ENESCO GROUP INC
EX-10.1
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<TYPE>EX-10.1
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<FILENAME>exhibit1.htm
<DESCRIPTION>EX-10.1
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<P align="right" style="font-size: 10pt"><FONT style="font-size: 12pt">Exhibit&nbsp;10.1</FONT>



<P align="center" style="font-size: 12pt"><B>ENESCO GROUP, INC.</B>



<P align="center" style="font-size: 12pt"><B>AMENDED AND RESTATED</B>



<P align="center" style="font-size: 12pt"><B>1996 LONG-TERM INCENTIVE PLAN</B>



<P align="center" style="font-size: 12pt"><B>(Amended and Restated As of January&nbsp;24, 2006)</B>



<P align="left" style="font-size: 12pt; text-indent: 4%">1.&nbsp;<U>Purpose</U>. The purpose of this Amended and Restated 1996 Long-Term Incentive Plan
(the &#147;Plan&#148;) is to advance and promote the interests of Enesco Group, Inc. (the &#147;Company&#148;) and its
Subsidiaries by providing key management employees of the Company and its Subsidiaries with an
incentive to achieve corporate objectives, to attract and retain key management employees of
outstanding competence and to provide such individuals with an equity interest in the Company
through the ownership of Shares and by providing for payments to such individuals based on the
appreciation in value or value of such Shares.


<P align="left" style="font-size: 12pt; text-indent: 4%">2.&nbsp;<U>Definitions</U>. When used herein, the following terms shall have the meaning set
forth below:



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.1 <B>&#147;Award&#148; </B>means an Option, an Option granted in tandem with an SAR, a Performance
Plan Award, a Phantom Stock Unit Award, a Restricted Stock Award, a Restricted Stock Award
granted in tandem with an Option, an SAR, a Stock Bonus Award, or any other equity-based
instrument approved by the Committee, or any combination thereof, granted under the Plan.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.2 <B>&#147;Award Agreement&#148; </B>means a written agreement, which shall be duly executed by the
Company and the Employee and which shall set forth the terms and conditions of an Award
under the Plan. In the event of any conflict between this Plan document and the Award
Agreement, the terms of this Plan document shall control.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.3 <B>&#147;Board&#148; </B>means the Board of Directors of Enesco Group, Inc.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.4 <B>&#147;Cause&#148; </B>means, as determined by the Company, in its sole discretion: (a)&nbsp;the
continued failure by the Employee to perform substantially the Employee&#146;s duties with the
Company or a Subsidiary (other than any such failure resulting from the Employee&#146;s
incapacity due to physical or mental illness) after a written demand for substantial
performance is delivered to the Employee by the Company, which demand specifically
identifies the manner in which the Company believes that the Employee has not substantially
performed the Employee&#146;s duties or (b)&nbsp;the willful engagement by the Employee in conduct
which is demonstrably and materially injurious to the Company or its Subsidiaries, including
by way of example, but not by way of limitation, the Employee&#146;s engaging in fraud,
misappropriation of property of the Company or its Subsidiaries, or gross misconduct
damaging to such property or the business of the Company or its Subsidiaries, or the
Employee&#146;s conviction for a felony or a violation of any material policy of the Company or
its Subsidiaries.



<P align="left" style="margin-left:4%; font-size: 12pt">The determination that a termination of the Employee&#146;s employment is either for Cause or not
for Cause for the purposes of the Plan shall be made by the Company, in its sole discretion.
Any determination by the Company that the Employee&#146;s employment was terminated not for
Cause for the purposes of outstanding Awards held by such Employee or for any other purpose
of the Plan shall have no effect upon any determination of the rights or obligations of the
Company or such Employee for any other purpose.



<P align="left" style="margin-left:4%; font-size: 12pt">Notwithstanding the foregoing or any other provision of this Plan, the foregoing definition
of Cause shall supersede any definition of Cause (or any analogous term) set forth in an
Award Agreement. If no definition of Cause (or any analogous term) is set forth in such
Award Agreement, the foregoing definition shall apply.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.5 <B>&#147;Code&#148; </B>means the Internal Revenue Code of 1986, as in effect at the time of
reference, or any successor revenue code which may hereafter be adopted in lieu thereof, and
reference to any specific provisions of the Code shall refer to the corresponding provisions
of the Code as it may hereafter be amended or replaced.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.6 <B>&#147;Committee&#148; </B>means the Human Resources and Compensation Committee of the Board or
any other committee appointed by the Board that is invested by the Board with responsibility
for the administration of the Plan, which Committee shall be composed of not less than three
directors of the Company elected or to be elected as members of the Committee from time to
time by the Board. Each member of the Committee shall be a &#147;non-employee director&#148; within
the meaning of Rule&nbsp;16b-3 under the Exchange Act and an &#147;outside director&#148; within the
meaning of Section 162(m) of the Code and any applicable stock exchange requirements.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.7 <B>&#147;Company&#148; </B>means Enesco Group, Inc.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.8 <B>&#147;Disability&#148; </B>means the permanent and total disability of a person within the
meaning of Section&nbsp;22(e)(3) of the Code.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.9 <B>&#147;Employee Shareholder&#148; </B>means an Employee who, at the time an Incentive Stock Option
is granted, owns, as defined in Section&nbsp;424 of the Code, stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of: (a)&nbsp;the
Company; or (b)&nbsp;if applicable, a Subsidiary or a Parent.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.10 <B>&#147;Employees&#148; </B>means officers (including officers who are members of the Board) and
other key employees of the Company or any of its Subsidiaries.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.11 <B>&#147;ERISA&#148; </B>means the Employee Retirement Income Security Act of 1974, as in effect at
the time of reference, or any successor law which may hereafter be adopted in lieu thereof,
and any reference to any specific provisions of ERISA shall refer to the corresponding
provisions of ERISA as it may hereafter be amended or replaced.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.12 <B>&#147;Exchange Act&#148; </B>means the Securities Exchange Act of 1934, as amended, as in effect
at the time of reference, or any successor law which may hereafter be adopted in lieu
thereof, and any reference to any specific provisions of the Exchange Act shall refer to the
corresponding provisions of the Exchange Act as it may hereafter be amended or replaced.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.13 <B>&#147;Fair Market Value&#148; </B>means with respect to the Shares, (a)&nbsp;the closing price of the
Shares on the New York Stock Exchange or such other exchange on which Shares are then traded
or admitted to trading (or quoted), on the determination date, (b)&nbsp;if no sale takes place on
such date on any such exchange (or quotation system), the average of the last reported
closing bid and asked prices on such date as officially quoted on any such exchange (or
quotation system), or (c)&nbsp;if the Shares are not then listed or admitted to trading on any
such exchange, the average of the last reported closing bid and asked prices on such date on
the over-the-counter market (or quotation system); <I>provided, however, </I>if there shall be no
public market for the Shares the price shall be the fair market value determined in good
faith by the Board, or the Committee if one has been appointed, in its discretion, which
determination may, but need not, be based on (i)&nbsp;the advice of an independent financial
advisor or (ii)&nbsp;the last known price per Share paid by a purchaser in an arm&#146;s length
transaction. For purposes of (a)&nbsp;above, the NASDAQ Stock Market shall be deemed an
exchange. If there shall be a public market for the Shares, and the foregoing references
are unavailable or inapplicable, then the Fair Market Value shall be determined on the basis
of the appropriate substitute public market price indicator as determined by the Committee,
in its sole discretion.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.14 <B>&#147;Grant Date&#148; </B>means the date on which the Committee approves the grant of the
Award.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.15 <B>&#147;Incentive Stock Option&#148; </B>means an Option intending to meet the requirements and
containing the limitations and restrictions set forth in Section&nbsp;422 of the Code and
designated in the Award Agreement as an Incentive Stock Option.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.16 <B>&#147;Non-Qualified Stock Option&#148; </B>means an Option other than an Incentive Stock Option.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.17 <B>&#147;Option&#148; </B>means the right to purchase the number of Shares specified by the
Committee, at the closing bid price the day of the Grant Date, and for a term fixed by the
Committee, in accordance with the Plan, and subject to such other limitations and
restrictions as the Plan and the Committee may impose.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.18 <B>&#147;Parent&#148; </B>means any corporation, other than the employer corporation, in an
unbroken chain of corporations ending with the employer corporation if, at the time of the
granting of the Option, each of the corporations other than the employer corporation owns
stock possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.19 <B>&#147;Performance Goals&#148; </B>has the meaning ascribed to it in Section&nbsp;11 of the Plan.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.20 <B>&#147;Performance Period&#148; </B>has the meaning ascribed to it in Section&nbsp;11 of the Plan.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.21 <B>&#147;Performance Plan Award&#148; </B>means the right to receive Options, Phantom Stock Unit
Awards, Restricted Stock Awards, SARs, Shares, Stock Bonus Awards or units (representing
such monetary amount as designated by the Committee and payable in cash or in Shares)
pursuant to Section&nbsp;11 of the Plan, which right is based on, or subject to, in whole or in
part, the achievement of certain performance criteria specified by the Committee.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.22 <B>&#147;Phantom Stock Unit&#148; </B>means a contractual right to receive Shares or the value of
Shares in the future.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.23 <B>&#147;Plan&#148; </B>means the Amended and Restated 1996 Enesco Group, Inc. Long-Term Incentive
Plan.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.24 <B>&#147;Regulation&nbsp;T&#148; </B>means Part&nbsp;220, chapter II, title 12 of the Code of Federal
Regulations, issued by the Board of Governors of the Federal Reserve System pursuant to the
Exchange Act, as amended from time to time, or any successor regulation which may hereafter
be adopted in lieu thereof.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.25 <B>&#147;Restricted Period&#148; </B>means the period of time during which Phantom Stock Units vest
or performance goals must be achieved with respect to Phantom Stock Units, as specified in
the Award Agreement applicable to the Phantom Stock Units.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.26 <B>&#147;Restricted Stock Award&#148; </B>means the right to receive Shares, but subject to
forfeiture and/or other restrictions set forth in the related Restricted Stock Award
Agreement and the Plan.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.27 <B>&#147;Restricted Stock Award Agreement&#148; </B>means an Award Agreement executed in connection
with a Restricted Stock Award.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.28 <B>&#147;Rule&nbsp;16b-3&#148; </B>means Rule&nbsp;16b-3 of the General Rules and Regulations of the
Securities and Exchange Commission as in effect at the time of reference, or any successor
rules or regulations which may hereafter be adopted in lieu thereof, and any reference to
any specific provisions of Rule&nbsp;16b-3 shall refer to the corresponding provisions of Rule
16b-3 as it may hereafter be amended or replaced.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.29 <B>&#147;SAR&#148; </B>means a stock appreciation right, which is a right to receive an amount in
cash, or Shares, or a combination of cash and Shares, as determined by the Committee, no
greater than the excess, if any, of (i)&nbsp;the Fair Market Value of a Share on the date the SAR
is exercised, over (ii)&nbsp;the SAR Base Price.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.30 <B>&#147;SAR Base Price&#148; </B>means the Fair Market Value of a Share on the date an SAR was
granted, or if the SAR was granted in tandem with an Option (whether or not the Option was
granted on a different date than the SAR), in the Committee&#146;s discretion, the option price
of a Share subject to the Option.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.31 <B>&#147;Shares&#148; </B>means shares of the Company&#146;s common stock $0.125 par value each or, if
by reason of the adjustment provisions contained herein, any rights under an Award under the
Plan pertain to any other security, such other security.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.32 <B>&#147;Stock Bonus Award&#148; </B>means the right to receive Shares as provided in Section&nbsp;10 of
the Plan.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.33 <B>&#147;Subsidiary&#148; </B>or <B>&#147;Subsidiaries&#148; </B>means any corporation or corporations other than
the employer corporation in an unbroken chain of corporations beginning with the employer
corporation if each of the corporations other than the last corporation in the unbroken
chain owns stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.34 <B>&#147;Successor&#148; </B>means the legal representative of the estate of a deceased Employee or
the person or persons or trust who shall acquire the right to exercise or receive an Award
by bequest or inheritance or by reason of the death of the Employee.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">2.35 <B>&#147;Term&#148; </B>means the period during which a particular Award may be exercised.


<P align="left" style="font-size: 12pt; text-indent: 4%">3.&nbsp;<U>Administration</U>. The Plan shall be administered by the Committee subject to the
provisions of the Plan. The Committee is authorized to approve the timing, recipients and grants
of Awards under the Plan, to interpret the Plan and such Awards, to amend and revise the Plan and
the Awards, and to make other determinations necessary or advisable for the administration of the
Plan, all of which determinations shall be conclusive, subject to Board and/or shareholder
approval, if necessary. The Committee shall act pursuant to a majority vote or by unanimous
written consent. A majority of the Committee shall constitute a quorum. The Committee has
authority, in its discretion, to delegate administrative powers, including, but not limited to,
those set forth in this section.


<P align="left" style="font-size: 12pt; text-indent: 4%">4.&nbsp;<U>Shares Subject to the Plan</U>. The aggregate number of shares, which are authorized
and may be issued under Awards granted pursuant to the Plan, shall not exceed 3,000,000 shares of
the Company&#146;s common stock $0.125 par value each. Such Shares shall be either authorized, but
unissued Shares, or authorized issued Shares that shall have been reacquired by the Company. Such
aggregate number of Shares may be adjusted under Section&nbsp;17 below. Any Shares subject to issuance
upon exercise of Options or SARs, or vesting of Performance Plan Awards, but which are not issued
because of a surrender, lapse, expiration, forfeiture or termination of any such Option, SAR or
Performance Plan Award prior to issuance of the Shares shall once again be available for issuance
in satisfaction of Awards. Similarly, any Shares issued pursuant to a Restricted Stock Award which
are subsequently forfeited pursuant to the terms of the related Restricted Unit Award Agreement
shall once again be available for issuance in satisfaction of Awards. In addition, if Shares are
not delivered pursuant to a Phantom Stock Unit Award or a SAR Award that is not related to an
Option because the Award is paid in cash or Shares subject to the Award are withheld to satisfy
applicable tax withholding obligations upon exercise, payment or settlement of an Award other than
Restricted Stock, such Shares shall not be deemed to have been delivered for purposes of
determining the maximum number of Shares available for delivery under the Plan.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.&nbsp;<U>Eligibility</U>. Awards shall be granted under the Plan to such Employees as the
Committee shall determine from time to time. In determining the Employees to whom Awards shall be
granted and the number of Shares to be issued or subject to purchase or issuance under such Awards,
the Committee shall take into account the recommendations of the Company&#146;s management as to the
duties of the respective Employees, their present and potential contributions to the success of the
Company and its Subsidiaries, and such other factors as the Committee shall deem relevant in
connection with accomplishing the purposes of the Plan.


<P align="left" style="font-size: 12pt; text-indent: 4%">6.&nbsp;<U>Allotment of Shares</U>. The Committee shall determine the total number of Shares to
be offered to each Employee under the Plan; <I>provided, however, </I>that no Employee may be granted (a)
Options which exceed 200,000 Shares under the Plan in any calendar year, and (b)&nbsp;Performance Plan
Awards, SARs, Restricted Stock Awards and Stock Bonus Awards which exceed 100,000 Shares under the
Plan in any calendar year. In addition, the Committee may not make grants of Performance Plan
Awards, SARs, Restricted Stock Awards and Stock Bonus Awards which exceed 900,000 Shares.


<P align="left" style="font-size: 12pt; text-indent: 4%">7.&nbsp;<U>Stock Options</U>.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>7.1 Types of Options</I>. Options granted pursuant to the Plan may be either Incentive
Stock Options or Non-qualified Stock Options. It is the intent of the Company that
Non-qualified Stock Options granted under the Plan not be classified as Incentive Stock
Options, that the Incentive Stock Options granted under the Plan be consistent with and
contain or be deemed to contain all provisions required under Section&nbsp;422 and the other
appropriate provisions of the Code and any implementing regulations (and any successor
provisions thereof), and that any ambiguities in construction shall be interpreted in order
to effectuate such intent. The Award Agreement shall designate whether an Option is an
Incentive Stock Option or a Non-Qualified Stock Option.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>7.2 Option Price</I>. The Shares shall be offered from time to time under the Plan at a
price that shall be not less than the greater of (a)&nbsp;100% of the Fair Market Value of the
Company&#146;s common stock on the date the Option is granted, or (b)&nbsp;the par value of the
Company&#146;s common stock subject to the Option; <I>provided, however, </I>that the price shall be not
less than 110% of such Fair Market Value in the case of Shares offered under any Incentive
Stock Option granted to an Employee Shareholder.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>7.3 Terms and Conditions of Options. </I>The Committee shall have power, subject to the
limitations contained in the Plan, to prescribe the terms and conditions of any Option
granted hereunder. Each such Option shall be evidenced by an Award Agreement, which shall
prescribe the following terms and conditions and such other terms and conditions as the
Committee may deem necessary or advisable:



<P align="left" style="margin-left:8%; font-size: 12pt; text-indent: 4%">(a)&nbsp;Duration of Options. Except as hereinafter otherwise provided, Options
granted under the Plan shall not be exercisable for a term of more than ten (10)
years from the date of grant, but shall be subject to earlier termination as
hereinafter provided. No Option granted in tandem with an SAR shall be exercisable
during the first six (6)&nbsp;months following the date of grant of the SAR, except that
this limitation shall not apply in the event that it is permissible under Rule&nbsp;16b-3
to exercise the Option prior to the expiration of the six month period.
Notwithstanding anything herein to the contrary, if an Incentive Stock Option is
granted to an Employee Shareholder, then such Incentive Stock Option shall not be
exercisable more than five (5)&nbsp;years from the date of grant thereof, but shall be
subject to earlier termination as hereinafter provided.



<P align="left" style="margin-left:8%; font-size: 12pt; text-indent: 4%">(b)&nbsp;Termination of Options.



<P align="left" style="margin-left:8%; font-size: 12pt; text-indent: 7%">(1)&nbsp;Disability, or Retirement at or after age 59-1/2. If the Employee&#146;s
employment with the Company or any Subsidiary terminates by reason of Disability, or
by reason of retirement at or after age 59-1/2, if not sooner terminated pursuant to
their terms, all outstanding Options then held by the Employee that have vested as
of the date of Disability or date of retirement shall be exercisable for the
remainder of the Term of the Options by the Employee or his or her guardian or legal
representative(s), except further that in the case of Incentive Stock Options the
period for such exercise following such termination shall be limited to three (3)
months.



<P align="left" style="margin-left:8%; font-size: 12pt; text-indent: 7%">(2)&nbsp;Termination by Voluntary Resignation. If the Employee&#146;s employment with
the Company or any Subsidiary is terminated by voluntary resignation for any reason
other than Death, Disability or retirement, all outstanding Options, which have
vested, then held by the Employee shall be exercisable by the Employee or his or her
guardian or legal representative(s), if applicable, during the thirty (30)&nbsp;day
period following such Employee&#146;s termination by voluntary resignation.



<P align="left" style="margin-left:8%; font-size: 12pt; text-indent: 7%">(3)&nbsp;Death. If the Employee&#146;s employment with the Company or any Subsidiary is
terminated by reason of Death, all outstanding Options that have vested as of the
date of Death and those that will vest within one (1)&nbsp;year of the date of Death then
held by the Employee shall be exercisable by the Employee&#146;s Successor during the
eighteen (18)&nbsp;month period following the date of Death.



<P align="left" style="margin-left:8%; font-size: 12pt; text-indent: 7%">(4)&nbsp;Termination for Cause. If the Employee&#146;s employment with the Company or
any Subsidiary is terminated for Cause, all outstanding Options then held by the
Employee shall thereupon be forfeited by the Employee and canceled by the Company as
of the date of the Employee&#146;s termination for Cause.



<P align="left" style="margin-left:8%; font-size: 12pt; text-indent: 7%">(5)&nbsp;Termination within One Year of Grant. Notwithstanding the foregoing, upon
the Employee&#146;s termination of employment with the Company or any Subsidiary at any
time for any reason other than Death or Disability, all outstanding Options granted
within the last twelve (12)&nbsp;months prior to the Employee&#146;s termination shall
thereupon be forfeited by the Employee and canceled by the Company.


<P align="left" style="font-size: 12pt; text-indent: 4%">8.&nbsp;<U>Stock Appreciation Rights</U>.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>8.1 Grant of SAR. </I>The Committee, in its discretion, may grant an Employee an SAR in
tandem with an Option or may grant an Employee an SAR on a stand-alone basis. The
Committee, in its discretion, may grant an SAR in tandem with an Option either at the time
the Option is granted or at any time after the Option is granted, to the extent that such
Options at such time have not been exercised and have not been terminated, so long as the
grant of the SAR is made during the period in which grants of SARs may be made under the
Plan. The Committee, in its discretion, may grant an SAR in tandem with an Option which is
exercisable either in lieu of, or in addition to, the exercise of the related Option.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>8.2 Limitations on Exercise. </I>Each SAR granted in tandem with an Option shall be
exercisable to the extent, and only to the extent, the related Option is exercisable and
shall be for such Term as the Committee may determine (which Term, not to exceed ten (10)
years, may expire prior to the Term of the related Option). Each SAR granted on a
stand-alone basis shall be exercisable to the extent, and for such Term, as the Committee
may determine. The SARs shall be subject to such other terms and conditions as the
Committee, in its discretion, shall determine which are not otherwise inconsistent with the
Plan. The terms and conditions may include Committee approval of the exercise of the SAR,
limitations on the time within which and the extent to which such SAR shall be exercisable,
limitations, if any, on the amount of appreciation in value which may be recognized with
regard to such SAR, and specification of what portion, if any, of the amount payable to the
Employee upon exercise of such SAR shall be payable in cash and what portion if any, shall
be payable in Shares. If, and to the extent, that Shares are issued in satisfaction of
amounts payable on exercise of an SAR, the Shares shall be valued at their Fair Market Value
on the date of exercise.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>8.3 SARs in Tandem with Incentive Stock Options. </I>With respect to SARs granted in
tandem with Incentive Stock Options, the following shall apply:



<P align="left" style="margin-left:8%; font-size: 12pt; text-indent: 4%">(a)&nbsp;No SAR shall be exercisable unless the Fair Market Value of the Shares on
the date of exercise exceeds the option price of the related Incentive Stock Option.



<P align="left" style="margin-left:8%; font-size: 12pt; text-indent: 4%">(b)&nbsp;In no event shall any amounts paid pursuant to the SAR exceed the
difference between the Fair Market Value of the Shares on the date of exercise and
the option price of the related Incentive Stock Option.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>8.4 Surrender of Option or SAR Granted in Tandem. </I>If the Award Agreement related to
the grant of an SAR in tandem with an Option provides that the SAR can only be exercised in
lieu of the related Option, then, upon exercise of such SAR, the related Option or portion
thereof with respect to which such SAR is exercised shall be deemed surrendered and shall
not thereafter be exercisable, and, similarly, upon exercise of the Option, the related SAR
or portion thereof with respect to which such Option is exercised shall be deemed
surrendered and shall not thereafter be exercisable. If the Award Agreement related to the
grant of an SAR in tandem with an Option provides that the SAR can be exercised in addition
to the related Option, then, upon exercise of such SAR, the related Option or portion
thereof with respect to which such SAR is exercised shall not be deemed surrendered and
shall continue to be exercisable and, similarly, upon exercise of the Option, the related
SAR or portion thereof with respect to which such Option is exercised shall not be deemed
surrendered and shall continue to be exercisable.


<P align="left" style="font-size: 12pt; text-indent: 4%">9.&nbsp;<U>Restricted Stock Awards</U>. Restricted Stock Awards granted under the Plan shall be
subject to such terms and conditions, including, without limitation, performance criteria, vesting,
dividend deferral or dividend reinvestment requirements, as the Committee may, in its discretion,
determine and set forth in the related Restricted Stock Award Agreements. The Committee, in its
discretion, may grant an Employee a Restricted Stock Award on a stand-alone basis or in tandem with
an Option. Restricted Stock Awards shall be granted in accordance with, and subject to, the
provisions set forth below.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>9.1 Issuance of Shares. </I>Each Restricted Stock Award shall be evidenced by a Restricted
Stock Award Agreement which shall set forth the number of Shares issuable under the
Restricted Stock Award. Subject to the restrictions in Section&nbsp;9.3 of the Plan, and subject
further to such other restrictions or conditions established by the Committee, in its
discretion, and set forth in the related Restricted Stock Award Agreement (such as requiring
the Employee to pay an amount equal to the aggregate par value of the Shares to be issued
thereunder), the number of Shares granted under a Restricted Stock Award shall be issued in
the recipient Employee&#146;s name on the date of grant of such Restricted Stock Award or as soon
as reasonably practicable thereunder.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>9.2 Right of Recipient Employees. </I>Shares received pursuant to Restricted Stock Awards
shall be duly issued or transferred to the Employee. Subject to the restrictions in Section
9.3 of the Plan, and subject further to such other restrictions or conditions established by
the Committee, in its discretion, and set forth in the related Restricted Stock Award
Agreement, the Employee shall thereupon be a shareholder with respect to all such Shares and
shall have the rights of a shareholder with respect to such Shares, including the right to
vote such Shares and to receive dividends and other distributions paid with respect to such
Shares.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>9.3 Restrictions. </I>Except as otherwise determined by the Committee in its sole
discretion, each Share issued pursuant to a Restricted Stock Award Agreement shall be
subject, in addition to any other restrictions set forth in the related Restricted Stock
Award Agreement, to the following restrictions until such restrictions have lapsed pursuant
to Section&nbsp;9.4 of the Plan:



<P align="left" style="margin-left:8%; font-size: 12pt; text-indent: 4%">(a)&nbsp;Disposition. The Shares awarded to an Employee and the right to vote such
Shares or receive dividends on such Shares may not be sold, exchanged, transferred,
pledged, hypothecated or otherwise disposed of; <I>provided, however, </I>that such Shares
may be transferred upon the death of the Employee to the Employee&#146;s Successor. Any
transfer or purported transfer of such Shares in violation of the restrictions
outlined in this Section&nbsp;9.3 shall be null and void and shall result in the
forfeiture of the Shares transferred or purportedly transferred to the Company
without notice and without consideration.



<P align="left" style="margin-left:8%; font-size: 12pt; text-indent: 4%">(b)&nbsp;Forfeiture. Subject to the provisions of Section&nbsp;9.4, the Shares awarded
to an Employee shall be forfeited to the Company without notice and without
consideration therefor immediately upon the termination of the Employee&#146;s employment
with the Company and all Subsidiaries of the Company for any reason whatsoever.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>9.4 Lapse of Restrictions. </I>The Committee, in its sole discretion, shall determine the
circumstances upon which the restrictions set forth in Section&nbsp;9.3 of the Plan on Shares
issued under a Restricted Stock Award shall lapse.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>9.5 Surrender of Options or Restricted Stock Granted in Tandem. </I>If the Restricted
Stock Award Agreement related to the grant of a Restricted Stock Award in tandem with an
Option provides that the Option can only be exercised in lieu of the scheduled vesting for
the Restricted Stock Award, then, upon vesting of the Shares subject to the Restricted Stock
Award, the related Option or portion thereof with respect to which such Restricted Stock
Award becomes vested shall be deemed surrendered and shall not thereafter be exercisable
and, similarly, upon exercise of the Option, the Shares subject to the related Restricted
Stock Award or portion thereof with respect to which such Option is exercised shall be
deemed forfeited to the Company and shall be canceled as provided by the Plan or the
Restricted Stock Award Agreement.


<P align="left" style="font-size: 12pt; text-indent: 4%">10.&nbsp;<U>Stock Bonus Awards</U>. Stock Bonus Awards may be granted under the Plan with respect
to Shares, and shall be granted, subject to the provisions of the Plan, upon such terms and
conditions as the Committee may determine in its discretion. The Committee, in its discretion, may
require the Employees to whom Stock Bonus Awards are granted to pay the Company an amount equal to
the aggregate par value of the Shares to be issued to such Employees. Subject to the Employee
delivering in cash or by check the amounts, if any, required to be paid pursuant to this Section&nbsp;10
or pursuant to Section&nbsp;20 of the Plan (relating to taxes), Shares shall be issued in the Employee&#146;s
name as soon as reasonably practicable following the date of grant, or if such payments are
required, following the date of such payments. The Company shall deliver such Shares to the
Employee and the Employee shall thereupon be a shareholder with respect to all such Shares and
shall have all the rights of a shareholder with respect to such Shares.


<P align="left" style="font-size: 12pt; text-indent: 4%">11.&nbsp;<U>Performance Plan Awards</U>.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>11.1 Performance Plan Awards. </I>Performance Plan Awards may be granted under the Plan in
such form as the Committee may from time to time approve. Performance Plan Awards may be
granted alone, in addition to or in tandem with other Awards under the Plan. Subject to the
terms of the Plan, including the terms of the Plan applicable to any underlying type of
Award that is the subject of a Performance Plan Award (i.e., an Option, an Option granted in
tandem with an SAR, a Phantom Stock Unit Award, a Restricted Stock Award, a Restricted Stock
Award granted in tandem with an Option, an SAR or a Stock Bonus Award, as the case may be),
the Committee shall determine the number of Performance Plan Awards to be granted to an
Employee, the terms and conditions applicable to any particular Performance Plan Award made
to an Employee and, in the case of a Performance Plan Award of units, the monetary amount
represented by each such unit.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>11.2 Performance Goals and Performance Periods. </I>A Performance Plan Award shall provide
that in order for an Employee to vest, in whole or in part, in such Performance Plan Award
the Company and/or the Employee must achieve certain individual and/or aggregate performance
criteria (&#147;Performance Goals&#148;) over a designated performance period, which period may be no
less than twelve months subject to earlier termination by reason of death, disability or
termination of employment, as determined by the Committee (&#147;Performance Period&#148;). The
Performance Goals and Performance Period shall be established by the Committee, in its sole
discretion. The Committee also may establish a schedule or schedules for any such
Performance Period setting forth the portion of the Performance Plan Award that will be
earned or forfeited based on the degree of achievement of the Performance Goals actually
achieved or exceeded. In setting Performance Goals the Committee may use such measures as
cumulative or non-cumulative return on equity, return on assets and operating income,
earnings growth, revenue growth or such other individual and/or aggregate measure or
measures of performance in such manner as it deems appropriate. During the Performance
Period, the Committee, except as provided otherwise in the Award Agreement evidencing the
Performance Plan Award, shall have the authority to adjust upward or downward the
Performance Goals in such manner as it deems appropriate.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>11.3 Payments of Units. </I>An employee who has been granted a Performance Plan Award of
units shall be entitled to receive a payment with respect to such units in an amount equal
to the number of units earned at the conclusion of the respective Performance Period times
the dollar value of each unit. Payment in settlement of such unit shall be made in cash, in
Shares, or in any combination thereof, as the Committee in its sole discretion shall
determine, and shall be made as soon as practicable following the conclusion of the
respective Performance Period and the calculation of the dollar value of such units.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.&nbsp;<U>Phantom Stock Unit Awards</U>.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">12.1 Phantom Stock Unit Awards may be granted under the Plan subject to the provisions
of the Plan, upon such terms and conditions as the Committee may determine in its
discretion.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>12.2 Value of Phantom Stock Units. </I>Each Phantom Stock Unit shall have an initial value
that is established by the Committee on the Grant Date. The Committee may set performance
goals in its sole discretion which, depending on the extent to which they are met, will
determine the number and/or value of Phantom Stock Units that will be paid out to the
Participant.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>12.3 No Rights as Shareholders. </I>No Participant shall have any rights as a shareholder
with respect to any Phantom Stock Units subject to his Award.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%">12.4 V<I>esting or Earning of Phantom Stock Units. </I>Subject to the terms of the Plan,
after the applicable Restricted Period has ended, the Employee shall be entitled to receive
a payout of the number and value of Phantom Stock Units vested or earned, as the case may
be, by the Employee over the Restricted Period. If the Committee establishes performance
goals for a Phantom Stock Unit Award, the number and value of Phantom Stock Units will be
determined by the Committee, in its sole discretion, as a function of the extent to which
the corresponding performance goals have been achieved.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>12.5 Form and Timing of Payment of Phantom Stock Units. </I>Except as provided below,
payment of vested or earned Phantom Stock Units shall be made in the form of cash or in
Shares (or in a combination thereof) which have an aggregate Fair Market Value equal to the
value of the vested or earned Phantom Stock Units at the close of the applicable Restricted
Period. At the Grant Date or shortly thereafter, the Committee, in its sole discretion and
in accordance with terms designated by the Committee, may provide for a voluntary and/or
mandatory deferral of all or any part of an otherwise vested or earned Phantom Stock Unit
Award. At the sole discretion of the Committee, Employees may be entitled to receive any
dividends declared with respect to Shares earned in connection with a Phantom Stock Unit
Award which has been vested or earned, but not yet distributed to Employees (such dividends
shall be subject to the same forfeiture, and payout restrictions as apply to dividends
earned with respect to Shares of Restricted Stock, if any).



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>12.6 Effect of Termination. </I>The Committee, in its sole discretion, shall set forth in
the applicable Phantom Stock Unit Award Agreement the extent to which an Employee shall have
the right to a payout of a Phantom Stock Unit Award following a Termination. Such
provisions need not be uniform among all Awards of Phantom Stock Units granted pursuant to
the Plan, and may reflect distinctions based on the reasons for such Termination.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>12.7 Change in Control. </I>The Committee, in its sole discretion, shall set forth in the
applicable Award Agreement the extent to which an Employee shall have the right to a payout
of a Phantom Stock Unit Award in the event of a Change in Control (as defined below). Such
provisions need not be uniform among all Awards of Phantom Stock Units granted pursuant to
the Plan, and may reflect distinctions based on the reasons for such Termination.


<P align="left" style="font-size: 12pt; text-indent: 4%">13.&nbsp;<U>Exercise of Rights Under Options or SARs</U>.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>13.1 Notice of Exercise. </I>An Employee entitled to exercise an Option or a SAR shall do
so by delivering to the Company&#146;s Human Resources Department a written notice to that effect
specifying the number of Shares with respect to which the Option or SAR is being exercised
and any other relevant information that the Committee may require. The notice shall be
accompanied by payment in full of the purchase price of any Shares to be purchased, which
payment may be made in cash or, with the Committee&#146;s approval (which in the case of
Incentive Stock Options must be given at the time of grant), in Shares held by the Employee
for at least six months and that are held free and clear of all liens and encumbrances
valued at Fair Market Value at the time of exercise or a combination thereof. No Shares
shall be issued upon exercise of an Option or a SAR until full payment has been made
therefor.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>13.2 Cashless Exercise Procedures. </I>The Company, in its sole discretion, may establish
procedures whereby an Employee, subject to the requirements of Rule&nbsp;16b-3, Regulation&nbsp;T,
federal income tax laws, and other federal, state and local tax and securities laws, can
exercise an Option or a portion thereof without making a direct payment of the exercise
price to the Company; <I>provided, however, </I>that these cashless exercise procedures shall not
apply to (a)&nbsp;Incentive Stock Options that are outstanding on the date the Company
establishes such procedures unless the application of such procedures to such Options is
permitted pursuant to the Code and the regulations thereunder without affecting the Options&#146;
qualification under Code Section&nbsp;422 as Incentive Stock Options or (b)&nbsp;any Award to a
participant where the utilization of the cashless exercise procedure would be deemed a
violation of Section 13(k) of the Exchange Act. If the Company so elects to establish a
cashless exercise program, the Company shall determine, in its sole discretion, and from
time to time, such administrative procedures and policies as it deems appropriate and such
procedures and policies shall be binding on any Employee wishing to utilize the cashless
exercise program.


<P align="left" style="font-size: 12pt; text-indent: 4%">14.&nbsp;<U>Award Terms and Conditions</U>. Each Award or each Award Agreement shall contain such
other terms and conditions not inconsistent herewith as shall be approved by the Committee.


<P align="left" style="font-size: 12pt; text-indent: 4%">15.&nbsp;<U>Rights of Award Holder</U>. The holder of an Award shall not have any of the rights
of a shareholder with respect to the Shares subject to purchase or receipt under the Award, except
that (a)&nbsp;an Award holder&#146;s rights with respect to a Restricted Stock Award shall be as prescribed
in Section&nbsp;9.2 and (b)&nbsp;shareholder rights with respect to any other Award shall arise at the time
and to the extent that the Shares shall be delivered to the holder upon the due exercise or grant
of the Award.


<P align="left" style="font-size: 12pt; text-indent: 4%">16.&nbsp;<U>Nontransferability of Awards</U>. An Award shall not be transferable other than: (a)
by will or the laws of descent and distribution, and an Award subject to exercise may be exercised,
during the lifetime of the holder of the Award, only by the holder or in the event of death, the
holder&#146;s Successor, or in the event of disability, the holder&#146;s personal representative, (b)&nbsp;as
otherwise permitted under Rule&nbsp;16b-3 under the Exchange Act from time to time and allowed by the
Committee, or (c)&nbsp;pursuant to a qualified domestic relations order, as defined in the Code or ERISA
or the rules thereunder; <I>provided, however, </I>that an Incentive Stock Option may not be transferred
pursuant to a qualified domestic relations order unless such transfer is otherwise permitted
pursuant to the Code and the regulations thereunder without affecting the Option&#146;s qualification
under Code Section&nbsp;422 as an Incentive Stock Option.


<P align="left" style="font-size: 12pt; text-indent: 4%">17.&nbsp;<U>Changes in Stock</U>. In the event of a stock dividend, stock split, combination or
exchange of shares, recapitalization, reclassification, merger, consolidation, separation,
reorganization, partial or complete liquidation or similar events, or in the event of
extraordinary cash or non-cash dividends being declared with respect to the Shares, or other
similar transaction having the same effect of the foregoing, the number and kind of Shares at the
time of such change remaining subject to the Plan and to any Award granted or to be granted
pursuant to the Plan, the applicable purchase price and any other relevant provisions may be
appropriately adjusted by the Board of Directors of the Company, whose determination shall be
binding on all persons. No adjustment provided for in this Section&nbsp;17 shall require the Company to
issue or sell a fractional share under any Award hereunder and any fractional share resulting from
any such adjustment shall be deleted from the Award involved.


<P align="left" style="font-size: 12pt; text-indent: 4%">Notwithstanding anything herein to the contrary, in the event of a &#147;Change in Control&#148; as
defined below, including certain consolidation or merger events otherwise giving rise to the
adjustments or alternatives described in the above paragraph, the Committee may in its discretion,
taking into account the purposes of the Plan, determine that the Awards granted under the Plan
shall terminate upon the consummation of the consolidation or merger event or Change in Control,
<I>provided that </I>prior to the merger, consolidation or Change in Control, the Employees shall be
entitled to exercise any outstanding Award without regard to vesting limitations and all
restrictions with respect to outstanding Awards shall lapse. As used herein, &#147;Change in Control&#148;
means a Change in Control of a nature that would, in the opinion of the Company&#146;s General Counsel,
be required to be reported in response to Item&nbsp;6(e) of Schedule&nbsp;14A of Regulation&nbsp;14A promulgated
under the Exchange Act; <I>provided that, </I>without limitation, such a Change in Control shall be deemed
to have occurred if: (i)&nbsp;any &#147;Person&#148; (as such term is used in Sections&nbsp;13(d) and 14(d) of the
Exchange Act (other than the Company or any subsidiary of the Company, any trustee or fiduciary
holding securities under an employee benefit plan of the Company or any of its subsidiaries or a
corporation owned, directly or indirectly, by the shareholders of the Company in substantially the
same proportions as their ownership of the shares of the Company)) becomes the &#147;beneficial owner&#148;
(as defined in Rule&nbsp;13d-3 of the Exchange Act), directly or indirectly, of securities of the
Company representing 25% or more of the combined voting power of the Company&#146;s then outstanding
securities; or (ii)&nbsp;during any period of two (2)&nbsp;consecutive years (not including any period prior
to the effective date of this Plan), individuals who at the beginning of such period constitute the
Board of Directors and any new director (other than a director designated by a Person who has
entered into an agreement with the Company to effect a transaction described in clause (i), (iii),
or (iv)&nbsp;of this paragraph) whose election by the Board of Directors or nomination for election by
the Company&#146;s shareholders was approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of the period or whose election or
nomination for election previously was so approved cease for any reason to constitute a majority
thereof; or (iii)&nbsp;the shareholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than (A)&nbsp;a merger or consolidation that would result in the
voting securities of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of the surviving
entity), in combination with the ownership of any trustee or other fiduciary holding securities
under an employee benefit plan of the Company, at least 75% of the combined voting power of the
voting securities of the Company or such surviving entity outstanding immediately after such merger
or consolidation, or (B)&nbsp;a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person acquires 25% or more of the combined voting
power of the Company&#146;s then outstanding securities; or (iv)&nbsp;the shareholders of the Company approve
a plan of complete liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all the Company&#146;s assets.


<P align="left" style="font-size: 12pt; text-indent: 4%">18.&nbsp;<U>Effective Date; Shareholder Approval; Term</U>. The Plan was originally adopted by
the Board of Directors on January&nbsp;24, 1996 and became effective as of January&nbsp;24, 1996 and was
amended as of April&nbsp;24, 2003 and May&nbsp;19, 2004. This Amended and Restated 1996 Enesco Group, Inc.
Long-Term Incentive Plan was adopted by the Board of Directors on January&nbsp;17, 2006 and shall become
effective as of January&nbsp;24, 2006 if approved by the requisite vote of the shareholders. No Award
hereunder shall be granted after January&nbsp;23, 2016 or the earlier suspension or termination of the
Plan in accordance with its terms. The Plan shall terminate on January&nbsp;23, 2016 or on such earlier
date as it may be suspended or terminated under the provisions of Section&nbsp;19 below or as of which
all Shares subject to Awards authorized to be granted under the Plan shall have been acquired.


<P align="left" style="font-size: 12pt; text-indent: 4%">19.&nbsp;<U>Amendment or Discontinuance of the Plan</U>. The Committee may, insofar as permitted
by law, at any time or from time to time, suspend or terminate the Plan or revise or amend it in
any respect whatsoever except that, without the appropriate approval of the shareholders of the
common stock, no such revision or amendment shall increase the maximum number of Shares subject to
the Plan, change the designation of the class of employees eligible to receive options, decrease
the price at which Options may be granted, increase or decrease any option price after the date of
grant, or otherwise change the provisions of this Plan, to the extent approval of the holders of
the common stock of the Company is required under the applicable laws, rules and/or regulations of
the Exchange Act, the Code and/or the New York Stock Exchange.


<P align="left" style="font-size: 12pt; text-indent: 4%">20.&nbsp;<U>Taxes</U>.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>20.1 Right To Withhold Required Taxes. </I>The Company shall have the right to require a
person entitled to receive Shares pursuant to the receipt, vesting or exercise of an Award
under the Plan to pay the Company the amount of any taxes which the Company is or will be
required to withhold with respect to such Shares before such Shares are delivered pursuant
to the Award. Further, the Company may elect to deduct such taxes from any other amounts
then payable in cash or in shares or from any other amounts payable any time thereafter to
the Employee. The Company also shall have the right to deduct from any cash payment payable
to a person pursuant to an Award the amount of any taxes that the Company is required by law
to withhold with respect to such cash payment. If the Employee disposes of Shares acquired
pursuant to an Incentive Stock Option in any transaction considered to be a disqualifying
disposition under Sections&nbsp;421 and 422 of the Code, the Employee shall notify the Company of
such transfer and the Company shall have the right to deduct any taxes required by law to be
withheld from any amounts otherwise payable then or at any time thereafter to the Employee.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 4%"><I>20.2 Employee Election to Withhold Shares. </I>Subject to Committee approval (which in the
case of Incentive Stock Options must be given at the time of grant), an Employee may elect
to satisfy the tax liability with respect to the exercise of an Option by having the Company
withhold Shares otherwise issuable upon exercise of the Option; <I>provided, however, </I>that if
an Employee is subject to Section 16(b) of the Exchange Act at the time the Option is
exercised, such election must satisfy the requirements of Rule&nbsp;16b-3.


<P align="left" style="font-size: 12pt; text-indent: 4%">21.&nbsp;<U>Applicable Laws or Regulations and Notification of Disposition</U>. The Company&#146;s
obligation to sell and deliver Shares under an Award is subject to such compliance as the Company
deems necessary or advisable with federal and state laws, rules and regulations applying to the
authorization, issuance, listing or sale of securities. The Company also may require in connection
with any exercise of an Incentive Stock Option that the Employee agree to notify the Company when
making any disposition of the Shares, whether by sale, gift, or otherwise, within two (2)&nbsp;years of
the date of grant or within one (1)&nbsp;year of the date of exercise.


<P align="left" style="font-size: 12pt; text-indent: 4%">22.&nbsp;<U>No Employment Right; No Obligation to Exercise Option</U>. Nothing contained in the
Plan, or in any Award granted under it, shall confer upon any participant any right to continued
employment by the Company or any of its subsidiaries or limit in any way the right of the Company
or any subsidiary to terminate the Employee&#146;s employment at any time.


<P align="left" style="font-size: 12pt"><FONT style="font-size: 8pt">CH2 20183586.6
</FONT>


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