the time of
the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain, and (ii) any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company, provided each corporation
(other than the last corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain. The Board, in its sole discretion, shall have the authority to
determine (i) the time or times at which the foregoing ownership tests are
applied, and (ii) whether "Affiliate" includes entities other than corporations
within the foregoing definition.
 
      (b) "ANNUAL AWARD" means a Stock Award granted to each Eligible Director
pursuant to Section 8(c)(ii).
 
                                       1.
 
<PAGE>
 
      (c) "ANNUAL MEETING" means the first meeting of the Company's stockholders
held each calendar year at which Directors of the Company are selected.
 
      (d) "AWARD" means a Stock Award or a Performance Cash Award.
 
      (e) "BOARD" means the Board of Directors of the Company.
 
      (f) "CAPITALIZATION ADJUSTMENT" has the meaning ascribed to that term in
Section 12(a).
 
      (g) "CAUSE" means, as determined by the Company, in its sole discretion:
 
            (i) the Participant's engaging in fraud, misappropriation of
property of the Company or an Affiliate, or gross misconduct damaging to such
property or the business of the Company or an Affiliate; or
 
            (ii) the Participant's conviction of a felony or a violation of any
material policy of the Company or an Affiliate.
 
      The determination that a termination of the Participant's Continuous
Service is either for Cause or without Cause shall be made by the Company, in
its sole discretion. Any determination by the Company that the Continuous
Service of a Participant was terminated by reason of dismissal without Cause for
the purposes of outstanding Awards held by such Participant shall have no effect
upon any determination of the rights or obligations of the Company or such
Participant for any other purpose.
 
      Notwithstanding the foregoing or any other provision of this Plan, the
definition of Cause (or any analogous term) in an individual Stock Award
Agreement or other written agreement between the Company or any Affiliate and
the Participant shall supersede the foregoing definition with respect to Stock
Awards subject to such agreement; provided, however, that if no definition of
Cause (or any analogous term) is set forth in such Stock Award Agreement or
other written agreement, the foregoing definition shall apply.
 
      (h) "CHANGE IN CONTROL" means the occurrence, in a single transaction or
in a series of related transactions, of any one or more of the following events:
 
            (i) any Exchange Act Person becomes the Owner, directly or
indirectly, of securities of the Company representing more than fifty percent
(50%) of the combined voting power of the Company's then outstanding securities
other than by virtue of a merger, consolidation or similar transaction.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
(A) on account of the acquisition of securities of the Company by an investor,
any affiliate thereof or any other Exchange Act Person from the Company in a
transaction or series of related transactions the primary purpose of which is to
obtain financing for the Company through the issuance of equity securities or
(B) solely because the level of Ownership held by any Exchange Act Person (the
"SUBJECT PERSON") exceeds the designated percentage threshold of the outstanding
voting securities as a result of a repurchase or other acquisition of voting
securities by the Company reducing the number of shares outstanding, provided
that if a Change in Control would occur (but for the operation of this sentence)
as a
 
                                       2.
 
<PAGE>
 
result of the acquisition of voting securities by the Company, and after such
share acquisition, the Subject Person becomes the Owner of any additional voting
securities that, assuming the repurchase or other acquisition had not occurred,
increases the percentage of the then outstanding voting securities Owned by the
Subject Person over the designated percentage threshold, then a Change in
Control shall be deemed to occur;
 
            (ii) there is consummated a merger, consolidation or similar
transaction involving (directly or indirectly) the Company and, immediately
after the consummation of such merger, consolidation or similar transaction, the
stockholders of the Company immediately prior thereto do not Own, directly or
indirectly, either (A) outstanding voting securities representing more than
fifty percent (50%) of the combined outstanding voting power of the surviving
Entity in such merger, consolidation or similar transaction or (B) more than
fifty percent (50%) of the combined outstanding voting power of the parent of
the surviving Entity in such merger, consolidation or similar transaction, in
each case in substantially the same proportions as their Ownership of the
outstanding voting securities of the Company immediately prior to such
transaction;
 
            (iii) the stockholders of the Company approve or the Board approves
a plan of complete dissolution or liquidation of the Company, or a complete
dissolution or liquidation of the Company shall otherwise occur;
 
            (iv) there is consummated a sale, lease, exclusive license or other
disposition of all or substantially all of the consolidated assets of the
Company and its Subsidiaries, other than a sale, lease, license or other
disposition of all or substantially all of the consolidated assets of the
Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the
combined voting power of the voting securities of which are Owned by
stockholders of the Company in substantially the same proportions as their
Ownership of the outstanding voting securities of the Company immediately prior
to such sale, lease, license or other disposition; or
 
            (v) individuals who, on the date this Plan is adopted by the Board,
are members of the Board (the "INCUMBENT BOARD") cease for any reason to
constitute at least a majority of the members of the Board; provided, however,
that if the appointment or election (or nomination for election) of any new
Board member was approved or recommended by a majority vote of the members of
the Incumbent Board then still in office, such new member shall, for purposes of
this Plan, be considered as a member of the Incumbent Board.
 
      The term Change in Control shall not include a sale of assets, merger or
other transaction effected exclusively for the purpose of changing the domicile
of the Company.
 
      Notwithstanding the foregoing or any other provision of this Plan, the
definition of Change in Control (or any analogous term) in an individual Stock
Award Agreement or other written agreement between the Company or any Affiliate
and the Participant shall supersede the foregoing definition with respect to
Stock Awards subject to such agreement; provided, however, that if no definition
of Change in Control (or any analogous term) is set forth in such Stock Award or
other written agreement, the foregoing definition shall apply.
 
      (i) "CODE" means the Internal Revenue Code of 1986, as amended.
 
                                       3.
 
<PAGE>
 
      (j) "COMMITTEE" means a committee of one (1) or more members of the Board
to whom authority has been delegated by the Board in accordance with Section
3(d).
 
      (k) "COMMON STOCK" means the common stock of the Company.
 
      (l) "COMPANY" means US Airways Group, Inc., a Delaware corporation.
 
      (m) "CONSULTANT" means any person, including an advisor, who is (i)
engaged by the Company or an Affiliate to render consulting or advisory services
and is compensated for such services, or (ii) serving as a member of the Board
of Directors of an Affiliate and is compensated for such services. However,
service solely as a Director, or payment of a fee for such service, shall not
cause a Director to be considered a "Consultant" for purposes of the Plan.
 
      (n) "CONTINUOUS SERVICE" means that the Participant's service with the
Company or an Affiliate, whether as an Employee, Director or Consultant, is not
interrupted or terminated. A change in the capacity in which the Participant
renders service to the Company or an Affiliate as an Employee, Consultant or
Director or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the
Participant's service with the Company or an Affiliate, shall not terminate a
Participant's Continuous Service. For example, a change in status from an
employee of the Company to a consultant to an Affiliate or to a Director shall
not constitute an interruption of Continuous Service. To the extent permitted by
law, the Board or the chief executive officer of the Company, in that party's
sole discretion, may determine whether Continuous Service shall be considered
interrupted in the case of any leave of absence approved by that party,
including sick leave, military leave or any other personal leave.
Notwithstanding the foregoing, a leave of absence shall be treated as Continuous
Service for purposes of vesting in a Stock Award only to such extent as may be
provided in the Company's leave of absence policy or in the written terms of the
Participant's leave of absence.
 
      (o) "CORPORATE TRANSACTION" means the occurrence, in a single transaction
or in a series of related transactions, of any one or more of the following
events:
 
            (i) a sale or other disposition of all or substantially all, as
determined by the Board in its sole discretion, of the consolidated assets of
the Company and its Subsidiaries;
 
            (ii) a sale or other disposition of at least ninety percent (90%) of
the outstanding securities of the Company;
 
            (iii) the consummation of a merger, consolidation or similar
transaction following which the Company is not the surviving corporation; or
 
            (iv) the consummation of a merger, consolidation or similar
transaction following which the Company is the surviving corporation but the
shares of Common Stock outstanding immediately preceding the merger,
consolidation or similar transaction are converted or exchanged by virtue of the
merger, consolidation or similar transaction into other property, whether in the
form of securities, cash or otherwise.
 
      (p) "COVERED EMPLOYEE" means the chief executive officer and the four (4)
other highest compensated officers of the Company for whom total compensation is
required to be
 
                                       4.
 
<PAGE>
 
reported to stockholders under the Exchange Act, as determined for purposes of
Section 162(m) of the Code.
 
      (q) "DIRECTOR" means a member of the Board.
 
      (r) "DISABILITY" means the permanent and total disability of a person
within the meaning of Section 22(e)(3) of the Code.
 
      (s) "ELIGIBLE DIRECTOR" means a Director who is not an Employee and is
eligible to participate in the Non-Discretionary Grant Program.
 
      (t) "EMPLOYEE" means any person employed by the Company or an Affiliate.
However, service solely as a Director, or payment of a fee for such services,
shall not cause a Director to be considered an "Employee" for purposes of the
Plan.
 
      (u) "ENTITY" means a corporation, partnership or other entity.
 
      (v) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
 
      (w) "EXCHANGE ACT PERSON" means any natural person, Entity or "group"
(within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that
"Exchange Act Person" shall not include (i) the Company or any Subsidiary of the
Company, (ii) any employee benefit plan of the Company or any Subsidiary of the
Company or any trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any Subsidiary of the Company, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as their Ownership of stock of
the Company; or (v) any natural person, Entity or "group" (within the meaning of
Section 13(d) or 14(d) of the Exchange Act) that, as of the effective date of
the Plan as set forth in Section 15, is the Owner, directly or indirectly, of
securities of the Company representing more than fifty percent (50%) of the
combined voting power of the Company's then outstanding securities.
 
      (x) "FAIR MARKET VALUE" means, as of any date, the value of the Common
Stock determined as follows:
 
            (i) If the Common Stock is listed on any established stock exchange
or market, the Fair Market Value of a share of Common Stock shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or market (or the exchange or market with the greatest
volume of trading in the Common Stock) on the date of determination, as reported
in The Wall Street Journal or such other source as the Board deems reliable.
Unless otherwise provided by the Board, if there is no closing sales price (or
closing bid if no sales were reported) for the Common Stock on the date of
determination, then the Fair Market Value shall be the closing selling price (or
closing bid if no sales were reported) on the last preceding date for which such
quotation exists.
 
            (ii) In the absence of such markets for the Common Stock, the Fair
Market Value shall be determined by the Board in good faith.
 
                                       5.
 
<PAGE>
 
      (y) "INCENTIVE STOCK OPTION" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
 
      (z) "INITIAL AWARD" means an Option granted to an Eligible Director
pursuant to Section 8(c)(i).
 
      (aa) "NON-DISCRETIONARY GRANT PROGRAM" means the non-discretionary grant
program in effect under Section 8 of the Plan.
 
      (bb) "NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not a
current employee or officer of the Company or an Affiliate, does not receive
compensation, either directly or indirectly, from the Company or an Affiliate
for services rendered as a consultant or in any capacity other than as a
Director (except for an amount as to which disclosure would not be required
under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
("REGULATION S-K")), does not possess an interest in any other transaction for
which disclosure would be required under Item 404(a) of Regulation S-K, and is
not engaged in a business relationship for which disclosure would be required
pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a
"non-employee director" for purposes of Rule 16b-3.
 
      (cc) "NONSTATUTORY STOCK OPTION" means an Option not intended to qualify
as an Incentive Stock Option.
 
      (dd) "OFFICER" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
 
      (ee) "OPTION" means an Incentive Stock Option or a Nonstatutory Stock
Option to purchase shares of Common Stock granted pursuant to the Plan.
 
      (ff) "OPTION AGREEMENT" means a written agreement between the Company and
an Optionholder evidencing the terms and conditions of an Option grant. Each
Option Agreement shall be subject to the terms and conditions of the Plan.
 
      (gg) "OPTIONHOLDER" means a person to whom an Option is granted pursuant
to the Plan or, if applicable, such other person who holds an outstanding
Option.
 
      (hh) "OTHER STOCK AWARD" means an award whose value is based in whole or
in part on the Common Stock and that is granted pursuant to Section 7(d).
 
      (ii) "OTHER STOCK AWARD AGREEMENT" means a written agreement between the
Company and a holder of an Other Stock Award evidencing the terms and conditions
of an Other Stock Award grant. Each Other Stock Award Agreement shall be subject
to the terms and conditions of the Plan.
 
      (jj) "OUTSIDE DIRECTOR" means a Director who either (i) is not a current
employee of the Company or an "affiliated corporation" (within the meaning of
Treasury Regulations promulgated under Section 162(m) of the Code), is not a
former employee of the Company or an "affiliated corporation" who receives
compensation for prior services (other than benefits under a
 
                                       6.
 
<PAGE>
 
tax-qualified retirement plan) during the taxable year, has not been an officer
of the Company or an "affiliated corporation," and does not receive remuneration
from the Company or an "affiliated corporation," either directly or indirectly,
in any capacity other than as a Director, or (ii) is otherwise considered an
"outside director" for purposes of Section 162(m) of the Code.
 
      (kk) "OWN," "OWNED," "OWNER," "OWNERSHIP" A person or Entity shall be
deemed to "Own," to have "Owned," to be the "Owner" of, or to have acquired
"Ownership" of securities if such person or Entity, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise, has
or shares voting power, which includes the power to vote or to direct the
voting, with respect to such securities.
 
      (ll) "PARTICIPANT" means a person to whom an Award is granted pursuant to
the Plan or, if applicable, such other person who holds an outstanding Award.
 
      (mm) "PERFORMANCE CASH AWARD" means an award of cash granted pursuant to
Section 11(h)(ii).
 
      (nn) "PERFORMANCE CRITERIA" means the one or more criteria that the Board
shall select for purposes of establishing the Performance Goals for a
Performance Period. The Performance Criteria that shall be used to establish
such Performance Goals may be based on any one of, or combination of, the
following: (i) earnings before interest, taxes, depreciation, rent and
amortization expenses ("EBITDAR"); (ii) earnings before interest, taxes,
depreciation and amortization ("EBITDA"); (iii) earnings before interest and
taxes ("EBIT"); (iv) EBITDAR, EBITDA, EBIT or earnings before taxes and unusual
or nonrecurring items as measured either against the annual budget or as a ratio
to revenue or return on total capital; (v) net earnings; (vi) earnings per
share; (vii) net income (before or after taxes); (viii) profit margin; (ix)
operating margin; (x) operating income; (xi) net operating income; (xii) net
operating income after taxes; (xiii) growth; (xiv) net worth; (xv) cash flow;
(xvi) cash flow per share; (xvii) total stockholder return; (xviii) return on
capital; (xix) stock price performance; (xx) revenues; (xxi) revenues per
available seat mile; (xxii) costs; (xxiii) costs per available seat mile; (xxiv)
working capital; (xxv) capital expenditures; (xxvi) improvements in capital
structure; (xxvii) economic value added; (xxviii) industry indices; (xxix)
regulatory ratings; (xxx) customer satisfaction using the Air Travel Consumer
Report issued by the United States Department of Transportation; (xxxi) expenses
and expense ratio management; (xxxii) debt reduction; (xxxiii) profitability of
an identifiable business unit or product; (xxxiv) levels of expense, cost or
liability by category, operating unit or any other delineation; (xxxv)
implementation or completion of projects or processes; and (xxxvi) combination
of airline operating certificates within a specified period. Partial achievement
of the specified criteria may result in the payment or vesting corresponding to
the degree of achievement as specified in the Stock Award Agreement or the
written terms of a Performance Cash Award. The Board shall, in its sole
discretion, define the manner of calculating the Performance Criteria it selects
to use for a Performance Period.
 
      (oo) "PERFORMANCE GOALS" means, for a Performance Period, the one or more
goals established by the Board for the Performance Period based upon the
Performance Criteria. Performance Goals may be set on a Company-wide basis, with
respect to one or more business units, divisions, Affiliates, or business
segments, and in either absolute terms or relative to the performance of one or
more comparable companies or a relevant index. The Board is authorized
 
                                       7.
 
<PAGE>
 
to make adjustments in the method of calculating the attainment of Performance
Goals for a Performance Period as follows: (i) to exclude restructuring and/or
other nonrecurring charges; (ii) to exclude exchange rate effects, as
applicable, for non-U.S. dollar denominated net sales and operating earnings;
(iii) to exclude the effects of changes to generally accepted accounting
standards required by the Financial Accounting Standards Board; (iv) to exclude
the effects of any statutory adjustments to corporate tax rates; (v) to exclude
the effects of any "extraordinary items" as determined under generally accepted
accounting principles; (vi) to exclude any other unusual, non-recurring gain or
loss or other extraordinary item; (vii) to respond to, or in anticipation of,
any unusual or extraordinary corporate item, transaction, event or development;
(viii) to respond to, or in anticipation of, changes in applicable laws,
regulations, accounting principles, or business conditions; (ix) to exclude the
dilutive effects of acquisitions or joint ventures; (x) to assume that any
business divested by the Company achieved performance objectives at targeted
levels during the balance of a Performance Period following such divestiture;
(xi) to exclude the effect of any change in the outstanding shares of common
stock of the Company by reason of any stock dividend or split, stock repurchase,
reorganization, recapitalization, merger, consolidation, spin-off, combination
or exchange of shares or other similar corporate change, or any distributions to
common shareholders other than regular cash dividends; (xii) to reflect a
corporate transaction, such as a merger, consolidation, separation (including a
spinoff or other distribution of stock or property by a corporation), or
reorganization (whether or not such reorganization comes within the definition
of such term in Section 368 of the Code); and (xiii) to reflect any partial or
complete corporate liquidation. The Board also retains the discretion to reduce
or eliminate the compensation or economic benefit due upon attainment of
Performance Goals.
 
      (pp) "PERFORMANCE PERIOD" means the one or more periods of time, which may
be of varying and overlapping durations, as the Board may select, over which the
attainment of one or more Performance Goals will be measured for the purpose of
determining a Participant's right to and the payment of a Performance Stock
Award or a Performance Cash Award.
 
      (qq) "PERFORMANCE STOCK AWARD" means a Stock Award granted pursuant to
Section 11(h)(i).
 
      (rr) "PLAN" means this US Airways Group, Inc. 2005 Equity Incentive Plan.
 
      (ss) "RULE 16B-3" means Rule 16b-3 promulgated under the Exchange Act or
any successor to Rule 16b-3, as in effect from time to time.
 
      (tt) "RETIREMENT" means:
 
            (i) for purposes of any Stock Award granted under the Plan, except
for any Stock Award granted pursuant to the Non-Discretionary Grant Program
under Section 8, retirement from the Company and all Affiliates (a) at or after
the age of fifty-five (55) and prior to age sixty-five (65) with the consent of
the Board or Committee, or (b) at or after the age of sixty-five (65) without
the consent of the Board or Committee; and
 
            (ii) for purposes of any Stock Award granted under the Plan pursuant
to the Non-Discretionary Grant Program under Section 8, retirement from the
Board (a) at or after the
 
                                       8.
 
<PAGE>
 
age of fifty-five (55) and prior to age sixty-five (65) with the consent of the
Board, or (b) at or after the age of sixty-five (65) without the consent of the
Board.
 
      Notwithstanding the foregoing or any other provision of this Plan, the
definition of Retirement (or any analogous term) in an individual Stock Award
Agreement or other written agreement between the Company or any Affiliate and
the Participant shall supersede the foregoing definition with respect to Stock
Awards subject to such agreement; provided, however, that if no definition of
Retirement (or any analogous term) is set forth in such Stock Award Agreement or
other written agreement, the foregoing definition shall apply.
 
      (uu) "SECURITIES ACT" means the Securities Act of 1933, as amended.
 
      (vv) "STOCK APPRECIATION RIGHT" means a right to receive the appreciation
on Common Stock that is granted pursuant to the terms and conditions of Section
7(c).
 
      (ww) "STOCK APPRECIATION RIGHT AGREEMENT" means a written agreement
between the Company and a holder of a Stock Appreciation Right evidencing the
terms and conditions of a Stock Appreciation Right grant. Each Stock
Appreciation Right Agreement shall be subject to the terms and conditions of the
Plan.
 
      (xx) "STOCK AWARD" means any right granted under the Plan, including an
Option, a Stock Bonus Award, a Stock Appreciation Right, a Stock Unit Award, an
Other Stock Award, or a Performance Stock Award.
 
      (yy) "STOCK AWARD AGREEMENT" means a written agreement between the Company
and a Participant evidencing the terms and conditions of a Stock Award grant.
Each Stock Award Agreement shall be subject to the terms and conditions of the
Plan.
 
      (zz) "STOCK BONUS AWARD" means an award of shares of Common Stock which is
granted pursuant to Sections 7(a) and 8(c)(iii)(2).
 
      (aaa) "STOCK BONUS AWARD AGREEMENT" means a written agreement between the
Company and a holder of a Stock Bonus Award evidencing the terms and conditions
of a Stock Bonus Award grant. Each Stock Bonus Award Agreement shall be subject
to the terms and conditions of the Plan.
 
      (bbb) "STOCK UNIT AWARD" means a right to receive shares of Common Stock
which is granted pursuant to Sections 7(b) and 8(c)(iii)(2).
 
      (ccc) "STOCK UNIT AWARD AGREEMENT" means a written agreement between the
Company and a holder of a Stock Unit Award evidencing the terms and conditions
of a Stock Unit Award grant. Each Stock Unit Award Agreement shall be subject to
the terms and conditions of the Plan.
 
      (ddd) "SUBSIDIARY" means, with respect to the Company, (i) any corporation
of which more than fifty percent (50%) of the outstanding capital stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether, at the time, stock of any other class or
classes of such corporation shall have or might have voting power by
 
                                       9.
 
<PAGE>
 
reason of the happening of any contingency) is at the time, directly or
indirectly, Owned by the Company, and (ii) any partnership in which the Company
has a direct or indirect interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent
(50%).
 
      (eee) "TEN PERCENT STOCKHOLDER" means a person who Owns (or is deemed to
Own pursuant to Section 424(d) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any Affiliate.
 
3.    ADMINISTRATION.
 
      (a) ADMINISTRATION BY BOARD. The Board shall administer the Plan unless
and until the Board delegates administration of the Plan to a Committee, as
provided in Section 3(d). However, the Board may not delegate administration of
the Non-Discretionary Grant Program.
 
      (b) POWERS OF BOARD. Except with respect to the Non-Discretionary Grant
Program, the Board or the Committee, to the extent delegated to the Committee
pursuant to Section 3(d), shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
 
            (i) To determine from time to time (1) which of the persons eligible
under the Plan shall be granted Awards; (2) when and how each Award shall be
granted; (3) what type or combination of types of Awards shall be granted; (4)
the provisions of each Award granted (which need not be identical), including
the time or times when a person shall be permitted to receive cash or Common
Stock pursuant to an Award; and (5) the number of shares of Common Stock with
respect to which a Stock Award shall be granted to each such person.
 
            (ii) To construe and interpret the Plan and Awards granted under it,
and to establish, amend and revoke rules and regulations for its administration.
The Board, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan or in any Stock Award Agreement or in the written
terms of a Performance Cash Award, in a manner and to the extent it shall deem
necessary or expedient to make the Plan fully effective.
 
            (iii) To amend the Plan or an Award as provided in Section 13.
 
            (iv) To terminate or suspend the Plan as provided in Section 14.
 
            (v) Generally, to exercise such powers and to perform such acts as
the Board deems necessary or expedient to promote the best interests of the
Company and that are not in conflict with the provisions of the Plan.
 
            (vi) To adopt such procedures and sub-plans as are necessary or
appropriate to permit participation in the Plan by individuals who are foreign
nationals or employed outside the United States.
 
                                      10.
 
<PAGE>
 
      (c) ADMINISTRATION OF NON-DISCRETIONARY GRANT PROGRAM. The Board shall
have the power, subject to and within the limitations of, the express provisions
of the Non-Discretionary Grant Program:
 
            (i) To determine the provisions of each Stock Award to the extent
not specified in the Non-Discretionary Grant Program.
 
            (ii) To construe and interpret the Non-Discretionary Grant Program
and the Stock Awards granted under it, and to establish, amend and revoke rules
and regulations for its administration. The Board, in the exercise of this
power, may correct any defect, omission or inconsistency in the
Non-Discretionary Grant Program or in any Stock Award Agreement, in a manner and
to the extent it shall deem necessary or expedient to make the Non-Discretionary
Grant Program fully effective.
 
            (iii) To amend the Non-Discretionary Grant Program, including the
number of shares subject to Initial and Annual Awards or a Stock Award
thereunder, as provided in Section 13.
 
            (iv) Generally, to exercise such powers and to perform such acts as
the Board deems necessary or expedient to promote the best interests of the
Company and that are not in conflict with the provisions of the
Non-Discretionary Grant Program.
 
      (d) DELEGATION TO COMMITTEE.
 
            (i) GENERAL. The Board may delegate some or all of the
administration of the Plan (except the Non-Discretionary Grant Program) to a
Committee or Committees. If administration is delegated to a Committee, the
Committee shall have, in connection with the administration of the Plan, the
powers theretofore possessed by the Board that have been delegated to the
Committee, including the power to delegate to a subcommittee any of the
administrative powers the Committee is authorized to exercise (and references in
this Plan to the Board shall thereafter be to the Committee or subcommittee),
subject, however, to such resolutions, not inconsistent with the provisions of
the Plan, as may be adopted from time to time by the Board. The Board may retain
the authority to concurrently administer the Plan with the Committee and may, at
any time, revest in the Board some or all of the powers previously delegated.
 
            (ii) SECTION 162(m) AND RULE 16b-3 COMPLIANCE. In the sole
discretion of the Board, the Committee may consist solely of two or more Outside
Directors, in accordance with Section 162(m) of the Code, and/or solely of two
or more Non-Employee Directors, in accordance with Rule 16b-3. In addition, the
Board or the Committee, in its sole discretion, may (1) delegate to a committee
of one or more members of the Board who need not be Outside Directors the
authority to grant Awards to eligible persons who are either (a) not then
Covered Employees and are not expected to be Covered Employees at the time of
recognition of income resulting from such Award, or (b) not persons with respect
to whom the Company wishes to comply with Section 162(m) of the Code, and/or (2)
delegate to a committee of one or more members of the Board who need not be
Non-Employee Directors the authority to grant Stock Awards to eligible persons
who are not then subject to Section 16 of the Exchange Act.
 
                                      11.
 
<PAGE>
 
      (e) DELEGATION TO AN OFFICER. The Board may delegate to one or more
Officers of the Company the authority to do one or both of the following: (i)
designate Officers and Employees of the Company or any of its Subsidiaries to be
recipients of Awards and the terms thereof; and (ii) determine the number of
shares of Common Stock to be subject to Stock Awards granted to such Officers
and Employees of the Company; provided, however, that the Board resolutions
regarding such delegation shall specify the total number of shares of Common
Stock that may be subject to the Stock Awards granted by such Officer and that
such Officer may not grant a Stock Award to himself or herself. Notwithstanding
anything to the contrary in this Section 3(e), the Board may not delegate to an
Officer authority to determine the Fair Market Value of the Common Stock
pursuant to Section 2(x)(ii) above.
 
      (f) EFFECT OF BOARD'S DECISION. All determinations, interpretations and
constructions made by the Board in good faith shall not be subject to review by
any person and shall be final, binding and conclusive on all persons.
 
      (g) CANCELLATION AND RE-GRANT OF STOCK AWARDS. Neither the Board nor any
Committee shall have the authority to effect any of the following, unless the
stockholders of the Company have approved such an action within the preceding
twelve (12) months: (i) reduction of the exercise price of any outstanding Stock
Awards under the Plan; (ii) cancellation of any outstanding Stock Awards under
the Plan and the grant in substitution therefor of (A) new Stock Awards under
the Plan or another equity plan of the Company covering the same or a different
number of shares of Common Stock, (B) cash and/or (C) other valuable
consideration (as determined by the Board, in its sole discretion); or (iii) any
other action that is treated as a repricing under generally accepted accounting
principles.
 
4.    SHARES SUBJECT TO THE PLAN.
 
      (a) SHARE RESERVE. Subject to the provisions of Section 12(a) relating to
Capitalization Adjustments, the number of shares of Common Stock that may be
issued pursuant to Stock Awards shall not exceed, in the aggregate, 10,969,191
shares of Common Stock. Subject to Section 4(b), the number of shares available
for issuance under the Plan shall be reduced by: (i) one (1) share for each
share of stock issued pursuant to (A) an Option granted under Section 6 or 8, or
(B) a Stock Appreciation Right granted under Section 7(c); and (ii) three (3)
shares for each share of Common Stock issued pursuant to a Stock Bonus Award,
Stock Unit Award or Other Stock Award granted under Section 7. Shares may be
issued in connection with a merger or acquisition as permitted by NYSE Listed
Company Manual Section 303A(8) or, if applicable, NASD Rule 4350(i)(1)(A)(iii)
and such issuance shall not reduce the number of shares available for issuance
under the Plan.
 
      (b) REVERSION OF SHARES TO THE SHARE RESERVE. If any (i) Stock Award shall
for any reason expire or otherwise terminate, in whole or in part, without
having been exercised in full, (ii) shares of Common Stock issued to a
Participant pursuant to a Stock Award are forfeited to or repurchased by the
Company pursuant to the Company's reacquisition or repurchase rights under the
Plan, including any forfeiture or repurchase caused by the failure to meet a
contingency or condition required for the vesting of such shares, or (iii) Stock
Award is settled in cash, then the shares of Common Stock not issued under such
Stock Award, or forfeited to or repurchased by the Company, shall revert to and
again become available for issuance under the Plan. If any
 
                                      12.
 
<PAGE>
 
shares subject to a Stock Award are not delivered to a Participant because the
Stock Award is exercised through a reduction of shares subject to the Stock
Award (i.e., "net exercised") or an appreciation distribution in respect of a
Stock Appreciation Right is paid in shares of Common Stock, the number of shares
subject to the Stock Award that are not delivered to the Participant shall
remain available for subsequent issuance under the Plan. If any shares subject
to a Stock Award are not delivered to a Participant because such shares are
withheld in satisfaction of the withholding of taxes incurred in connection with
the exercise of an Option or Stock Appreciation Right or the issuance of shares
under a Stock Bonus Award, Stock Unit Award or Other Stock Award, the number of
shares that are not delivered to the Participant shall remain available for
subsequent issuance under the Plan. If the exercise price of any Stock Award is
satisfied by tendering shares of Common Stock held by the Participant (either by
actual delivery or attestation), then the number of shares so tendered shall
remain available for subsequent issuance under the Plan. Any shares subject to
outstanding stock awards granted under the America West 2002 Incentive Equity
Plan or the US Airways Group, Inc. 2004 Omnibus Stock Incentive Plan that expire
or terminate for any reason prior to exercise or settlement shall be added to
the share reserve of this Plan and become available for issuance pursuant to
Stock Awards granted hereunder.
 
      To the extent there is issued a share of Common Stock pursuant to a Stock
Award that counted as three (3) shares against the number of shares available
for issuance under the Plan pursuant to Section 4(a) and such share of Common
Stock again becomes available for issuance under the Plan pursuant to this
Section 4(b), then the number of shares of Common Stock available for issuance
under the Plan shall increase by three (3) shares.
 
            (i) INCENTIVE STOCK OPTION LIMIT. Notwithstanding anything to the
contrary in this Section 4(b), subject to the provisions of Section 12(a)
relating to Capitalization Adjustments, the aggregate maximum number of shares
of Common Stock that may be issued pursuant to the exercise of Incentive Stock
Options shall be 10,969,191 shares of Common Stock.
 
      (c) SOURCE OF SHARES. The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock, including shares repurchased
by the Company on the open market.
 
5.    ELIGIBILITY.
 
      (a) ELIGIBILITY FOR SPECIFIC AWARDS. Incentive Stock Options may be
granted only to Employees. Stock Awards other than Incentive Stock Options may
be granted to Employees, Directors and Consultants. Non-discretionary Stock
Awards granted under the Non-Discretionary Grant Program in Section 8 may be
granted only to Eligible Directors. Performance Cash Awards may be granted to
Employees, Directors and Consultants.
 
      (b) TEN PERCENT STOCKHOLDERS. A Ten Percent Stockholder shall not be
granted an Incentive Stock Option unless the exercise price of such Option is at
least one hundred ten percent (110%) of the Fair Market Value of the Common
Stock on the date of grant and the Option is not exercisable after the
expiration of five (5) years from the date of grant.
 
                                      13.
 
<PAGE>
 
      (c) SECTION 162(m) LIMITATION. Subject to the provisions of Section 12(a)
relating to Capitalization Adjustments, at such time as the Company may be
subject to the applicable provisions of Section 162(m) of the Code, no Employee
shall be eligible to be granted during any calendar year Options or Stock
Appreciation Rights covering more than one million (1,000,000) shares of Common
Stock.
 
      (d) CONSULTANTS. A Consultant shall not be eligible for the grant of a
Stock Award if, at the time of grant, a Form S-8 Registration Statement under
the Securities Act ("FORM S-8") is not available to register either the offer or
the sale of the Company's securities to such Consultant because of the nature of
the services that the Consultant is providing to the Company, because the
Consultant is not a natural person, or because of any other rule governing the
use of Form S-8.
 
6.    OPTION PROVISIONS.
 
      Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. All Options shall be separately
designated Incentive Stock Options or Nonstatutory Stock Options at the time of
grant, and, if certificates are issued, a separate certificate or certificates
shall be issued for shares of Common Stock purchased on exercise of each type of
Option. The provisions of separate Options need not be identical; provided,
however, that each Option Agreement shall include (through incorporation of
provisions hereof by reference in the Option or otherwise) the substance of each
of the following provisions:
 
      (a) TERM. No Option shall be exercisable after the expiration of ten (10)
years from the date of grant, or such shorter period specified in the Option
Agreement; provided, however, that an Incentive Stock Option granted to a Ten
Percent Stockholder shall be subject to the provisions of Section 5(b).
 
      (b) EXERCISE PRICE OF AN INCENTIVE STOCK OPTION. Subject to the provisions
of Section 5(b) regarding Ten Percent Stockholders, the exercise price of each
Incentive Stock Option shall be not less than one hundred percent (100%) of the
Fair Market Value of the Common Stock subject to the Option on the date the
Option is granted. Notwithstanding the foregoing, an Incentive Stock Option may
be granted with an exercise price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution for
another option in a manner consistent with the provisions of Section 424(a) of
the Code.
 
      (c) EXERCISE PRICE OF A NONSTATUTORY STOCK OPTION. The exercise price of
each Nonstatutory Stock Option shall be not less than one hundred percent (100%)
of the Fair Market Value of the Common Stock subject to the Option on the date
the Option is granted. Notwithstanding the foregoing, a Nonstatutory Stock
Option may be granted with an exercise price lower than that set forth in the
preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner consistent with the provisions of
Section 424(a) of the Code.
 
                                      14.
 
<PAGE>
 
      (d) CONSIDERATION. The purchase price of Common Stock acquired pursuant to
the exercise of an Option shall be paid, to the extent permitted by applicable
law and as determined by the Board in its sole discretion, by any combination of
the methods of payment set forth below. The Board shall have the authority to
grant Options that do not permit all of the following methods of payment (or
otherwise restrict the ability to use certain methods) and to grant Options that
require the consent of the Company to utilize a particular method of payment.
The methods of payment permitted by this Section 6(d) are:
 
            (i) by cash or check;
 
            (ii) pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board that, prior to the issuance of Common
Stock, results in either the receipt of cash (or check) by the Company or the
receipt of irrevocable instructions to pay the aggregate exercise price to the
Company from the sales proceeds;
 
            (iii) by delivery to the Company (either by actual delivery or
attestation) of shares of Common Stock;
 
            (iv) by a "net exercise" arrangement pursuant to which the Company
will reduce the number of shares of Common Stock issued upon exercise by the
largest whole number of shares with a Fair Market Value that does not exceed the
aggregate exercise price; provided, however, the Company shall accept a cash or
other payment from the Participant to the extent of any remaining balance of the
aggregate exercise price not satisfied by such reduction in the number of whole
shares to be issued; provided, however, that shares of Common Stock will no
longer be outstanding under an Option and will not be exercisable thereafter to
the extent that (i) the number of shares is reduced to pay the exercise price
pursuant to the "net exercise," (ii) shares are delivered to the Participant as
a result of such exercise, and (iii) shares are withheld to satisfy tax
withholding obligations; or
 
            (v) in any other form of legal consideration that may be acceptable
to the Board.
 
      (e) TRANSFERABILITY OF OPTIONS. The Board may, in its sole discretion,
impose such limitations on the transferability of Options as the Board shall
determine. In the absence of such a determination by the Board to the contrary,
the following restrictions on the transferability of Options shall apply:
 
            (i) RESTRICTIONS ON TRANSFER. An Option shall not be transferable
except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionholder only by the Optionholder.
 
            (ii) DOMESTIC RELATIONS ORDERS. Notwithstanding the foregoing, an
Option may be transferred pursuant to a domestic relations order; provided,
however, that if an Option is an Incentive Stock Option, such Option shall be
deemed to be a Nonstatutory Stock Option as a result of such transfer.
 
            (iii) BENEFICIARY DESIGNATION. Notwithstanding the foregoing, the
Optionholder may, by delivering written notice to the Company, in a form
provided by or
 
                                      15.
 
<PAGE>
 
otherwise satisfactory to the Company, designate a third party who, in the event
of the death of the Optionholder, shall thereafter be entitled to exercise the
Option. In the absence of such a designation, the executor or administrator of
the Optionholder's estate shall be entitled to exercise the Option.
 
      (f) VESTING OF OPTIONS GENERALLY. The total number of shares of Common
Stock subject to an Option may vest and therefore become exercisable in periodic
installments that may or may not be equal. The Option may be subject to such
other terms and conditions on the time or times when it may or may not be
exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The
provisions of this Section 6(f) are subject to any Option provisions governing
the minimum number of shares of Common Stock as to which an Option may be
exercised.
 
      (g) TERMINATION OF CONTINUOUS SERVICE. In the event that an Optionholder's
Continuous Service terminates (other than for Cause or upon the Optionholder's
death, Disability or Retirement), the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such Option
as of the date of termination of Continuous Service), but only within such
period of time ending on the earlier of (i) the date three (3) months following
the termination of the Optionholder's Continuous Service (or such longer or
shorter period specified in the Option Agreement), or (ii) the expiration of the
term of the Option as set forth in the Option Agreement. If, after termination
of Continuous Service, the Optionholder does not exercise his or her Option
within the time specified herein or in the Option Agreement (as applicable), the
Option shall terminate.
 
      (h) EXTENSION OF TERMINATION DATE. An Optionholder's Option Agreement may
provide that if the exercise of the Option following the termination of the
Optionholder's Continuous Service (other than upon the Optionholder's death,
Disability or Retirement, or upon a Change in Control, if applicable) would be
prohibited at any time solely because the issuance of shares of Common Stock
would violate the registration requirements under the Securities Act, then the
Option shall terminate on the earlier of (i) the expiration of a period of three
(3) months after the termination of the Optionholder's Continuous Service during
which the exercise of the Option would not be in violation of such registration
requirements, or (ii) the expiration of the term of the Option as set forth in
the Option Agreement.
 
      (i) DISABILITY OF OPTIONHOLDER. In the event that an Optionholder's
Continuous Service terminates as a result of the Optionholder's Disability, the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of termination of Continuous
Service), but only within such period of time ending on the earlier of (i) the
date three (3) years following such termination of Continuous Service (or such
longer or shorter period specified in the Option Agreement), or (ii) the
expiration of the term of the Option as set forth in the Option Agreement. If,
after termination of Continuous Service, the Optionholder does not exercise his
or her Option within the time specified herein or in the Option Agreement (as
applicable), the Option shall terminate.
 
      (j) DEATH OF OPTIONHOLDER. In the event that (i) an Optionholder's
Continuous Service terminates as a result of the Optionholder's death, or (ii)
the Optionholder dies within the period (if any) specified in the Option
Agreement after the termination of the Optionholder's
 
                                      16.
 
<PAGE>
 
Continuous Service for a reason other than death, the Option may be exercised
(to the extent that the Optionholder was entitled to exercise such Option as of
the date of death) by the Optionholder's estate, by a person who acquired the
right to exercise the Option by bequest or inheritance or by a person designated
to exercise the option upon the Optionholder's death, but only within the period
ending on the earlier of (i) the date three (3) years following the date of
death (or such longer or shorter period specified in the Option Agreement), or
(ii) the expiration of the term of such Option as set forth in the Option
Agreement. If, after the Optionholder's death, the Option is not exercised
within the time specified herein or in the Option Agreement (as applicable), the
Option shall terminate.
 
      (k) RETIREMENT OF OPTIONHOLDER. In the event that an Optionholder's
Continuous Service terminates as a result of the Optionholder's Retirement, the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of termination of Continuous
Service), but only within such period of time ending on the earlier of (i) the
date three (3) years following such termination of Continuous Service (or such
longer or shorter period specified in the Option Agreement), or (ii) the
expiration of the term of the Option as set forth in the Option Agreement. If,
after termination of Continuous Service, the Optionholder does not exercise his
or her Option within the time specified herein or in the Option Agreement (as
applicable), the Option shall terminate.
 
      (l) TERMINATION FOR CAUSE. In the event that an Optionholder's Continuous
Service is terminated for Cause, the Option shall terminate upon the termination
date of such Optionholder's Continuous Service, and the Optionholder shall be
prohibited from exercising his or her Option from and after the time of such
termination of Continuous Service.
 
      (m) EARLY EXERCISE. The Option may include a provision whereby the
Optionholder may elect at any time before the Optionholder's Continuous Service
terminates to exercise the Option as to any part or all of the shares of Common
Stock subject to the Option prior to the full vesting of the Option. Any
unvested shares of Common Stock so purchased may be subject to a repurchase
option in favor of the Company or to any other restriction the Board determines
to be appropriate. The Company shall not be required to exercise its repurchase
option until at least six (6) months (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes) have
elapsed following exercise of the Option unless the Board otherwise specifically
provides in the Option.
 
7.    PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.
 
      (a) STOCK BONUS AWARDS. Each Stock Bonus Award Agreement shall be in such
form and shall contain such terms and conditions as the Board shall deem
appropriate. To the extent consistent with the Company's Bylaws, at the Board's
election, shares of Common Stock may be (i) held in book entry form subject to
the Company's instructions until any restrictions relating to the Stock Bonus
Award lapse; or (ii) evidenced by a certificate, which certificate shall be held
in such form and manner as determined by the Board. The terms and conditions of
separate Stock Bonus Award Agreements need not be identical; provided, however,
that each Stock Bonus Award Agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:
 
                                      17.
 
<PAGE>
 
            (i) CONSIDERATION. A Stock Bonus Award may be awarded in
consideration for (i) past or future services rendered to the Company or an
Affiliate, or (ii) any other form of legal consideration that may be acceptable
to the Board, in its sole discretion, and permissible under applicable law.
 
            (ii) VESTING. Shares of Common Stock awarded under a Stock Bonus
Award Agreement may be subject to forfeiture to the Company in accordance with a
vesting schedule to be determined by the Board.
 
            (iii) TERMINATION OF CONTINUOUS SERVICE. In the event a
Participant's Continuous Service terminates, the Company may receive, pursuant
to a forfeiture condition, any or all of the shares of Common Stock held by the
Participant which have not vested as of the date of termination of Continuous
Service under the terms of the Stock Bonus Award Agreement.
 
            (iv) TRANSFERABILITY. Rights to acquire shares of Common Stock under
the Stock Bonus Award Agreement shall be transferable by the Participant only
upon such terms and conditions as are set forth in the Stock Bonus Award
Agreement, as the Board shall determine in its sole discretion, so long as
Common Stock awarded under the Stock Bonus Award Agreement remains subject to
the terms of the Stock Bonus Award Agreement.
 
      (b) STOCK UNIT AWARDS. Each Stock Unit Award Agreement shall be in such
form and shall contain such terms and conditions as the Board shall deem
appropriate. The terms and conditions of separate Stock Unit Award Agreements
need not be identical; provided, however, that each Stock Unit Award Agreement
shall include (through incorporation of the provisions hereof by reference in
the agreement or otherwise) the substance of each of the following provisions:
 
            (i) CONSIDERATION. At the time of grant of a Stock Unit Award, the
Board will determine the consideration, if any, to be paid by the Participant
upon delivery of each share of Common Stock subject to the Stock Unit Award. The
consideration to be paid (if any) by the Participant for each share of Common
Stock subject to a Stock Unit Award may be paid in any form of legal
consideration that may be acceptable to the Board in its sole discretion and
permissible under applicable law.
 
            (ii) VESTING. At the time of the grant of a Stock Unit Award, the
Board may impose such restrictions or conditions on the vesting of the Stock
Unit Award as it, in its sole discretion, deems appropriate.
 
            (iii) PAYMENT. A Stock Unit Award may be settled by the delivery of
shares of Common Stock, their cash equivalent, any combination thereof or in any
other form of consideration, as determined by the Board and contained in the
Stock Unit Award Agreement.
 
            (iv) ADDITIONAL RESTRICTIONS. At the time of the grant of a Stock
Unit Award, the Board, as it deems appropriate, may impose such restrictions or
conditions that delay the delivery of the shares of Common Stock (or their cash
equivalent) subject to a Stock Unit Award to a time following the vesting of
such Stock Unit Award.
 
                                      18.
 
<PAGE>
 
            (v) DIVIDEND EQUIVALENTS. Dividend equivalents may be credited in
respect of shares of Common Stock covered by a Stock Unit Award, as determined
by the Board and contained in the Stock Unit Award Agreement. At the sole
discretion of the Board, such dividend equivalents may be converted into
additional shares of Common Stock covered by the Stock Unit Award in such manner
as determined by the Board. Any additional shares covered by the Stock Unit
Award credited by reason of such dividend equivalents will be subject to all the
terms and conditions of the underlying Stock Unit Award Agreement to which they
relate.
 
            (vi) TERMINATION OF CONTINUOUS SERVICE. Except as otherwise provided
in the applicable Stock Unit Award Agreement, such portion of the Stock Unit
Award that has not vested will be forfeited upon the Participant's termination
of Continuous Service.
 
      (c) STOCK APPRECIATION RIGHTS. Each Stock Appreciation Right Agreement
shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. Stock Appreciation Rights may be granted as stand-alone
Stock Awards or in tandem with other Stock Awards. The terms and conditions of
separate Stock Appreciation Right Agreements need not be identical; provided,
however, that each Stock Appreciation Right Agreement shall include (through
incorporation of the provisions hereof by reference in the agreement or
otherwise) the substance of each of the following provisions:
 
            (i) TERM. No Stock Appreciation Right shall be exercisable after the
expiration of ten (10) years from the date of grant, or such shorter period
specified in the Stock Appreciation Right Agreement.
 
            (ii) STRIKE PRICE. Each Stock Appreciation Right will be denominated
in shares of Common Stock equivalents. The strike price of each Stock
Appreciation Right granted as a stand-alone or tandem Stock Award shall not be
less than one hundred percent (100%) of the Fair Market Value of the Common
Stock equivalents subject to the Stock Appreciation Right on the date of grant.
 
            (iii) CALCULATION OF APPRECIATION. The appreciation distribution
payable on the exercise of a Stock Appreciation Right will be not greater than
an amount equal to the excess of (i) the aggregate Fair Market Value (on the
date of the exercise of the Stock Appreciation Right) of a number of shares of
Common Stock equal to the number of share of Common Stock equivalents in which
the Participant is vested under such Stock Appreciation Right, and with respect
to which the Participant is exercising the Stock Appreciation Right on such
date, over (ii) the strike price that will be determined by the Board at the
time of grant of the Stock Appreciation Right.
 
            (iv) VESTING. At the time of the grant of a Stock Appreciation
Right, the Board may impose such restrictions or conditions to the vesting of
such Stock Appreciation Right as it, in its sole discretion, deems appropriate.
 
            (v) EXERCISE. To exercise any outstanding Stock Appreciation Right,
the Participant must provide written notice of exercise to the Company in
compliance with the provisions of the Stock Appreciation Right Agreement
evidencing such Stock Appreciation Right.
 
                                      19.
 
<PAGE>
 
            (vi) PAYMENT. The appreciation distribution in respect of a Stock
Appreciation Right may be paid in Common Stock, in cash, in any combination of
the two or in any other form of consideration, as determined by the Board and
set forth in the Stock Appreciation Right Agreement evidencing such Stock
Appreciation Right.
 
            (vii) TERMINATION OF CONTINUOUS SERVICE. In the event that a
Participant's Continuous Service terminates, the Participant may exercise his or
her Stock Appreciation Right (to the extent that the Participant was entitled to
exercise such Stock Appreciation Right as of the date of termination) but only
within such period of time ending on the earlier of (i) the date three (3)
months following the termination of the Participant's Continuous Service (or
such longer or shorter period specified in the Stock Appreciation Right
Agreement), or (ii) the expiration of the term of the Stock Appreciation Right
as set forth in the Stock Appreciation Right Agreement. If, after termination,
the Participant does not exercise his or her Stock Appreciation Right within the
time specified herein or in the Stock Appreciation Right Agreement (as
applicable), the Stock Appreciation Right shall terminate.
 
      (d) OTHER STOCK AWARDS. Other forms of Stock Awards valued in whole or in
part by reference to, or otherwise based on, Common Stock may be granted either
alone or in addition to Stock Awards provided for under Section 6 and the
preceding provisions of this Section 7. Subject to the provisions of the Plan,
the Board shall have sole and complete authority to determine the persons to
whom and the time or times at which such Other Stock Awards will be granted, the
number of shares of Common Stock (or the cash equivalent thereof) to be granted
pursuant to such Other Stock Awards and all other terms and conditions of such
Other Stock Awards.
 
8.    NON-DISCRETIONARY GRANTS TO ELIGIBLE DIRECTORS.
 
      (a) GENERAL. The Non-Discretionary Grant Program in this Section 8 allows
Eligible Directors to receive Stock Awards automatically at designated intervals
over their period of Continuous Service on the Board.
 
      (b) ELIGIBILITY. The Stock Awards shall automatically be granted to all
Eligible Directors who meet the specified criteria.
 
      (c) NON-DISCRETIONARY GRANTS.
 
            (i) INITIAL AWARD. Without any further action of the Board, each
person who on or after January 1, 2006 is elected or appointed for the first
time to be an Eligible Director automatically shall, upon the date of his or her
initial election or appointment as an Eligible Director, be granted an Initial
Award as described in Section 8(c)(iii) below.
 
            (ii) ANNUAL AWARDS. Without any further action of the Board, on the
date of each Annual Meeting, commencing with the first Annual Meeting after
January 1, 2006, each person who is then an Eligible Director automatically
shall be granted an Annual Award as described in Section 8(c)(iii) below;
provided, however, that if the person has not been serving as an Eligible
Director for the entire period since the preceding Annual Meeting, then the
number of shares subject to such Annual Award shall be reduced pro rata for each
full month prior to the date of grant during which such person did not serve as
an Eligible Director.
 
                                      20.
 
<PAGE>
 
            (iii) FORM OF INITIAL AND ANNUAL AWARDS. On or before December 31 of
any calendar year, the Board shall determine if all Initial or Annual Awards to
be granted in the subsequent calendar year shall be in the form of Options
described in Section 8(d) or Stock Bonus or Stock Unit Awards described in
Section 8(e). If the Board does not make such a determination on or before
December 31 of a calendar year, all Initial and Annual Awards to be granted in
the subsequent calendar year shall be in the form of Options described in
Section 8(d).
 
                        (1) OPTION. If the Initial or Annual Award is in the
form of an Option, the Initial or Annual Award shall be a Nonstatutory Stock
Option to purchase four thousand one hundred twenty-five (4,125) shares of
Common Stock on the terms and conditions set forth in Section 8(d).
 
                        (2) STOCK BONUS AWARD OR STOCK UNIT AWARD. If the
Initial or Annual Award is in the form of a Stock Bonus Award or Stock Unit
Award, the Initial or Annual Award shall not be more favorable to an Eligible
Director than that number of unvested shares of Common Stock, rounded down to
the next whole number of shares, determined as the quotient obtained by dividing
(i) the "fair value" of the Option specified in Section 8(c)(iii)(1) determined
under generally accepted accounting principles and using the option pricing
model employed by the Company for purposes of estimating the value of
compensatory stock options for financial reporting purposes as reported in the
Annual Report filed on Form 10-K or Form 10-KSB (or any successor forms) with
the Securities and Exchange Commission in the calendar year preceding the date
of grant, by (ii) the Fair Market Value per share of the Common Stock on the
date of grant.
 
      (d)   NON-DISCRETIONARY OPTION GRANT PROVISIONS.
 
            (i) OPTION TYPE. Each Option granted hereunder shall be a
Nonstatutory Stock Option.
 
            (ii) VESTING. Each Option granted hereunder shall be fully vested on
the date the Option is granted.
 
            (iii) TERM. No Option shall be exercisable after the expiration of
ten (10) years from the date it was granted.
 
            (iv) EXERCISE PRICE. The exercise price of each Option shall be one
hundred percent (100%) of the Fair Market Value of the Common Stock subject to
the Option on the date the Option is granted.
 
            (v) TERMINATION OF CONTINUOUS SERVICE. The provisions of Sections
6(g), 6(h), 6(i), 6(j) and 6(k) shall apply to each Option granted hereunder;
provided, however, that in the event that an Optionholder's Continuous Service
terminates upon a Change in Control, the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such Option
as of the date of termination of Continuous Service) within such period of time
ending on the earlier of (i) the date three (3) years following the termination
of the Optionholder's Continuous Service (or such longer or shorter period
specified in the Option Agreement), or (ii) the expiration of the term of the
Option as set forth in the Option Agreement. If, after termination of Continuous
Service, the Optionholder does not exercise his or her Option
 
                                      21.
 
<PAGE>
 
within the time specified herein or in the Option Agreement (as applicable), the
Option shall terminate.
 
            (vi) REMAINING TERMS. The remaining terms and conditions of each
Option shall be as set forth in an Option Agreement in the form adopted from
time to time by the Board; provided, however, that the terms of such Option
Agreement shall be consistent with the provisions of the Plan.
 
      (e)   NON-DISCRETIONARY STOCK BONUS AWARD OR STOCK UNIT AWARD PROVISIONS.
 
            (i) CONSIDERATION. Payment for the Stock Bonus Award or Stock Unit
Award shall be for past or future services rendered to the Company or an
Affiliate. In the event that additional consideration is required to be paid so
that the shares of Common Stock subject to the Stock Bonus Award or Stock Unit
Award shall be deemed fully paid and nonassessable, the Board shall determine
the amount and character of such additional consideration.
 
            (ii) REMAINING TERMS. The remaining terms and conditions of each
grant of Stock Bonus Awards and Stock Unit Awards shall be as set forth in a
Stock Bonus Award Agreement or Stock Unit Award Agreement in a form adopted from
time to time by the Board; provided, however, that the terms of such Stock Bonus
Award Agreement or Stock Unit Award Agreement shall be consistent with the
provisions of the Plan.
 
9.    COVENANTS OF THE COMPANY.
 
      (a) AVAILABILITY OF SHARES. During the terms of the Stock Awards, the
Company shall keep available at all times the number of shares of Common Stock
required to satisfy such Stock Awards.
 
      (b) SECURITIES LAW COMPLIANCE. No Stock Award under the Plan shall be
construed as an offer to sell securities of the Company, and no such offer shall
be outstanding, unless and until the Board, in its sole discretion, has
determined that any such offer, if made, would comply with all applicable
requirements of the U.S. federal securities laws and any other laws to which
such offer, if made, would be subject.
 
10.   USE OF PROCEEDS FROM SALES OF COMMON STOCK.
 
            Proceeds from the sale of shares of Common Stock pursuant to Stock
Awards shall constitute general funds of the Company.
 
11.   MISCELLANEOUS.
 
      (a) ACCELERATION OF EXERCISABILITY AND VESTING. The Board shall have the
power to accelerate the time at which a Stock Award may first be exercised or
the time during which a Stock Award or any part thereof will vest in accordance
with the Plan, notwithstanding the provisions in the Stock Award stating the
time at which it may first be exercised or the time during which it will vest.
 
                                      22.
 
<PAGE>
 
      (b) STOCKHOLDER RIGHTS. No Participant shall be deemed to be the holder
of, or to have any of the rights of a holder with respect to, any shares of
Common Stock subject to such Stock Award unless and until such Participant has
satisfied all requirements for exercise of the Stock Award pursuant to its
terms.
 
      (c) NO EMPLOYMENT OR OTHER SERVICE RIGHTS. Nothing in the Plan, any Stock
Award Agreement or other instrument executed thereunder or in connection with
any Award granted pursuant to the Plan shall confer upon any Participant any
right to continue to serve the Company or an Affiliate in the capacity in effect
at the time the Stock Award was granted or shall affect the right of the Company
or an Affiliate to terminate (i) the employment of an Employee with or without
notice and with or without cause, (ii) the service of a Consultant pursuant to
the terms of such Consultant's agreement with the Company or an Affiliate, or
(iii) the service of a Director pursuant to the Bylaws of the Company or an
Affiliate, and any applicable provisions of the corporate law of the state in
which the Company or the Affiliate is incorporated, as the case may be.
 
      (d) INCENTIVE STOCK OPTION $100,000 LIMITATION. To the extent that the
aggregate Fair Market Value (determined at the time of grant) of Common Stock
with respect to which Incentive Stock Options are exercisable for the first time
by any Optionholder during any calendar year (under all plans of the Company and
any Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or
portions thereof that exceed such limit (according to the order in which they
were granted) shall be treated as Nonstatutory Stock Options, notwithstanding
any contrary provision of the applicable Option Agreement(s).
 
      (e) INVESTMENT ASSURANCES. The Company may require a Participant, as a
condition of exercising or acquiring Common Stock under any Stock Award, (i) to
give written assurances satisfactory to the Company as to the Participant's
knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (ii) to
give written assurances satisfactory to the Company stating that the Participant
is acquiring Common Stock subject to the Stock Award for the Participant's own
account and not with any present intention of selling or otherwise distributing
the Common Stock. The foregoing requirements, and any assurances given pursuant
to such requirements, shall be inoperative if (i) the issuance of the shares
upon the exercise or acquisition of Common Stock under the Stock Award has been
registered under a then currently effective registration statement under the
Securities Act, or (ii) as to any particular requirement, a determination is
made by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws. The Company may, upon
advice of counsel to the Company, place legends on stock certificates issued
under the Plan as such counsel deems necessary or appropriate in order to comply
with applicable securities laws, including, but not limited to, legends
restricting the transfer of the Common Stock.
 
      (f) WITHHOLDING OBLIGATIONS. To the extent provided by the terms of a
Stock Award Agreement, the Company may, in its sole discretion, satisfy any
federal, state or local tax withholding obligation relating to a Stock Award by
any of the following means (in addition to the Company's right to withhold from
any compensation paid to the Participant by the Company)
 
                                      23.
 
<PAGE>
 
or by a combination of such means: (i) causing the Participant to tender a cash
payment; (ii) withholding shares of Common Stock from the shares of Common Stock
issued or otherwise issuable to the Participant in connection with the Stock
Award; or (iii) by such other method as may be set forth in the Stock Award
Agreement.
 
      (g) ELECTRONIC DELIVERY. Any reference herein to a "written" agreement or
document shall include any agreement or document delivered electronically or
posted on the Company's intranet.
 
      (h) PERFORMANCE AWARDS.
 
            (i) PERFORMANCE STOCK AWARDS. A Performance Stock Award is a Stock
Award that may be granted, may vest, or may be exercised based upon the
attainment during a Performance Period of certain Performance Goals. A
Performance Stock Award may, but need not, require the completion of a specified
period of Continuous Service. The length of any Performance Period, the
Performance Goals to be achieved during the Performance Period, and the measure
of whether and to what degree such Performance Goals have been attained shall be
conclusively determined by the Committee, in its sole discretion. The maximum
benefit to be received by any Participant in any calendar year attributable to
Stock Awards described in this Section 11(h)(i) shall not exceed the value of
one million (1,000,000) shares of Common Stock.
 
            (ii) PERFORMANCE CASH AWARDS. A Performance Cash Award is a cash
award that may be granted upon the attainment during a Performance Period of
certain Performance Goals. A Performance Cash Award may, but need not, require
the completion of a specified period of Continuous Service. The length of any
Performance Period, the Performance Goals to be achieved during the Performance
Period, and the measure of whether and to what degree such Performance Goals
have been attained shall be conclusively determined by the Committee, in its
sole discretion. The maximum benefit to be received by any Participant in any
calendar year attributable to cash awards described in this Section 11(h)(ii)
shall not exceed five million dollars ($5,000,000).
 
12.   ADJUSTMENTS UPON CHANGES IN COMMON STOCK; CORPORATE TRANSACTIONS.
 
      (a) CAPITALIZATION ADJUSTMENTS. If any change is made in, or other events
occur with respect to, the Common Stock subject to the Plan or subject to any
Stock Award after the effective date of the Plan set forth in Section 15 without
the receipt of consideration by the Company (through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or other transaction
not involving the receipt of consideration by the Company (each a
"CAPITALIZATION ADJUSTMENT")), the Board shall appropriately adjust: (i) the
class(es) and maximum number of securities subject to the Plan pursuant to
Section 4(a); (ii) the class(es) and maximum number of securities that may be
issued pursuant to the exercise of Incentive Stock Options pursuant to Section
4(b); (iii) the class(es) and maximum number of securities that may be awarded
to any person pursuant to Sections 5(c) and 11(h); (iv) the class(es) and number
of securities subject to each Stock Award under the Non-Discretionary Grant
Program under Section 8; and (v) the class(es) and number of securities and
price per share of stock subject to outstanding Stock Awards. The Board shall
make such
 
                                      24.
 
<PAGE>
 
adjustments, and its determination shall be final, binding and conclusive.
(Notwithstanding the foregoing, the conversion of any convertible securities of
the Company shall not be treated as a transaction "without receipt of
consideration" by the Company.)
 
      (b) DISSOLUTION OR LIQUIDATION. In the event of a dissolution or
liquidation of the Company, all outstanding Stock Awards (other than Stock
Awards consisting of vested and outstanding shares of Common Stock not subject
to the Company's right of repurchase) shall terminate immediately prior to the
completion of such dissolution or liquidation, and the shares of Common Stock
subject to the Company's repurchase option may be repurchased by the Company
notwithstanding the fact that the holder of such Stock Award is providing
Continuous Service, provided, however, that the Board may, in its sole
discretion, cause some or all Stock Awards to become fully vested, exercisable
and/or no longer subject to repurchase or forfeiture (to the extent such Stock
Awards have not previously expired or terminated) before the dissolution or
liquidation is completed but contingent on its completion.
 
      (c) CORPORATE TRANSACTION. The following provisions shall apply to Stock
Awards in the event of a Corporate Transaction unless otherwise provided in a
written agreement between the Company or any Affiliate and the holder of the
Stock Award:
 
            (i) STOCK AWARDS MAY BE ASSUMED. In the event of a Corporate
Transaction, any surviving corporation or acquiring corporation (or the
surviving or acquiring corporation's parent company) may assume or continue any
or all Stock Awards outstanding under the Plan or may substitute similar stock
awards for Stock Awards outstanding under the Plan (including, but not limited
to, awards to acquire the same consideration paid to the stockholders of the
Company pursuant to the Corporate Transaction), and any reacquisition or
repurchase rights held by the Company in respect of Common Stock issued pursuant
to Stock Awards may be assigned by the Company to the successor of the Company
(or the successor's parent company, if any), in connection with such Corporate
Transaction. A surviving corporation or acquiring corporation may choose to
assume or continue only a portion of a Stock Award or substitute a similar stock
award for only a portion of a Stock Award. The terms of any assumption,
continuation or substitution shall be set by the Board in accordance with the
provisions of Section 3(b).
 
            (ii) STOCK AWARDS HELD BY CURRENT PARTICIPANTS. In the event of a
Corporate Transaction in which the surviving corporation or acquiring
corporation (or its parent company) does not assume or continue such outstanding
Stock Awards or substitute similar stock awards for such outstanding Stock
Awards, then with respect to Stock Awards that have not been assumed, continued
or substituted and that are held by Participants whose Continuous Service has
not terminated prior to the effective time of the Corporate Transaction
(referred to as the "CURRENT PARTICIPANTS"), the vesting of such Stock Awards
(and, if applicable, the time at which such Stock Awards may be exercised) shall
(contingent upon the effectiveness of the Corporate Transaction) be accelerated
in full to a date prior to the effective time of such Corporate Transaction as
the Board shall determine (or, if the Board shall not determine such a date, to
the date that is five (5) days prior to the effective time of the Corporate
Transaction), and such Stock Awards shall terminate if not exercised (if
applicable) at or prior to the effective time of the Corporate Transaction, and
any reacquisition or repurchase rights held by the Company
 
                                      25.
 
<PAGE>
 
with respect to such Stock Awards shall lapse (contingent upon the effectiveness
of the Corporate Transaction).
 
            (iii) STOCK AWARDS HELD BY OTHERS. In the event of a Corporate
Transaction in which the surviving corporation or acquiring corporation (or its
parent company) does not assume or continue such outstanding Stock Awards or
substitute similar stock awards for such outstanding Stock Awards, then with
respect to Stock Awards that have not been assumed, continued or substituted and
that are held by persons other than Current Participants, the vesting of such
Stock Awards (and, if applicable, the time at which such Stock Award may be
exercised) shall not be accelerated and such Stock Awards (other than a Stock
Award consisting of vested and outstanding shares of Common Stock not subject to
the Company's right of repurchase) shall terminate if not exercised (if
applicable) prior to the effective time of the Corporate Transaction; provided,
however, that any reacquisition or repurchase rights held by the Company with
respect to such Stock Awards shall not terminate and may continue to be
exercised notwithstanding the Corporate Transaction.
 
            (iv) PAYMENT FOR STOCK AWARDS IN LIEU OF EXERCISE. Notwithstanding
the foregoing, in the event a Stock Award will terminate if not exercised prior
to the effective time of a Corporate Transaction, the Board may provide, in its
sole discretion, that the holder of such Stock Award may not exercise such Stock
Award but will receive a payment, in such form as may be determined by the
Board, equal in value to the excess, if any, of (i) the value of the property
the holder of the Stock Award would have received upon the exercise of the Stock
Award, over (ii) any exercise price payable by such holder in connection with
such exercise.
 
      (d) CHANGE IN CONTROL. A Stock Award may be subject to additional
acceleration of vesting and exercisability upon or after a Change in Control as
may be provided in the Stock Award Agreement for such Stock Award or as may be
provided in any other written agreement between the Company or any Affiliate and
the Participant, but in the absence of such provision, no such acceleration
shall occur.
 
13.   AMENDMENT OF THE PLAN AND AWARDS.
 
      (a) AMENDMENT OF PLAN. Subject to the limitations, if any, of applicable
law, the Board at any time, and from time to time, may amend the Plan. However,
except as provided in Section 12(a) relating to Capitalization Adjustments, no
amendment shall be effective unless approved by the stockholders of the Company
to the extent stockholder approval is necessary to satisfy applicable law.
 
      (b) STOCKHOLDER APPROVAL. The Board, in its sole discretion, may submit
any other amendment to the Plan for stockholder approval, including, but not
limited to, amendments to the Plan intended to satisfy the requirements of
Section 162(m) of the Code and the regulations thereunder regarding the
exclusion of performance-based compensation from the limit on corporate
deductibility of compensation paid to Covered Employees.
 
      (c) CONTEMPLATED AMENDMENTS. It is expressly contemplated that the Board
may amend the Plan in any respect the Board deems necessary or advisable to
provide eligible Employees with the maximum benefits provided or to be provided
under the provisions of the
 
                                      26.
 
<PAGE>
 
Code and the regulations promulgated thereunder relating to Incentive Stock
Options and/or to bring the Plan and/or Incentive Stock Options granted under it
into compliance therewith.
 
      (d) NO IMPAIRMENT OF RIGHTS. Rights under any Award granted before
amendment of the Plan shall not be impaired by any amendment of the Plan unless
(i) the Company requests the consent of the affected Participant, and (ii) such
Participant consents in writing.
 
      (e) AMENDMENT OF AWARDS. The Board, at any time and from time to time, may
amend the terms of any one or more Awards, including, but not limited to,
amendments to provide terms more favorable than previously provided in the Stock
Award Agreement or the written terms of a Performance Cash Award, subject to any
specified limits in the Plan that are not subject to Board discretion; provided,
however, that the rights under any Award shall not be impaired by any such
amendment unless (i) the Company requests the consent of the affected
Participant, and (ii) such Participant consents in writing.
 
14.   TERMINATION OR SUSPENSION OF THE PLAN.
 
      (a) PLAN TERM. The Board may suspend or terminate the Plan at any time.
Unless sooner terminated, the Plan shall terminate on the day before the tenth
(10th) anniversary of the effective date specified in Section 15. No Awards may
be granted under the Plan while the Plan is suspended or after it is terminated.
 
      (b) NO IMPAIRMENT OF RIGHTS. Suspension or termination of the Plan shall
not impair rights and obligations under any Award granted while the Plan is in
effect except with the written consent of the affected Participant.
 
15.   EFFECTIVE DATE OF PLAN.
 
      The Plan shall become effective September 17, 2005.
 
16.   CHOICE OF LAW.
 
      The law of the State of Delaware shall govern all questions concerning the
construction, validity and interpretation of this Plan, without regard to that
state's conflict of laws rules.
 
                                      27.
</TEXT>
</DOCUMENT>