Darwin Professional Underwriters Inc
EX-10.1: 2006 STOCK INCENTIVE PLAN
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<TYPE>EX-10.1
<SEQUENCE>4
<FILENAME>y21591exv10w1.txt
<DESCRIPTION>EX-10.1: 2006 STOCK INCENTIVE PLAN
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                                                                    EXHIBIT 10.1


                     DARWIN PROFESSIONAL UNDERWRITERS, INC.

                            2006 STOCK INCENTIVE PLAN

      1. PURPOSES OF THE PLAN. The purposes of the Darwin Professional
Underwriters, Inc. 2006 Stock Incentive Plan (the "Plan") are to further the
long-term growth of Darwin Professional Underwriters, Inc. (the "Corporation"),
to the benefit of its stockholders, by providing incentives to the officers and
other key employees of the Corporation and its subsidiaries who will be largely
responsible for such growth, and to assist the Corporation in attracting and
retaining executives of experience and ability on a basis competitive with
industry practices. The Plan permits the Corporation to provide incentive
compensation in the form of, or based upon the value of, the Corporation's
common stock, $.01 par value ("Common Stock"), of the types commonly known as
restricted stock, stock options, stock appreciation rights and performance
shares, as well as other types of equity-based incentive compensation
(collectively, the "Awards").

      2. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Compensation Committee of the Board of Directors or such other committee of two
or more directors as the Board of Directors of the Corporation may from time to
time designate (the "Committee"). Subject to the provisions of the Plan, the
Committee shall have exclusive power to select the officers or other key
employees to participate in the Plan, to determine the type, size and terms and
conditions of Awards (including, but not limited to, restrictions as to
transferability or forfeiture, exercisability or settlement of an Award and
waivers or accelerations thereof, based in each case on such considerations as
the Committee shall determine) and all other matters to be determined in
connection with any Award to be made to each Participant selected, and to
determine the time or times when Awards will be granted; provided, however, that
if the Committee is not the Compensation Committee of the Board of Directors,
then an Award granted hereunder by the Committee to any Participant will be
revoked if such Award is not thereafter ratified by the Compensation Committee
of the Board of Directors. The Committee's interpretation of the Plan or of any
Awards granted thereunder shall be final and binding on all parties concerned,
including the Corporation and any Participant. The Committee shall have the
authority, subject to the provisions of the Plan, to correct any defect or
supply any omission or reconcile any inconsistency in the Plan, and to adopt,
revise and rescind such rules, regulations, guidelines, forms of agreements and
instruments relating to the Plan as it may deem necessary or advisable for the
administration of the Plan.

      3. PARTICIPATION. The Committee shall select from the officers and other
key employees of the Corporation and its subsidiaries (the "Participants") the
persons who will receive Awards pursuant to the Plan. The term "subsidiary"
shall mean any corporation a majority of the total combined voting power of
whose stock is beneficially owned, directly or indirectly, by the Corporation.
Participants may receive multiple Awards under the Plan.

      4. SHARES OF STOCK SUBJECT TO THE PLAN. Subject to adjustment as provided
in Section 6(a) hereof, 850,000 shares of Common Stock may be issued pursuant to
Awards under the Plan, provided that no more than 850,000 shares of Common Stock
may be issued pursuant to Options intended to qualify as incentive stock
options. Shares to be issued under the Plan may be either authorized but
unissued shares of Common Stock or shares of

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Common Stock held by the Corporation as treasury shares, including shares
acquired by purchase.

      No Award may be granted if the number of shares of Common Stock to which
such Award relates, when added to the number of shares of Common Stock
previously issued under the Plan and the number of shares of Common Stock which
may then be acquired pursuant to other outstanding, unexercised Awards, exceeds
the number of shares of Common Stock available for issuance pursuant to the
Plan. If any shares of Common Stock subject to an Award are forfeited or such
Award is settled in cash or otherwise terminates or is settled for any reason
whatsoever without an actual issuance of shares of Common Stock to the
Participant, any shares of Common Stock counted against the number of shares of
Common Stock available for issuance pursuant to the Plan with respect to such
Award shall, to the extent of any such forfeiture, settlement, or termination,
again be available for Awards under the Plan; provided, however, that the
Committee may adopt procedures for the counting of shares of Common Stock
relating to any Award to ensure appropriate counting, avoid double counting, and
provide for adjustments in any case in which the number of shares of Common
Stock actually distributed differs from the number of shares of Common Stock
previously counted in connection with such Award. Notwithstanding anything to
the contrary herein, the following shares of Common Stock shall not again be
available for issuance as Awards under the Plan: (i) shares of Common Stock
tendered (either actually, by attestation or otherwise) to pay all or any part
of the exercise price on any Option, (ii) any shares of Common Stock retained by
the Corporation in satisfaction of the Participant's obligation for withholding
taxes, and (iii) shares of Common Stock not issued as a result of a net exercise
of an Option.

      5.    AWARDS.

            (a) General. Awards under the Plan may include, but need not be
      limited to, shares of Common Stock that may be subject to certain
      restrictions and to a risk of forfeiture ("Restricted Stock"), options to
      purchase a specified number of shares of Common Stock at a fixed exercise
      price ("Options"), rights to receive the appreciation of Common Stock from
      the date of grant to the date of exercise ("SARs") and a book-entry unit
      with an initial value equal to Common Stock on the date of grant
      ("Performance Shares"). The Committee may also make any other type of
      Award payable in, or valued in whole or in part by reference to, shares of
      Common Stock ("Stock-Based Awards") deemed by the Committee to be
      consistent with the purposes of the Plan. Awards may be granted on the
      terms and conditions set forth in this Section 5.

            (b) Vesting, Other Performance Requirements and Forfeiture. In
      making Awards under the Plan, the Committee may, on the date of grant or
      thereafter, (i) specify that the right to exercise, receive, retain and/or
      transfer such Award shall be conditional upon the fulfillment of specified
      conditions, including, without limitation, completion of specified periods
      of service in the employ of the Corporation or its subsidiaries, and/or
      the achievement of specified business and/or personal performance goals,
      and (ii) provide for the forfeiture of all or any portion of any such
      Awards in specified circumstances. The Committee may also specify by whom
      and/or in what manner the accomplishment of any such performance goals
      shall be determined. Notwithstanding the foregoing, the

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      Committee shall retain full power to accelerate or waive any such
      condition as it may have previously imposed. All Awards shall be evidenced
      by an Award agreement.

            (c) Term of Awards. The term of each Award shall, except as
      otherwise provided herein, be for such period as may be determined by the
      Committee; provided, however, that in no event shall the term of any Award
      exceed a period of ten years from the date of grant.

            (d) Restricted Stock. The Committee may grant Restricted Stock to
      Participants on the following terms and conditions:

                  (i) Restricted Stock shall be subject to such restrictions on
      transferability and other restrictions, if any, as the Committee may
      impose at the date of grant or thereafter, which restrictions, if any, may
      lapse separately or in combination at such times, under such circumstances
      (including, without limitation, upon achievement of performance criteria
      if deemed appropriate by the Committee), in such installments, or
      otherwise, as the Committee may determine. Except to the extent restricted
      under the Award agreement relating to the Restricted Stock, a Participant
      granted Restricted Stock shall have all of the rights of a shareholder
      including, without limitation, the right to vote Restricted Stock and the
      right to receive dividends (whether in cash or in shares of Common Stock)
      thereon.

                  (ii) Except as otherwise determined by the Committee, at the
      date of grant or thereafter, upon termination of employment prior to
      specific vesting dates, shares of Restricted Stock and any accrued but
      unpaid dividends that are at that time subject to restrictions shall be
      forfeited.

                  (iii) Restricted Stock granted under the Plan may be evidenced
      in such manner as the Committee shall determine. If certificates
      representing Restricted Stock are registered in the name of the
      Participant, such certificates shall bear an appropriate legend referring
      to the terms, conditions, and restrictions applicable to such Restricted
      Stock, and, if the Committee so determines, the Corporation shall retain
      physical possession of the certificate representing such Restricted Stock
      (whether or not vested).

            (e) Options. The Committee may grant Options to Participants on the
      following terms and conditions:

                  (i) An Option shall confer on the Participant the right to
                  purchase a specified number of shares of Common Stock at a
                  fixed exercise price (the "Exercise Price"). Options granted
                  may include Options intended to qualify as incentive stock
                  options within the meaning of Section 422 of the Internal
                  Revenue Code of 1986, as amended ("Code"), and Options not
                  intended to so qualify.

                  (ii) The term of any Option shall be determined by the
                  Committee, but in no event shall any Option be exercisable
                  more than ten years after the date on which it was granted.

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                  (iii) The Exercise Price at which shares of Common Stock may
                  be purchased pursuant to any Option shall be determined by the
                  Committee at the time the Option is granted, but in no event
                  shall the Exercise Price be less than 100 percent of the Fair
                  Market Value of such shares on the date the Option is granted.
                  For purposes of the Plan, Fair Market Value is the mean of the
                  high and low sales prices of the Common Stock on the relevant
                  date as reported on the stock exchange or market on which the
                  Common Stock is primarily traded, or, if no sale is made on
                  such date, then Fair Market Value is the weighted average of
                  the mean of the high and low sales prices of the Common Stock
                  on the next preceding day and the next succeeding day on which
                  such sales were made as reported on the stock exchange or
                  market on which the Common Stock is primarily traded.

                  (iv) Upon exercise of an Option, the Exercise Price shall be
                  payable to the Corporation in cash, or, at the discretion of
                  the Committee, in shares of Common Stock valued at the Fair
                  Market Value thereof on the date of payment, or in a
                  combination of cash and shares of Common Stock.

                  (v) The Corporation may, if the Committee so determines,
                  accept the surrender by a Participant, or the personal
                  representative of a Participant, of an Option, in
                  consideration of a payment by the Corporation equal to the
                  difference obtained by subtracting the aggregate Exercise
                  Price from the aggregate Fair Market Value of the Common Stock
                  covered by the Option on the date of such surrender, such
                  payment to be in cash, or, if the Committee so provides, in
                  shares of Common Stock valued at Fair Market Value on the date
                  of such surrender, or partly in shares of Common Stock and
                  partly in cash.

            (f) Stock Appreciation Rights. The Committee is authorized to grant
      SARs to Participants on the following terms and conditions:

                  (i) A SAR shall confer on the Participant to whom it is
                  granted a right to receive, upon exercise thereof, the excess
                  of (A) the Fair Market Value of one share of Common Stock on
                  the date of exercise over (B) the Fair Market Value of one
                  share of Common Stock on the date of grant of the SAR (the
                  "Grant Value").

                  (ii) The Committee shall determine the time or times at which
                  a SAR may be exercised in whole or in part, the method of
                  exercise, method of settlement, form of consideration payable
                  in settlement, the method by which shares of Common Stock will
                  be delivered or deemed to be delivered to Participants, and
                  any other terms and conditions of any SAR.

            (g) Performance Shares. The Committee is authorized to grant Awards
      of Performance Shares to Participants with a value equal to the Fair
      Market Value of one share of Common Stock on the date of grant. An Award
      of Performance Shares shall

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      vest and become payable to a Participant after a specified period of
      continued employment with the Corporation or a subsidiary or upon the
      achievement of specified performance goals, as determined by the
      Committee. Settlement of Performance Shares shall be made in cash or
      shares of Common Stock or any combination thereof, as determined by the
      Committee.

            (h) Other Stock-Based Awards. The Committee is authorized, subject
      to limitations under applicable law, to grant to Participants Stock-Based
      Awards, in addition to those provided in Sections 5(d), (e), (f) and (g)
      hereof, as deemed by the Committee to be consistent with the purposes of
      the Plan, including Stock-Based Awards granted in substitution for any
      other right of a Participant to receive payment of compensation from the
      Corporation or a subsidiary. The Committee shall determine the terms and
      conditions of such Awards.

            (i) Cash Payments. The Committee is authorized, subject to
      limitations under applicable law, to grant to Participants cash payments,
      including cash payments of dividend equivalents with respect to a
      specified number of shares of Common Stock, whether awarded separately or
      as a supplement to any other Award. The Committee shall determine the
      terms and conditions of such cash payment Awards.

            (j) Certain Qualifying Awards. The Committee, in its sole
      discretion, may grant an Award to any Participant with the intent that
      such award qualifies as "performance-based compensation" under Section
      162(m) of the Code (a "Qualifying Award"). The right to receive or retain
      any award granted as a Qualifying Award (other than an Option or SAR)
      shall be conditional upon the achievement of specified performance goals
      during a calendar year or such other period (a "Performance Period") as
      may be established by the Committee. Performance goals shall be
      established in writing by the Committee prior to the beginning of each
      Performance Period, or at such other time no later than such time as is
      permitted by the applicable provisions of the Code. Such performance
      goals, which may vary from Participant to Participant and Award to Award,
      shall be based upon the attainment of specific amounts of, or increases
      in, one or more of the following: the Fair Market Value of Common Stock,
      revenues, operating income, cash flow, earnings before income taxes, net
      income, earnings per share, stockholders' equity, return on equity,
      underwriting profits, compound growth in net loss and loss adjustment
      expense reserves, loss ratio or combined ratio of the Corporation's
      insurance businesses, operating efficiency or strategic business
      objectives consisting of one or more objectives based on meeting specified
      cost targets, business expansion goals and goals relating to acquisitions
      or divestitures, all whether applicable to the Corporation or any relevant
      subsidiary or business unit or entity in which the Corporation has a
      significant investment, or any combination thereof as the Committee may
      deem appropriate. Each performance goal may be expressed on an absolute
      and/or relative basis, may be based on, or otherwise employ, comparisons
      based on internal targets, the past performance of the Corporation and/or
      the past or current performance of other companies, may provide for the
      inclusion, exclusion or averaging of specified items in whole or in part,
      such as catastrophe losses, realized gains or losses on strategic
      investments, discontinued operations, extraordinary items, accounting
      changes, and unusual or nonrecurring items, and, in the case of
      earnings-based measures, may use or

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      employ comparisons relating to capital, shareholders' equity and/or shares
      outstanding, assets or net assets. Prior to the payment of any Award
      granted as a Qualifying Award, the Committee shall certify in writing that
      the performance goals were satisfied. The maximum number of shares of
      Common Stock with respect to which Qualifying Awards may be granted to any
      Participant in any calendar year shall be 127,500 shares of Common Stock,
      subject to adjustment as provided in Section 6(a) hereof.

            (k) Form of Payment. Subject to the terms of the Plan and any
      applicable Award agreement, payments or transfers to be made under the
      Plan upon the grant or exercise of an Award may be made in such forms as
      the Committee shall determine, including, without limitation, cash, shares
      of Common Stock, other Awards, or other property, and may be made in a
      single payment or transfer, or on a deferred basis. The Committee may,
      whether at the time of grant or at any time thereafter prior to payment or
      settlement, permit (subject to the requirements of applicable law and any
      conditions as the Committee may from time to time establish) a Participant
      to elect to defer receipt of all or any portion of any payment of cash or
      shares of Common Stock that would otherwise be due to such Participant in
      payment or settlement of an Award under the Plan. (Such payments may
      include, without limitation, provisions for the payment or crediting of
      reasonable interest in respect of deferred payments credited in cash, and
      the payment or crediting of dividends in respect of deferred amounts
      credited in Common Stock equivalents.)

            (l) Exchange and Buy Out Provisions; Limitation on Repricing. The
      Committee may at any time offer to exchange or buy out any previously
      granted Award for a payment in cash, shares of Common Stock, other Awards,
      or other property based on such terms and conditions as the Committee
      shall determine and communicate to a Participant at the time that such
      offer is made. Notwithstanding the foregoing, unless such action is
      approved by the Corporation's stockholders, the Exercise Price of any
      outstanding Option or the Grant Value of an SAR may not be reduced (except
      pursuant to Section 6), nor may an Option or an SAR be cancelled and a new
      Option or SAR granted in consideration therefore (whether for the same or
      a different number of shares) having a lower Exercise Price or issued at a
      Grant Value less than the Exercise Price of the Option or the Grant Value
      of the SAR cancelled, as the case may be.

      6.    DILUTION AND OTHER ADJUSTMENTS.

            (a) Changes in Capital Structure. In the event of any corporate
      transaction involving the Corporation (including, without limitation, any
      subdivision or combination or exchange of the outstanding shares of Common
      Stock, stock dividend, stock split, spin-off, split-off, recapitalization,
      capital reorganization, liquidation, reclassification of shares of Common
      Stock, merger, consolidation, extraordinary cash distribution, or sale,
      lease or transfer of substantially all of the assets of the Corporation),
      the Board of Directors of the Corporation shall make such equitable
      adjustments as it may deem appropriate in the Plan and the Awards
      thereunder, including, without limitation, an adjustment in (i) the total
      number of shares of Common Stock which may thereafter be issued pursuant
      to Awards under the Plan and the maximum number of shares of Common Stock
      that may be issued pursuant to Options intended to qualify as incentive

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      stock options pursuant to Section 4 hereof, (ii) the number of shares of
      Common Stock with respect to which Qualifying Awards may be granted to any
      Participant in any calendar year under Section 5(j) hereof, and (iii) the
      Exercise Price, Grant Price or other price or value at the time of grant
      relating to any Award. Moreover, in the event of any such transaction, the
      Board of Directors of the Corporation may provide in substitution for any
      or all outstanding Awards under the Plan such alternative consideration as
      it may in good faith determine to be equitable under the circumstances and
      may require in connection therewith the surrender of all Awards so
      replaced. Agreements evidencing Awards may include such provisions as the
      Committee may deem appropriate with respect to the adjustments to be made
      to the terms of such Awards upon the occurrence of any of the foregoing
      events.

            (b) Tender Offers and Exchange Offers. In the event of any tender
      offer or exchange offer, by any person other than the Corporation, for
      shares of Common Stock, the Committee may (i) make such adjustments in
      outstanding Awards and authorize such further action as it may deem
      appropriate to enable the recipients of outstanding Awards to avail
      themselves of the benefits of such offer, including, without limitation,
      acceleration of the exercise date of outstanding Options so that they
      become immediately exercisable in whole or in part, or offering to acquire
      all or any portion of specified categories of Options for a price
      determined pursuant to Section 5(e)(v) hereof, or acceleration of the
      payment of outstanding Awards payable, in whole or in part, in shares of
      Common Stock and/or (ii) cancel any outstanding Award and cause the holder
      thereof to be paid, in cash or shares of Common Stock, or any combination
      thereof, the value of such Award based upon the price per share of Common
      Stock received or to be received by other shareholders of the Corporation
      in the tender offer or exchange offer.

            (c) Limits on Discretion to Make Adjustments. Notwithstanding any
      provision of this Section 6 to the contrary, no adjustment shall be made
      in any outstanding Qualifying Awards to the extent that such adjustment
      would adversely affect the status of that Qualifying Award as
      "performance-based compensation" under Section 162(m) of the Code.

      7.    MISCELLANEOUS PROVISIONS.

            (a) Right to Awards. No employee or other person shall have any
      claim or right to be granted any Award under the Plan.

            (b) Rights as Stockholders. A Participant shall have no rights as a
      holder of Common Stock by reason of Awards under the Plan, unless and
      until certificates for shares of Common Stock are issued to the
      Participant.

            (c) No Assurance of Employment. Neither the Plan nor any action
      taken thereunder shall be construed as giving any employee any right to be
      retained in the employ of the Corporation or any subsidiary.

            (d) Costs and Expenses. All costs and expenses incurred in
      administering the Plan shall be borne by the Corporation.

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            (e) Unfunded Plan. The Plan shall be unfunded. The Corporation shall
      not be required to establish any special or separate fund nor to make any
      other segregation of assets to assure the payment of any Award under the
      Plan.

            (f) Withholding Taxes. The Corporation is authorized to withhold
      from any Award granted and any payment relating to an Award under the
      Plan, including from a distribution of Common Stock or any payroll or
      other payment to a Participant amounts of withholding and other taxes due
      in connection with any transaction involving an Award, and to take such
      other action as the Committee may deem advisable to enable the Corporation
      and Participants to satisfy obligations for the payment of withholding
      taxes and other tax obligations relating to any Award. This authority
      shall include authority to withhold or receive shares of Common Stock or
      other property, to make payment of an Award net of a Participant's
      withholding taxes and other tax obligations and to make cash payments in
      respect thereof in satisfaction of a Participant's tax obligations.
      Withholding of taxes in the form of shares of Common Stock issued pursuant
      to an Award (including any net payments) shall not occur at a rate that
      exceeds the minimum required statutory federal and state withholding
      rates.

            (g) Limits on Transferability. No Awards under the Plan nor any
      rights or interests therein shall be pledged, encumbered, or hypothecated
      to, or in favor of, or subject to any lien, obligation, or liability of a
      Participant to, any party, other than the Corporation or any subsidiary,
      nor shall such Awards or any rights or interests therein be assignable or
      transferable by the recipient thereof except, in the event of the
      recipient's death, to his designated beneficiary as hereinafter provided,
      or by will or the laws of descent and distribution. During the lifetime of
      the recipient, Awards under the Plan requiring exercise shall be
      exercisable only by such recipient or by the guardian or legal
      representative of such recipient. Notwithstanding the foregoing, the
      Committee may, in its discretion, provide that Awards granted pursuant to
      the Plan (other than an Option granted as an incentive stock option) be
      transferable, without consideration, to a Participant's immediate family
      members (i.e., children, grandchildren or spouse), to trusts for the
      benefit of such immediate family members and to partnerships in which such
      family members are the only partners. The Committee may impose such terms
      and conditions on such transferability as it may deem appropriate.

            (h) Beneficiary. Any payments on account of Awards under the Plan to
      a deceased Participant shall be paid to such beneficiary as has been
      designated by the Participant in writing to the Secretary of the
      Corporation or, in the absence of such designation, according to the
      Participant's will or the laws of descent and distribution.

            (i) Nature of Benefits. Awards under the Plan, and payments made
      pursuant thereto, are not a part of salary or base compensation.

            (j) No Fractional Shares. No fractional shares of Common Stock shall
      be issued or delivered pursuant to the Plan or any Award. In the case of
      Awards to Participants, the Committee shall determine whether cash or
      other property shall be issued or paid in lieu of such fractional shares,
      or whether such fractional shares or any rights thereto shall be forfeited
      or otherwise eliminated.

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            (k)   Compliance with Legal Requirements.

                  (i) The obligation of the Corporation to issue shares of
                  Common Stock hereunder shall be subject to the satisfaction of
                  all applicable legal and securities exchange requirements,
                  including, without limitation, the provisions of the
                  Securities Act of 1933, as amended and the Securities Exchange
                  Act of 1934, as amended. The Corporation shall endeavor to
                  satisfy all such requirements in such a manner to permit the
                  issuance and delivery of shares of Common Stock under the
                  Plan.

                  (ii) The Committee may require, as a condition to the right to
                  receive shares of Common Stock pursuant to any Award, that the
                  Corporation receive from the Participant, at the time any such
                  Award is exercised, vests or any applicable restrictions
                  lapse, representations, warranties and agreements to the
                  effect that the shares are being purchased or acquired by the
                  Participant for investment only and without any present
                  intention to sell or otherwise distribute such shares and that
                  the Participant will not dispose of such shares in
                  transactions which, in the opinion of counsel to the
                  Corporation, would violate the registration provisions of the
                  Securities Act of 1933, as then amended, and the rules and
                  regulations thereunder. The certificates issued to evidence
                  such shares shall bear appropriate legends summarizing such
                  restrictions on the disposition thereof.

      (l) Discretion. In exercising, or declining to exercise, any grant of
authority or discretion hereunder, the Committee may consider or ignore such
factors or circumstances and may accord such weight to such factors and
circumstances as the Committee alone and in its sole judgment deems appropriate
and without regard to the effect such exercise, or declining to exercise such
grant of authority or discretion, would have upon the affected Participant, any
other Participant, any employee, the Company, any Subsidiary, any stockholder or
any other person.

      8. AMENDMENT OR TERMINATION OF THE PLAN. The Board of Directors of the
Corporation, without the consent of any Participant, may at any time terminate
or from time to time amend the Plan in whole or in part; provided, however,
that, subject to Section 6 hereof, no such action shall materially and adversely
affect any rights or obligations with respect to any Awards theretofore made
under the Plan; and provided, further, that no amendment, without approval of
the holders of Common Stock by an affirmative vote of a majority of the shares
of Common Stock voted thereon in person or by proxy, shall (i) increase the
aggregate number of shares subject to the Plan (other than increases pursuant to
Section 6 hereof), (ii) extend the maximum term of Awards under the Plan or the
Plan itself, (iii) decrease the price at which Options and SARs may be granted
under the Plan (other than decreases pursuant to Section 6 hereof) to less than
Fair Market Value at the time of grant, or (iv) make any other change that would
require stockholder approval pursuant to the terms of the Plan or under any
regulatory requirement applicable to the Plan (including as necessary to comply
with any applicable stock exchange listing requirement). Subject to Section 6
hereof, with the consent of the Participants affected, the Committee may amend
outstanding agreements evidencing Awards under the Plan in any manner not
inconsistent with the terms of the Plan.

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      9. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective when
adopted by the Board of Directors, provided that the Plan is approved by the
stockholders of the Corporation at the annual meeting of stockholders next
following the adoption of the Plan by the Board of Directors, and no Award shall
become exercisable, realizable or vested prior to such annual meeting. If the
Plan is not so approved by the stockholders at the next annual meeting, all
Awards theretofore granted shall be null and void. The Plan shall terminate at
the close of business on the tenth anniversary of the date the Plan was adopted
by the Board of Directors, unless sooner terminated by action of the Board of
Directors of the Corporation. No Award may be granted hereunder after
termination of the Plan, but such termination shall not affect the validity of
any Award then outstanding.

      10. LAW GOVERNING. The validity and construction of the Plan and any
agreements entered into thereunder shall be governed by the laws of the State of
Delaware without giving effect to principles of conflict of laws.

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