<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>ex99-1form8k_081204.txt
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
                                                                    EXHIBIT 99.1
                                                                    ------------
 
 
                          POLO RALPH LAUREN CORPORATION
 
                       1997 LONG-TERM STOCK INCENTIVE PLAN
                 (AS AMENDED AND RESTATED AS OF AUGUST 12, 2004)
 
 
SECTION 1.        PURPOSE AND HISTORY. The purposes of this Polo Ralph Lauren
Corporation 1997 Long-Term Stock Incentive Plan are to promote the interests of
Polo Ralph Lauren Corporation and its stockholders by (i) attracting and
retaining exceptional officers and other employees and third party service
providers of the Company and its Subsidiaries, as defined below; (ii) motivating
such individuals by means of performance-related incentives to achieve
longer-range performance goals; and (iii) enabling such individuals to
participate in the long-term growth and financial success of the Company. The
Plan was originally adopted on June 9, 1997, amended on June 13, 2000, amended
and restated as of July 1, 2004, subject to the approval of the Company's
stockholders, and was further amended and restated as of August 12, 2004.
 
SECTION 2.        DEFINITIONS. As used in the Plan, the following terms shall
have the meanings set forth below:
 
                  "Affiliate" shall mean (i) any entity that, directly or
indirectly, is controlled by, or controls or is under common control with, the
Company and (ii) any entity in which the Company has a significant equity
interest, in either case as determined by the Committee.
 
                  "Award" shall mean any Option, Stock Appreciation Right,
Restricted Stock Award, Restricted Stock Unit Award, Performance Award, Other
Stock-Based Award or Performance Compensation Award.
 
                  "Award Agreement" shall mean any written agreement, contract,
or other instrument or document evidencing any Award, which may, but need not,
be executed or acknowledged by a Participant.
 
                  "Board" shall mean the Board of Directors of the Company.
 
                  "Change of Control" shall mean the occurrence of any of the
following: (i) the sale, lease, transfer, conveyance or other disposition, in
one or a series of related transactions, of all or substantially all of the
assets of the Company to any "person" or "group" (as such terms are used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than the Permitted
Holders, (ii) any person or group, other than the Permitted Holders, is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50% of the total voting power of the voting
stock of the Company, including by way of merger, consolidation or otherwise or
(iii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board
 
<PAGE>
 
                                                                               2
 
 
(together with any new directors whose election by such Board or whose
nomination for election by the shareholders of the Company was approved by a
vote of a majority of the directors of the Company, then still in office, who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board, then in office.
 
                  "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
 
                  "Committee" shall mean either (i) the Board or (ii) a
committee of the Board designated by the Board to administer the Plan and
composed of not less two directors, each of whom is required to be a
"Non-Employee Director" (within the meaning of Rule 16b-3) and an "outside
director" (within the meaning of Section 162(m) of the Code) to the extent Rule
16b-3 and Section 162(m) of the Code, respectively, are applicable to the
Company and the Plan. If at any time such a committee has not been so
designated, the Board shall constitute the Committee.
 
                  "Company" shall mean Polo Ralph Lauren Corporation, together
with any successor thereto.
 
                  "Effective Date" shall mean June 9, 1997.
 
                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
 
                  "Fair Market Value" shall mean, (A) with respect to any
property other than Shares, the fair market value of such property determined by
such methods or procedures as shall be established from time to time by the
Committee and (B) with respect to the Shares, as of any date, (i) the mean
between the high and low sales prices of the Shares as reported on the composite
tape for securities traded on the New York Stock Exchange for such date (or if
not then trading on the New York Stock Exchange, the mean between the high and
low sales price of the Shares on the stock exchange or over-the-counter market
on which the Shares are principally trading on such date), or if, there were no
sales on such date, on the closest preceding date on which there were sales of
Shares or (ii) in the event there shall be no public market for the Shares on
such date, the fair market value of the Shares as determined in good faith by
the Committee.
 
                  "Full Value Award" shall mean an Award which is other than in
the form of an Option or Stock Appreciation Right, and that is settled by the
issuance of Shares.
 
                  "Incentive Stock Option" shall mean a right to purchase Shares
from the Company that is granted under Section 6 of the Plan and that is
intended to meet the requirements of Section 422 of the Code or any successor
provision thereto.
 
                  "Negative Discretion" shall mean the discretion authorized by
the Plan to be applied by the Committee to eliminate or reduce the size of a
Performance Compensation Award; PROVIDED that the exercise of such discretion
would not cause the
 
<PAGE>
 
                                                                               3
 
 
Performance Compensation Award to fail to qualify as "performance-based
compensation" under Section 162(m) of the Code. By way of example and not by way
of limitation, in no event shall any discretionary authority granted to the
Committee by the Plan including, but not limited to, Negative Discretion, be
used to (a) grant or provide payment in respect of Performance Compensation
Awards for a Performance Period if the Performance Goals for such Performance
Period have not been attained; or (b) increase a Performance Compensation Award
above the maximum amount payable under Sections 4(a) or 11(d)(vi) of the Plan.
Notwithstanding anything herein to the contrary, in no event shall Negative
Discretion be exercised by the Committee with respect to any Option or Stock
Appreciation Right (other than an Option or Stock Appreciation Right that is
intended to be a Performance Compensation Award under Section 11 of the Plan).
 
                  "Non-Qualified Stock Option" shall mean a right to purchase
Shares from the Company that is granted under Section 6 of the Plan and that is
not intended to be an Incentive Stock Option.
 
                  "Option" shall mean an Incentive Stock Option or a
Non-Qualified Stock Option.
 
                  "Other Stock-Based Award" shall mean any right granted under
Section 10 of the Plan.
 
                  "Participant" shall mean any officer or other employee,
director or consultant of the Company or its Subsidiaries eligible for an Award
under Section 5 and selected by the Committee to receive an Award under the
Plan.
 
                  "Performance Award" shall mean any right granted under Section
9 of the Plan.
 
                  "Performance Compensation Award" shall mean any Award
designated by the Committee as a Performance Compensation Award pursuant to
Section 11 of the Plan.
 
                  "Performance Criteria" shall mean the criterion or criteria
that the Committee shall select for purposes of establishing the Performance
Goal(s) for a Performance Period with respect to any Performance Compensation
Award under the Plan. The Performance Criteria that will be used to establish
the Performance Goal(s) shall be based on the attainment of specific levels of
performance of the Company (or Subsidiary, Affiliate, division or operational
unit of the Company) and shall be limited to the following: (a) net earnings or
net income (before or after taxes); (b) basic or diluted earnings per share
(before or after taxes); (c) net revenue or net revenue growth; (d) gross profit
or gross profit growth; (e) net operating profit (before or after taxes); (f)
return measures (including, but not limited to, return on assets, capital,
invested capital, equity, or sales); (g) cash flow (including, but not limited
to, operating cash flow, free cash flow, and cash flow return on capital); (h)
earnings before or after taxes, interest, depreciation and/or amortization; (i)
gross or operating margins; (j) productivity ratios; (k) share price (including,
but not limited to, growth measures and total stockholder return); (l) expense
 
<PAGE>
 
                                                                               4
 
 
targets; (m) margins; (n) operating efficiency; (o) objective measures of
customer satisfaction; (p) working capital targets; (q) measures of economic
value added; and (r) inventory control. Any one or more of the Performance
Criterion may be used to measure the performance of the Company, Subsidiary
and/or Affiliate as a whole or any business unit of the Company, Subsidiary
and/or Affiliate or any combination thereof, as the Committee may deem
appropriate, or any of the above Performance Criteria as compared to the
performance of a group of comparator companies, or published or special index
that the Committee, in its sole discretion, deems appropriate, or the Company
may select Performance Criterion (k) above as compared to various stock market
indices. The Committee also has the authority to provide for accelerated vesting
of any Award based on the achievement of Performance Goals pursuant to the
Performance Criteria specified in this paragraph. To the extent required under
Section 162(m) of the Code, the Committee shall, within the first 90 days of a
Performance Period (or, if longer, within the maximum period allowed under
Section 162(m) of the Code), define in an objective fashion the manner of
calculating the Performance Criteria it selects to use for such Performance
Period. In the event that applicable tax and/or securities laws change to permit
Committee discretion to alter the governing Performance Criteria without
obtaining stockholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining stockholder approval.
 
                  "Performance Formula" shall mean, for a Performance Period,
the one or more objective formulas applied against the relevant Performance Goal
to determine, with regard to the Performance Compensation Award of a particular
Participant, whether all, some portion but less than all, or none of the
Performance Compensation Award has been earned for the Performance Period.
 
                  "Performance Goals" shall mean, for a Performance Period, the
one or more goals established by the Committee for the Performance Period based
upon the Performance Criteria. The Committee is authorized at any time during
the first 90 days of a Performance Period, or at any time thereafter (but only
to the extent the exercise of such authority after the first 90 days of a
Performance Period would not cause the Performance Compensation Awards granted
to any Participant for the Performance Period to fail to qualify as
"performance-based compensation" under Section 162(m) of the Code), in its sole
and absolute discretion, to adjust or modify the calculation of a Performance
Goal for such Performance Period to the extent permitted under Section 162(m) of
the Code in order to prevent the dilution or enlargement of the rights of
Participants based on the following events: (a) asset write-downs, (b)
litigation or claim judgments or settlements, (c) the effect of changes in tax
laws, accounting principles, or other laws or provisions affecting reported
results, (d) any reorganization and restructuring programs, (e) extraordinary
nonrecurring items as described in Accounting Principles Board Opinion No. 30
(or any successor pronouncement thereto) and/or in management's discussion and
analysis of financial condition and results of operations appearing in the
Company's annual report to stockholders for the applicable year, (f)
acquisitions or divestitures, (g) any other unusual or nonrecurring events, (h)
foreign exchange gains and losses, and (i) a change in the Company's fiscal
year. To the extent
 
<PAGE>
 
                                                                               5
 
 
such inclusions or exclusions affect Awards to Participants, they shall be
prescribed in a form that meets the requirements of Section 162(m) of the Code
for deductibility.
 
                  "Performance Period" shall mean the one or more periods of
time of at least one year in duration, as the Committee 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
Compensation Award.
 
                  "Permitted Holders" shall mean, as of the date of
determination, (i) any and all of Ralph Lauren, his spouse, his siblings and
their spouses, and descendants of any of them (whether natural or adopted)
(collectively, the "Lauren Group") and (ii) any trust established and maintained
primarily for the benefit of any member of the Lauren Group and any entity
controlled by any member of the Lauren Group.
 
                  "Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, government
or political subdivision thereof or other entity.
 
                  "Plan" shall mean this Polo Ralph Lauren Corporation 1997
Long-Term Stock Incentive Plan.
 
                  "Restatement Effective Date" shall mean July 1, 2004.
 
                  "Restricted Stock" shall mean any Share granted under Section
8 of the Plan.
 
                  "Restricted Stock Unit" shall mean any unit granted under
Section 8 of the Plan.
 
                  "Rule 16b-3" shall mean Rule 16b-3 as promulgated and
interpreted by the SEC under the Exchange Act, or any successor rule or
regulation thereto as in effect from time to time.
 
                  "SEC" shall mean the Securities and Exchange Commission or any
successor thereto and shall include the Staff thereof.
 
                  "Shares" shall mean the shares of Class A Common Stock of the
Company, $.01 par value, or such other securities of the Company (i) into which
such common shares shall be changed by reason of a recapitalization, merger,
consolidation, split-up, combination, exchange of shares or other similar
transaction or (ii) as may be determined by the Committee pursuant to Section
4(b).
 
                  "Stock Appreciation Right" shall mean any right granted under
Section 7 of the Plan.
 
                  "Subsidiary" shall mean (i) any entity that, directly or
indirectly, is controlled by the Company and (ii) any entity in which the
Company has a significant equity interest, in either case as determined by the
Committee.
 
<PAGE>
 
                                                                               6
 
 
                  "Substitute Awards" shall have the meaning specified in
Section 4(c).
 
                  "Third Party Service Provider" means any consultant, agent,
advisor, or independent contractor who is a natural person and who renders
services to the Company, a Subsidiary, or an Affiliate, that (a) are not in
connection with the offer and sale of the Company's securities in a capital
raising transaction, and (b) do not directly or indirectly promote or maintain a
market for the Company's securities.
 
SECTION 3.        EFFECTIVE DATE AND ADMINISTRATION.
 
        (a)       The Plan was originally effective as of the Effective Date.
The amendment and restatement of the Plan is effective as of the Restatement
Effective Date; provided that the amendment and restatement of the Plan, and the
validity and exercisabilty of any and all Awards granted pursuant to the Plan in
respect of Shares in excess of those reserved for Awards immediately prior to
the Restatement Effective Date is contingent upon approval of the Plan by the
stockholders of the Company in a manner intended to comply with the stockholder
approval requirements of Sections 162(m) and 422 of the Code, and of the New
York Stock Exchange.
 
        (b)       The Plan shall be administered by the Committee. Subject to
the terms of the Plan and applicable law, and in addition to other express
powers and authorizations conferred on the Committee by the Plan, the Committee
shall have full power and authority to: (i) designate Participants; (ii)
determine the type or types of Awards to be granted to a Participant and
designate those Awards which shall constitute Performance Compensation Awards;
(iii) determine the number of Shares to be covered by, or with respect to which
payments, rights, or other matters are to be calculated in connection with,
Awards; (iv) determine the terms and conditions of any Award; (v) determine
whether, to what extent, and under what circumstances Awards may be settled or
exercised in cash, Shares, other securities, other Awards or other property, or
canceled, forfeited, or suspended and the method or methods by which Awards may
be settled, exercised, canceled, forfeited, or suspended; (vi) determine
whether, to what extent, and under what circumstances cash, Shares, other
securities, other Awards, other property, and other amounts payable with respect
to an Award (subject to Section 162(m) of the Code with respect to Performance
Compensation Awards) shall be deferred either automatically or at the election
of the holder thereof or of the Committee; (vii) interpret, administer reconcile
any inconsistency, correct any default and/or supply any omission in the Plan
and any instrument or agreement relating to, or Award made under, the Plan;
(viii) establish, amend, suspend, or waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper administration
of the Plan; (ix) establish and administer Performance Goals and certify
whether, and to what extent, they have been attained; and (x) make any other
determination and take any other action that the Committee deems necessary or
desirable for the administration of the Plan.
 
        (c)       Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations, and other decisions under or with
respect to the Plan or any Award shall be within the sole discretion of the
Committee, may be made at any time
 
<PAGE>
 
                                                                               7
 
 
and shall be final, conclusive, and binding upon all Persons, including the
Company, any Affiliate, any Participant, any holder or beneficiary of any Award,
and any stockholder.
 
        (d)       The mere fact that a Committee member shall fail to qualify as
a "Non-Employee Director" or "outside director" within the meaning of Rule 16b-3
and Code Section 162(m), respectively, shall not invalidate any award made by
the Committee which award is otherwise validly made under the Plan.
 
        (e)       No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Award
hereunder.
 
        (f)       With respect to any Performance Compensation Award granted
under the Plan, the Plan shall be interpreted and construed in accordance with
Section 162(m) of the Code.
 
        (g)       Notwithstanding the foregoing, the Committee may delegate, in
a manner consistent with Section 157(c) of the Delaware General Corporation Law
(or other applicable law), to one or more officers of the Company the authority
to grant awards to Participants who are not officers or directors of the Company
subject to Section 16 of the Exchange Act or "covered employees" within the
meaning of Section 162(m) of the Code.
 
SECTION 4.        SHARES AVAILABLE FOR AWARDS.
 
        (a)       SHARES AVAILABLE. Subject to adjustment as provided in Section
4(b), the aggregate number of Shares with respect to which Awards may be granted
under the Plan shall be 26,000,000; the maximum number of Shares with respect to
which Options and Stock Appreciation Rights may be granted to any Participant in
any fiscal year shall be 1,000,000 and the maximum number of Shares which may be
paid to a Participant in the Plan in connection with the settlement of any
Award(s) designated as "Performance Compensation Awards" in respect of a single
Performance Period shall be 1,000,000 or, in the event such Performance
Compensation Award is paid in cash, the equivalent cash value thereof. In
addition, of the Shares reserved for issuance under the Plan pursuant to this
Section 4(a), no more than 26,000,000 of the reserved Shares may be issued
pursuant to Incentive Stock Options. If, after the effective date of the Plan,
any Shares covered by an Award granted under the Plan, or to which such an Award
relates, are forfeited, or if an Award has expired, terminated or been canceled
for any reason whatsoever (other than by reason of exercise or vesting), then
the Shares covered by such Award shall again be, or shall become, Shares with
respect to which Awards may be granted hereunder. In addition, Shares delivered
(either directly or by means of attestation or withholding) in full or partial
payment of the exercise price of any Award or of any tax withholding obligation,
shall be deducted from the number of Shares delivered to the Participant
pursuant to such Award for purposes of determining the number of Shares acquired
pursuant to the Plan.
 
        (b)       ADJUSTMENTS. Notwithstanding any provisions of the Plan to the
contrary, in the event that the Committee determines that any dividend or other
distribution
 
<PAGE>
 
                                                                               8
 
 
(whether in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, issuance of warrants or other rights
to purchase Shares or other securities of the Company, or other similar
corporate transaction or event affects the Shares such that an adjustment is
determined by the Committee in its discretion to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan, then the Committee shall, in such manner as
it may deem equitable, adjust any or all of (i) the number of Shares or other
securities of the Company (or number and kind of other securities or property)
with respect to which Awards may be granted, (ii) the number of Shares or other
securities of the Company (or number and kind of other securities or property)
subject to outstanding Awards, and (iii) the grant or exercise price with
respect to any Award or, if deemed appropriate, make provision for a cash
payment to the holder of an outstanding Award in consideration for the
cancellation of such Award which, in the case of Options and Stock Appreciation
Rights shall equal the excess if any, of the Fair Market Value of the Shares
subject to such Options or Stock Appreciation Rights over the aggregate exercise
price or grant price of such Options or Stock Appreciation Rights.
 
        (c)       SUBSTITUTE AWARDS. Subject to Section 12(b), Awards may, in
the discretion of the Committee, be made under the Plan in assumption of, or in
substitution for, outstanding awards previously granted by the Company or its
Affiliates or a company acquired by the Company or with which the Company
combines ("Substitute Awards"). The number of Shares underlying any Substitute
Awards shall be counted against the aggregate number of Shares available for
Awards under the Plan.
 
        (d)       SOURCES OF SHARES DELIVERABLE UNDER AWARDS. Any Shares
delivered pursuant to an Award may consist, in whole or in part, of authorized
and unissued Shares or of treasury Shares.
 
        (e)       FULL VALUE AWARDS. Except with respect to a maximum of five
percent (5%) of the shares authorized under the Plan, any Full Value Awards that
vest solely on the basis of the Participant's continued employment with or
provision of service to the Company shall not provide for vesting that is any
more rapid than annual pro rata vesting over a three (3) year period, and any
Full Value Awards that vest upon the attainment of performance goals shall
provide for a performance period of at least twelve (12) months. Subject to the
rights of any Participant under an outstanding award, the vesting of Full Value
Awards may only be accelerated for (i) death, disability, retirement or other
termination of employment of the Participant or (ii) a Change of Control.
 
<PAGE>
 
                                                                               9
 
 
SECTION 5.        ELIGIBILITY. Any officer or other employee, or Third Party
Service Provider to the Company or any of its Subsidiaries (including any
prospective officer, employee, or Third Party Service Provider) shall be
eligible to be designated a Participant.
 
SECTION 6.        STOCK OPTIONS.
 
        (a)       GRANT. Subject to the provisions of the Plan, the Committee
shall have sole and complete authority to determine the Participants to whom
Options shall be granted, the number of Shares to be covered by each Option, the
exercise price therefor and the conditions and limitations applicable to the
exercise of the Option. The Committee shall have the authority to grant
Incentive Stock Options, or to grant Non-Qualified Stock Options, or to grant
both types of Options. In the case of Incentive Stock Options, the terms and
conditions of such grants shall be subject to and comply with such rules as may
be prescribed by Section 422 of the Code, as from time to time amended, and any
regulations implementing such statute. All Options when granted under the Plan
are intended to be Non-Qualified Stock Options, unless the applicable Award
Agreement expressly states that the Option is intended to be an Incentive Stock
Option. If an Option is intended to be an Incentive Stock Option, and if for any
reason such Option (or any portion thereof) shall not qualify as an Incentive
Stock Option, then, to the extent of such nonqualification, such Option (or
portion thereof) shall be regarded as a Non-Qualified Stock Option appropriately
granted under the Plan; provided that such Option (or portion thereof) otherwise
complies with the Plan's requirements relating to Non-Qualified Stock Options.
 
        (b)       EXERCISE PRICE. The Committee shall establish the exercise
price at the time each Option is granted, which exercise price shall be set
forth in the applicable Award Agreement, but shall be no less than the Fair
Market Value of a Share at the date of grant.
 
        (c)       EXERCISE. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Committee may, in its sole
discretion, specify in the applicable Award Agreement or thereafter. Each Option
shall expire at such time as the Committee shall determine at the time of grant;
PROVIDED, HOWEVER, no Option shall be exercisable after the tenth anniversary of
the grant date. The Committee may impose such conditions with respect to the
exercise of Options, including without limitation, any relating to the
application of federal or state securities laws, as it may deem necessary or
advisable. Options with an exercise price equal to or greater than the Fair
Market Value per Share as of the date of grant are intended to qualify as
"performance-based compensation" under Section 162(m) of the Code.
 
        (d)       PAYMENT.
 
                  (i)      No Shares shall be delivered pursuant to any exercise
of an Option until payment in full of the aggregate exercise price therefor is
received by the Company. Such payment may be made in cash, or its equivalent or
(x) by tendering to the Company Shares valued at Fair Market Value at the time
the Option is exercised, which are not the
 
<PAGE>
 
                                                                              10
 
 
subject of any pledge or other security interest and which have been owned by
such optionee for at least 6 months or which have such other characteristics, if
any, as may be determined by the Committee, or (y) subject to such rules as may
be established by the Committee, through delivery of irrevocable instructions to
a broker to sell the Shares otherwise deliverable upon the exercise of the
Option and to deliver promptly to the Company an amount equal to the aggregate
exercise price, or by a combination of the foregoing, provided that the combined
value of all cash and cash equivalents and the Fair Market Value of any such
Shares so tendered to the Company as of the date of such tender is at least
equal to such aggregate exercise price.
 
                  (ii)     Wherever in this Plan or any Award Agreement a
Participant is permitted to pay the exercise price of an Option or taxes
relating to the exercise of an Option by delivering Shares, the Participant may,
subject to procedures satisfactory to the Committee, satisfy such delivery
requirement by presenting proof of beneficial ownership of such Shares, in which
case the Company shall treat the Option as exercised without further payment and
shall withhold such number of Shares from the Shares acquired by the exercise of
the Option.
 
SECTION 7.        STOCK APPRECIATION RIGHTS.
 
        (a)       GRANT. Subject to the provisions of the Plan, the Committee
shall have sole and complete authority to determine the Participants to whom
Stock Appreciation Rights shall be granted, the number of Shares to be covered
by each Stock Appreciation Right Award, the grant price thereof (which shall be
no less than the Fair Market Value of a Share at the date of grant) and the
conditions and limitations applicable to the exercise thereof. Stock
Appreciation Rights with a grant price equal to or greater than the Fair Market
Value per Share as of the date of grant are intended to qualify as
"performance-based compensation" under Section 162(m) of the Code. Stock
Appreciation Rights may be granted in tandem with another Award, in addition to
another Award, or freestanding and unrelated to another Award. Stock
Appreciation Rights granted in tandem with or in addition to an Award may be
granted either at the same time as the Award or at a later time.
 
        (b)       EXERCISE AND PAYMENT. A Stock Appreciation Right shall entitle
the Participant to receive an amount equal to the excess of the Fair Market
Value of a Share on the date of exercise of the Stock Appreciation Right over
the grant price thereof. The Committee shall determine whether a Stock
Appreciation Right shall be settled in cash, Shares or a combination of cash and
Shares.
 
        (c)       OTHER TERMS AND CONDITIONS. Subject to the terms of the Plan
and any applicable Award Agreement, the Committee shall determine, at or after
the grant of a Stock Appreciation Right, the term, methods of exercise, methods
and form of settlement, and any other terms and conditions of any Stock
Appreciation Right; PROVIDED, HOWEVER, that no Stock Appreciation rights shall
be exercisable after the tenth anniversary of the date of its grant. Any such
determination by the Committee may be changed by the Committee from time to time
and may govern the exercise of Stock Appreciation Rights granted or exercised
prior to such determination as well as Stock Appreciation Rights
 
<PAGE>
 
                                                                              11
 
 
granted or exercised thereafter. The Committee may impose such conditions or
restrictions on the exercise of any Stock Appreciation Right as it shall deem
appropriate.
 
SECTION 8.        RESTRICTED STOCK AND RESTRICTED STOCK UNITS.
 
        (a)       GRANT. Subject to the provisions of the Plan, the Committee
shall have sole and complete authority to determine the Participants to whom
Shares of Restricted Stock and Restricted Stock Units shall be granted, the
number of Shares of Restricted Stock and/or the number of Restricted Stock Units
to be granted to each Participant, the duration of the period during which, and
the conditions, if any, under which, the Restricted Stock and Restricted Stock
Units may be forfeited to the Company, and the other terms and conditions of
such Awards.
 
        (b)       TRANSFER RESTRICTIONS. Shares of Restricted Stock and
Restricted Stock Units may not be sold, assigned, transferred, pledged or
otherwise encumbered, except, in the case of Restricted Stock, as provided in
the Plan or the applicable Award Agreements. Certificates issued in respect of
Shares of Restricted Stock shall be registered in the name of the Participant
and deposited by such Participant, together with a stock power endorsed in
blank, with the Company. Upon the lapse of the restrictions applicable to such
Shares of Restricted Stock, the Company shall deliver such certificates to the
Participant or the Participant's legal representative.
 
        (c)       PAYMENT. Each Restricted Stock Unit shall have a value equal
to the Fair Market Value of a Share. Restricted Stock Units shall be paid in
cash, Shares, other securities or other property, as determined in the sole
discretion of the Committee, upon the lapse of the restrictions applicable
thereto, or otherwise in accordance with the applicable Award Agreement.
Dividends paid on any Shares of Restricted Stock may be paid directly to the
Participant, withheld by the Company subject to vesting of the Restricted Shares
pursuant to the terms of the applicable Award Agreement, or may be reinvested in
additional Shares of Restricted Stock or in additional Restricted Stock Units,
as determined by the Committee in its sole discretion.
 
        (d)       MINIMUM VESTING REQUIREMENTS. Notwithstanding the foregoing,
(i) except as provided in Section 4(e), any Awards of Shares of Restricted Stock
and/or Restricted Stock Units that are Full Value Awards and vest solely on the
basis of the Participant's continued employment with or provision of service to
the Company shall not provide for vesting that is any more rapid than annual pro
rata vesting over a three (3) year period, and any Awards of Shares of
Restricted Stock and/or Restricted Stock Units that are Full Value Awards and
vest upon the attainment of performance goals (whether or not combined with
other conditions) shall provide for a performance period of at least twelve (12)
months; and (ii) subject to the rights of any Participant under an Award
outstanding as of August 12, 2004, the vesting of Awards of Shares of Restricted
Stock and/or Restricted Stock Units that are Full Value Awards may only be
accelerated upon (a) death, disability, retirement or other termination of
employment of the Participant or (b) a Change of Control.
 
<PAGE>
 
                                                                              12
 
 
SECTION 9.        PERFORMANCE AWARDS.
 
        (a)       GRANT. The Committee shall have sole and complete authority to
determine the Participants who shall receive a "Performance Award", which shall
consist of a right which is (i) denominated in cash or Shares, (ii) valued, as
determined by the Committee, in accordance with the achievement of such
performance goals during such performance periods as the Committee shall
establish, and (iii) payable at such time and in such form as the Committee
shall determine.
 
        (b)       TERMS AND CONDITIONS. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the performance goals
to be achieved during any performance period, the length of any performance
period, the amount of any Performance Award and the amount and kind of any
payment or transfer to be made pursuant to any Performance Award.
 
        (c)       PAYMENT OF PERFORMANCE AWARDS. Performance Awards may be paid
in a lump sum or in installments following the close of the performance period
or, in accordance with procedures established by the Committee, on a deferred
basis.
 
        (d)       MINIMUM VESTING REQUIREMENTS. Notwithstanding the foregoing,
(i) except as provided in Section 4(e), any Performance Awards that are Full
Value Awards and vest upon the attainment of performance goals shall provide for
a performance period of at least twelve (12) months; and (ii) subject to the
rights of any Participant under an Award outstanding as of August 12, 2004, the
vesting of Performance Awards that are Full Value Awards may only be accelerated
upon (a) death, disability, retirement or other termination of employment of the
Participant or (b) a Change of Control.
 
SECTION 10.       OTHER STOCK-BASED AWARDS.
 
        (a)       GENERAL. The Committee shall have authority to grant to
Participants an "Other Stock-Based Award", which shall consist of any right
which is (i) not an Award described in Sections 6 through 9 above and (ii) an
Award of Shares or an Award denominated or payable in, valued in whole or in
part by reference to, or otherwise based on or related to, Shares (including,
without limitation, securities convertible into Shares), as deemed by the
Committee to be consistent with the purposes of the Plan; provided that any such
rights must comply, to the extent deemed desirable by the Committee, with Rule
16b-3 and applicable law. Subject to the terms of the Plan and any applicable
Award Agreement, the Committee shall determine the terms and conditions of any
such Other Stock-Based Award, including the price, if any, at which securities
may be purchased pursuant to any Other Stock-Based Award granted under this
Plan.
 
        (b)       DIVIDEND EQUIVALENTS. In the sole and complete discretion of
the Committee, an Award, whether made as an Other Stock-Based Award under this
Section 10 or as an Award granted pursuant to Sections 6 through 9 hereof, may
provide the Participant with dividends or dividend equivalents, payable in cash,
Shares, other securities or other property on a current or deferred basis.
 
 
<PAGE>
 
                                                                              13
 
 
        (c)       MINIMUM VESTING REQUIREMENTS. Notwithstanding the foregoing,
(i) except as provided in Section 4(e), any "Other Stock-Based Awards" that are
Full Value Awards and vest solely on the basis of the Participant's continued
employment with or provision of service to the Company shall not provide for
vesting that is any more rapid than annual pro rata vesting over a three (3)
year period, and any "Other Stock-Based Awards" that are Full Value Awards and
vest upon the attainment of performance goals shall provide for a performance
period of at least twelve (12) months; and (ii) subject to the rights of any
Participant under an Award outstanding as of August 12, 2004, the vesting of
"Other Stock-Based Awards" that are Full Value Awards may only be accelerated
for (a) death, disability, retirement or other termination of employment of the
Participant or (b) a Change of Control.
 
SECTION 11.       PERFORMANCE COMPENSATION AWARDS.
 
        (a)       GENERAL. The Committee shall have the authority, at the time
of grant of any Award described in Sections 6 through 10 (other than Options and
Stock Appreciation Rights granted with an exercise price or grant price, as the
case may be, equal to or greater than the Fair Market Value per Share on the
date of grant), to designate such Award as a Performance Compensation Award in
order to qualify such Award as "performance-based compensation" under Section
162(m) of the Code.
 
        (b)       ELIGIBILITY. The Committee will, in its sole discretion,
designate within the first 90 days of a Performance Period (or, if longer,
within the maximum period allowed under Section 162(m) of the Code) which
Participants will be eligible to receive Performance Compensation Awards in
respect of such Performance Period. However, designation of a Participant
eligible to receive an Award hereunder for a Performance Period shall not in any
manner entitle the Participant to receive payment in respect of any Performance
Compensation Award for such Performance Period. The determination as to whether
or not such Participant becomes entitled to payment in respect of any
Performance Compensation Award shall be decided solely in accordance with the
provisions of this Section 11. Moreover, designation of a Participant eligible
to receive an Award hereunder for a particular Performance Period shall not
require designation of such Participant eligible to receive an Award hereunder
in any subsequent Performance Period and designation of one person as a
Participant eligible to receive an Award hereunder shall not require designation
of any other person as a Participant eligible to receive an Award hereunder in
such period or in any other period.
 
        (c)       DISCRETION OF COMMITTEE WITH RESPECT TO PERFORMANCE
COMPENSATION AWARDS. With regard to a particular Performance Period, the
Committee shall have full discretion to select the length of such Performance
Period, the type(s) of Performance Compensation Awards to be issued, the
Performance Criteria that will be used to establish the Performance Goal(s), the
kind(s) and/or level(s) of the Performance Goals(s) is(are) to apply to the
Company and the Performance Formula. Within the first 90 days of a Performance
Period (or, if longer, within the maximum period allowed under Section 162(m) of
the Code), the Committee shall, with regard to the Performance Compensation
Awards to be issued for such Performance Period, exercise its discretion with
respect to
 
<PAGE>
 
                                                                              14
 
 
each of the matters enumerated in the immediately preceding sentence of this
Section 11(c) and record the same in writing.
 
        (d)       PAYMENT OF PERFORMANCE COMPENSATION AWARDS
 
                 (i)       CONDITION TO RECEIPT OF PAYMENT. Unless otherwise
provided in the applicable Award Agreement, a Participant must be employed by
the Company on the last day of a Performance Period to be eligible for payment
in respect of a Performance Compensation Award for such Performance Period.
 
                  (ii)     LIMITATION. A Participant shall be eligible to
receive payment in respect of a Performance Compensation Award only to the
extent that: (1) the Performance Goals for such period are achieved; and (2) the
Performance Formula as applied against such Performance Goals determines that
all or some portion of such Participant's Performance Award has been earned for
the Performance Period.
 
                  (iii)    CERTIFICATION. Following the completion of a
Performance Period, the Committee shall meet to review and certify in writing
whether, and to what extent, the Performance Goals for the Performance Period
have been achieved and, if so, to calculate and certify in writing that amount
of the Performance Compensation Awards earned for the period based upon the
Performance Formula. The Committee shall then determine the actual size of each
Participant's Performance Compensation Award for the Performance Period and, in
so doing, may apply Negative Discretion, if and when it deems appropriate.
 
                  (iv)     NEGATIVE DISCRETION. In determining the actual size
of an individual Performance Award for a Performance Period, the Committee may
reduce or eliminate the amount of the Performance Compensation Award earned
under the Performance Formula in the Performance Period through the use of
Negative Discretion if, in its sole judgment, such reduction or elimination is
appropriate.
 
                  (v)      TIMING OF AWARD PAYMENTS. The Awards granted for a
Performance Period shall be paid to Participants as soon as administratively
possible following completion of the certifications required by this Section 11.
 
                  (vi)     MAXIMUM AWARD PAYABLE. Notwithstanding any provision
contained in this Plan to the contrary, the maximum Performance Compensation
Award payable to any one Participant under the Plan for a Performance Period is
1,000,000 Shares or, in the event the Performance Compensation Award is paid in
cash, the equivalent cash value thereof on the last day of the Performance
Period to which such Award relates. Furthermore, any Performance Compensation
Award that has been deferred shall not (between the date as of which the Award
is deferred and the payment date) increase (i) with respect to Performance
Compensation Award that is payable in cash, by a measuring factor for each
fiscal year greater than a reasonable rate of interest set by the Committee or
(ii) with respect to a Performance Compensation Award that is payable in Shares,
by an amount greater than the appreciation of a Share from the date such Award
is deferred to the payment date.
 
<PAGE>
 
                                                                              15
 
 
        (e)       MINIMUM VESTING REQUIREMENTS. Notwithstanding the foregoing,
(i) except as provided in Section 4(e), any Performance Compensation Awards that
are Full Value Awards and vest upon the attainment of performance goals shall
provide for a performance period of at least twelve (12) months; and (ii)
subject to the rights of any Participant under an Award outstanding as of August
12, 2004, vesting of Performance Compensation Awards that are Full Value Awards
may only be accelerated upon (a) death, disability, retirement or other
termination of employment of the Participant or (b) a Change of Control.
 
SECTION 12.       AMENDMENT AND TERMINATION.
 
        (a)       AMENDMENTS TO THE PLAN. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time; provided
that (a) no such amendment, alteration, suspension, discontinuation or
termination shall be made without stockholder approval if such approval is
necessary to comply with any tax or regulatory requirement applicable to the
Plan and provided further that any such amendment, alteration, suspension,
discontinuance or termination that would impair the rights of any Participant or
any holder or beneficiary of any Award theretofore granted shall not to that
extent be effective without the consent of the affected Participant, holder or
beneficiary, and (b) no material revision to the Plan shall be made without
stockholder approval. A "material revision" shall include, without limitation:
(i) a material increase in the number of shares available under the Plan (other
than an increase solely to reflect a reorganization, stock split, merger,
spin-off or similar transaction); (ii) an expansion of the types of awards
available under the Plan; (iii) a material expansion of the class of employees,
directors or other service providers eligible to participate in the plan; (iv) a
material extension of the term of the plan; (v) a material change to the method
of determining the exercise price of Options under the Plan; and (vi) the
deletion or limitation of any provision prohibiting repricing of options.
 
        (b)       AMENDMENTS TO AWARDS. The Committee may, to the extent
consistent with the terms of any applicable Award Agreement, waive any
conditions or rights under, amend any terms of, or alter, suspend, discontinue,
cancel or terminate, any Award theretofore granted or the associated Award
Agreement, prospectively or retroactively; provided that any such waiver,
amendment, alteration, suspension, discontinuance, cancellation or termination
that would impair the rights of any Participant or any holder or beneficiary of
any Option theretofore granted shall not to that extent be effective without the
consent of the affected Participant, holder or beneficiary; and provided,
further, that, without stockholder approval, (i) no amendment or modification
may reduce the exercise price of any Option, (ii) the Committee may not cancel
any outstanding Option and replace it with a new Option (with a lower exercise
price) in a manner which would either (A) be reportable on the Company's proxy
statement as Options which have been "repriced" (as such term is used in Item
402 of Regulation S-K promulgated under the Exchange Act), or (B) result in any
Option being accounted for under the "variable" method for financial statement
reporting purposes and (iii) the Committee may not take any other action which
is considered a "repricing" for purposes of the stockholder approval rules of
any applicable stock exchange.
 
<PAGE>
 
                                                                              16
 
 
        (c)       ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. The Committee is hereby authorized to make adjustments in
the terms and conditions of, and the criteria included in, Awards in recognition
of unusual or nonrecurring events (including, without limitation, the events
described in Section 4(b) hereof) affecting the Company, any Affiliate, or the
financial statements of the Company or any Affiliate, or of changes in
applicable laws, regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan; PROVIDED that no such adjustment shall be authorized to the
extent that such authority or adjustment would cause an Award designated by the
Committee as a Performance Compensation Award under Section 11 of the Plan to
fail to qualify as "performance-based compensation" under Section 162(m) of the
Code.
 
SECTION 13.       CHANGE OF CONTROL. In the event of a Change of Control after
the date of the adoption of this Plan, any outstanding Awards then held by
Participants which are unexercisable or otherwise unvested shall automatically
be deemed exercisable or otherwise vested, as the case may be, as of immediately
prior to such Change of Control.
 
SECTION 14.       GENERAL PROVISIONS.
 
        (a)       NONTRANSFERABILITY.
 
                  (i)      Each Award, and each right under any Award, shall be
exercisable only by the Participant during the Participant's lifetime, or, if
permissible under applicable law, by the Participant's legal guardian or
representative.
 
                  (ii)     No Award may be assigned, alienated, pledged,
attached, sold or otherwise transferred or encumbered by a Participant otherwise
than by will or by the laws of descent and distribution, and any such purported
assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall
be void and unenforceable against the Company or any Affiliate; provided that
the designation of a beneficiary shall not constitute an assignment, alienation,
pledge, attachment, sale, transfer or encumbrance.
 
                  (iii)    Notwithstanding the foregoing, the Committee may in
the applicable Award Agreement evidencing an option granted under the Plan or at
any time thereafter in an amendment to an Award Agreement provide that Options
granted hereunder which are not intended to qualify as Incentive Options may be
transferred by the Participant to whom such Option was granted (the "Grantee")
without consideration, subject to such rules as the Committee may adopt to
preserve the purposes of the Plan, to:
 
 
                           (A)      the Grantee's spouse, children or
                                    grandchildren (including adopted and
                                    stepchildren and grandchildren)
                                    (collectively, the "Immediate Family");
 
                           (B)      a trust solely for the benefit of the
                                    Grantee and his or her Immediate Family; or
 
<PAGE>
 
                                                                              17
 
 
                           (C)      a partnership or limited liability company
                                    whose only partners or stockholders are the
                                    Grantee and his or her Immediate Family
                                    members;
 
                  (each transferee described in clauses (A), (B) and (C) above
                  is hereinafter referred to as a "Permitted Transferee");
                  PROVIDED that the grantee gives the Committee advance written
                  notice describing the terms and conditions of the proposed
                  transfer and the Committee notifies the Grantee in writing
                  that such a transfer would comply with the requirements of the
                  Plan and any applicable Award Agreement evidencing the option.
 
                  The terms of any option transferred in accordance with the
                  immediately preceding sentence shall apply to the Permitted
                  Transferee and any reference in the Plan or in an Award
                  Agreement to an optionee, Grantee or Participant shall be
                  deemed to refer to the Permitted Transferee, except that (a)
                  Permitted Transferees shall not be entitled to transfer any
                  Options, other than by will or the laws of descent and
                  distribution; (b) Permitted Transferees shall not be entitled
                  to exercise any transferred Options unless there shall be in
                  effect a registration statement on an appropriate form
                  covering the shares to be acquired pursuant to the exercise of
                  such Option if the Committee determines that such a
                  registration statement is necessary or appropriate, (c) the
                  Committee or the Company shall not be required to provide any
                  notice to a Permitted Transferee, whether or not such notice
                  is or would otherwise have been required to be given to the
                  Grantee under the Plan or otherwise and (d) the consequences
                  of termination of the Grantee's employment by, or services to,
                  the Company under the terms of the Plan and applicable Award
                  Agreement shall continue to be applied with respect to the
                  Grantee, following which the Options shall be exercisable by
                  the Permitted Transferee only to the extent, and for the
                  periods, specified in the Plan and the applicable Award
                  Agreement.
 
        (b)       NO RIGHTS TO AWARDS. No Participant or other Person shall have
any claim to be granted any Award, and there is no obligation for uniformity of
treatment of Participants, or holders or beneficiaries of Awards. The terms and
conditions of Awards and the Committee's determinations and interpretations with
respect thereto need not be the same with respect to each Participant (whether
or not such Participants are similarly situated).
 
        (c)       SHARE CERTIFICATES. All certificates for Shares or other
securities of the Company or any Affiliate delivered under the Plan pursuant to
any Award or the exercise thereof shall be subject to such stop transfer orders
and other restrictions as the Committee may deem advisable under the Plan or the
rules, regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange upon which such Shares or other securities are
then listed, and any applicable Federal or state laws, and the Committee may
cause a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
 
        (d)       WITHHOLDING.
 
<PAGE>
 
                                                                              18
 
 
                  (i)      A Participant may be required to pay to the Company
or any Affiliate and the Company or any Affiliate shall have the right and is
hereby authorized to withhold from any Award, from any payment due or transfer
made under any Award or under the Plan or from any compensation or other amount
owing to a Participant the amount (in cash, Shares, other securities, other
Awards or other property) of any applicable withholding taxes in respect of an
Award, its exercise, or any payment or transfer under an Award or under the Plan
and to take such other action as may be necessary in the opinion of the Company
to satisfy all obligations for the payment of such taxes. The Committee may
provide for additional cash payments to holders of Awards to defray or offset
any tax arising from the grant, vesting, exercise or payments of any Award.
 
                  (ii)     Without limiting the generality of clause (i) above,
a Participant may satisfy, in whole or in part, the foregoing withholding
liability by delivery of Shares owned by the Participant (which are not subject
to any pledge or other security interest and which have been owned by the
Participant for at least 6 months) with a Fair Market Value equal to such
withholding liability or by having the Company withhold from the number of
Shares otherwise issuable pursuant to the exercise of the option a number of
Shares with a Fair Market Value equal to such withholding liability.
 
                  (iii)    Notwithstanding any provision of this Plan to the
contrary, in connection with the transfer of an Option to a Permitted Transferee
pursuant to Section 14(a) of the Plan, the Grantee shall remain liable for any
withholding taxes required to be withheld upon the exercise of such Option by
the Permitted Transferee.
 
        (e)       AWARD AGREEMENTS. Each Award hereunder shall be evidenced by
an Award Agreement which shall be delivered to the Participant and shall specify
the terms and conditions of the Award and any rules applicable thereto,
including but not limited to the effect on such Award of the death, disability
or termination of employment or service of a Participant and the effect, if any,
of such other events as may be determined by the Committee.
 
        (f)       NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing contained
in the Plan shall prevent the Company or any Affiliate from adopting or
continuing in effect other compensation arrangements, which may, but need not,
provide for the grant of options, restricted stock, Shares and other types of
Awards provided for hereunder (subject to stockholder approval if such approval
is required), and such arrangements may be either generally applicable or
applicable only in specific cases.
 
        (g)       NO RIGHT TO EMPLOYMENT. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of, or
in any consulting relationship to, the Company or any Affiliate. Further, the
Company or an Affiliate may at any time dismiss a Participant from employment or
discontinue any consulting relationship, free from any liability or any claim
under the Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement.
 
<PAGE>
 
                                                                              19
 
 
        (h)       NO RIGHTS AS STOCKHOLDER. Subject to the provisions of the
applicable Award, no Participant or holder or beneficiary of any Award shall
have any rights as a stockholder with respect to any Shares to be distributed
under the Plan until he or she has become the holder of such Shares.
Notwithstanding the foregoing, in connection with each grant of Restricted Stock
hereunder, the applicable Award shall specify if and to what extent the
Participant shall not be entitled to the rights of a stockholder in respect of
such Restricted Stock.
 
        (i)       GOVERNING LAW. The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan and any Award Agreement
shall be determined in accordance with the laws of the State of New York.
 
        (j)       SEVERABILITY. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform the applicable laws, or if it cannot be
construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award, such provision shall be
stricken as to such jurisdiction, Person or Award and the remainder of the Plan
and any such Award shall remain in full force and effect.
 
        (k)       OTHER LAWS. The Committee may refuse to issue or transfer any
Shares or other consideration under an Award if, acting in its sole discretion,
it determines that the issuance or transfer of such Shares or such other
consideration might violate any applicable law or regulation or entitle the
Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in
connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary. Without limiting the generality of
the foregoing, no Award granted hereunder shall be construed as an offer to sell
securities of the Company, and no such offer shall be outstanding, unless and
until the Committee in its sole discretion has determined that any such offer,
if made, would be in compliance with all applicable requirements of the U.S.
federal securities laws.
 
        (l)       NO TRUST OR FUND CREATED. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant or
any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Affiliate.
 
        (m)       NO FRACTIONAL SHARES. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities, or other property shall be paid or transferred
in lieu of any fractional Shares or whether such fractional Shares or any rights
thereto shall be canceled, terminated, or otherwise eliminated.
 
<PAGE>
 
                                                                              20
 
 
        (n)       PAYMENTS TO PERSONS OTHER THAN PARTICIPANTS. If the Committee
or the senior human resource officer of the Company shall find that any person
to whom any amount is payable under the Plan is unable to care for his affairs
because of illness or accident, or is a minor, or has died, then any payment due
to such person or his estate (unless a prior claim therefor has been made by a
duly appointed legal representative) may, if the Committee or the senior human
resource officer of the Company so directs the Company, be paid to his spouse,
child, relative, an institution maintaining or having custody of such person, or
any other person deemed by the Committee to be a proper recipient on behalf of
such person otherwise entitled to payment. Any such payment shall be a complete
discharge of the liability of the Committee and the Company therefor.
 
        (o)       RELATIONSHIP TO OTHER BENEFITS. No payment or benefit under
the Plan shall be taken into account in determining any benefits under any
pension, retirement, profit sharing, group insurance or other benefit plan of
the Company or any Subsidiary except as otherwise specifically provided in such
other plan.
 
        (p)       NO LIABILITY OF COMMITTEE MEMBERS. No member of the Committee
shall be personally liable by reason of any contract or other instrument
executed by such member or on his behalf in his capacity as a member of the
Committee nor for any mistake of judgment made in good faith, and the Company
shall indemnify and hold harmless each member of the Committee and each other
employee, officer or director of the Company to whom any duty or power relating
to the administration or interpretation of the Plan may be allocated or
delegated, against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim) arising out of any act or
omission to act in connection with the Plan to the fullest extent permitted by
the Company's Amended and Restated Certificate of Incorporation, as may be
hereafter amended from time to time. The foregoing right of indemnification
shall not be exclusive of any other rights of indemnification to which such
persons may be entitled under the Company's Amended and Restated Certificate of
Incorporation or By-Laws, as a matter of law, or otherwise, or any power that
the Company may have to indemnify them or hold them harmless.
 
        (q)       HEADINGS. Headings are given to the Sections and subsections
of the Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
 
SECTION 15.       TERM OF THE PLAN.
 
        (a)       RESTATEMENT EFFECTIVE DATE. The amendment and restatement of
the Plan shall be effective as of the Restatement Effective Date.
 
        (b)       EXPIRATION DATE. No Award shall be granted under the Plan
after June 30, 2014. Unless otherwise expressly provided in the Plan or in an
applicable Award Agreement, any Award granted hereunder may, and the authority
of the Board or the Committee to amend, alter, adjust, suspend, discontinue, or
terminate any such Award or
 
<PAGE>
 
                                                                              21
 
 
to waive any conditions or rights under any such Award shall, continue after
June 30, 2014.
 
        (c)       SECTION 162(M) REAPPROVAL. The provisions of the Plan
regarding Performance Compensation Awards shall be disclosed and reapproved by
stockholders of the Company no later than the first stockholder meeting that
occurs in the fifth year following the year that stockholders previously
approved such provisions, in order for Performance Compensation Awards granted
after such time to be exempt from the deduction limitations of Section 162(m) of
the Code. Nothing in this Section 15(c), however, shall affect the validity of
Performance Compensation Awards granted after such time if such stockholder
approval has not been obtained.
 
 
 
</TEXT>
</DOCUMENT>